Financial Penalty Reduced Due to Health Issues and Dyslexia

OUTCOME: Allowed in Part

FIRST-TIER TRIBUNAL

[NAME_1] CHAMBER

([NAME_1])

Case reference : MAN/00EJ/HNA/2024/0647

[NAME_1] : 16 Brackenridge, Shotton Colliery [POSTCODE]

Applicants : [redacted]

Respondent : [redacted]

Type of application : Appeal against a financial penalty - section 249A & Schedule 13A Housing Act 2004

Tribunal : Tribunal Judge J Adams,

Tribunal Member [NAME_4]

Date of decision : 20 November 2025

__________________________________________________________

DECISION

__________________________________________________________

The appeal is refused in part, the Tribunal confirms the financial penalty issued by the Respondent to the Applicant, but substitutes the sum of the financial penalty in the sum of £3,000.00.

The Application

1. By Application dated 14 December 2024 the Applicant appealed against a financial penalty of £4,500.00 imposed upon him by the Respondent by a Final Notice dated 2 December 2024 in respect of the [NAME_1].

2. The Respondent was notified of the application on 10 April 2025 and indicated its intention to oppose the appeal. Procedural Directions were issued by the Tribunal on 27 June 2025.

3. The Application is opposed by the Respondent. Both parties presented their own bundle of documents, comprising 62 pages (Applicants) and 252 pages, plus supplementary Reply of 15 pages (Respondent), which the Tribunal took time to read before the hearing.

4. The Application was heard at an in person hearing at Peterlee Magistrates Court on 20 November 2025. For the Applicant, [NAME_2] gave oral evidence to the Tribunal. He is owner and landlord of the [NAME_1]. The Respondent was represented by [NAME_5], Solicitor. Evidence for the Respondent was given by [NAME_6], Senior Housing Enforcement Officer, who provided a statement dated 24 July 2025. We accepted that statement as his main evidence.

Facts and Chronology

5. The basic facts were largely agreed. The [NAME_1] is a house, located in a residential area of Shotton Colliery designated by the Respondent for selective licensing under Part 3 of Housing Act 2004, being Shotton East, which commenced on 1 April 2022. [NAME_1] occupied under a residential tenancy within that area would require a licence.

6. The Applicant acquired the [NAME_1] on 1 March 2007. It was accepted that the [NAME_1] was let by the Applicant to a residential occupier from around April 2022, within the period when selective licensing had become effective for the locality, although the date of commencement of the original tenancy was unclear. The Applicant let the [NAME_1] under a further tenancy agreement dated 6 December 2023, again within the period of selective licensing.

7. The Respondent’s Council Tax records state that [NAME_8] was the tenant from 7 December 2023. When an officer of the Respondent visited the [NAME_1] on 25 June 2024 they learned that the occupier was [NAME_8], who stated she was a tenant but did not have her tenancy agreement to hand. This was later supplied, confirming a tenancy start date of 6 December 2023, for a period of 12 months.

8. In October 2023, suspecting the Applicant had committed an offence under section 95 Housing Act 2004 an enquiry process was undertaken by the Respondent and the Respondent wrote to the Applicant on 27 October 2023 advising that the [NAME_1] required a licence. Dialogue was entered into between the Applicant and the Respondent, with the Applicant questioning the placement of the [NAME_1] in an area designated for selective licensing.

9. On 2 February 2024 the Respondent wrote to the Applicant advising an offence may have been committed under the Housing Act. The letter was issued under caution and contained a number of questions for the Applicant, to which the Applicant did not respond. A response was instead sent via email on 9 February 2024, advising he was looking to sell the [NAME_1] and sought information on exemption from licensing. The Respondent responded to advise that the [NAME_1] required a licence.

10. On 13 February 2024 the Applicant created an account on the Respondents licensing portal but did not submit a licensing application. On 11 April 2024 the Respondent contacted the Applicant as the Applicant had still not submitted a licence Application. The Applicant advised he was having difficulty accessing the [NAME_1] to provide the required information and was advised by the Respondent to submit his application without this information (understood to be the room dimensions).

11. On 25 June 2024 the Applicant applied for a licence. The application could not be completed due to missing documentation which the Applicant supplied on 29 August 2025. A draft licence was issued on 5 September 2024 and a final licence on 26 September 2024.

