First-tier Tribunal Rejects Appeal Against HMO Licence Variation Refusal

OUTCOME: Dismissed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : CAM/00KG/HMD/2025/001 Property : 25 [ADDRESS], [POSTCODE] Applicant: [redacted] Respondent : [redacted] Thurrock Council (2) [NAME] [APPELLANT] of [NAME] : Appeal in respect of refusal to vary an [NAME] Tribunal member(s) : Judge Adcock-Jones Mr O N Miller BSc Date of hearing and venue : 28 August 2025 by CVP Date of decision : 01 September 2025

DECISION

Decision of the Tribunal 1. The [NAME] is dismissed. The Hearing 2. The hearing was held on 28 August 2025 by CVP and was attended by the Applicant in person. The First Respondent was represented by [RESPONDENT] [NAME] [NAME] [NAME] of Thurrock Council. The [NAME] Respondent was not in attendance nor was he represented. The Tribunal proceeded in his absence.

3. The Tribunal was provided with significant papers entitled Bundles A and B and additional correspondence from the Respondents.

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Background 4. The [NAME] is dated 7 August 2024 although it was sent to the Tribunal on the 6 August 2024. The [NAME] was to appeal a decision of the First Respondent to serve an HMO declaration although the Tribunal understood it was intended and was treated as such for the purposes of this decision to appeal a refusal by the First Respondent to vary an existing [NAME] for [NAME].

5. The Applicant sought a variation of the [NAME] to allow her to manage [NAME]. The First Respondent’s decision to refuse the request was communicated by notice dated 11 July 2024 explaining that the [NAME] had been notified of the request and had installed his own manager [RESPONDENT].

6. The [NAME] Respondent was added to the proceedings by way of the directions referred to below and the parties were encouraged to communicate with each other to try and reach an agreement or narrow the issues and whether it might be possible for parties to agree on a suitable independent manager to ensure that any [NAME] costs are paid.

7. [NAME] is described as a three-storey [NAME] with five rooms, four toilets and three bathrooms, one kitchen, one utility room and one living room.

8. The [NAME] was granted on 05 July 2023 and provided for a term of five years from 30 October 2022.

9. On 6 June 2024, the Applicant applied to be appointed as manager for [NAME] as a [NAME] and notice of the [NAME] was served by the First Respondent upon the [NAME] Respondent inviting representations.

10. On 11 July 2024, the First Respondent confirmed in writing that representations received had been duly considered and a decision to vary the [NAME] to appoint the Applicant as manager had been refused. The reason given for refusing to vary the [NAME] was that the [NAME], the [NAME] Respondent, had rejected the request for the Applicant to be appointed as manager and had proposed to install his own manager.

11. By way of correspondence on the same date, the First Respondent stated that under section 69 of the [NAME] 2004, it was necessary to vary the [NAME] to appoint [COMPANY] as the manager.

12. On 12 August 202, the First Respondent sent further correspondence confirming again that representations have been duly considered and it had not changed its decision in respect of the manager appointed and that the manager was deemed to be a [NAME] for the purposes of management of [NAME].

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Directions 13. Directions were issued on the 13 March 2025 by Judge David Wyatt which made provision the exchange of documentation and for bundles to be prepared to assist the Tribunal at the final hearing.

14. Further directions issued on 09 April 2025 and 08 May 2025 regarding provision of bundles and noting that filing piecemeal correspondence at the Tribunal was not appropriate.

Inspection 15. The Directions issued did not provide for an inspection of [NAME] and no request for an inspection was made by the Parties. The Tribunal did not consider an inspection to be necessary or proportionate to the issue. Issues 16. In accordance with Schedule 5 of the [NAME] 2004, as set out below, the appeal is to be by way of re-hearing, but may be determined having regard to matters of which the council were unaware. The Applicant’s Case 17. The Applicant stated that she and the [NAME] Respondent jointly own [NAME] subject to a mortgage with [NAME] but she and the [NAME], the [NAME] Respondent, are divorcing and he now lives in Nigeria. She stated that he is collecting rent from the tenants at [NAME] but not paying the mortgage and other costs and/or utilites.

18. In addition to the Tribunal's consideration of her documentation filed, the Applicant stated that her main concern was the well-being of the tenants and [NAME], compliance with law and ensuring that all bills and the mortgage was paid. The Applicant and [NAME] Respondent had shared responsibility and had access to a business account since 2007 and that this account was the recipient account for all of the rent paid by direct debit by the tenants at [NAME].

19. She had frequently attended to the tenants’ welfare and request for assistance when the [NAME] Respondent was in Nigeria and unresponsive to their contact.

20. On or around 1 March 2024, the [NAME] Respondent withdrew rental payments from the business account and diverted them to his personal accounts which meant that the Applicant had to borrow at higher interest rates and had difficulty in meeting the mortgage payments.

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21. In February 2024, she had removed him as director of the company they shared and he had entered into separate tenancy agreements with the tenants, which she described as secret.

22. The Tribunal was informed that a number of tenants had resided in [NAME] for around four or five years and one tenant around 5 or 6 months. She was concerned about the tenants’ well-being and so she did not push the issue of the new tenancy agreements however she did inform the tenants that she did not agree to them.

23. The Tribunal was referred to various council tax bills, utility bills and enforcement notices relating to unpaid accounts for gas and water. The mortgage instalment is £1233.88 per month and rental income is £3200 to £3400 per month. Therefore there was no reason why the mortgage should be in arrears given the rental income that the [NAME] Respondent would be receiving.

24. The Tribunal was referred to messages from the tenants who had been in contact with the Applicant as a reliable point of contact if there were any issues with [NAME].

25. It was confirmed that whilst [NAME] had threatened possession proceedings, no procession proceedings had yet been commenced.

26. [NAME] wrote to the Applicant and [NAME] Respondent on 5 February 2025 and 5 April 2025 to confirm that they withdrew their consent to [NAME] being let with the reason cited being that they, as borrowers, were on a payment holiday and were in arrears on the mortgage.

27. The Applicant stated that [NAME] always contacted her and she had contacted the First Respondent to say that the [NAME] was going to be withdrawn because they did not have the mortgagor’s consent to let [NAME].

28. She referred to bank statements produced in the separate financial matrimonial proceedings which demonstrated that the [NAME] Respondent was spending a significant sum on expensive luxury items rather than prioritising the mortgage and debts. She has sought advice from the police and been provided with a crime reference number as her name has been added to various utility accounts for the purposes of billing without her consent which she considered to be fraudulent behaviour on the part of the [NAME] Respondent.

29. She considered that she should have been appointed as manager because she recognised the ongoing commitment and reliability that the tenants needed and noted her proximity of living approximately 1 minute away from [NAME].

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30. In answering the Tribunal’s inquiries, the Applicant confirmed that she had not appointed herself as [NAME] originally due to being the primary carer for their children and it being more reasonable for her to deal with their needs and for the [NAME] Respondent to deal with [NAME]. Their relationship broke down at the end of 2022.

31. The Applicant considered herself to be the most relevant person under section 255 of the [NAME] 2004 and did not think that [COMPANY] were an appropriate party to be appointed as manager. She referred the Tribunal to difficulties that she had personally experienced with [COMPANY] in the past relating to a solely owned property and a jointly owned property relating to a deposit provided by a tenant which was not receipted and poor communication with vulnerable tenants.

32. She also did not consider it appropriate for a paid manager to be appointed as the money was best put towards payment of the mortgage and the bills and utility arrears. When asked whether she would be looking to take over as [NAME] upon expiry of the [NAME] in October 2027, this could not be answered at this stage given that [NAME] was subject to the ongoing financial matrimonial proceedings.

33. The Tribunal queried how practically the relationship between her as manager and the [NAME] Respondent as [NAME] would work given that they were going through a very acrimonious divorce and had difficulties in communication.

34. The Applicant stated that this would not create any issues and that she would collect rent fairly but could not at this point because she had been restricted access. She repeated her concern that the [NAME] was out of the country and that her appointment would render it more efficient for her to pay the outstanding mortgage and bills.

35. The Applicant was referred to the briefing note from the First Respondent dated 21 May 2025 in which it was stated that they took no issue with [COMPANY] and that the tenants were content with them.

36. The Applicant repeated the previous concerns she had that it was not appropriate for a paid manager to be appointed given that they were not sending her sums owed and the [NAME] Respondent being out of the country.

37. The Applicant stated that they did not pay use the money to pay the outstanding sums, although the Tribunal noted that a managing property agent would not ordinarily be involved in such matters which would be the sole responsibility of the owners of [NAME] and to those account holders of the various utilities and creditor accounts and subject to the mortgage conditions.

38. The Applicant reiterated that she took issue that [APPELLANT] were not paying her although again the Tribunal noted that a managing property agent would not be involved in such [NAME] disputes

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between owners of [NAME]. Instead, there would be a right of recourse for a disgruntled owner to seek an account of any sums due to them through the County Court or indeed, as appeared to be taking place, through matrimonial proceedings and financial remedies proceedings.

39. In respect of contact, the Applicant stated that she does have direct contact with the [NAME] Respondent and heard emailed him. Although he had not responded to her latest e-mail, she knew it had been received as she had not received a bounce back and she was able to send messages and also messages through their solicitors. The Tribunal expressed concern that there did not appear to be open channels of communication and again questioned the practicality of how her proposal to be appointed as manager would work. The Applicant stated that there would be no problem with communication.

The First Respondent’s Case 40. The Tribunal was referred to the briefing note of 21 May 2025 and its contents listed therein insofar as an inspection had taken place on the 14 April 2025.

41. During the visit [NAME] was found to be a reasonable state of repair with all fire protection measures working effectively. Utilities were working as required and an escape route was adequately protected with correct operation of fire doors.

42. A couple of tenants were present at the time of the visit and spoken to about the running of [NAME]. All said they were satisfied with their living conditions and had experienced no issues regarding cutting off of utilities or repairs not being undertaken. They were paying rent as required and were content.

43. The First Respondent had also spoken to [RESPONDENT] and they confirmed they visit [NAME] once a month and had no issues with non-payment of bills or payment from the [NAME] Respondent for their services.

44.

Accordingly, the First Respondent deemed the [NAME] Respondent as being a [NAME] for the purposes of holding an [NAME]. As he was not always present in the country, he had appointed [COMPANY] as manager who were also considered to be a [NAME] with no previous convictions. The First Respondent therefore did not consider that there were any grounds upon which they were to revoke or vary the [NAME] from its current terms.

45. The Tribunal queried whether the [COMPANY]’s withdrawal of consent to let [NAME] would have an impact on the [NAME] or [NAME]. Mr [NAME] noted that the variation to the [NAME] had been made prior to receiving that information in February and April this year and

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that the council's opinion was this was a matter between the mortgagees and the [COMPANY].

46. The First Respondent had written to all interested parties as part of the [NAME] and given 14 days for representations to be made including those by [NAME] who did not oppose the variation.

47. The Tribunal inquired whether if a [COMPANY] confirmed that consent was not given to let [NAME] whether this would be a reason to refuse the [NAME] and Mr [NAME] confirmed that this was not necessarily a reason to refuse the [NAME] as it would ultimately be a question for the local council to decide upon. It would be a separate matter if the [COMPANY] took possession action against the mortgagees for breach of the mortgage.

48. The Tribunal noted that if the security of the tenants was at risk, then as part of any possession proceedings, the [COMPANY] was obliged to inform the local authority of a potential homelessness situation and that the tenants would also have a right of redress against their landlords in such circumstances.

