First-tier Tribunal Confirms £11,250 Penalty for HMO Non-Compliance

OUTCOME: Dismissed

FIRST-TIER TRIBUNAL [NAME] CHAMBER ([NAME])

Case Reference

:

CHI/45UH/HNA/2023/0031

[NAME]

:

85 [ADDRESS], [POSTCODE]

Applicant: [redacted]

:

Respondent: [redacted] Representative

: Ms [COUNSEL] [NAME] of Application

: Appeal against a financial penalty under section 249A of the Housing Act 2004

Tribunal Members

Date and Venue of Hearing

:

:

Judge N [NAME], [NAME].

19 September 2024. [ADDRESS], [POSTCODE]

Date of Decision

:

23 September 2024

DECISION

© CROWN COPYRIGHT 2024

1. Background

2. This is an appeal by the Applicant against a financial penalty imposed upon him by the Respondent under section 249A of the Housing Act 2004 (the Act).

3. The Applicant is the owner of a two-storey seven bedroomed house at 85 [ADDRESS] [POSTCODE] ([NAME]). [NAME] is a House in Multiple Occupation (HMO).

4. On 5 August 2019 the Respondent issued an HMO licence for [NAME]. The licence was subject to certain conditions set out in the schedules to it. Schedule 3 set out details of works that were required to [NAME] in order to comply with the Management of Houses in Multiple Occupation (England) Regulations 2006 and other Prescribed Standards. The Respondent was not satisfied that the Applicant had carried out the required works to [NAME] and determined that accordingly he had committed a relevant housing offence under section 234 of the Act (a failure to comply with a management regulation in respect of an HMO). On 16 November 2023 it served on the Applicant a notice of financial penalty under section 249A of the Act. The level of the financial penalty was £11,250. By an application to the Tribunal dated 12 December 2023 the Applicant appealed against the decision to impose the penalty on him.

5. There was before the Tribunal a bundle of documents of some 300 pages. It contained the Applicants application, grounds of appeal, Directions made by the Tribunal, the Respondent’s response in the form of a witness statement of [NAME] a Senior Environmental Health Officer employed by the Respondent, the Applicant’s reply and various other documents. References to page numbers in this decision are references to page numbers in that bundle. There was also before the Tribunal a separate bundle provided by the Respondent (the [NAME]) containing the Respondent’s Civil Penalties Process, the Ministry of Housing Communities & Local Government Guide for Local Housing Authorities in Respect of Civil Penalties under the Housing and Planning Act 2016 and the Respondent’s Private Sector Housing Enforcement Policy. Prior to the hearing each side filed a skeleton argument.

6. The Law

7. Section 249A of the Act provides that a 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 . ‘Relevant housing offence’ means one or more of the offences set out in subsection 2 which include an offence under section 234 of the Act.

8. Subsection 4 provides that the amount of a financial penalty imposed must not be more than £30,000.

9. Section 234 of the Act provides for regulations to be made the purpose of ensuring that in respect of every HMO there are in place satisfactory management arrangements and for satisfactory standards to be observed. Those may include duties on the person managing the HMO in respect of its repair, maintenance, cleanliness and good order and of the facilities and equipment in it. Subsection 3 provides that a person commits an offence if he fails to comply with regulations made under section 234. Subsection 4 provides that in proceedings against a person for an offence under subsection 3 that it is a defence that he had a reasonable excuse for not complying with the regulation.

10. The Management of Houses in Multiple Occupation (England) Regulations 2006 (the Regulations) are regulations made under section 234 of the Act.

Regulation 4 of the Regulations provides:

(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.

Regulation 7 provides:

(1) The manager must ensure that all common parts of the HMO are - (a) maintained in good and clean decorative repair; (b) maintained in a safe and working condition; and (c) kept reasonably clear from obstruction …………. (4) The manager must ensure that – (b) any garden belonging to the HMO is kept in a safe and tidy condition;

Regulation 8 provides:

(1) Subject to paragraph (4), the manager must ensure that each unit of living accommodation with in the HMO and any furniture supplied with it are in clean condition at the beginning of a person’s occupation of it (2) subject to paragraphs (3) and (4), the manager must ensure, in relation to each part of the HMO that is used as living accommodation, that – (a) the internal structure is maintained in good repair; (b) any fixtures, fittings or appliances within the part are maintained in good repair and in clean working order; and (c) every window and other means of ventilation are kept in good repair. (3) The duties imposed under paragraph (2) do not require the manager to carry out any repair the need for which arises in consequence of use by the [NAME] of his living accommodation otherwise than in a tenant like manner (4) the duties imposed under paragraphs (1) and (2)(b) do not apply in relation to furniture, fixtures, fittings or appliances that the [NAME] is

entitled to remove from the HMO or which are otherwise outside the control of the manager.

