Banning Landlords- the First Appeal

The Housing and Planning Act 2016 introduced a power in England to seek orders in the First-Tier Tribunal banning landlords from operating as landlords at all. These have not been used a great deal because it is only possible to make a banning order if a landlord has been prosecuted of an appropriate offence. However the 2016 Act also introduced civil penalties for many of the offences under the Housing Act 2004 that had been the subject of a lot of the prosecutions. Local authorities have therefore preferred to issue civil penalties. This has no doubt been motivated by the view that the authority will obtain a higher penalty than it would in the Magistrates court, which is notoriously unpredictable, and also by the fact that the local authority can retain money from civil penalties which helps to fund their work. Lack of prosecutions has therefore translated, somewhat predictably, into a lack of banning orders. It is therefore interesting, and unusual, when a banning order is sought in the Tribunal, even more so when one is appealed to the Upper Tribunal. Recently this has indeed happened and it is the first such appeal of a banning order.

In this case the landlord owned 29 properties and had been a landlord for 30 years. Bristol council had increasing concerns about her property management and had sought promises that this would improve. Those promises were not kept and a further promise to hand over management to a letting agent ceased to be kept in 2021 when the agent terminated the relationship. The council then began to get annoyed and progressed through a series of penalties, moves to revoke HMO licences, and ultimately prosecution for eight charges, seven of which involved breaches of the HMO Management Regulations. The Council then sought to ban the landlord and applied to the FTT to do so. The FTT agreed that a ban was appropriate and banned the landlord for five years with a six month delay to allow her to bring existing tenancies to an end.

The landlord appealed to the Upper Tribunal. There were two principle grounds of appeal. The first was that the FTT had not considered the offences properly. They had only considered the size of fine which the FTT said was high and not the nature of the offending, which even the council accepted were not the most serious. The second (And slightly ambitious) ground was that a banning order creates a ban on “letting housing”, which the landlord said was a ban on creating new lettings and not a ban on continuing existing tenancies.

Looking at the first ground in more detail the FTT had purportedly accepted that HMO Management offences were serious enough to justify a ban. The landlord suggested they were not. The UT did not agree and considered that a Management regulations offence was sufficiently serious that it might justify a ban. The second part of this complaint was that the FTT judged the fine to be serious without giving the parties any chance to understand what experience the FTT had on fines or to comment on it. The council had argued that the fines were high for the type of offending and this reflected the seriousness of the offence. The FTT said it had applied its general knowledge and expertise and also considered it an aggravating factor that the offences were committed at three different properties. The UT found this to be entirely acceptable for a specialist tribunal particularly as the landlord and council had both simply said the fines were low or high respectively with no attempt made to give evidence or contextualise those comments. The third element was that the FTT was wrong in any event to use the level of fine as a yardstick to measure the seriousness of the offending by. That was to assign the actual decision making to the Magistrates rather than the FTT actually considering the offending for itself. The UT agreed with the FTT on this issue. The 2016 Act simply requires the FTT to consider the seriousness of the offence. That can be done in a number of different ways but an entirely valid one is to use the level of fine. Suggesting that the FTT should simply ignore the Magistrates and consider the level of offending for itself was inappropriate and was an attempt to review the entirety of the prosecution in the wrong venue. The proper way to do so would be by appealing the prosecution in the Crown Court.

On the second point the UT examined the 2016 Act in more detail. First it did not agree that the use of the phrase “letting housing” meant that there was a limit to new lettings. In addition, the legislation referred to exception to allow for existing tenancies to be dealt with. If the restricted reading being pressed by the landlord was right those exceptions would not be required.

There were some other grounds of appeal but the UT dismissed them as weak and they are not particularly interesting. The UT therefore upheld the ban and simply adjusted the six month delay for existing tenancies to allow for the period between the original decision and the decision on appeal. If the landlord wishes to appeal again she will need to go to the Court of Appeal.