First-tier Tribunal Grants Banning Order Against Landlord for Three Years

OUTCOME: Allowed

© CROWN COPYRIGHT 2021

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER

(RESIDENTIAL PROPERTY)

Case References : LON/00BC/HBA/2020/0007 V:CVP

Applicant

: [redacted]

: [NAME_2]

Respondent

: [redacted]

: [NAME_8]

Application : Application for a Banning Order under s.16 Housing and Planning Act 2016

Members of Tribunal : [NAME_10] [NAME_13] Judge

Ms S Coughlin MCIEH

Date and Venue of Hearing : 25 February 2021 Remote

Date of Decision : 2 June 2021

DECISION

The Tribunal makes a Banning Order against [NAME_4] for 3 years in the terms set out in the Order that accompanies this decision.

1 Remote Hearing Arrangements:

(A) This has been a remote video hearing which has been consented to by the parties. The form of remote hearing was V:CVP. A face-to-face hearing was not held because it was not practicable, and no request was made for a face-to-face hearing. The documents that the Tribunal was referred to were in a bundle from the Applicant of 186 pages, including a one-page extract from the [NAME_53] that was submitted just before the hearing. The bundle for the Respondent was 42 pages, plus an additional five pages of witness statements. The Applicant produced a skeleton argument at the hearing. Following the hearing the Tribunal made further Directions for the Applicant to submit an amended draft Banning Order and an opportunity for the Respondent to make submissions. The Respondent’s submitted a further document of 5 pages on 11 March 2021 and these submissions extended beyond the amended banning order and therefore the Tribunal allowed the Applicant a further opportunity to respond to those additional comments and that response was a further 4 pages. (B) All documents have been noted by the Tribunal. Numbers in bold and in square brackets with the prefix A, below refer to pages in the hearing bundle prepared by [NAME_1] and those with the prefix R refers to pages in the bundle provided by [NAME_15]. (C) The remote video hearing took place on 25 February 2021. In attendance on behalf of the Applicant were [NAME_2] of counsel, [NAME_16], [NAME_18], [NAME_34] and [NAME_21] and [NAME_23] joined later and gave evidence about the tenancy arrangements made by the Respondent of the London Borough of [NAME_1]. [NAME_15] was in attendance and was represented by [NAME_78].

Background:

1. This is an application, brought by London Borough of [NAME_1] (“[NAME_1]”), seeking an order under s.16 Housing and Planning Act 2016 (“the 2016 Act”), against [NAME_4].

2. It was confirmed at the hearing that on 11 October 2019, at Barkingside Magistrates’ Court [A35], [NAME_26] pleaded guilty to 15 offences and was fined a total of £14,800 plus a Victims’ Surcharge of £260 and prosecution costs of £10,105. The dates of the offences range from 29 January to 9 April 2019. It is stated that the fines were reduced because of [NAME_15] pleading guilty. The 15 offences were in respect of five properties as detailed below:

(a) two offences in respect of 1 [ADDRESS], [POSTCODE], namely:

(i) two offences under s.234 of the Housing Act 2004 (“the 2004 Act”), concerning fire safety issues and breach of management regulations in respect of [NAME_27] for which he was fined £2,700. The details of the offences included that the property was in multiple occupation and that

2 the underside of the stairs were not fitted with fire resistant plasterboard; there were no smoke detectors in the bedrooms; the bedrooms and the kitchen doors did not have self-closing devices; there was no fire blanket in the kitchen and the bedroom doors were operated by removable keys.

(b) four offences in respect of 30, [ADDRESS], [POSTCODE], namely: (i) an offence under s.72 of the 2004 Act concerning failure to license it as a [NAME_28] (“[NAME_29]”) for which he was fined £200; and (ii) three offence under s.234 of the 2004 Act, concerning fire safety issues and breach of management regulations in respect of [NAME_27] for which he was fined a total of £3,000. The details of the offences included that the property was in multiple occupation and there were no smoke detectors in the bedrooms or the kitchen; there were no manual call points next to the final exits; the bedrooms and the kitchen doors did not have self-closing devices and the bedroom doors were operated by removable keys.

(c) three offences in respect of 8, [ADDRESS], [POSTCODE], namely: (i) an offence under s.72 Housing Act 2004 (“the 2004 Act”) concerning failure to license it as a [NAME_28] (“[NAME_29]”) for which he was fined £200; and (ii) two offence under s.234 of the 2004 Act, concerning fire safety issues and breach of management regulations in respect of [NAME_27] for which he was fined a total of £2,700. The details of the offences included that the property was in multiple occupation and that there was no emergency lighting in the hallways; there were no smoke detectors in the bedrooms; the bedrooms and the kitchen doors did not have self-closing devices and the bedroom doors were operated by removable keys.

(d) three offences in respect of 33, [ADDRESS], [POSTCODE], namely (i) an offence under s.72 Housing Act 2004 (“the 2004 Act”) concerning failure to license it as a [NAME_28] (“[NAME_29]”) for which he was fined £200; and (ii) two offence under s.234 of the 2004 Act, concerning fire safety issues and breach of management regulations in respect of [NAME_27] for which he was fined a total of £2,700. The details of the offences included that the property was in multiple occupation and that the underside of the stairs were not fitted with fire resistant plasterboard; there were no smoke detectors in three of the bedrooms; the first and second floor bedroom doors were not fitted with smoke seals or self-closing devices; there was no manual call points next to the final exits and the bedrooms and the bedroom doors were operated by removable keys.

(e) three offences in respect of 67, [ADDRESS], [POSTCODE], namely

3 (i) an offence under s.72 Housing Act 2004 (“the 2004 Act”) concerning failure to license it as a [NAME_28] (“[NAME_29]”) for which he was fined £200; and (ii) two offences under s.234 of the 2004 Act, concerning fire safety issues and breach of management regulations in respect of [NAME_27] for which he was fined a total of £2,700. The details of the offences included that the property was in multiple occupation and that there were no smoke detectors or heat detectors in the kitchen; that only three of seven bedrooms had smoke detectors; there were no manual call points; no fire blanket in the kitchen; the bedroom doors were operated by removable keys and the bedroom and kitchen doors did not have self-closing devices or intumescent smoke seals.

