Christopher Hopkins recently succeeded in having two financial penalties issued by an East Midlands Local Authority (the “LA”) both cancelled by the First Tier Tribunal.

A House in Multiple Occupation (“HMO”) was owned by the appellant company but there was a management agreement in place for the HMO to be managed by a third party. That agreement included contractual obligations for the third party to keep the HMO in good repair and condition. A licence had been issued for the HMO by the LA although this had not been in the correct name of the appellant company.

Officers from the LA inspected the HMO following complaints received from tenants. Multiple alleged breaches of the HMO licence conditions were identified concerning the condition of the property (including an absence of required FD30 fire doors). The company was further alleged to have failed to comply with a condition to inform the LA of changes in the management of the HMO when the third party was brought in.

The LA issued separate notices of intent to issue financial penalties under section 249A of the Housing Act 2004 against both the owner company and its sole director totalling more than £26,000 each. The third-party management company had also received its own separate penalties. Section 249A allows LA’s to issue penalties of up to £30,000 where it is satisfied, beyond reasonable doubt, that the conduct of the person receiving the fine amounts to a relevant housing offence. Penalties can be issued for offences including breaches of the HMO management regulations and failing to licence an HMO when required (or to comply with the conditions of an existing licence). The LA can issue separate penalties against the same person where multiple housing offences are identified in which case the aggregate can exceed £30,000.

After receiving his own notice of intent, the director of the owner company sought advice from Chris Hopkins on a public access basis leading to written representations being sent to the LA. Both penalties were reduced by the LA to just under £12,000 each accordingly.

Both the owner company and its director appealed against their penalties to the First Tier Tribunal. Chris Hopkins assisted in drafting an expanded statement of written reasons for the appeals. This included several procedural complaints including that the company had not been correctly named on the licence and more substantive complaints including that the alleged licence condition breaches were denied.

At the appeal, the Judge dealt with the issue of the licence name as a preliminary matter. The company demonstrated that it had applied in the correct name but, due to an error at the LA, the licence had then been issued to a different, non-existent company. This error had not been identified by either the company or the LA before the penalties had been issued. The significance of naming the correct holder on an HMO licence is underlined by section 68(6) HA 2004 which provides that a licence, once issued, cannot be transferred to another person. Chris Hopkins submitted this error was fatal to the owner company’s penalty since, in consequence, it could not be held responsible for breaches of the licence conditions. Absent any offence by the company, the director could not be held responsible either. The LA opposed arguing that the error had been merely a typo and the owner company had understood all along that it was the licence holder and was bound by the conditions. The Tribunal disagreed, holding that the name on the licence was fundamental. It allowed both appeals cancelling both the owner company and the director’s penalties.

Whilst the decision is not binding on future Tribunals hearing appeals against financial penalties, it does underline for issuing LA’s the importance of following correct procedure in issuing both HMO licences and penalties. In doing so, it follows recent Upper Tribunal decisions including in Ekweozoh v London Borough of Redbridge [2021] UKUT 018 where an earlier Tribunal’s decision to dismiss an appeal against a financial penalty was set aside after the issuing LA had failed to follow its own policy on informal resolution before issuing the penalty.