In each case, it is a matter of judgment for the First-tier Tribunal whether it is objectively reasonable for a landlord to have been ignorant of a requirement and for how long.
In Marigold and others v Wells [2023] UKUT 33 (LC); [2023] PLSCS 31 the Upper Tribunal (Lands Chamber) was asked to determine on appeal whether a landlord had a reasonable excuse for being in control of an unlicensed house in multiple occupation, contrary to section 72(1) of the Housing Act 2004.
The respondent was a professional landlord who held a long lease of a flat situated in Stepney, London, E1. In November 2018, he granted a tenancy of the flat to five friends. The tenants vacated the flat November 2020. At the material time the flat was let, it was not required to be licensed.
In October 2018 the local housing authority made an additional licensing designation encompassing the area the flat was situated. The designation came into force in April 2019. From that date the flat was required to be licensed.
The tenants subsequently applied to the FTT for an RRO. The landlord accepted he had committed the offence under section 72(1). Yet, relying on D’Costa v D’Andrea and others [2021] UKUT 144 (LC); [2021] PLSCS 113, he raised the defence of reasonable excuse. He contended that he had applied for a licence in October 2018, but was told by the LHA that a licence was not yet required. He was informed he would be contacted in due course when the new licensing regime was in place, but they never did. The FTT found the defence was established.
On appeal, the tenants argued the FTT had treated D’Costa as establishing a rule rather than applying its own judgment to the facts of the present case. The UT disagreed.
The tenants also argued the FTT had failed to consider whether the landlord’s belief that the LHA would contact him personally when the new licensing regime came into force remained a reasonable belief throughout the period he was in control of the unlicensed HMO. The UT agreed. It was an identifiable flaw in the FTT’s reasoning that it failed to consider this aspect of the tenants’ case. If it did consider the same, it failed to give adequate reasons in its decision.
Relying on Perrin v HMRC [2018] UKUT 156 (TCC), the UT provided the following guidance as to the approach the FTT should adopt when considering a “reasonable excuse” defence:
- Establish the facts that is said to give rise to a reasonable excuse
- Decide which of those facts are proven
- Viewed objectively, decide whether those proven facts amount to an objectively reasonable excuse for the default and the time that objectively reasonable excuse ceased. The experience and any relevant attribute of the defaulting party should be taken into consideration
- It is a matter of judgment for the FTT as to whether ignorance of a requirement was objectively reasonable for the person in default, and if so, for how long.
Elizabeth Dwomoh is a barrister at Lamb Chambers
