HMO Licence Revoked Due to Criminal Record

OUTCOME: Dismissed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference : LON/00BE/HML/2019/0025 Property : 246 [ADDRESS], [POSTCODE] Applicant : [redacted] : [COUNSEL] Respondent : [redacted] : [COUNSEL] (Counsel)

Type of Application : Appeal in respect of an [NAME] 71 and Schedule 5 of the Housing Act 2004 Tribunal Members : Judge Robert Latham Marina Krisko FRICS Date and venue of Hearing : 30 October 20198 at 10 [ADDRESS] [POSTCODE] Date of Decision : 13 November 2019

DECISION

The Tribunal confirms the decision, dated 24 May 2019, revoking the [NAME] which had been issued by the Respondent on 16 April 2018.

2

Summary of the Decision 1. On 16 April 2018, the Respondent issued an [NAME] in respect of 246 [ADDRESS], [POSTCODE] (“the property”) to “[COMPANY]” pursuant to section 64 of the Housing Act 2004 (“the Act”).

2. On 16 April 2019, the Respondent served a Notice of [NAME] on the Applicant at 69 [ADDRESS], [POSTCODE], pursuant to paragraph 22 of Schedule 5 of the Act. The stated reason for the [NAME] revocation was that the Applicant had been convicted in June 2018 (a date which seems to be wrong) and found guilty of a number of offences and was therefore not considered to be a “fit and proper person” as defined by Section 66 of the Act.

3. On 2 February 2018, the Applicant had pleaded guilty to a total of 9 offences in respect of a property which it was [NAME] at 238 [ADDRESS] [POSTCODE] and was fined a total of £5,000. The offences consisted of failing to [NAME] the HMO contrary to Section 72(1) of the Act and eight offences under the Management of Houses in Multiple Occupation (England) Regulations 2006. It was further ordered to pay costs of £2,000 and a victim surcharge of £300.

4. The Applicant did not make any representations in response to the Notice of [NAME]. On 24 May 2019, the Respondent served a Notice of Decision to Revoke the [NAME] on the Applicant at [ADDRESS] pursuant to paragraph 24 of Schedule 5 of the Act. It is against this decision that the Applicant seeks to appeal.

5. The property is owned by Miss [NAME]. On 28 September 2018, [COMPANY], acting as [NAME] agents for Miss [NAME], granted an assured shorthold tenancy of the property for a term 36 months to three tenants.

6. The Tribunal confirms the Respondent’s decision to revoke the [NAME]. We are satisfied that on this date, the Applicant was no longer a fit and proper person to be the [NAME] as it is no longer the “[NAME]” of the property. We are further satisfied that the Applicant has no standing to bring this appeal as it is no longer has a sufficient involvement in the property. The Application 7. On 26 June 2019, [NAME] [NAME] [NAME] issued an application seeking to appeal against the revocation of Additional HMO Licences in

3 respect of nine properties, namely (i) [ADDRESS]; (ii) [ADDRESS], [POSTCODE]; (iii) 57 [ADDRESS], [POSTCODE]; (iv) 42 [ADDRESS], [POSTCODE]; (v) 6 [NAME], [POSTCODE]; (vi) 120 [ADDRESS], [POSTCODE]; (vii) 24 [NAME], [POSTCODE]; (viii) 22 [ADDRESS], [POSTCODE]; and (ix) 26 [ADDRESS], [POSTCODE]. [COMPANY] was named as [NAME] [COUNSEL] representative. [NAME] [COUNSEL] was identified as an interested party. It stated that [NAME] [NAME] would require an interpreter “Portuguese (Brazil”). Grounds of Appeal were attached which had been drafted by [NAME], Solicitors. The substance of the appeal is that there has been a change in the ownership and [NAME] of the [COMPANY]. At the time of the conviction, the sole owner and director was [NAME]. Since 2 October 2018, [NAME] [NAME] has been the sole owner and director. The address given for the [COMPANY] was [NAME], 18 [ADDRESS], [POSTCODE].

8. The application attached two notices in respect of [ADDRESS]: (i) the [NAME], dated 16 April 2018, issued to the [COMPANY]; and (ii) a Notice of Decision to Revoke a [NAME], dated 24 May 2019, issued to [NAME] (sic). The application did not include two relevant documents required by the Tribunal’s Practice Direction, namely the Notice of [NAME] or the Notice of Decision to Revoke which the Respondent had served on the [COMPANY].