3. On 31 March 2020, [NAME_1] sent [NAME_15] a Notice of Intent to Issue a Banning Order [A21]. The notice invited him to make representations within 28 days from the day after that on which the notice was given. This notice indicated that the length of the proposed ban was four years. It also set out the reasons for applying for a Banning Order with reference to a Banning Order Matrix that consider factors such as severity of the offence, culpability, harm/potential harm, punishment and deterrence to the offender and others.

4. On 28 April 2020, [NAME_30], for [NAME_15], made representations as to why it was considered that a Banning Order was inappropriate as [NAME_15] was unaware of his legal obligations; about flaws to the [NAME_1]’s decision-making process and policy on Banning Orders and that the Tribunal would be unlikely to make a Banning Order [A43].

5. The application to the Tribunal was dated 30 July 2020. Directions were given by the Tribunal on 25 November 2020 [A12], and the application proceeded to an oral hearing on 25 February 2021 as detailed above.

Statutory Provisions and Guidance

6. The statutory provisions relating to Banning Orders are contained within Chapter 2 of Part 2 of the 2016 Act and, to the extent relevant, are set out in Schedule 1 to this decision.

7. In summary, a local housing authority ([NAME_31]) may apply to this Tribunal for a Banning Order against a person who has been convicted of a Banning Order offence and who was a residential landlord or a property agent at the time the offence was committed.

8. Section 14 of the 2016 Act provides that if a Banning Order is made by the Tribunal, the person can be banned from:

(a) letting housing in England; (b) engaging in English letting agency work; (c) engaging in English property management work; or (d) doing two or more of those things.

4 9. Section 15 requires the [NAME_31] to give the person a notice of intended proceedings before applying for a Banning Order by:

(a) informing the person that the authority is proposing to apply for a Banning Order and explaining why;

(b) stating the length of each proposed ban; and

(c) inviting the person to make representations within a period specified in the notice of not less than 28 days.

10. The [NAME_31] must consider any representations made during that notice period and must wait until the notice period has ended before applying for a Banning Order. Notice of intended proceedings may not be given after the end of the period of six months beginning with the day on which the person was convicted of the offence to which the notice relates.

11. Section 16 provides that in deciding whether to make a Banning Order against a person, and in deciding what order to make, the Tribunal must consider:

(a) the seriousness of the offence of which the person has been convicted;

(b) any previous convictions that the person has for a Banning Order offence;

(c) whether the person is or has at any time been included in the database of [NAME_32] and property agents; and

(d) the likely effect of the Banning Order on the person and anyone else who may be affected by the order.

12. Section 17 provides that a ban must last at least 12 months but may contain exceptions to the ban for some or all of the period to which the ban relates. The exceptions may also be subject to conditions. In addition, a person who is subject to a Banning Order that includes a ban on letting, may not make an unauthorised transfer of an estate in land to a prohibited person. Nor can a banned person hold an [NAME_29] licence or a licence under Part 3 of the Housing Act 2004 in respect of a house. In addition, an [NAME_29] licence or Part 3 licence must be revoked if a Banning Order is made against the licence holder. Interim and final management orders may be made in cases where a Banning Order has been made and a property has been let in breach of the Banning Order.

13. Section 18 makes provision that a person against whom a Banning Order is made, may be banned from being involved in any body corporate, that carries out the activities that the person is banned from carrying out.

14. Section 14(3) defines a “Banning Order offence” as an offence of a description specified in regulations made by the Secretary of State. The relevant regulations are the Housing and Planning Act 2016 (Banning Order Offences) Regulations 2018 (“the 2018 Regulations”) which sets out the Banning Order offences in the schedule

5 to the Regulations. The 2018 Regulations only apply to offences committed after the coming into force of the regulations, on 6th April 2018.

15. For the purposes of this application, the following offences, in the above-mentioned schedule, constitute Banning Order offences, unless the sentence imposed on the person convicted of the offence is an absolute discharge or a conditional discharge:

(a) offences in relation to licensing of Houses in Multiple Occupation under section 72(1), (2) and (3) Housing Act 2004; and

(b) offences in relation to failure to comply with management regulations in respect of Houses in Multiple Occupation under s.234(3) Housing Act 2004.

16. The Tribunal has also had consideration to the guidance from MHCLG entitled Banning Order Offences under the Housing and Planning Act 2016 - Guidance for Local Housing Authorities, published in 2018 [[NAME_33]].

London Borough of [NAME_1]’s Case:

17. The application is made seeking a Banning Order against [NAME_15] following convictions of 15 separate offences in relation to five properties on 11 October 2019, putting at risk approximately 56 tenants and a number of children. Nine other offences had been identified in relation to three other properties, but these were not pursued due to the expiry of the limitation periods due to an administrative error. In relation to those properties there were a further 25 tenants at potential risk.

18. The offences related to Houses in Multiple Occupation ([NAME_27]) and the nature of those properties meant there were elevated risks with particular regard to poorly maintained gas, electrical installations, overcrowding and fire safety. Details of [NAME_1]’s fire safety requirements are available on their website. It is claimed that in all but one property the staircases were not properly protected with a 30-minute fire resistant plasterboard; that the kitchens and bedrooms did not have suitable fire doors with self-closing devices and intumescent strips and thumb turn locks were missing from the bedrooms and final exit doors. None of the properties had met the [NAME_31]’s minimum [NAME_29] fire safety standards.

19. Although the offences were considered at one hearing, it is stated that the failures were a gross failure over a number of properties spanning 1-5 years. By disregarding the duties of a property manager, the Respondent had saved himself a significant amount of money. The level of the fines indicate the severity of the offences and [NAME_1] considers the Respondent to by the ‘most serious offender’ as set out in the [NAME_33] because of the substandard accommodation and the fire safety concerns.

