Legal: landlords cannot shift the blame for civil penalties on HMO landlords

There is a licensing regime in England for houses in multiple occupation (HMOs) which comes under the Housing Act 2004. It requires that landlords of properties occupied by a number of tenants in two or more households, those who share facilities, to apply to the local authority for and to hold a licence to operate an HMO.

Holding such an HMO licence obliges landlords to comply with regulations pertaining to the condition of the property under section 234 of the Housing Act 2004. The regulations are prescribed under the “Management of Houses in Multiple Occupation (England) Regulations 2006” known as the “HMO regulations” and these relate to fire safety, gas and electrical safety, the decoration and cleanliness of the property, rubbish disposal etc.

Responsible person

The HMO regulations hold the responsible person individually or collectively as landlord, owner, manager or agent to account for the condition of the property to a higher degree than would be the case with single family lets.

Instead of going through with the complex and time consuming process of prosecuting a landlord for the offence of failing to comply with the regulations through the county courts, a local housing authority now has the power to impose a financial penalty on a landlord under section 249A of the Housing Act 2004, up to a maximum of £30,000 for each offence.

Dorval v Tendering district Council

In the case of Dorval v Tendering district Council Mrs Dorval and her husband were joint landlords and registered proprietors of an HMO for which Mrs Dorval applied for and obtained HMO licences for two adjacent properties and was permitted up to eight and six occupants respectively.

In 2018 managing agents were appointed to manage both properties but after officers from the local housing authority visited on a number of occasions, Mrs Dorval was sent schedules of work that needed to be done. There were also police visits following complaints about anti-social behaviour by the tenants. In August 2019 both the HMO houses were closed down following the service by the Council of Emergency Prohibition Orders under section 43 of the Housing Act 2004.

The Council then imposed financial penalties on Mrs Dorval amounting to £90,000 on the charge that she had committed five separate offences in respect of each property. Mrs Dorval then appealed the final financial penalty notices to the First-tear Property Tribunal (FTT).

The appeal

The appeal was listed for a hearing in November 2021 and again in January 2022, but following a number of requests by Mrs Dorval for the adjournment the Tribunal decided to go ahead with the hearing under its written representations procedure. This meant that a review with a view to a re-hearing was not possible and only a review of the FTT’s decision was possible.

Mrs Dorval was represented by solicitors earlier in the proceedings but later was unrepresented.

The financial penalties had been imposed on the basis that Mrs Dorval had failed to comply with the regulations and had committed offences at each property under the following paragraphs of the HMO regulations:

– Regulation 4(2), which requires the manager of the HMO to ensure that firefighting equipment and alarms are in good working order;

– Regulation 6(1) and (3) which relate to the testing of gas appliances and electrical installations;

– Regulation 7 which imposes a number of requirements about the cleanliness and decoration of the property, and the condition of handrails, banisters, stair coverings, ventilation and of any garden and boundary fences;

– Regulation 8 which requires the accommodation and any furniture supplied with it to be and to be kept clean and safe; and

– Regulation 9 which requires adequate arrangements for disposing of rubbish.

Witness statements were made at the proceedings by four local authority officers and two police officers, but the FTT in its decision acknowledged the witnesses were called and cross-examined, but said nothing about the content of their witness statements.

A bundle of 158 photographs indicated that the two properties were “in miserable condition”, but there was no labelling to indicate which photographs referred to which offences.

Mrs Dorval also made a witness statement and gave evidence to the FTT which was referred to briefly that her argument was that the condition of the property was the responsibility of the managing agents and that considerable damage was done by the tenants.

A witness statement by a director of the managing agents was in the bundle but there is no reference to this it in the FTT decision. There was an explanation by the FTT that there was a conflict between the agents and Mrs Dorval as to who was responsible for arranging repairs. It found that Mrs Dorval was primarily culpable under the HMO regulations. Her defence of reasonable excuse was turned down.

The decision largely upheld

The FTT said it was satisfied beyond reasonable doubt that Mrs Dorval had committed all the offences bar one or two and set out its findings about each instance of breach.

Mrs Dorval stated during tribunal hearings that some work had been done to the properties, and that some of the damage was caused by the tenants – saying she was a victim to the occupiers, a view recognised by the tribunal panel in its ruling. Dorval had no previous convictions.

That tribunal slightly reduced the fines, and following a subsequent appeal over the level of penalty another tribunal panel reduced the penalties again to £23,000. The Council had originally set fines of £90,000 but the tribunal panel ruled the issues were a rapid deterioration over a short period of time and therefore there was less culpability.

Judge Ruth Wayte concluded that the penalties “will in large measure remove any financial benefit to the applicant as manager over the period of the council’s involvement with the properties”.

Paul Honeywood, TDC Cabinet Member for Housing, said the level of fine showed landlords they must maintain their properties.

“We are not afraid to take action against rogue landlords who think it is acceptable for our residents to live in sub-standard housing – whether that’s issuing our own fines, or following various appeals through the tribunals.

“The vast majority of landlords in Tendring properly maintain their properties and want the same thing as us; decent quality homes for tenants, and in turn a rental income for them. We will always work with and support landlords who share this view.

“Unfortunately this case highlights the issues which can happen, rarely to this level, and we will not hesitate to take strong action to clamp down on landlords who flout the rules.”

The case has important implications as it confirms that tribunals must take into account a council’s policy when imposing civil penalties for these offences.

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