First-tier Tribunal Dismisses Appeal Against Housing Improvement Notice Penalty

OUTCOME: Dismissed

FIRST - TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference : MAN/00EJ/HNA/2025/0687

Date of Hearing : 04 February 2026

Property : 32 [ADDRESS], [POSTCODE]

Appellant: [redacted]

Respondent : [redacted]

Type of Application : Housing Act 2004, Section 249A & Sch. 13A

Tribunal Members : [NAME] (Tribunal Judge) [NAME] C Snowball (MRICS); [NAME] M Steer (Member)

______________________________________________ DECISION AND REASONS ____________________________________

Decision

1. The Tribunal dismisses the appeal against liability and finds, beyond reasonable doubt, that the Appellant failed to comply with the Improvement Notice served on 5 July 2023, contrary to section 30 Housing Act 2004.

2. The Tribunal varies the financial penalty imposed by the Respondent. Applying the Respondent’s Civil Penalty Matrix afresh and considering all relevant culpability, harm, aggravating and mitigating factors, the Tribunal determines that the appropriate and proportionate penalty is £18,000.

Reasons

Introduction

1. This appeal concerns a financial penalty of £30,000 imposed by Durham County Council (“the Respondent”) on [APPELLANT] (“the Appellant”) for an alleged failure to comply with an Improvement Notice served under sections 11 and 12 of the Housing Act 2004 in respect of [ADDRESS], a selectively licensed rental property.

2. We heard evidence in person from the Respondent’s officers, [NAME] [RESPONDENT] and [NAME] [APPELLANT], and evidence from [NAME] [APPELLANT] (“Aaron”), who manages the Appellant’s properties, and from [NAME] [APPELLANT] [NAME], the director of the Appellant company.

3. There was no inspection of the property by the Tribunal, but we had a bundle of documents comprising from the Respondent and a number of documents from the Appellant. These included various photographs of the subject property, from which we were able to gain an understanding of its location, size and layout.

Findings of Fact

4. An inspection of the property, which is situated in a selective licensing zone, was conducted on the 01 March 2023 by officers of Durham County Council, [NAME] [NAME] and [NAME] [NAME] [NAME] in the company of [NAME] [APPELLANT] from the Appellant company. At that time the property was not occupied but several repairs were identified as necessary before the property could become tenanted. Subsequently, the Respondent was notified on the 11 May 2023 that the property was now tenanted and various repairs remained outstanding. Two unsuccessful attempts to gain entry to the property were made by [NAME] [APPELLANT] due to the tenant not being at home. The tenant did respond to a text message and confirmed that she would be available for an inspection on the 16 June 2023. At the relevant time the tenant, [NAME] [APPELLANT], was pregnant.

5. Following that further inspection, on the 28 June 2023 [NAME] [NAME] carried out a HHSRS calculation and identified one category 1 hazard: excess cold; and 6 category 2 hazards: damp and mould, carbon monoxide, food safety, personal hygiene, falls associated with the stairs and hot surfaces. At the same time [NAME] [NAME] confirmed that ownership of the property was held by [APPELLANT] [COMPANY].

6. An Improvement Notice was served on 5 July 2023 requiring the Appellant to begin works by 3 August 2023 and complete them by 31 August 2023. The Notice was not appealed and therefore became operative.

7. The Improvement Notice identified the items and categories set out above and, on the 12 July 2023, [NAME] [NAME] rang [NAME] [NAME] about the improvement notice advising that he was having difficulty gaining access to the property.

8. Following an initial failed attempt to gain access by the Respondent on the 18 September 2023 as the tenant was not at home, a compliance inspection on 20 October 2023 showed that no material progress had been made. By letter dated 03 November 2023, [NAME] [NAME] [NAME] was invited to an interview under caution to take place on the 15 November 2023 but [NAME] [NAME] [NAME] did not attend the interview and on the 13 February 2024, [NAME] [NAME] completed a “case file” for an offence of failing to comply with an improvement notice electing a civil penalty as opposed to a prosecution in the magistrates’ court. On the 15 February 2024, [NAME] [NAME] emailed [NAME] [NAME] [NAME] to remind him to complete the works and [NAME] [NAME] responded to say that the works would be started the following day. [NAME] [NAME] subsequently emailed on the 19 February 2024 to say that necessary works had been completed.

