Tribunal Quashes HMO Licence Penalty, Upholds Management Regulation Violation

OUTCOME: Allowed in Part

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference

:

HAV/00LC/HNA/2025/0628 HAV/00LC/HNA/2025/0629

Property

:

54 [ADDRESS], [POSTCODE]

Applicant

:

[redacted]

:

Respondent

:

[redacted]

:

Type of Application

:

Appeal against a financial penalty - Section 249A & Schedule 13A to the Housing Act 2004

Tribunal Members

:

Regional Judge Whitney Colin Davies

Date of hearing

Date of decision

:

: 11 June 2026

26 June 2026

DECISION

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BACKGROUND 1. On 5 November 2025 the Tribunal received an email from the Applicant requesting to appeal against two Financial Penalty notices under section 249A of the Housing Act 2004. Two further emails were received on 12 November 2025 with the relevant completed application forms.

2. The Applicant is appealing two separate Notices of Financial Penalty, one with the reference 25/003277/CH14 of £12,000.00 and the second with the reference 25/00905/CH14 of £10,000.00. Both Notices are dated 15 October 2025, with their covering letter’s dated 16 October 2025.

3. The appeals are to be by way of a re-hearing of the Respondent’s decision to impose the penalties and/or the amount of the penalties, but it may be determined having regard to matters of which the Respondent was previously unaware.

4. It was directed that both appeals would be dealt with together and directions were issued dated 8 April 2026. Whilst a notice that the Tribunal was minded to strike out the appeals was issued ultimately the directions were substantially complied with.

Hearing

5. The hearing took place remotely. The Applicant attended in person. [NAME_3], in house solicitor, represented the respondent together with his witness [NAME_4].

6. The Tribunal had before it an electronic hearing bundle consisting of 427 pdf pages. References in [] are to pages within that bundle. Unfortunately, [NAME_5] did not have a copy of the bundle with him. At times the Tribunal had to read relevant parts to him.

7. The hearing was recorded and we set out below a precis.

8. [NAME_5] explained the property had been a total nightmare. He had been working with [NAME_2] council Rough Sleepers Initiative to place rough sleepers they nominated in rooms at the Property. He believed he ended up fighting the housing team over the house. He explained he would undertake works and then everything would get smashed. Thid led to the list of things wrong with the Property. He believed he did what he could to make the property as safe as possible. He stated he could not visit unless he had a security guard with him due to the actions of the occupants.

9. He explained he had originally applied for and been granted a licence in September 2021. He thought he had a five year licence and not a three year licence. He stated he did not receive any reminder, yet he had been

3 working with the Council. As soon as he became aware he applied and paid even though at that point he did not need a licence as occupancy less than 5. He felt he had personally tried to engage with the council and they had not done so.

10. He agreed there was a witness statement in the bundle in his name [3]. His team had put this together and someone had added his electronic signature.

11. On cross examination he explained he was a member of various accreditation schemes. He had been letting property for about 7 or 8 years. He was the managing director of the Accommodation Team. He had several HMOs and agreed he was aware of the Management Regulations.

12. [NAME_5] stated that neither he nor his team applied to renew the HMO licence upon its expiry. He also agreed that he had breached the management regulations. He agreed he was receiving rent for the Property which he occupied under a rent to rent agreement from the registered owner. He agreed he had not renewed the licence and ought to have been aware it was originally only granted for three years. He understood from [NAME_2]’s website that they would issue reminders. No evidence of this was within the bundle. He suggested at the time of the inspection there were only three people in the house.

13. [NAME_5] agreed he personally managed the property. He described it as like a crack den. He accepted he made mistakes but was just trying to run a business and as part of that worked with the local authority.

14. [NAME_5] believed the actions of the local authority were harsh. He did not believe the amount of the penalty was fair. He believed that he had all the works undertaken when bought to his attention, he thought this was an improvement notice that allowed him time to complete the required works.

15. The house was a constant nightmare; no sooner had you fixed one thing than something else arose. He agreed [73] was from his personal email account. He misunderstood and thought he had time to comply.

16. He agreed it was not a property he was proud of. He did however feel that he and the council should have worked together given the occupants.

17. [NAME_5] was questioned by the Tribunal.

18. He explained he worked with other local authorities. He had 4 HMO licences and about 20 properties. He no longer operated rent to rent agreements.

19. He explained he operated in [NAME_2]. Team was himself, two ladies in the office, a remote assistant and a handyman.

4 20. [NAME_3] then presented the case for the Respondent council. He called [NAME_4] [124-135]. He agreed his statement was true.

21. [NAME_5] had no questions for [NAME_4].

22. He was questioned by the Tribunal.

23. He explained he explained he did not deal with licencing. He was involved in enforcement. Originally matters had been dealt with by one of his officers who no longer worked for the Respondent.

24. He explained that they did speak to the [NAME_6]. He exhibited an email [370]. He agreed this showed as at July 2025 the property did not require a licence. He had no direct evidence within the bundle of the number of occupants at the Property as at the date of inspection in December 2024.

25. He did not think his colleague guessed when determining that at the date of his inspection in December 2024 the Property needed a licence. He relied on the notes on the council’s system which were not within the bundle which showed six people at the Property. He agreed there was a “fluidity” of people at the Property.

26. [NAME_5] did then ask some questions of the witness. [NAME_4] indicated he was not aware that the licensing team had inspected, he understood the licence was issued on a desktop basis.

27. [NAME_3] made brief submissions in response. He invited us to uphold the penalties which in his submission were a justifiable alternative to prosecution for the offences. He referred us to an email from the Fire Officer [285].

