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Landlords Beware!

  • Housing Act Civil Penalties – A Potential Goldmine for Councils?

Schofield Sweeney’s litigation team has recently acted for two residential landlords in appeal proceedings before the First Tier Tribunal Property Chamber in relation to civil penalties levied by a council under Section 249A Housing Act 2004.

The Landlords were husband and wife but were engaged in divorce proceedings.  They owned a number of properties let to residential tenants.  The properties were all in a particular area of the city for which the Council had approved a selective licencing scheme under Section 80 of the 2004 Act.  The scheme required all landlords renting out properties within that area to be licenced to do so and the deadline for applications was 1 November 2018.

The landlords were negotiating in the divorce as to who would take which of the properties (if any) and neither submitted a licence application by the deadline date.  One of the landlords was spoken to by a Council officer and she said that she was not in a position to make an application for licences at that stage as it was unknown who was going to have which properties.  No contact was made with the co-landlord until the Council wrote to both threatening civil penalties under Section 249A of the Act.  That allows local authorities to impose penalties of up to £30,000 per property and the Council was proposing to impose penalties of £4,000 on each of 8 properties.  The landlords made representations themselves to the local Council against the imposition of the civil penalties Applications for licences were made at the same time.

The Council confirmed the intention to impose penalties of £4,000 on each of the 8 properties, a total of £32,000.  Schofield Sweeney’s litigation team was consulted and it advised making an appeal to the First Tier Tribunal Property Chamber under the appeal provisions of the Act.  Appeal Notices were prepared, and the proceedings progressed through to a hearing before the First Tier Tribunal.

Albeit by now divorced, the landlords co-operated together to present a united front against the Council.  At the hearing the Tribunal found that it was not satisfied that the civil penalties imposed by the Council under the Act had been set at the correct level.  The local authority officer who was involved in setting the penalties gave evidence (as did the landlords) and the local authority’s documentation showing the Council’s reasoning in fixing the penalties was analysed during the hearing.  The Tribunal decided that the penalties should be reduced by 75% namely from £4,000 per property to £1,000 per property.

During the ongoing licencing process the Council assessed the landlords as “high risk” and proposed an additional fee of £1,000 per property for a total of 16 properties (8 had not been previously subject to penalty).  In the light of the findings of the Tribunal, Schofield Sweeney was able to persuade the local authority to reduce the additional charges upon the 16 properties from £1,000 to £500 per unit, a saving of £8,000.

The lesson is to ensure that if a licencing application has to be submitted by a certain date then make sure that date is met.  The second lesson is that these civil penalties can be subject to review and scrutiny and if you are faced with a civil penalty under the 2004 Housing Act, seek advice.  Schofield Sweeney is currently advising a landlord faced with civil penalties of over £90,000 proposed to be levied by a council for alleged (but disputed) breaches of property condition requirements.

About the Author

James Staton

Partner

James is a Partner and Head of the Dispute Resolution team and primarily handles commercial…

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