Landlord wins 40% RRO reduction despite omitting to re-licence during COVID

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An expat landlord who forgot to licence his property during the pandemic has managed to get £6,500 knocked off a hefty Rent Repayment Order.

Gary Michelson told a First Tier Property Tribunal that the more severe lockdown in France and his fears for family members suffering from Covid-19 resulted in him forgetting to renew it.

He argued that as a one-property, unprofessional landlord who was resident overseas, he relied on his managing agent to remind him of his obligations.

The tribunal ruled that it was no excuse but said this wasn’t a case where a landlord didn’t licence a property to avoid spending money.

It added: “We accept that Mr Michelson did genuinely intend to renew his licence, and that he did genuinely forget to do so, in the conditions of the pandemic.

“That does not amount to a defence of reasonable excuse, but it is relevant to the level of his culpability and the amount of the RRO.”

Lapsed

The tribunal ordered him to pay £9,860 out of a possible £16,426. It had heard that the two tenants lived in his two-bed terraced house in Pretoria Avenue, Walthamstow (pictured), which was licensed under a previous scheme in Waltham Forest that lapsed in April 2020.

“The new scheme came into effect the next month but Michelson did not apply for a licence until June 2021.

He told the court that he relied on the rent as his only income and that £11,520 in an ISA would go towards paying off the principal of the interest-only mortgage (£161,000) in 2027.

Now retired and living in France, he added that he would have to sell the property because the mortgage was interest only.

The tribunal heard he had not disclosed two additional joint accounts held with his partner but agreed that it couldn’t assume he could use these resources which it took into account when deciding on the cash award.

Read more about RROs.

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