Financial Penalty Confirmed for HMO License Holder

OUTCOME: Dismissed

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FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME]) Case reference : LON/00AE/HNA/2023/0021 [NAME] : 10 [ADDRESS] [POSTCODE] Applicant : [redacted] : In person Respondent : [redacted] : Ms [NAME] [NAME] & Ms [NAME] [NAME] of [NAME] : Appeal against a financial penalty Tribunal members : Judge [NAME] [NAME] M.Sc Date of Decision

26 February 2024

DECISION

The Tribunal’s decision (1) The Tribunal confirms the financial penalty of £5,000 imposed by the London Borough of [NAME] in respect of the offence committed by [NAME] [NAME] under section 72(3) of the Housing Act 2004 (breach of a licence condition), but not in respect of the alleged offences under the Management of Houses in Multiple Occupation (England) Regulations 2006, which were not proved. (2) The penalty should be paid to the [NAME] within 42 days of the date of this decision.

2 The appeal 1. By an [NAME] under section 249A and Schedule 13A of the Housing Act 2004 (“the 2004 Act”), the Applicant appealed against a financial penalty of £5,000 imposed upon him by the Respondent local housing authority, the London Borough of [NAME] (“[NAME]”), in a Final Notice dated 25 January 2023.

2. The Final Notice alleged that the Applicant had committed several offences under sections 72 and 234 of the 2004 Act, with the effective date of the offences being “12th August 2022 [Ongoing]”. Further details of the offences were given in the accompanying Reasons, and they amplified again in the Schedule of Offences in the hearing bundle, where it was said that the offices had occurred “between 16 July and 12 August 2022”. The alleged offences were that the Applicant: [redacted] being a licence holder of a House in Multiple Occupation (“HMO”) situated at 10 [ADDRESS] [POSTCODE] (“the [NAME]”), failed to install the required and stipulated smoke alarm(s) in the [NAME] in breach of Condition 21 of the [NAME] licence, contrary to Section 72(3)(b) Housing Act 2004, (ii) being a licence holder and [NAME] managing an HMO situated at the [NAME], failed to provide information to the [NAME] and to ensure that such details were displayed in a prominent position within the HMO, contrary to section 234(3) of the 2004 Act and Regulation 3 of The Management of Houses in Multiple Occupation (England) Regulations 2006 (“the Management Regulations”), and (iii) being a licence holder and [NAME] managing an HMO situated at the [NAME], failed to take all measures as are reasonably required to protect the [NAME] of the HMO from injury, in that officers noted: • There was no mains fire alarm system, • Only one fire blanket was provided in the kitchen, which was insufficient to protect the tenants in the event of a fire, • no heat detection system in the [NAME], • no valid BS5839 [fire detection] certificate or electric condition report in respect of the [NAME], contrary to section 234(3) of the 2004 Act and Regulation 4(4) of the Management Regulations.

3. Paragraph 10 of Schedule 13A to the Housing Act 2004 provides that [NAME] to whom a Final Notice is given may appeal the decision to impose the penalty, or the amount of the penalty. The matter proceeds as a re-hearing of the council’s decision to impose a penalty; and the Tribunal may confirm, vary or cancel the Final Notice.

3 4. On 5 September 2023, the Tribunal issued Directions leading up to a final hearing which took place on 24 January 2024 at 10 [ADDRESS] [POSTCODE]. The hearing 5. At the hearing on 24 January 2024, the Applicant [NAME] [APPELLANT] appeared in person. The Respondent was represented by Ms [COUNSEL] [NAME], solicitor-advocate within the Respondent’s Legal Department, and Ms [COUNSEL] [NAME], joint advocate, accompanied by [NAME] [COUNSEL], manager of the licensing team, and two witnesses, [NAME] [NAME] [NAME] and [NAME] [NAME].

6. The Tribunal had the benefit of a 276-page hearing bundle prepared by [NAME] on behalf of both parties. The bundle contained witness statements from three [NAME] employees, giving the council’s reasons for opposing the appeal, and numerous exhibits relating to the [NAME], including inspection reports, photographs, correspondence with [NAME] [APPELLANT] and his tenant [NAME] [APPELLANT] [NAME], and documents relating to the imposition of the financial penalty. In addition, the Tribunal had the detailed Grounds for Appeal submitted by [NAME] [NAME] with this appeal.

7. The Tribunal heard oral evidence in this order from: (i) [NAME] [NAME] [NAME], a Housing Enforcement Surveyor within the Respondent’s Private Housing Services team; (ii) [NAME] [RESPONDENT], an Environmental Health Officer in the same team; and (iii) The Applicant in person.

8. The appeal is by way of a re-hearing of the decision made by [NAME] to impose a financial penalty. The Tribunal is entitled to have regard to matters of which [NAME] was previously unaware, which existed at the time of its decision. The facts 9. Apart from disagreements with what was said in certain telephone calls and at a meeting on 12 August 2022, [NAME] [NAME] did not dispute the primary facts of the case. 10. [NAME] [NAME], an enforcement surveyor, gave evidence by reference to the documents in the hearing bundle. These showed that the freehold of the [NAME] was owned by [NAME] [NAME] and his wife [NAME], [NAME] been acquired by them on 14 February 1984. On 20 June 2021, the council had received an anonymous report from a member of the public to say that there were a large number of tenants in occupation of the [NAME]. [NAME] wrote to [NAME] [NAME] on the 24 June 2021, identifying that the [NAME] may require a [NAME] licence and requiring him to make an [NAME] or provide information why

4 the [NAME] does not need a licence. 11. [NAME] [NAME] replied in July and August 2021 to say that he was in bad health, and he needed more time to complete the licence [NAME]. [NAME] replied on 12 August to suggest that [NAME] [NAME] may wish to consider nominating somebody else to apply the [NAME] licence. That suggestion was repeated twice in September 2021. In the absence of an [NAME] for an HMO licence, the matter was referred to [NAME] [NAME] in the enforcement team on 30 September 2021.

12. On 11 October 2021, [NAME] [NAME] submitted a licence [NAME] form, seeking an HMO licence. In that form is said that seven people lived in the [NAME] and there was one letting. [NAME] [NAME] said that he was the “prime contact”. Issue of an HMO licence 13. When asked by the Tribunal, [NAME] [NAME] said that he had been assisted by the council in completing that form. On 4 January 2022, [NAME] wrote to [NAME] [NAME] enclosing a notice that a mandatory HMO licence had been granted to him, a copy of the HMO licence and “a booklet, which forms part of the licence, that sets out the legal conditions of the Mandatory HMO licence that will need to be adhered to.” The notice of the grant of the licence confirms that [NAME] [NAME] “is a fit and proper person to be the licence holder and is, out of all the persons reasonably available to be the licence holder in respect of the house, the most appropriate person to be the licence manager.” The licence itself was dated 6 December 2021 and remained in force for one year. The licence was stated to be non-transferable and must be displayed at the premises. The licence was for a maximum of five people. Given that there were already seven people living in the [NAME], it was said to be overcrowded so that “you are required to ensure that these numbers are reduced at the earliest opportunity. However, existing tenancies must be allowed to run their full term, unless tenants agree to an early termination of their tenancy, and any termination would have to comply with the correct statutory procedure.” Inspection of the [NAME]

14. The licence was granted to [NAME] before [NAME] inspected the [NAME]. However, on 2 March 2022 [NAME] [NAME] [NAME], a compliance officer, carried out an inspection as a result of which he completed a “compliance inspection form”, a copy of which was found in the hearing bundle. [NAME] [NAME] wrote to [NAME] [NAME] on 3 March 2022. His letter was headed “Action Required. Do not ignore.” The letter pointed out that “During the inspection, a number of breaches of the licensing conditions were identified and require action to be taken by you. These are listed in the Schedule on the following page and the deadline in which you must resolve the breaches by the 14/04/2022.” The letter went on to say that [NAME] [NAME] should provide evidence of

5 complying with those breaches but, if the required improvements were not carried out within the specified time, enforcement action might be taken against him.

