[2023] UKUT 118 (LC)

Mr Auld submitted that the FTT had no power to ban the appellant from continuing to manage properties which she had previously let and where the tenancies or licences were continuing. He contended that section 14(1)(a), 2016 Act empowers the FTT to ban the granting of any new tenancy or licence but not to ban a person from being a landlord under an existing tenancy.

The relevant part of section 14(1) defines a banning order as an order which bans a person from “letting housing”. Mr Auld suggested that this language was ambiguous and was capable of bearing more than one meaning. To ban someone from “letting” could include prohibiting them from being a landlord or it could be limited to prohibiting them from entering into new landlord and tenant relationships. However, he submitted, as a matter of practicality Parliament cannot have intended that the effect of a banning order would be immediately to ban its subject from being a landlord; it was not possible for a person lawfully to terminate a tenant’s occupation of property, or to divest themselves of ownership without a substantial period of notice, and Parliament could not have intended to criminalise a person for being in a situation which could not be avoided.

There are at least two substantial objections to Mr Auld’s argument.

First, the effect of a banning order is dealt with in section 17 in terms which make it clear that it may have immediate effect in relation to existing tenancies. It is for that reason that a power to make exceptions is provided, including exceptions “to deal with cases where there are existing tenancies, and the landlord does not have the power to bring them to an immediate end” (section 17(4)(a)). There would be no need to include a provision such as that if, in principle, banning orders could not apply to existing tenancies. The availability of an exception for existing tenancies also answers Mr Auld’s suggested practical difficulty for a banned landlord who may be required to extricate themselves from existing tenancies with little or no notice. It is to be expected that exceptions will be made for existing tenancies (as was done in this case, where the FTT delayed the prohibition for a period of 6 months). A banning order may also allow a landlord to apply to the FTT if she has been unable to end her relationship with current tenants within the time permitted.

Secondly, as Mr Auld acknowledged, as a matter of language a ban on “letting housing” is capable of including a prohibition on being a landlord in respect of any tenancy, whether current at the time of the ban or not. The question therefore arises whether one of the available meanings is more consistent with the objectives of the legislation? It is clear from the list of banning order offences, and from statements in the Government’s Guidance, that banning orders are intended as a response to serious criminality. It is very difficult to imagine that the protection for tenants which this part of the statute is obviously intended to provide was meant only to benefit prospective tenants of a rogue landlord and not the current tenants against whom the banning order offences may well have been committed. There is no logical reason why existing tenants and tenancies should not be within its scope or that only new tenants should be protected.

Nor do I accept Mr Auld’s submission that the possible exception provided for by section 17(4)(a) may be intended simply to deal with cases where a fixed term tenancy is in existence when a banning order is made so that the landlord has no power to terminate it until the expiry of the contractual term. Mr Auld suggested that a prohibition on new lettings would bite in such a situation when the contractual term expired and was replaced by a statutory continuation. I agree that an exception could be made to any banning order allowing fixed term tenancies to expire, but that possibility does not seem to me to be a reason for giving the power to make exceptions an extremely restricted reading. The statute clearly contemplates that banning orders may have the effect of banning a landlord from continuing to be a landlord under an existing tenancy, whatever the characteristics of that tenancy.

Nor should it be thought that the only course open to a landlord against whom a banning order has been made is to give notice terminating all tenancies with which they are concerned. Such a landlord could alternatively dispose of their interest in the property altogether by selling it subject to the tenancy or by granting a lease for a term of more than 21 years. If the existing tenancies are in an HMO, one consequence of the making of a banning order is that the local housing authority will come under a duty to revoke the landlord’s licence (section 70A(1), Housing Act 2004). Once an HMO licence is terminated the landlord against whom a banning order has been made will be unable to give notice under section 21, Housing Act 1988 to terminate any assured shorthold tenancies in the HMO (see paragraph 27, above). It is difficult to reconcile these restrictions and prohibitions with an intention that a banned landlord may nonetheless remain a landlord, perhaps indefinitely, and I therefore reject this ground of appeal.