[2024] UKUT 202 (LC)

The Council has adopted its own policy on enforcement action in the private housing sector, which its staff are required to follow. The policy provides guidance but emphasises that staff are expected to use their own professional judgment in determining the appropriate intervention in each case.

The policy deals with enforcement action ranging from informal advice to prosecution or the imposition of a financial penalty (or, civil penalties, as they are referred to in the document). One of the grounds of appeal is that the FTT did not have regard to the policy, so it is important to consider what the policy means.

Three sub-paragraphs of the policy deal with the circumstances in which prosecution or a financial penalty will be considered appropriate. Paragraph 5(g) deals in general with prosecution and civil penalty notices but it overlaps with the following sections, which deal separately with those forms of enforcement for section 234 offences and section 72 offences, and their intended relationship is unclear. Initiating a prosecution or a civil penalty is described in paragraph 5(g) as the most likely outcome where an offence has been committed, but the paragraph then lists circumstances in which those forms of action will be considered. The impression created by that list is that prosecution or a civil penalty will be resorted to only, or mainly, in more serious cases. Thus, the listed circumstances include where a breach has given rise to a significant risk to tenants despite warnings, where a failure to supply information would affect the Council’s ability to take enforcement action, and where the breach relates to “a specific local problem of rogue landlord operations/systemic management failures”. It might be inferred that where none of the circumstances in the list applies, or there are no other factors of comparable seriousness which make prosecution or a civil penalty appropriate, the Council’s policy is to opt for a lesser form of enforcement. Lesser options include issuing a caution, refusing or revoking a licence, issuing a licence for a shorter period than the usual 5 years, requiring work to be done to remedy management breaches or issuing verbal or written advice.

Paragraph 5(h) then addresses prosecution or civil penalty notices for management offences. Where contraventions of the 2006 Management Regulations are minor or there are no aggravating factors enforcement staff are advised that they may send a warning letter asking for the contraventions to be dealt with within a specified time. Prosecution or a civil penalty will be resorted to where there are aggravating features which affect living conditions and tenant welfare, including multiple Category 1 and Category 2 HHSRS hazards, or operating an unlicensed HMO. Where two or more aggravating factors are present, prosecution or a penalty will be expected but may also be justified where a single aggravating factor is particularly serious: “e.g. no smoke alarms where there has been a fatal fire/injury or unlicensed HMO operated by a repeat offender with any HMO regulation offences (however slight)”.

Paragraph 5(i) considers prosecution or civil penalty notices (CPN) in cases involving unlicensed HMOs. Much of the argument on the appeal focussed on this paragraph, which was revised in February 2023. The policy which the Council applied when it imposed the penalties, and which the FTT quoted in its decision, was as follows:

The meaning of the first part of the original version of paragraph 5(i) seems to me to be clear enough. The main targets of prosecutions and civil penalties are to be landlords who are unwilling to licence. Where “small portfolio, good landlords who are simply unaware of the scheme” are operating HMOs without a licence the expectation will be that the failure to licence will be dealt with by a warning rather than by prosecution or a financial penalty. The general thrust of the remaining text is also clear. Professional letting agents and property companies who are expected to be aware of their responsibilities to licence will be treated more harshly; prosecution or a civil penalty are likely to be resorted to without the need for any prior warning if tenants’ welfare has been compromised and will remain options in other cases.

The single area of ambiguity in the policy concerns the scope to prosecute or impose a financial penalty on a landlord who was unaware of the need to licence and who was not a professional letting agent or property company. When read together with the general provisions in paragraph 5(g) the intent of the policy seems to be that rigorous enforcement action will not be the normal response to cases of small portfolio landlords who have failed to licence because of ignorance rather than resistance. No doubt in some cases prosecution or a financial penalty will be appropriate, but those cases must have been intended to be the exception and will presumably feature the sort of aggravating circumstances listed in paragraph 5(g).