An agent hit with a demand for £14,999 for allegedly operating an illegal, unlicensed HMO has won its appeal.
The agent received the civil penalty notice from Islington Council in London.
It disputed the penalty, saying no offence had taken place, but the council still issued a final penalty notice together with the offer of a 20% reduction for prompt payment.
According to industry consultant Richard Tacagni, who runs advisory firm London Property Licensing, this left the agent in a quandary as to whether to pay the penalty quickly and take the discount, or mount a challenge.
The un-named agency called in Tacagni who reviewed the case.
It transpired that the property had been let to four sharers on a single Assured Shorthold Tenancy with a clause stipulating no sub-letting.
This was below the mandatory licensing threshold of five sharers, and was why the agent had not applied for an HMO licence.
The agent had found no evidence of sub-letting at its inspections. The tenants said they had friends stay with them from time to time, but had not sub-let any rooms.
A decision was made to lodge an appeal with the First-tier Tribunal and also to challenge the level of the penalty.
Following this decision, the council wrote to advise that it had reviewed the case and was withdrawing the penalty.
The agent in turn withdrew its appeal.
Tacagni said that “many” councils are now issuing civil penalties as an alternative to prosecution.
He said: “If a landlord or agent believes that a penalty has been unfairly imposed or that the penalty is unreasonable high, the First-tier Tribunal appeals process provides the opportunity to challenge the decision.”
Local authorities can issue penalties of up to £30,000 per offence without having to secure a court conviction.
The relevant offences are:
- failure to comply with an improvement notice;
- operating a licensable but unlicensed property in breach of a mandatory HMO, additional or selective licensing scheme, or failure to comply with a licence condition;
- failure to comply with an HMO overcrowding notice;
- failure to comply with the HMO management regulations.
Islington Council is currently seeking to introduce borough-wide additional licensing, which will bring HMOs shared by three or more people into a new regime.
It is also planning to introduce a selective licensing scheme in Finsbury Park, covering all other private rental properties.
A consultation on its plans closes on November 3.