Upper Tribunal remits tenancy deposit case back to First-tier Tribunal due to shortage of evidence for conclusions

About this case:

• Citation:
  2024UT49
• Judgment:
  External link
• Court:
  Upper Tribunal for Scotland
• Judge:
  Sheriff O'Carroll

Judith Kennard was ordered to pay a total of £5,175 to the five respondents, all of whom were attending university in Edinburgh, by the First-tier Tribunal. She argued that the accommodation was occupied under short-term lets excluded from the Tenancy Deposit Schemes (Scotland) Regulations 2011 and the FTS had erred in concluding otherwise on the material before it.

The appeal was heard by Sheriff Derek O’Carroll of the Upper Tribunal. The appeal was determined based on the written submissions of the parties without a hearing.

Undertaking not to apply

The parties agreed to enter into a tenancy agreement on 11 March 2022. A deposit of £3,450 was paid later that month and the tenancy commenced on 10 July 2022. It was agreed that the deposit was not paid into an approved scheme per the 2011 Regulations and that the deposit was returned in full to the respondents after the end of the tenancy in May 2023, albeit after a delay.

A document submitted to the FTS dated 2 May 2023 stated that the property was to be occupied as a holiday let. Various agreements were produced which covered individual months of the tenancy with only two of the five tenants named on any given application. At a hearing, the respondents’ representative said that he believed this was done because the appellant’s HMO licence had expired in 2021. Notably, none of the respondents attended the hearing to give evidence, which their representative said was because they were busy studying for exams.

The FTS found that the respondents had occupied the property as their principal home for the relevant period and therefore that the tenancy was a private residential tenancy to which the 2011 Regulations applied. It rejected an argument of personal bar presented by the appellant based on an email sent on behalf of the respondents in June 2023, which she claimed amounted to an undertaking not to apply to the FTS if the deposit was repaid by 12 June.

In her written submissions to the Upper Tribunal, the appellant argued that FTS was not entitled to conclude that the let property was the respondents’ only or principal home for the period from September 2022 to May 2023 based on the limited evidence presented to it. Secondly, she submitted that the FTS was wrong in law to conclude that the respondents were not personally barred from making the application.

Very little fact finding

In his decision, Sheriff O’Carroll said of the nature of the tenancy: “It is rather unfortunate that none of the respondents were able to attend the tribunal due to their studies and so were unable to give oral evidence to the tribunal. Neither was very much in the way of documentary evidence provided by the respondents to the tribunal as regards the way in which they came to occupy the accommodation, what the accommodation was used for, how long they were in the accommodation, what other accommodation was open to them, how it was used, the use made in term time and outside term time.”

He continued: “It will be important to decide for each respondent what they consider during the period in question to be their principal home. The weight to be given to each factor will be a matter for the FTS to determine. Unfortunately, very little of this fact finding has been done by the FTS in this case and therefore the appeal on this ground must succeed.”

On the second ground of appeal, the sheriff said: “The application of personal bar is highly fact dependent. That means that the fact finder must make detailed findings in fact at the outset before it is able to apply the law. This has not been done. The facts found are sparse even though the FTS had before it both the sender and the recipient of the email. No notice appears to have been taken of the fact that the application to the FTS appears to have been made before the expiry of the ultimatum.”

He concluded: “It said that since the author of the email was not a tenant of the appellant, he had no locus to make an application to the tribunal. But plainly, he held himself out as a representative of the respondents and could be presumed to have had the necessary locus. He was representing them at that very hearing. If that is not correct, no reason is given.”

The appeal was therefore allowed on both grounds and remitted to a differently constituted FTS for reconsideration. Addressing the task before the FTS, Sheriff O’Carroll added: “The Tribunal will need to consider all the circumstances of occupation including the analysis of the tenancy or occupancy written agreements. The tribunal will be astute, as all tribunals and courts must be in cases such as this, to the possibility of sham arrangements being entered into designed to avoid legal protections for tenants, including their deposits and to rule accordingly.”