Tribunal Upholds Financial Penalty for HMO Violations

OUTCOME: Dismissed

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY)

Case Reference(s)

:

BIR/00CS/HNA/2023/0023 Property : 3 St Mary’s [ADDRESS] [POSTCODE] Applicant : [redacted] : None Respondent : [redacted] Representative Type of Applications : : [COUNSEL] & [NAME] against Financial Penalties - Section 249A & Paragraph 6 of Schedule 13A to the Housing Act 2004 Tribunal Members : [NAME] R [NAME] - [NAME], [NAME] of Decision : 29 September 2025

DECISION

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BACKGROUND

1. This is the Tribunal’s determination in respect of an appeal made by [APPELLANT] [NAME] as Applicant against a financial penalty amounting to £16,000 under section 249A and Schedule 13A of the Housing Act 2004.

2. The penalty was issued by the Respondent, The Borough Council of Sandwell (‘the Council’).

3. The Council issued a Final Notice confirming the issue of a Financial Penalty on [NAME] [NAME] dated 10 August 2023. The Notice stated the Council was satisfied that the Applicant had committed offences under sections 30, 72 and 234 of the Housing Act 2004 in relation to the Property.

4. The Council served an Improvement Notice dated 10 November 2022 on the Applicant effective from 9 December 2022. An inspection on 25 May 2023 by the Council established that the Notice had not been complied with resulting in an offence under section 30 of the Housing Act. In addition, it was established that the Property was a House in Multiple Occupation (HMO) to which mandatory licensing under section 61 of the Housing Act 2004 applies. The Applicant did not possess a House in Multiple Occupation Licence for the Property which is an offence under section 72 of the Housing Act 2004. Finally, the Management of Houses in Multiple Occupation (England) Regulations 2006 apply to this Property and the Council’s inspection revealed breaches under Regulations 3, 4, 6, 7 and 8 (Duty of manager to:

- to provide information to occupier; - to take safety measures; - to supply and maintain gas and electricity; - to maintain common parts, fixtures, fittings and appliances; - to maintain living accommodation).

5. The Council’s proposed financial penalty was £16,000 payable within 28 days of the Final Notice. Details of how the penalty was calculated is attached as Schedule 1 to the Notice and has regard to not only the severity of the offence but also associated aggravating and mitigating factors.

6. [NAME] [NAME] submitted an appeal to the First-tier Tribunal Property Chamber dated 24 September 2023 on the grounds that he claimed he had not received any prior notice of intent or notification that the Property was under investigation or that any issues required immediate attention and that the regulations had been wrongly interpreted and submitted evidence of various claimed improvements and stated he had been proactive in addressing any concerns raised by the Council and had been in communication with them and had carried out various works including installation of 6 kitchen units, two

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communal fridges, tables, removal of electric cookers from each flat and fitted one cooker in the communal kitchen, interlinked smoke and heat detectors, new fire door, adjusted room 4 door, changed room 6 door, repainted a small area in room 5 and replaced some plaster board. In addition, the Applicant claimed financial hardship if the penalty were to be upheld and advised is an active member in the community and has housed many people over the years.

7. The appeal against the Penalty Charge Notice was received on 10 October 2023 having been issued on 10 August 2023. The appeal was therefore outside the 28-day requirement as specified in Rules 27 (1) and (2) of the Tribunal Procedure Rules. However, the Procedural Judge was made aware that the Applicant is elderly and unable to speak English and that the appeal was sent in time to the Council. As a result, it was decided to extend time as necessary, which the Council did not object to.

8. The Tribunal issued its [NAME] dated 20 October 2023 requiring the Respondent to submit any relevant documents by 14 November 2023 on the Tribunal and Applicant and for the Applicant to serve its documents on the Tribunal and Respondent by 5 December 2023.

9. Following this, the Council submitted an application dated 10 November 2023 requesting an extension of time to the [NAME] on the grounds that they were served with an incomplete application form which did not include all the Applicant’s grounds of appeal. They therefore requested a 2-week deferment to the timetable to allow further time to consider and respond to the Applicants grounds of appeal.