The term ‘the manager’ is defined in Regulation 2(c) in relation to an HMO to mean; ‘the person managing the HMO’.

11. Paragraph 10 of Schedule 13A to the Act provides that a person who has been served with a final penalty notice may appeal to this Tribunal against the decision to impose the penalty, or the amount of the penalty. The appeal is to be a rehearing of the local authority’s decision, but may be determined having regard to matters of which the authority were unaware. On an appeal the Tribunal may confirm, vary or cancel the final penalty notice. Paragraphs 1 – 8 of Schedule 13A set out the procedural steps to be taken by a local authority if it wishes to impose a financial penalty on a person under section 249A.

12. The Applicant’s Case

13. The Applicant told the Tribunal (and as is stated in his skeleton argument) that he accepted that as manager of [NAME] that he had committed a breach of the Regulations. However, that he had a reasonable excuse for doing so. That he had at all times recognised the importance and significance of the conditions attached to the HMO licence not least for reasons of tenant safety, something to which he was profoundly committed. He had engaged contractors to carry out the work required to [NAME] as set out in schedule 3 to the HMO licence. That he had relied upon the contractors to undertake the work properly albeit his contractors did at times require clarification as to the exact nature of the works needed. He made the point that at no time had he received any complaints from his tenants about the condition of [NAME].

14. That where, following inspections of [NAME] by Mr [RESPONDENT] on behalf of the Respondent required works were identified which had not been complied with or completed to the Respondent’s satisfaction, he had sought clarity from the Respondent which he says was not forthcoming. He refers in his written submissions, by way of example, to an email that he sent to Mr [NAME] on 30 April 2021 (155) that stated: ‘I haven’t received the list of work I have to do at my [NAME]’, to which he received no reply. He wanted to work with the Respondent to ensure that the conditions set out in schedule 3 of the licence were complied with. To that end, he would have been greatly assisted he said if the Respondent had provided an explanation as to exactly what works were required. For example, had he been given the photographs of [NAME] taken by Respondent at the time of the inspections and which now appear in the bundle (for example at pages 116-189) he would have been in a better position to understand what work was needed.

15. There was, the Applicant states, a lack of constructive communication and guidance from the Respondent as to what was required. That he always made proactive efforts to properly manage [NAME] and to comply with the Regulations. That he was not trying to avoid carrying out the required works, indeed to the contrary he was keen to comply with the conditions attached to the HMO licence. That the contractors instructed by him undertook such

works as they felt were required. But that it was the lack of communication from the Respondent which was ‘the hurdle’ that he had to get over. He contended that the [NAME] and the conditions attached to the licence were extremely complex. That it now seemed, he suggested, that landlords needed a professional qualification to understand those requirements. However, that since 2018 he had understood more and more and was always willing to learn more.

16. In answer to questions from the Tribunal he said that he was not a member of a professional landlords association. That he had not at any time sought advice from a third party such as a surveyor or managing agent because of the cost that would be involved. He said that he appreciated that the Respondent was not a project manager but there was what he described as a ‘communication gap’ between him and the Respondent. That he didn’t understand why the Respondent had not provided more ‘helpful guidance’. That he continually improved [NAME] when he could; it was he said ‘a work in progress’. He was concerned that if he was required to pay a civil penalty that would take away funds from him which would otherwise be used to carry out work to [NAME].

17. The Applicant states that he was further hindered by the unprecedented circumstances imposed by the COVID 19 pandemic. That many businesses including contractors were forced to close or operate at a reduced capacity. Consequently he was unable to instruct a contractor to carry out the works to [NAME] whilst the country was in lockdown.

18. The Applicant was asked by the Tribunal how often he inspected [NAME]. He indicated that it was difficult to inspect because he could not always obtain access to rooms occupied by tenants. It was put to him that he could still inspect the common areas such as the communal bathroom and kitchen. He said that he inspected when he received a complaint from the tenants, but that he received very few complaints. It was put to the Applicant by the Respondent that he didn’t need to see photographs to ascertain the condition of [NAME], he could do that for himself by regular inspections.

19. A financial penalty of £11,250, the Applicant says, would in all the circumstances be disproportionate. That any penalty should serve as a corrective measure aimed at improving compliance with the Regulations rather than as a purely punitive action. That it should reflect the Applicant’s genuine attempts to comply with the Regulations taking in to account external factors beyond his control such as the pandemic. That the need to enforce the Regulations must be balanced against the unique challenges faced by [NAME] owners during the pandemic. That any penalty should reflect a compassion and understanding of those unique circumstances and should serve to encourage compliance rather than foster a sense of alienation and punishment. In answer to a question from the Tribunal the Applicant said that he had no comments as regards the Respondent’s approach to the calculation of the penalty.

20. As to his financial circumstances, the Applicant states that his tax return for the year 2022-2023 reflected an increase in rental income and also an

income as a self-employed taxi driver. He makes reference to a bounce back loan of £20,500 which attracts monthly repayments of £221 and to certain credit card debts. He says that his mortgage repayments for [NAME] have increased following the end of a fixed term agreement from £1068 per month to £2459 per month.

21. The Respondent’s Case

22. The Tribunal had before it a witness statement of [NAME] a Senior Environmental Health Officer employed by the Respondent (pages 50-62). Mr [RESPONDENT] states that following receipt of an application from the Applicant for an HMO licence that on 14 January 2019 he carried out an inspection of [NAME] to determine its suitability for licensing. He states that he found [NAME] to be dirty and in poor repair. He states that he identified what he describes as ‘a number of significant risks’ that would need to be remedied by the Applicant including:

• ‘Non-compliant fire doors, due to poor fitting, lack of maintenance and modifications

• lack of protection to stairs from fire

• inadequate fire separation between rooms and the means of escape

• disrepair to the electrical installation and overloading of sockets

• a section of collapsing floor in one bedroom

• inadequate kitchen amenity provision for the number of occupants, that was also unhygienic

• firefighting equipment poorly sited, with a fire blanket located above the kitchen window

• lack of hand rail to the stairs • disrepair to Windows

• tenants cooking in rooms

• boiler held together by tape

• disrepair and insanitary conditions in the communal bathrooms’

23. Despite the poor condition of [NAME], Mr [NAME] determined that it would be appropriate issue an HMO licence with conditions requiring works to be carried out to bring [NAME] up to a safe condition.

24. Mr [APPELLANT] prepared a draft HMO licence which he sent to the Applicant on 18 July 2019. The draft licence contained conditions (set out in schedule 3 to

the draft licence (95-99) ) setting out works required to be completed to [NAME] by 31 October 2019 (unless stated otherwise). The works were divided into eight categories: 1. Fire safety. 2. Electrical safety. 3. Gas safety. 4. Kitchen facilities. 5. Washing and WC facilities. 6. Maintenance of living accommodation. 7. Protection from falls. 8. External works.

25. Mr [NAME] states that no representations as regards the draft licence or its conditions were received from the Applicant so on 5 August 2019 he issued a full HMO licence to the Applicant (101) which contained the same conditions in schedule 3 setting out the same works required to be carried out to [NAME] as in the draft licence, such works to be completed in the main by 31 October 2019 but some by 5 February 2020.

26. On 28 September 2020 Mr [NAME] varied the HMO licence to extend its duration following receipt of information that the planning use class for [NAME] had been regularised (page 124). The varied licence contained the same conditions in schedule 3 as before. On the same day [NAME] wrote to the Applicant with a copy of the varied licence and notified the Applicant that he intended to inspect [NAME] on 14 October 2020 to check that the works set out in schedule 3 had been completed to a satisfactory standard.

27. At his inspection Mr [NAME] states that he found that the majority of the works set out in schedule 3 had not been carried out. That he cautioned the Applicant for a breach of the licence conditions and of the Regulations.

28. On 30 May 2022 Mr [APPELLANT] wrote to the Applicant stating that the works set out in schedule 3 of the licence should have been completed and that he intended to inspect [NAME] again on 16 June 2022 (156). Mr [APPELLANT] says that he also sent to the Applicant a table of the works set out in schedule 3 of the licence with his comments as to which items of work had been complied with and which had not (158-165).

29. At his inspection on 16 June 2022 Mr [NAME] states that he noted that much of the work set out in schedule 3 to the HMO licence had still not been completed to a standard sufficient to reduce or remove risk to the occupants. Those included works to fit compliant fire doors, to rectify unsafe electrical installations, to repair windows and repairs to the communal bathroom and kitchen.

