Trinity Social Housing Law barrister, Henry Percy-Raine has prepared the following summary of the recent Upper Tribunal (Lands Chamber) decision of Kazi v Bradford Metropolitan District Council (Housing - Civil Penalty - mitigation - totality)  UKUT 263 (LC).
This was an appeal to the Upper Tribunal (Lands Chamber) concerning penalties imposed by a local authority for offences relating to the condition of a landlord’s property. The issues raised include mitigation, totality and the principle of a penalty to remove any financial benefit the landlord obtained as a result of committing the offence.
Mr Kazi is a landlord of several properties, one of which is a large four-storey house converted into 8 self-contained flats. He housed several tenants there who would otherwise have been homeless. In 2020 he received a letter from an officer in the local authority’s housing department with a list of requirements to make one of the flats habitable for a prospective tenant. Following that letter, the tenant moved in.
In 2021, an environmental health officer inspected the property. Thereafter eight improvement notices were served. Subsequently, three notices of intention to issue a financial penalty were served, as not all of the required works had been completed. The notices related to (ii) failure to comply with the improvement notice concerning flats 1 and 4 by failing to provide new kitchens and adequate heating; and (ii) failure to comply with HMO regulations.
Decision of the First Tier Tribunal
The FTT rejected the argument in mitigation that the tenants themselves had contributed to the problems on the basis that tenants were not to blame for the type of heating provided or the quality of the kitchen. The FFT applied a 5 per cent discount to the improvement notices and HMO penalties on the basis that Mr Kazi had done some work but not completed all that was required. This percentage derived from the local authority’s policy which stated that a discount of no more than 5 per cent could be applied for individual items of aggravation or mitigation. The FTT also uplifted the HMO penalty adopting the requirement in the enforcement policy that any financial penalty is not less than the cost of compliance with the breach.
Mr Kazi was successful on two of his grounds of appeal. It was held:
- As to mitigation of the level of penalty, it was considered that if some of the problems were caused or exacerbated by the tenants that can provide a defence; alternatively it will be a very significant item of mitigation. In a situation, as here, where the notice required a long list of work to be done and the starting point for the penalty was the same whether all or only some parts of the notice have not been complied with, the mitigation applicable to any of the work should have been relevant [41-42].
- The FTT had exceeded its discretion by failing to allow mitigation based on the tenants’ contribution to the state of the property and fettering its own discretion in adhering to the respondent’s policy that any mitigating factor may only make a difference of 5 per cent.
- The FTT also acted irrationally in following the respondent’s policy that a civil penalty “must never be less than what it would have cost the landlord to comply with the legislation in the first place”. There was no evidence of financial benefit that Mr Kazi may have obtained as a result of committing the offences. He still had to comply with the improvement notices and the property remained an HMO to which the regulations applied [55-56].
The three penalties were accordingly reduced on appeal. A discount percentage greater than 5 per cent was applied to allow for the fact Mr Kazi had done some of the work required and also to take account of the role the tenants played in causing the disrepair/ making it difficult to do the work.