9. Between July 2023 and January 2024, the Appellant’s case is that repeated attempts were made to contact the tenant, [NAME] [APPELLANT], but made limited progress. It is claimed that the tenant was intermittently absent due to personal and health issues. In support of this claim, during the relevant period from July to October 2023, the Appellant proffered no documentary evidence of any date or time of attendance; no evidence of any correspondence sent to the tenant giving dates and times for a property inspection to be carried out and no indication that any formal process might be started under the terms of the tenancy agreement to gain access. We were told at the hearing that [NAME] [NAME] would occasionally drop by the property on his way to somewhere else and find the tenant absent. He went as far as to tell us that at one point he thought she had moved out but subsequently resiled from this claim when he was asked if rent still continued to be paid. [NAME] [APPELLANT] explained that he was unable to leave notes for the tenant as he had nothing to write on. The only evidence we had were emails and texts from January 2024. This is in contrast to the Respondent’s evidence that when attempts were made to gain access these were documented and followed through, resulting in access being gained.

10. During questioning in the hearing, [NAME] [NAME] [NAME] told us that the company did in fact write to the tenant and that he even went as far as to attend the property and put a letter through the door. When asked why this had not previously been mentioned or why copies of these letters were not included in the bundle, we were told that no copy had been retained. We did not accept that any correspondence had been written to the tenant, but it is salient that [NAME] [APPELLANT] mentioned correspondence to us as it would be something that any reasonable landlord might do when faced with a tenant who was never at home.

11. In his evidence, [NAME] [APPELLANT] asked the Tribunal to listen to a recording he had subsequently made with the tenant (who no longer lives in the property) in support of the claim that she was the block to carrying out the works and failed

to allow access. We placed no weight on that recording for the following reasons. Firstly, Miss [NAME] did not attend the hearing to give evidence herself; secondly, from listening to the recording we gained the impression that she thought she was being accused of causing the £30,000 fine and so presumably she was scared of the consequences and answered in a way she thought necessary to avoid being implicated; thirdly the recording does not really go anywhere near establishing that she was either refusing entry or deliberately failing to allow access and finally, even if what is stated during the recording is relevant, the Appellant still failed to take any steps a reasonable landlord might take in gaining access to carry out urgent and important repairs following service of an improvement notice.

12.

Accordingly, the Tribunal finds that the Appellant did not take all reasonable steps available to it and necessary to gain access and carry out works. The Tribunal does not accept that there were frequent visits to the property; we do not accept that any correspondence was sent to the tenant and even if that were the case, a responsible landlord would have taken legal advice and commenced proceedings to gain access under the terms of the tenancy agreement.

13. On the 01 March 2024, the Respondent served a Notice of Intent to impose a Civil Penalty on the Appellant and written representations were received on the 11 March 2024 as set out in [NAME] [NAME] witness statement. Following consideration of those representations, the Respondent issued a Final Civil Penalty Notice on the 16 April 2024 in the sum of £30,000 – the maximum allowable under the Civil Penalty Scheme.

14. We were told that in relation to a prosecution in his personal capacity, for an offence of failure to comply with the requirements of an improvement notice for another property, 07 May 2024, [NAME] [NAME] [NAME] attended Peterlee Magistrates court, pleaded guilty to the offence and was fined £1611.69 including costs in the sum of £573.69 payable at £400 per calendar month. We were told that in this case he also claimed that the tenant refused to allow access.

15. The Improvement Notice was eventually revoked on 6 January 2025 after reinspection confirmed that all of the remedial works specified within the notice had been satisfactorily completed.

The Legal Framework

16. By section 249A of the Housing Act 2004:

(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.

(2) In this section “relevant housing offence” means an offence under—

(a) section 30 (failure to comply with improvement notice), ………..