49. In terms of recent action, unannounced visits had been attempted on the 22 and 27 August 2025; however, there was no response and access had not been gained. They had been unable to speak to any of the occupants.

50. These unannounced visits were not prompted by any concerns with [NAME]; it was more to seek an additional update if possible in light of the present proceedings before the Tribunal. There had been no further contact with [RESPONDENT].

51. [RESPONDENT] had passed the First Respondent’s [NAME] test and no issues had been raised. The Tribunal inquired about the contents of this test and was referred to the First Respondent’s licencing policy in which investigations were made into any unspent convictions or refusal of an [NAME] amongst other criteria. Declarations had to be made in the [NAME] by the [NAME] and by the appointed manager who completed their own form. The contents are cross referenced and given information received, they made checks with Colchester Council as they were made aware that the [NAME] held another licenced property under that council’s jurisdiction.

52. Mr [NAME] noted that concerns the local authority would have with the manager would usually relate to complaints from a member of public, disrepair at [NAME], any report from a tenant occupying the HMO or from any referral from a third-party service emergency service.

53. [COMPANY] appears to be a trading name of [COMPANY] under Companies [NAME] 06936983.

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54. The Tribunal inquired whether the nature of the Applicant and [NAME] Respondent’s relationship would give any cause any concern to the council.

55. Mr [NAME] confirmed materially they would require clear lines of communication between the parties in order to ensure that [NAME] was kept in a [NAME] and managed condition.

56. The tribunal inquired as to what other checks were made to ensure that someone was a [NAME] and fit person under the [NAME] 2004 and were advised that various searches were made including Land Registry, council tax databases, [NAME], [COMPANY], [NAME] and the rogue landlord database.

57. Whilst the First Respondent would wish to ensure that bills were paid, it was not for them to enforce and would only be a cause for concern if it impacted upon the security of the tenants in the HMO. At this stage, the [COMPANY] has not commenced any possession proceedings nor had any creditors commenced action which would threaten that security.

58. Potentially such information could constitute a material change of circumstances to be considered under section 69 of the [NAME] 2024 when the [NAME] was up for renewal but at this stage, the information provided by the Applicant would not result in a revocation or variation of the [NAME].

59. The principle concern for the council was who had control of [NAME] and in this case it was clearly the [NAME] Respondent as the party in receipt of rent and the manager appointed being [APPELLANT].

60. The Applicant was given an opportunity to respond and noted that whilst letters were sent to both her and the [NAME] Respondent, [NAME] only appeared to contact her and if that she did not have the [COMPANY]'s permission to let [NAME] out, she would have to serve notices to quit on the tenants in order to prove to the [COMPANY] that she was doing all that could be done but arrears had been outstanding on the mortgage for one and a half years.

61. She repeated that a manager was needed as someone who would not put the tenants at risk by having utilities cut off and that the [NAME] Respondent as a [NAME] was no longer a [NAME].

Accordingly, the next person to be considered was her and she should therefore be so appointed as manager. The [NAME] Respondent’s Case 62. As noted above, the [NAME] Respondent was not in attendance or represented at the hearing.

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63. The Tribunal however took into account the various correspondence filed with the Tribunal with his position, which in summary, was that the [NAME] was objected to on the basis that the variation to the [NAME] was appropriate and given that he was frequently in Nigeria, he had appointed [COMPANY] as his manager to deal with [NAME]. The [NAME] 2004 67 [NAME] conditions (1) A [NAME] may include such conditions as the local [NAME] authority consider appropriate for regulating all or any of the following– (a) the management, use and occupation of the [NAME] concerned, and (b) its condition and contents.

