Successful Appeal Against Financial Penalty Due to Procedural Irregularities

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case Reference :

LON/00AW/HNA/2025/0694 Property :

3 [ADDRESS] [POSTCODE] Applicant: [redacted] :

In person Respondent :

[redacted] Chelsea Representative :

[COUNSEL] ([NAME])

Type of Application :

Appeal against a financial penalty – Section 249A & Schedule 13A of the Housing At 2004

Tribunal Members

:

Judge Robert Latham Susan Coughlin MCIEH

Date and Venue of Hearing :

25 February 2026 at 10 [ADDRESS] [POSTCODE] Date of Decision :

26 February 2026

DECISION

Decision of the Tribunal

(i) The Tribunal allows the appeal and quashes the Financial Penalty. (ii) The Tribunal orders the Respondent to pay the Applicant £341 within 21 days of this determination in respect of the tribunal fees that he has paid.

2 The Application 1. The Tribunal is required to determine an appeal against a Financial Penalty imposed by the Royal Borough of Kensington and Chelsea ("[NAME]") under Section 249A & Schedule 13A of the Housing At 2004 (“the Act”) in respect of an offence of control or management of an unlicenced HMO under section 72 of the Act. The applications relate to three bedroom maisonette at 3 [ADDRESS] [POSTCODE] (“the Property”).

2. On 30 April 2025, [NAME] imposed a Financial Penalty of £6,000 on Mr [APPELLANT], the Applicant. The alleged offence was that "On 21 January 2015 being the owner of the property at 3 [ADDRESS] [POSTCODE], you did fail to licence a House in Multiple Occupation (HMO) and therefore committed an offence under Section 72(1) of the Housing Act 2004". On 17 February 2025, [NAME] had served a Notice of Intention proposing to impose a Financial Penalty in the sum of £7,5000. The Financial Penalty was reduced because on 24 February 2025, the Applicant had applied for a licence. On 21 August 2025, [NAME] granted a licence subject to conditions as to works relating to fire risk at the property.

3. On 29 August 2025, the Tribunal gave Directions. The Tribunal highlights the following: (i) Paragraph 1 provided: "The parties shall communicate with each other within the next two weeks with a view to settling their dispute or narrowing the issues.

(ii) The Respondent was directed to serve its Bundle of Documents on or before 3 October 2025. Provision was made for witness statements. Original witness statements should be brought to the hearing. In addition, witnesses are expected to attend the hearing to be questioned about their evidence, unless their statement has been agreed by the other party. (iii) The Applicant was directed to serve his Bundle of Documents on or before 20 October 2025. (iv) The Directions specified Mr [NAME] as the relevant contact point at the Respondent.

4. On 9 October, having sent listing questionnaires to the parties, the Tribunal notified the parties that the appeal would be heard on 25 February 2026.

5. The Respondent did not file its Bundle of Documents by 3 October. On 8 October, [NAME] [NAME] [NAME] emailed the Tribunal apologising for missing this deadline. She attributed this to "leave and sickness". She stated that she would endeavour to provide this by 13 October. The Bundle was not served until 15 December 2025. This included four witness statements: (i) [NAME] [NAME] [NAME], the relevant Housing and Health Practitioner who had inspected the Property and was responsible for serving the Financial Penalty; (ii) [NAME] [NAME], one of the relevant tenants; (iii) [APPELLANT] [NAME], another tenant; and (iv) [APPELLANT], acting on behalf of a prospective tenant.

6. On 20 October 2025, the Applicant served his bundle in accordance with the Directions. The Applicant raises the following points in his Expanded Statement of Reasons for his appeal:

(i) There were procedural irregularities in that the Notices were served on an address, namely 21 [ADDRESS], [POSTCODE], with which he has had no contact. There was no letter before action.

(ii) Before granting the tenancy, the Applicant had asked the tenants if they were a single household. They said that they were. They signed a tenancy agreement which recorded this. He had checked with the NRLA and asked if he needed to do anything further. He was told that he should have no reason to doubt them.

(iii) Whilst the Applicant was aware that an HMO licence was required for a letting with 5 or more persons, he was unaware of the Respondent's Additional Licencing Scheme.

(iv) If an offence had been committed, he had a defence of "reasonable excuse". He had believed that they were a single household. Despite inquiries, he was not aware that a licence was required.

(v) On 24 February 2025, the Applicant had applied for a HMO licence which was finally granted on 21 August 2025. He alleged that no works were required.

(vi) The Respondent failed to have regard to the reasons why there had been some delay in applying for a licence. He had not received relevant correspondence. Both his sister and father had been diagnosed with life threatening cancer.

(vii) The Respondent had failed to comply with the Directions given by the Tribunal and should be debarred.

(viii) The Respondent had refused to mediate.

(ix) The Financial Penalty of £6,000 was excessive.

The Hearing 7. The Applicant appeared in person. He has been assisted by the [COMPANY]. Students were present to take notes and offer him support. However, they did not assist with his advocacy.

4 8. The Respondent was represented by Mr [RESPONDENT], a [NAME] who was assisted by Mr [NAME], the team Manager in the Private Sector housing Team.

9. None of the Respondent's were present. The Tribunal was told that [NAME] [RESPONDENT] was on extended leave until 9 March. It would seem that no attempt had been made to ensure that the other witnesses were present. Mr [NAME] said that such witnesses are often reluctant to attend. The Tribunal notes that Mr [NAME] is a lawyer. No attempt had been made to agree any of the witness statements with the Applicant.

10. The Respondent accepted that the notices had been sent to 21 [ADDRESS], [POSTCODE]. [NAME] also accepted that the Applicant had no connection with this address. He stated that that the Respondent had used their GBG data system which had identified this address. This is yet a further example of the dangers of using A1 without checking the accuracy of the information provided. This is a real threat to the administration of justice (see R ([NAME]) v Haringey LBC ("[NAME]") [2025] EWHC 1383 (Admin); [2025] 1 WLR 5147).

11. Mr [NAME] stated that the relevant letters had been sent to other addresses. However, these letters were not in the bundle. There was no evidence that the relevant letters had been sent to 155 [ADDRESS], [POSTCODE], the Applicant's business address which had been specified on the tenancy agreement.

12. Mr [NAME] denied that he had received the initial letter of 18 October 2024. A copy of the Notice of Intention had been emailed to him, but he had been unable to open it. He had not visited the Property at this time as his sister had been admitted to hospital as part of her treatment for cancer.

13. The Respondent was not in possession of the Applicant’s Bundle. Mr [APPELLANT] was able to show that on 20 October 2025, this had been emailed to both [NAME] [NAME] and Mr [NAME]. Both had acknowledged receipt.

14. The Tribunal asked why the Respondent had not agreed to mediation. Mr [RESPONDENT] had expressed a desire to mediate. On 5 August 2025, the Tribunal had sent mediation forms to the parties. Mr [RESPONDENT] stated that it was not the practice of the Respondent to mediate in this type of case. He agreed that the Respondent had failed to engage with Mr [RESPONDENT] in the two weeks after the service of the Directions. The Respondent accepted that the Applicant had sought to engage.

15. The Tribunal was not impressed by this response. The Tribunal expect parties to seek to resolve any dispute without the need to draw on the limited resources of the tribunal.

5 The Tribunal's Determination 16. These are quasi-criminal proceedings. This appeal is a re-hearing of [NAME]'s decision to impose the Financial Penalty. [NAME] would therefore be required to present their case first and satisfy the Tribunal to the criminal standard of proof that the Applicant was guilty of the relevant offence of control or management of an unlicenced HMO. The Tribunal was satisfied that in the absence of live evidence, the Respondent would be unable to prove either the offence, or that the authority had complied with the procedural requirements before it could impose a Financial Penalty.

17. The Tribunal indicated to the parties that it was not willing to consider the evidence of the Respondent's four witnesses in the absence of the witnesses. There were three reasons for this: (i) The issue is whether the Property was let to one or three households is fact sensitive. This could only be determined fairly if the Respondent adduced live evidence so that questions could be put to the relevant witnesses. Mr [NAME] live evidence would have been uncontradicted (ii) The Financial Penalty was determined having regard to applying the Respondent's "Matrix". [NAME] [RESPONDENT] had assessed the Penalty. The Tribunal would have wished to question her as to how she had applied the Matrix. (iii) The Respondent faced a number of procedural problems which it would be unable to address in the absence of evidence from [NAME] [RESPONDENT].

18. In the light of this indication, Respondent did not oppose the appeal. We therefore allowed the appeal and quashed the Financial Penalty. We made an order that the Respondent should refund to the Applicant the tribunal fees of £341 which he has paid.

19. The overriding objective of this Tribunal is to deal with cases fairly and justly. As rule 3(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 explains, dealing with cases fairly and justly includes dealing with them in ways which are proportionate to the importance of the case, avoiding unnecessary formality and seeking flexibility in the proceedings, ensuring, so far as practicable, that the parties are able to participate fully in the proceedings, and using the FTT’s special expertise effectively. A Tribunal should not adopt an impermissibly technical and legalistic approach to the material relied on by the parties and lose sight of its own overriding objective of dealing with cases fairly and justly.

20. However, the imposition of a Financial Penalty is a quasi-criminal jurisdiction which has serious consequences for any landlord. The Directions given by the Tribunal are intended to provide the framework whereby such applications can be determined fairly and justly. There is a particular onus on a local housing authority, who must prove a criminal offence so that the

6 tribunal is satisfied beyond reasonable doubt, to adhere to such Directions. It must ensure that the necessary evidence is available to prove the offence. Judge Robert Latham 26 February 2024

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 Regional office which has been dealing with the case.

2. 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.

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.