Guardians can STILL Get Rent Back!

Our regular readers will remember that Flat Justice brought the first RRO case for guardians back in 2019:
Guardians can Get Rent Back!“. Since then we have continued to fight to protect guardians’ rights for better housing standards through compliance with licensing requirements in what are often some of the most precarious conditions in the Private Rented Sector (PRS).

The Court of Appeal (CA) handed down a judgment today which involved one of Flat Justice’s cases: Laleva & ORS v Global 100. Having won at both first at the First-tier Tribunal Property Chamber (Residential Property) (FtT) and the Upper Tribunal (Lands Chamber) (UT) the guardians defended against the appeal by Global Guardian Management Ltd & Global 100 Ltd, heard at CA on 11th October 2023. The Laleva case was heard together with another similar case, not a Flat Justice case: Jimenez v Global .

All grounds of appeal were rejected by CA in its judgment. Key findings were:

• Guardians’ only use of the property was as living accommodation. Any security they provided to the building was simply a corollary of their occupation. CA distinguished between the occupants use vis-à-vis the use by the guardianship company. CA did not accept that ‘purpose’ equated to ‘use’: Lord Justice Lewison used the example of taking a car for a test drive: one might be using the car but that was different to its purpose:

The fact that the car was being test driven by a person interested in purchasing it (their purpose) did not alter the use made of the car.” (§50)

This has been an argument adopted in several guardianship cases, including current cases with Flat Justice, so it’s great to get that clarified.

• A further ground of appeal was that Global Guardian Management could not have been “a person managing” the HMO because it had only been granted a licence not a lease. To be culpable for a RRO, a landlord must be either “a person managing” or “a person in control” according to s263 The Housing Act 2004 (HA)), however s262 of the same act requires that a person managing must be either an owner or a tenant. So if Global had only had a licence (and not an tenancy), they couldn’t have been managing.
This was rejected by CA as they agreed with FtT & UT that Global had possession of the property, so distinguishing it from a mere licensee who does not. Therefore they were a person managing.

• The further appeal ground, that Global Guardians Management Ltd was not in control of the property did not need to be further considered, having established that it was a person managing

• Global 100 Ltd was further deemed to be in control of the property by the CA who dismissed Global’s contention that the “rack rent” had not been established by FtT and UT. CA found that it was reasonable to assume that a for-profit company would extract the maximum rent from their guardian occupants: ain’t that the truth!

It is possible that an attempt may be made to appeal this to the Supreme Court so this may not be the end of the story…
Congratulations and thanks to all involved for your hard work on this: Ranjit Bhose KC, George Penny (formerly FJ), Tara O’Leary, Justin Bates and Simon Mullings.

The streamed hearing is available here: