Guillaume Marc-Alex Guinard v Klimas Jurevicius & Anor

This is an appeal by Mr Guillaume Guinard against the First-tier Tribunal’s refusal to make a rent repayment order in his favour against the respondents, his former landlords, Klimas Jurevicius and Emilia Arno. Mr Guinard presented his own case in the appeal, while the respondents were represented by Mr James Rudall of counsel, who also represented them before the FTT; I am grateful to them both.

The Housing and Planning Act 2016 enables tenants and local housing authorities to make an application for a rent repayment order against a landlord who has committed one or more of the offences listed in section 40. One of them is the offence created by section 72(1) of the Housing Act 2004, of managing or being in control of a house in multiple occupation (“HMO”) which is required to be licensed and is not licensed.

HMOs come in a number of forms; in this appeal we are concerned with what is perhaps the typical form, the shared house with individual bedrooms and communal kitchen, bathroom and so on. Not all houses in multiple occupation require a licence; in general, those occupied by five or more persons in two or more households will require a licence, but a local housing authority may designate an area of additional licensing under section 56 of the Housing Act 2004.

In the present appeal it is relevant that the property in question was at all material times within an area of additional licensing, designated by the London Borough of Southwark by a notice made on 28 October 2021 and in force until 1 March 2027. The effect of that notice was that a shared property occupied by three or more persons in two or more households, sharing living accommodation, required a licence.

However, Schedule 14 to the Housing Act 2004 provides that certain buildings are not HMOs including (paragraph 6):

“(1)

Any building which is occupied only by persons within the following paragraphs–

(a)

one or more persons who have, whether in the whole or any part of it, either the freehold estate or a leasehold interest granted for a term of more than 21 years;

(b)

any member of the household of such a person or persons;

(c)

no more than such number of other persons as is specified for the purposes of this paragraph in regulations made by the appropriate national authority.”

The regulations referred to in paragraph 6(1)(c) are the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England), which provide at regulation 6 that the relevant number is two. The effect of all that is that a house with a resident landlord is not an HMO if the occupants of the house are only the landlord, his or her household, and no more than two others.

The property is a four-bedroomed house which the respondents purchased on 11 November 2022.

The second respondent Ms Arno had lived there since 2018; in her witness statement in the FTT she said that she moved in “under an assured shorthold tenancy with three other housemates”. The first respondent Mr Jurevicius moved in, according to his witness statement, “in 2019 as a tenant, sharing a room with Emily under an Assured Shorthold Tenancy”.

When the respondents bought the property in 2019 the other occupants were Torunn Sorlie and “Lousie”, who had both been renting a room from the previous freeholder, and the appellant Mr Guinard who was there as Ms Sorlie’s guest. On 1 December 2022 the second respondent and the appellant entered into a “Lodger Agreement” in relation to a “private bedroom” and shared kitchen, lounge, bathroom and storage, at a rent of £775 per calendar month.

On 7 November 2023 the respondents gave the appellant and Ms Sorlie one month’s notice to leave the property, on 6 December 2023. The second respondent in her witness statement explained that they did not leave and “we accepted their proposed (generous) extension of February 1^st. However, Ms Sorlie and the appellant did not move out until late March 2024.”

In February 2025 the appellant and Ms Sorlie applied to the FTT for a rent repayment order for the period 1 March 2023 to 29 February 2024, in the sums of £9,000 for Ms Sorlie (who was paying £750 per month) and £9,300 for the appellant.

The respondents both gave lengthy written evidence to the FTT about their dealings with the appellant, who they said was unwelcome from the start. Their evidence was that they did not want him in the property because they knew that his presence would mean that the house was an HMO and that they would need a licence. It was their clear evidence in the FTT, confirmed by them on appeal, that they knew that. Indeed, they knew that before their purchase the house was an unlicensed HMO, which should have been licensed, although they and their fellow tenants decided not to do anything about that because they enjoyed living there.

The second respondent’s evidence was that before the purchase they warned the appellant that he could not stay after they had purchased because they “could not legally or emotionally cope with more than two lodgers. We were actively researching HMO licensing guidance at the time and consulted the Southwark Council website, which clearly states that owner-occupiers with no more than two lodgers are exempt from mandatory licensing.” She explained in her witness statement that since April 2021 the appellant’s behaviour in the house had been unacceptable and they did not in any event want to live with him.

The first respondent confirmed that they were aware that they would need a licence if they had more than two lodgers, and he also in any event did not like living with the appellant whom he found “volatile and manipulative”.

The second respondent said that the appellant pressured her into signing the licence agreement in December 2023. The first respondent’s written evidence was that he did not know that an agreement had been signed.

Both respondents gave evidence of unpleasant behaviour by the appellant and said they felt unsafe with him in the house. The second respondent said that he asked her to send him money so that he could return it to her (which he did) “in order to fabricate evidence of rent repayments for Universal Credit”; she said she did not understand that this was fraudulent. I have to confess that I do not understand what was happening there, but neither party claims that the appellant’s rent was paid by universal credit during the period for which the rent repayment order was sought.

The second respondent said that the notice to leave in November 2023 was given “after months of escalating tension, manipulation and emotional pressure”. Nevertheless, they agreed to a 12-week extension; and yet, even then, the appellant did not leave until March 2024.

I have summarised the respondents’ evidence to the FTT very briefly. In the appeal Mr Rudlan described a situation where the appellant was constantly being asked to leave, on one occasion given formal notice to leave, and was repeatedly promising to leave but never did.

The FTT conducted a hearing, which the appellant attended but Ms Sorlie did not, and heard evidence from the appellant and the two respondents. It discussed the occupation of the property and the licensing requirements and concluded, correctly, that:

“19.

The tribunal determines that for as long as there were more than 2 lodgers in occupation with the respondents, property was not exempt from the licensing requirements. …

20.

Consequently, the tribunal finds that, prima facie an offence pursuant to s.72(1) HA 2004 was committed by the respondents but finds the respondents have successfully raised a defence of ‘reasonable excuse.’”

The respondents said that they had the defence of reasonable excuse for which section 72(5) of the Housing Act 2004 provides. The FTT said this:

The appellant Mr Guinard appeals on three grounds, with permission from this Tribunal; Ms Sorlie has not appealed the FTT’s decision. Accordingly, on the rent paid by the appellant is now in issue. The grounds of appeal are, in summary, that:

I can take grounds 1 and 2 together; the appellant argues that the facts found by the FTT in its paragraphs 25 and 26 were wrong, and that nothing in the FTT’s findings could have caused or explained the respondents’ failure to apply for a licence.

Turning to paragraphs 25 and 26, the appellant first points to the comment that the respondents “made numerous enquiries to ascertain whether or not the property was exempt”. The only enquiries of which there was any evidence were made in 2025. As to the website being confusing, the respondents’ own evidence was that they were aware of the licensing position. They were not confused. In paragraph 26 the FTT found that his conduct “actively prevented” the respondents from avoiding commission of the licensing offence, yet nothing in the facts the FTT found indicated that he prevented them from applying for a licence; on the contrary, they voluntarily provided a written licence agreement.

In response Mr Rudall took me through the respondents’ evidence to the FTT and to their eloquent account of a very difficult time of pressure, manipulation, “veiled and overt legal threats”, fear and stress during the appellant’s occupation of the property. He explained that their case on reasonable excuse was that there were two ways for them to avoid commission of the licensing offence; one was to apply for a licence, the other was to ask the appellant to leave, which is what they did. They regarded that as cheaper and quicker than applying for a licence. The second respondent had explained in her evidence that she had ADHD and therefore very readily believes what people say to her; when the appellant said he was going to leave, she believed him.

Mr Rudall stressed that the appellant and Ms Sorlie could be seen to have acted deliberately, and to have manipulated the situation and prolonged their occupation with a view to obtaining a rent repayment order.

Mr Rudall argued that the FTT was entitled to accept the respondents’ evidence, and to accept that the facts they asserted amounted in law to a reasonable excuse for the purposes of section 72(5) of the 204 Act. That, he said, was an exercise in judgment with which an appellate tribunal should not interfere. As to the level of explanation provided, Mr Rudall took me to several passages in English v Emery Reimbold & Strick Limited 2002 [EWCA] Civ 605, where the Court of Appeal (Lord Phillips MR, Latham LJ and Arden LJ) explained that a judge need not go through every element of the evidence; “it is sufficient if what he says shows the parties … the basis on which he acted.” (paragraph 17).

It is important to appreciate that the appellant did not challenge anything that the FTT said in its paragraphs 21 to 24. His challenge is not to the facts found by the FTT in those paragraphs, but to what the FTT said in paragraphs 25 and 26. As to those facts, he is right.

Looking first at paragraph 25, the respondents themselves have made it abundantly clear, and it was part of their case in the FTT, that they knew about the HMO licensing requirements, knew that they would need a licence if they had three lodgers but were exempt if they had two, and were not confused. It is clear from the bundle that they did make enquiries in a series of emails in 2025, asking whether an HMO licence would be needed “if a lodger invites one guest to stay temporarily for a short-term visit”; those emails were sent after the application to the FTT had been made (and were not in any event an accurate reflection of the relevant facts since they made no mention of the licence agreement or the receipt of rent). What the FTT found in its paragraph 25 was contrary to the evidence.

I also accept what the appellant says in relation to the FTT’s paragraph 26; nothing in the evidence before the FTT indicated that the conduct of the appellant prevented the respondents from applying for an HMO licence.

Indeed, that was not their case. Mr Rudall was clear that they were not arguing that anything prevented them from applying for a licence, but rather that their attempts to get the appellant to leave the property amounted to a reasonable excuse such as to provide a defence to the section 72(1) offence.

In my judgment the FTT explained its decision perfectly well, but erred in law in accepting the respondents’ argument. The respondents have amply and eloquently explained why the allowed the appellant to stay for so long. Indeed, one can sympathise with their predicament. Being a resident landlord in a situation of conflict with an occupier is a most difficult and stressful situation. One can readily understand why the respondents were reluctant to exercise their right to give notice to leave until the appellant had been in the property for over a year; and it may have been very difficult having given that notice to follow it up by taking proceedings to remove the appellant and Ms Sorlie. All that is readily understandable.

Less understandable is the decision to enter into a licence agreement in December 2022, very shortly after the respondents’ purchase, and to accept £775 per month in rent. I have to say that that is not consistent with their evidence that they did not want the appellant to be there and wanted him to leave. They, or at least the second respondent, chose to entitle him to stay and chose to accept rent.

The question remains why, having entered into that agreement, however reluctantly, the respondents did not then apply for an HMO licence. There was nothing to prevent them from doing so.

Nothing in the facts found by the FTT explains why the respondents did not apply for an HMO licence, if not immediately upon their purchase (when they could have applied for a Temporary Exemption Notice if they were set upon requiring the appellant to leave) then certainly after 1 December 2022 when he had a written licence agreement and was paying rent. There is no explanation, let alone an excuse The explanation that it was cheaper and quicker to get the appellant to leave is not consistent with the respondents’ choice not to enforce the right to require him to leave, nor with the second respondent’s choice to enter into a written licence agreement and to accept rent.

The FTT’s findings of fact in its paragraphs 25 and 26 were made contrary to the evidence; its finding that the respondents had a reasonable excuse for not having an HMO licence was irrational and made in error of law. I set it aside, and substitute the Tribunal’s decision that the respondents did not have a reasonable excuse.

