Look, look! A banning order! I don’t know if this is the first, it may well be. It is certainly the first decision I have seen.

43 Dudmaston, Telford, Shropshire TF3 2DF: BIR/00GF/HSH/2019/0001

This is the First Tier Tribunal (Property Chamber) decision on applications by the Borough of Telford and Wrekin for a banning order against David Beattie under section 15(1) Housing and Planning Act 2016 and for a rent repayment order under section 41 H&PA 2016.

The banning order application was on the back of a successful prosecution of Mr Beattie by Telford for an unlicensed HMO. In February 2019, the Magistrates levied a paltry fine of £284 (because, well, Magistrates Courts. Don’t expect anything much and you won’t be disappointed). There was, however, a rather more substantial history and set of issues, as became clear in the Tribunal.

So, in March, Telford served notices of intended proceedings on both the  banning order and the rent repayment order (RRO), then in April began proceedings – separately but joined by the Tribunal.

We should note in passing that the Tribunal inspected the property. It had, at that time, four occupants, but seven bedrooms. It was worn, but otherwise in good condition. The standard of the property plays no further part in these proceedings, though the number of occupants does.

Section 16: Making a banning order

(1) The First-tier Tribunal may make a banning order against a person who—

(a) has been convicted of a banning order offence, and
(b) was a residential landlord or a property agent at the time the offence was committed.

(2) A banning order may only be made on an application by a local housing authority in England that has complied with section 15.

(4) In deciding whether to make a banning order against a person, and in deciding what order to make, the Tribunal must consider—

(a) the seriousness of the offence of which the person has been convicted,
(b) any previous convictions that the person has for a banning order offence,
(c) whether the person is or has at any time been included in the database of rogue landlords and property agents, and
(d) the likely effect of the banning order on the person and anyone else who may be affected by the order.

The timescales for a banning order offence mean that the offence must have been committed after 6 April 2018 (not the conviction). That was all met here – the failure to licence an HMO was for the period June to September 2018.

So, the consideration was of the seriousness of the conviction, the previous convictions, and, given no previous entry on the rogue landlord database (as no previous banning order), the likely effect of the banning order on Mr Beattie and others.

The Tribunal went through the history as put by the council and Mr Beattie..

In 2011, Telford found 6 people in occupation on an inspection.

In 2012, an inspection found 5 people, but Telford were assured it would be 4 within 3 weeks.

In 2015, an inspection found 5 people in residence. After this, Mr Beattie and his partner Debbie Fisher applied for an HMO licence. This was refused on the basis that Mr Beattie was not a fit and proper person to be the licence holder. That decision was not appealed. The Council wrote to Ms Fisher to give her the option of applying for a licence, or keeping occupants below 5. No application was made.

In July, August and September 2018, 5 occupants were found, leading to the prosecution.

David Beattie, the Tribunal found, does not give tenants written assure shorthold tenancy agreements. Based on a 2018 ‘licence to occupy’ evidenced by the council, Mr Beattie purported to issue ‘excluded occupancy agreements’ for a 12 month fixed term for a weekly licence fee, with 48 hours notice period.

(This appears to be a more widespread issue in Telford, as the trading standards officer had written to a number of landlords and letting agents about it.)

On this background the council argued that the conviction of February 2019 was a serious offence. The low fine as partly due to an early guilty plea. Mr Beattie had also claimed in mitigation that the fifth occupier was a homeless person he was temporarily helping out at no cost. A comment  of Mr Beattie’s on the Shropshire Star wed site was cited:

“Yes folks its me … nothing printed as it seems tho. I had a homeless person with mental health issues living there not paying any rent to me. For doing my part in helping someone in desperate need I’ve been yet again attacked by the wolfs at environmental health … the court actually apologised for having to impose a £284 fine as it was the law!!!”

However, Mr Beattie was paid housing benefit for that occupier, and the only reason that they were homeless was that Mr Beattie had evicted him from another of his properties that he wished to sell.

The council also raised Mr Beatties’ conviction for illegal eviction in March 2017, with a sentence of 200 hours unpaid work and a restraining order.

Mr Beattie continued to advertise rooms at the property, despite the current four person occupancy.

In 2017, Mr Beattie admitted to 8 tenanted properties and 25 tenants, but denied it was profitable. The council suggested at least 3 in Telford were also HMOs.

Mr Beattie argued:

The offence on the unlicensed HMO was not of the utmost seriousness. There was an early guilty plea, the period of over occupancy was 106 days, and the fifth occupant was a friend of Mr Beattie’s with mental health issue, and housing benefit did not pay the full rent.

The previous convictions were not worthy of a banning order, given the complications of the illegal eviction being of a former boyfriend of Mr B’s daughter.