12. After consideration a Notice of Intent to issue a financial penalty in the sum of £7,500.00 was issued to the Applicant by the Respondent. The Applicant was permitted to make representations in respect of the same. The Respondent’s panel found beyond reasonable doubt that the Applicant had committed an offence under s95(1) Housing Act 2004 in that he was a person in control of and/or managing premises which were required to be licensed under Part 3 Housing Act 2004, but which were not.

13. The Respondent agreed to reduce the penalty by £3,000.00 on account of the representations received and in view of the mitigating factors applied from its own matrix. On 2 December 2024 a Final Notice was issued imposing a civil penalty in the sum of £4,500.00.

14. The process leading to the Respondent imposing a financial penalty for the offence was not in dispute, albeit the Applicant continued to dispute that there was a need for selective licensing to apply to the [NAME_1], and the Tribunal was satisfied that there had been compliance by the Respondent with the requirements of s 249A and Schedule 13 Housing Act 2004.

15. The basis of calculation of the amounts of the penalties is set out in [NAME_6]’s statement and the matrix was provided in the Respondent’s second bundle. [NAME_6] gave evidence to the Tribunal as to how the penalty was calculated. Our findings on that matter are set out below. The period relevant to the Penalty Notice was potentially from April 2022, when the selective licensing scheme came into force, but from at least the commencement of the residential letting on (according to the Applicant) 6 December 2023 to 25 June 2024 (application properly submitted).

16. The Applicant confirmed at the hearing that he accepted an appropriate licence should have been in place for the [NAME_1] in accordance with the selective licensing regime, although he reiterated that he disputed there was a need for the scheme in the locality of the [NAME_1]. The tribunal noted that the [NAME_1] was so properly designated. The Applicant however continued to pursue that he had a reasonable excuse for failing to have a licence and in any event the level of financial penalty imposed.

The Law

17. Section 249A of the Housing Act 2004 (“the 2004 Act”) states that:

“(1) The local housing authority may impose a financial penalty on a person if satisfied, beyond reasonable doubt, that the person’s conduct amounts to a relevant housing offence in respect of premises in England.”

18. Section 249A(2) sets out what constitutes a “relevant housing offence”. It includes an offence under section 95(1) of the 2004 Act, by which it is an offence for a person who has control of or manages a house to do so without a licence where that house is required to be licensed.

19. Section 263 sets out definitions of “person having control” and “person managing”, as:

“(1) In this Act “person having control”, 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 having 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.”

20. In the first instance, the local housing authority must ascertain beyond reasonable doubt whether a licence should have been applied for and that it was not applied for.

21. In the event that the local housing authority determines that a relevant housing offence has been committed, Schedule 13A to the 2004 Act sets out the procedural requirements which the local housing authority must then follow, including the service of notices of intent and of final notices, before the financial penalty may be imposed under section 249A.

22. In addition, by paragraph 12 of Schedule 13A, the local housing authority must have regard to guidance which the government has issued to local housing authorities as to how their financial penalty powers are to be exercised. The guidance confirms that local housing authorities are expected to issue their own policies in relation to housing offences and the imposition of civil penalties, and must include the factors which it will consider when establishing the offender’s level of culpability and the harm which has been caused by the offence, as well as a matrix for calculating the appropriate level of penalty after taking into account any additional mitigating or aggravating circumstances.

23. In this case, the Respondent’s policy is the document in the Respondent’s bundle, commencing at page 216 entitled ‘Corporate Enforcement Policy’, and the ‘Civil Penalties’ Policy (commencing page 234) in the Respondent’s bundle.

24. Section 95(4) of the 2004 Act provides that it is a defence to proceedings if the person committing the offence had a reasonable excuse for having control of or managing the house without a licence. It is for the Applicant here, to show on a balance of probabilities that he had a reasonable excuse for so doing.

25. On an appeal against a financial penalty, the Tribunal is required to make its own finding as to the imposition and/or amount of a financial penalty and may take into account matters which were unknown to the local housing authority when the Final Notice was issued. The Tribunal must make its decision in accordance with the Respondent’s published policy unless there are compelling reasons to depart from it.

Applicants’ position

26. In his Representations submitted with his Tribunal appeal dated December 2024 and his Statement of Case, submitted in August 2025 the Applicant’s challenge to the penalty can be identified as:

• A dispute as to whether the [NAME_1] fell within selective licensing, leading to a delay in applying.