20. The Respondent was involved with the letting and management of property and he collected rents. Since 2017 he has been a director of [COMPANY_75], which was listed as letting and operating owned or leased real estate. It is submitted that this role indicated that he was working at a professional level and should have been aware of the statutory responsibilities.

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21. On 31 March 2020, [NAME_1] sent [NAME_15] written notice that it intended to apply to this Tribunal for a Banning Order [A21]. The notice invited him to make representations within 28 days from the day after that on which the notice was given. This notice indicated that the length of the proposed ban was four years. It also set out the reasons for applying for a Banning Order with reference to a Banning Order Matrix that consider factors such as severity of the offence, culpability, harm/potential harm, punishment and deterrence to the offender and others. The reasons also noted that during the sentencing in the Magistrates Court the Judge had commented ‘that there were 56 vulnerable residents, all of whom were at risk of severe consequences had there been a fire’. It was stated in opening that the submissions made on behalf of the Respondent were considered by [NAME_1] before it made the current application.

22. In light of the [NAME_33], [NAME_1] had developed its own policy for Banning Orders [A101] and had created a matrix against which cases could be considered. [NAME_34], the Senior Housing Enforcement Officer at [NAME_1], explained that his interpretation of the policy was that any case with an offence would be sufficient to trigger a consideration of whether or not a Banning Order was appropriate. From the scoring applied to the matrix it was considered that a Banning Order of 4 years was appropriate. [NAME_1] had also considered that [NAME_15] had a rent to rent business model which was concerning. This model can put vulnerable occupiers at risk as landlords seek to maximise profits by subletting on a room by room basis. Rent to rent arrangements are difficult to monitor in relation to who is the appropriate licence holder for an [NAME_29] licence and those that receive rents do not necessarily have the repair and maintenance obligations. Under normal scenarios the Housing Act 2004 interventions may be used when the appropriate person responsible for any works could be identified, but that may not be relevant in a rent to rent scenario. The length sought reflected that the offences related to the number of properties and the number of people at risk.

23. It was accepted that [NAME_1] had not engaged with the Respondent regarding these properties prior to 9 April 2019 and had not used any of the enforcement action under part 1 of the Housing Act 2004 because [NAME_15] had handed back the properties to the various owners. However, [NAME_1] had served a s255 notice ([NAME_29] declaration) on [NAME_15] on 29 January 2019 in relation to [ADDRESS], and there had been no appeal. There was also a section 255 notices in relation to 30 Dunspring. The notices had been served on the Respondent at the property address as these were the only details available for the Respondent. It was [NAME_34]’s opinion that the Respondent should have been aware of his legal obligations.

24. In respect of the matrix it was the position of [NAME_1] that whilst the matrix may go to the length of a Banning Order, it did not assist in the question of whether or not an order should be sought. The current application is not a judicial review of the [NAME_31]’s decision. However, whilst the matrix may help, there are the broad principles of considering the length and this is not a strict science and Tribunal may come to a different decision. The scoring on the matrix in relation to ‘harm/potential harm’ was based on the HHSRS guidance and in respect of the five properties none of them had the correct fire protection measures in place.

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25. [NAME_34] accepted that he had not appreciated that under the sentencing guidelines a fine was a lesser sentence than a community order and he therefore accepted that the matrix may need to be reviewed. He justified a score of 5 that was allocated for culpability to reflect the number of convictions on the five properties and the alleged offences in relation to another three properties. He accepted that the matrix gave little guidance on the deterrence effect of the length of the ban and that there was an element of the individual officer’s view on this. However, despite the criticisms levelled on the matrix by the Respondent, it was still [NAME_1]’s position that a four- year ban was still appropriate. The matrix was not fundamentally flawed and even a change to the hierarchy in respect of punishment this would not mean the scoring would fall below the banding for a four-year order.

26. Included in the Applicant’s Bundle were several witness statements. The witness statements were from [NAME_35], a [NAME_43] and made in respect of his knowledge of [ADDRESS] [A120] and [ADDRESS] [A129]; [NAME_38], a Housing Enforcement Officer with [NAME_1] and made in respect of [ADDRESS] [A137]; [NAME_41] a [NAME_43] and made in respect of her knowledge of [ADDRESS] [A143] and 67, [ADDRESS] [A152] and [NAME_44], an Environmental Health Practitioner with [NAME_1] and made in respect of 76, [ADDRESS], [POSTCODE] [A160] and 78, [ADDRESS], [POSTCODE] [A168] and 23 [ADDRESS], [POSTCODE] [A172]. The Applicant set out a summary of the offences and properties in a schedule [A57]. This is a summary of what is set out in the various witness statements listed above. There was no dispute as to the contents of this schedule and it is included in Schedule 2 to this decision.

27. There was some evidence of how [NAME_15] arranged his affairs and the Tribunal heard from [NAME_47], who confirmed that is relation to the three properties she was investigating none of the occupiers had tenancy agreements. [NAME_23] was able to confirm that in relation to 33 Downshall that the Respondent had an AST with the Freeholder for 12 months from 14 November 2018.

28. [NAME_2] submitted that the Tribunal has unfettered discretion under section 16(4). The factors the Tribunal must consider under section 16(4)(a) is the seriousness of the offence of which the person has been convicted. In this case the offences were of a serious nature and amongst other matters, related to fire safety issues in a multiple of properties. The fire alarms were not adequate and the treatment of the underside of the staircases was a complete failure and not just an oversight. The total fines of £15,000 significantly exceeded those in the Telford and Wrekin Council v [NAME_72] (Beattie) and Doncaster Metropolitan Borough Council v [NAME_73] ([NAME_48]) cases. The [NAME_33] suggests that Banning Orders are for the most serious offenders and it is the [NAME_1]’s position that the fire safety issues uncovered at the five relevant properties were of the most serious concern. In the Beattie case a Banning Order was made in relation to a single offence of having control or managing a [NAME_28] that should have been licensed and was not so licensed, contrary to s72 of the Housing Act 2004. The Respondent was in a position of responsibility and it is misguided to suggest that [NAME_49] have a

8 duty to tell landlords of their responsibilities. It is for a landlord to know their own responsibilities.

