10 Warrior Gardens, St. Leonards-on-Sea, East Sussex, TN37 6EB CHI/21UD/HML/2019/0017

FIRST-TIER TRIBUNAL
PROPERTY CHAMBER (RESIDENTIAL PROPERTY)
Case No CHI/21UD/HML/2019/0017
Between
Linda TurnerApplicantHastings Borough CouncilRespondent
Before
Judge EdgingtonRichard Athow FRICS MIRPMPeter Gammon MBE BADate 1 November 2019Property: 10 Warrior Gardens, St. Leonards-on-Sea, East Sussex, TN37 6EB

DECISION

[1]The Respondent’s only assertion as to the property’s status as an HMO is that it is a building that it fulfils the conditions laid down by section 257 of the 2004 Act (“section 257”). This has not been proved on the balance of probabilities and, hence, the Tribunal is not satisfied that it is an HMO. The licence HMO is hereby revoked.

REASONS

[2]The Applicant is the long leaseholder of and lives in the ground floor flat at the property which is a terraced house in central St. Leonards-on-Sea. She also has a share of the freehold title. On the 26th February 2019, the Respondent local authority gave formal written notice to the Applicant that the property is an HMO. The letter is unhelpful and abrupt in the sense that(a) it does not set out why the Respondent comes to that view(b) it says that the Applicant ‘must’ apply for a licence and(c) it says that if she fails to apply for a licence, she is ‘committing an offence’.[3]The letter does, in its heading, refer to the 2004 Act and then just says ‘Part 2 (61)’. Assuming that this is a reference to Section 61 of the 2004 Act, this simply sets out the requirement to license an HMO. An ordinary member of the public is not likely to understand the significance of this and, in particular, the failure to mention the section defining this particular HMO. No suggestion is made for the recipient to seek independent legal advice.[4]A notice dated 18th June 2019 was then sent to the Applicant informing her that the Respondent proposed to grant a licence. Again, the wording is not clear. It does not say what the licence is for or to whom the licence is to be granted but just says that they have received an application for a licence from Ian Lawson, who is the long leaseholder of the first floor flat. He does not have an interest in the freehold title.[5]There is then another notice from the Respondent to the Applicant dated 16th July 2019 giving notice of a decision made on the same date to grant a licence but, again, it does not say what for or to whom. It says that the licence comes into effect 28 days after 16th July 2019 unless an appeal is made.[6]Finally, there is a copy of an HMO licence said to have been issued on the 16th July 2019 with the words ‘start date 19th March 2019; expiry date 18th March 2020’. There is no explanation as to why the dates are different to those in the notice. It sets out the following under the heading ‘Responsible Persons’: “Licence Holder Indigo Properties UK Ltd. Ms Anne Barett Mr. Ralph Black Mr. Lewis Brown Manager Indigo Properties UK Ltd.” Alongside all names are addresses, none of which is at the subject property. The applicant, Ian Lawson is not mentioned.[7]This appeal is against the granting of the licence and sets out 5 pages of single spaced writing and printing which basically say that the property is not an HMO, the licence has been wrongly granted and the whole situation is unjust.[8]The Applicant said that the case could be determined by the Tribunal on the papers and written representations of the parties. Judge Agnew issued a directions order dated 28th August 2019 in which it is said that the issue as to whether the property is an HMO should be determined as a preliminary issue. Such determination is to be made on a consideration of the papers as soon as possible after 18th October. Directions for both parties to file written representations were made and such representations have been made and considered. No request for an oral hearing has been received. The Law[9]The Respondent was ordered to set out its reasons for deciding that the property is an HMO. It has done so and, in essence, it says that the building comes within the definition of an HMO as set out in section 257 i.e. it is a ‘converted block of flats’.[10]This section sets out the requirements for a building to come within that definition i.e. “(1) For the purpose of this section a ‘converted block of flats’ means a building or part of a building which___(a) has been converted into, and(b) Consists of, self-contained flats. (2) This sections applies to a converted block of flats if___ (a) building work undertaken in connection with the conversion did not comply with the appropriate building standards and still does not comply with them; and (b) less than two-thirds of the self contained flats are owner-occupied.”[11]As to whether the property meets prescribed standards, the parties may also wish to consider the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions)(England) Regulations 2006 (SI 2006/373) and the Licensing and Management of Houses in Multiple Occupation (Additional Provisions)(England) Regulations 2007 (SI 2007/1903).[12]A great deal is said by both parties about whether the building is an HMO. However, is it agreed that this building has been converted into 5 self contained flats and long leases were granted for each flat for 99 years commencing 25th December 1988. It is also agreed that the only owner-occupied flat is that of the Applicant and that is clearly less than two-thirds of the total number of flats. Discussion[13]I remind myself that these are adversarial proceedings and it is up to the Respondent to establish, on the balance of probabilities, that this building comes within the definition set out in section 257 as mentioned in section 61. Also, it should be mentioned that as the Respondent was not at all clear in its earlier notices about why it said that this particular property is an HMO, the Applicant has brought all sorts of other arguments before the Tribunal in her application which are simply not relevant at the moment.[14]It really is not clear who is actually appointed to manage the building. A licence holder must be a fit and proper ‘person’ and there are provisions relating to what happens when a licence holder becomes deceased. There are no similar provisions to cover what may happen if a limited company goes into liquidation. In other words, it seems clear from the wording in the 2004 Act that a licence holder and, indeed, a manager must be a ‘person’ in the generally accepted meaning of the word rather than a legal ‘person’ such as a limited company. In her statement on behalf of the Respondent, Deborah Jane Watts, at page 39 in the bundle says that Ian Lawson applied for the licence ‘on behalf of ‘Indigo Properties’. “He was applying as the manager of the property”. He is not named as such in the licence.[15]There are a number of problems with the granting of the licence and I set out some of those in the final section of the reasons for this decision. However, at the end of the day, I just have to determine whether the building is an HMO within the definition set out in section 257, which is the only section relied upon by the Respondent. Conclusions[16]I find, on balance, that the definition in section 257 has been complied with save for the issue of whether the building was converted in accordance with the appropriate building standards and, if so, whether it still does not comply with them. SI 2006/373 also says that the property must meet prescribed standards. The long leases commenced in 1988 which means that the conversion is almost certain to have been in 1988 or beforehand. This means that the building work had to comply with the applicable regulations and/or standards at the time the work was undertaken in accordance with the Building Act 1984.[17]There is no reference to any building regulations or consideration of prescribed standards in the Respondents’ evidence. On page 5 of the Respondent’s bundle, as part of their legal submissions, it says that the only ‘evidence’ the Respondent has of any failure to comply with building standards is in the application for a licence. That ‘evidence’ is at page 93 when, in answer to the question ‘Does the conversion to flats comply with the 1991 Building Regulations (or later)?’ The answer given by Mr. Lawson is simply ‘No’.[18]This assertion on the part of the Respondent highlights the flaw in its case. If their only evidence on this issue is in Ian Lawson’s application dated 19th March 2019, then why have they written to the Applicant on the 26th February 2019 telling her that the property is an HMO with the inference that if she does not apply for a licence, she will be prosecuted? Also, why do they restrict the standard to the 1991 Building Regulations when those regulations clearly did not exist at the time of conversion in 1988 or before?[19]The representations go on to say that a search was made on the Wealdon District Council website and ‘it is clear no applications have been made’. There is no evidence of when the conversion work was carried out, who made the search, what was searched and exactly what was found. There is no evidence of an examination of the building by anyone to find out whether any lack of building standards exists. In view of the wording of section 257 and the subsequent Statutory Instrument i.e. that the building “did not comply with the appropriate building standards and still does not comply with them” and does not meet prescribed standards, it seems to me from the evidence submitted, that these minimum requirements have not even been considered by the Respondent. Therefore, the property does not come within the definition of an HMO as defined by section 257 and the licence must therefore be revoked.[20]I did consider whether I should inspect the property to see what I could ascertain about the present condition of the building. However, I have taken the view that the Respondent local authority knows that the preliminary issue is to determine whether the property is an HMO and if it wanted to rely on evidence or submissions, they should have been provided. It is not my task to fill gaps in the Respondent’s case, if indeed, they are capable of being filled. The Future[21]As I have mentioned above, the parties may find it helpful if I highlighted some other problems in this case if further action is anticipated. This is not an exhaustive list:• A great deal has been said by the Respondent about its Additional Licensing Scheme. This is not relevant to the preliminary issue as the scheme still has to apply to HMOs as defined by the 2004 Act. The Applicant says that she received no notice of any consultation as required by the 2004 Act but even she refers to 2 consultation meetings held by the Respondent and to information on its website. I am just about satisfied, on the evidence I have seen, that there was sufficient consultation.• The freehold owners of this building are, according to the Land Registry documents supplied, the Applicant, Lewis Jeffery Brown, Anne Rosemary Barett and Caroline Frost. In an e-mail from Ian Lawson dated 1st March 2019 which is at page 99 in the Respondent’s bundle, it appears clear that he is taking control of the application for a licence. He addresses the message to his ‘fellow freeholders’, which is not, of course, a correct form of address as he is not a freeholder. The licence, a copy of which appears at page 33, states that Indigo Properties UK Ltd is a licence holder and the manager, despite the fact that such company is only the leasehold owner of flat 4. Mr. Lawson says that he ‘will pass the fit & proper declaration as I’ve already done so with other local authorities and I’m also an accredited landlord’. It seems that the Applicant’s allegations of anti-social behaviour on the part of his tenants and how Mr. Lawson and/or Indigo Properties UK Ltd. dealt with the problems will need to be considered by the Respondent, so that the ‘fit and proper person’ test can be satisfied.• In the Housing in Multiple Occupation (Certain Blocks of Flats)(Modifications to the Housing Act 2004 and Transitional Provisions for section 257 HMOs)(England) Regulations 2007 it says, in regulation 4, that when deciding whether the proposed licence holder is a fit and proper person to be the licence holder, the local authority must take into consideration whether that person has control of the HMO and the extent to which he has control over it. There is no evidence of this whatsoever save for the Applicant’s allegations of incompetent management referred to above.• The Applicant mentions, in her application, that 2 of the freeholders held ‘selective licences’ for their flats which, she says, expired on 11th January 2013. The Respondent makes no mention of these licences. These historical facts need to be explained. ………………………………….. Judge Edgington 1st November 2019 ANNEX - RIGHTS OF APPEAL i. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to the First-tier Tribunal at the Regional office which has been dealing with the case. ii. The application for permission to appeal must arrive at the Regional office within 28 days after the Tribunal sends written reasons for the decision to the person making the application. iii. If the application is not made within the 28 day time limit, such application must include a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit. iv. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal, and state the result the party making the application is seeking. Case reference : CHI/21UD/HML/2019/0017 Property : 10 Warrior Gardens, St. Leonards-on-Sea, East Sussex, TN37 6EB Applicant : Linda Turner Respondent : Hastings Borough Council Application : Appeal against grant of House in Multiple Occupation (“HMO”) licence (Part 3, Schedule 5 of the Housing Act 2004 (“the 2004 Act”)) Application date : 8th August 2019 (rec’d 13th) Tribunal : Judge Edgington Richard Athow FRICS MIRPM Peter Gammon MBE BA ____________________________________________ DECISION _________________________________ Crown Copyright ©[1]The appeal against the granting of this particular HMO licence succeeds and Respondent’s decision to grant the existing licence, assuming that it has been renewed, is reversed in accordance with paragraph 34(3) of Schedule 5 to the 2004 Act. Reasons Introduction[2]The Applicant is the long leaseholder of and lives in the ground floor flat at the property which is a terraced house in central St. Leonards-on-Sea. She also has a share of the freehold title.[3]The Applicant has appealed against the decision of the Respondent to grant an HMO licence for the property. As one of the grounds for appeal was that the property was not an HMO, it was decided to have that matter determined as a preliminary issue. Judge Edgington determined that the property was not an HMO.[4]Following an appeal to the Upper Tribunal, that decision was set aside which had the effect of reinstating the HMO licence pending a determination on the other grounds of appeal against the Respondent’s decision to grant the licence. The Upper Tribunal did not say that Judge Edgington should be excluded from this determination and, as can be seen, this Tribunal now consists of 3 members. Judge Edgington continues to be involved as it is generally accepted that continuity of judiciary is good practice.[5]In her initial application, the Applicant says that she has had many problems with Ian Lawson who applied for the licence on behalf of what appears to be his company, Indigo Properties UK Ltd. (“Indigo”). Mr. Lawson is the long leasehold owner of flat 1 and Indigo is the long leasehold owner of flat 2. Flat 1 is immediately above the Applicant’s flat.[6]For the avoidance of doubt, the Register of HMO Licences, being exhibit DW10 in the bundle with ‘page 465’ endorsed in the top right hand corner, states that the licence was issued on the 16th July 2019 and the licence holders are Indigo, Anne Barett, Ralph Black and Lewis Brown. The manager is said to be Indigo.[7]The Applicant asked for a determination on the papers and the Respondent agreed. The appeal is against the granting of the licence and sets out 5 pages of single spaced writing and printing which, apart from saying that the property is not an HMO, says that the licence has been wrongly granted and the whole situation is unjust.[8]The Tribunal has considered all of the papers filed including those filed originally, those submitted to the Upper Tribunal and statements from Deborah Jane Watts, an EHO employed by the Respondent dated 27th July 2020, and Christine Barkshire-Jones, chief legal officer of the Respondent dated 28th July 2020. The Applicant has also filed an 8 page statement which is undated but is said to be filed in response to Judge Edgington’s directions order of 9th July 2020. All exhibits to those statements have also been considered. The Applicant’s case[9]In essence, the Applicant points out that(a) all the licensees live at or trade from premises far from the property and are therefore unsuitable to be licence holders or managers(b) that none of the licensees have ‘control’ of the building(c) Mr. Lawson has historically had tenants who caused a continuous nuisance by having loud music playing and, presently, having 2 dogs who bark all the time(d) there was a water leak from Mr. Lawson’s flat which she had asked him to deal with but he did not. As a result she suffered an electric shock one night when she got up to see what was happening and turned her light on to see that water had leaked on to her floor. She had to get a plumber out.(e) works organised by Mr. Lawson were often over charged or not done at all e.g. to repair a roof.(f) the classification of the property as an HMO may affect her mortgage and the value of her property The Respondent’s case[10]The Respondent says that all the licensees are responsible people and the only reasons that people away from the property have been appointed is because the applicant, as the only freehold owner living at the property, refused to be involved. There are no indications of any of the offences or conduct set out in section 66 of the 2004 Act, as amended. The Law[11]The matters to be considered by a local authority in granting or refusing to grant a licence are set out in sections 64 and 66 of the 2004 Act as amended.[12]A licence holder has to be a fit and proper person and “is, out of all the persons reasonably available to be the licence holder in respect of the house, the most appropriate person to be the licence holder”.[13]The manager has to be either “the person having control of the house, or a person who is an agent or employee of the person having control of the house”.[14]It is also provided that “the proposed management arrangements for the house are otherwise satisfactory”.[15]Section 66 sets out a list of offences which licensees or managers cannot have committed and as there is clear evidence that none of those involved in this case have committed or been associated with anyone who has committed such offences, this point is irrelevant. However section 66 also says that people involved in the management of the building must have “a sufficient level of competence to be so involved” and the local authority must consider “whether any proposed management structures and funding arrangements are suitable”. Discussion[16]It has been said before that the approach of the Respondent has been unfortunate, to say the least. Its first letter to the Applicant was aggressive in tone and clearly caused a great deal of distress to the Applicant. Judge Edgington raised issues as obiter matters at the end of his decision and Judge Cooke said at the end of her decision that she acknowledged that the Applicant had been caused so much distress. She went on to say “I hope that the parties may be able to discuss matters in a way that will offer some reassurance to the respondent about the many concerns that she has raised”.[17]These requests and suggestions appear to have been ignored. They were intended to give the Respondent as clear a message as possible that the Applicant has raised concerns which, even if the Respondent disagrees with them, should, even as a matter of reasonable public relations by a public authority, be addressed and dealt with.[18]The Respondent’s witness, Deborah Watts, in paragraph 17 of her recent statement has even, as the Applicant suggests, raised quite unnecessary issues such as the refusal of the Applicant to allow Mr. Lawson or his company to be freehold owners. Apart from situations such as compulsory purchase, it is an absolute right of the owner of a freehold title to transfer or refuse to transfer title to anyone.[19]However, at the end of the day, this Tribunal’s duty is to determine whether there are any grounds for saying that this local authority has made an incorrect decision when considering the provisions of sections 64 and 66 of the 2004 Act. According to the Upper Tribunal, the property is an HMO and there must be a licence holder.[20]The Respondent tried to get the Applicant involved as a licence holder but she refused. None of the other freeholders or long lessees appear to live at or near the property which made appointing a licence holder near the property an impossibility.[21]There is no evidence to suggest that the licence holders or the manager have any convictions or involvement with persons with such convictions. As to anyone having control of the building, it does seem clear that Mr. Lawson has actually arranged for works to be undertaken to the building over the years and therefore does appear to have sufficient control to undertake management of the common parts.[22]The Respondent’s approach seems to be encapsulated in paragraph 37 of the statement of Christine Barkshire-Jones wherein she says that “the Respondent has taken a pragmatic approach in granting the licence to” Indigo and the other freehold owners apart from the Applicant. The Respondent’s approach[23]Whilst proportionality demands that pragmatism is appropriate on occasions, this is a case where the Applicant objects strongly to the licence being granted and there is therefore an obligation on the Respondent to carefully consider the law and explain its conclusions in detail to the Applicant.[24]In Judge Edgington’s directions, he orders the Respondent to file a statement setting out its reasons for saying that Indigo is a suitable licence holder, pointing out that its address is some 40 miles away from the property. In paragraph 6 of the statement of Deborah Jane Watts, she records that “it was decided that as there was no management company in place all the freeholders would be named as licence holders in addition to” Indigo.[25]The Respondent’s response to the direction in Ms. Barkshire-Jones’ statement starts with the comment that “the phrase ‘suitable licence holder’ is not a phrase used in the Housing Act 2004”. Sub-sections 66(5) and (6) of the 2004 Act say that a local authority must consider whether any proposed management structures and funding arrangements are “suitable”.[26]Indigo is named as both a licence holder and manager. It is agreed by the Respondent that it was not the manager when the application for a licence was made. The Respondent can only say that there is no evidence to suggest that Indigo is not a fit and proper person. The evidence is that Indigo is owned by Mr. Lawson. There is clear evidence that Mr. Lawson’s management qualities are not acceptable which may or may not be true, but has simply not been investigated. Assumptions have been made which, according to the evidence submitted, did not involve any such investigation.[27]As Judge Edgington said, obiter, in his original judgment at paragraph 21 there have been serious allegations about incompetent management on the part of Mr. Lawson and historic facts about the selective licences need to be explained. Both the Applicant and the Tribunal needed to know what investigations have been undertaken by the Respondent into these allegations and facts.[28]The requirement in section 64 of the 2004 Act that the licence holder must be “out of all the persons reasonably available to be the licence holder in respect of the house, the most appropriate person to be the licence holder” does not appear, on the evidence submitted, to have been considered by the Respondent, particularly with Indigo which was neither a freehold owner nor the manager when the application was made.[29]The Tribunal did consider whether it should adjourn this application to enable the Respondent to deal with these matters. However, it was considered, on balance, that the Respondent has been given more than sufficient warning that these were matters which the Tribunal wanted answers to and it was decided not to adjourn. Conclusions[30]The Tribunal concludes that as the property is an HMO, the Respondent should have considered whether there were suitable management structures and funding arrangements in place and, in addition, whether the proposed management arrangements were satisfactory. Those considerations should have involved an investigation into the Applicant’s allegations. It is understood that the other freehold owners did not object but they do not live at the property and may have been completely unaware of the problems faced by the Applicant.[31]It is also necessary to deal with the other concern expressed by the Applicant namely that she is an owner occupier and this whole procedure is against her human rights. The problem she may not appreciate is that whilst most HMOs can apply to a building or part of a building, i.e. her flat could be excluded, this is an application which relies on section 257 of the 2004 Act. That section and section 254 say that where a building consists of a converted block of flats and satisfies the definition set out in section 257, which according to the Upper Tribunal this does, then it is the building which is the HMO. An HMO must have a licence holder.