[2025] UKUT 279 (LC)

The appellant has permission, granted by this Tribunal, to appeal the finding that it was managing the property on the relevant date, and also the amount of the penalty, on the basis that both are unexplained by the FTT.

The difficulty with the finding that the appellant was a person managing the property is that the basis on which the FTT made its finding was that it had a management agreement with the freeholder, that it had some involvement in a repair at the property but had not visited regularly, and that it benefited from the rent paid to it by CTLL.

As I said above, the concept of “managing” property is defined in the 2004 Act; it is not a commonsense concept and the definition is not satisfied merely by being a party to a management agreement or doing something that could be described as management. The FTT did not see the agreement between the appellant and the freeholder (as it stated at its paragraph 16).

Section 263(3) requires that the person concerned be an “owner or lessee of the premises.” There is no evidence that the appellant was either. There is no suggestion anywhere that its agreement with the freeholder was a lease, and the freeholders’ reply to the section 16 enquiry stated that the appellant was its managing agent, and did not refer to it as a tenant. If the FTT regarded the appellant as an owner or lessee of the property, it did not say why.

Section 263(3) also states that if payment by the occupiers is received through an agent, then that agent is also a person managing the property. To bring the appellant within the definition the FTT would have had to find that the freeholders were receiving rent from the occupiers through the agency of the appellant, and it made no such finding. That, I think, may be what it had in mind in view of the emphasis it placed on the management agreement.

But on the facts found by the FTT neither the appellant nor the freeholders were receiving rent from the occupiers. The appellant could be seen as benefiting indirectly from the occupiers’ payments, but that is not what section 263(3) requires. As the FTT found, the appellant received rent from CTLL – which would have remained payable whether the occupiers paid rent or not.

So the finding that the appellant was a person managing the property is unexplained, and indeed could not be explained on the basis of the evidence before the FTT. The FTT’s finding is set aside.

Furthermore there is no explanation of the penalty imposed. Again, this was a decision to be made afresh, and therefore explained, by the FTT, albeit by reference to the respondent’s enforcement policy; a cursory reference to the respondent’s reasons will not do. The FTT’s decision about the penalty is also set aside because it was unexplained.