In recent years there has been an increase in the practice known as ‘rent-to-rent’, where a landlord lets a property to a company that then rents out parts of the property for a profit. In this case, the landlord is known as a ‘ghost landlord’.
A recent Supreme Court ruling has split opinion. In the case of Rakusen v Jepsen, the Court ruled that the rent-to-rent company, not the ghost landlord, was liable to pay the Rent Repayment Order (RRO). The landlord had let a flat to a rent-to-rent company, who let the flat to tenants without obtaining the required licence. The tenants sought an RRO from the landlord, even though the landlord did not receive rents directly from the tenants.
The initial Tribunal ruled in favour of the tenants, but the Court of Appeal and subsequently the Supreme Court have ruled in favour of the landlord. This means that ghost landlords are not held liable for the legal failings of rent-to-rent companies.
Landlords, generally, are pleased with this ruling, but housing campaigners say that it gives ‘rogue’ landlords a blue light to use rent-to-rent companies to avoid legal responsibilities.
May 25th, 2023
