[2024] UKUT 202 (LC)

Some, but not all, houses in multiple occupation (HMOs) are subject to mandatory licensing under Part 2 of the 2004 Act. In relation to those HMOs which are not subject to mandatory licensing a local housing authority has power under section 56, 2004 Act, to designate all or part of its district as an area subject to additional licensing. Where an area is so designated, any HMO of a description covered by the designation is required to be licensed (section 61, 2004 Act). A person commits an offence, contrary to section 72(1), 2004 Act, if, without a reasonable excuse, they have control of or are managing an HMO which is required to be licensed but which is not licensed.

The Management of Houses in Multiple Occupation (England) Regulations 2006 (the 2006 Management Regulations) are made under section 234, 2004 Act and impose obligations on the person managing an HMO to make satisfactory arrangements including in respect of safety measures and the repair and maintenance of the house. By section 234(3)-(4), a person commits an offence if, without a reasonable excuse, they fail to comply with a regulation made under the section.

Section 249A, 2004 Act permits a local housing authority to impose a financial penalty on a person if it is satisfied beyond reasonable doubt that they have committed a relevant housing offence. Relevant housing offences include the offences under section 72 (licensing of HMOs) and section 234 (breach of management regulations).

Section 249A(3) provides that: “Only one financial penalty under this section may be imposed on a person in respect of the same conduct”. Section 249A(5) reflects the policy that financial penalties under section 249A are intended to be an alternative to prosecution for relevant housing offences by stipulating that a financial penalty may not be imposed where the person has already been convicted of the offence or where criminal proceedings remain outstanding .

Schedule 13A, 2004 Act deals with procedural matters. Paragraph 10 makes provision for appeals to the FTT against the decision of a local housing authority to impose a financial penalty and against the amount of that penalty. The appeal is a re-hearing and the FTT is required to make its own decision whether to impose a penalty and in what amount (up to a maximum of £30,000 for each offence).

Paragraph 12 of Schedule 13A requires local housing authorities to have regard to any guidance given by the Secretary of State about financial penalties. Relevant guidance was published in 2016 and re-issued in 2018. It requires authorities to develop their own enforcement policies and identifies the following matters to be taken into account to ensure that penalties are set at an appropriate level: the severity of the offence, the culpability and track record of the offender, the harm caused to the tenant, punishment of the offender, and the need to deter the offender from repeating the offence, to deter others from committing similar offences, and to remove any financial benefit the offender may have obtained as a result of committing the offence.

In determining appeals against decisions of local housing authorities the FTT must have particular regard to the authority’s own enforcement policy and will normally apply it, but the FTT it is not bound by the policy and may depart from it in an appropriate case. In London Borough of Waltham Forest v Marshall [2020] UKUT 35 (LC), at [54], this Tribunal (Judge Cooke) summarised the effect of authorities on the approach which a court or tribunal should take to a local authority’s policy: