Landlord Fined for Operating HMO Without License

OUTCOME: Dismissed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00BH/HNA/2024/0619 Property : 40 [ADDRESS] [POSTCODE] Applicant : [redacted] : In person Respondent : [redacted] Representative : [NAME] [COUNSEL], counsel Type of [NAME] : Appeal against a financial penalty – Housing Act 2004, Sch. 13A, para 10 Tribunal members : Judge [NAME] S Mason BSc FRICS Venue : 10 [ADDRESS] [POSTCODE] Date of hearing Date of decision : 10 July 2025 30 July 2025

DECISION

2

Decisions of the tribunal (1) The tribunal confirms the respondent’s decision to issue a Financial

Penalty Notice. (2) The tribunal confirms the amount of the penalty in the sum of £4,400. (3) The tribunal refuses the applicant’s appeal. _____________________________________________________ The [NAME] 1. This is an appeal against a Financial Penalty pursuant to Schedule 13A

para 10(1)(a) of the Housing Act 2004 issued by the London Borough

of Waltham Forest dated 26 September 2024, in the sum of £4,400 for

having failed to ensure the premises at [ADDRESS], London E17

7BZ (‘the premises’) were licensed under section 72 of the Housing Act

2004 as on 5 July 2022. Procedural matters 2. At the hearing the respondent was represented by [NAME] [COUNSEL] of counsel. The applicant represented herself but had requested an interpreter speaking either Urdhu or Punjabi and the tribunal arranged for the attendance of [NAME] [NAME] [NAME] at the hearing. It quickly became clear at the hearing that the applicant both read and understood English as she was able to answer the tribunal’s questions in English with only very occasional assistance from [NAME] [NAME], the Urdhu interpreter. The background 3. The subject premises are a 6 bedroom house which the applicant had let out as an HMO since 2017/18. However, the Article 4 Direction under the Town and Country Planning Act subsequently came into force and removed permitted development rights for Class C4 (houses in multiple occupation) and required planning permission for change of use from Class C3 (use as a dwelling house as a single household) to Class C4. The applicant was subsequent informed by the respondent that:

‘…the [NAME] use is unauthorised and should cease. The

Council will be satisfied to allow you a period of 6 months to

cease the use and remove the tenants provided you can

provide the Council with a copy of the Section 21 Notice to Quit.’

3 4. Subsequently, the applicant informed the respondent that she had

served a S.21 Notice to Quit on the 5 tenants still in occupation on

10/06/2022. In 2023 the applicant converted the use of the premises

from a HMO to a single household use.

5. On 3 January 2023 the respondent issued a Notice of Intention to issue a Financial Penalty and invited the applicant to make representations. Subsequently on 26 September 2024 a Final Notice was issued imposing a Financial Penalty of £4,400 in which it was alleged the applicant had committed an offence pursuant to s.72 of the Housing Act 2004 (failing to ensure the premises were licensed) as on 5 July 2022.

6. The applicant had previously unsuccessfully appealed the respondent’s

refusal to grant a HMO licence. The respondent’s refusal relied on the

imposition of an Article 4 Direction under the Town and Country

Planning Act came into force that removed permitted

development rights for Class C4 (houses in multiple occupation) and

required planning permission for change of use from Class C3 (use as a

dwelling house as a single household) to Class C4; see ref:

AB/LONBH/HML/2020/005 dated 14 March 2022. Consequently,

the applicant was no longer permitted to use the premises as an

HMO and only permitted to let it to a single household. The hearing 7. The applicant provided the tribunal with a digital bundle of 25 pages and the respondent provided a digital bundle of 288 pages. As this appeal was by way of a re-hearing the tribunal heard first from the respondent as to its decision to impose the financial penalty on the applicant and the process by which it had reached the appropriate amount of that penalty. The respondent’s case 8. The respondent relied upon and referred the tribunal to the witness statements of former tenants at the premises, [NAME] dated 29 June 2022, [NAME] dated 5 July 2022 and [NAME] also dated 5 July 2022 who were all found to be in occupation of the subject premises on that day together with four or more other persons.

9. The tribunal heard oral evidence from [RESPONDENT], Team Manager within the respondent’s Private Sector Housing and Licensing Team who spoke to her witness statement dated 5 March 2025 in which she stated: On 30th March 2017 the Authority received an [NAME] for a mandatory HMO license in respect of the Property. The [NAME] was made by [NAME[NAME] (hereafter “Mrs [NAME]”) of 36 [ADDRESS] [POSTCODE]. [NAME] was the proposed Licence Holder and she provided (details

4 removed by tribunal as her contact details. A copy of the [NAME] is produced as Exhibit GS6 to the witness statement of [NAME[NAME] dated 15th December 2022. On 23rd January 2018 the Authority proposed to grant a reduced term licence for 1 year. The reduced term was proposed because the Authority became aware that the Property was operating as an HMO without planning consent for a change of use from a C3 dwelling house to a [NAME]. Since 16 September 2014, following the Authority having made an Article 4 Direction removing permitted development rights for the change of use of properties from Class C3 (single family dwelling) to Class C4 (HMOs occupied by 3 to 6 people), it is the case that property owners in Waltham Forest must obtain planning permission or be able to demonstrate established use for a [NAME] accommodating 3-6 persons on a shared basis. It is the case, therefore, that any such HMO established after 16 September 2014 without the owner obtaining the necessary consent represents a planning breach… On 29th June 2022 a visit was made to the Property. This was to identify whether the house was still being used as an illegal HMO and operating without a licence. Ms [NAME] visited the Property where she met [NAME[NAME]. Ms [NAME] confirmed in a signed witness statement that she had lived in the Property for 15 months and paid rent to [NAME[NAME]. She confirmed in her 5th March 2025 statement that she shared the Property and the facilities with 4 other people that she was not related to such that the Property came under the definition of a Mandatory HMO…

On 5th July 2022 Ms [NAME] returned to the Property where

she met two other tenants who identified themselves as [NAME] and [NAME]. Both tenants confirmed that they

shared the accommodation with four other people who they

were not related to and paid their rent to [NAME[NAME] or

[NAME[NAME]…

These visits carried out on 29th June 2022 and 5th July 2022

confirmed that the Property at 40 [ADDRESS] [POSTCODE] was

operating as an unlicenced HMO and Mrs [NAME] decision to

operate an illegal HMO without a licence constituted an offence

under Section 72(1) Housing Act 2004. 10. Ms [NAME] also stated: As per the Authority’s policy when responding to representations the (applicant’s) representation was passed to another Team Manager, [NAME] to respond and on 7th March 2023 a response was sent to [NAME]. The response

5 confirmed the Authority’s decision to uphold the financial penalty for the following reasons: • Following the decision by the tribunal to confirm the Authority’s decision to refuse the HMO Licence Mrs [NAME] did not consult with the Private Sector Housing and Licensing Team about how best to proceed. Instead she contacted a [NAME], [NAME]. [NAME] [NAME] response was to inform her that, from his department’s point of view, he would not take any enforcement action against the planning breach for 6 months. Mrs [NAME] was advised by [NAME] [NAME] that the two departments are very different and are governed by different legislation. • Despite this Mrs [NAME] decided to continue to rent the Property as an HMO. A valid Section 21 notice had not been served on any tenant in the Property since the decision to refuse the licence. Evidence was gathered on 29 June 2022 that the Property continued to be occupied by multiple tenants. In fact, a new tenancy was created in June 2022 which was approximately 3 months after the Tribunal upheld the Council’s decision to refuse the licence and further adding to the view that Mrs [NAME] had no intention to comply with the law. • Mrs [NAME] had from 1 February 2018 to have reverted the Property to a single-family dwelling or to have obtained a certificate of lawfulness for the change of use from a C3 dwelling house to a [NAME]. She waited almost 2 years to apply for the latter. No attempt had been made to lessen the numbers of tenants prior to the offence date (29 June 2022). She made no effort to comply with the regulations and continued to profit from renting the Property as an illegal HMO.

11. The respondent asserted that the value of the Civil Penalty was calculated correctly according to the Council’s policy. This had recommended the imposition of a penalty of £5,000 as a serious Band 2 offence. To this was added the sum of £500 due to the aggravating existence of disrepair, bringing the total to £5,500. This sum was reduced to £4,400 on the Final Notice as it was said by the respondent that as the applicant has complied in remedying the identified breach. The applicant’s case 12. The applicant did not provide a witness statement in support of her appeal but gave oral evidence to the tribunal. The applicant did not deny she had control of or was managing the subject premises. Further, the applicant did not deny she failed to obtain a licence and asserted that as she had in June 2022 been given 6 months by the respondent’s Planning Department to lawfully evict her tenants and

6 restore the premises as a single family home. The applicant stated it was unfair of the respondent’s Housing Department to have imposed a financial penalty on her for an offence alleged to have been committed on 5 July 2022 as she had already served a Notice to Quit. However, she accepted she had neither provided a copy or copies of the Notice to Quit to the respondent and had simply served a handwritten notice on the tenants that was not in the required format with the requisite information as she had been unaware of what a Notice was or required.

13. The applicant also stated that she had been previously granted an HMO licence which was subsequently revoked and had subsequently reapplied for a licence and had appealed unsuccessfully against this decision to the First-tier Tribunal in March 2022. The tribunal’s decision 14. The tribunal confirms the respondent’s decision to issue a Financial

Penalty Notice. The tribunal confirms the amount of the penalty to the

original sum of £4,400 and refuses the applicant’s appeal. Reasons for the tribunal’s decision 15. The tribunal is satisfied so that it is sure that the applicant has committed the offence alleged pursuant to s72(1) of the Housing Act 2004 and has failed to raise any reasonable defence. Further, the tribunal is satisfied the respondent has given proper consideration to its policy in deciding whether or not to impose a financial penalty and its amount.

16. Section 72(1) of the Housing Act states: A person commits an offence if he is a person having control of or managing an HMO which is required to be licensed under this Part (see section 61(1)) but is not so licensed.

17. The tribunal finds that the applicant had neither provided a copy or

copies of the Notice to Quit to the respondent and had simply served a

handwritten notice on the tenants. This was not in the required format

with the requisite information as the applicant admitted she had not

known what form a valid s.21 Notice required despite having been a

landlord of the subject premises since about 2017/2018.

18. The tribunal also finds the applicant knew that she was required to cease using the subject premises as an HMO after the tribunal’s decision of 14 March 2022 and confirmed in the subsequent correspondence in 2022 from the respondent informing her of the action she needed to take. The tribunal finds the applicant deliberately continued to let the premises as an HMO despite being fully aware she was not permitted to do so and only remedied the

7 breach in early 2023 for which she was given a 20% discount in the Final Notice.

19. Further, the tribunal finds the applicant was made aware that the decision to allow her six months to lawfully evict her tenants was a decision from [NAME] and concerned potential breaches of planning law and not the respondent’s Housing and Licensing Department. In any event, the tribunal finds the applicant failed to serve a valid Notice to Quit and continued to let the premises as an HMO.

20. The tribunal finds the respondent has correctly applied its policy in the

level of the financial penalty and has reasonably provided the applicant

with a 20% discount. 21. In conclusion, the tribunal confirms the service of the Financial Penalty

Notice in the sum of £4,400 and refuses the applicant’s appeal. Name: Judge Tagliavini Date: 30 July 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 (Lands Chamber), then a written [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office 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, the property 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 (Lands Chamber).