30. Following the inspection Mr [NAME] states that he considered the appropriate action for the Respondent to take in line with its enforcement policy and the requirements of the Act. He felt that the continued ongoing breaches of the conditions set out in schedule 3 of the HMO licence and of the Regulations were placing the Applicant’s tenants at risk of serious harm, particularly from fire. He decided that some form of action was required to make the Applicant appreciate the seriousness of the matter. He determined that it would be appropriate to issue the Applicant with a Financial Penalty Notice.

31. Mr [APPELLANT] carried out an assessment of the level of financial penalty in line with the Respondent’s Private Sector Housing Team’s Civil Penalties Process. (There is a copy of that process at pages 2-9 of the [NAME]

provided by the Respondent). That used a form of matrix to set the level of fine. He considered the Applicants level of culpability, the potential level of harm to tenants together with aggravating or mitigating factors to arrive at a figure of £11,250. He reviewed his assessment with two other officers within the Private Sector Housing Team.

32. On 14 December 2022 Mr [NAME] served a Notice of Intent to Impose a Financial Penalty of £11,250 on the Applicant (202). It was served within six months of the commission of the date of offence being the date of Mr [NAME] last inspection of [NAME] on 16 June 2022 (see paragraph 2 of Schedule 13A to the Act).

33. On 15 December 2022 the Applicant responded asking Mr [APPELLANT] to provide details of the grounds which formed the basis for the proposed fine and asked for a list of works that required rectifying following the inspection on 16 June 2022 (204). On 19 December 2022 Mr [APPELLANT] sent to the Applicant a copy of the Respondent’s Civil Penalty Assessment form (195) and an updated schedule of outstanding works (205 – 219).

34. On 15 January 2023 the Applicant submitted representations to Mr [APPELLANT], together with supporting documents including a financial assessment form asking Mr [NAME] to reconsider his decision to impose a financial penalty (221-268). The majority of the documents submitted Mr [NAME] says were historical in nature not relevant to the offence for which the Notice of Intent to Impose a Financial Penalty had been issued.

35. On 7 September 2023 Mr [NAME] reviewed the financial penalty notice with two colleagues. They considered representations made by Applicant both on 15 January 2023 and subsequently. They determined that the level of the financial penalty should not be changed. That for a number of reasons: Firstly, that schedule 3 to the HMO licence clearly set out the works required to be carried out to [NAME]. If those works had been completed there would have been no offence. Secondly, the Applicants contention that he could not complete the required works because of the lockdown caused by the pandemic was not accepted. That because the works should have been completed prior to the lockdown that commenced in March 2020. The Applicant had had over two years from the original deadline set out in schedule 3 of the licence to complete the works but still had not as at the inspection on 16 June 2022. Thirdly, that the Applicant did not appear to have taken any formal measures to access rooms occupied by tenants in order to carry out works. Fourthly, the Applicant was a landlord operating a business and had the option to appoint a [NAME] manager if he felt that he lacked the necessary expertise. Fifthly, that by issuing a financial penalty notice in lieu of prosecution the Respondent was able to deal with the matter as a civil case which would not prohibit the Applicant from continuing to operate [NAME] as a licensed HMO.

36. As part of the Respondent’s review of the financial penalty it considered the Applicants assets and income. The Applicant had submitted a financial assessment form contending that he would be unable to afford a fine. The Respondent considered the financial information provided by the Applicant

to be unreliable or at least inconsistent with that which had been previously been provided. It noted that the Applicant owned two freehold residential properties which were considered as significant assets those being the [NAME] and a separate [NAME] in which the Applicant resided with his family. There is a copy of the Respondent’s asset check which forms part of Respondent’s Civil Penalty Assessment form at page 283 of the bundle.

35. On 16 November 2023 the Respondent served on the Applicant a Notice of Financial Penalty (273) in the sum of £11,250.

36. On 7 December 2023 Mr [NAME] carried out a further inspection of [NAME] in connection with an application received for a new HMO licence. That application was in the name of is [APPELLANT] who was understood to be the Applicant’s wife. Mr [APPELLANT] noted that significant improvements had been made to the fire doors in particular and that [NAME] was broadly compliant with the conditions set out in schedule 3 of the licence. He considered the work was likely to have been completed by a competent contractor but in his opinion would not have been if the Respondent had not taken action for repeated breaches of the Regulations.