10. The Tribunal contacted the Applicant seeking a response to the Respondents request and advising them to respond within 7 days. No response was received.

11. The Applicant failed to submit any documents to the Tribunal in accordance with its [NAME] and the revised Timetable. The Tribunal issued a strike out warning dated 23 January 2024 Directing that failure to submit any documents by 4pm on 6 February 2024 would lead to the automatic striking out of proceedings under Rule 9(1) of the Tribunal Procedure (First Tier Tribunal) (Property Chamber) Rules 2013.

12. On 21 February 2024 the Applicant submitted its documents to the Tribunal and the Council. The Tribunal wrote to the parties to request their availability in July, August and September for an inspection and hearing and received confirmation from the Council but nothing from the Applicant.

13. The initial inspection and hearing was set for 21 January 2025.

14. The Tribunal carried out its inspection and convened the hearing with the parties on that day. At the hearing the Applicant informed the Tribunal they

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had not received the [NAME] bundle. The Tribunal instructed the Respondent to resend its bundle to the Applicant and adjourned the hearing to a suitable date and time to allow the Applicant sufficient time to properly consider the contents of the Respondents case.

15. The hearing was reconvened on 18 March 2025 and both parties were in attendance. The parties confirmed they had exchanged documents in accordance with the Tribunal’s [NAME] and the hearing proceeded where the parties gave additional information and evidence for the Tribunals consideration.

Submissions of the Applicant

16. The Applicant’s Witness Statement is undated, however effectively reiterated the grounds set out in his application form (see above) as to why he appealed against the financial penalty order enclosing various electrical certificates and therefore seeks from the Tribunal a decision revoking the penalty imposed by the Council. No further documents or evidence were submitted to the Tribunal for its consideration.

17. At the hearing the Applicant informed the Tribunal that the property was owned by their [NAME] and had owned the property for about 50 years. The property had been rented since about 2014 and had had a HMO licence previously but not since 2021. The Applicant also confirmed that he owned another property as well but has no other source of income apart from the rental income and a state pension. The Tribunal was informed the ownership of the property was to be transferred to the [NAME] and the Landlord was currently in India and was unwell which had contributed to the failure and had tried to do their best given the circumstances.

Submission of the Respondent

18. The Respondents bundle included the Applicants Appeal form, [NAME] dated 20 October 2023, a Statement of Case, a Witness Statement from [NAME] dated 28 November 2023 and 23 exhibits and an extract from section 249A of the Housing Act 2004.

19. The [NAME] statement of case states that the financial penalties were imposed because the Applicant had committed various offences as set out in paragraphs 3 and 4 above.

20. As regard the offence in relation to section 30 of the Housing Act, the Council states the Applicant had more than sufficient time to comply with the Improvement Notice that was served and that the works had not been carried out by 25 April 2023 some 4 months after they were required to be done as specified in the Notice and that the works therefore remained outstanding.

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The Applicant had been suitably notified in accordance with the required procedure and the Council was therefore satisfied, beyond any reasonable doubt that the Applicant had failed to comply with the Notice.

21. In respect of the offence under section 72 of the Housing Act 2004 for a failure to license a HMO, the planning department had permitted through a lawful development certificate granted in January 2018 a six-bedroom HMO with communal living, cooking and bathroom facilities. It did not permit the Property to be used as seven self-contained flats. An inspection by the Council on 23 April 2023 found the cooking facilities had been removed from each room and were now being provided by a communal kitchen which had previously been used as a bedroom/ flat. The Council had also tried to engage the Applicant on several occasions to comply with the certificate but to no avail. In addition, the Council tried to engage the Applicant to apply for an HMO license and following a visit on 8 November 2023 from the Licensing Team confirmed an application had still not been submitted. The Council therefore considered it had exhausted all its options and was therefore satisfied beyond reasonable doubt that the Applicant had committed an offence in this regard.

22. As regard the breaches of the Management of Houses in Multiple Occupation (England) Regulations 2006, the Council noted during their inspection on 27 April 2022, and on 3 November 2022 and 25 May 2023 that these breaches remained outstanding.

