[2025] UKUT 196 (LC)

The basis of Mr Cetin’s appeal was that, as a letting agent engaged on “let only” terms (as the FTT accepted) he was not a person managing the property and so could not be liable for the offence under section 72. In granting permission to appeal the Tribunal (Judge Cooke) said there was a realistic prospect of a successful appeal on the basis that Mr Cetin did not come within the description in section 263(3) of “person managing” : either because he received one payment of rent only from each tenant or because the payment he did receive was made at the start of the tenancy and in advance and there was no finding that the tenants were in occupation at that time.

The FTT was satisfied that an offence had been committed under section 72 but it made no finding as to the date or duration of the offence. It will assist in considering the question of law which arises on the appeal if I begin by identifying the specific facts disclosed by the evidence and found by the FTT which were capable (subject to that question of law) of constituting a criminal offence.

The penalty notice alleged that Mr Cetin committed the offence of being a person in control of or managing an unlicensed HMO “between 11th October 2021 and 10th February 2022 and between 17th February 2022 and 6th April 2022” (the break for one week in February was when the number of tenants briefly fell below five).

I suspect the details of the offence were framed in that way because penalties were also being imposed on the landlords who received rent throughout the specified period. But the notice of intent provided a fuller description of the facts alleged to constitute the offence and alleged only that the Company had received holding deposits and rental payments from two tenants, the second of whom, Ms Weir-Clarke, moved in on 11^th October at which point the flat became a licensable HMO.

Ms Weir-Clarke’s witness statement was unclear on the precise sequence of events. She said that she paid the deposit to the Company by bank transfer on 11th October, but her bank statement shows that sum leaving her account on 9th October. She said that she paid the first month’s rent on 12th October and that she lived at the flat from that date.

The important point is that only four people were living in the flat until Ms Weir-Clarke moved in. That was confirmed by Mr Spinks, the first of the two tenants found by the Company, who had moved in on 2nd October and who said he was shown two empty rooms. Although the flat was an HMO, until Ms Weir-Clarke moved in it was not an HMO which required to be licensed, because there were only four people living there. It follows that neither the receipt of payments from Mr Spinks nor the receipt of a holding deposit from Ms Weir-Clarke involved the commission of any offence. The earliest date on which an offence might have been committed was when Ms Weir-Clarke paid the first instalment of rent for her room on 12^th October 2021.

It is not clear on the evidence whether the payment of rent on 12^th October was made before or after Ms Weir-Clarke received keys for the flat or moved in. There was no written tenancy agreement and the letting itself is therefore likely to have commenced at the time the first rent instalment was paid. That would be the normal expectation and it is consistent with a receipt given for the holding deposit which stated that the rent of £480 was to be paid on or before taking the keys.

When permission to appeal was granted, the Tribunal suggested that the precise sequence of events might be significant (because there was no finding by the FTT that the tenants were in occupation at the time the first instalment of rent was received by the Company). On behalf of the Council Ms O’Brien objected to that point being taken on appeal as she said it had not been taken by Mr Cetin before the FTT. I do not think that complaint carries much weight in a case like this in which it was for the Council to prove all elements of the offence to the criminal standard.

In any event, as I will explain, I do not think that the precise sequence of events is critical. The evidence is that the first instalment of rent was received by the Company, as agent for the landlords, on the day the tenancy commenced. I am content to proceed on the basis that those facts are not inconsistent with the FTT’s finding that an offence had been committed.

The more fundamental question is the question posed at the start of this decision, namely, whether an agent who is instructed on a “let only” basis, can be a “person managing” an HMO within the meaning of section 263(3) of the Act. Mr Cetin’s response to the suggestion that he had committed an offence has, from the beginning, been that the Company had never managed the property and was engaged only to let it. It was the evidence of Ms Black, the Environmental Health Officer who had investigated the alleged offence and who represented the Council at the hearing, that she had taken advice from the Council’s legal department whether a “let-only” arrangement could give rise to the status of “person managing” under section 263. The Council has been live to the point from the beginning. It was the basis on which Mr Cetin asked for permission to appeal, and the broad proposition falls within the scope of the permission given by the Tribunal.

Neither Mr Cetin nor Mr Oba made submissions on the law. On behalf of the Council Ms O’Brien argued that a strictly literal approach to the construction of section 263(3) was required and that an agent who receives a single instalment of rent or other payment from a tenant in occupation of an HMO on behalf of an owner or lessee of the premises commits an offence. On the basis of that literal construction she suggested that there was force in the proposition that if the person making the payment was not yet “in occupation” as a tenant or licensee when they handed over the money, the recipient would not become a “person managing” by virtue of receiving the payment. She suggested that because the sequence of events had not been investigated at the hearing, no point which depended on it could be taken on an appeal, or alternatively that the matter should be remitted to the FTT for it to make additional findings of fact.