As to the FTT’s indication that had it been required to do so it would have made a nominal award of £1, this is either unexplained or irrational. It is unexplained in its brevity; there is no consideration of the statutory requirements in section 44 of the 2016 Act. And it is irrational because, as the appellant says, it elevates the tenant’s conduct over all other considerations. I accept of course that the respondents have raised strong arguments in mitigation; but that is not the only relevant consideration. And moreover their own conduct has not been entirely consistent, as I have explained above.

It would be open to the Tribunal ato remit this matter to the FTT for consideration of whether to make a rent repayment order and if so in what amount. That would be unfortunate because it would require evidence to be re-heard before a different panel, and would prolong the proceedings and magnify the stress for all concerned. Since the appeal hearing I have asked the parties if they would be content for the Tribunal to substitute its own decision as to whether a rent repayment order should be made and, if so, in what amount, on the basis of the facts found by the FTT in its paragraphs 21 to 24, 27 and 29. They have agreed that the Tribunal should do so.

In my judgment it is right to make a rent repayment order in these circumstances, bearing in mind particularly that the respondents were aware that they needed an HMO licence and nothing prevented them from applying for one.

Turning to the amount to be ordered to be re-paid, section 44 of the Housing and Planning Act 2016 directs me to take into account in particular:

“(a)

the conduct of the landlord and the tenant,

(b)

the financial circumstances of the landlord, and

(c)

whether the landlord has at any time been convicted of an offence to which this Chapter applies.”

Furthermore, I bear in mind the guidance given by the Tribunal in Acheampong v Roman [2022] UKUT 239 (LC) at paragraph 20 as to the process to be followed in assessing the amount to be ordered to be repaid:

“a.

Ascertain the whole of the rent for the relevant period;

b.

Subtract any element of that sum that represents payment for utilities that only benefited the tenant, for example gas, electricity and internet access.  It is for the landlord to supply evidence of these, but if precise figures are not available an experienced tribunal will be able to make an informed estimate.

c.

Consider how serious this offence was, both compared to other types of offence in respect of which a rent repayment order may be made …and compared to other examples of the same type of offence. What proportion of the rent (after deduction as above) is a fair reflection of the seriousness of this offence? …:

d.

Consider whether any deduction from, or addition to, that figure should be made in the light of the other factors set out in section 44(4).”

In light of that, I reason as follows. The rent paid by the appellant for the period of 12 months was £9,300 (see paragraph 11 above).

The “Lodger Agreement” of 1 December 2022 stated that the monthly rent included £11 for water, £50 to £60 for electricity and “~£44” for council tax. Putting those figures together I deduct £115 x 12 (= £1,380)from the total claimed, making the total claim £7,920.

As the Tribunal has found on other occasions, being in control of and managing a house in multiple occupation is one of the less serious of those listed in section 40 of the 2016 Act. And as instances of this offence go, it is again among the less serious. The FTT did not accept the appellant’s evidence about the condition of the property. There is no evidence that the absence of a licence caused him any discomfort or danger. In my judgment repayment of 50% of the rent would be appropriate as a starting point.

I turn to the factors listed in section 44 of the 2016 Act.

As to the conduct of both parties, the FTT made clear its view that the conduct of the appellant was such that no award should be made. I have already explained that I disagree, not only because the conduct of the tenant is not the only relevant factor but also because the respondents were not entirely blameless – they failed to get a licence when they knew they needed one, and the second respondent actively chose to legitimise the appellant’s occupation by making a written agreement with him and charging him rent.

Set against that is the unusual factor in this case that the respondents were resident landlords. I think that changes the complexion of the situation. It makes everything very personal and makes it extremely hard to take formal steps to require a lodger to leave.

The FTT did not make any findings about the financial circumstances of the landlord.

There is no suggestion that either of the respondents has ever been convicted of an offence.

In my judgment the appropriate rent repayment order in favour of the appellant is a sum equating to 25% of the rent paid by him during the relevant period, being 25% of £ which is £1,980. I will make a separate order to that effect and in that order will also address the application the respondents have made for a stay of any order that I make.