23. The Council therefore consider that the Applicant had multiple opportunities to address their legal obligations and had he done so in a timely manner he would have avoided the financial penalties imposed, for non-compliance.

24. The Respondent also considered it has applied its policies correctly regarding the fixed level of fines as set out in the relevant Council cabinet report.

25. As regard the Applicants’ grounds of appeal, the Council rejected these as they considered the evidence against the Applicant was overwhelming and did not accept that the Applicant was unaware of the rules and regulations or the penalties being imposed. The Applicant had been given ample notice and was warned on several occasions and despite this chose not to address the breaches.

26. In respect of the Applicant’s assertion of financial hardship, the Council rejected this as no evidence of support was submitted by the Applicant. Nor did the Council accept that the Applicant had acted in good faith as is evidenced by their conduct to date.

27. In summary, the Council rejects the Applicants’ grounds of appeal as having no merit and requires the Tribunal to dismiss them and impose the financial penalties being sought.

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The Law

28. The regime of financial penalties as an alternative to prosecution for certain housing offences came into force on 6 April 2017. Section 249A of the 2004 Act, inserted by section 126 of, and paragraphs 1 and 7 of Schedule 9 to, the Housing and Planning Act 2016 (‘the 2016 Act’) provides –

(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—

([APPELLANT] 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—

([APPELLANT] procedure for imposing financial penalties, (b) appeals against financial penalties, (c) enforcement of financial penalties, and (d) guidance in respect of financial penalties.

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(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.

Paragraphs 1 to 10 of Schedule 13A to the Housing Act 2004 state as follows:

Notice of intent

29. Before imposing a financial penalty on a person under section 249A the local housing authority must give the person notice of the authority's proposal to do so (a “notice of intent”).

(1) The notice of intent must be given before the end of the period of 6 months beginning with the first day on which the authority has sufficient evidence of the conduct to which the financial penalty relates. (2) But if the person is continuing to engage in the conduct on that day, and the conduct continues beyond the end of that day, the notice of intent may be given—

(a) at any time when the conduct is continuing, or (b) within the period of 6 months beginning with the last day on which the conduct occurs.

(3) For the purposes of this paragraph a person's conduct includes a failure to act.

The notice of intent must set out—

([APPELLANT] amount of the proposed financial penalty, (b) the reasons for proposing to impose the financial penalty, and (c)information about the right to make representations under paragraph 4.

Right to make representations

(1) A person who is given a notice of intent may make written representations to the local housing authority about the proposal to impose a financial penalty.

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(2) Any representations must be made within the period of 28 days beginning with the day after that on which the notice was given (“the period for representations”).

Final notice

30. After the end of the period for representations the local housing authority

must—

1. decide whether to impose a financial penalty on the person, and 2. if it decides to impose a financial penalty, decide the amount of the penalty.

If the authority decides to impose a financial penalty on the person, it must give the person a notice (a “final notice”) imposing that penalty.

The final notice must require the penalty to be paid within the period of 28 days beginning with the day after that on which the notice was given.

The final notice must set out—

(c) the amount of the financial penalty, (d) the reasons for imposing the penalty, (c)information about how to pay the penalty, (d)the period for payment of the penalty, (e)information about rights of appeal, and (f)the consequences of failure to comply with the notice.

Withdrawal or amendment of notice

(1) A local housing authority may at any time—

(a)withdraw a notice of intent or final notice, or (b)reduce the amount specified in a notice of intent or final notice.

(2) The power in sub-paragraph (1) is to be exercised by giving notice in writing to the person to whom the notice was given.

Appeals

(1) A person to whom a final notice is given may appeal to the First-tier Tribunal

against—

-the decision to impose the penalty, or

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-the amount of the penalty.

(2) If a person appeals under this paragraph, the final notice is suspended until the appeal is finally determined or withdrawn.

An appeal under this paragraph—

(a) is to be a re-hearing of the local housing authority's decision, but (b) may be determined having regard to matters of which the authority was unaware.

(3) On an appeal under this paragraph the First-tier Tribunal may confirm, vary or cancel the final notice.