• The Applicant was unaware of the selective licensing scheme in place until contacted by the Respondent in November 2023 (there is a dispute as to whether the first communication was October or November 2023).

• Mitigating circumstances/Reasonable excuse– severe ill health and treatment for cancer delayed the application for a licence.

• The Respondent failed to consider relevant representations or evidence and provide guidance to the Applicant on applying for an exemption.

27. The Applicant set out:

• “I will reiterate, at no point did I indicate I would not pay for a Selective License, I only wanted answers to my very relevant questions before I did.”

• “To impose a fine at all is extremely unjust, the fact that the licence is now in place shows that I am a fit and proper person.”.

• “I had asked [NAME_9] on details for an exemption, I am yet to receive them.”

• “I have explained to [NAME_9] the reasons for the delay in applying, ongoing health issues around my cancer, and feel these have not been factored into their decision making at all.”

28. In oral evidence, the Applicant, [NAME_2] stated that he had one other [NAME_1] that he let out in the Sunderland area, which he understood, and it was well advertised, was in an area that required a licence. He stated that he was not aware that selective licensing applied to the [NAME_1] until contacted by the Respondent. He advised that he felt that licensing was unnecessary in the area and sought clarification from the Respondent as to why in had been implemented, stating he did not intend not to apply for the licence but sought clarification as to the Respondent’s reasoning. This dialogue commenced in November 2024.

29. He went on to say that he delayed in applying for the licence due to significant ill health, having been diagnosed with cancer around this time, which led to a number of hospital appointments and procedures. Further he clarified that when he attempted to start the application the system required the room sizes of the [NAME_1], which would require him to attend the [NAME_1] and measure. He accepted that the Respondent told him to proceed without these but advised that this led to a further delay.

30. [NAME_2] also submitted in his written application that he sought details of any necessary exemptions as he was looking to sell the [NAME_1]. It was noted that there was no actual contract for sale at any stage during the relevant period.

31. [NAME_2] represented that the Respondent had adopted an aggressive stance and had imposed a penalty for a minor error, therefore the penalty should be cancelled, and in any event his health was such that it afforded a reasonable excuse for failure to obtain a licence.

Respondent’s representations

32. In his witness statement and oral evidence, [NAME_6] set out that enforcement action was taken as the informal approach taken with the Applicant, starting in October 2024 had not worked and a licence had not been applied for. He advised the Tribunal that a number of warnings had been given to the Applicant that a licence was required before a decision to pursue enforcement was taken. He advised that if the Applicant had wished to attend an interview rather than answer the PACE (Caution) questions in writing the letter made it clear that he was able to request this, but the Applicant did not request this nor return the completed questionnaire.

33. [NAME_6] noted that the application for a licence was not made until after the [NAME_1] had been visited by an enforcement officer and a number of warnings issued. In evidence he confirmed the enquiries made satisfied the Respondent that the [NAME_1] was being operated without a licence in breach of the requirements of the selective licencing scheme.

34. In evidence [NAME_6] outlined that the original Notice of Intention to issue a financial penalty indicated that the starting point would be £7,500.00, however a meeting was had with team leaders to discuss the penalty level once the representations from the Applicant had been received, [NAME_6] advised that it was decided to reduce the level of penalty by £3,000.00 to £4,500.00 due to the low number of properties held by the Applicant and the personal circumstances in regards to his ill health. [NAME_6] advised the Tribunal that the Respondents banding guidelines were applied in this regard.

35. In terms of seriousness, [NAME_6] advised the Tribunal that the Respondent considered the failure to obtain a licence a ‘serious breach’ in line with their published policy, which set the starting point for the financial penalty imposed. The penalty imposed was in line with the published policy of the Respondent.

Conclusions and Reasons

36. The Tribunal must be satisfied in respect of the Applicant, beyond a reasonable doubt, that he had committed a “relevant housing offence” in respect of the [NAME_1]. The area in which the [NAME_1] is situated was designated as a selective licensing area with effect from April 2022. From that date, any [NAME_1] occupied under a residential tenancy within that area would require a licence.