37. It is the Respondent’s case that the Applicant is guilty of an offence under section 234(3) of the Act. That he failed to comply with regulations made pursuant to section 234, namely the Regulations. In particular that the inspection of [NAME] on 16 June 2022 revealed the following breaches:

i. Regulation 4, the Applicant as manager of [NAME] had failed to ensure that all means of escape from fire were free from obstruction and maintained in good order and repair. In particular fire doors were non-compliant incorporating incorrect materials with gaps and holes around them and seals and strips missing. The under stairs cupboard was not adequately protected against fire and there were flammable items stored therein. A Wi-Fi unit had been fitted in the ground floor hallway, an escape route, not encased in fire resistant materials. In the hallway and other rooms were adapters and multiple cables increasing the risk of ignition. Firefighting equipment was poorly sited including a fire blanket located above the kitchen window. There was inadequate fire separation between the rooms and the means of escape.

ii. Regulation 7, the Applicant as manager of [NAME] had failed to ensure that all common parts of [NAME] were maintained in a good and clean decorative repair, were in a safe and working condition and were clear from obstruction, including the garden. In particular the window in the ground floor bathroom was in disrepair and would not fully close, the bathroom was not clean. The kitchen was in a poor condition with crude attempts having been made to cover damaged areas. The boiler was held together with tape. The garden was being used to store furniture and soft furnishings which may attract vermin.

iii. Regulation 8, the Applicant as manager of [NAME] had failed to ensure that every window and means of ventilation were in good repair. In particular windows in multiple bedrooms were in disrepair with badly rotten frames and failed seals to double glazed units. The manager had failed to ensure that

the internal structure of [NAME] was maintained in good repair and that fixtures and fittings were clean and working. In particular the floor in room 7 have been poorly and inadequately repaired leaving loose floor coverings to conceal a large gap between the floorboards.

38. The HMO licences issued to the Applicant, including the draft licence in July 2019, clearly set out, the Respondent says, the works that were required to comply with the Regulations and to hold an HMO licence. Those works had to be completed by 5 February 2020. That it was a matter for the Applicant as to how he managed [NAME] in order to comply with the Regulations to include, if he felt necessary, instructing a managing agent. That the COVID 19 pandemic had no effect on the requirement to complete the works to [NAME] as they were required to be completed before the country went into lockdown in March 2020. That the Applicant had been cautioned for failing to comply with the Regulations following an inspection on 11 January 2017, again following the inspection on 14 October 2020 and for a third time following the inspection on 16 June 2022. It was that third inspection that had led to the commission of the offence for which the Notice of Financial Penalty was issued. The Applicant cannot, the Respondent says, establish on the balance of probabilities a defence of reasonable excuse for not complying with the Regulations. That indeed on the evidence there cannot be a reasonable excuse for the commission of the offence not least given that [NAME] has been non-compliant with the Regulations since 2017.

39. The financial penalty, the Respondent says is at an appropriate level having regard to the relevant factors set out in its Civil Penalties Process (pages 2-9 of the [NAME]). The Respondent submits that the culpability for the offence (factor 1 of stage one of the process) must be ‘high’ given that [NAME] has not been compliant with the regulations since 2017. That the works required by the licence should have been completed by February 2020. The fact that they were not, exposed the [NAME] to an increased risk of death, injury or illness. There was, Ms [NAME] said, a history of non- compliance in this case which justified a higher penalty. She submitted that the Applicant knew of his responsibilities, that he been cautioned on three separate occasions. That the required works were only completed after the Respondent had served the final notice.

40. That the level of harm (factor 2 of stage 1 of the process - page 5 of the Authority’s Bundle) should also be regarded as ‘high’ by reason of the high risk of an adverse effect on [NAME] occasioned by the poor state of repair of the fire doors, the tripping hazards caused by unsafe floorboards, the risk of cold due to failing windows and the risk of illness from the unclean kitchen. That applying the level of culpability as ‘high’ and the level of harm as ‘high’ to the matrix in the Respondent’s Civil Penalties Process (page 6 of the [NAME]) produced a scoring matrix of 9 equivalent to a financial penalty of £11,250.