(2) Those conditions may, in [NAME], include (so far as appropriate in the circumstances)– 1. (a) conditions imposing restrictions or prohibitions on the use or occupation of [NAME] parts of the [NAME] by persons occupying it; 2. (b) conditions requiring the taking of reasonable and practicable steps to prevent or reduce anti-social behaviour by persons occupying or visiting the [NAME]; 3. (c) conditions requiring facilities and equipment to be made available in the [NAME] for the purpose of meeting standards prescribed under section 65; 4. (d) conditions requiring such facilities and equipment to be kept in repair and [NAME] working order; 5. (e) conditions requiring, in the case of any works needed in order for any such facilities or equipment to be made available or to meet any such standards, that the works are carried out within such period or periods as may be specified in, or determined under, the [NAME]; 6. (f) conditions requiring the [NAME] or the manager of the [NAME] to attend training courses in relation to any applicable code of practice approved under section 233.

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(3) A [NAME] must include the conditions required by Schedule 4.

(4) As regards the relationship between the authority's power to impose conditions under this section and functions exercisable by them under or for the purposes of Part 1 (“Part 1 functions”)– (a) the authority must proceed on the basis that, in general, they should seek to identify, remove or reduce category 1 or category 2 hazards in the [NAME] by the exercise of Part 1 functions and not by means of [NAME] conditions; (b)this does not, however, prevent the authority from imposing [NAME] conditions relating to the installation or maintenance of facilities or equipment within subsection (2)(c) above, even if the same result could be achieved by the exercise of Part 1 functions; (c) the fact that [NAME] conditions are imposed for a [NAME] purpose that could be achieved by the exercise of Part 1 functions does not affect the way in which Part 1 functions can be subsequently exercised by the authority. (5) A [NAME] may not include conditions imposing restrictions or obligations on a [NAME] other than the [NAME] unless that person has consented to the imposition of the restrictions or obligations. (6) A [NAME] may not include conditions requiring (or intended to secure) any alteration in the terms of any tenancy or [NAME] under which any person occupies the [NAME]. 69 Variation of licences (1) The local [NAME] authority may vary a [NAME]– 1. (a) if they do so with the agreement of the [NAME], or 2. (b) if they consider that there has been a change of circumstances since the time when the [NAME] was granted. For this purpose “change of circumstances” includes any discovery of new information. (2) Subsection (3) applies where the authority– (a) are considering whether to vary a [NAME] under subsection (1)(b); and (b) are considering–

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1. (i) what number of households or persons is appropriate as the maximum number authorised to occupy the HMO to which the [NAME] relates, or 2. (ii) the standards applicable to occupation by a [NAME] number of households or persons. (3) The authority must apply the same standards in relation to the circumstances existing at the time when they are considering whether to vary the [NAME] as were applicable at the time when it was granted. This is subject to subsection (4). (4) If the standards– (a) prescribed under section 65, and (b) applicable at the time when the [NAME] was granted, have subsequently been revised or superseded by provisions of regulations under that section, the authority may apply the new standards. (5) A variation made with the agreement of the [NAME] takes effect at the time when it ismade. (6) Otherwise, a variation does not come into force until such time, if any, as is the operative time for the purposes of this subsection under paragraph 35 of Schedule 5 (time when period for appealing expires without an appeal being made or when decision to vary is confirmed on appeal). (7) The power to vary a [NAME] under this section is exercisable by the authority either– (a) on an [NAME] made by the [NAME] or a relevant person, or (b) on the authority's own initiative. (8) In subsection (7) “relevant person” means any person (other than the [NAME])– 1. (a) who has an estate or interest in the HMO concerned (but is not a tenant under a lease with an unexpired term of 3 years or less), or 2. (b) who is a person managing or having control of the [NAME] (and does not fall within paragraph (a)), or 3. (c) on whom any restriction or obligation is imposed by the [NAME] in accordance with section 67(5).

