Letting Agent Appeals Successful: Financial Penalty Quashed

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AC/HTD/2024/0001 Property : [ADDRESS] [POSTCODE] Applicant : [redacted] : [APPELLANT] solicitors Respondent : [redacted] Representative : Ref: TSCP/20/0000299 [COUNSEL] of [NAME] : Appeal against a Financial Penalty Tribunal member : Judge Tagliavini Venue : 10 [ADDRESS] [POSTCODE] Date of decision : 3 December 2024

DECISION

2

The tribunal’s decision 1. The tribunal quashes the Financial Penalty Notice dated 24 April 2024

pursuant to its powers under para. 6(5) of schedule 3 of the Tenant Fees

Act 2019.

The [NAME] 2. This is an [NAME] by the applicant [NAME] against a decision

by the respondent local authority, The London Borough of Barnet ([NAME])

to impose a financial penalty of £5,ooo on the applicant landlord for an

alleged breach of section 2 of the Tenant Fees Act 2019 (‘the 2019 Act’)

as it is alleged the applicant repaid to the tenants only the sum of £350

of a holding deposit of £500. Background 3. The applicant asserted it obtained a holding deposit of £500 for a prospective

tenant [NAME] [APPELLANT] [NAME] of the subject address at [ADDRESS] [POSTCODE]. Subsequently a tenancy was

entered into with effect from 8 October 2022 for a term of 12 months

with [NAME] [NAME] and [NAME] [NAME] [NAME] (‘the

tenants’). 4. Subsequently, 6 months’ rent in advance was demanded by the applicant

in the sum of £8,700 plus £1,450 deposit totalling £10,150. The holding

deposit is said to have been credited on 6 October 2022 against the sums

due from the tenants leaving a balancing payment of £9650.00 due for

the tenants. 5. On about 22 August 2023 the respondent served a Notice of Intent to

Issue a Financial Penalty alleging only £150 of the Holding Deposit had

been returned to the tenants. Subsequently an (undisclosed) settlement

agreement was entered into with the tenants in full and final

satisfaction of the issues between them arising out of the subject

property. The respondent the issued a Final Notice dated 24 April 2024

imposing a financial penalty of £5,000. The hearing 6. As neither party requested an oral hearing this [NAME] was

determined on the documents provided by both parties.

3 The applicant’s case 7. The applicant asserted:

(i) The Holding Deposit of £500 was credited against the rent

due as permitted by para. 6 of Schedule 2 of the 2019

Act.

(iii) By imposing the maximum fine possible of £5,000 the

respondent had little or no regard to the facts of to

the guidance on fines and has failed to provide an

explanation of how the fine was calculated.

(iii) In any event, the fine is excessive and disproportionate

to the severity of the offence alleged.

8. The applicant also provided the tribunal with a Reply to top the respondent’s Grounds of Opposition to this appeal. The applicant asserted the respondent had failed to provide evidence to support its assertions that £350of the Holding Deposit had not been returned; that the tenants had not consented to the £500 being credited against the six months’ rent due or that had followed its own policies in deciding upon the amount of the fine.

The respondent’s case

9. The respondent alleged that the applicant had required the tenants to pay a prohibited fee from a tenant contrary to s.2 of the 2019 Act. The respondent alleged that in addition to the £10,150 paid on 7 October 2022 a sum of £500 by way of a Holding Deposit had been received from the tenants. Of this holding deposit only £150 was returned to the tenants.

10. The respondent asserted that the sum of £500 exceeded the maximum allowed of one week’s rent of £334.62 and £165.38 was in any event a prohibited payment. A credit of the holding deposit against the first rent instalment due is only permitted if the tenants consent to this.

11. The applicant retained £350 of the Holding Deposit as an administration fee and charged the tenants 6 months rent of £8700.00 and £1,450.00 by way of a deposit.

12. In setting the amount of the Financial Penalty, the respondent asserted it had regard to its enforcement policy including fines and consulted the relevant leads for [NAME].

4 The tribunal’s reasons 13. This matter is dealt with as a re-hearing, of the respondent’s decision to impose a Financial penalty. Therefore, is for the respondent to prove that an offence has been committed under the relevant provision of the 2019 Act.

14. The tribunal finds the respondent has failed to prove the offence alleged has been committed by the applicant. Although, the tribunal finds that a payment in excess of one week’s rent was charged to the tenants, this is not the offence alleged for which a Financial Penalty has been imposed.

15. The tribunal is satisfied that the Deal Sheet dated 06 October 2022 relied upon by the applicant, shows a credit of £500 to the tenant’s account and that the payment due of six month’s rent of £8,700 and the £1,450 deposit was as a consequence, reduced to a balancing payment due of £9650.00. In the absence of any evidence to the contrary, the tribunal is satisfied the tenants either expressly or implicitly consented to this course of action.

16. The respondent failed to provide any witness statement from the tenants that asserted they had not been refunded the whole of the £500 holding deposit.

17. The tribunal finds the respondent has failed to demonstrate the steps taken to follow its own enforcement policy or how it had regard, if at all, to the submissions of the applicant before it imposed a fine of £5,000.

18. In conclusion the tribunal finds the respondent has failed to prove an offence as alleged has been committed by the applicant. In any event, the tribunal finds the amount of financial penalty imposed excessive and unreasonable.

Name: Judge Tagliavini

Date: 3 December 2024

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] should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp- pta-[NAME]-for-permission-to-appeal-a-decision-to-the-upper-tribunal-lands- chamber

5 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, 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 ([NAME]).