In a case dealing with the question of whether rent repayment orders can be made against a superior landlord rather than the immediate direct landlord, the question will now be decided by the Supreme Court in late 2022 or early 2023 and will be of great importance to private sector landlords who let their properties with a clause allowing the tenant to sublet.

In the specific circumstances of this case, the superior landlord, Mr Rakusen, bought a 999 year lease of a flat in London from the freeholder but later moved out to live elsewhere. He then let the flat to a property investment company introduced to him by his agent, Hamptons, on a 36 month contract but with an amendment allowing the company "... to sublet each unit individually or the whole as part of the day to day management of their business." Subsequently the tenant company let rooms in the flat to different people on an individual licence to occupy basis and effectively made the flat into an unlicensed HMO. Sometime later the company informed Mr Rakusen that they wished to apply for an HMO licence but there was no record that a licence was ever actually applied for or granted. Mr Rakusen did not renew the company's tenancy at the end of the term and then, 4 months later, the occupants to whom the flat had been let by the investment company applied for a rent repayment order against Mr Rakusen. The First Tier Tribunal originally found for the occupants but the Court of Appeal subsequently found for Mr Rakusen. The facts of the case and the reasoning of the Court of Appeal can be found here (at paragraph 2 [the facts] and paragraphs 22 to 43 [the reasoning]) but, basically, the court decided that RROs could only be made against immediate landlords (i.e the property investment company) especially where the superior landlord had not received the money paid in rent by the occupiers.