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71 Procedural requirements and appeals against [NAME] decisions Schedule 5 (which deals with procedural requirements relating to the grant, refusal, variation or revocation of licences and with appeals against [NAME] decisions) has effect for the purposes of this Part. SCHEDULE 5 LICENCES UNDER PARTS 2 AND 3: PROCEDURE AND APPEALS PART 3 [NAME] 32 Right to appeal against decision or refusal to vary or revoke [NAME] (1) The [NAME] or any relevant person may appeal to the appropriate tribunal against a decision by the local [NAME] authority– (a) to vary or revoke a [NAME], or (b) to refuse to vary or revoke a [NAME]. (2) But this does not apply to the [NAME] in a case where the decision to vary or revoke the [NAME] was made with his agreement. 34 Powers of tribunal hearing appeal (1) This paragraph applies to appeals to the appropriate tribunal under paragraph 31 or 32. (2) An appeal– 1. (a) is to be by way of a re-hearing, but 2. (b) may be determined having regard to matters of which the authority were unaware. (3) The tribunal may confirm, reverse or vary the decision of the local [NAME] authority. (4) On an appeal under paragraph 31 the tribunal may direct the authority to grant a [NAME] to the applicant for the [NAME] on such terms as the tribunal may direct. Reasons 64. The Tribunal took into account all of the documentary evidence provided by the parties in advance of the hearing.

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65. As findings of fact, the Tribunal was not satisfied of the evidence produced by the Applicant and notwithstanding her proximity to [NAME] and previous assistance and interactions with the tenants, do not consider it appropriate for her to be appointed as manager to [NAME].

66. The Applicant and the [NAME] Respondent are clearly going through a very acrimonious divorce and their relationship has irretrievably broken down. Whilst the Applicant gave assurances that communication could be maintained between the two and this would not affect her management of [NAME], the Tribunal was not satisfied that practically her appointment would work, and that communication was clearly not open responsive.

67. The Tribunal noted the contents of the correspondence exchanged between the parties with the Tribunal in the present proceedings which gave an indication as to the level of discord between the parties and clearly demonstrated to the Tribunal that her proposal would not be feasible.

68. As the Tribunal noted, it does not have jurisdiction to consider any matters relating to unpaid mortgage instalments and special utilities or other creditor debts and that it would for an affected party to seek redress to account for any sums owed either by way contributions to outstanding bills or to account for their entitlement to rental income through the County Court or indeed through the Family Court through financial remedies an matrimonial proceedings.

69. The Tribunal also notes the Applicant’s position that the mortgage had been in arrears for a year and a half and therefore [NAME] would have been aware of this at the time that they were consulted by the First Respondent for representations to the proposed variation and they did not in such circumstances oppose the variation.

70. The Tribunal was however satisfied that the First Respondent had carried out sufficient and detailed checks to establish that the [NAME] Respondent was a [NAME] for the purposes of holding an [NAME]. Given the practical difficulty that he was not present in the UK, he had sensibly appointed a manager being [COMPANY] who had also been deemed by the council as a [NAME] under the requirements of the [NAME] 2004.

71. The Tribunal therefore agreed with the First Respondent's submissions and accepted the evidence produced in support that there were no grounds upon which to revoke or vary the [NAME] from its current terms.

72. The Tribunal again repeats that given the irretrievable breakdown of the Applicants and [NAME] Respondent’s relationship, the appointment of an independent third party manager was an appropriate course of action.

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Determination 73. The Tribunal does not accept that the Applicant’s various concerns amount to a sufficient reason for the [NAME] to be varied as she proposes for the reasons set out above and therefore the [NAME] is dismissed. Name: Judge Adcock-Jones

Date: 01 September 2025 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 ([NAME]), then a written [NAME] for permission must be made to the First- tier Tribunal at the [NAME] which has been dealing with the case. The [NAME] for permission to appeal must arrive at the [NAME] within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28 day time limit, such [NAME] 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 [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, [NAME] and the case number), state the grounds of appeal and state the result the party [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal ([NAME]).