17. By subsection (4) of section 249A the maximum penalty is £30,000 and subsection (6) provides that the procedure for imposing such a fine and for an appeal against the financial penalty is as set out in schedule 13A to the Act.

18. Paragraphs 1 to 3 of Schedule 13A set out the provisions in relation to a “Notice of Intent” which must be served before imposing a financial penalty. Paragraph 2 provides that the notice must be served within 6 months unless the failure to act is continuing (which is the case in this appeal) and paragraph 3 sets out the information which must be contained within the Notice.

19. After service of the Notice of Intent and following consideration of any representation made, paragraph 6 provides for the service of a “Final Notice”, which must set out the amount of the financial penalty and the information required in paragraph 8: i.e., the amount, the reasons, how to pay and information about the right of appeal.

20. Paragraph 10 of schedule 13A sets out the provisions in relation to such an appeal:

(1) A person 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.

(2) If a person appeals under this paragraph, the final notice is suspended until the appeal is finally determined or withdrawn.

(3) An appeal under this paragraph—

(a) is to be a re-hearing of the local housing 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.

(5) The final notice may not be varied under sub-paragraph (4) so as to make it impose a financial penalty of more than the local housing authority could have imposed.

21. Accordingly, the Tribunal, in this appeal, has jurisdiction over the decision to impose a penalty; it has jurisdiction over the amount of the penalty, and we can confirm, vary or cancel the final notice including increasing, if it so determines, the amount of the penalty. The appeal is by way of a re-hearing, which we have conducted at the hearing.

22. We had to be satisfied beyond reasonable doubt that the conduct of the Appellant amounts to a “relevant housing offence” under sections 30 and 234(3) of the Act – i.e. that the Appellant had failed to comply with the terms of an improvement notice and the HMO management regulations.

Our Assessment of the Appeal 23. This is a re-hearing of the decision to impose a financial penalty for the offences committed by the Appellant under section 30 and section 234(3) of the Housing Act 2004.

24. On the basis of our findings of fact as set out above, we are satisfied beyond reasonable doubt that the Appellant has committed an offence under section 30 of the Housing Act 2004 in relation to the subject property. The terms of the improvement notice in relation to the property were clear and there was no appeal against that notice. The Appellant was required to carry out the necessary works by the end of August 2023, and it failed to do so. We have decided that there was no reasonable excuse by reason of any failure to gain access and that reasonable steps which might have been taken were not taken.

25. We find as fact that the Notice of Intent and Final Notice were properly served in relation to both offences and that they contained the proper statutory information. There were no procedural irregularities and in fact no procedural irregularities were raised in the appeal by the Appellant.

26. Accordingly, and given our findings of fact, that the breach is made out and that the Appellant is culpable the only remaining issue is the level of the financial penalty for the breach which we will address below.

The Amount of the Penalty

27. The starting point is the Respondent’s policy in relation to civil penalties, the relevant parts of which has been provided in the Respondent’s bundle. The policy starts at page 88 of the Respondent’s bundle and on page 89 identifies the relevant statutory guidance considerations of severity of the offence, culpability, harm, punishment etc. The policy creates what it terms a Civil Penalty Matrix indicating that an officer will conduct a “four stage process” during which the seriousness of the offence; the number of rental properties; fourthly aggravating and mitigating factors will be considered and finally any discounts will be applied. The policy provides generally that in “exceptional circumstances, officers may determine that the presence of one or more mitigating factors justify a decrease in the penalty in excess of £5000…” and that a list of mitigating factors has not been provided as “there are myriad possible circumstances...”.

28. In terms of the starting point, the policy sets out a box of six levels of seriousness ranging from mild - £2500 through to very severe - £27,500. The policy indicates that a failure to comply with an improvement notice will always be classed as being “severe” attracting a starting point of £22,500, adding that in the event that a landlord has more than 6 properties then an uplift of £5000 will be applied, giving a starting point of £27,500 - £2,500 below the maximum allowed under the scheme.