41. That it was an aggravating factor Ms [NAME] said (for the purposes of stage two of the process – page 6 of the [NAME])) that the required works were only completed following the service of the Financial Penalty

Notice. This was, she submitted, one of the worst cases of non-compliance with the Regulations that the Respondent had seen. The effect was to at increase the penalty by one score point to £13,500. Turning to mitigating factors (stage three of the process – page 7 of the [NAME]) it was acknowledged Ms [NAME] said, albeit she felt somewhat generously, that the Applicant had attended every inspection of [NAME] and had been cooperative throughout, although that was she suggested perhaps the very least that could be expected from a landlord. The effect was to reduce the penalty by one score point back to £11,250.

42. The statutory guidance, the Respondent contends, is that the fine should remove any financial benefit that an offender may have obtained as a result of committing the offence. That the offender should not benefit as result of committing the offence, i.e. it should not be cheaper to offend than to ensure that [NAME] is well maintained and properly managed. That the effect should be to send a suitable message to other landlords. The fine should be, Ms [NAME] suggested, both a deterrence and a punishment. Something which she said appeared to have worked in this case given that the works to [NAME] had only been carried out after service of the final notice.

43. With reference to stage four of the process (page 7 of the [NAME]) Ms [NAME] submitted that the Proceeds of Crime Act 2002 permits the value of any assets owned by the landlord to be taken into account when making an assessment and settling the level of penalty. That the Applicant owned two freehold properties. Firstly, the subject [NAME]; [ADDRESS] which was valued she said between £447,000 - £485,000 and was subject to a mortgage of £285,398. Secondly the Applicant’s place of residence; [ADDRESS], Worthing which was valued she said at £387,501 and subject to a mortgage of £129,935. That as such she submitted there was not insignificant equity in both properties. That bank statements and credit card statements produced by the Applicant (15 – 26) showed a bank account in credit and credit card debts that were being paid. Ms [NAME] made the point that a civil penalty can be paid by instalments or placed as a charge on a [NAME] so that it need not have an immediate adverse financial effect.

In all the circumstances the Respondent contends that the financial penalty is properly fixed in the sum of £11,250. That a penalty in that some is proportionate and will have an appropriate impact.

44. The Tribunal’s Decision

45. The Tribunal first reminds itself that this appeal is by way of a rehearing and may be determined having regard to matters of which the Respondent was unaware. That the Tribunal may confirm, vary or cancel the final notice dated 16 November 2023.

46. The Tribunal is satisfied beyond reasonable doubt on the basis of the evidence before it, that the Applicant, as manager of [NAME], failed to comply with regulations 4, 7 and 8 of the Regulations thereby committing an offence under section 234(3) of the Act. That had the Applicant undertaken the works set out in schedule 3 of the HMO licence he would have complied with

the Regulations and would not have committed an offence. However as at the date of the inspection on 16 June 2022 the majority of the conditions set out in schedule 3 of the draft licence dated 18 July 2019 as well as in the licence dated 5 August 2019 and the variation thereof dated 28 September 2020 had not been completed. As such the Applicant failed to manage [NAME] so as to ensure that the requirements of Regulations 4, 7 and 8 were met.

47. The Applicant, to his credit, acknowledges that that as at the date of the inspection on 16 June 2022 that not all of the works set out in schedule 3 to the HMO licence had been completed and that as such there was a breach of the Regulations. He raises a defence of reasonable excuse. That in summary he was hampered by a lack detail from the Respondent as to the exact nature and extent of the works required to [NAME]. That there was a lack of communication and assistance from the Respondent that would have helped him understand the nature and extent of the works required to comply with the Regulations. That the nature of the work and the requirements set out in schedule 3 to the HMO licence were so complex as to go beyond the understanding of a layperson in such matters. That he was hindered in his efforts to carry out the required works because of the unprecedented circumstances and difficulties imposed by the COVID 19 pandemic.

48. The Applicants reasonable excuse defence is not made out. The works set out in schedule 3 of the HMO licence were clear and detailed. The Applicant was the manager of [NAME] at all material times. It was incumbent upon him to take such steps as were necessary to inform himself sufficiently of the condition of [NAME] from time to time and as to what works were required to be carried out to ensure compliance with the Regulations. Those steps could include, where appropriate, seeking advice from an expert third party such as a surveyor or [NAME] manager (even if that incurred the Applicant in cost). The burden was on the Applicant as manager of [NAME] to comply with the Regulations. If he didn’t understand what was required of him that was not the fault of the Respondent. In any event, the Respondent set out in detail the works that were required in schedule 3 of the HMO licence. The fact that works were required to [NAME] on an ongoing basis should have been apparent in view of the Tribunal to the Applicant upon a regular inspection of [NAME]. He should not need to see photographs taken by the Respondent to understand what was required.

