Tenant's Financial Penalty Cancelled for Licence Failure

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL [NAME_1] CHAMBER ([NAME_1]) Case Reference : LON/00BH/HNA/2024/0064 [NAME_1] : 22 [ADDRESS] [POSTCODE] Applicant : [redacted] : In person Respondent : [redacted] WandsworthWaltham Forest Representative : [NAME_3] of Counsel instructed by [COMPANY_4] :

Appeal against a financial penalty – Section 249A of, and Schedule 13A to, the Housing Act 2004

Tribunal Members : Judge P Korn Mr A [NAME_5] Date of Hearing : 23 January 2025 Date of Decision : 24 February 2025 Amended on 17 March 2025

AMENDED DECISION

2 We exercise our powers under Rule 50 of the Tribunal Procedure (First-tier Tribunal) ([NAME_1] Chamber) Rules 2013 to correct the clerical mistake, accidental slip or omission on the front page of our Decision dated 24 February 2025. Our amendment is made in bold red type. We have corrected our original Decision because the Respondent was erroneously named as the London Borough of Wandsworth rather than the London Borough of Waltham Forest.

Description of hearing

The hearing was a face-to-face hearing. Decision of the tribunal

The final notice served by the Respondent on the Applicant is cancelled, and consequently the financial penalty imposed by that notice is not payable.

Introduction and background 1. The Applicant has appealed against a financial penalty imposed on her by the Respondent under section 249A of the Housing Act 2004 (“the 2004 Act”) in relation to [NAME_1].

2. The financial penalty was imposed on the Applicant under section 95 of the 2004 Act for being “a person having control of or managing a house which is required to be licensed under [Part 3 of the 2004 Act] but is not so licensed”.

3. The Applicant is the long leaseholder of [NAME_1]. It is common ground between the parties that the Applicant had rented out [NAME_1] to a [NAME_6] (“the Tenant”) and that the Tenant had lived there for many years.

4. On 5 December 2016 the Applicant applied for a private rented [NAME_1] licence in respect of [NAME_1] and she completed the application online. That licence (“the First Licence”) was granted on 17 January 2017, initially until 31 March 2020. On 25 November 2019 the Applicant emailed the Respondent to request a variation of the First Licence, and on 19 February 2020 the Respondent granted the variation which had the effect of extending the First Licence until 17 January 2022.

5. It is common ground that the Applicant (a) was legally obliged to apply for a fresh licence on or prior to the expiry of the First Licence under the then current licensing scheme but (b) did not have a new licence in place when the First Licence expired. The dispute between the parties centres on whether the Applicant’s failure to have a new licence in place at the relevant time constituted a criminal offence or whether she had a valid ‘reasonable excuse’ defence for that failure.

3 Applicant’s written case 6. The Applicant states that the Tenant was her tenant for 26 years. The Applicant submitted the application for the First Licence within 3 weeks of receiving a letter, with help from the [NAME_8].

7. When the time came for renewal of the licence the Applicant tried to renew but experienced continuous access issues. She believes that the problem was caused by the fact that the Respondent’s system had four different addresses for [NAME_1] and that the helpline staff to whom she spoke several times did not realise that this was the problem and therefore did not escalate the issue. She asked the helpline staff if she could answer the relevant questions over the telephone on the basis that the helpline staff would themselves fill in the application, but this was refused.

8. The Applicant persevered with the online application for 19 months but each time she came up against a problem and raised the same IT issues with the helpline staff. Her final calls to the helpline were on 26 July 2023 and totalled 55 minutes but these calls still did not resolve the IT problems and she was in tears by the end. At that point she put the application to one side in order to protect her mental wellbeing and to wait for a more senior employee of the Respondent to make contact.

9. Ultimately the main obstacle to completing the licence application was her inability to upload her safety certificates. The helpline suggested that she state on the form that she did not have any safety documents in order to get around this problem, but she was unwilling to make a statement which was untrue and which would constitute a declaration that she was breaking the law by not having these documents. She requested a paper application in order to get round the problem lawfully, but this was refused.

10. The Applicant notes that the Respondent conducted an investigation into the reasons why her application was not submitted, but she comments that the person who conducted the investigation ([NAME_9]) could have contacted her to discuss the issues but did not.

11. When the licence application was finally submitted this was as a result of her being assisted by [NAME_10], Licensing Enforcement Officer for the Respondent, over a period of 3 days in early March 2024. She adds that [NAME_10] witnessed for herself all of the IT problems, and this resulted in [NAME_10] asking the IT department to merge two accounts.

12. In preliminary written submissions the Applicant also states that she does not live in the borough and did not receive any information or see

4 any advertising about the need to apply for a fresh licence when the old one expired. Respondent’s written case 13. On 7 December 2021 the Respondent wrote to the Applicant to warn her that the First Licence was about to expire. On 6 February 2023 the Applicant began to complete an application for a new licence. On 29 March 2023, over a year after the expiry of the First Licence, the Respondent again wrote to the Applicant to warn her that [NAME_1] was unlicensed. A similar letter followed on 12 April 2023 requesting her to apply within the next 7 days and providing an online link.

14. On 8 September 2023, the Respondent’s officer attended [NAME_1], and the Tenant was present and completed a statement. On 6 February 2024 the Respondent issued the Applicant with a notice of intention to prosecute for failing to licence [NAME_1], the notice giving the date of the offence as 8 September 2023.

15. On 4 March 2024 the Applicant made written representations, citing among other things “severe anxiety in relation to IT/online issues” and issues with completing the application on the Respondent’s system as excuses for her failure to license [NAME_1] between January 2022 and September 2023. She also claimed not to have received communications from the Respondent. In particular, she claimed not to have received the letter of 29 March 2023 warning her that [NAME_1] was unlicensed, but she admitted to receiving the letter of 12 April 2023 (which was in similar terms). She also appeared to suggest that she had received the Respondent’s letter of 7 December 2021. She said that she had contacted the licensing department’s helpline on numerous occasions since 2022 regarding IT issues that she was having with her online application, claiming that she would have completed her application earlier had those issues not occurred.

16. On 1 March 2024, having received the notice of intent dated 6 February 2024, the Applicant telephoned [NAME_10]. Among other things, the Applicant stated that she had failed to apply for a licence due to “lack of confidence with IT systems”, that she had received reminders but had “buried her head in the sand”, and that she thought she “had more time” because the reminders did not warn of a penalty.

17. In the Respondent’s submission, the Applicant’s own account at the time was that her lack of confidence rendered her disinclined to complete the application, which was not the same as her being precluded from completing the application due to technical problems with the system. Having started the application in February 2023 there was no technical reason why she could not have completed it. In any event, the Respondent disputes her account of the extent to which she suffers from IT-induced anxiety. In particular, no evidence exists to

5 support her claim that she contacted the Respondent’s helpdesk repeatedly over several months. In the alternative, it was open to the Applicant to appoint an agent to handle IT-related or application- related matters for her. Cross-examination of witnesses [NAME_10]

18. As noted above, [NAME_10] is a Licensing Enforcement Officer employed by the Respondent. She gave two witness statements and was available to be cross-examined on them at the hearing.

19. The Applicant put it to [NAME_10] that the system did not recognise the Applicant’s email address, but [NAME_10] said that this did not by itself prevent the Applicant from proceeding with an application under [NAME_1] address with which she had started. [NAME_10] accepted that she had suggested that the Applicant tick the wrong box to state that she did not have safety certificates, in order to get round the IT problems with the online form, and then send through copies of the safety certificates separately. In answer to a specific question from the Applicant she accepted that it was legitimate for her not to want to lie on an official form.

20. In answer to another question from the Applicant [NAME_10] did not accept that there were four separate addresses for [NAME_1] on the Respondent’s system. She also said that the Respondent did not have the resources to log all telephone calls and therefore she was unable either to confirm or deny that the Applicant had made all of the calls to the helpline that the Applicant had said she had made. The Applicant, noting that [NAME_10] had been able to help the Applicant submit her licence application within 3 days after getting involved in March 2024, asked [NAME_10] why the matter had not been escalated sooner to someone such as herself, but [NAME_10] was unable to say.

21. The Applicant put it to [NAME_10] that she had asked for support on about 25 separate occasions whilst trying to make her licence application over an extended period, but [NAME_10] said that she simply did not know whether that was the case.

22. Regarding the Respondent’s refusal to provide the Applicant with a paper application, [NAME_10] said that this was standard policy.

23. During re-examination by [NAME_3], Counsel for the Respondent, [NAME_10] agreed with him that there were not as many as four address options when the Applicant was trying to apply for a licence. There were three options, one of which (22A) the Applicant would have known to be the first floor flat (and therefore not her ground floor

6 premises). Of the remaining two, “Ground Floor Flat 1” could not be taken further on the system and therefore the Applicant should not have been confused. Furthermore, she had started her application using the correct address and therefore just had to complete it using that same address. The Applicant 24. The Applicant was also cross-examined. She repeated the point that the system did not recognise her email address and therefore she had to contact the helpline and was told by them what [NAME_1] address to use although it subsequently turned out to be the wrong one. 25. [NAME_3] put it to the Applicant that she did not start her renewal application until 6 February 2023, long after the First Licence had expired, but she said that she had started the application in December 2021. Her evidence for this was a handwritten note in her bundle, but [NAME_3] put it to her that this was not actual evidence that the application was commenced in December 2021. In response the Applicant confirmed that nevertheless she had started the process in December 2021. When asked why she did not use the [ADDRESS] address, i.e. the one that it turned out was the correct address to use, she said that this was because the helpline had told her not to.

26. The Applicant accepted in cross-examination that she put the licence application to one side when she, in her words, “hit a brick wall” and that she effectively gave up on the process for the time being. However, she adder that the Respondent seemed happy for the application to remain incomplete until the technical problems had been resolved. 27. [NAME_3] asked the Applicant why she did not attend when the Respondent’s officer visited [NAME_1] on 26 April 2023. She replied that it was because of the ambiguous wording of the letter informing her about the proposed visit. After a follow-up question, she clarified her comment by saying that it was not stated to be compulsory for her to attend and she did not think that it would help with the licence application as this was being dealt with by the helpline. Follow-up submissions at hearing Respondent’s further submissions 28. In closing submissions, [NAME_3] for the Respondent accepted that the Applicant was an honest person but submitted that her actions had not been reasonable and that therefore she had not had a reasonable excuse for her failure to license as at the date specified in the final notice. It was clear that she had received at least two warnings, and in [NAME_10] view (as set out in her second witness statement) the

7 Respondent’s online system was user-friendly. The Applicant had admitted to having poor IT skills, but the Respondent did not accept that the situation was as confusing as she had claimed and there was nothing on the system itself to prevent her from using the correct ‘[ADDRESS]’ address in her online application. This was the address that she started using and was the one that she should have continued to use.

29. The real problem, in [NAME_3]’ submission, was the Applicant’s failure to upload the safety certificates. Whilst he noted her concerns about lying on the application form, the real choice before her in his submission was between obtaining a licence or not doing so. He also noted that the Applicant had had an opportunity to attend the April 2023 meeting at [NAME_1] but chose not to do so. [NAME_3] added that one needed to look at the totality of the Applicant’s conduct over the whole period, and it constituted an unreasonable risk for the Applicant just to allow the application to fail to progress at the point or points when she was not actively engaged. 30. [NAME_3] submitted that it was the serving of the notice of intention to prosecute that had galvanised her into action, ultimately leading to a successful licence application, and it therefore followed that she could have acted sooner if she had made more effort. For example, she could have asked a family member or friend to help her with the process. Applicant’s further submissions 31. In closing submissions, the Applicant pointed to documentation within her bundle which in her view indicated that some other local authorities took a more helpful approach when dealing with landlords who were having problems applying for licences.

32. The Applicant also pointed to an exchange of emails on 4 March 2024 with [NAME_10] which she felt showed that it was accepted by [NAME_10] that the online system was still not working properly even at that stage. In addition, she referred to a handwritten note in the Respondent’s own bundle which stated “IT issues with completing the application”. Tribunal’s analysis 33. Under Schedule 13A to the 2004 Act, this appeal is a re-hearing of the Respondent’s decision but may be determined having regard to matters of which the Respondent was unaware.

34. Under section 95(1) of the 2004 Act, “a person commits an offence if he is a person having control of or managing a house which is required

8 to be licensed under this Part [i.e. Part 3 of the 2004 Act] but is not so licensed”.

35. It is common ground between the parties that [NAME_1] required a licence under Part 3 and that it did not have a licence on the date specified in the Respondent’s final notice, and on the basis of the evidence before us we are satisfied that both of these points have been proven.

36. We are also satisfied on the evidence before us that the Applicant was a “person managing” and/or a “person having control” in relation to [NAME_1], as those terms are defined in section 263 of the 2004 Act, and the Applicant does not deny this. Statutory defence 37. The Applicant submits that she had a reasonable excuse under section 95(4) of the 2004 Act for the failure to have licensed [NAME_1] by the date specified in the final notice.

38. Section 95(4) reads as follows: “In proceedings against a person for an offence under subsection (1) … it is a defence that he had a reasonable excuse … for having control of or managing the house in the circumstances mentioned in subsection (1) …”.

39. Neither party has brought any case law or other legal authority in support of their position as to whether the Applicant in fact had a reasonable excuse within the meaning of section 95(4) on the facts of this case.

40. The Applicant had previously applied for and obtained a licence and therefore was familiar with the process. She was also aware, or at least should have been aware, that the licence needed to be renewed. As part of her evidence, she has referred to the question of whether she received letters from the Respondent or saw anything advertised by them regarding licensing requirements, but the legal obligation to obtain a licence is not conditional on [NAME_1] owner first having been reminded of their duty to license by the local housing authority. It is for each [NAME_1] owner who lets out their [NAME_1] to inform themselves as to their legal obligations and then to comply with those obligations.

41. In fact the Respondent did send reminders, and the Applicant accepts that she did receive at least certain reminders. There is a factual dispute between the parties as to when the Applicant first started to apply for the new licence, but at the very least the evidence indicates that she started the process many months before the date specified in the final notice as the date of the offence.

9 42. As regards what happened from the point at which the Applicant first started to fill out the online application form, accounts differ. The Applicant says that there was a problem with the online system but that she persevered for 19 months and sought assistance on 25 separate occasions. Each time she came up against a problem she raised it with the helpline staff but they were unable to resolve it and did not escalate her complaint to a more senior person. The helpline staff were neither (a) willing to complete the online application on her behalf using information provided by her over the telephone nor (b) prepared to send her a paper application, although we heard from [NAME_10] at the hearing that it was standard policy not to provide a paper application. 43. [NAME_10] for the Respondent was unable to confirm or deny the Applicant’s account of her dealings with the helpline, and this was because the Respondent did not log all telephone calls. The Respondent’s position was that the Applicant had admitted to having poor IT skills and that it was her own lack of confidence that had caused her to fail to complete the application.

44. The Applicant said that confusion was caused by there being four addresses for [NAME_1] on the system whilst the Respondent’s position was that only one of those addresses was plausibly correct and it was the one with which the Applicant had started her application and therefore she merely needed to continue with that application. The Applicant, though, said that she called the helpline because she was having problems, and it was the helpline staff themselves who had told to use a different address which it much later transpired was the wrong address to use.

45. In relation to the issue of uploading of safety certificates, the Respondent’s position was that – given the technical problems that she was experiencing in trying to upload documents – the Applicant should have stated on the form that she did not have the relevant certificates and then sent them through separately. The Applicant’s position was that she was not prepared to lie on an official form and nor did she want to say – untruthfully – that she had failed to obtain documents that she had a legal obligation to obtain.

46. As regards the April 2023 meeting at [NAME_1], the Respondent questioned the reasonableness of the Applicant failing to attend, whereas the Applicant stated that attendance was not compulsory and she did not see how it could help in relation to the licence application in respect of which she was in touch with the [NAME_8]. As for the Applicant’s admission that at a certain point she put the licence application to one side having “hit a brick wall”, her position was that she tried very hard to complete the application over a lengthy period of time without getting anywhere and it was for the helpline either to come back to her with a solution or to escalate the matter to someone more senior. The Respondent’s position was that putting the

10 application to one side in this way was tantamount to giving up, for which there could be no reasonable excuse, and the Applicant’s more urgent response to receiving a notice of intention to prosecute demonstrated that she could have dealt with the matter sooner and more effectively if she had put her mind to it.

47. Taking all of the above points together, this is not a case in which the position is clear-cut. It took an extremely long time for the application to be properly made, and some of the blame for the long delay rests with the Applicant. Whether by enlisting the help of a friend or family member or by some other method, it should have been possible for her to complete the application much more quickly. It could also be argued that at a certain point in time she ceased making much effort in relation to the application and that her decision to focus again on getting the application completed was triggered more by her receipt of a notice of intention to prosecute than by an independent wish to complete the process.

48. However, the Applicant did come across reasonably well at the hearing. Previously she had successfully applied for and obtained the First Licence in connection with a letting to the same tenant, and therefore the evidence indicates that she was not the sort of person who would be looking to avoid obtaining a licence. Her evidence that she did not use what turned out to be the correct address when trying to complete her licence application because the helpline had told her to use a different address is credible. Also credible is her reluctance to lie on the application form in order to circumvent the technical problems, even though it might seem to others that this would simply have been a practical way forward if followed by the provision of the safety certificates by email to correct the incorrect statement on the form. As regards the Applicant’s failure to attend the April 2023 meeting, in our view it would have been prudent in the circumstances to attend but we can see why the Applicant might genuinely have believed that it was irrelevant to the process of completing the application form which she had been trying to sort out with the helpline.

49. We do have reservations about the Applicant seemingly giving up at a certain point in time, but we accept that she was being truthful when she said that many months of trying to get the matter resolved left her feeling that she needed to protect her mental wellbeing by taking a break from progressing the matter. We also note that there is no evidence before us of the Applicant ever having used a ‘reasonable excuse’ defence in any other circumstances and there is no evidence that this is a case of someone who has cynically pretended to try to obtain a licence in order to escape criminal liability.

50. There are arguments going in both directions, but on the balance of probabilities we accept that the Applicant had a reasonable excuse for the purposes of section 95(4) of the 2004 Act.

11 Conclusion 51. Pursuant to Schedule 13A to the 2004 Act we therefore cancel the final notice, and consequently the financial penalty is not payable. Cost applications 52. There were no cost applications.

Name: Judge P Korn Date: 24 February 2025

Amended on 17 March 2025

RIGHTS OF APPEAL

A. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) a written application for permission must be made to the First-tier Tribunal at the regional office dealing with the case.

B. 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.

C. If the application is not made within the 28 day time limit, such application must include a request for extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit.

D. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, [NAME_1] and the case number), state the grounds of appeal, and state the result the party making the application is seeking.

12 Appendix

Housing Act 2004

95 Offences in relation to licensing of HMOs (1) A person commits an offence if he is a person having control of or managing a house which is required to be licensed under this Part … but is not so licensed. (4) In proceedings against a person for an offence under subsection (1) … it is a defence that he had a reasonable excuse … for having control of or managing the house in the circumstances mentioned in subsection (1) … .

249A Financial penalties for certain housing offences in England (1) The local housing authority may impose a financial penalty on a person if satisfied, beyond reasonable doubt, that the person's conduct amounts to a relevant housing offence in respect of premises in England. (2) In this section “relevant housing offence” means an offence under— (a) section 30 (failure to comply with improvement notice), (b) section 72 (licensing of HMOs), (c) section 95 (licensing of houses under Part 3), (d) section 139(7) (failure to comply with overcrowding notice), or (e) section 234 (management regulations in respect of HMOs). (3) Only one financial penalty under this section may be imposed on a person in respect of the same conduct. (4) The amount of a financial penalty imposed under this section is to be determined by the local housing authority, but must not be more than £30,000. (5) The local housing authority may not impose a financial penalty in respect of any conduct amounting to a relevant housing offence if— (a) the person has been convicted of the offence in respect of that conduct, or (b) criminal proceedings for the offence have been instituted against the person in respect of the conduct and the proceedings have not been concluded. (6) Schedule 13A deals with— (a) the procedure for imposing financial penalties, (b) appeals against financial penalties, (c) enforcement of financial penalties, and (d) guidance in respect of financial penalties.

13 (7) The Secretary of State may by regulations make provision about how local housing authorities are to deal with financial penalties recovered. (8) The Secretary of State may by regulations amend the amount specified in subsection (4) to reflect changes in the value of money. (9) For the purposes of this section a person's conduct includes a failure to act.

SCHEDULE 13A FINANCIAL PENALTIES UNDER SECTION 249A Appeals 6 If the authority decides to impose a financial penalty on [a] person, it must give the person a notice (a “final notice”) imposing that penalty. 10 (1) A person to whom a final notice is given may appeal to the First-tier Tribunal against – (a) the decision to impose the penalty, or (b) the amount of the penalty. (3) An appeal under this paragraph – (a) is to be a re-hearing of the local authority’s decision, but (b) may be determined having regard to matters of which the authority was unaware. (4) On an appeal under this paragraph the First-tier Tribunal may confirm, vary or cancel the final notice.