(4) The final notice may not be varied under sub-paragraph (4) so as to make it impose a financial penalty of more than the local housing authority could have imposed.

Recovery of financial penalty

(1) This paragraph applies if a person fails to pay the whole or any part of a financial penalty which, in accordance with this Schedule, the person is liable to pay. (2) The local housing authority which imposed the financial penalty may recover the penalty or part on the order of the county court as if it were payable under an order of that court. (3) In proceedings before the county court for the recovery of a financial penalty or part of a financial penalty, a certificate which is—

(a) signed by the chief finance officer of the local housing authority which imposed the penalty, and (b) states that the amount due has not been received by a date specified in the certificate,

is conclusive evidence of that fact.

(4) A certificate to that effect and purporting to be so signed is to be treated as being so signed unless the contrary is proved

(5) In this paragraph “chief finance officer” has the same meaning as in section 5 of the Local Government and Housing Act 1989.

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Decision

31. The Tribunal carried out an inspection of the Property on 21 January 2025.

32. The Tribunal inspected the communal kitchen and found that some kitchen units had been installed on the wall and floor including a countertop and two fridges. The Tribunal, however, found that one base cabinet had not been fixed to the floor or wall and nor had the countertop been properly fixed in place. The tiles had not been grouted, and the electric cabling had only been externally trunked. The Tribunal also inspected each room and bathroom, some of which were occupied. In addition, at the time of its inspection, it appeared that the Applicant had only just finished repainting the walls in the ground floor bathroom.

33. At the reconvened hearing held on 18 March 2025, the Respondent took the Tribunal through each of the offences it claimed had been committed by the Applicant.

34. The offence under section 30 concerns the Applicant’s failure to comply with the Improvement Notice dated 10 November 2022.

35. The offence under section 72 concerns the failure of a landlord who rents a Property that is occupied as a 6 bedroom House in Multiple Occupation (HMO) without a relevant valid licence.

36. As regard the offence under section 234, the Tribunal found at its inspection that the Applicant had failed to comply with Regulation 3 – Duty of manager to provide information to occupier; failed to comply with Regulation 4 – Duty of manager to take safety measures; failed to comply with Regulation 7 – Duty of Manager to maintain common parts, fixtures, fittings and appliances. However, the Tribunal did find the Applicant had complied with Regulation 6 – Duty of manager to supply and maintain gas and electricity and had complied with Regulation 8 – Duty of manager to maintain living accommodation.

37. The Tribunal has considered the appeal in three parts:

(1) Whether the Tribunal was satisfied, beyond reasonable doubt, that

the applicant’s conduct amounted to a “relevant housing offence” in

respect of premises in England (see sections 249A (1) and (2) of the

Housing Act 2004);

(2) Whether the local housing authority complied with all of the necessary

requirements and procedures relating to the imposition of the financial

penalty (see section 249A and paragraphs 1 to 8 of Schedule 13A of the

2004 Act); and/or

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(3) Whether the financial penalty was set at an appropriate level, having

regard to any relevant factors, including:

(i) the offender’s means; (ii) the severity of the offence; (iii) the culpability and track record of the offender; (iv) the harm (if any) caused to a tenant of the premises; (v) the need to punish the offender, to deter repetition of the offence or to deter others from committing similar offences; and/or (vi) the need to remove any financial benefit the offender may have obtained as a result of committing the offence.

Consideration 1 - Did the Applicants’ conduct amount to a relevant housing offence?

37. The Applicant did not contest that the disrepair amounted to a relevant housing offence.

38. The Tribunal has some sympathy with the Applicant as he is not a professional landlord nor has an agent to manage the Property on his behalf. However, the extent of the disrepairs was severe enough to warrant immediate remediation and the fact that the Applicant was not well versed in the law is in itself no excuse and he should have sought legal advice or professional assistance before entering into the letting market thereby avoiding the issues that have arisen.

39. The Tribunal is therefore satisfied beyond reasonable doubt that the alleged offence was committed.

Consideration 2 - Whether the local housing authority complied with all of the necessary requirements and procedures relating to the imposition of the financial penalty?