The property was maintained to a high standard.

Mr B’s rental income was his only income. His DJing was only a hobby. The properties were in negative equity and his tenants depended on him.

The Tribunal found:

Save for the 2017 and 2019 convictions, Mr Beattie’s previous convictions were spent under Rehabilitation of Offenders Act 1974. But the March 2017 conviction, normally spent within 2 years, was not spent because of the Feb 2019 conviction.

On the unlicensed HMO conviction, Mr Beattie’s behaviour with regard to the 5th tenant was not altruistic. He received housing benefit and had been responsible for the 5th tenant becoming homeless in the first place. Mr B did not receive an absolute or conditional discharge, so the sentence stood as a serious offence. It was a deliberate offence, Mr B had been refused a licence as not a fit and proper person and the previous illegal eviction offence showed a pattern of flouting his obligations and harassing tenants (the 2017 offence being probative, not itself a banning order offence).

There was some evidence that Mr Beattie’s tenants were vulnerable and

We take into account the Respondent’s use of Licence Agreements which clearly state “This Licence to Occupy does not create any form of tenancy.” We find that the use of such Licences is a deliberate attempt to mislead tenants as to their legal rights and in particular security of tenure.

(…)

The risk of harm is significant because it is clear that a number of the Respondent’s tenants are vulnerable. The evidence from tenants produced by the Respondent at I95 – I97 speaks of individuals who have been homeless, assaulted or are recovering from broken relationships. It is particularly concerning the Respondent was aware of the allegation made by his daughter that the victim of the 2017 offences was selling cocaine from the room he was renting at the Property. The Respondent did not call the police as he was obliged to do, not least to protect other residents. Instead his priority was to force the victim to chase up his Housing Benefit using theRespondent’s telephone on loudspeaker so that he could listen in to the victim’s conversation

The likely economic impact on Mr Beattie was taken into account, as was the fact that the property was not substandard.

However, the Respondent has repeatedly flouted his legal obligations. He has unlawfully evicted one tenant and has mislead the others as to their legal rights. In all the circumstances we find that the Respondent falls within the category of “the most serious offenders” We exercise our discretion to make a Banning Order. We find that the making of a Banning Order is proportionate and necessary to protect tenants from potential harm from the Respondent, to deter him from repeating his offending and to deter others from committing similar offences.

On the issue of the length of the banning order, the council had proposed that Mr B let through an approved letting agent as “they believe that the Respondent is “temperamentally unsuitable to be a landlord” and “removing him from the picture” would reduce the risk to his tenants.” (This was rejected completely by Mr B).

Alternatively, the council sought a four year banning order with an initial exception “until the expiry of an initial fixed term or for 3 months’. Mr Beattie produced a schedule of agreements showing some had nearly 12 months to run.

The FTT noted that

It is suggested that the Respondent could obtain possession within 8 weeks using “section 21” procedure. However, the Respondent has not issued assured shorthold tenancies and cannot therefore use the accelerated possession procedure under section 21 of the Housing Act 1988. The “Licence to Occupy” issued by the Respondent is a fixed term agreement for a 12 month period. The Respondent has no prospect of obtaining possession before expiry of the term.

So, as per a s.17(3) exception, existing tenancies (not licences as described) would continue till the end of the fixed term, up to 12 months.

There would be a banning order also for the subsequent 4 years, so 5 years overall.

On the RRO – this was admitted, and an RRO for £1924.65 made.

The Councils’ application fees of £400 ordered against Mr Beattie.

Comment

Oooh!

Points worth noting here.

The timing of offences meaning that the 2017 one wasn’t spent.

The Tribunal not taking the low Magistrates fine into account, after rather more detailed evidence on the situation than the Mags would have heard in mitigation on an early guilty plea.

The entirely ludicrous ‘licence agreements’ – this appears to be something that a certain sub-set of HMO landlords think that they can do, grant licenses not tenancies. Someone styling themselves ‘HMO Daddy’ seems to have spread this nonsense.  Let it be clear, if you are granting permission to occupy a specific room in a shared house, you are granting a tenancy.

And, as I know people have been saying ‘where are the banning orders’ ever since 6 April 2018, this was always going to be the timescale. A post 6 April 2018 offence, followed by a prosecution (and possible appeal),, followed by notice of intention and time for response, then an application to the FTT and directions to hearing? This is about when banning orders could be made. Let us just hope this is the first of many, not an isolated instance.

The issue on tenants remaining. Granted Beattie had rather messed things up with his 12 month term but 48 hour notice ‘licences’. But would an alternative to leaving him with his tenants (not licensees) be the council seeking a management order?