37. Whilst it was unclear when the first tenancy commenced, it was clear that this occurred on or around the same time that selective licensing came into force in April 2022, on the Applicant’s own case. We found it had no bearing upon the potential offence being committed during the period before application was made for a licence, or on the consequential amount of the penalty issued, it was clear that the [NAME_1] remained without a licence when the tenancy with [NAME_8] commenced in December 2023, after the Applicant had been notified of the requirement for a licence. We found that the Applicant did not have a licence for the [NAME_1] from April 2022 until 5 September 2024 when the draft licence was issued. We found that the Applicant did not apply for a licence until 25 June 2024. Further, no evidence was presented that any other person or body held an appropriate licence.

38. It was not disputed that the Applicant was a person having control and/ or management, of the [NAME_1], as defined by s263.

39. The Applicants’ position was that they had a “reasonable excuse” for the offence because they were entitled to challenge the basis on which the Respondent had designated the area in which the [NAME_1] was located as one to which selective licensing should apply, that the Respondent had not responded to its request for an exemption due to a potential sale of the [NAME_1] and further that the ill health of the Applicant prevented them from seeking a licence. We found these points to carry no weight in respect of the failure to seek a licence.

40. The Applicant did not argue ignorance of the application of selective licensing affecting the [NAME_1] (and that of itself is very rarely the basis of a reasonable excuse). The burden lay on the Applicant to make the appropriate application in a timely fashion. On their own evidence the [NAME_1] was let from at least April 2022 and the application was not submitted until June 2024. The application was not made timely and only after the Respondent prompted it by firstly its initial contact and thereafter enforcement visits to the [NAME_1]. The fact that the Applicant disagreed with the designation of the [NAME_1] within an area of selective licensing did not provide a reasonable excuse to obtain a licence within a timely manner.

41. We rejected the Applicants suggestion that the Respondent’s failure to provide information as to any applicable exemption owing to a [NAME_1] sale was relevant or would amount to an excuse. It was clear from the policy documents, and would have been clear from information available to the Respondent that such an exemption may only be granted where there is a pending sale, with contracts usually exchanged. In this case the Applicant indicated that he may be looking to sell the [NAME_1] but it was no higher than that, and the Tribunal found that any available extension on this basis would be a long way off, even if achieved, this did not excuse the Applicant from obtaining a licence in the relevant period.

42. The Tribunal noted the significant health concerns of the Applicant, which covered a period of time where the [NAME_1] was without a licence, however the failure to licence ran from April of 2022 and it was noted that the Applicant was able to engage in dialogue with the Respondent throughout the relevant period, albeit the Tribunal accepted there may have been delays occasioned by the Applicant’s ill health. The Tribunal therefore found that the ill health did not amount to a reasonable excuse in terms of a failure to obtain a licence, but one of mitigation in relation to the level of penalty imposed.

43. The Tribunal found it was reasonable to expect the Applicant to have in place processes to ensure compliance with relevant national and local laws and regulations.

44.

Accordingly, the Tribunal was satisfied beyond a reasonable doubt that the Applicant committed a “relevant housing offence” in respect of the [NAME_1] and that the offence was being committed between at least April 2022 and June 2024 (when the license application was made) on the Applicant’s own admission, although the evidenced tenancy ran from December 2023. In consequence, a penalty may become payable in accordance with the aforementioned policies.

Amount of the Penalty

45. The Respondent provided through [NAME_6] detail on the method of calculating the penalties. The Applicants’ challenge was just in broad terms about its unfairness.

46. As noted above, [NAME_10] has been issued to local housing authorities regarding how their financial penalty powers are to be exercised. The Guidance encourages each authority to issue its own policy for determining the appropriate level of penalty, with the maximum amount being reserved for the worst offenders. Relevant factors include:

a. the severity of the offence;

b. the culpability and track record of the offender;

c. the harm caused to the tenant;

d. punishment of the offender;

e. deterring the offender from repeating the offence;

f. deterring others from committing similar offences; and

g. removing any financial benefit the offender may have obtained as a result of committing the offence.

47. The Tribunal has considered the Respondent’s published policy (see paragraph 23), and notes that it is reflective of the [NAME_10]. We found that whilst the financial penalty imposed was calculated in accordance with the Respondent’s published policy, the mitigating factors of the Applicant were not properly taken into account in terms of the reduction applied.

48. The Respondent’s process was to identify a starting figure for the penalty. First, by determining the severity of the offence, the policy of the Respondent is that any failure to obtain a licence, irrespective of reasons for the failure, has a starting point that the offence is serious, thus the level of penalty starts at £12,500.00 in line with the matrix set out in the policy.