29. In relation to section 16(4)(b) and (c), it was accepted that there were no previous convictions and the only reason that the Respondent was on the [NAME_32] database was as a result of the current offences. However, the evidence suggests an involvement with these properties from 2015 and maybe before.

30. Under section 16(4)(d) the Tribunal must consider the likely effect of the order on the Respondent and on anyone else who may be affected. [NAME_1] submits there was no cogent evidence as to the economic impact on the Respondent. He is a graduate will have other economic opportunities available to him. Additionally, [NAME_15] has the current income flow from the two other residential properties that he owns.

31. A draft Banning Order was included with the papers [A63] and sought to ban [NAME_15] from letting housing in England; engaging in English letting agency work and engaging in English property management work and also to ban him from being involved in any body corporate that carries out the above listed activities. [NAME_2] explained that the proposed Banning Order was worded in a way that allowed [NAME_15] to continue the letting of the two properties that he owned through a letting agent but that once the tenancies had ended that the properties should not be let out. In respect of the practicalities of the order, [NAME_2] said that [NAME_1] would have misgivings if the [NAME_50] was able to manage the two properties owned by them as there would be concerns about any safeguards in relation to [NAME_15] becoming involved. [NAME_1] took a neutral stance when it was suggested that a solution that a management agency could oversee the lettings.

32. As part of the other considerations a Banning Order would prevent the Respondent from making a profit from similar scenarios for which he has been convicted. It was suggested that [NAME_15] was evasive with his answers and had not been open and forthcoming and that this does not suggest a character who understands his duties as a landlord. There is no evidence that the Respondent has taken any steps to educate himself on the obligations of a residential landlord.

33. In replying to the response made on behalf of [NAME_15] on 11 March 2021 it was stated that there was no evidence adduced at the hearing with regards to the lack of other applications for Banning Orders sought by [NAME_1] in relation to other prosecutions and that even so, this application should be considered on its own merits. Whilst it is accepted that the relevant offences did not relate to letting agency work, on [NAME_15]’ own evidence he was responsible for the letting and management of the properties. There is also an overlap between this type of work and to allow letting work would negate the effect of any order and render the order ambiguous.

34. Under section 18 in respect of the body corporate, there is no requirement that the company was involved in the offence. The purpose of including a prohibition on [NAME_15] being involved in any company dealing with the letting and

9 management is to ensure that he does not engage in the banned activity. To allow him to operate by a company would render the Banning Order ineffective.

35. Dealing with the question of spent convictions, this was not raised at the hearing but the Tribunal should have regard to the decision in Hussain v LB Waltham Forrest [2020] EWCA Civ 1539 as authority that a [NAME_31] were entitled to consider the facts that led to spent convictions when determining whether a person was a fit and proper person to hold a [NAME_29].

36. In relation to how the Banning Order may impact on the profitability of [ADDRESS] and [ADDRESS], there was no evidence on this point and there is no ability for the Applicant to cross examine this assertion. However, the Applicant’s position is that the gravity of the offences still warrants a Banning Order. The Applicant could have sought a complete ban but has proposed an order that allows an exception in relation to the current lettings at these two properties.

37. Responding to the point about the impact upon [NAME_15]’ wife, it is stated that the order is only sought against [NAME_15] but in any case, the right to a profit does not engage Article 8 of the ECHR. Further that the application for a Banning Order is proportionate.

[NAME_15]’ Case:

38. In his oral evidence [NAME_15] explained that he had started letting/managing residential property about 2-3 years ago. When it was put to him that there is evidence of his connection to one property from 2014, he responded that he did not have his notes available. He then suggested that he used to stay at [ADDRESS] with his family He could not remember whether he had been asked to sub-let the property. He was unable to help as to why the council tax documentation was in his name in relation to 67 Wanstead from 2015, he had never lived at the property but he could not remember any details of the circumstances relating to how he took the property on, but knew he dealt with the agent rather than the freeholder. He then stated that in relation to [ADDRESS] he took on an AST from an agent called [COMPANY_51], the property being empty when he took the tenancy and was unaware that he was not entitled to sub-let. The property at 33 Downshall was vacant when he took it on, and he decided how many people he would sub-let to; the agent was aware of the rent to rent arrangements. As to the presence of children in the properties, he said the families were aware of the size of the room and made their own decisions as to whether or not they would take the accommodation. He said that the use of this address in a response to the council was a mistake as he had never lived there. [NAME_15] took an AST for 30 Dunspring in January 2018. It was empty and he arranged the sub-lettings. He confirmed that he did not undertake any work at the property. He took over [ADDRESS] in September 2018. Again, the property was empty when he took it over. He was aware of what an AST was and had not taken any advice. On receipt of the s255 notices and s16 notices he had not made any enquiries or investigated what was happening. There had been a quick succession of action by the [NAME_31] and documentation from the [NAME_31]. Although the occupiers had informed him about the [NAME_31]’s inspections, he had taken no steps to investigate. He had not informed the managing agents, but the ASTs were terminated

10 as the landlords did not want to be bothered with the hassle of the [NAME_31]’s involvement. He had been obliged to give his tenants notices to quit.

39. He had set up a management company 2-3 years ago as a further stage to his management activities. In total he thought he managed eight properties. His arrangement was that he took on a tenancy and sub-let. He received the rent from the occupiers and he would contact the agents/owners when any work was needed. He confirmed that he owned three properties with his wife; one was a family home and the other two were let out to single families.

40. [NAME_15] was unaware of the fire safety measures needed in the properties and if he had been made aware, he would have sorted the problems out. It was put to him that it was inconceivable that a person involved in property management and having a property management company that managed eight properties and owned three properties would have been unaware of the statutory requirements. He again repeated that he was not previously aware of his obligations. He stated that he did not provide any tenancy agreements as none of the occupiers asked for an agreement and these were short term lets. Any occupier would just call him if there were any problems, but he was vague about how else an occupier could contact him. Rental payments were either bank transfers or cash, although he did not always attend to collect the cash. He occasionally collected any post from the properties. He contacted agents so that he could take on tenancy agreements and the arrangement allowed a rental flow to the superior landlord. He could not tell the Tribunal the level of his profit margins, but he would need about £200 - £300 a month for each room. He found occupiers through word of mouth or advertising. He would have provided tenancy agreements if requested but he was unaware of any request. He paid the utility bills and provided some cleaning but sometimes the occupiers did it themselves. The properties were in fairly good order. If work was needed or the batteries in the smoke detectors needed changing he would contact the agent or the landlord.

41. Prior to the Covid-19 pandemic he was involved in property management. Previously he had been a railway engineer with experience in track maintenance and had then been promoted to recruitment manager.

42. It was submitted that the Respondent does not fall into the classification of the ‘most serious offender’ as envisaged in the Banning Order Offences under the [NAME_33]. [NAME_15] had handed back the properties in respect of which he had been convicted and that he was only involved in the management and sub-letting of one property that had a [NAME_29] licence, but he was in the process of handing that property back. Whilst admitting his previous mistakes the Respondent has co- operated with [NAME_1]. [NAME_15] was unaware of the relevant legislation prior to the prosecutions and he had not knowingly breached his statutory obligations. Part of a [NAME_31]’s role is to provide information in relation to the obligations and responsibilities that arise from the various statutory provisions. [NAME_1] had not informed the Respondent of his obligations and he had had no opportunity to remedy the problems. In relation to previous Tribunal decisions in [NAME_48], consideration was given to the Local Housing Authority’s lengthy involvement prior to the Banning Order application, which was in contrast with the current case.

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43. The fines for the individual offences were relatively low and the Respondent pleaded guilty at an early stage. The fines imposed by the [NAME_52] were not of the highest severity, given that such fines could be unlimited. It is suggested that this is an indication the Magistrates Court did not find the actions of the Respondent as intentional. In contrast to the Beattie case, whilst the fines in that case were relatively low in the current case [NAME_15] shows remorse and has had no previous convictions. In the [NAME_48] case, it was stated that the severity of the sentence was not a determinative factor it was for the Tribunal to make its own assessment on the evidence available.

44. It is claimed that the Respondent had no previous convictions and was not known to [NAME_1] or other [NAME_49] for similar breaches and he was not previously on any [NAME_53]. Essentially these were not multiple offences, but one course of conduct. It is submitted that the offences did not span any length of time beyond one day as set out in the memorandum of conviction. There have been no further offences and he could not be regarded as a ‘repeat offender’. After the convictions he had returned all the properties. From the [NAME_48] decision being on the [NAME_53] for the offence in hand did not add significant weight,

45. The matrix produced by [NAME_1] was criticised as there did not appear to be an initial assessment of whether or not a Banning Order is appropriate but started with an assumption of an order being made and a minimum ban for twelve months. Questions were raised whether the policy reflected the full rationale of the approach taken by [NAME_1]. There were a number of flaws in the matrix as scores are allocated even if there had been an absolute discharge and a fine was allocated a higher score than a community order. There was an element of duplication in the severity of offence category and punishment category and to the extent that the matrix corresponds to the sentencing guidelines.

46. In respect of the scoring of the matrix, the subsequent addition of [NAME_15] on the [NAME_53] because of the current offences was not a factor to be taken into account in the current case and there were no previous offences. Accordingly, the score attributed for culpability was wrong.

47. In relation to the assessment of harm there is no explanation as to what the classes of harm represents. It is stated there was no harm was caused to any of the tenants whilst the Respondent was managing/letting the subject properties. The potential of harm is not an aggravating factor, it is just a way to describe the offence. Therefore, the score attributed to this was wrong.

48. In relation to the deterrence of the offender and others, it was explained that the Respondent had already returned the properties which were the subject of the offences and was in the process of returning [ADDRESS]. The submissions from [NAME_55] stated that [NAME_15] was currently looking for employment which did not involve letting and/or management of properties.

49. [NAME_8] suggested that if the flaws in the matrix were addressed and the circumstances in the current case re-applied, including the inconsistency about the

12 type of sentence, the lack of knowledge on [NAME_15]’ part then the total re- scoring would be 7 ½ to 8.

50. Dealing with the alleged offences on the other three properties these were alleged to have occurred between 6 and 19 June 2019 and the Applicant would have been within time if the wished to prosecute if they had considered it necessary. It is submitted that any information about these alleged offences should be disregarded as they are not convictions that fall within s16 off the 2016 Act.

51. Addressing the issues relating to the Fire-Resistant Plaster Board, these were limited to [ADDRESS] and [ADDRESS] and not all five properties. There was some fire safety measures in each of the properties with battery operated fire alarms.

52. It is submitted that the effect on the Respondent and his family would be significant as property management is his main source of income. [NAME_15] had a son who was suffering from bullying at school due to the current circumstances. In general, it is argued that the Respondent should be awarded another opportunity as these offences were his first and only convictions and he is now aware of the legislative obligations. The convictions and current case had caused stress and had a financial impact on himself and his family. He hopes to re-build his property portfolio following the pandemic. He now understands the requirements and would comply with those obligations.

53. The additional pages to the Respondent’s bundle included several witness statements from [NAME_56], [NAME_59] and [NAME_62] that attest to his good character and from [NAME_65], [NAME_68] as former tenants that state amongst other matters that he was a responsible landlord.

54. The use of a property management company was a means for the Respondent to act properly even if previously that was without full knowledge of his obligations. The attitude of [NAME_1] was a rapid flow of investigations that were in the form of raids.

