Tribunal Reduces Financial Penalty for Property Manager's Licensing Breach

OUTCOME: Allowed in Part

FIRST-TIER TRIBUNAL

PROPERTY CHAMBER

(RESIDENTIAL PROPERTY)

Case Reference : MAN/00DA/HNA/2025/0632

Property : 18 COWPER MOUNT, HAREHILLS, LEEDS

Applicant: [redacted]

Respondent : [redacted]

Type of Application : Appeal against financial penalty: section 249A, Housing Act 2004

Tribunal Members : Judge A Davies

N Swain, MRICS

Date of Decision

:

16 January 2026

DECISION

The financial penalty imposed on the Applicant on 20 February 2025 is reduced to £12,000.

REASONS

1. During a routine street check in July 2024 officers of the Respondent’s housing standards team noted that the exterior of 18 Cowper Mount (“the property”) was in disrepair. The property is a two bedroomed back to back house over three floors plus a cellar, and was within the Harehills Selective Licensing area. The property is owned by the [NAME], but she has no involvement in its letting or management and does not receive the rent. On 20 February 2023 a licence under the Selective Licence Scheme had been granted to her son Mr [APPELLANT] as the property manager.

2. On 27 August 2024 Mr [RESPONDENT] of the [NAME] wrote to Mr [APPELLANT], advising that the property would be inspected on 4 September 2024 “to ensure that you are complying with the conditions imposed on you by the licence”. At the time Mr [APPELLANT] was away in Scotland and received notice of the inspection in a telephone call from Mr [NAME]. He did not return to Leeds until 6 September. During this first inspection the Respondent noted that the property was occupied by a couple with 7 children under a tenancy agreement dated 20 August 2024. There was no viable kitchen, no working smoke alarms, and the property (including the windows and doors) was in a state of serious disrepair. In his witness statement Mr [NAME] says of this visit “we identified an extremely dangerous situation.”

3. A second inspection of the property took place on 11 September 2024. By then the occupants had left the house. Smoke alarms had been installed by Mr [APPELLANT]’s electrician, but otherwise the property was in a similar condition to the previous week. The property has remained untenanted ever since.

THE LAW

4. Section 249A of the Housing Act 2004 (“the Act”) empowers a local housing authority to impose a financial penalty on the manager of a let property where it is satisfied beyond reasonable doubt that a housing offence has been committed. “Housing offence” includes failure to comply with the conditions attached to a licence issued for a Selective Licensing Area, contrary to section 95(2) of the Act. The imposition of a financial penalty is an alternative to prosecution. It is open to the person responsible for the offence to show (on a balance of probabilities) by way of defence that he had a reasonable excuse for his actions or failures.

5. The licence conditions are notified to the licence holder prior to grant of the licence, and are also attached to the licence when it is finally issued. Among other requirements, the licence holder must (1) ensure that the internal structure of the house and every window is maintained in good repair, and (2) install and maintain in working order a smoke alarm on each floor of the living accommodation.

6. The level of financial penalty must be calculated in accordance with the housing authority’s published policy, which itself must comply with government guidelines. Schedule 13A to the Act governs the procedure for imposition of a financial penalty, and allows for an appeal to this Tribunal.

7. On appeal the Tribunal is to re-hear the Respondent’s decision but may take into account matters which were existing when the financial penalty was calculated but of which the local authority was unaware at the time. The Tribunal may confirm, vary or cancel the notice (paragraph 9(4) of Schedule 13A). In reaching its decision, the Tribunal must generally assess the financial penalty in accordance with the policy of the local authority.

8. The overall intention of the powers given to local authorities to impose financial penalties under the Act is stated to be: (1) punishment of the offender (2) deterring the offender from re-offending (3) deterring others from committing similar offences and (4) removing any financial benefit obtained by the offender from committing the offence.

9. The Respondent’s financial penalty policy sets out examples of conduct which indicate the levels of culpability and harm to be taken into account, and concludes: “The final determinate of any civil penalty MUST be the general principle: the civil penalty should be fair and proportionate but in all instances should act as a deterrent and remove any gain as a result of the offence”.

