Financial Penalty Reduced to £7,500 in Housing Offence Case

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00AL/HNA/2025/0635 Property : 9A [ADDRESS] [POSTCODE] Applicant: [redacted]

[COMPANY] (Formerly known as [COMPANY]) Representative : [COUNSEL] of Counsel Respondent : [redacted] Representative : [COUNSEL] of Counsel Type of [NAME] :

Appeal against a financial penalty – Section 249A of, and Schedule 13A to, the Housing Act 2004

Tribunal Members :

Judge P [NAME] Mr A Fonka MSc FCIEH CenvH

Date of Hearing : 27 November 2025 Date of Decision : 23 December 2025

DECISION

Description of hearing

The hearing was a face-to-face hearing.

2 Decision of the tribunal

The final notice served by the Respondent on the Applicant is varied by reducing the financial penalty from £10,000 to £7,500.

Introduction and background 1. The Applicant has appealed against a financial penalty imposed on it by the Respondent under section 249A of the Housing Act 2004 (“the 2004 Act”) in relation to the Property.

2. The financial penalty was imposed on the Applicant under section 95 of the 2004 Act for being “[NAME] having control of or managing a house which is required to be licensed under [Part 3 of the 2004 Act] but is not so licensed”. At the relevant time, the Applicant was the managing agent in respect of the Property. It had also entered into a [NAME] (“the [NAME]”) dated 15 March 2022 with the owner of the Property, [APPELLANT]. Applicant’s written case 3. The Applicant states that on 22 March 2022 it entered into an Assured Shorthold Tenancy Agreement with the current tenants of the Property, this following on from its entering into the [NAME] with the owner of the Property. At that time, the local housing authority’s selective licensing scheme had not yet been introduced. Instead, the selective licensing scheme came into effect on 1 October 2022, more than six months after the tenancy began.

4. The Applicant is based outside the Royal Borough of Greenwich (“[NAME]”), the borough in which the Property is situated, and therefore was not exposed to the various advertising measures such as local lamp-post posters or bus advertisements. It did not receive direct notice from [NAME], and it states that it had no other reason to become aware of the scheme until 2024.

5. On 29 January 2024, the Applicant emailed the Private Rented Property Licensing Department at [NAME] with a list of properties under its management to clarify which ones required licensing. In response, [NAME] stated that [ADDRESS] required a selective licence. After receiving this confirmation, the Applicant (as managing agent) contacted the owner of the Property by email on 5 March 2024 to inform it that a licence was required. The owner responded on the same date indicating that it intended to handle the licence [NAME] itself. It also informed the Applicant that the licence [NAME] was delayed pending the outcome of his DBS check.

3 6. The Applicant followed up with the owner, advising that if it did not submit the [NAME] within 72 hours the Applicant itself would proceed with the [NAME], but the Applicant was unable to proceed without the DBS certificate. [NAME] then wrote to the Applicant on 3 April 2024 requiring it to apply for a licence within 14 days. This was complied with as the licence [NAME] was then submitted (by the owner) on 9 April 2024, 6 days after the owner finally received the DBS certificate.

7. The Applicant submits that the imposition of a financial penalty in the above circumstances contradicts official guidance and lacks procedural fairness.

8. The Applicant notes that [APPELLANT] [NAME], an Environmental Health Officer, states in her witness statement that the Applicant attempted to obstruct inspection but the Applicant disputes this. On 10 January 2024, when the Notice of Entry was served, the Applicant contacted the tenant to arrange access.

