A local authority's £21,000 HMO licensing civil penalty appeal is allowed and clarifies requirements of councils' Notices of Intent

Close Up Detail Of The Scales Of Justice 2021 08 27 16 37 29 Utc

In an important case for councils and PRS landlords the Upper Tier Tribunal (UTT) has allowed an appeal by Welwyn Hatfield Borough Council after the First Tier Tribunal (FTT) invalidated a £21,000 civil penalty imposed on a private rented sector HMO landlord.

Notices of Intent are required to be served, under the Housing Act 2004, before a civil penalty can be imposed and, as per Schedule 13A paragraphs 3 to 8, must be sufficient in the reasons given, for the recipient to be able to make representations to the local authority against the imposition of the penalty. This Civil Penalty Notice [CPN] process is used by councils as an alternative to either an informal warning to or the prosecution of a private landlord as a means of enforcement against breaches housing regulations and licensing conditions.

In this case, the HMO, owned by the landlord since 2010, was visited by an officer from the council's private sector housing team but this mid licence term inspection was fairly limited in scope because it took place during the Covid-19 pandemic. However, the officer did still find a number of issues at the property including inadequate smoke detectors, damp and mould and obstructions to fire escape routes and subsequently raised these with the landlord over the phone and by letter which also included a schedule of works with relevant photographs of the defects to be remedied by the landlord. The letter (of 29 October 2021), the schedule and the photographs were sent to the landlord by email 2 days after the inspection visit (the FTT noted that all of the works detailed in the schedule had been completed by the end of 2021). However, details of concern which had been laid out in the schedule of works were later omitted from the notices of intent.

The landlord was invited to an interview under caution but didn't reply to the invitation and didn't attend at the appointed time. On the day of that appointment, the council officer and their manager later discussed the case and made detailed notes of that discussion including the defects highlighted at the property with all the items listed in the schedule of works and they decided to start the CPN procedure against the landlord. In February 2022 the council served notices of intent on the landlord advising that she had 28 days within which to make representations to them.

In the UTT, the Deputy President noted that "When drafting the notices of intent it would have been a straightforward matter for officers to transpose the deficiencies recorded in the note of their discussion into the Council's standard notice of intent template, but that was not what they did" [para 51]. The notes attached to the notices referred to section 249A and paras 1-4, schedule 13A of the 2004 Housing Act but didn't refer to regulation 4 of the Management of Houses in Multiple Occupation (England) 2006 Regulations (keeping means of escape from fire free from obstruction and fire fighting equipment maintained and in good order) but the Deputy President pointed out that the council had provided the landlord with copies of the regulations on a number of previous occasions.

The landlord didn't respond to these notices and in March 2022 the council served her with final notices of intent confirming the penalty amounts proposed in the previous notices. These final notices contained "considerable detail concerning its [the council's] reasons for imposing the penalties" [56] and also "a specific and fuller explanation .... of why it considered a financial penalty was the most appropriate course of action": its confidence that the offences could be proved beyond reasonable doubt, the absence of any previous conviction, the potential of harm to the occupants, the fact that the landlord had managed another HMO and the fact that she had been supplied with a copy of the 2006 Regulations on a previous occasion. The landlord then appealed to the FTT.

At that hearing the FTT 'invited' submissions on the validity of the notices and then decided that they were invalid saying "An appellant is entitled to know precisely what allegation is being made against them in the NOI, to enable the representation process to be as effective as possible .... it is akin to counts on an indictment .... and it is not adequate to rely on previous correspondence ...." [63]. Clarity of what the landlord was being accused of was not achieved by these notices of intent [64]. The UTT, however, pointed out that the landlord had not herself raised any issues of "procedural irregularity" in her grounds of appeal and the FTT had only raised these specific concerns about the validity of the notices on the morning of the hearing and thus neither party had come prepared to argue the issue: "The FTT proceeded to allow the appeal without giving proper time for research and consideration. The procedure adopted by the FTT was unfair" [66 &67].

Welwyn Hatfield sought to appeal citing the case of Waltham Forest LBC v Younis but the FTT refused the application citing the case of Maharaj v Liverpool City Council (a debate which the UTT Deputy President, himself having decided the Younis case, dealt with at paragraphs [21-35]). The Deputy President, however, allowed the council's renewed appeal application based on the suggestion that these two previous cases were inconsistent with each other.

He made clear that there was no inconsistency between the two precedents and said the Tribunal's "overriding objective" was to deal with cases fairly and justly and "That requires that the recipient of a notice of intent should not be subjected to substantial financial penalties .... without being given fair warning of the case against them and a fair opportunity to respond to it [71] .... What is important is that the notice should equip the recipient with the information they require to enable them to answer the charge against them [74]. Pointing out that, taken in isolation, the notices would not have been good enough to reach the overriding objective he added that the notices of intent did not contain the only information available to the landlord [80] and that any reasonable person with the knowledge available to this landlord from the other documentation provided to her by the council would have understood what was the case against her.

The Deputy President concluded that "the notices of intent were not invalid .... They depended for their validity on the detailed information contained in the schedule of work and the selection of photographs served earlier but, in the circumstances of this case, I do not consider that the lapse of time made any difference ..." [85]. He also didn't accept that a council needed to explain the reasons given for taking the CPN route as opposed to alternative enforcement such as an informal warning or a prosecution. The case has been referred back to the FTT for a rehearing by a different panel.

The 'take away' from this case for councils is the clarity given as to when a notice of intent might be regarded as invalid for lack of sufficient information provided to the landlord but what other circumstances in a given case might rectify any initially assumed deficiency. Though the landlord in this case didn't appeal the final notices on validity grounds PRS landlords should take note of the importance of notices of intent, whether or not they understand their contents and should always make representations after having received such a notice.

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