49. [NAME_6] referred in his oral evidence to the deductions applied, and the policy gives guidance on aggravating factors. No list of mitigating factors is provided in the policy as the policy itself recognises that any list provided cannot be considered exhaustive. However the Tribunal noted that the banding guidelines applied by the Respondent did set a list of fixed mitigating factors which if applied, reduced the penalty to be imposed.

50. The Respondent thereafter applied their banding guidelines (as per the second bundle of the Respondent). A reduction of £5,000.00 was applied due to the small number of properties owned by the Applicant. A further reduction of £2,000.00 applied due to the Applicant’s rectification of the breach by obtaining a licence. Finally a reduction of £1,000.00 was applied to take account of the Applicant’s ill health.

51. This left a penalty of £4,500.00 which followed the policy of the Respondent and its banding matrix. However the Tribunal considered that just as the policy of the Respondent recognised that mitigating factors would be particular to each case, the parameters of the medical/ill health deductions in the banding guidelines did not enable the Respondent to [NAME_1] attribute a proper reduction to the penalty in accordance with this Applicant’s circumstances. The Tribunal formed the view that whilst the Applicant had not been an inpatient in hospital so as to qualify for the highest medical deduction in the banding, the lower banding applied failed to take account of the Applicant’s personal circumstances. Whilst he may not have been an inpatient, he was attending numerous appointments, day case surgeries and undergoing cancer treatment, which the Tribunal concluded would have impacted his ability to engage in the licence process and that the reduction applied did not reflect this and the medical bands were too narrow in this regard. The Tribunal concluded that the Respondent should have attributed a further reduction to reflect this under the exceptional reasons box in the matrix to apply a further reduction. The Tribunal felt this reduction should be £1,000.00 to properly reflect matters and provide an intermediate category between the highest medical band and the one applied by the Respondent, as the existing bands did not allow for the level of discretion necessary. The Tribunal felt that the Respondent’s banding restricted the proper attribution of medical mitigation in this case and in applying the further reduction follows the policy of the Respondent, noting that the Respondent’s own policy accepts mitigation is to be considered on a case by case basis.

52. Further the Tribunal noted that the Applicant was dyslexic and struggled to read. His evidence to the Tribunal was such that he required help in reading letters sent to him by the Tribunal which also impacted his level of understanding and the speed by which he responded to requests made of him. The extent of these issues were not apparent until the hearing but it was evident to the tribunal that they would likely have contributed to the delay in this case. It was noted that the banding guidelines of the Respondent referenced applying reduction for matters of this nature, yet the banding categories did not seem to align with these circumstances. Again the Tribunal felt that the penalty should be reduced to reflect this matter in the exceptional reasons category. Thus the Tribunal applies a further reduction of £500.00.

53. Having taken account of all of the evidence before it, the representations and the submissions, the Tribunal concluded that the mitigation bands applied did not truly reflect the mitigation in this case and under exceptional grounds the penalty should be reduced further by £1,500.00 to £3,000.00, which the Tribunal felt accorded with the Respondent’s own policy.

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME_1] Chamber) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have.

If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written application for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case.

The application for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the person making the application.

If the application is not made within the 28 day time limit, such application 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 application for permission to appeal to proceed, despite not being within the time limit.

The application for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the [NAME_1] and the case number), state the grounds of appeal and state the result the party making the application is seeking.

If the tribunal refuses to grant permission to appeal, a further application for permission may be made to the Upper Tribunal (Lands Chamber).

FIRST-TIER TRIBUNAL

[NAME_1] CHAMBER

([NAME_1])

Case reference : MAN/00EJ/HNA/2024/0647

[NAME_1] : 16 Brackenridge, Shotton Colliery [POSTCODE]

Applicants : [redacted]

Respondent : [redacted]

Tribunal : Tribunal Judge J Adams,

Tribunal Member [NAME_4]

Date of decision : 20 November 2025

__________________________________________________________

DECISION

__________________________________________________________

The Application

Facts and Chronology

The Law

Applicants’ position

27. The Applicant set out:

Respondent’s representations

Conclusions and Reasons

44.

Amount of the Penalty

a. the severity of the offence;

b. the culpability and track record of the offender;

c. the harm caused to the tenant;

d. punishment of the offender;

e. deterring the offender from repeating the offence;

f. deterring others from committing similar offences; and

Rights of appeal