9. The Tribunal has treated the application as an appeal by the [COMPANY] in respect of the revocation of the [NAME] of the subject property at [ADDRESS]. On 2 July, the Tribunal notified the [COMPANY] and [NAME] [APPELLANT] that any application in respect of any of the [NAME] eight properties required completed application forms and the requisite fee of £100 for each appeal. The [COMPANY] failed to comply. On 26 July, a Procedural Judge issued a Notice of Intention to Strike out these eight applications. On 16 August, a Procedural Judge struck out these applications. In respect of one application ([ADDRESS]), there is an application to reinstate the appeal in respect of which Directions have now been issued.

10. On 16 August 2019, a Procedural Judge issued Directions for this appeal. (i) By 30 August, the Applicant was directed to inform the Tribunal of any occupants/tenants at the property the Tribunal could notify them of the application. The Applicant failed to comply with this Direction. (ii) Two Bundles of Documents have been filed on behalf of the Applicant, one by [NAME] [APPELLANT] and a second by [NAME] [APPELLANT]. (iii) The Respondent has filed an extensive bundle extending to more than 250 pages. Most of the material relates to the unlicensed property at 238

[ADDRESS]. The Respondent state that [NAME] [RESPONDENT] did not inform them of the change of [NAME] of the [COMPANY] or of any change of address for the Company. They further raise the procedural issue that the Applicant made no response to the Notice of the [NAME]. On 29 August 2019, [NAME] [NAME] [NAME], an environmental health officer, inspected the property and identified a number of management defects. The Respondent do not address the circumstances in which the [NAME] was issued on 16 April 2018 or the circumstances in which the [NAME] was issued despite the conviction in respect of [ADDRESS]. The Hearing 11. [NAME] [APPELLANT] appeared to represent the Applicant. [NAME] [APPELLANT] has no interest in the property. However, he is the freeholder of [ADDRESS]. He was accompanied by [NAME] [NAME] and Miss [NAME]. The Tribunal arranged for an interpreter to attend to assist [NAME] [NAME] whose first language is Portuguese. 12. [NAME] [COUNSEL] (Counsel) appeared on behalf of the Respondent. He was accompanied by [NAME] [RESPONDENT] [NAME].

13. The hearing was far from satisfactory: (i) No party had provided the Tribunal with a copy of the Notice of the Decision to Revoke the [NAME] which had been served on the Applicant and which was subject to the appeal. [NAME] [APPELLANT] stated that he had not received a copy as it had been served on [ADDRESS], an address no longer used by the [COMPANY]. [NAME] [APPELLANT] responded that the Applicant had not notified [NAME] of either the change of ownership of the [COMPANY] or any change of address. After an adjournment, [NAME] [NAME] was able to show the Tribunal an electronic copy of the Notice and has subsequently provided a hard copy of this. (ii) [NAME] [RESPONDENT] did not have a copy of the Respondent’s Bundle. He explained that he had a broken arm and was unable to convey a copy to the hearing. He was provided with the Tribunal’s copy. (iii) The Respondent had not received a copy of [NAME] [RESPONDENT] bundle. The hearing was adjourned so that he could be provided with a copy. (iv) [NAME] [NAME] stated that he had not been provided with a copy of [NAME] [NAME]. The Tribunal provided him with a copy. When the Tribunal resumed the hearing, it became apparent that the bundle which [NAME] [RESPONDENT] had provided to the Respondent was more extensive than that provided to the Tribunal. In particular, it had a full copy of a tenancy

5 agreement, dated 28 September 2018, which is the critical document in the appeal. 14. [NAME] [NAME] and [NAME] [NAME] seem to have proceeded on the basis that the change in ownership in the [COMPANY] from [NAME] [APPELLANT] to [NAME] [APPELLANT] was a critical change of circumstances and that it was for the Respondent to satisfy the Tribunal that [NAME] [RESPONDENT] is not a fit and proper person to hold the [NAME]. They fail to recognise that the Respondent is a separate legal entity from either [NAME] [RESPONDENT] and [NAME] [NAME]. It has been convicted of a number of offences relating to the management of the HMO at [ADDRESS]. It is for the Applicant to establish that, despite this conviction, it is a “fit and proper person to be the [NAME]” in respect of this property.