9. As regards the amount of the financial penalty levied, in the Applicant’s submission the penalty matrix used by the Respondent unfairly inflates its culpability by referencing previous enforcement matters from a different borough. It adds that the Property was licensed as soon as reasonably practicable once the Applicant became aware of the licensing scheme. The Applicant also argues that it had a reasonable excuse in that the responsibility to apply for the property licence was exclusively that of the property owner. In addition, the licence [NAME] was submitted prior to the initiation of any enforcement proceedings. Respondent’s written case 10. The Respondent states that it introduced the selective licensing scheme on 1 October 2022 and that the scheme required all privately rented single-household properties within a designated area of the borough to be licensed. The Respondent undertook statutory publicity for the designation and notified the public of the designation using a variety of publications. Notification was set out on its website and via social media such as X (formerly Twitter), [NAME] etc. The Respondent also advertised the designation on lampposts and on the rear of buses operating throughout [NAME]. The selective licensing scheme was also discussed on various websites including the ‘Property118 | Property Forum and News’ website. Leaflets were hand delivered while organising various events with stakeholders. The Respondent also conducted a comprehensive 12-week consultation before implementing the scheme.

11. On 13 December 2024 a complainant contacted [NAME]’s Core Support Team to report poor conditions within the Property. The complaint was

4 allocated to Ms [NAME] for investigation, and she reviewed [NAME]’s internal records which showed that no selective licence [NAME] had been submitted for the Property and nor had a Temporary Exemption Notice been granted. Ms [NAME] also searched the publicly available designated postcode checker on the [NAME] website which confirmed that the Property fell within the selective licensing scheme. On 4 January 2024, Ms [APPELLANT] called the complainant who stated that they were a family of four people living at the Property, consisting of two adults and two children, one of whom was under 12 months old.

12. On 10 January 2024, Ms [NAME] served a section 239 Notice of Entry to inspect the Property under section 239 of the 2004 Act. She received email correspondence from the Applicant stating that the tenants and their representatives were not available and asking her to re-schedule. She contacted the tenant who confirmed that they were still available and then told the Applicant that she would be going ahead with the visit on 11 January. During the inspection she was met by a representative of the Applicant called [COUNSEL], and the tenants were also present. They discussed the deficiencies at the Property and Ms [NAME] gave verbal instructions to Mr [NAME] on what needed to be done. She also verbally advised Mr [NAME] that she had not found a selective licence for the Property and that the Applicant needed to that ensure an [NAME] for a selective licence was submitted.

13. On 2 April 2024, Ms [NAME] revisited the Property for an unannounced inspection. Overall, she found the Property still in poor condition. During that inspection she took photographs of the Property. She was satisfied that there were four occupants who were all family members and who all lived in the Property and were renting it from the Applicant.

14. On 3 April 2024, Ms [APPELLANT] issued a selective licence invitation letter to the Applicant, providing guidance on the licensing process, outlining the required steps to achieve compliance and explicitly highlighted the legal consequences of failing to obtain a licence. On 10 April 2024, a selective licence [NAME] was then received from the owner.

15. The Assured Shorthold Tenancy Agreement commenced on 21 March 2022, and the Property remained unlicensed until 9 April 2024.

16. In determining the level of the financial penalty, Ms [NAME] referred to the Environmental Health and Trading Standards Enforcement Policy, the Private Sector Housing Supplement, and the Private Sector Housing Enforcement Policy (updated October 2024). The scoring matrix within these policies was applied to ensure consistency, transparency, and fairness in the assessment. This approach ensured that the correct procedures were followed and that the calculation of the Civil Penalty Notice was in line with the Respondent’s policy.

5 17. On 11 October 2024 the Applicant submitted written representations in response to the Respondent’s Notice of Intent to issue a Financial Penalty for the failure to license the Property. Ms [NAME] reviewed the representations and determined that no new information or supporting evidence had been provided to address the Applicant’s failure to applying for the licence before being invited to do so. The hearing – initial oral submissions 18. [APPELLANT] for the Applicant reiterated that the Property was let before the selective licensing scheme came into force. The Applicant did not know about the selective licensing scheme when it was introduced, and part of the delay in obtaining the licence once the scheme was known about was due to the discussions between the Applicant and the owner as to who would apply for the licence and what was needed to enable this to happen. 19. [RESPONDENT] for the Respondent emphasised that the Property required a licence and that one was not applied for until a long time after the selective licensing scheme came into force. The Applicant’s defence was based on ignorance, and this was not sufficient to qualify for the reasonable excuse defence. Cross-examination of witnesses [NAME] [NAME]

20. As noted above, Ms [NAME] is an Environmental Health Officer employed by the Respondent, and she gave a witness statement.