40. The Applicant did raise a challenge to the proper service of the notices by the Council, but the Tribunal is satisfied that the proper procedures were followed and that the procedural elements of the imposition of the penalties were also correctly followed.

41. Following various inspections and visits, the Applicant was notified several times by the Council that they were in breach. The Council therefore served an Improvement Notice under section 11 and 12 of the Housing Act on the Applicant dated 10 November 2022 – specifying the hazards of fire, electrical, food safety and materials. These were categorized under category 1 and 2 hazards as set out in schedule 1 of the Notice and required these works identified in schedule 2 to begin

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not later than 10 December 2022 and to complete them within a period of 2 weeks of that date.

42. The Applicant had still not addressed the issues concerning the lack of a licence on 25 May 2023 following an inspection by the Council and the Applicant had still not complied with the Improvement Notice requiring a worktop to the right hand side of the cooker, works to the kitchen units remaining unfinished, lack of a dining table, some fire doors failing to close properly, lack of a 30 mins fire resistance to loft hatch, and a hole remaining in a corner of one bedroom.

43. Due to the continued failure by the Applicant the Council pursued further enforcement for the non-compliance and this resulted in the service of a notice of intent to issue a financial penalty.

44. The Notice of Intention to issue a financial penalty was served on the Applicant dated 22 June 2023. No representations were made by the Landlord and as a consequence the Council served its Final Notice of Financial Penalty dated 10 August 2023. This triggered the Applicants appeal.

45. The Council checked again on 8 November 2023 to establish if an HMO licence application had been made and was notified by the Licensing Team that it had not.

46. It is clear that the Council had repeatedly contacted the Applicant to bring the Property up to standard and requested they make an application for a licence.

47. The Council does however acknowledge that the Applicant has carried out most of the remedial works identified by the time they had reinspected on 25 May 2023. However, there remained several matters that were still outstanding from the Improvement Notice. Furthermore, the Applicant made no attempt to contact the Council between May 2023 and September 2023 to confirm that these breaches had been addressed.

48. The respondent Council was not prepared to accept the Applicants claim of financial hardship, given no evidence in support of this has been adduced.

49. The Tribunal therefore finds that the Applicant has been given ample opportunity to bring the Property up to standard, to comply with the Improvement Notice and appropriately licence the property, yet has failed to do so to a substantial degree and in the required timescales.

50. Unless the offence is continuing, the notice of intent must be given before the end of the period of 6 months beginning with the first day on which the authority has sufficient evidence of the conduct to which the financial penalty relates. The time periods within which the Respondent became aware of the offences and subsequently served its Notice of Intent satisfy the requirements of paragraph 2 of Schedule 13A to the Act. Further, the Notice of Intent included all the necessary information required under paragraph 3.

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51. The Tribunal determines that the procedural requirements for the imposition of the Financial Penalties were satisfied.

Consideration 3 - Whether the financial penalty was set at an appropriate level?

52. In determining whether the penalty was set at an appropriate level, the Tribunal (the First-tier Tribunal, “FTT”) must take into account the guidance given in recent Upper Tribunal decisions in respect of financial penalties, particularly the following two cases which were consolidated as follows:

London Borough of Waltham Forest and [NAME] of Waltham Forest and [NAME] [NAME] were noted under the UT UKUT 0035 (LC).

53. In both appeals, Judge Cooke reinstated the original penalty amounts and held that the FTT must accept the local authority's policy:

"the FTT is not the place to challenge the policy about financial penalties".

When determining an appeal, it must

"start from the policy"

and, though it may depart from it, may only do so in certain circumstances. In addition, the Applicant, in any particular matter, bears the burden of persuading it to do so, and in considering whether it should do so, the FTT must:

"Look at the objectives of the policy and ask itself whether those objectives will be met if the policy is not followed",

And

"Consider the need for consistency between offenders, which is one of the most basic reasons for having a policy and an essential component of fairness in the financial penalty system."

