Landlord and tenant – Selective licensing – “Fit and proper person” – Housing Act 2004 – Respondent landlord convicted of failure to apply for licence but held to be “a fit and proper person” within Housing Act – First-tier Tribunal allowing respondent’s appeal – Local authority appealing – Whether convictions relevant to decision on length of licence granted – Appeal dismissed
The respondent was the freehold owner of nine flats in London E17 let to residential tenants. With effect from 1 April 2015 the whole of the London Borough of Waltham Forest was designated by the appellants as a selective licensing area, requiring landlords to apply for private rented property licences pursuant to section 85 and Part 3 of Schedule 5 to the Housing Act 2004. Unless renewed the designation would end on 31 March 2020. The respondent failed to apply for the necessary licences and, following visits to a number of the properties by council officers, he was prosecuted.
In December 2015 the respondent applied for temporary extension notices (TENs) in respect of three of the properties on the grounds that he was in talks regarding their sale. The application was refused. In March 2016 summonses in respect of the respondent’s failure to licence five of his properties were served on him. Shortly afterwards he applied for licences and subsequently pleaded guilty to failing to licence those properties. He was fined £10,000 plus costs. On 14 September 2016 the appellants granted licences for one year in respect of eight flats and reduced the term of one flat from five years to one.
The FTT allowed the respondent’s appeal and extended the licence in respect of each property to expire on 31 March 2020. Whilst the FTT regarded the convictions as a serious failing, it did not consider them as determinative of whether the respondent was a “fit and proper person”. There was no evidence that he had failed to comply with other regulatory requirements or that there was any significant disrepair. Whilst the appellants had a discretion as to the length of the licence, there was no reason to limit the duration of the licence. It was not appropriate to grant a reduced term licence simply to allow a relevant conviction to become spent which was the only justification under the appellants’ policy for the grant of a one-year licence and in its view the policy was unreasonable. The appellants appealed.
Held: The appeal was dismissed.
(1) Section 87 to 90 of the Housing Act 2004 dealt with applications for licences, the granting or refusal of licences and the imposition of licence conditions. Application had to be made to the local housing authority, which might charge a fee (section 87(1), (3)). The fee charged by the appellants was originally £500 for each house but had subsequently been increased to £650. Where an application was made to an authority under section 87, the authority had to either grant or refuse a licence. Amongst other matters specified in section 87(3), about which the authority had to be satisfied before it granted a licence, was that the proposed licence holder was a fit and proper person to hold the licence and that the proposed management arrangements were satisfactory. When deciding whether a person was fit and proper, the authority had to have regard to evidence including any evidence that the person had “contravened any provision of the law relating to housing or of landlord and tenant law” (section 89(2)). No mention was made of the relevance of any contravention of planning law: Waltham Forest London Borough Council v Khan [2017] UKUT 153 (LC) followed.
If it was satisfied that the conditions in section 87(3) were met, the authority might grant a licence (section 87(2)); they had a discretion to refuse a licence even when the specified conditions were satisfied. A right of appeal was available to the FTT against a decision to grant a licence. In accordance with paragraph 34 of Schedule 5 to the 2004 Act, such appeals were determined by way of rehearing but the FTT might have regard to matters of which the authority was unaware when it made its own decision. The FTT had to exercise its own discretion whether to grant a licence and on what terms. Having undertaken that exercise the FTT was then empowered by paragraph 34 to confirm, reverse or vary the decision of the local housing authority. Since the decision in question concerned the exercise of a statutory discretion over the terms of a licence, the issue for the Upper Tribunal was whether the decision-making tribunal, properly directing itself on the law and taking proper account of the relevant facts, and ignoring irrelevant facts, could have exercised its discretion in the manner in which it had done.
(2) In the present case, the appellants were plainly entitled to consider matters relevant to the question whether a landlord was a fit and proper person when determining the duration of such licence. The extent to which such matters were relevant would depend on the facts of the individual case. The appellant’s policy allowed the landlord to remedy the issue that gave rise to the reduced-term licence or for a relevant conviction to become spent. On the facts found by the FTT, the respondent was unaware of the need to licence the properties until November 2015. He was entitled to apply for a TENS when he did. He applied for licences promptly on withdrawing his appeal against the refusal of the TENs. There was in reality only one omission. This was not a case of a continuing breach. Although the appellants might have greater knowledge of housing conditions in its area than the FTT, it was difficult to see how the policy of granting a reduced term solely to allow conviction to be spent had anything to do with local conditions. The FTT was a specialist tribunal and more justified in disagreeing with the appellants than a county court. This appeal was a rehearing. The FTT plainly had regard to the appellant’s policy. It was entitled to conclude that the convictions were not relevant on the facts of the case. Thus, there was no error of law: Waltham Forest London Borough Council v Khan [2017] UKUT 153 (LC) and Waltham Forest London Borough Council v Power (1 Sep 2017; MR/LON/00BH/HMV/2017/0004) distinguished.
Ashley Underwood QC (instructed by Waltham Forest London Borough Council) appeared for the appellant. Patrick McMorrow (instructed by Sternberg Reed) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Waltham Forest London Borough Council v Reid
