Landlord wins Upper Tribunal appeal over penalty imposed for failure to comply with improvement notice relating to her tenanted property

Manchester City Council should have made greater efforts to ensure that an improvement notice and subsequent penalty demand reached a landlord, the Upper Tribunal (Lands Chamber) has said, upholding an appeal against a decision of the First-Tier Tribunal (Property Chamber).

The appellant had faced a £22,500 penalty for failing to carry out works detailed in the improvement notice but said she never received the correspondence concerned.

She owns a property known as 58 Ollier Avenue, which is let to tenants but is not a house in multiple occupation requiring a licence.

In March 2019 the tenant complained to Manchester about disrepair and the council found HM Land Registry showed the address for service for 58 Ollier Avenue was that house, but its records showed the appellant lived elsewhere.

It sent the appellant various notices and letters to Ollier Avenue, none of which she received and none were passed on by the tenant.

In March 2020 the tenant left and the appellant refurbished the house. four months later Manchester sent her a final reminder for the overdue payment of the £22,500 penalty having found her correct address in its council tax records

She appealed to the FTT against the financial penalty, arguing a defence of reasonable excuse and that the notices were not correctly served;

The tribunal though found Manchester used the address for service recorded at HM Land Registry for 58 Ollier Avenue, and therefore the notices were correctly served.

The appellant argued that despite this she did not receive the improvement notice and other communications when Manchester could easily have checked its council tax records properly - as it eventually did and found her without difficulty.

Manchester said that provided service is effected correctly a landlord has deemed knowledge of an improvement notice, and this did not come to the appellant's attention because she failed to update her address with the Land Registry and so could not provide a reasonable excuse.

The council argued that to allow that as a reasonable excuse would be “to rob the legislation of its purpose, because all that a landlord would need to do to avoid liability for disrepair, or indeed other offences, would be to avoid updating his or her address at HM Land Registry”.

Upper Tribunal Judge Elizabeth Cooke said: “I am not persuaded by that argument. Local housing authorities and  tribunals should be able to distinguish between landlords deliberately evading service and those who have simply failed to update their address details, and on the basis of the evidence accepted by the FTT it is clear that [the appellant] fell into the latter category.

“The FTT accepted that she did not deliberately avoid receiving the improvement notice. She had been registered all along for council tax at her home address and she was easy to find once the respondent tried to do so for the purposes of enforcement.

“To find her guilty of a criminal offence in those circumstances seems to me exceptionally harsh.”

She noted Manchester had been unable to “point to any authorities where a landlord had been found to have committed the offence of failing to comply with an improvement notice where he or she never received the notice”.

The judge said it was unrealistic to regard a failure to update one’s address for service at HM Land Registry as wrongdoing as it was “an error, but a very technical one that most people would have no idea they could commit”.

This meant the FTT had been “wrong and irrational to find that [the appellant] did not have the defence of reasonable excuse”.

Judge Cooke substituted her finding that [the appellant] did have a defence, and so no penalty was payable.

She went on to consider the impact on a local housing authority.

“Service itself remains straightforward,” the judge said. “But in a case like this where a series of communications went unanswered it may be worth a little further checking…in case there is a simple explanation for the failure to respond.” 

Mark Smulian