Decision

28. We thank all parties for their helpful and considered submissions.

29. It was plain that the events leading to this hearing and the letting generally of the Property was not something of which [NAME_5] was proud. We record that [NAME_5] was in our judgment genuinely remorseful and tried to provide an honest account. We would remind him if he ever finds himself again in such a situation he must prepare his own statement and not rely on others. This was his evidence.

30. We turn now to each of the offences. We deal firstly with the notice relying on the fact that [NAME_5] was the person managing a house in multiple occupation without a licence.

31. [NAME_5] agreed he was managing the Property and in receipt of the rent from the occupiers. He accepted that he previously held a licence but that this had expired. He stated that he understood he would receive

5 reminders from the local authority but no evidence such as print outs of the relevant pages of the local authority website were provided.

32. To be a house in multiple occupation requiring a licence the Property was required to be occupied by 5 or more individuals consisting of two or more households. [NAME_4] had little or no evidence. The evidence he relied on in July 2025 [370] suggested that there may have been four occupants at best. No evidence had been obtained or presented from the Rough Sleepers Team suggesting that there was at any point in time after the expiry of the licence 5 or more persons living at the Property.

33. [NAME_4] records that on inspection on 17 December 2024 there were 6 bedrooms. This is not disputed. However, there is no evidence as to whether or not all were occupied. Whist he referred to note son the council’s system this was not provided to us and is not referred to in the documents. We find the council presumed each room was occupied. We find that we are not satisfied that there was evidence before us that the Property was actually occupied by five or more persons as their permanent home.

34. We note [NAME_5] admits he did not renew his licence and in fact is evidence was that when notified he applied for renewal notwithstanding that he did not believe a licence was required. He did this to demonstrate to the local authority that he wished to be a good and compliant landlord.

35. We are not satisfied beyond reasonable doubt that the Applicant was committing the offence of managing a property as a mandatory licensable HMO without such a licence.

36. As a result we are satisfied that no penalty can be imposed for such offence and the penalty for this offence [63] is quashed.

37. We turn now to the second notice [57] imposing a penalty for Being a person managing a house which is subject to The Management of Houses in Multiple Occupation (England) Regulations 2006 and Section 234, Housing Act 2004 where you have failed to comply with a regulation under this section, you are guilty of an offence.

38. [NAME_5] admitted that he had failed to comply with the Management Regulations. He explained he believed he had time to comply as he thought the notice was an improvement notice. He accepted that this was an error on his part.

39. We have had regard to the evidence of the Respondent and in particular the photographs within the bundle and we are satisfied beyond reasonable doubt the offence was committed by [NAME_5].

40.We have considered if he has a defence of reasonable excuse. We note that [NAME_5] is a professional landlord with a number of Houses of Multiple Occupation. He was actively engaged in the sector trying as he described to work with the local authority with vulnerable high need

6 groups. By his own admission in respect of this property this had not worked out well for anyone. He was however on his evidence an experienced landlord of houses in multiple occupation and the requirements of the same.

41. We do take account of the email from [NAME_7]. The [NAME_7] were sufficiently concerned to alert the Respondent. Whilst certain of the breaches of the regulations may be said to be modest a number relate to fire safety and given the description given by [NAME_5] as to the occupants and their habits this would lead in our judgment to a prudent landlord or manager taking steps to ensure compliance above and beyond what typically may be the case for an HMO of this size. We had no specific evidence of the frequency of visits to check the Property was compliance with the Management Regulations.

42. [NAME_5] accepted this was a “problem” property and we would have expected he would be visiting on a very frequent basis to ensure compliance.

43. We have considered the totality of the evidence and we find that we are satisfied beyond reasonable doubt the offence was committed and the Applicant has no defence of reasonable excuse.

44. We turn now to the penalty. We remind ourselves that this is a re- hearing. It is for us to determine the penalty although we ought to have regard to the local authority policy in so doing. We have considered the local authority statement of reasons [339] and the policy at [302]. We are satisfied we should follow [NAME_2]’s policy in determining the amount of the penalty.

45. We find that [NAME_5]’s culpability is “High” [306]. He was aware of the particular challenges this property faced and had not taken appropriate steps to ensure the offences were not committed. In particular we have regard to the photographs and the range of items identified (see [NAME_5]’s email at [379] to the Respondent).

46. We find on the evidence that as to track record [NAME_5] was “None or Negligible”. It was accepted the Council had very little need to contact [NAME_5] in respect of the 7 properties the council had identified.

47. As to portfolio size the council identified 7 properties. [NAME_5] in evidence stated he managed about 20, 4 of which had an HMO licence. Taking account of all the evidence and giving the benefit of the doubt to [NAME_5] over the number for the purpose of calculating any penalty we assess his portfolio size as “Five to 19 Units”. We observe [NAME_3] did not invite us to depart from this.

48. We are satisfied the risk of harm is Level 3. We are satisfied that certain of the matters identified, particularly relating to fire safety could lead to extreme harm with a medium risk given the use of the Property. We are

7 supported in this finding having regard to the photographs within the bundle showing the items which give rise to the offence.

49. Applying these factors to the local authority matrix [310] provides an indicative penalty of £12,000.

50. We are satisfied that there are no aggravating factors account of which has not already been taken within the matrix, such as the fire risk. We are satisfied that [NAME_5] and his team co-operated with the local authority and have in our judgment learnt from this experience.

51. We must consider if there is any mitigation. Little was suggested by [NAME_5]. He did not suggest he could not afford to pay any penalty and adduced no evidence as to his finances. Thankfully it appears no occupant was harmed. Overall, we are satisfied no mitigation was presented.

52. We determine the penalty which should be imposed in respect of the breach of the [NAME_8] should be £12,000 and we confirm the penalty notice served by the Respondent.

RIGHTS OF APPEAL 1. A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application by email to [EMAIL]

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

3. If the person wishing to appeal does not comply with the 28 day time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.

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