Two individuals are the joint landlords and owners of a property, which is a house in multiple occupation. The HMO is required to be licensed under Part 2 of the Housing Act 2004. A failure to license the property is an offence under section 72(1).
The local housing authority discovers that the property is not so licensed, and imposes a civil financial penalty on each of the joint landlords. The penalties are appealed to the First-tier Tribunal, which upholds the same.
Does section 249A allow a civil financial penalty to be imposed on each of the joint landlords, or may only one penalty be imposed on them jointly, if at all? These were the questions the Upper Tribunal (Lands Chamber) had to determine in Gill and another v The Royal Borough of Greenwich [2022] UKUT 26 (LC); [2022] PLSCS 23.
The statutory provisions
Pursuant to section 72(1), it is an offence to be a “person having control or managing an HMO” that is required to be licensed under Part 2, but is not so licensed.
A “person having control” is defined in section 263(1) as the person who receives the rack rent of the premises, or who would so receive it if the premises were let at a rack rent. Section 263(2) defines “rack rent” as rent which is not less than two-thirds of the full net annual value of the premises.
A local housing authority in which an HMO is situated may, pursuant to section 249A, impose a civil financial penalty on a person if satisfied they have committed a relevant housing offence. An offence under section 72(1) is a relevant housing offence for the purposes of section 249A. In particular, section 249A(3) provides that only one financial penalty may be imposed on a person in respect of the same conduct.
The appellants, Gurmail Gill and his brother, Jarnail Gill, accepted their property, situated in Plumstead, SE18, was required to be licensed. It met the statutory definition of an HMO and was within an area, which the respondent local housing authority (the Royal Borough of Greenwich) had designated as being subject to additional licensing.
The council imposed separate financial penalties in the sum of £10,000 on each of the Gills under section 249A in light of the offence they were each found to have committed. The penalties were upheld by the FTT and the Gills appealed.
“Persons having control”
The UT observed that, under section 6 of the Interpretation Act 1978, unless the contrary intention appeared, words in the singular included the plural. In light of this statutory provision, the Gills accepted that nothing in section 263, or the Act as a whole, gave rise to a contrary intention that reference to the “person having control” could not be taken in the plural to mean “persons having control”. Accordingly, where the rack rent was received by more than one person the expression “the person” would include each individual in receipt of the rack rent.
The Gills’ second prong of attack was to argue that if more than one person owned the premises, section 263 required that each individual’s share of the rent received had to be taken into consideration in determining whether they were a “person having control”. If the portion of rent that each of the joint owners received was less than the requisite amount, they would not meet the definition of “person having control”. This argument was rejected.
The UT determined that the true position in relation to joint ownership cases was far simpler than that contended by the Gills. Joint owners were entitled to receive the rent for the whole premises. The manner in which they held their joint beneficial interests that gave rise to their entitlement to only a portion of the rent as against the other was irrelevant. This was the accepted wisdom because where there were joint landlords, any one of them could give good receipt for the rent and on the death of one of them the rent was payable in full.
Separate penalties
The Gills further argued that section 249A only allowed for the imposition of one financial penalty on joint landlords where a housing-related offence was committed. This ground of appeal was also rejected by the UT.
The UT accepted the council’s argument that the FTT had rightly found each of the appellants was a “person having control” of an HMO. Further, the FTT found that each had separately committed the offence under section 72(1), and therefore each of the appellants could have been prosecuted separately.
Section 294A(3) only prohibited multiple financial penalties being levied against a person in respect of the same conduct. It did not prohibit two individuals being subject to a separate penalty in respect of separate offences they had committed.
Note of caution
The UT sounded a note of caution in this case. It underscored that when a civil financial penalty is to be imposed on joint landlords, the penalty imposed must reflect each landlord’s degree of culpability.
Elizabeth Dwomoh is a barrister at Lamb Chambers