THE FINANCIAL PENALTY

10. The Respondent considered that a housing offence (breach of licensing conditions) under section 95(2) had been committed on 4 September 2024. After obtaining sight of the electrical and gas safety certificates and Mr [APPELLANT]’s response to a PACE letter, it was determined that a financial penalty of £16,500 should be imposed. Notice of this intention was sent to Mr [APPELLANT] on 31 October 2024. Mr [APPELLANT] made written representations in response, but nothing in these suggested to the Respondent that the proposed penalty was too high, and final notice of the financial penalty in the sum of £16,500 was issued on 20 February 2025.

11. In assessing the penalty, the Respondent found that the level of culpability was “medium” and the level of harm was “high”. According to its published matrix, this resulted in a penalty of £15,000. The Respondent’s financial penalty policy enables it to add or subtract 5% from a proposed penalty for aggravating or mitigating factors. In this case the following aggravating factors resulted in a 15% increase: Mr [APPELLANT] being motivated by financial gain, the breach having occurred over a long period of time, and lack of insight into the offence. 5% was deducted to allow for the fact that Mr [APPELLANT] had no relevant previous convictions.

12. Mr [APPELLANT] appealed to the Tribunal against the imposition of any financial penalty and, in the alternative, sought a substantial reduction in the amount.

INSPECTION AND HEARING

13. The Tribunal inspected the property in the presence of Mr [APPELLANT], [NAME], the Respondent’s solicitor, and Mr [COUNSEL] of counsel. The hearing was held in Leeds later the same morning.

14. At the time of inspection the property was in the course of renovation. It was not possible to view the cellar, due to obstruction.

15. At the hearing Mr [APPELLANT] represented himself. Mr [APPELLANT] made a preliminary request that Mr [APPELLANT]’s witness, his builder Mr [APPELLANT], should not be present while Mr [APPELLANT] gave his evidence, on the ground that the credibility of both men was in question and Mr [NAME] evidence was solely intended to confirm that of Mr [APPELLANT]. This was agreed by the Tribunal and to avoid any suggestion of unfairness the Respondent’s witnesses were also excluded from the hearing prior to giving evidence.

THE APPLICANT’S CASE

16. Mr [APPELLANT] told the Tribunal that the financial penalty notice should be quashed, because the damage in the property had been caused by the occupants and he had responded in the only available way given the circumstances.

17. He explained that his tenants Mr and Mrs [NAME] had taken a tenancy in November 2023 at a rent of £670 per month, increased to £775 in July 2024. They lived there with two children. He said that during the tenancy he inspected the property every 6 months and kept it in good condition, using the services of Mr [NAME] for odd jobs that needed to be done. He had last inspected the property with Mr [NAME] on 29 March 2024, and had made a note of his findings. At that time the smoke alarms were in place and working. He completed an inspection report and a list of problems that needed his immediate attention, and other matters which should be kept under observation. In accordance with this list, he arranged for Mr [NAME] to work on the piping below the kitchen sink, which had been leaking and causing damage to the new lino flooring in the kitchen. He made a note that WD40 was to be applied to two stiff window catches and that loose roof tiles and brackets on the downpipe were to be replaced. Other damage was to be reviewed at the next inspection in 6 months’ time.

18. Mr [APPELLANT] told the Tribunal that the kitchen pipework was fixed around 14 April, and WD40 was applied to window catches. He went with Mr [NAME] to collect the rent (paid in cash) on 9 May but was then told by Mr [NAME] that the repair work was an invasion of privacy and that neither he nor his workmen would be permitted any further access to the property. Subsequently Mr [NAME] said that he and his family were going on holiday.

19. On Sunday 17 August, Mr [APPELLANT] said, he and Mr [APPELLANT] drove past the house to see whether the tenants had returned. They found that a Mr and Mrs [APPELLANT] were living there with their children – Mr [APPELLANT] said that they saw two children at the property. They inspected the property briefly and found that the covers had been taken off the smoke alarms on all floors. Mr [APPELLANT] had to leave on family business for a visit to Scotland the following day. He was unable to instruct his electrician until Monday 18 August but then told him to replace the electrical sockets and smoke alarms as a matter of urgency. His electrician said that he would be unable to do the work until 27 August, and this was agreed. In the event, the smoke alarms were not replaced as the electrician was busy, but Mr [APPELLANT] was not aware of this until he returned to Leeds on 6 September. He had the smoke alarms replaced within two days after his return.

20. Mr [APPELLANT] said that on viewing the property on 6 September he found that Mr [NAME] had removed the kitchen flooring and cupboards, including the units which Mr [APPELLANT] had had installed in February 2024. He said that Mr [NAME] had not asked for permission to do this, or to pour concrete on the kitchen floor. He also found that the WC was unstable, which he said he had not been aware of earlier. By the time of this visit he was also aware that there were nine people living in the house. Mr [NAME] told him that they were intending to vacate the property.

21. Before leaving for Scotland, Mr [APPELLANT] asked [NAME] to supply Mr and Mrs [APPELLANT] with his usual form of tenancy agreement. Mr [APPELLANT] prepared a tenancy agreement giving Mr [APPELLANT]’s name as landlord and providing for a rent of £775 per month. Mrs [APPELLANT] signed it. A copy was sent to Mr [APPELLANT] to sign. However the [NAME] left the property before 11 September. They did not pay any rent.

22. Mr [APPELLANT] relied on these events as a defence of reasonable excuse, ie that he was not responsible for the disrepair in the property, most of which he said had been caused by the [NAME] family and explained Mr [NAME] reluctance to allow access after 9 May 2024. He said he was not responsible for the removal of the kitchen units and flooring by Mr [NAME], and in regard to the overcrowding and the lack of smoke alarms, he had not been aware of these problems until he returned from Scotland after the date (4th September) on which the housing offence was said to have been committed.

23. Alternatively, these events, Mr [APPELLANT] said, should substantially reduce the assessment of his culpability as they were largely outside his control. So far as the level of harm was concerned, Mr [APPELLANT] said that there was only a period of about two weeks when there were, to his knowledge, no smoke alarms in the property. There was no evidence as to exactly when the smoke alarm covers were removed between 14 April and 17 August.

24. Mr [APPELLANT] argued that the financial penalty was not proportionate or fair, and that the Respondent had failed to follow its own policy by taking in sufficient note of his financial situation. His earned gross income was £31,500 before overtime. His car sales business did not make a profit, and indeed he had to put money into that company in order to enable it to meet its rent, insurance and similar commitments. He objected to the addition of 15% for aggravating factors: the breach had not continued for a long time after he became aware of it, and he was not motivated by financial benefit. He explained that once he found the [NAME] family in the house, and not knowing at that time how many people were living there, he thought that the right thing to do was to give them a tenancy agreement, but he had not obtained rent in advance and in fact received no rent from them.

THE RESPONDENT’S CASE

25. For the Respondent, Mr [RESPONDENT] referred to the property itself, saying that as a back to back house with three floors and a cellar but only one exit the upper floors of the property were a potential trap in case of fire. In the circumstances, the lack of smoke alarms, the fact that the electric meter box had been tampered with, and the lack of properly fitted doors with latches meant that there was a substantial risk to the occupants. Moreover at the time of the offence there were two adults, a newborn baby and 6 children in the property, with insufficient storage units and work surfaces in the kitchen and, in the bathroom, a toilet which was not properly fixed to the floor, as well as considerable disrepair to walls, windows and guttering. For the purposes of the Respondent’s financial penalty matrix, the level of harm was therefore properly assessed as “high”.

26. In terms of culpability Mr [APPELLANT] questioned Mr [APPELLANT] and [NAME] as to the level of their knowledge of the defects in the property when their inspection was carried out on 29 March 2024 and while Mr [NAME] worked on the kitchen on or around 14 April 2024. He examined the detail of Mr [APPELLANT]’s March 2024 inspection report and argued that it appeared to have been fabricated after the Respondent had decided to take enforcement action. He noted that no previous inspection reports had been produced.

27. Mr [APPELLANT] also questioned Mr [APPELLANT] as to why he had not ensured that temporary but working smoke alarms were fitted as an emergency measure on or as soon as possible after 17 August. He queried whether Mr [APPELLANT] was really unaware on that date that there were 7 children living in the property. He ascertained that Mr [APPELLANT] understood the conditions attached to the licence and his obligations in terms of keeping the property safe for occupants, and asked him why he had taken no action, such as taking legal advice, when Mr [NAME] refused him access to inspect and repair.

FINDINGS

28. Having considered the evidence and examined the passports included in the Respondent’s documents, the Tribunal finds that on 4 September 2024 there were three adults and 6 children living in the property, including the new baby.

29. The Tribunal finds on a balance of probabilities that most of the defects in the property existed on 29 March 2024 and were or ought to have been known to Mr [APPELLANT] at that time. The inspection report on which he relies appears to have been written after the Respondent began its investigation into the property. The wording is repetitive and considerably more formal than would be expected of a note made (as Mr [APPELLANT] claimed) solely for his own records. Mr [APPELLANT] has made the mistake of weakening his case by fabricating evidence in an attempt to strengthen it.

30. However at 29 March 2024 there was a fitted kitchen in the property. The smoke alarms were checked and were found to be working – this was confirmed by Mr [NAME] whose evidence was convincing. Although there were many other defects, the property was not at that time in a dangerous condition. In regard to the urgent repair, this was dealt with in April when the plumbing in the kitchen was addressed, although it appears that a small leak may have continued and damaged the flooring, perhaps also causing the small flood in the cellar.

31. Mr [APPELLANT] may not have known what to do when Mr [APPELLANT] denied him further access to the house on 9 May 2024. He may have believed that taking legal action would be too expensive. In any event, Mr [APPELLANT] did not tell the Tribunal that he had had any plans, at that time, to remedy the outstanding defects such as ill-fitting doors, and windows which did not open (or close).

32. On gaining access to the property on 17 August 2024 Mr [APPELLANT] should have taken immediate steps to deal with the lack of smoke alarms. His arrangement with the electrician was inadequate but represented an effort to make the house safer. At that date the kitchen units and flooring had not been removed, and Mr [APPELLANT] did not tell Mr [APPELLANT] that he was going to remove them. Mr [APPELLANT] did not know how many people were living in the house on that date. Mr [NAME] told him that the family planned to vacate the property after a few weeks. His belief that a tenancy agreement had to be drawn up was misguided but appears to have been genuine. His use of an incorrect form of tenancy agreement, which he said he had obtained from the internet, was again misguided but the Tribunal has no evidence that he intended to deny his tenants their rights.

33. Mr [APPELLANT] committed a housing offence under section 95(2) of the Act on and around 4 September 2024 when he failed to comply with the conditions of his licence as follows: he failed to ensure that smoke alarms were installed on each storey of the living accommodation of the property, and he failed to ensure that the internal structure of the house (including the internal doors) and every window and other means of ventilation were maintained in good repair. As property manager Mr [APPELLANT] was responsible for maintaining the house in a safe condition. Having taken into account all the evidence the Tribunal finds that the actions of his tenants do not amount to a reasonable excuse for failing to do so, and Mr [APPELLANT] has not raised an effective defence.

34. The level of harm was correctly assessed by the Respondent as “high”, and in cross-examination Mr [APPELLANT] agreed.

35. The level of culpability was correctly assessed by the Respondent as “medium”, giving a starting point of £15,000 for the financial penalty.

36. The Tribunal do not find that at the relevant time Mr [APPELLANT]’s failure to deal with the defects in the property was motivated by financial benefit. He obtained no rent from the [APPELLANT] family.

37. Mr [APPELLANT]’s lack of insight into the offence stems from the particular circumstances of the case, in which the most dangerous defects (lack of smoke alarms) were caused by the occupants and left him at a loss as to how he ought to have dealt with the situation. At the hearing he readily admitted and apologised for his failures. From the outset he has cooperated with the Respondent’s investigation. He also took voluntary, although largely ineffective, steps to make the property safer at a time when he was forced by family circumstances to be away from Leeds (17 August to 6 September 2024).

38. The Tribunal were not convinced by Mr [APPELLANT]’s claim that a large penalty would cause him very severe financial hardship. He produced no convincing evidence of this. As well as his salary, he has had the rent from the property until July 2024, and his expenditure should be relatively low as he lives with his mother in her house.

39. The Tribunal finds that in all the circumstances a penalty of £16,500 is out of proportion to the level of culpability given that the penalty for the very worst offences is capped at £30,000. Starting at £15,000, the Tribunal adds nothing for aggravating circumstances and reduces the penalty by 20% for the following: (1) the lack of previous convictions (2) the obstruction caused by Mr [NAME] and the unusual and (for a non-professional manager) difficult fact of the [NAME] family’s occupation and their misuse of the house, (3) Mr [APPELLANT]’s cooperation with the Respondent, and (4) the voluntary attempts he made to manage the risks at the property. The resulting penalty of £12,000 will be a financial burden to Mr [APPELLANT], a sufficient punishment, and an appropriate deterrent to him and other property managers.