[2025] UKUT 279 (LC)

On 20 April 2023 the respondent served upon both the appellant and another company, Come to London Limited (“CTLL”), a Final Notice imposing a financial penalty of £10,000 on each of them for the offence of managing an HMO without a licence. The property concerned was 6, North Grove, London N15.

Both companies appealed that penalty to the FTT, although CTLL then made a compromise agreement with the respondent and took no further part in the FTT proceedings.

The respondent’s officer Camilla Filipescu made a witness statement for the FTT. She said that in February 2023 she received a complaint about pest infestation and over-crowding at the property. A search at HM Land Registry revealed that the freeholders were a Mr and Mrs Vogiev. She carried out an unannounced visit on 1 March 2023 and found 5 people living there; they said that the managing agent for the property was CTLL and that they paid their rent to CTLL.

On 6 March 2023 the respondent served notices under section 16 of the Local Government (Miscellaneous Provisions) Act 1976 requiring information about the property; the notices were served on the freeholders, on CTLL, and on the appellant. The witness statement does not say why the appellant was served or how it was identified at that stage as having anything to do with the property. However, in their reply to that notice the freeholders said that they had a “rent guarantee scheme with a managing agent who has tenants in the property”; and CTLL in its reply said that the appellant was the freeholder’s agent and said that it too was the managing agent.

The respondent on 21 March 2023 served a Notice of Intent to impose a financial penalty on both the appellant and CTLL; it received no reply from the appellant. On 20 April 2023 it served the Final Notices. The FTT said:

“The respondent asserted it had concluded that Come to London Limited could be defined as persons managing the HMO because they were in receipt of rental income directly from the occupying tenants.”

The appellant then wrote to the respondent and stated that it had not received either the section 16 notice or the Notice of Intent, and that it was not managing the property but had let the property from 3 August 2022 to CTLL, for one year, at a rent of £2,000 per month, and that it was CTLL’s responsibility to apply for an HMO licence if necessary.

That was the appellant’s case in the FTT; it said that it had let the property to CTLL and was not a person managing it. The FTT considered the terms of that letting agreement and noted that the appellant was stated in the agreement to be both the landlord and the landlord’s agent.

The FTT found that the property was a house in multiple occupation that required a licence and did not have one at the relevant time, and there is no appeal from that finding. In relation to the appellant it said:

“18.

The Tribunal finds that the [appellant] at all times was a managing agent for the property on behalf of the freeholders and entered into the Agreement with Come to London Ltd on their behalf.

19.

The Tribunal finds that the Agreement required the applicant to obtain or give permission for any sub-letting and it gave this permission in respect of the Assured Shorthold Tenancy Agreement granted by Come to London Ltd as the landlord to Maybe Luz Ovando Roman and Fausto Eloy Bonifaz Ormaza dated 5 August 2022 at a rent of £2,600 per month.

20.

The Tribunal finds that early in this assured shorthold tenancy the applicant investigated and undertook a repair to remedy a water leak. Thereafter, the applicant could have carried out regular inspections to ensure Come to London Ltd was abiding by the terms of the Agreement but failed to do so. The applicant also failed to ensure the change in tenants was approved by it or the freeholders and that Come to London Ltd had applied for the relevant HMO licence.

21.

The Tribunal finds that the applicant had no contract with the tenants found in occupation by Ms Filipescu and was not their landlord. However, the Tribunal finds that the applicant remained the managing agents for both the freeholders and Come to London Ltd as reflected in their s.16 replies. The respondent benefitted from its collection of rent from Come to London Ltd, as only part of which had to be passed onto the freeholder in order to meet its guaranteed rent obligation to the freeholders, the remainder being kept by the applicant as payment for its managing services.

…

24.

The Tribunal finds that the applicant was managing the subject Property from the date of its guaranteed rent agreement with the freeholders and therefore committed an offence pursuant to section 72(1) of the 2004 Act when it became an unlicensed HMO.”

As to the amount of the penalty the FTT said:

“25.

The Tribunal also considered the level of the financial penalty imposed and the respondent’s reasons in imposing £10,000. The Tribunal finds that the applicant was sent and did receive the s 16 request as well as all the other required documentation as set out in Schedule 13A of the 2004 Act in imposing a financial penalty on the applicant.

26.

No other representations were made by the applicant as to why the sum of £10,000 should be reduced and provided no evidence of the applicant’s financial health or otherwise and accepted it managed a large portfolio of properties.

27.

Therefore, the Tribunal refuses the appeal and confirms the Financial Penalty in the sum of £10,000”.