[32]Further, the Applicant should know that the position of her mortgage or the effect on the value of her ownership, are not matters which have to be considered by the local authority, although the Tribunal obviously has some sympathy for these concerns.[33]Thus, on the evidence produced by the parties, the Tribunal is satisfied that whilst a licence could be issued to the 3 other freehold owners, assuming that the Applicant still does not want to be a licensee, it is not satisfied either that there are suitable management structures and/or funding arrangements in place, or that either Indigo or Mr. Lawson are either fit and proper or ‘satisfactory’ persons or managers. This appeal succeeds. ………………………………….. Judge Edgington 7th September 2020 ANNEX - RIGHTS OF APPEAL i. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to the First-tier Tribunal at the Regional office which has been dealing with the case. ii. The application for permission to appeal must arrive at the Regional office within 28 days after the Tribunal sends written reasons for the decision to the person making the application. iii. If the application is not made within the 28 day time limit, such application must include a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit. iv. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal, and state the result the party making the application is seeking. --- decision_2.pdf --- 1 First-tier Tribunal Property Chamber (Residential Property) Case reference : CHI/21UD/HML/2019/0017 Property : 10 Warrior Gardens, St. Leonards-on-Sea, East Sussex, TN37 6EB Applicant : Linda Turner Respondent : Hastings Borough Council Application : Appeal against grant of House in Multiple Occupation (“HMO”) licence (Part 3, Schedule 5 of the Housing Act 2004 (“the 2004 Act”)) Application date : 8th August 2019 (rec’d 13th) Tribunal : Judge Edgington Richard Athow FRICS MIRPM Peter Gammon MBE BA ____________________________________________ DECISION _________________________________ Crown Copyright ©[1]The appeal against the granting of this particular HMO licence succeeds and Respondent’s decision to grant the existing licence, assuming that it has been renewed, is reversed in accordance with paragraph 34(3) of Schedule 5 to the 2004 Act. Reasons Introduction[2]The Applicant is the long leaseholder of and lives in the ground floor flat at the property which is a terraced house in central St. Leonards-on-Sea. She also has a share of the freehold title.[3]The Applicant has appealed against the decision of the Respondent to grant an HMO licence for the property. As one of the grounds for appeal was that the property was not an HMO, it was decided to have that matter determined as a preliminary issue. Judge Edgington determined that the property was not an HMO. 2[4]Following an appeal to the Upper Tribunal, that decision was set aside which had the effect of reinstating the HMO licence pending a determination on the other grounds of appeal against the Respondent’s decision to grant the licence. The Upper Tribunal did not say that Judge Edgington should be excluded from this determination and, as can be seen, this Tribunal now consists of 3 members. Judge Edgington continues to be involved as it is generally accepted that continuity of judiciary is good practice.[5]In her initial application, the Applicant says that she has had many problems with Ian Lawson who applied for the licence on behalf of what appears to be his company, Indigo Properties UK Ltd. (“Indigo”). Mr. Lawson is the long leasehold owner of flat 1 and Indigo is the long leasehold owner of flat 2. Flat 1 is immediately above the Applicant’s flat.[6]For the avoidance of doubt, the Register of HMO Licences, being exhibit DW10 in the bundle with ‘page 465’ endorsed in the top right hand corner, states that the licence was issued on the 16th July 2019 and the licence holders are Indigo, Anne Barett, Ralph Black and Lewis Brown. The manager is said to be Indigo.[7]The Applicant asked for a determination on the papers and the Respondent agreed. The appeal is against the granting of the licence and sets out 5 pages of single spaced writing and printing which, apart from saying that the property is not an HMO, says that the licence has been wrongly granted and the whole situation is unjust.[8]The Tribunal has considered all of the papers filed including those filed originally, those submitted to the Upper Tribunal and statements from Deborah Jane Watts, an EHO employed by the Respondent dated 27th July 2020, and Christine Barkshire- Jones, chief legal officer of the Respondent dated 28th July 2020. The Applicant has also filed an 8 page statement which is undated but is said to be filed in response to Judge Edgington’s directions order of 9th July 2020. All exhibits to those statements have also been considered. The Applicant’s case[9]In essence, the Applicant points out that(a) all the licensees live at or trade from premises far from the property and are therefore unsuitable to be licence holders or managers(b) that none of the licensees have ‘control’ of the building(c) Mr. Lawson has historically had tenants who caused a continuous nuisance by having loud music playing and, presently, having 2 dogs who bark all the time(d) there was a water leak from Mr. Lawson’s flat which she had asked him to deal with but he did not. As a result she suffered an electric shock one night when she got up to see what was happening and turned her light on to see that water had leaked on to her floor. She had to get a plumber out.