21. In cross-examination, Ms [APPELLANT] said that the Applicant should have done its due diligence. It was put to her by Mr [NAME] that in January 2024 [NAME] was not enforcing breaches, including failures to obtain a licence, and yet when [NAME] started enforcement proceedings against the Applicant offences were referenced back to the date on which they were first committed. Ms [NAME] accepted that this was the case but said that the Applicant was given a grace period and could have applied earlier.

22. Regarding the financial penalty matrix, Mr [NAME] noted that it was stated in the completed matrix that the Applicant initially lied to the Respondent, but he put it to Ms [RESPONDENT] that this was an unfair characterisation of what had happened. In response, Ms [RESPONDENT] said that she had been told by the Respondent’s legal department to remove the section of her witness statement which supported the proposition that the Applicant had lied.

6 23. Regarding the level of harm identified for the purposes of the financial penalty matrix, Mr [NAME] asked whether this was calculated by reference to the improvement notice and whether the licence was granted before the works specified in the improvement notice had been completed. Ms [NAME] said that she was unsure.

24. Regarding the financial benefit identified for the purposes of the financial penalty matrix, Ms [NAME] conceded, in response to a question from Mr [NAME], that in the absence of an improvement notice the score might be 1 or 5. [APPELLANT]

25. Mr [APPELLANT] is a director of the [COMPANY], and he gave a witness statement which forms the basis of the Applicant’s written case.

26. In cross-examination, Mr [APPELLANT] agreed that there was mould at the Property and he said that it cost about £8,000 to fix. He said that the Applicant manages about 600 properties, 5 of which are in [NAME]. As to how he keeps up to date with the law on property licensing, he said that he has subscriptions to relevant bodies.

27. Mr [NAME] noted that under clause 13 of the [NAME], the obligation was on [APPELLANT] to provide the Applicant with various certificates and relevant licences to enable the Applicant to let the Property. However, clause 6 of the [NAME] gave the Applicant full management responsibility including compliance with licence obligations. He then asked Mr [APPELLANT] what steps the Applicant had taken to comply and he replied that he had written to [NAME] in January 2024 regarding licensing. Mr [NAME] pointed out to him that this represented a delay of 15 months since the licensing scheme came into effect.

28. Mr [APPELLANT] was asked how proactive the Applicant had been in checking its licensing obligations and he conceded that it had not been particularly proactive. As regards the implication in his witness statement that in January 2024 the Applicant had raised the licence issue with [NAME] without having first been contacted by [NAME], Mr [APPELLANT] accepted that one of the Applicant’s employees might have been told by Ms [APPELLANT] in January 2024 that a licence was required. Mr [NAME] also accepted that the works required by the improvement notice were not all completed by the deadline specified in that notice. [NAME]

29. Mr [NAME] is a Residential Investigation Enforcement Officer employed by the Respondent, and he gave a witness statement. His

7 witness statement refers to enforcement action taken against Mr [APPELLANT] – the sole director of the Applicant – in respect of other properties. Mr [APPELLANT] was not cross-examined on his evidence. Follow-up submissions at hearing Respondent’s further submissions 30. Mr [RESPONDENT] submitted that ignorance of a local housing authority’s licensing rules was not by itself sufficient to meet the test for the defence of reasonable excuse, and he referred to the decision in R ([NAME] and [NAME]) v Waltham Forest London Borough Council [2020] EWHC 1083 as giving an example (in paragraph 44) of what would amount to a reasonable excuse. In addition to the fact that the example of a reasonable excuse given in R ([NAME] and [NAME]) did not apply in our case, Mr [NAME] said that the position was more serious in our case as the Applicant was a professional portfolio agent.

31. Mr [APPELLANT] added that it was also at least arguable that the Applicant had taken responsibility for licensing issues under the [NAME]. Applicant’s further submissions 32. Mr [APPELLANT] accepted that the licensing offence under section 95(1) of the 2004 Act was a strict liability offence, subject to the availability of the reasonable excuse defence and any other defences. However, this licensing scheme was a new scheme. In addition, the Applicant was based outside the borough and in his submission the advertising of the scheme was minimal.

