Thurrock Council v Palm View Estates (HOUSE IN MULTIPLE OCCUPATION – defence of reasonable excuse for having control of or managing) (202)] UKUT 355 (LC)

The Upper Tribunal corrects an FTT decision that Palm View Estates had a reasonable excuse defence to a civil penalty for managing an unlicensed HMO.

Palm View had converted a property in Essex to occupation by 6 separate people in 2014. In 2017, the Council inspected and served a notice requiring the enlargement of the shared kitchen so it would be suitable for 6 people. Palm View extended the kitchen and applied for planning permission (the order of things here is not clear, but the extension was defintely done before planning permission was obtained.) Planing permission was initially refused, then granted in February 2019 on appeal. In the meantime, in October 2018, the fell under th extension of mandatory licensing. Palm View knew this, as it had other HMOs for which licenses were obtained. The Council levied a civil penalty following correspondence and interviews from March 2019 onwards. Palm View applied for a licence in July 2019 . Palm View appealed to the FTT on the basis that it had a reasonable excuse for not obtaining a licence because it “had been told by an employee of the appellant in its planning department, that there was no point in applying for an HMO licence while the planning position for the kitchen remained in dispute.”

The FTT allowed the appeal. The Council appealed to the Upper Tribunal.

The Upper Tribunal held that the FTT decision was in error. The offence was not ‘failing to apply for a licence’, but of managing or being in control of in HMO without a licence.

Palm View’s ‘excuse’ was effectively that it did not apply for a licence at a time when it was likely to be refused (due to the planning permission issue).

While there may be situations where a good reason for not applying for a licence would amount to a reasonable excuse defence to the offence, this was not one of them.

It is conceivable that a good reason for not applying for a licence might provide an excuse for committing the offence, for example the level of ignorance of the law referred to in Daoudi, noted above. I am not going to speculate on the possibilities. I am not persuaded that where a landlord fails to apply for a licence because it thinks it will be refused and for an incorrect reason, that amounts to a good reason not to apply (in view of the obvious advantage to a landlord of bringing itself within section 72(4)(b) and in view of the fact that an appeal system exists for cases where a local authority gets it wrong), let alone for committing the offence.

FTT decision, including findings of fact, set aside, and matter remitted for fresh hearing.