55. Following the re-submission of the draft Banning Order, the Respondent was invited to make a response, and this was received in a document from [NAME_8] dated 11 March 2021. It is suggested that the Banning Order does not need to comprehensively ban all the areas referred to in section 14(1) of the 2016 Act because none of the relevant convictions related to letting agency work. That the Respondent should not be banned from being involved in a body corporate as the relevant offences do not relate to any offending by the Respondent’s company, [COMPANY_75]. To prevent the Respondent from being involved in a body corporate would mean that he would be prevented from being involved in the letting or management of the non [NAME_29] properties owned by the Respondent and his wife at 246 [ADDRESS], [POSTCODE]. In relation to the period sought, four years is considered exceptionally excessive as the offending is not the most serious at the ‘fortieth percentile’ and [NAME_1] have not pursued Banning Orders on other similar prosecutions. The offences were spent for the purposes of section 139 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 on 11 October 2020 and the Respondent’s inclusion on the [NAME_71] concluded on 11 October 2020. The Respondent’s business model has been disrupted by the prosecutions and by the

13 impacts of the Covid-19 pandemic. If a Banning Order was made it should be limited to 12 months. If the restrictions on the lettings for [ADDRESS] and [ADDRESS] were included then this may result in the properties having to be sold and this would be detrimental to the Respondent, his wife and children. These properties are let to single families and are not [NAME_27] and therefore not similar to the properties that were subject to the convictions. It is further stated that the restrictions suggested would impact upon the [NAME_50]’s right to a private life as enshrined by article 8 of the ECHR.

Discussion and Determination:

56. Before a Tribunal makes a Banning Order, it must be satisfied that a number of conditions have been met. Those conditions are: a. that the Respondent has been convicted of a banning order offence; b. that the Respondent is a ‘residential landlord’ or a ‘property agent’ at the time the offence was committed; and c. that the Local Housing Authority has complied with Section 15 of 2016 Act, this required: i. give the Respondent a notice of intended proceedings that the [NAME_31] proposes to apply for a banning Order and the reasons why; ii. inform the Respondent of the proposed length of the proposed ban; iii. invite the Respondent to make representations within a period, being not less than 28 days; iv. the [NAME_31] to consider any representations made under iii above; v. the [NAME_31] to wait until the period detailed in iii before applying for a Banning Order and vi. that the notice of intended proceedings under i, may not be given after the end of six months beginning with the day on which the Respondent was convicted of the offence to which the notice applies.

57. The Respondent raised no dispute in respect of these prior conditions. As detailed in paragraph 2 above, we are satisfied that on 11 October 2019, [NAME_15] was convicted of fifteen banning order offences.

58. It is clear that [NAME_15] was a ‘residential landlord’ at the time that he committed the offences as the properties which were the subject of the offences provided residential accommodation.

59. The final pre-condition was whether the Applicant had complied with section 15 of the 2016 Act. As set out in paragraph 3 above, [NAME_1] served a Notice of Intent to Issue a Banning Order on the Respondent on 31 March 2020, this being within six months from the date of conviction on 11 October 2019. The notice set out the reasons why the Applicant was proposing to apply for a Banning Order, it included the length of the proposed ban and invited the Respondent to make representations within 28 days beginning with the day after which the notice was given. As the period for making representations was 28 days from 1 April 2020 and the application was dated 30 July 2020, the condition in paragraph 56 c. v. above, is satisfied. As explained in paragraph 21, the Applicant stated that it had consideration of the representations made on behalf of the Respondent.

14 60. Although none of this was disputed, the Tribunal can confirm that it is satisfied that all the pre-conditions listed in paragraph 56 have been met.

61. S16(4) sets out the factors which we must take into account, but we do not consider this is an exclusive list and we consider that the Tribunal may take other factors into account. The Tribunal is not bound by the matrix produced by [NAME_1] and indeed the current process is not a review of that matrix. Likewise, the [NAME_33] is not binding but the Tribunal may take the Guidance into account and indeed the Tribunal attaches significant weight to its contents. Paragraph 1.7 of the Guidance states that Banning Orders are aimed at “[NAME_32] who flout their legal obligations and rent out accommodation which is substandard. We expect banning orders to be used for the most serious offenders”.

62. Paragraph 3.3 of the Guidance addresses the factors that a [NAME_31] should consider when deciding whether to apply for a Banning Order, and when deciding on the proposed duration of any order. The statutory requirements in s.16(4) are listed and in relation to section 16(4)(d) when considering the likely effect of an Order on the person who is to be the subject of the order, and anyone else that may be affected by it, regard should be had to:

(a) harm caused to the tenant;

(b) punishment of the offender;

(c) deterring the offender from repeating the offence; and

(d) deterring others from committing similar offences.

63. Under 16(4)(a) the seriousness of the offence of which the person has been convicted must be considered. In this case there are 15 offences in relation to five properties. In our view the volume of offences is a significant factor. It was argued for the Respondent that the offences were a single course of conduct. However, we do not accept that proposition, as the offences occurred in respect of the five properties and there was a time span of a few months between all the inspections. There was no evidence that the Respondent took any steps to remedy any of the problems but continued with his business model. The suggestion that as the offences are recorded as being on a single day suggests a minor level of offending is misguided. The manner in which criminal convictions are recorded does not detract from the fact that the circumstances to these offences did not arises on a single day. As an example, on the balance of probabilities, the failure to obtain the appropriate [NAME_29] licenses was not isolated to the day of the offence. Likewise, the failure to comply with the fire safety requirements extended beyond the day of the recorded offence. The nature of the offences is also of importance. Potentially the failure to obtain the necessary [NAME_29] licenses on all five properties may have been sufficient to result in a Banning Order, but in all five properties there were significant breaches of the fire safety requirements as detailed in paragraph 2 above and these could have had the potential to put a large number of lives at risk, including a number of children. In addition, by not complying with the relevant licensing requirements, [NAME_15]’ conduct has risked undermining [NAME_1]’s regulatory functions as a [NAME_31]. We do not agree that the Respondent is absolved from culpability for his lack

15 of knowledge of the offences. As a professional residential landlord there was a duty on him to ensure that he knew of his obligations and that he should have complied with those duties. The fines incurred were significant and would likely have been greater, but for the fact that [NAME_15] pleaded guilty. We are satisfied that the seriousness of the offences, both in terms of the volume and the nature of the offences are sufficient for the making of the Banning Order.