(e) works organised by Mr. Lawson were often over charged or not done at all e.g. to repair a roof.(f) the classification of the property as an HMO may affect her mortgage and the value of her property The Respondent’s case[10]The Respondent says that all the licensees are responsible people and the only reasons that people away from the property have been appointed is because the 3 applicant, as the only freehold owner living at the property, refused to be involved. There are no indications of any of the offences or conduct set out in section 66 of the 2004 Act, as amended. The Law[11]The matters to be considered by a local authority in granting or refusing to grant a licence are set out in sections 64 and 66 of the 2004 Act as amended.[12]A licence holder has to be a fit and proper person and “is, out of all the persons reasonably available to be the licence holder in respect of the house, the most appropriate person to be the licence holder”.[13]The manager has to be either “the person having control of the house, or a person who is an agent or employee of the person having control of the house”.[14]It is also provided that “the proposed management arrangements for the house are otherwise satisfactory”.[15]Section 66 sets out a list of offences which licensees or managers cannot have committed and as there is clear evidence that none of those involved in this case have committed or been associated with anyone who has committed such offences, this point is irrelevant. However section 66 also says that people involved in the management of the building must have “a sufficient level of competence to be so involved” and the local authority must consider “whether any proposed management structures and funding arrangements are suitable”. Discussion[16]It has been said before that the approach of the Respondent has been unfortunate, to say the least. Its first letter to the Applicant was aggressive in tone and clearly caused a great deal of distress to the Applicant. Judge Edgington raised issues as obiter matters at the end of his decision and Judge Cooke said at the end of her decision that she acknowledged that the Applicant had been caused so much distress. She went on to say “I hope that the parties may be able to discuss matters in a way that will offer some reassurance to the respondent about the many concerns that she has raised”.[17]These requests and suggestions appear to have been ignored. They were intended to give the Respondent as clear a message as possible that the Applicant has raised concerns which, even if the Respondent disagrees with them, should, even as a matter of reasonable public relations by a public authority, be addressed and dealt with.[18]The Respondent’s witness, Deborah Watts, in paragraph 17 of her recent statement has even, as the Applicant suggests, raised quite unnecessary issues such as the refusal of the Applicant to allow Mr. Lawson or his company to be freehold owners. Apart from situations such as compulsory purchase, it is an absolute right of the owner of a freehold title to transfer or refuse to transfer title to anyone.[19]However, at the end of the day, this Tribunal’s duty is to determine whether there are any grounds for saying that this local authority has made an incorrect decision when considering the provisions of sections 64 and 66 of the 2004 Act. According to the Upper Tribunal, the property is an HMO and there must be a licence holder. 4[20]The Respondent tried to get the Applicant involved as a licence holder but she refused. None of the other freeholders or long lessees appear to live at or near the property which made appointing a licence holder near the property an impossibility.[21]There is no evidence to suggest that the licence holders or the manager have any convictions or involvement with persons with such convictions. As to anyone having control of the building, it does seem clear that Mr. Lawson has actually arranged for works to be undertaken to the building over the years and therefore does appear to have sufficient control to undertake management of the common parts.[22]The Respondent’s approach seems to be encapsulated in paragraph 37 of the statement of Christine Barkshire-Jones wherein she says that “the Respondent has taken a pragmatic approach in granting the licence to” Indigo and the other freehold owners apart from the Applicant. The Respondent’s approach[23]Whilst proportionality demands that pragmatism is appropriate on occasions, this is a case where the Applicant objects strongly to the licence being granted and there is therefore an obligation on the Respondent to carefully consider the law and explain its conclusions in detail to the Applicant.