Homes of Multiple Occupation: Defining ‘sufficient evidence’ when imposing a financial penalty on an unlicensed HMO

Where a landlord has operated a House of Multiple Occupation (HMO) without a licence, is the housing authority out of time in imposing a financial penalty contrary to the Housing Act 2004 and will ‘sufficient evidence’ prove the offence to criminal standard?

The background

In Pinto v Welwyn Hatfield Borough Council [2022], the appellant landlord owned a property which had been let to 4 tenants. Under the Housing Act 2004, the property required an HMO licence; operation of the HMO without a licence could result in prosecution of the landlord, and a local authority is entitled to impose a financial penalty under the legislation up to £30,000.

The authority must be satisfied beyond reasonable doubt that a relevant housing offence had been committed. A final notice served by the authority should contain the amount of the penalty imposed, and the notice must be given within 6 months of the date when it ‘has sufficient evidence of the conduct to which the financial penalty relates’.

In this case, the authority served notice on 1 December 2020, stating that the authority had sufficient evidence on 29 June 2020. A final notice imposing the financial penalty was issued on 24 February 2021. The landlord appealed the notice in the First-tier Tribunal, arguing that the notice had been served out of time due to the point at which the authority had ‘sufficient evidence’.

The FTT determined that wording ‘sufficient evidence of the conduct to which the financial penalty relates’ meant sufficient evidence to justify imposing a financial penalty and to satisfy the authority ‘beyond reasonable doubt’ that an offence had been committed; the local authority had to be certain that the offence had been committed. The FTT found that the authority did not have sufficient evidence prior to 27 June 2020 and the notice had been served in time.

The decision

On appeal by the landlord, the Upper Tribunal upheld the FTT’s decision and found in favour of the authority.

The landlord argued that a lower standard of proof was required by use of the words ‘sufficient evidence’, stating that this did not refer to ‘beyond reasonable doubt’ or ‘sure’. The UT disagreed, finding that wording should be interpreted as ‘sufficient evidence to impose a financial penalty’, which in turn would mean evidence that was sufficient to prove beyond reasonable doubt that an offence had been committed. From the point where the authority has sufficient evidence to prove an offence beyond reasonable doubt, it should then progress with the penalty process.

Without this interpretation, it would be difficult to identify what constituted ‘sufficient evidence’.

Further, the UT considered whether the authority had sufficient evidence in this case before 1 June 2020 which would result in the notice of intent being served out of time. The UT upheld the FTT’s decision on this point, finding that once relevant evidence had been received, the matter had gone beyond reasonable doubt.

Advice and action for landlords

This case is a useful point of reference for housing authorities seeking to impose a financial penalty on unlicensed HMOs.

‘Sufficient evidence’ is determined as ‘sufficient evidence to impose a financial penalty’, the point at which it can be proven beyond reasonable doubt that an offence had been committed. Notice should then be served at this point to progress in good time.