The Government has revealed that it intends to overturn this year’s landmark Jepsen vs Rakusen rent repayment order decision in the Supreme Court (pictured) within its Renters (Reform) Bill.
The amendment is within a raft of changes to the Bill published in parliament overnight highlighting the change, which was predicted by leading property lawyer David Smith in comments to LandlordZONE earlier this year.
The ruling had implications for rent-to-rent arrangements and meant tenants cannot go after superior landlords – property owners or leaseholders - when seeking redress and repayment of their rent.
It was good news for those who find their property has been sublet unknowingly in rent-to-rent set-ups but not for tenants who struggle to take dodgy companies to task.
Levelling Up minister Jacob Young (pictured) has included the amendment, saying: “In Jepsen and others v Rakusen the Supreme Court decided that a rent repayment order could not be made under Chapter 4 of Part 2 of the Housing and Planning Act 2016 against a superior landlord.
“This new Clause, which is intended to be added to Part 3 of the Bill, will allow such orders to be made against superior landlords, will extend the period that can be taken into account when calculating payments due under such orders and will make provision about how payments are to be calculated and made in cases where there are multiple landlords or multiple orders.”
Paul Sowerbutts, Head of Legal at Landlord Action, says: “This could, as with other reforms, mean landlords exit the sector leaving less choice for tenants.”
Smith, who is a Partner at legal firm JMW Solicitors, tells LandlordZONE that despite the new clause containing a promise to turn the Supreme Cout decision on its head, he doubts if it will work in practice.
"From a first look at the amendement, it doesn't deal very well with 'straw man' [rent to rent] companies and means superior landlords will still be able to use such firms without being liable for Rent Repayment Orders - so I don't think they've appeciated the compexities of the existing legislation or how to solve the problem."