Upper Tribunal refers tenancy deposit case back to First Instance Tribunal due to lack of evidence to support claims

Judith Kennard was ordered by the Court of First Instance to pay a total of £5,175 to five respondents, all of whom were studying at the University of Edinburgh. She claimed that the accommodation was occupied as short-term lets excluded from the The Tenant Deposit Schemes (Scotland) Regulations 2011 and the FTS erroneously drew a different conclusion based on the materials available to it.

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

Commitment to non-use

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

The 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 covering individual months of the tenancy, with only two of the five tenants named on any given application. At the hearing, the respondents’ representative stated that they believed this was because the applicant’s HMO licence expired in 2021. Significantly, none of the respondents attended the hearing to give evidence, which their representative suggested was because they were busy studying for exams.

The FTS found that the respondents occupied the property as their principal home for the relevant period and therefore the tenancy agreement was a private residential tenancy to which the 2011 Regulations applied. It rejected the personal obstruction argument advanced by the applicant based on an email sent on behalf of the respondents in June 2023 which she alleged amounted to an undertaking not to comply with the FTS if the deposit was returned by 12 June.

In her written submissions to the Upper Tribunal, the applicant argued that the FTS was not entitled to conclude that the rental property was the respondents’ sole or principal home between September 2022 and May 2023 on the limited evidence before it. Secondly, she submitted that the FTS erred in law in concluding that the respondents were not personally deprived of the opportunity to make the application.

Very few factual findings

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 hearing because of their studies and therefore were unable to give oral evidence to the tribunal. None of them were greatly assisted by the documentary evidence provided by the respondents to the tribunal in relation to the manner in which they occupied the accommodation, what the accommodation was used for, how long they stayed in the accommodation, what other accommodation was available to them, how it was used, how it was used during and outside term time.”

He continued: “It will be important for each respondent to decide what they consider to be their principal home at any given time. The weight to be given to each factor will be a matter for the FTS to determine. Unfortunately, in this case the FTS made very few findings of fact and an appeal on that basis must be allowed.”

In the second ground of appeal, the sheriff said: “The application of a personal restraining order is very fact-dependent. This means that the fact-finder must make detailed findings of fact at the outset before he can apply the law. This was not done. The facts found are scant, even though the FTS had before it both the sender and the recipient of the email. It appears that no consideration was given to the fact that the application to the FTS was apparently made before the expiry of the ultimatum period.”

He concluded: “It was submitted that because the author of the email was not a tenant of the applicant, he had no locus to make the application to the tribunal. But he clearly presented himself as the representative of the respondents and it was reasonable to assume that he had the necessary locus. He represented them at that particular hearing. If that is not true, no reason is given.”

The appeal was therefore allowed on both grounds and remitted to a different FTS bench. Referring to the task before the FTS, Sheriff O’Carroll added: “The Tribunal will have to consider all the circumstances of the occupation, including an analysis of the written leases or occupation agreements. The Tribunal will be vigilant, as all tribunals and courts must be in such cases, to the possibility of sham arrangements being made to avoid the legal protections of tenants, including their deposits, and will rule accordingly.”