15. The Respondent produced two print-outs from [NAME] dated 26 June 2019 and 10 October 2019. [NAME] [NAME] was appointed as a director on 2 October 2018. He is described as an Italian national. In recent years, there have been eight appointments and resignations. The June print-out records [NAME] [NAME] address as [ADDRESS]; in October this was changed to [NAME], 18 [ADDRESS], [POSTCODE]. 16. [NAME] stated that he purchased the [COMPANY] from [NAME] [APPELLANT] for £45,000 plus costs. He acquired two employees and an office at 6 [ADDRESS], [POSTCODE]. He stated that [NAME] is currently the registered address for the Applicant and that he had changed this address some six months previously. The Statutory Framework 17. The appeal is brought pursuant to Part 3 of Schedule 5 of the Act. Paragraph 34 provides for the powers of this tribunal: (i) The appeal is to be by way of a re-hearing; (ii) The appeal may be determined [NAME] regard to matters of which the authority were unaware. (iii) The tribunal may confirm, reverse or vary the decision of the local housing authority. (iv) On an appeal, the tribunal may direct the authority to grant a [NAME] to the applicant for the [NAME] on such terms as the tribunal may direct.

18. This is an appeal against an [NAME] issued pursuant to Section 64 of the Act. An authority has a discretion to a [NAME] to the applicant or some

6 [NAME], or to refuse to grant a [NAME]. If an authority are satisfied as to the matters mentioned in section 64(3), it may grant a [NAME] either to (a) the applicant; or (b) to some [NAME], if both he and the applicant agree.

19. An authority may only grant a [NAME] if satisfied on the following matters mentioned in in Section 64(3), namely that: (a) the [NAME] is reasonably suitable for occupation by not more than a specified number of persons; (aa) that no banning order under section 16 of the Housing and Planning Act 2016 is in force “(b) that the [NAME] (i) is a fit and proper person to be the [NAME], and (ii) is, out of all the persons reasonably available to be the [NAME] in respect of the [NAME], the most appropriate person to be the [NAME]”; (c) that the [NAME] is either (i) the [NAME], or (ii) a person who is an agent or employee of the [NAME]; (d) that the [NAME] is a fit and proper person to be the manager of the [NAME]; and (e) that the [NAME] management arrangements for the [NAME] are otherwise satisfactory.

20. Section 66(1) provides that in deciding for the purposes of section 64(3)(b) or (d) whether a person (“[NAME]”) is a fit and proper person to be the [NAME] or (as the case may be) the manager of the [NAME], the authority must have regard (among [NAME] things) to any evidence within subsection (2) or (3): “(2) Evidence is within this subsection if it shows that [NAME] has: (a) committed any offence involving fraud or [NAME] dishonesty, or violence or drugs, or any offence listed in Schedule 3 to the Sexual Offences Act 2003 (c. 42) (offences attracting notification requirements); (b) practised unlawful discrimination on grounds of sex, colour, race, ethnic or national origins or disability in, or in connection with, the carrying on of any business;

7 (c) contravened any provision of the law relating to housing or of landlord and tenant law; or (d) acted otherwise than in accordance with any applicable code of practice approved under section 233.” (3) Evidence is within this subsection if: “(a) it shows that any person associated or formerly associated with [NAME] (whether on a personal, work or [NAME] basis) has done any of the things set out in subsection (2)(a) to (d), and (b) it appears to the authority that the evidence is relevant to the question whether [NAME] is a fit and proper person to be the [NAME] or (as the case may be) the manager of the [NAME]”.

21. Section 66(4) provides that “for the purposes of section 64(3)(b) the local housing authority must assume, unless the contrary is shown, that the [NAME] is a more appropriate person to be the [NAME] than a [NAME]”.

22. Section 263 defines the following terms: (i) “[NAME]” means “(unless the context otherwise requires) the person who receives the rack-rent of the premises (whether on his own account or as agent or trustee of another person), or who would so receive it if the premises were let at a rack-rent.” (ii) “rack-rent” means “a rent which is not less than two-thirds of the full net annual value of the premises.” (iii) “[NAME]” means “the person who, being an owner or lessee of the premises: “(a) receives (whether directly or through an agent or trustee) rents or [NAME] payments from (i) in the case of a [NAME] in multiple occupation, persons who are in occupation as tenants or licensees of parts of the premises……; or (b) would so receive those rents or [NAME] payments but for [NAME] entered into an arrangement (whether in pursuance of a court order or otherwise) with another person who is not an owner or lessee of the premises by virtue of which [NAME] receives the rents or [NAME] payments; and includes, where those rents or [NAME] payments

8 are received through another person as agent or trustee, [NAME].” (iv) References in the Act to any person involved in the management of a HMO include references to the [NAME] it.