15. The Schedule outlined several breaches of condition of the HMO licence the most important of which were: • Condition 10: if gas is supplied to the HMO, [NAME] [NAME] must produce a gas safety certificate for the past 12 months and a current certificate within 14 days on demand, • Condition 21: required [NAME] [NAME] to install a hard-wired mains operated smoke alarm with battery backup on each storey of the HMO, with interlinked alarms in the escape route (hallway), kitchen and utility room, and in each of the bedrooms, • Condition 22: required [NAME] [NAME] to replace existing non-fire doors with 30-minute fire doors to the kitchen, utility room, bedrooms and communal living room, • Condition 23: required [NAME] [NAME] to provide a valid fire safety certificate for the [NAME] as well as a certificate for all the firefighting equipment installed in the [NAME], • Condition 25: required thumb turn locks without the use of a key to be fitted to the communal living room door and all bedrooms, and to the kitchen door leading to the rear garden, • Conditions 26, 27, 29: required [NAME] [NAME] to make residents aware of fire routines, provide a fire blanket, remove a polystyrene ceiling in one room and fit a 30-minute fire resistant panel under the stairs, • Condition 30: required a report to be provided about the electrical installations, and • Condition 36: required documents to be displayed within the [NAME] namely a copy of the licence, a copy of the current gas safety certificate, the name, address and telephone number of the licensee and/or manager of the premises and energy performance certificates carried out for new tenancies. 16. [NAME] [NAME] said that the breaches of greatest concern to the council were those that related to fire safety. She also saw it as important that information was provided to occupants. Extended deadlines to comply with licence conditions 17. Although the original deadline to carry out work was 14 April 2022, this was later extended to 15 July 2022.

18. On 11 July 2022, [NAME] [NAME] sent an email to [NAME] [NAME] which confirmed that some works had been carried out at the [NAME], such as the installation of fire doors, a mortise thumb turn for the front entrance door and the installation of a window restrictor, but it

6 appeared that none of the other breaches had been resolved at that stage. In a taste of what was to come later with [NAME] [NAME], [NAME] [NAME] said in his letter: “I feel unhappy that you believe I threatened you”, although no further details were provided. [NAME] [NAME] confirmed that the deadline for doing the outstanding works was still 15 July 2022. 19. [NAME] [NAME] responded on 12 July to say that he could not meet the (extended) deadline. He thought that the council’s approach was “antagonising” and that their approach should be “co-operative not confrontative.” He said that he was “now half way through compliance, I find the requirements too demanding and not worth the financial return. I am therefore seriously considering to re-convert it to a non- HMO house.” He asked for forbearance to the end of the month.

20. In a longer email of 12 July 2020, [NAME] [RESPONDENT] said “It is necessary to clarify my position as Landlord. Please be informed that I am not renting to individual occupants. I rented the [NAME] to one individual ([NAME] [NAME] [NAME]) who is subletting to individuals. It is [NAME] [APPELLANT], my tenant, who has agreement with occupants, not me. He manages the [NAME], deals with the tenants and pays me rent [at the] end of the month. And it is [NAME] [NAME] who is getting the compliance work done.” [NAME] [NAME] asked [NAME] [NAME] to discuss the position with [NAME] [NAME] and agree a new deadline with him so that all the issues could be resolved and there was no need to involve enforcement.

21. The hearing bundle contained no witness statement from [NAME] [NAME], nor did he appear at the hearing. There was no written tenancy agreement showing that he was [NAME] [APPELLANT] tenant of the [NAME], but there was sufficient surrounding evidence for the Tribunal to be satisfied that he was indeed the tenant, and had been for about 10 years, and that he occupied the [NAME] with six others.

22. On 1 and/or 5 August 2022 (it was not clear), [NAME] [NAME] in the enforcement team spoke with [NAME] [NAME] about arranging an inspection of the [NAME] to see which works had been completed and which remained outstanding. [NAME] [NAME] claimed the call had been very stressful and that [NAME] [NAME] had bullied him, demanding that he should meet her “at 1 pm tomorrow”, though [NAME] [NAME] denied this. Second inspection of the [NAME]

23. A meeting was arranged, and, on 12 August 2022, [NAME] [NAME] carried out an inspection of the [NAME] in the presence of [NAME] [NAME] and [NAME] [NAME]. 24. [NAME] [NAME] said the appointment had been rearranged on that date for the convenience of [NAME] [NAME], and that [NAME] [NAME] had wanted him to understand the requirements should he apply to be the new licence holder. [NAME] [NAME] said that she “behaved in a professional manner” when she arrived at the [NAME]. However, her

7 visit was cut short because of [NAME] [NAME] angry behaviour and tone, such that she felt threatened and scared. She had called her manager, [NAME] [NAME], who had spoken to [NAME] [NAME] “to calm him down”.

25. At the hearing, [NAME] [NAME] complained loudly about [NAME] [NAME] description of the inspection on 12 August. He said this description was “totally false” and a “blatant lie”. He said that he was not rude to women, and it had been the other way around: [NAME] [NAME] had bullied him at the [NAME]. He accused her of dishonesty and abuse of power, and it was all part of a personal attack upon him, a vendetta.

26. The Tribunal gave [NAME] [NAME] the opportunity to respond to [NAME] [NAME] allegations. She said that her intention had been to work with [NAME] [NAME], not against him. She said that the whole approach of the council was to work with landlords to cure breaches: [NAME] grants licences without an inspection, then inspects the [NAME] and gets work done, so that landlords get longer licence when they reapply. In the spirit of cooperation, [NAME] was generous with its deadlines. She had noticed the failings of the [NAME] on 12th August 2022 without [NAME] been able to conduct a full visit or taking photographs, as she would normally have done. She said that she felt unsafe because of the way [NAME] [NAME] was speaking to her. He was angry and she had therefore phoned her manager for support.

27. When [NAME] [NAME] gave evidence, he confirmed that he received a call from [NAME] [NAME] and that “there was loud talking” in the background. He had spoken to [NAME] [NAME] and after the call he had said to [NAME] [NAME] that he was not comfortable that she should remain at the [NAME] and that she should abort the inspection. 28. [NAME] heard both sides, the tribunal prefers the evidence of [NAME] [NAME] as to what happened at the [NAME] on 12 August 2022. Her tone in giving evidence was far more measured than [NAME] [NAME], who was somewhat angry and forceful. Furthermore, [NAME] [NAME] evidence was corroborated by her manager, who had heard raised voices at the [NAME] down the telephone.

