Intent in HMO Licensing Offences

22nd May 2020 Commercial Litigation

The High Court recently confirmed that the landlord’s intent is irrelevant to the offence of failing to license a licensable HMO, contrary to section 72(1) of the Housing Act 2004. In other words the offence is one of strict liability, which severely limits the scope of defences available to landlords.

The claimants, Mr & Mr Lahrie, sought judicial review in respect of summonses alleging HMO licensing offences. The Secretary of State for Housing, Communities and Local Government also intervened in the case.

District Judge Sweet had already found in Wimbledon Magistrates Court that the summonses were lawfully issued and that the section 72(1) offence was a continuing offence being committed each day a licensable HMO is not licensed. The 22 April 2020 hearing also dealt with the judicial review of DJ Sweet’s decision, brought by the claimants.

The High Court considered three issues:

  1. Whether sufficient information was provided by the council to justify the issue of the summonses and, if not, whether the summonses should be quashed;
  2. Whether the offence of failing to licence an HMO is a strict liability offence or has a mental element; and
  3. Whether the informations against the claimants were in time.

The first issue

This part is not particularly exciting, but in summary the information was sufficient as the schedule the council had provided to the court described the offence charged in ordinary language and gave such particulars as were necessary to give reasonable information of the charge, which satisfied section 1 of the Magistrates’ Court Act 1980. The schedule set out as follows: ‘On 7 July 2016 you did manage or have control of the property of 24 Eastfield Road, London, E17 3BA which was required to be licensed under Part 2 of the Housing Act 2004 but which was not so licenses CONTRARY TO section 72(1) of the Housing Act 2004.’

Additionally, the court confirmed that had it found that the information had been insufficient, it would still not have nullified the summons, because further information had since been provided to the claimants, thus ensuring that the criminal proceedings could be fairly determined. This will not be the case where insufficient information is provided and this cannot be rectified through the provision of further information later on, for example where that information has ceased to exist or never existed.

The second issue

Most interestingly, the court then proceeded to examine the authorities in order to consider whether a section 72(1) offence was a strict liability offence. The claimants sought to assert that the relevant property was an HMO in breach of the tenancy agreement and they had no knowledge of this.

The Court took the view that ‘it is plain that there is no requirement to prove that the defendant knew that the property he had control of or managed was an HMO, and therefore required to be licensed’. The reasons the court listed in support of its decision were as follows:

  • The comprehensive statutory definitions of a ‘person having control’ and a ‘person managing’ in section 263 of the Housing Act 2004 refer to the objective arrangements by which a defendant has control of or manages the property and actual knowledge of whether the property is a licensable HMO is not required;
  • Other offences set out in the same section contain an express requirement of knowledge, illustrating that if knowledge was a required element of this offence, this would have been made clear in the wording of the Act;
  • The new civil penalty regime created by the Housing & Planning Act 2016 does not include a knowledge element;
  • A reasonable excuse defence is provided for in section 72(5) and lack of knowledge could be considered as part of that defence, which would be incompatible with knowledge being a requirement of the original offence;
  • The presumption that intent is required for an offence to be committed is more easily displaced in regulatory licensing offences, such as the section 72(1) offence;
  • The absence of a requirement for intent is in line with and promotes the objective of the Housing Act 2004 in ensuring that HMOs are licensed and proper housing standards for tenants are provided;
  • This view was also in line with existing case law.

This decision is not all that surprising. Most people took the view that a failure to have an HMO licence was a strict liability offence. The more interesting point was the acceptance that some other offences might not be strict liability.

The third issue

Pursuant to section 127(1) of the Magistrates’ Court Act 1980 there is a six-month time limit for the court to consider a charge laid before it. The High Court agreed with DJ Sweet that since the section 72(1) Housing Act 2004 offence was a recurring one, it kept being committed every day the HMO remained unlicensed and, accordingly, the criminal proceedings should not be dismissed as they were not out of time. The claimants’ submission that the six months start running as soon as the council becomes aware of the offence was not accepted.

Again, this accorded with what most people already believed but it is important conformation that where a landlord fails to get an HMO licence the offence is committed anew every day until they regularise their position by applying for a licence or a temporary exemption notice. Therefore the local authority has six months from the date that the offence stops being committed to take a case to the magistrates.

Conclusion

Both judicial review applications were dismissed.

This decision, while far from ground-breaking, provides clarity by setting out that landlords cannot avoid prosecution (or civil penalties) by pleading ignorance. Lack of knowledge may be raised as part of a reasonable excuse defence, but is not a get out of jail free card. Considering the seriousness of the consequences of committing an offence, landlords are encouraged to take active steps to ensure compliance.

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David Smith is a Partner located in Londonin our Commercial Litigation department

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Neli Borisova is a Solicitor located in Londonin our Commercial Litigation department

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