49. Nor does the Tribunal accept that the COVID 19 pandemic and consequential lockdowns provide the Applicant with a reasonable excuse. Works required by schedule 3 of the HMO licence were required to be completed by 5 February 2020, prior to the commencement of the lockdown. Further the pandemic did not prohibit [NAME] inspections. There was no need for the Applicant to enter rooms occupied by tenants, he could still inspect the external areas and the communal areas. There were no doubt some difficulties were experienced during the lockdown, but those do not provide, in the view of the Tribunal, the Applicant with a defence of reasonable excuse.

50. The Quantum of the Penalty

51. The Applicant does not suggest that the Tribunal should depart from the Respondent’s Civil Penalties Process, nor in the view of the Tribunal should it.

52. The first stage of the process is to band the level of offence. That is in two parts, firstly; culpability (the seriousness of the offence and culpability), and secondly; the level of harm.

53. The level of culpability was high. The reality is that the Applicant knew, or should have known, of his responsibilities as manager of [NAME] as far back as 2017. He received the draft HMO licence with the schedule 3 conditions in July 2019. He received the full licence with the same conditions in August 2019. The same conditions appeared on the varied licence produced by the Respondent in September 2020. He was cautioned by the Respondent following inspections in January 2017, October 2020 and June 2022. The Respondent’s Civil Penalty Process describes an ‘high’ assessment as a landlord having ‘actual foresight of, or wilful blindness to, risk of offending but risk nevertheless taken’. A reasonable and competent landlord should have understood over a period of years what works were required to [NAME] in order to comply with the Regulations. It is noteworthy that the Applicant only completed the required works after service of the final notice.

54. The level of harm, more particularly potential harm, was also high. The breach by the Applicant in particular of Regulation 4 is in the view of the Tribunal extremely serious. The failure by the Applicant to carry out works to address the fire safety issues set out in schedule 3 of the HMO licence gave rise to a risk of significant harm to [NAME] of [NAME] by fire. The failure to properly fix floorboards give rise to a very real tripping hazard. The failure to carry out works to repair or replace damaged windows undoubtedly allowed the ingress of cold and damp to the detriment of the [NAME]. The failure to ensure that the kitchen facilities and bathrooms were properly maintained in good and clean decorative repair and in a safe condition gave rise to a potential adverse effect on the health and safety of [NAME].

55. Applying the scoring matrix in the Respondent’s Civil Penalties Process (page 6 of the [NAME]) that produces a financial penalty of £11,250.

56. The second stage of the process is to amend the penalty scoring based on any aggravating factors. The Tribunal agrees with the Respondent that it is an aggravating feature of this case that the works that were required to [NAME] were outstanding for a considerable amount of time, and were only completed after service of the final notice. That is in the view of the Tribunal a significant aggravating factor which justifies increasing the civil penalty by a penalty score point to the sum of £13,500.

57. The third stage of the process is to amend the penalty scoring based on any mitigating factors. The Tribunal accepts that the Applicant did cooperate with the Respondent at least to the extent that he did not obstruct and

attended the inspections of [NAME] carried out by the Respondent (albeit that might be regarded as the least that might be expected from a [NAME]). That the required works to [NAME] were belatedly completed following service of the final notice. The effect is to decrease the civil penalty by a penalty score point reducing it back to the sum of £11,250.

58. Stage four the process is to review the civil penalty to ensure that it is proportionate. The Tribunal is satisfied that a fine of £11,250 is not at a level that would mean that the Applicant benefits financially by committing the offence. That the sum is proportionate and will have the appropriate impact. That the Applicants financial circumstances and assets do not warrant any further adjustment to the level of the penalty.

59. The Tribunal is also satisfied from the evidence before it and the submissions made by the Respondent that the procedural requirements for the imposition of a financial penalty set out at paragraphs 1-8 of schedule 13A to the Act were properly met.

60. Summary of Decision.

61. The Tribunal confirms the Final Notice of Financial Penalty dated 16 November 2023 in the sum of £11,250.00.

23 September 2024

Judge N [NAME]

1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application by email to [EMAIL] to the First-tier Tribunal at the Regional office which has been dealing with the case.

2. The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.

3. If the person wishing to appeal does not comply with the 28-day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

4. The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking.