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August began under the shadow of the momentous Rakusen v Jepsen (Rakusen) judgment made on the 29th of July, which stated tenants can only make claims against their immediate landlord.

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In consequence, many hearings scheduled for August, including those brought by Flat Justice, did not see the light of day, as Applicants hastily withdrew doomed claims against superior landlords.

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Nonetheless, many Applicants still managed to win big in August.

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The spectre of Rakusen-Jepsen

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Even in successful RRO1 applications in August, Rakusen loomed large.

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In Adjety V Kenneth Lloyds Limited & Ali, Mr Adjety made a claim against both their immediate landlord and their superior landlord. This approach – which Flat Justice had often employed prior to ​Rakusen – did not survive the opening moments of the hearing. Shortly after the hearing began, the Tribunal adjourned to consider Rakusen. On returning, the Tribunal swiftly decided that a claim could only be made against the immediate landlord: Kenneth Lloyds Limited.

Nonetheless, Mr Adjety won 100% of his rent back from Kenneth Lloyds Limited. So long as Kenneth Lloyds Limited pays the award, Mr Adjety will have triumphed.

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However, the worry is that in cases like these it might be cost effective for immediate landlords – who are limited companies – to liquidate and re-emerge in the form of phoenix companies.

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Fingers crossed for you Mr Adjety!!

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In other cases, Judges made sure to confirm whether a Respondent was an ‘immediate landlord’. What hallmarks of an ‘immediate landlord’ did the Tribunal look for?

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Arrears hurt Rent Repayment Orders:

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In Mohamud V 9 Connaught Road Limited and Chadwell Holdings Limited (1) Brian Thomas Estate Agents (2), the Tribunal made a 5% deduction to the award based on the fact that the Applicant had rent arrears. The deduction was small as the arrears began outside the period applied for. However, the fact that the deduction was made, despite the arrears being outside the period applied for, is a further reminder that the Tribunal is not always strict in keeping its focus on the ‘relevant period’.

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Similarly, there was a 15% reduction in Islam & Siwon V Madlani owing to tenant arrears. However, in Islam the arrears had occured during the period.

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Deductions are a one way street?

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In Reeves & Ors v Watson & Watson, the Tribunal made a 10% deduction for good landlord conduct despite also finding evidence of extremely poor landlord conduct:

All this despite the fact that the Respondent was judged by the Tribunal to have been a “long-standing professional landlord”, so should normally have been dealt with more harshly for failing to license. Essentially, the deduction was made because there was no “deliberate flouting of the law by the respondents”…

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This is a somewhat concerning trend, in which the Tribunal reduces an award from 100% if there are ANY reasons to make deductions.

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We have always argued that if a Tribunal sees reasons to make a deduction, this must be balanced against reasons not to make a deduction.

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So if a landlord demonstrates equally good and bad conduct, the two would balance out, and there would be no deduction to an award.

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However, it seems that often, if the Tribunal sees a reason to come down from 100%, no amount of bad landlord conduct will lead them to come back up.

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Sham licences are bad conduct!

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In Zaric & ORS v J & G Home Share Limited & ORS, the tribunal found ‘that the landlord used a licence agreement which in the opinion of the tribunal was not appropriate’.

This, as the Tribunal noted, had ‘consequences… It meant that the deposit was not protected when it should have been. It also meant that the applicants thought they had very limited security of tenure.’

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Summary of all cases in August 2021:

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