29. However, while the charged atmosphere at the [NAME] is most regrettable, what was said and how it was said do not have a material effect on the Tribunal’s decision.

30. Shortly after the inspection, [NAME] [NAME] wrote to [NAME] [NAME] to give him a final 21 days to complete all outstanding works, stating that she would re-inspect on 8 September 2022 “and if any works are pending enforcement action will proceed immediately.” [NAME] [NAME] replied on 17 August 2022 to say that, after careful consideration, he had decided not to stop his tenant’s [NAME]. As [NAME] [APPELLANT] was personally “unfit to hold any HMO responsibility” due to his serious health condition, he asked [NAME] [NAME] to take up the outstanding list of work directly with his tenant, [NAME] [APPELLANT], who

8 had confirmed his intention to become the licence holder and complete the work.

31. Almost immediately, [NAME] [NAME] replied, also on 17 August 2024, to say that [NAME] [NAME] had had sufficient time to complete the works, irrespective of his tenant’s involvement, that as licence holder [NAME] [APPELLANT] was ultimately responsible for complying with all the conditions of the licence and, if he did not do so, he would be referred to the council’s legal team. [NAME] [NAME] also said that the HMO licence could not be transferred “so therefore, until there is another named person, you remain culpable.” 32. Meanwhile, [NAME] [NAME] gave evidence about events in August 2022, when he corresponded with [NAME] [NAME] [NAME], who was keen to obtain his own HMO licence. [NAME] [NAME] produced a medical report on 23 August 2022 outlining his health conditions and, in an email of 24 August 2022, purported to resign as the licence holder due to poor health and proposed [NAME] [NAME] in his place. Third and final inspection of the [NAME]

33. On 8 September 2022, [NAME] [NAME] and [NAME] [NAME] re-inspected the [NAME] together and found that works that had been on the original compliance schedule of 3 March 2022 had still not been completed. In particular, the [NAME] still had no mains fire alarm system, and there were no notices to the occupants giving them safety and contact information. Notice of Intent to issue a final penalty 34. [NAME] [NAME] gave evidence that she prepared the Notice of Intent to issue a financial penalty in relation to offences committed under sections 72 and 234 of the Housing Act 2004. The Notice of Intent proposed a financial penalty of £5,000. It was dated 30 September 2022 and sent to [NAME] [NAME] by letter dated 5 October 2022. Although it did not impose a penalty, unusually, if offered a 20% discount to £4,000 if [NAME] [NAME] paid by 2 November 2022.

35. Also on 5 October 2022, [NAME] [NAME] sent an email to [NAME] [NAME] to confirm that all the outstanding compliance work had been done at the [NAME] except for the fire alarm. The email appeared to have been prepared earlier, because it referred to dates in September when the work would be completed. Regarding the fire alarm, [NAME] [NAME] said that he had been let down by his electrician but had now found another, who would finish the work on 14 September 2022. He asked for a telephone call after he returned from holiday on 23rd September to complete his licence [NAME].

36. An email from an electrician, [NAME], on 6 October 2002 confirmed that he had been instructed to install the fire alarm; and he made an enquiry on 17 November to check that the council would be happy with a hard-wired interlinked fire alarm system with battery

9 backup. [NAME] [NAME] confirmed on 18 November that that would be fine. 37. [NAME] [NAME] responded to the Notice of Intent on 26 October 2022, [NAME] representations that: he had not committed any offence; it was his tenant sub-letting that had caused the [NAME] to become an HMO, not him; he was not controlling or managing the [NAME] and, therefore, he was wrongly appointed a licence holder; when he was appointed, he had not been given any guidance or explanation about the duties and responsibilities of a licence holder and, had these been explained, he would not have become one; furthermore, he was medically unfit to hold the licence. Given that his tenant [NAME] [APPELLANT] had taken full responsibility for his subtenants and managing and controlling the HMO, [NAME] [NAME] invited the council to withdraw the Notice of Intent and deal directly with [NAME] [NAME]. Review of the council’s decision 38. [NAME] carried out a review of the Notice of Intent to issue a financial penalty and issued a Notice of Review dated 2 December 2022. In short, the Review concluded that: [NAME] [NAME] had had sufficient time to complete the works and, by failing to do so, he had committed offences as the licence holder and the person responsible; [NAME] [NAME] was the “person in [NAME]” of the HMO because he received the rack-rent and, while his tenant might also be liable in relation to his conduct and have committed an offence under another provision, it was [NAME] [NAME], the licence holder, who had agreed to be bound by the licence conditions; [NAME] [NAME] had had ample time during the [NAME] process to peruse the licence [NAME] form to see what it entailed and what was required, he had been advised on several occasions to consider choosing someone else to be the licence holder (given his health), but he had still applied for an HMO licence in his own name; and the penalty remained at £5,000 “because the offences found during the inspection were serious and posed a high level of potential harm to the occupants, in that there were no early warning signs or mains wired smoke or heat detection system to alert the [NAME] in the event of a fire”.

39. On 6 December 2022, the HMO licence issued to [NAME] [NAME] expired, without him [NAME] made an [NAME] to extend it; but nothing turns on this with regards to this appeal.

40. On 12 December 2022, [NAME] [NAME] responded to the Notice of Review, by writing to [NAME] [NAME], the Head of Private Housing Services. In his detailed letter, supported by two medical reports, [NAME] [NAME] explained the delays in doing the works were due to his ill health and the problems finding tradesmen during the summer; and he complained about the case officer’s “aggressive and bullying” attitude and the fact she rushed to impose a penalty. He provided a list of “mitigating factors” including “prompt acceptance of responsibility” and “that full compliance will be done”, immediately replacing 11 doors

10 with fire doors, his good character, the lack of harm to anyone and no complaints from his tenant or his sub-tenants.

41. Meanwhile, on 19 December 2022, [NAME] [NAME] made an [NAME] in his own name for an HMO licence in respect of the [NAME]; and, in due course a new 5-year HMO licence was granted to [NAME] [NAME] for up to 10 occupants in the [NAME] (now that additional kitchen facilities had been provided), with effect from that date. The Final Notice 42. On 25 January 2023, [NAME] council sent a Final Notice to [NAME] [NAME] confirming a financial penalty for £5,000, with a 10% discount to £4,500 for early payment. The Final Notice was accompanied by a copy of the council’s matrix used for calculating the amount of the penalty, reasons and an explanation of how the penalty was calculated.