64. In relation to the alleged offences for the three other properties, it has not been necessary to consider that evidence as there is enough evidence before the Tribunal to make its decision on the Banning Order from the fifteen offences where there have been convictions. That is not to say that in other cases we would be excluded from considering such evidence when excising our discretion. We do not think that the provisions of section 16(4) is an exclusive list.

65. It is common ground that sections 16(4)(b) and (c) do not apply, as there were no previous convictions and all agree that prior to the current events there was no entry on the [NAME_71].

66. By section 16(4)(d) we must consider the impact of any Banning Order on the Respondent and upon anyone else who may be affected by the order. We also agree that when deciding whether to make a Banning Order, it is a legitimate to consider the potential deterrent and punishment effect on [NAME_15] and the deterrent effect on other landlords, and that these factors all weigh in favour of making an order. We acknowledge that Banning Orders should be reserved for the most serious offenders but are in no doubt that this is one such case.

67. The Tribunal was not persuaded that [NAME_15] was contrite. His oral evidence about his business arrangements was vague. At times he stated he could not remember the background to his dealings with various properties, which seemed evasive and he did not provide an adequate explanation as to the contradictory evidence relating to the time he was involved in a couple of the properties, namely the council tax evidence for [ADDRESS] and [ADDRESS].

68. We also consider that the rent to rent model adopted by [NAME_15] is undesirable. This type of model, whereby there is a fixed rental payment to a superior landlord, is an encouragement to landlords to optimize profits by placing the maximum number of people in the properties. This had the potential to lead to overcrowding and to leave vulnerable people and families having to contend with sub-standard housing. This model envisages an individual taking rental payments directly from occupiers but with seemingly no repairing obligations and therefore no incentive to ensure compliance with health and safety requirements. The making of a Banning Order in the current case, should act as a deterrent to landlords who wish to exploit vulnerable occupiers.

69. In taking into account the impact that the Banning Order may have upon [NAME_15] we note the contradictory evidence on this point. From the written submissions made by [NAME_55] it is stated that [NAME_15] was ceasing to trade on his rent to rent arrangements and we note that all such arrangements have now been terminated. It was asserted that [NAME_15] was seeking other employment opportunities. We note that he is a graduate and has previous

16 experience in engineering and in the recruitment sector. It is now stated that he now wishes to re-establish himself in the residential property sector and any order would impact on those plans. It is claimed that the order will have an impact on his family but there was no particular evidence on this point.

70. The Tribunal recognises that the making of an order would obviously have an adverse effect upon [NAME_15], his wife and his family – because it would curtail his activities as a professional landlord for a given period of time. The extent of that adverse impact would depend upon the duration and the extent of any ban imposed. However, provided the terms of the order are proportionate, the fact that it would necessarily deprive [NAME_15] of a source of income is not a reason why a Banning Order should not be made. Indeed, the fact that a Banning Order will have both a punitive and a deterrent effect is an important policy consideration underpinning the legislation.

71. In considering the impact on any current tenants, those interests can be protected with the terms of any order. We note that with his wife, [NAME_15] owns two further properties as 246 [ADDRESS], [POSTCODE] and 102 [ADDRESS], [POSTCODE]. These are currently let out to single families and are not [NAME_27]. We consider that to protect the tenants and to allow [NAME_15], his wife and his family to have a continued income flow, then the proposal made by [NAME_1] that the properties can be continued to be let out through an approved local letting agent provides a balance between the conflicting interests of the order acting as both punitive and a deterrent and ensuring an income flow on the property assets. The interests of the occupiers will also be protected by these arrangements. However, given the length of the Banning Order, whilst the current tenants may remain in the property, the properties could become vacant and that could have an unacceptable financial consequence. So, as put to the parties at the hearing, we consider a solution is that future lettings would be allowed for the duration of the Banning Order, but provided that the properties are let, administered and managed through the approved local lettings agents for the whole period of the Banning Order and are kept in single family occupation. The main objective of the Banning Order is to prevent [NAME_15] utilizing the rent to rent model to let properties as [NAME_27] as a means to derive a profit for the relevant period.

72. The Tribunal now goes onto determine the terms in which a Banning Order should be made. It is, of course, appropriate also to have regard to the proposals set out in the notice of intent served by [NAME_1], but the Tribunal is not constrained by those proposals. [NAME_1] seek to ban the Respondent from residential letting, letting agency work and property management work. In consideration of all the circumstances of this case, we agree with the Applicant’s position that [NAME_15] should be banned from doing all three things. It is self-evident that the ban should include letting housing and engaging in property management work given the failings of [NAME_15]. The evidence was that by advertising and dealing with potential occupiers, [NAME_15] was involved in the letting in the properties as well as the overall management of those lettings. We find that in this case there is an interrelationship between the lettings and management and we consider that it would be inappropriate to allow [NAME_15] to pursue any letting agency activities for the duration of the ban so we do not limit the scope of the Banning Order so as to remove the prohibition on letting agency activities.

17 73. To allow [NAME_15] to continue to be involved in a body corporate for the letting and management of residential property would allow [NAME_15] to bypass the order itself and would be inappropriate. Therefore, as an anti-avoidance measure, [NAME_15] should be banned from acting as an officer of any company that lets housing or is engaged in property management or letting agency work in England.

74. As to the length of the order we note that the minimum period is 12 months but there is no upper limit. There may be circumstances when the relevant behaviour is so extreme that it would merit a significantly long or permanent ban on the activities. In this case [NAME_1] has proposed a ban for four years. This proposal was based upon the scoring set out in the matrix created by [NAME_1]. As mentioned previously, it is not the role of the Tribunal to consider the details of the [NAME_31]’s policy or matrix. However, the Tribunal noted that [NAME_34] accepted that the flaws identified by [NAME_8] in relation to the inconsistencies with the sentencing guidelines and the potential for double counting may mean that a review of the policy was required.

75. Although the Respondent suggests that the proposed four years is exceptionally excessive, this needs to be measured against a scale of a minimum period of 12 months and a lifetime ban. In this case given the nature and volume of offences we do not think the minimum period of 12 months is sufficient. However, we have reduced the period of the ban from four years to three years. We have done this as we recognise that the potential flaws in the [NAME_31]’s matrix may have produced a lower recommendation, but we are concerned to ensure that the length of the ban is sufficient so that the Banning Order will have the appropriate punitive effect on [NAME_15], given the very serious nature of his offending. It is also important that the order has a real deterrent effect, both on the Respondent and on other landlords.

76. In conclusion, the Tribunal makes a Banning Order for a period of three years from the date of the Order. The Banning Order is attached to these reasons.

Tribunal Chair: [NAME_10]

Date: 2 June 2021

18

First-tier Tribunal (Property Chamber) Residential Property

Tribunal Reference LON/00BC/HNA/2020/0007

Applicant: [redacted]

Respondent: [redacted]

_________________________________________________ BANNING ORDER (Section 16 of the Housing and Planning Act 2016) _____________________________________________________

By this Order, [NAME_5] of 13, [ADDRESS], [POSTCODE] IS BANNED from:

1. Letting housing in England; 2. Engaging in English letting agency work and 3. Engaging in English property management work.

[NAME_15] IS ALSO BANNED from being involved in any body corporate that carries out any of the above activities. He may not act as an officer of such a body corporate or directly or indirectly take part in, or be concerned in, its management.

19

Subject to the following exception, these bans take effect immediately. They will last for a period of THREE YEARS from the date of this Order.

The ban on letting housing in England is subject to an exception:

[NAME_15] may continue to let the two properties listed in the Annex hereto but only through a local letting agent approved by the London Borough of [NAME_1] (consent not to be unreasonably withheld). However, these properties must only be let as single-family dwellings.

Signed: [NAME_11] of the First-tier Tribunal Date: 2 June 2021

ANNEX 1. 246, [ADDRESS], [POSTCODE] 2. 102 [ADDRESS], [POSTCODE]

20

NOTES: 1. A person who breaches a banning order commits an offence and is liable on summary conviction to imprisonment for a period not exceeding 51 weeks or to a fine or to both. Alternatively, a local housing authority may impose a financial penalty of up to £30,000 on a person whose conduct amounts to that offence.

2. A person who is subject to a banning order that includes a ban on letting may not make an unauthorised transfer of an estate in land to a prohibited person. Any such transfer is void (see section 27 of the Housing and Planning Act 2016)

3. A breach of a banning order does not affect the validity or enforceability of any provision of a tenancy or other contract.

4. A person against whom a banning order is made may apply to the Tribunal for an order under section 20 of the Housing and Planning Act 2016 revoking or varying the order.

5. The expressions “English letting agency work” and “English property management work” have the meanings given to them by sections 54 and 55 of the Housing and Planning Act 2016 respectively.

6. The reasons for making this banning order are set out in a decision issued separately by the Tribunal.

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© CROWN COPYRIGHT 2021 RIGHTS OF APPEAL By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property 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 property 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).

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SCHEDULE 1 Statutory Provisions Housing and Planning Act 2016 Chapter 2 – Banning Orders Banning Orders: key definitions 14. “Banning Order” and “Banning Order offence” (1) In this Part “Banning Order” means an order, made by the First-tier Tribunal, banning a person from- (a) letting housing in England, (b) engaging in English letting agency work, (c) engaging in English property management work, or (d) doing two or more of those things. (2) …………………. (3) In this Part “Banning Order offence” means an offence of a description specified in regulations made by the Secretary of State.

23 (4) …………………. Imposition of Banning Orders 15. Application and notice of intended proceedings (1) A local housing authority in England may apply for a Banning Order against a person who has been convicted of a Banning Order offence. (2) ………………. (3) Before applying for a Banning Order under subsection (1), the authority must give the person a notice of intended proceedings-

(a) informing the person that the authority is proposing to apply for a Banning Order and explaining why, (b) stating the length of each proposed ban, and (c) inviting the person to make representations within a period specified in the notice of not less than 28 days (“the notice period”). (4) The authority must consider any representations made during the notice period. (5) The authority must wait until the notice period has ended before applying for a Banning Order. (6) A notice of intended proceedings may not be given after the end of the period of 6 months beginning with the day on which the person was convicted of the offence to which the notice relates.

16. Making a Banning Order (1) The First-tier Tribunal may make a Banning Order against a person who- (a) has been convicted of a Banning Order offence, and (b) was a residential landlord or a property agent at the time the offence was committed (but see subsection (3)).

24 (2) A Banning Order may only be made on an application by a local housing authority in England that has complied with section 15. (3) …………………… (4) In deciding whether to make a Banning Order against a person, and in deciding what order to make, the Tribunal must consider- (a) the seriousness of the offence of which the person has been convicted, (b) any previous convictions that the person has for a Banning Order offence, (c) whether the person is or has at any time been included in the database of [NAME_32] and property agents, and (d) the likely effect of the Banning Order on the person and anyone else who may be affected by the order.

17. Duration and effect of Banning Order (1) A Banning Order must specify the length of each ban imposed by the order. (2) A ban must last at least 12 months. (3) A Banning Order may contain exceptions to a ban for some or all of the period to which the ban relates and the exceptions may be subject to conditions. (4) A Banning Order may, for example, contain exceptions- (a) to deal with cases where there are existing tenancies and the landlord does not have the power to bring them to an immediate end, or (b) to allow letting agents to wind down current business. 18 Content of banning order: involvement in bodies corporate (c) (1) A banning order may include provision banning the person against whom it is made from being involved in any body corporate that carries out an activity that the person is banned by the order from carrying out.

25 (d) (2) For this purpose a person is “involved” in a body corporate if the person acts as an officer of the body corporate or directly or indirectly takes part in or is concerned in the management of the body corporate.

SCHEDULE 2

26

27

28

.