[24]In Judge Edgington’s directions, he orders the Respondent to file a statement setting out its reasons for saying that Indigo is a suitable licence holder, pointing out that its address is some 40 miles away from the property. In paragraph 6 of the statement of Deborah Jane Watts, she records that “it was decided that as there was no management company in place all the freeholders would be named as licence holders in addition to” Indigo.[25]The Respondent’s response to the direction in Ms. Barkshire-Jones’ statement starts with the comment that “the phrase ‘suitable licence holder’ is not a phrase used in the Housing Act 2004”. Sub-sections 66(5) and (6) of the 2004 Act say that a local authority must consider whether any proposed management structures and funding arrangements are “suitable”.[26]Indigo is named as both a licence holder and manager. It is agreed by the Respondent that it was not the manager when the application for a licence was made. The Respondent can only say that there is no evidence to suggest that Indigo is not a fit and proper person. The evidence is that Indigo is owned by Mr. Lawson. There is clear evidence that Mr. Lawson’s management qualities are not acceptable which may or may not be true, but has simply not been investigated. Assumptions have been made which, according to the evidence submitted, did not involve any such investigation.[27]As Judge Edgington said, obiter, in his original judgment at paragraph 21 there have been serious allegations about incompetent management on the part of Mr. Lawson and historic facts about the selective licences need to be explained. Both the Applicant and the Tribunal needed to know what investigations have been undertaken by the Respondent into these allegations and facts. 5[28]The requirement in section 64 of the 2004 Act that the licence holder must be “out of all the persons reasonably available to be the licence holder in respect of the house, the most appropriate person to be the licence holder” does not appear, on the evidence submitted, to have been considered by the Respondent, particularly with Indigo which was neither a freehold owner nor the manager when the application was made.[29]The Tribunal did consider whether it should adjourn this application to enable the Respondent to deal with these matters. However, it was considered, on balance, that the Respondent has been given more than sufficient warning that these were matters which the Tribunal wanted answers to and it was decided not to adjourn. Conclusions[30]The Tribunal concludes that as the property is an HMO, the Respondent should have considered whether there were suitable management structures and funding arrangements in place and, in addition, whether the proposed management arrangements were satisfactory. Those considerations should have involved an investigation into the Applicant’s allegations. It is understood that the other freehold owners did not object but they do not live at the property and may have been completely unaware of the problems faced by the Applicant.[31]It is also necessary to deal with the other concern expressed by the Applicant namely that she is an owner occupier and this whole procedure is against her human rights. The problem she may not appreciate is that whilst most HMOs can apply to a building or part of a building, i.e. her flat could be excluded, this is an application which relies on section 257 of the 2004 Act. That section and section 254 say that where a building consists of a converted block of flats and satisfies the definition set out in section 257, which according to the Upper Tribunal this does, then it is the building which is the HMO. An HMO must have a licence holder.[32]Further, the Applicant should know that the position of her mortgage or the effect on the value of her ownership, are not matters which have to be considered by the local authority, although the Tribunal obviously has some sympathy for these concerns.[33]Thus, on the evidence produced by the parties, the Tribunal is satisfied that whilst a licence could be issued to the 3 other freehold owners, assuming that the Applicant still does not want to be a licensee, it is not satisfied either that there are suitable management structures and/or funding arrangements in place, or that either Indigo or Mr. Lawson are either fit and proper or ‘satisfactory’ persons or managers. This appeal succeeds. ………………………………….. Judge Edgington 7th September 2020 ANNEX - RIGHTS OF APPEAL 6 i. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written application for permission must be made to the First-tier Tribunal at the Regional office which has been dealing with the case. ii. The application for permission to appeal must arrive at the Regional office within 28 days after the Tribunal sends written reasons for the decision to the person making the application. iii. If the application is not made within the 28 day time limit, such application must include a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the application for permission to appeal to proceed despite not being within the time limit. iv. The application for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal, and state the result the party making the application is seeking.