43. On 7 February 2023, the installation of a fire alarm system in the [NAME] was certified.

44. On 21 February 2023, [NAME] [NAME] submitted this appeal against the financial penalty to the Tribunal, with detailed Grounds for Appeal. [NAME] [NAME] evidence and arguments 45. [NAME] [NAME] did not produce a witness statement of his evidence but relied upon his written Grounds for Appeal and his oral evidence and submissions at the hearing. Written Grounds for Appeal 46. In his written Grounds for Appeal, [NAME] [NAME] stated that [NAME]’s decision to issue a penalty notice was flawed because it failed to take into account his health conditions and all the circumstances of the case. He also did not think that the enforcement officer (by which he meant [NAME] [NAME]) had used her power properly, believing that she “has failed to consider essential facts and behaved unreasonably, has been inconsiderate and acted spitefully towards me.” 47. [NAME] [NAME] placed emphasis on a telephone call he received from [NAME] [NAME] on 5 August 2022 seeking to arrange a meeting at the [NAME]. He claimed that she had started by accusing him of not doing any compliance work, but he had in fact carried out a number of remedial works. He found her tone bullying, offensive and rude. He met [NAME] [NAME] at the [NAME] on 12 August 2022 and complained again about what he said was her bullying and rude behaviour. He claimed that when he told [NAME] [NAME] that he was sick and unable to take her pressure, she said that she could not care whether he was sick or dying.

48. In support of the appeal, [NAME] [NAME] emphasised his health issues,

11 the difficulty [NAME] in getting tradesmen and the high cost of the compliance work, which he said required a £25,000 loan which he was unable to borrow from a bank given his age (69 years). Nonetheless, “I made no excuse and still worked very hard to get a number of compliance work completed.” 49. The dispute about what did or did not take place at the [NAME] on 12 August 2022 has been dealt with earlier in this decision. In his Grounds for Appeal, [NAME] [NAME] talked about [NAME] [NAME] “unusual and erratic behaviour” and said that he “knew she decided to get me”. As a result, her decision to impose a financial penalty on him “is unfair, oppressive and ego serving” and the penalty should be withdrawn. 50. [NAME] [NAME] added that he did not set up an [NAME] but had merely rented his [NAME] to an [NAME] and his family. Without his knowledge, they had sublet the [NAME] to a few other individuals, [NAME] it an HMO. He had agreed to take up the HMO licence but without knowing the full extent of the client compliance work and the money that it would involve. While the [NAME] form had many questions, it had none about the licence holder’s health. He said that if it had it done so, he would not have gone for the licence and that he was not fit and proper to hold an HMO licence. However, although medically unfit, he nevertheless completed a good deal of remedial work until 15 July 2022 after which his health condition deteriorated. His doctor advised him to take bed rest to avoid a heart attack and, upon advice, he submitted his resignation from holding the HMO licence on 24 August 2022. 51. [NAME] [NAME] felt strongly that, [NAME] resigned, [NAME] should not have gone after him. He was aggrieved that he had been punished when he should have been resting. He outlined disagreements with [NAME] [NAME] statements to demonstrate her “unjustified wrong intentions towards me” and to show that her evidence could not be relied upon. He listed the work that he had carried out, namely the installation of 11 fireproof doors, installing window restrictors on several windows, buying a fire extinguisher and fire blanket, giving all the occupants his telephone number and that of the manager (presumably, [NAME] [NAME]), [NAME] a valid gas certificate and a electrical installation condition report, coupled with the ongoing search for an electrician who was qualified to install a fire alarm.

52. His conclusion was that “any reasonable person would not have penalised me, not when so much work have been accomplished and at an unprecedented time when we are all faced with a biting recession, huge energy price rise and cost of living crisis.” He concluded that to set a time deadline and expect it to be achieved, when the council had not provided any funding, help or contractor, was oppressive and unrealistic. [NAME] [NAME] said that if he were called to attend the Tribunal, he would produce documents to show how much he had worked to find an electrician and skilled people to install the fire alarm (though there were no such documents at the hearing). Regarding his

12 health issues, he said “anyone reading my medical report would not have taken such harsh action”. He said that the financial penalty would not serve any useful purpose and to say that it would serve to deter repetition, was “surely not applicable in my case.” Evidence and submissions at the hearing 53. At the hearing, [NAME] [NAME] did not dispute that the [NAME] was an HMO, nor that it required to be licensed. In oral evidence, he said that he was not disputing the law, but he was still appealing to set aside the financial penalty. [NAME] [NAME] amplified his grounds for appeal, emphasising that this was in a difficult post-Covid period, the range and extent of the works that he had carried out, and that he had no real [NAME] of the [NAME], [NAME] acquired it 30 years ago but [NAME] sublet it for the past 10 years to [NAME] [NAME] and his family. He denied [NAME] broken any rules, blaming his tenant for creating the HMO. When he first heard about the council’s concerns, his initial reaction was to serve a notice to quit on [NAME] [NAME], but he said the council had asked him not to do so because that would make people homeless. 54. [NAME] [NAME] denied he was a [NAME] or managing the [NAME], because [NAME] [APPELLANT] was his tenant and dealt with the occupants. He also said that he only received £1,800 rent per month and claimed (without evidence) that each of the seven current occupants were paying [NAME] [NAME] £1,000 each per month. 55. [NAME] [NAME] also said that had not known what taking on an HMO licence would entail, suggesting that he had been deceived by the council and hooked into applying. Again, he blamed his ill-health for the difficulties in finding an electrician. He reiterated that the issue of a financial penalty was more of a personal attack on him, particularly by [NAME] [NAME], who was bullying and caused him stress. He complained about her “blatant lies” regarding the meeting at the [NAME] on 12 August 2022 and said that she should have given him the option of more time to complete the works. Overall, her approach, and that of the council, was not fair and an abuse of power. The Tribunal’s decision 56. The Tribunal confirms the financial penalty of £5,000 imposed by the London Borough of [NAME] in respect of the offence committed by [NAME] [NAME] under section 72(3) of the Housing Act 2004 (breach of a licence condition), but not in respect of the alleged offences under the Management of Houses in Multiple Occupation (England) Regulations 2006, which were not proved.

57. The penalty should be paid to the [NAME] within 42 days of the date of this decision.

13 The Tribunal’s reasons 58. Financial penalties were introduced by the Housing and Planning Act 2016 (“the 2016 Act”). The 2016 Act amended the Housing Act 2004 (“the 2004 Act”) by inserting section 249A and Schedule 13A. These provisions enable [NAME] to impose financial penalties of up to £30,000 in respect of a number of offences under the 2004 Act, as an alternative to prosecution.

59. Subsection 249A(1) of the 2004 Act provides that a local authority may only impose a financial penalty if satisfied beyond reasonable doubt that [NAME]’s conduct amounts to a relevant housing offence. The Tribunal must also be satisfied to the criminal standard of proof that an offence has been committed. 60. [NAME] (“the Guidance”) has been issued under paragraph 12 of Schedule 13A. The Guidance encourages each local authority to develop their own policy for determining the appropriate level of penalty; and the maximum amount should be reserved for the worse offenders.

61. The Guidance advises that the following factors must be taken into account when deciding on the level of the civil penalty, namely: • The severity of the offence, • The culpability and track record of the offender, • The harm (or potential for harm) caused to the tenant, • Punishment of the offender, • Deter the offender from repeating the offence, • Deter others from committing similar offences, and • Remove any financial benefit the offender may have obtained.

62. In [NAME] v Waltham Forest LBC [2020] UKUT 35 (LC), the Upper Tribunal confirmed that when dealing with an appeal against a Financial Penalty, a First-tier Tribunal should start with the local housing authority’s policy and apply it as if “standing in the shoes of the local authority”. Moreover, although the appeal is conducted as a re- hearing, the Tribunal must consider the authority’s original decision (i) to impose the Financial Penalty and (ii) as to the level of the penalty set under the Policy. The Tribunal must afford those decisions “considerable weight” and “great respect”. In the subsequent decision of Gateshead Borough Council v [COMPANY] [2023] UKUT 35 (LC), the Upper Tribunal emphasised that a First-tier Tribunal must make its own decision. Its role is not to review the decision made by the local housing authority.

14 Liability 63. We consider first the primary liability of the Applicant – that is, whether the offence is made out – before we consider the statutory defence of reasonable excuse in sections 72(5) and 234(4) of the 2004 Act.

64. There is no dispute that: • [NAME] [NAME] is the owner of the [NAME] (with his wife) and that he receives £1,800 per month for renting it out to his tenant, [NAME] [APPELLANT], • In June 2021 and at the time of the alleged offence, the [NAME] was occupied by seven unrelated people, • At all material times, including between 16 July and 12 August 2022, the [NAME] was an HMO that required to be licensed, and • [NAME] [NAME] applied for and held an HMO licence for the [NAME] between 6 December 2021 and 6 December 2022.

65. The question is whether on the relevant dates, between 16 July and 12 August 2022, we are satisfied beyond reasonable doubt that [NAME] [NAME] committed the offences as alleged in the Final Notice and the Schedule of Offences. The first alleged offence: section 72(3)(b)

66. The first alleged offence was under section 72(3)(b) of the 2004 Act. For convenience, the relevant parts of section 72 are set out below (underlining added): “72 Offences in relation to licensing of HMOs (1) [NAME] commits an offence if he is a [NAME] of or managing an HMO which is required to be licensed under this Part (see section 61(1)) but is not so licensed. (2) [NAME] commits an offence if– (a) he is a [NAME] of or managing an HMO which is licensed under this Part, (b) he knowingly permits another person to occupy the house, and (c) the other person’s occupation results in the house being occupied by more households or persons than is authorised by the licence. (3) [NAME] commits an offence if– (a) he is a licence holder or [NAME] on whom restrictions or obligations under a licence are imposed in accordance with section 67(5), and (b) he fails to comply with any condition of the licence. (4) In proceedings against [NAME] for an offence under

15 subsection (1) it is a defence that, at the material time– (a) a notification had been duly given in respect of the house under section 62(1), or (b) an [NAME] for a licence had been duly made in respect of the house under section 63, and that notification or [NAME] was still effective (see subsection (8)). (5) In proceedings against [NAME] for an offence under subsection (1), (2) or (3) it is a defence that he had a reasonable excuse– (a) for [NAME] [NAME] of or managing the house in the circumstances mentioned in subsection (1), or (b) for permitting the person to occupy the house, or (c) for failing to comply with the condition, as the case may be. (6) [NAME] who commits an offence under subsection (1) or (2) is liable on summary conviction to [a fine]. (7) [NAME] who commits an offence under subsection (3) is liable on summary conviction to a fine not exceeding level 5 on the standard scale. (7A) See also section 249A (financial penalties as alternative to prosecution for certain housing offences in England). (7B) If a local housing authority has imposed a financial penalty on [NAME] under section 249A in respect of conduct amounting to an offence under this section the person may not be convicted of an offence under this section in respect of the conduct.”

67. It is important to note that [NAME] [NAME] is not accused of an offence under section 72(1) or (2), which require him to be [NAME] “[NAME] [NAME] of or managing an HMO”, but under section 72(3), which merely refers to [NAME] being “a licence holder”.

68. The alleged offence is that [NAME] [NAME], being a licence holder of the HMO, he failed to install the required and stipulated smoke alarm(s) in the [NAME] in breach of Condition 21 of the [NAME] licence, contrary to Section 72(3)(b) Housing Act 2004.

69. The evidence of inspections of the [NAME] on 2 March, 8 August and 12 September 2022 demonstrate, and [NAME] [NAME] accepts, that smoke alarms had not been installed in the [NAME] on those dates, despite their being a requirement of Condition 21 of the HMO licence. Therefore, subject to any reasonable excuse, the Tribunal is satisfied beyond reasonable doubt that the conditions of section 72(3) of the 2004 Act are met, and that [NAME] [NAME] had committed this offence.

16 The second and third alleged offences: 234(3) and the Management Regulations 70. The two alleged offences related to breaches of the Management Regulations, were: (i) A failure to provide information to the occupants and ensure that such details were displayed in a prominent position in within the HMO (regulation 3), and (ii) A failure to take all measures reasonably required to protect the [NAME] from injury, including a failure to provide a mains fire alarm system, providing only one fire blanket, [NAME] no heat detection system in the [NAME] and no valid BS5839 [fire detection] certificate or electric condition report (regulation 4(4)).

71. The listed failings under the Management Regulations are all breaches of conditions of the HMO licence as well (condition 36 for the regulation 3 offence and conditions 21, 23, 27 and 30 for the regulation 4(4) offence) and they could equally have been included within the first offence under section 72(3). Indeed, the failure to provide a mains fire alarm duplicates the first offence and appears to add nothing to it. When the Tribunal asked at the hearing why [NAME] had specified offences under the Management Regulations rather than just relying on the offence for breach of licence conditions under section 72(3), the reply was that the conditions and Management Regulations “go hand in hand”.

72. Be that as it may, the relevant wording of section 234 of the Act, including the offence is sub-section (3), is as follows (underlining added): “234 Management regulations in respect of HMOs (1) The appropriate national authority may by regulations make provision for the purpose of ensuring that, in respect of every house in multiple occupation of a description specified in the regulations— (a) there are in place satisfactory management arrangements; and (b) satisfactory standards of management are observed. (2) The regulations may, in particular— (a) impose duties on the person managing a house in respect of the repair, maintenance, cleanliness and good order of the house and facilities and equipment in it; (b) impose duties on persons occupying a house for the purpose of ensuring that the person managing the house can effectively carry out any duty imposed on him by the regulations. (3) [NAME] commits an offence if he fails to comply with a regulation under this section.

17 (4) In proceedings against [NAME] for an offence under subsection (3) it is a defence that he had a reasonable excuse for not complying with the regulation. (5) [NAME] who commits an offence under subsection (3) is liable on summary conviction to a fine not exceeding level 5 on the standard scale. (6) See also section 249A (financial penalties as alternative to prosecution for certain housing offences in England). (7) If a local housing authority has imposed a financial penalty on [NAME] under section 249A in respect of conduct amounting to an offence under this section the person may not be convicted of an offence under this section in respect of the conduct.”