29. Taking account of the statutory purpose for the civil penalty scheme to arrive at deterrence without disproportion and the requirement for an individualised assessment under the statutory guidance, the starting point struck the Tribunal as unreasonable for a number of reasons. Firstly, it would mean that potentially a landlord with 5 properties who breached an improvement notice with many category 1 hazards (i.e. a very serious breach) would attract a significantly lower fine than a landlord with 6 properties with say one or two category 2 hazards; secondly, given the list of aggravating factors, then it is likely that in a large number of cases the fine will exceed the statutory maximum and thereafter a requirement to bring it down to the statutory maximum thus making it generally unworkable with standardised outcomes; thirdly, there is little scope for any degree of discretion arising out of the policy as the outcome will, in many cases, result in a fine at or near the statutory maximum and finally, the way the policy works creates what we decided is an irrationality, and is well demonstrated in the facts of this appeal. Taking the calculation sheet on page 182, it can be seen that the starting point for this offence would be £27,500. The total cost of aggravating factors was set at £4500 taking the total to £32,000 - £2000 over the statutory maximum. This meant that taking £2000 off for mitigation was meaningless as £2000 would have had to be removed in any event. That cannot have been the intention of the policy when read in the light of the legislation.

30. We therefore decided to detract from the policy to some extent so as to ensure a fair and just outcome given the nature of the offence and the severity of the issues. The Respondent’s Corporate Enforcement Policy, as detailed on page 218, confirms the need for penalties to be proportionate to the nature of the offence and harm caused.

31. Page 186 of the Council’s Civil Penalties Policy states that the Matrix starting level is ‘indicative’ and [NAME] [NAME] confirmed during Tribunal questioning that the suggested starting levels were not mandatory. We therefore decided that the nature of this offence is properly described as “serious” starting at £12,500. Taking account of the risk of harm caused to the tenant (which we determined to be a serious risk) together with the severity of the offence, the culpability and track record of the Appellant and the need to punish and deter, placing the seriousness of the offence at higher than the “serious” bracket would give rise to an unjust outcome having regard to the nature and degree of the issues in this appeal. Further, we note that there is no suggestion that the Appellant has benefitted financially from the failure to comply with the improvement notice.

32. We find that as the Appellant is a [COMPANY] with many properties then it is right to add on £5000 in line with the terms of the policy. Thereafter we

agree with the Respondent that an aggravating factor is the vulnerability of the tenant. She was pregnant at the relevant time and ensuring her safety was of utmost importance. The penalty should be increased by £1500 to reflect this giving a running total of £19,000. We also accept that the nature of the hazards is an aggravating factor, but we do not agree that the appropriate amount is £1500. Whilst there was a category 1 hazard (excess cold) this was down to ill fitting seals on the windows rather than a lack of heating and the category 2 hazards, in our judgement did not give rise to aggravating factors over and above any other improvement notice. The fact that there has been a breach of an improvement notice in itself gives rise to an offence and so should not also form the basis for it also being an aggravating factor to any appreciable extent. We therefore decided to add £1000 to take account of the category 1 hazard rather than £1500 to give a running total of £20,000.

33. With some hesitation we are also prepared to accept the Respondent’s concession that failure to gain access is a mitigating factor. We hesitate because we have noted above that claims to have written to the tenant were not accepted and we have also noted that there is scant, if any evidence, that visits were made. We also found that the telephone conversation was unreliable and of little evidential value. That said, there is some evidence that it was difficult to get access to the property on the Respondent’s side, and we therefore accept the concession that £2000 should be included as a mitigating factor.

Conclusion

34. The result is that in relation to the two offences for breach of the improvement notice the level of fine is £18,000.

35. If either party is dissatisfied with this decision, they may apply for permission to appeal to the Upper Tribunal (Lands Chamber) on a point of law only. Prior to making such an appeal, an application must be made, in writing, to this Tribunal for permission to appeal. Any such application must be made within 28 days of the issue of this decision (regulation 52 (2) of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rule 2013) stating the grounds upon which it is intended to rely in the appeal.

Signed Dated 23 February 2026 Phillip Barber, Judge of the First-tier Tribunal