54. As an appeal under Schedule 13A to the 2004 Act is by way of re-hearing, the Tribunal must of course make its own decision. In doing so, however, it must afford the local authority's decision particular weight, described variously by the Upper Tribunal as "special weight", "considerable weight" and "great respect".

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Parliament has conferred the primary decision-making function on democratically elected and accountable local authorities.

55. The starting point taken by the Council is based on its “Charging Table for determining value of Financial Penalties imposed under Housing Act 2004” (referred to as the Penalty Matrix) and calculations were for 1st offences. In its determination the Council state that “There is no evidence that a civil penalty has been issued here or at another local authority.’

56. The Respondent applied the penalty matrix to the failure to comply with the Improvement Notice and adopts the penalty of £5,000.00 for a first offence. No premiums have been applied to reflect any aggravating factors such as acts or omissions demonstrating high culpability or the presence of multiple category 1 or high category 2 hazards or the presence of vulnerable occupants in the property or financial hardship demonstrated by the landlord. Further, the Respondent considers there to be no mitigating factors and determines that there was no evidence of low culpability or rapid action taken to address the various failings. No further addition or reduction is therefore required.

57. The Tribunal adopts the penalty of £5,000 and notes the following in respect of the nature and conduct of the Applicant: [redacted] b) The Applicant is a private individual and has little knowledge of the relevant Housing Law. c) The Applicant failed to employ a managing agent to look after the

Property. d) The Applicant has undertaken some works however there remain

several repairs outstanding which were also apparent to the

Tribunal during their inspection. e) The standard of the repairs carried out are to a poor standard. f) The repairs carried out do not address several of the more serious

hazards. g) The Applicant should have completed all the repairs within the

required time period specified in the Respondents Notice. h) The Applicant failed to provide a reasonable excuse as to why all the

repairs and works were not carried out in full. i) The Tribunal found the Applicant was dilatory in his efforts to

undertake the works in time and as required by the Notice.

58. The Respondent applies the penalty matrix to the failure to licence the Property and adopts £10,000 as a first offence. The Applicant has not demonstrated an income below £440 per week as required by the matrix and the Tribunal is satisfied that the Applicants’ income exceeds this based on the arrears schedules provided. The Tribunal adopts a penalty of £10,000.

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59. The Respondent applied its penalty matrix for the failure to comply with the management regulations in respect of [NAME] and adopts £1,000 and appears to have combined all the offences specified as one. The Tribunal noted that the Applicant has carried out some remedial works albeit these are those that are considered less serious in nature. However, as the Applicant has failed to address the more serious remedial works the Tribunal finds that this is evidence of high culpability and considers that no deduction should be made or reflected in the Financial Penalty calculation.

60. The Tribunal noted that Regulation 3, Regulation 4, and Regulation 7 had not been completed however Regulation 6 (Gas safety certificates) and Regulation 8 (Rewire electric heater in ground floor bedroom via a dedicated fuse spur had been completed and the provision of intumescent strips and smoke seals to the first-floor bedroom and rear bedroom) had been completed. The Tribunal adopts a penalty of £1,000 for the outstanding matters.

61. The Tribunal notes the following in respect of the Respondent’s actions:

[APPELLANT] Respondent followed their policy in the calculation of the penalty. b) They have given suitable weight to the Applicants’ aggravating factors. c) The Respondent does not consider there to be any mitigating factors on the part of the Applicant. d) The Notice of Intention was correctly served. e) There were no representations received from the Applicant prior to the issue of the final notice.

62. The Tribunal is satisfied that the calculations are correct and follow the Council’s policy. As the Applicant has failed to fully comply with the Improvement Notice or its duties under the HMO Management Regulations and has not provided a reasonable explanation the Tribunal therefore finds there is no reason to deviate from the policy.

63. The Tribunal therefore finds and determines that the total Financial Penalty payable by the Applicant is £16,000 (Sixteen Thousand Pounds).

Appeal

64. If either party is dissatisfied with this decision, they may apply to this Tribunal for permission to appeal to the Upper Tribunal (Lands Chamber). Any such application must be received within 28 days after these written reasons have been sent to the parties (Rule 52 of The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013).

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[NAME]