73. The relevant wording of the Management Regulations is as follows (underlining added): “Interpretation 2. In these Regulations— (a) “the Act” means the Housing Act 2004; (b) […]; and (c) “the manager”, in relation to an HMO, means the person managing the HMO. Duty of manager to provide information to [NAME]

3. The manager must ensure that— (a) his name, address and any telephone contact number are made available to each household in the HMO; and (b) such details are clearly displayed in a prominent position in the HMO. Duty of manager to take safety measures 4.— (1) The manager must ensure that all means of escape from fire in the HMO are— (a) kept free from obstruction; and (b) maintained in good order and repair. (2) The manager must ensure that any fire fighting equipment and fire alarms are maintained in good working order. (3) Subject to paragraph (6), the manager must ensure that all notices indicating the location of means of escape from fire are displayed in positions within the HMO that enable them to be clearly visible to the [NAME]. (4) The manager must take all such measures as are reasonably required to protect the [NAME] of the HMO from injury, [NAME] regard to— (a) the design of the HMO;

18 (b) the structural conditions in the HMO; and (c) the number of [NAME] in the HMO.”

74. As will be seen, the offence under section 234(3) is committed by “[NAME]” who fails to comply with the Management Regulations, but those regulations impose duties on “the manager” of the HMO.

75. In his appeal, [NAME] [NAME] denied that he was either in [NAME] of or managing the HMO. The meaning of “[NAME]” and “person managing” is to be found in section 263 of the 2004 Act, which reads as follows (underlining added): “263 Meaning of “[NAME]” and “person managing” etc. (1) In this Act “[NAME]”, in relation to premises, means (unless the context otherwise requires) the person who receives the rack-rent of the premises (whether on his own account or as agent or trustee of another person), or who would so receive it if the premises were let at a rack-rent. (2) In subsection (1) “rack-rent” means a rent which is not less than two-thirds of the full net annual value of the premises. (3) In this Act “person managing” means, in relation to premises, the person who, being an owner or lessee of the premises– (a) receives (whether directly or through an agent or trustee) rents or other payments from– (i) in the case of a house in multiple occupation, persons who are in occupation as tenants or licensees of parts of the premises; and (ii) in the case of a house to which Part 3 applies (see section 79(2)), persons who are in occupation as tenants or licensees of parts of the premises, or of the whole of the premises; or (b) would so receive those rents or other payments but for [NAME] entered into an arrangement (whether in pursuance of a court order or otherwise) with another person who is not an owner or lessee of the premises by virtue of which that other person receives the rents or other payments; and includes, where those rents or other payments are received through another person as agent or trustee, that other person. (4) In its [NAME] to Part 1, subsection (3) has effect with the omission of paragraph (a)(ii). (5) References in this Act to any person involved in the management of a house in multiple occupation or a house to which Part 3 applies (see section 79(2)) include references to the person managing it.”

76. More than one person can have [NAME] of and be a manager of an HMO, and the two candidates at the [NAME] are [NAME] [APPELLANT] and

19 his tenant, [NAME] [APPELLANT]. 77. [NAME] [APPELLANT] submitted that he was neither in [NAME] of nor managing the HMO at the [NAME], he is [NAME] who receives the rack-rent of the premises (as a whole) from [NAME] [NAME]. Therefore, at the very least, by section 263(1), he is [NAME] “in [NAME] of” the premises.

78. However, the offence under section 234 and the Management Regulations does not rely upon or refer to [NAME] being “in [NAME]” (or, for that matter, to a “licence holder” as appears in the Schedule of Offences). Rather, the regulations only refer to the “manager” of the HMO which, by regulation 2(3), means the “person managing the HMO”. This, in turn, is defined by section 263(3) of the 2004 Act.

79. Recent cases have looked at the meaning of “person managing” premises for the purpose of 2004 Act: Cabo v Dezotti [2022] UKUT 240 (LC) (02 September 2022), [NAME] v [COMPANY] [2023] UKUT 306 (LC) (20 December 2023) and [COMPANY] v [NAME] & [NAME] [2023] EWCA Civ 1243 (27 October 2023). What emerges from these cases is that a “person managing” an HMO within section 263(3) must be “an owner or lessee” of the premises; and, as freeholder, [NAME] [NAME] satisfies this test. Thereafter, there is a distinction between [NAME] who receives rents from the occupants, in section 263(3)(a), and [NAME] who does not receive those rents because of an arrangement with another person, in section 263(3)(b).

80. So far as section 263(3)(a) is concerned, the person must be one who “receives (directly or through an agent or trustee) rents or other payments from, in the case of a house in multiple occupation, persons who are in occupation as tenants or licensees of parts of the premises”. In the Tribunal’s judgment, [NAME] [NAME] does not satisfy this section because he receives rent from only one person ([NAME] [NAME]) for the whole of the premises, not rents from several persons who occupy parts of the premises (the quoted words in section 263(3)(a) all being in the plural).

81. Turning next to section 263(3)(b), there are three requirements, as explained by [COUNSEL] KC in Cabo v [COUNSEL] [54-58]: (i) The first requirement is that [NAME] [NAME] must not have been receiving those rents or other payments referred to section 263(3)(a). That was the import of [NAME] [NAME] evidence: he only received £1,800 per month from [NAME] [NAME] for the rental of the whole [NAME], and he contrasted that with the £7,000 per month he assumed [NAME] [NAME] was receiving from the other occupants to whom he sub-let the rooms in the [NAME] [though with six other occupants, the appropriate calculation may have been £6,000 per month]. As with the preceding paragraph, the Tribunal is satisfied that [NAME] [NAME] did not receive rents or other payments from the

20 occupants of parts of the premises, and so he satisfies this requirement, (ii) The second requirement is that [NAME] [NAME] would have received the rents from the [NAME] of the [NAME] “but for [NAME] entered into” an agreement with [NAME] [NAME], the effect of which was to allow [NAME] [NAME] to keep all the rents from the occupants, so that [NAME] [NAME] was not in a position to receive rent or other payments from those in occupation. In Cabo v [NAME], a similar arrangement was held “to be sufficient to demonstrate the required causal connection between the arrangement and the non-receipt of rent.” [56], (iii) The third requirement is that the arrangement was made with another person who was not an owner or lessee of the [NAME]. While satisfied in Cabo v Dezotti, this requirement was not satisfied in [NAME] v [COMPANY], where the person receiving payments from the occupants had been lessee of the [NAME]. In this case, [NAME] [NAME] evidence was that he had sub-let the whole of the [NAME] to [NAME] [NAME]. Although he did not produce a copy of any tenancy agreement, this was his uncontested evidence at the hearing and [NAME] appears to accept it, as they have now issued an HMO licence to [NAME] [APPELLANT] as tenant of the [NAME]. Therefore, [NAME] [APPELLANT] does not satisfy this requirement and he is not a “person managing” the premises.

82. As [NAME] [NAME] is not [NAME] managing the premises under the 2004 Act, it follows that he is not a “manager” for the purposes of the Management Regulations. That being the case, the Tribunal is not satisfied beyond all reasonable doubt that [NAME] [NAME] has committed any of the offences alleged under section 234 of the 2004 Act and the Management Regulations.

83. The fact that he may have committed equivalent offences under section 72(3) in his capacity as “a licence holder” is nothing to the point: those offences were not specified in the Final Notice or in the Schedule of Offences in the hearing bundle.