33. In relation to the [NAME], Mr [APPELLANT] submitted that it was not so clear that the Applicant was responsible under its terms for licensing. In addition, it was the owner who ended up applying for the licence and arguably the Applicant was not in a position to take steps to ensure that a licence was applied for quicker without obtaining the owner’s agreement.

34. Regarding the financial penalty matrix, Mr [RESPONDENT] said that the Respondent had assessed a high score for harm and for financial benefit, but he questioned whether the level of severity calculated by the Respondent flowed from the offence itself. He also submitted that the Respondent had not fully considered all mitigating factors.

8 Tribunal’s analysis 35. Under Schedule 13A to the 2004 Act, this appeal is a re-hearing of the Respondent’s decision but may be determined having regard to matters of which the Respondent was unaware.

36. Under section 95(1) of the 2004 Act, “[NAME] commits an offence if he is [NAME] having control of or managing a house which is required to be licensed under this Part [i.e. Part 3 of the 2004 Act] but is not so licensed”.

37. It is common ground between the parties that the Property required a licence under Part 3 and that it did not have a licence on the date specified in the Respondent’s final notice, and on the basis of the evidence before us we are satisfied that both of these points have been proven.

38. We are also satisfied on the evidence before us that the Applicant was a “person managing” and/or a “person having control” in relation to the Property, as those terms are defined in section 263 of the 2004 Act, and the Applicant does not deny this. Therefore, subject to the availability of any relevant defences, we are satisfied that the Applicant has committed an offence under section 95(1) of the 2004 Act. Defence of reasonable excuse 39. The Applicant submits that it had a reasonable excuse under section 95(4) of the 2004 Act for the failure to have licensed the Property by the date specified in the final notice.

40. Section 95(4) reads as follows: “In proceedings against [NAME] for an offence under subsection (1) … it is a defence that he had a reasonable excuse … for having control of or managing the house in the circumstances mentioned in subsection (1) …”.

41. The Applicant’s case on this point is essentially that it did not know that the Property required a licence. It is clear from the case law, including but not limited to the case of [RESPONDENT] ([RESPONDENT] and [RESPONDENT]) cited by the Respondent, that mere ignorance does not amount to a reasonable excuse, and the Applicant has not sought to demonstrate otherwise. However, the Applicant has tried to show that in this case it had good reason for being unaware that the Property needed a licence.

42. First of all, the Applicant states in its defence that it was based outside the [NAME] area, but we do not find this to be a compelling submission. If [NAME] or company is based outside of the area in which it seeks to rent out – or to manage the renting out of – property it is incumbent on them to become familiar with the licensing rules in the relevant area.

9 The licensing rules are designed to ensure minimum housing safety standards for the benefit of often vulnerable occupiers, and there is no logic to the proposition that the rules should only be applied to landlords or agents who are resident in the relevant area.

43. Secondly, the Applicant argues that the Respondent failed to advertise the new licensing scheme sufficiently widely, but we reject this argument. The Respondent has given detailed evidence as to the various methods used to advertise the introduction of the new scheme and we are satisfied that it took all reasonable steps. The problem, in our view, is not with the steps taken by the Respondent but with the Applicant’s own failure to take steps to familiarise itself with the rules within [NAME]. The Applicant is an experienced agent and should have had a proper system for updating itself as to the rules in each area in which it was renting out or managing the renting out of property. At the hearing Mr [NAME] spoke vaguely about having subscriptions to relevant bodies but we are not convinced that he was taking reasonable steps to find out what the licensing rules actually were.

