A London landlord has been ordered to repay £7,500 in rent after running an unlicensed House in Multiple Occupation (HMO) near Portobello Road.
The case went to a first tier property tribunal after the tenant requested a Rent Repayment Order (RRO) on the basis the property was being run as an HMO without a licence.
Judge Dutton said Julian and Co Managing Partners Limited had a “lackadaisical attitude” to being a landlord of an HMO and its sole director, Gyula Ruzicska, had “limited knowledge” of the rules.
He said Mr Ruzicska should have known the licensing requirements given the company manages up to eight HMOs and demonstrated a lack of care “which amounted to issues of conduct”.
Mr Ruzicska apologised and claimed he could have put more data before the tribunal but ran out of time.
Judge Dutton said the director did not seek to exploit tenants and reminded the tribunal the tenant seeking an RRO had renewed his agreement to stay beyond the initial period.
Mohamed Maslouh applied for the RRO in July last year of £10,800 for rent paid between February 2023 and February 2024, a tribunal decision shows.
Mr Maslouh rented a room in a flat at Portobello Court, Westbourne Grove – a stone throw’s from Portobello Road – and paid £900 per month. He moved into the Notting Hill flat in February 2023 and remained there until he and other tenants vacated the property in May 2024.
He told the tribunal the flat consisted of five bedrooms, a joint kitchen, bathroom and toilet and was always occupied by more than three tenants who were not related. The property should have been licensed with Kensington and Chelsea Council.
In a statement made in December, Mr Ruzicska admitted a licence had not been obtained during the tenancy period because of an “administrative error”. He also accused Mr Maslouh of causing damage to the decoration in his bedroom, smoking in the property and leaving items behind when he vacated.
Mr Maslouh said he had broken his ankle and for a month was bedbound and smoked in his room during that time.
Mr Ruzicska requested the sum he owed Mr Maslouh be reduced because he swiftly rectified the “error”, and alleged issues with Mr Maslouh’s conduct, which was said to have contributed to financial losses and the compliance with health and safety issues.
He also said Julian and Co was not the owner of the property and the majority of rent was passed onto the freeholder.
According to limited evidence provided to the tribunal, the rent paid to the freeholder was £48,000 per annum but the rental income received was £57,696. This meant the company received a monthly profit in the region of £800 from the property, according to the tribunal.
The tribunal was also told the company had 16 employees, which accounted for £240,000 in salaries in the year ending March 31, 2024. Accounts also disclosed a directors’ loan over £358,000.
Mr Ruzicska said the loan was not freely available cash and had been reinvested in the company. According to the tribunal, the profit for the year was £25,818.
Mr Ruzicska said he had suffered from ill health since the start of the year. During cross examination, he admitted the company managed up to eight HMOs and the landlords of these properties arranged for the licensing to be dealt with.
He said Julian and Co did its own inventory before and after the letting. In his ruling, Judge Dutton said: “There is no argument that an offence of failing to licence an HMO has [been] made out. We accept that is the case. No reasonable defence was put forward.
“The fact that the respondent had relied on the freeholder to licence other properties they managed did not excuse the respondent from checking the position in relation to the property, the more so in that it had been managing same for some 8 years.
“To be fair to Mr Ruzicska, he did not seek to rely on this as an excuse and there is no evidence before us that the respondent was absolved from this responsibility as we did not have a complete copy of any lease with the freeholder.”
He concluded: “Having been satisfied that an offence has been committed and there is no reasonable excuse, we consider that an RRO should be made.”
Judge Dutton agreed to a 25per cent reduction saying the case was “one of the less serious offences” that can be made in respect to a Rent Repayment Order, bringing the total owed down from £10,062 to £7,546.
The sum of £35 per month for gas and electricity and a further £26.50 per month per tenant for council tax was also deducted.
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