Reasonable excuse defence 84. Regarding the offence for which the Tribunal has found primary liability, namely that as licence holder [NAME] [NAME] failed to install the required and stipulated smoke alarm(s) in the [NAME] in breach of Condition 21 of the [NAME] licence, contrary to Section 72(3)(b) of the 2004 Act, [NAME] [NAME] did not expressly argue that he had a reasonable excuse for his actions. However, the Tribunal nonetheless considered whether what [NAME] [NAME] said in his Grounds for Appeal and oral evidence and submissions, amounted to a reasonable excuse for [NAME] committed an offence, under section 72(5) of the

21 2004 Act.

85. We remind ourselves that it is for [NAME] [APPELLANT] as appellant to satisfy us, on the balance of probabilities, that the reasonable excuse is made out (see [COMPANY] v Salford City Council [2020] UKUT 81 (LC)).

86. The Upper Tribunal gave general guidance on the correct approach to what may be a reasonable excuse under section 72(5) in Marigold and Others v Wells [2023] UKUT 33 (LC). In that case, the Deputy President draws attention to the tax case of Perrin v HMRC [2018] UKUT 156 (TCC) at paragraph [47] and following. At paragraph [48], the Deputy President commended the following approach, quoting Perrin: “(1) First, establish what facts the taxpayer asserts give rise to a reasonable excuse (this may include the belief, acts or omissions of the taxpayer or any other person, the taxpayer’s own experience or relevant attributes, the situation of the taxpayer at any relevant time and any other relevant external facts). (2) Second, decide which of those facts are proven. (3) Third, decide whether, viewed objectively, those proven facts do indeed amount to an objectively reasonable excuse for the default and the time when that objectively reasonable excuse ceased. In doing so, it should take into account the experience and other relevant attributes of the taxpayer and the situation in which the taxpayer found himself at the relevant time or times. It might assist the FTT, in this context, to ask itself the question ‘was what the taxpayer did (or omitted to do or believed) objectively reasonable for this taxpayer in those circumstances?’” 87. [NAME] [NAME] was first alerted to the need to apply for an HMO licence in June 2021. [NAME] preferred him to be the licence holder because he was the freeholder, but he did not have to be. He was given three opportunities by the council to nominate someone else, offers that were made primarily to reflect [NAME] [NAME] ill-health. Nonetheless, he applied for a licence in his own name, completing a detailed [NAME] form with numerous questions relating to the condition of the [NAME] and he presented himself as the prime contact. When the licence was granted on 6 December 2021, [NAME] [NAME] was given details of all of the obligations of a licence holder, including all of the conditions to which the [NAME] must comply. The [NAME] was then overcrowded with seven occupants, but he was given time to allow the existing tenancy agreements to run their natural course rather than [NAME] to evict anyone. The council explained that if [NAME] [NAME] wanted more people in the [NAME] than the five authorised by the licence, he needed to make improvements to the facilities in the kitchen. This was not a requirement; it was merely an option.

22 88. On 2 March 2022, the council carried out a thorough inspection of the [NAME] and provided [NAME] [NAME] with a detailed inspection report [NAME] it crystal clear, by reference to the conditions on the licence, what he had to do to put the [NAME] into an acceptable state. [NAME] gave [NAME] [NAME] several extensions of time to carry out the work.

89. The Tribunal acknowledges that this was in the post-Covid pandemic period, but the third and last lockdown had been lifted, and all restrictions had come to an end by July 2021 and the national health emergency had largely passed. [NAME] [NAME] provided no evidence of his attempts to engage tradesmen to carry out the work necessary at the [NAME], nor of the problems that he said that he had encountered, and the Tribunal considers the time provided by the council was sufficient to complete the works, or to make much greater progress in doing so.

90. The Tribunal accepts that [NAME] [NAME] is ill. His medical reports confirm this. However, his health did not prevent him from applying for and obtaining the HMO licence and did not prevent him organising the replacement of 11 fire doors and installing window restrictors. The Tribunal is sympathetic to [NAME] [NAME] health condition, but there is nothing to suggest that it prevented him from organising tradesmen to carry out the necessary work at his [NAME], or to arrange for his tenant [NAME] [APPELLANT] to do so on his behalf.

91. The Tribunal also accepts that [NAME] [NAME] was under pressure from the council to comply with the licence conditions. However, it accepts [NAME] [NAME] evidence that the council was looking to work with [NAME] [NAME] to ensure the improvements to the [NAME] were made, so that his licence could be renewed for a five-year period. The Tribunal does not consider the pressure was untoward. The Tribunal rejects [NAME] [NAME] allegation of bullying or victimisation by the council’s officers and prefers their evidence that it was [NAME] [NAME] who was, at times, angry and confrontational. The problem was simply that [NAME] [NAME] did not take up the opportunity presented by the extensions of time given to him to do the necessary work.

92. The inspection on 12 August 2022 came more than one year after the requirement for an HMO licence was notified to [NAME] [NAME] and more than eight months after the issue of the HMO licence. In the Tribunal’s view, [NAME] [NAME] omission to carry out work required by the council amounted to prevarication on his part. He had months in which to carry out the work and extensions of time to deal with what were serious fire safety issues in a [NAME] that was overcrowded. He suggested that he could not afford the work or raise a loan but provided no evidence to support these contentions. Nor was there any evidence of the efforts he did or did not make to include his tenant in carrying out the work, beyond the fact that [NAME] [APPELLANT] was at the [NAME] on 12 August 2022, and that he entered into correspondence with the council about the possibility of applying for an HMO licence in his own name, which he eventually did.

23 93. Taking all these factors into consideration, the Tribunal is not satisfied that what [NAME] [NAME] did or omitted to do was objectively reasonable for him in these circumstances. It follows that on the basis of the evidence heard, the Tribunal is not satisfied on the balance of probabilities that the defence of reasonable excuse is made out in respect of the period in which the primary offence was committed, namely 16 July to 12 August 2022.

94.

Accordingly, we find beyond a reasonable doubt that [NAME] [NAME] committed the offence under section 72(3)(b) of the 2004 Act, and, on a balance of probabilities, we reject the proposition that he had a reasonable excuse. The amount of the civil penalty 95. We turn now to the amount of the financial penalty imposed.

96. The procedure followed by [NAME] to impose a financial penalty and the amount of that penalty are described in the Reasons attached to the Notice of Intent prepared by [NAME] [NAME], the Review decision and the Reasons attached to the Final Notice. 97. [NAME] [NAME] had regard to [NAME]’s enforcement policy, which guides council officers to a matrix of four factors to be taken into account and a system of points scoring according to the severity of the circumstances, offences and outcomes.

98. For completeness, the matrix is set out below. It will be noted that the points score for the last row is to be doubled in determining the final penalty charge, as it relates to the potential harms to the tenants of the [NAME] which arise from the offences.

Factors Score = 1 to 7 Score = 8 to 14 Score = 15 to 20 1-Deterrence & Prevention High confidence that a financial penalty will deter repeat Offending. Publicity not required as a deterrence, Medium confidence that a financial penalty will deter repeat offending. Some publicity will be required as a deterrence in the landlord community. Low confidence that a financial penalty will deter repeat offending. Mass publicity will be required as a deterrence in the landlord community. 2-Removal of Financial Incentive No significant assets and low financial profit made by offender. Small landlord/ agent managing up to 5 properties and/or some rental income retained. Portfolio landlord/agent running over 5 rental properties.

24 3-Offence & History No previous history and single low offence. More than one recent offence and/or moderate level offence(s). Multiple and/or continuous serious offences. 4- Harm to tenants – DOUBLE WEIGHTING Low potential harm to tenants and single household dwelling. Moderate potential harm to tenants and/or small HMO with up to 5 tenants, High level of potential harm to occupants, continuous impact and/or large HMO with more than 5 occupants

99. The fixed penalty charges associated with the scores produced by the matrix are as follows: Score Range Penalty Charge Score Range Penalty Charge 1-5 £300 51-60 £10,000 6-10 £500 61-70 £15,000 11-20 £750 71-80 £20,000 21-30 £1,000 81-90 £25,000 31-40 £2,500 91-100 £25,000 41-50 £5,000

100. In the present case, [NAME] proceeded from the basis that (according to the Final Notice): “The condition of the [NAME] indicates several breaches of Mandatory Licencing Conditions in relation to the management and fire safety at the [NAME]. In addition to this, there were failures in relation to HMO Management Regulations 2006.” 101. [NAME] then assigned the following points for each of the factors, with the reasons given in each case: • Row 1 – Deterrence and Prevention: 4 points.

In the Final Notice, the reasons given were: “Fairly high confidence that a financial penalty will deter repeat offending, however as the landlord has not complied with the schedule even after many months, it has been reflected in the scoring”. In oral evidence, [NAME] [NAME] said she had chosen 4 points because 1 point was too low where items of work were still outstanding, and 7 points would be too high, where there had been some compliance. [NAME] [NAME] had submitted that there was no need for any deterrence in this case, deterrence is a factor explicitly mentioned as one of the purposes of imposing a financial penalty in the [NAME] and,

25 therefore, it is appropriate to take it into account in the council’s matrix. The Tribunal therefore endorses this score.

• Row 2 – Removal of Financial Incentive: 8 points.

The reasons were: “[NAME] [RESPONDENT] is a small landlord and he has an AST with [NAME] [RESPONDENT] [NAME] who pays him £1,800 per calendar month. In an email dated 18th August 2022, [NAME] [NAME] [NAME] stated that him and his friends have lived in the [NAME] for 10 years. However, the [NAME] has only been licenced since December 2021, after failure to licence investigation by [NAME].” In oral evidence, [NAME] [NAME] said that the first column of the matrix was not relevant because [NAME] [NAME] did have assets and he had been accepting rent from the [NAME] for 10 years. [NAME] [NAME] should have applied for a licence when the council brought in its additional licencing scheme on 1st January 2015 and, in any event, a change in the law in 2018 removed the three-storey requirement for mandatory licencing of HMOs. She chose 8 points for this factor, being the lowest score in the “moderate” scoring column. The Tribunal agrees with this reasoning and confirms the score.

• Row 3 – Offence and History: 8 points.

The reasons given were: “More than one offence. Section 72 (3b) [sic] failing to comply with licencing conditions and Section 234 (3) of Housing Act 2004 failing to comply with HMO Management Regulations [details of which were then given]. The absence of a mains fire system, alarms and fire safety measures puts [NAME] at risk from injury.” [NAME] [NAME] chose 8 points for this factor, being the lowest score in the “moderate” scoring column. Although the Tribunal upheld only one offence, being the breach of licencing conditions under section 72(3)(b), the “moderate” column makes provision for “More than one recent offence and/or moderate level of offence(s)”. The Tribunal considers that the absence of a mains fire alarm system put the occupants at risk of injury from fire and this offence, alone, still justified the description of a “moderate level offence” and the 8 points allocated for this factor.

• Row 4 – Harm to Tenants (double counted): 30 points. The reasons given were: “High level of harm to [NAME] as large HMO with over 5 [NAME]. There is no mains fire system on the day of the original inspection on 2nd March 2022 and also on 12th August 2022. Only a fire blanket has been provided in the shared kitchen which is not sufficient to protect the tenants in the event of a fire. The level of harm is high and continuous as there are no early warning signs or mains wired smoke or heat detection to alert the [NAME] in the event of a fire. Furthermore, not [NAME] a valid BS5839 Fire safety certificate or Electrical Condition

26 Report (EICR) puts the tenants at risk of living in unsafe conditions that are a danger to their lives. Also, a majority of the fire doors have key-hole locks where smoke can go through the key-hole and harm the tenants. In addition to this, apart from one main tenant the other 6 [NAME] do not have any terms on which they occupy the [NAME], exposing them to illegal evictions and homelessness at any time.” [NAME] [NAME] had chosen 15 points, being the lowest score of the third column (“High level of potential harm to occupants”) which, in accordance with the matrix, she doubled to produce 30 points. The Tribunal regards the lack of an adequate fire alarm system to be serious and the risk of a catastrophic fire as being high in this case, so confirms the score in relation to this factor.

102. Overall, the points allocated for the four factors combined to result in a total of 50 points. That was the highest score in the 41-50 score range, which produced a penalty charge of £5,000. 103. [NAME] [NAME] did not specifically address the factors in the matrix, but he did say that he did not consider deterrence was appropriate in the circumstances of this case, he received less by way of rental income than his own tenant received from the other occupants and he depended on his rental income for his retirement, and he provided documentary evidence to support his contention that he was [NAME] of good standing. 104. The Tribunal is willing to accept that [NAME] [NAME] is a man of good standing, and it has dealt with the other points earlier, but repeats that it regards the lack of an adequate fire alarm system as a serious breach of the licensing conditions. The [NAME] was overcrowded in terms of the licence and facilities, and there was very little fire provision, so that the [NAME] were exposed to a high risk of very serious harm. Even if the Tribunal had reduced some of the individual factor scores by a few points (which it was not inclined to do), the total score would come still come within this score range 41-50 and the same £5,000 penalty would result. 105. Therefore, applying [NAME]’s policy and matrix, and [NAME] carefully considered all of the circumstances of this case (including the reasons why we were not satisfied that the reasonable excuse defence was made out), we find that a civil penalty in the sum of £5,000 was justified and therefore confirm that penalty. Name: Judge Powell Date: 26 February 2024

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME] Chamber) Rules 2013, the Tribunal is required to notify the parties about any right of appeal they may have.

27 If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the Tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28-day time limit, such [NAME] must include a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the [NAME] and the case number), state the grounds of appeal and state the result the party [NAME] the [NAME] is seeking. If the Tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber). Where possible, you should make your further [NAME] for permission to appeal on-line using the Upper Tribunal’s on-line document filing system, called CE-File. This will enable the Upper Tribunal to deal with it more efficiently and will enable you to follow the progress of your [NAME] and submit any additional documents quickly and easily. Information about how to register to use CE-File can be found by going to this web address: https://www.judiciary.uk/wp-content/uploads/2021/07/Practice-Note-on- CE-filing-Lands-Chamber-17.6.21_.pdf Alternatively, you can submit your [NAME] for permission to appeal by email to: [EMAIL]. The Upper Tribunal can also be contacted by post or by telephone at: Upper Tribunal (Lands Chamber), 5th [ADDRESS] [POSTCODE] (Tel: [PHONE]).