44. Thirdly, the Applicant makes the point that there was no licensing scheme in place when the tenancy agreement began. We accept that this is a relevant point to make but we do not accept that it is sufficient to meet the threshold of the reasonable excuse defence. This is because, even if there is no licensing issue when a property is first let out, there remains an obligation on the persons having control of or managing the property to ensure that they comply with the licensing rules at all times. That is not to say that a failure to apply for a licence as soon as the rules require a licence will always constitute a criminal offence; but in this case the new scheme came into force in October 2022 and the licence was not applied for until April 2024. In the circumstances, whilst the fact that a licence was not needed initially may be relevant to mitigation and therefore to the amount of the financial penalty, we do not accept that the Applicant had a reasonable excuse for its failure to license the Property over such a long period.

45. In conclusion, we do not accept the Applicant’s reasonable defence excuse, and we accept that the Respondent had the right to levy a financial penalty. The amount of the penalty 46. In relation to the amount of the penalty, we have considered the Respondent’s justification for the way in which it has calculated the penalty, and we have also considered the Applicant’s objections.

47. Turning first to the category “Punishment of the offender”, the Respondent has scored this at “10” on the alleged basis of “Minor previous infractions, attempts to pervert, unwilling to co-operate”. However, as became apparent at the hearing there was nothing in Ms

10 [NAME] witness statement to justify the serious allegation that the Applicant had attempted to pervert the course of justice and nor was there particularly strong evidence of unwillingness to co-operate. Therefore, this score needs to be reduced to “5” which is stated to apply to circumstances of “Minor previous infractions, no perversion and a willingness to adhere to advice” as this is a more accurate reflection of the situation.

48. Turning next to the category “Financial benefit”, the Respondent has scored this at “15” (multiplied by 2 because of an automatic multiplier and therefore equalling “30”) on the alleged basis of there being “Large financial impact (e.g. benefited from serious non-compliance, Improvement Notice issued)”. However, there is no evidence before us that the financial benefit was particularly large. It is true that an improvement notice was issued but the Respondent did not insist on all items in the improvement notice being dealt with before issuing the licence, and in any event the Respondent has failed to show that the financial benefit to the Applicant specifically of not obtaining a licence was a large one. In the circumstances, a score of “5” (multiplied automatically to “10”) would be more accurate on the basis of the evidence before us as this score relates to a situation in which there is a “Low to moderate financial impact”.

49. Turning next to the category “Mitigating factors”, we consider that the Respondent has been slightly harsh here. Specifically, there is no acknowledgement or credit for the fact that when the letting began there was no licensing scheme in place and therefore no criminal offence was being committed. The situation later changed, but this was not a case of someone letting out a property in circumstances where a licence is needed from the start, and in our view the Applicant’s level of culpability was less because the licensing scheme came into force o0nly after the Property had been let out. The score of “-5” is therefore changed to “-10” to reflect “One major or multiple minor mitigating factors”.

50. Regarding the Applicant’s submissions on the scoring of the “Level of harm”, we do not accept those submissions. This was scored at “15” (multiplied by 2 because of an automatic multiplier and therefore equalling “30”) on the basis of there being “severe-level health risks/harms identified (category 1 & 2 hazards). Two to four occupants”. The improvement notice, the accuracy of which has not been disputed, reveals a series of category 1 and category 2 hazards, and the evidence indicates that there were four occupants, therefore this score is fair and accurate.

51. For the sake of completeness we will also comment on certain other points that have been made. First of all the Applicant suggested in written submissions that it was solely the owner’s responsibility to apply for a licence, but this is not correct; under section 95(1) of the

11 2004 [NAME] commits an offence if they are a “person having control of or managing a house which is required to be licensed under this Part … but is not so licensed” and it is clear that the Applicant fell into this category. Secondly, it is worth reiterating that not only was the Property unlicensed for a long period, but it was in sufficiently poor condition that an improvement notice was served specifying various category 1 and category 2 hazards. Thirdly, the parties’ narratives differ as to whether the Applicant was proactive in applying for a licence. We prefer the Respondent’s narrative and are doubtful that the Applicant moved the licence [NAME] forward before being alerted by the Respondent as to the need to do so.

52. Fourthly, we do not accept that the Respondent’s decision to take a break from taking enforcement action in respect of failures to apply for licences is relevant in mitigation, as it does not affect the level of the Applicant’s culpability and the Applicant was given a grace period within which to apply. Fifthly, there was a disagreement between the parties as to the exact combined effect of clauses 6 and 13 of the [NAME]. In our view this is because those clauses do not fit very well together, but we do consider that clause 6 did place some level of obligation on the Applicant to deal with licensing issues during the term of the tenancy agreement. In any event, we do not accept that the terms of the [NAME] absolve, or were intended to absolve, the Applicant from all responsibility for licensing.

53. No other objections to the scoring have been made, and the scores in the other categories are justifiable. Putting together the above comments, the scores are reduced to the following: Culpability of offender

20 Level of harm

30 Punishment of offender

5 Financial benefit

10 Deter the offender and others 15 Assets and income

10 Mitigating factors

-10 54. The above totals “80” which means that the total financial penalty is reduced to £7,500. It has not been argued that the penalty should be

12 reduced further through the [NAME] of the totality principle, and we see no reason to reduce it further. Conclusion 55. Pursuant to Schedule 13A to the 2004 Act we therefore vary the final notice by reducing the financial penalty from £10,000 to £7,500. Cost applications 56. There were no cost applications.

Name: Judge P [NAME]: 23 December 2025

RIGHTS OF APPEAL

A. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) a written [NAME] for permission must be made to the First-tier Tribunal at the regional office dealing with the case.

B. 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].

C. If the [NAME] is not made within the 28 day time limit, such [NAME] must include a request for extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason and decide whether to allow the [NAME] for permission to appeal to proceed despite not being within the time limit.

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

13 Appendix

Housing Act 2004

95 Offences in relation to licensing of HMOs (1) [NAME] commits an offence if he is [NAME] having control of or managing a house which is required to be licensed under this Part … but is not so licensed. (4) In proceedings against [NAME] for an offence under subsection (1) … it is a defence that he had a reasonable excuse … for having control of or managing the house in the circumstances mentioned in subsection (1) … .

249A Financial penalties for certain housing offences in England (1) The local housing authority may impose a financial penalty on [NAME] if satisfied, beyond reasonable doubt, that the person's conduct amounts to a relevant housing offence in respect of premises in England. (2) In this section “relevant housing offence” means an offence under— (a) section 30 (failure to comply with improvement notice), (b) section 72 (licensing of HMOs), (c) section 95 (licensing of houses under Part 3), (d) section 139(7) (failure to comply with overcrowding notice), or (e) section 234 (management regulations in respect of HMOs). (3) Only one financial penalty under this section may be imposed on [NAME] in respect of the same conduct. (4) The amount of a financial penalty imposed under this section is to be determined by the local housing authority, but must not be more than £30,000. (5) The local housing authority may not impose a financial penalty in respect of any conduct amounting to a relevant housing offence if— (a) the person has been convicted of the offence in respect of that conduct, or (b) criminal proceedings for the offence have been instituted against the person in respect of the conduct and the proceedings have not been concluded. (6) Schedule 13A deals with— (a) the procedure for imposing financial penalties, (b) appeals against financial penalties, (c) enforcement of financial penalties, and (d) guidance in respect of financial penalties.

14 (7) The Secretary of State may by regulations make provision about how local housing authorities are to deal with financial penalties recovered. (8) The Secretary of State may by regulations amend the amount specified in subsection (4) to reflect changes in the value of money. (9) For the purposes of this section [NAME]'s conduct includes a failure to act.

SCHEDULE 13A FINANCIAL PENALTIES UNDER SECTION 249A Appeals 6 If the authority decides to impose a financial penalty on [a] person, it must give the person a notice (a “final notice”) imposing that penalty. 10 (1) [NAME] to whom a final notice is given may appeal to the First-tier Tribunal against – (a) the decision to impose the penalty, or (b) the amount of the penalty. (3) An appeal under this paragraph – (a) is to be a re-hearing of the local authority’s decision, but (b) may be determined having regard to matters of which the authority was unaware. (4) On an appeal under this paragraph the First-tier Tribunal may confirm, vary or cancel the final notice.