Ignorance is no Excuse…

Sometimes landlords will need to obtain a license from the local authority, not only when the property is an HMO, but also when the authority puts a selective licensing scheme in place...

Failure to obtain a license when required is problematic as the landlord can be punished by service a penalty notice or proceedings by the local authority. And, of course, failure to have a licence will render any section 21 notice invalid!

The Upper Tribunal has recent made an important decision which should alert landlords in the case of Gateshead MBC v City Estate Holdings.

https://www.bailii.org/uk/cases/UKUT/LC/2023/35.html

The Facts

The landlord had let two properties to tenants without having obtained a selective licence when required.  The authority served penalty notices sums of c. £5,000 and c. £4,500.

The landlord appealed submitting that it had not committed any offence because, when it had bought the properties at auction, that there was nothing in the seller’s pack which indicated that a licence was required. Therefore, the landlord had a ‘reasonable excuse’ for not obtaining a licence.

At first instance, the Tribunal accepted the landlord’s argument and quashed the penalties.

Appeal Decision

The decision was overturned by the Tribunal on appeal, holding that there was nothing ‘reasonable’ about the excuse.

Concluding, the Upper Tribunal held that, as there was no duty on a seller to disclose that a licence was required, the landlord should have made its own enquiries.

Conclusion

Landlords should always make enquiries of local authorities when purchasing properties with sitting tenants, or which they intend to let, to ascertain whether a selective licensing scheme is in place. Not being told by the seller is legal ignorance, rather than a lawful excuse!

If you need support with a licensing issue, then get in touch with us for some free and friendly initial advice followed by fixed fee support throughout your case:

01704 790 532
hello@landlord-support.co.uk
www.landlord-support.co.uk