23. Section 70 permits an authority to revoke a [NAME] in specified circumstances “relating to the [NAME]”, namely: “(a) where the authority consider that the [NAME] or any [NAME] has committed a serious breach of a condition of the [NAME] or repeated breaches of such a condition; (b) where the authority no longer consider that the [NAME] is a fit and proper person to be the [NAME]; and (c) where the authority no longer consider that the management of the [NAME] is being carried on by persons who are in each case fit and proper persons to be involved in its management.” The Tribunal’s Determination 24. The critical document in the determination of this appeal is the assured shorthold tenancy agreement dated 28 September 2018. The landlord is “Miss [RESPONDENT]”. The landlord’s agent is “[RESPONDENT]”. It is the address of this agent which is provided for the purposes of Section 48 of the Landlord and Tenant Act 1987, namely the service of any notices. The rent is to be paid to the agent. The property at [ADDRESS] is let to three tenants at a monthly rent of £,2000 for a fixed term of 36 months from 28 September 2018.

25. The Respondent was not aware of this tenancy agreement when it revoked the [NAME] on 24 May 2019. Indeed, the significance of this tenancy agreement only became apparent during the course of the hearing.

26. In its Grounds of Appeal (at paragraph 15(b)), the Applicant asserts: “The Applicant is [NAME] the [APPELLANT] well and the current management arrangements are satisfactory”. This was not true in respect of the subject property either at the date of the revocation of the [NAME] (24 May 2019), the date of the issue of the application (26 June 2019) or at the date of the hearing. On these dates, the Applicant was not [NAME] the subject property. 27. [NAME] [APPELLANT] conceded that the Applicant is no longer receiving the rent in respect of the property. He suggested that the Applicant retained some

9 residual responsibility for repairs. However, the tenancy agreement makes no reference to this.

28. The Tribunal is satisfied that there are only two persons who are fit and proper persons to be the [NAME] of the [NAME] of the subject property, namely (i) [NAME], as freeholder who is entitled to receive the “rack rent”; or (ii) [NAME]. The Applicant no longer has any sufficient involvement in the management of the property to hold the [NAME]. 29. [NAME] [NAME] did not seek to argue against this. He rather stated that [NAME] are not willing to be the [NAME]. In such circumstances, Miss [NAME] must either apply for a [NAME] or find a [NAME] agent who is willing to hold the [NAME].

30. It is apparent that the [COMPANY] has sought to pursue this appeal in the belief that a finding by this Tribunal that it is a fit and proper person to hold a [NAME] would extend to the [NAME] properties that it manages. That is not correct. [NAME] relates to a single property. Any prospective [NAME] must establish that they meet the statutory criteria in respect of that property.

31. The Tribunal confirms the Respondent’s decision, dated 24 May 2019 to revoke the [NAME]. We are entitled to have regard to matters of which the authority was unaware. We are satisfied that on this date, the Applicant was no longer a fit and proper person to be the [NAME] as it was no longer the “[NAME]” or the “[NAME]” the property. It had no sufficient involvement in the management of the [NAME]. Indeed, we have no sufficient evidence of the current management arrangements in respect of the property. We are further satisfied that the Applicant has no standing to bring this appeal as it is no longer has a sufficient involvement in the property.

32. The Applicant has paid tribunal fees of £300. In the light of our determination, we are satisfied that it would not be appropriate to make an order for the refund of the fees by the Respondent.

33. The parties confirmed that the relevant addresses for service are: (i) The Applicant’s representative is [NAME] [COUNSEL], 4 The Meadows, Guildford, Surrey, [POSTCODE]. (ii) The Respondent’s address is: London Borough of [NAME], PO Box 64529, London [POSTCODE]. Any correspondence should be marked for the attention of [NAME]. Judge Robert Latham

10 13 November 2019

Postscript Subsequent to drafting this decision, the Tribunal has seen the undated letter sent to the Tribunal on 8 November in which [NAME] [NAME] seeks to make further submissions. The Tribunal is satisfied that [NAME] is the “[NAME]” the property, as she is the owner who receives the rent through her agent. [NAME] is the “[NAME]”, as it is the person who receives the rent from the tenants. [NAME] regard to Sections 63(b) and 66(4), the Tribunal is satisfied that the [COMPANY] is not “the most appropriate person to be the [NAME]”. Indeed, it has no sufficient involvement in the management of the property to hold the [NAME].

RIGHTS OF APPEAL

1. 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 [NAME] which has been dealing with the case.

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

3. 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.

4. 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.