20 Luton Road, E13 8HD: LON/00BB/HSR/2015/0016 LON/00BB/HSR/2015/0016
DECISION
[39]Whilst we accept that the Respondent has faced considerable difficulties in his life and continues to have challenges with paperwork and computer processes, he has nevertheless, despite these problems and to his considerable credit, built up a business not only in construction but also in property ownership and letting.[40]It must be the case that the Respondent, in order to have made such a success of himself in business, has had to deal with numerous difficulties in terms of administration and official processes and he has no doubt, where he has been unable to deal with these himself, had the available resource or assistance. We are told that he has managed, in respect of all his other properties, to comply with his statutory obligations and, those obligations would involve form filling and computer processing.[41]We accept that the evidence shows that the Respondent attempted to register online for an account with Newham after receiving the letter from the Applicant regarding the requirement to licence. However, it appears to us that, whilst he made some effort, he could, and should have, gone further in seeking assistance from friends, family or business associates /agents to complete the process. There are, no doubt, many small landlords in the borough of Newham who may face difficulties in the licensing process, for example those whose first language may not be English. It is clear that the Respondent has a significant business in the letting of property and as such, should have at his disposal the necessary resources to deal with that business.[42]We note and sympathise with the problems faced by landlords who do not live in the borough of Newham and who may have been unaware of the introduction of the licensing requirement on 1 January 2013. However, in this case, that particular problem is not an issue because the letter dated 3 April 2014 sent to Mr O’Meara, which he had received informed him that if he applied for the licence within 14 days, no further action would be taken against him. It was the failure to comply with this letter in time that has led to these proceedings.[43]Nothing turns on the issue of the ‘fraudulent tenancy’. Even if the tenancy submitted with the Housing Benefit application was not genuine, the fact remains that there was in existence a tenancy between the persons named in that tenancy agreement at the same rent as quoted in the tenancy agreement. Regardless of whether the correct tenancy agreement was sent with the Housing Benefit application, the occupants of the Property were entitled to that benefit. The fact that the benefit was paid into the bank account of Ms Da Silver, it is neither here nor there, as an occupant of the property she was entitled to the benefit. The lack of knowledge on the part of the Respondent as to the fact that his tenants were in receipt of Housing Benefit is immaterial.[44]As a matter of general approach, we consider that in the normal run of events (and of course taking into account all other relevant circumstances) a tribunal should take account of how much a landlord is actually making by way of net profit from a property.[45]We do not consider that the fact that the Property was not making a profit in terms of rental income over the mortgage at the time is relevant. We say this because to take the mortgage into account would open up a complex consideration of ‘profit’ in relation to the Property, this would involve an investigation as to the capital gain in the Property value during this time. It seems to us that the correct approach for a mortgage cost in most cases is to treat those mortgage payments as the use to which the landlord puts his profit from the letting – i.e. by way of investment in the hope and expectation that property prices will continue their long-term rise. This approach can be contrasted with the landlord who may rent the property in question himself and then sub-let at a profit. In that case, the rent paid by the landlord clearly is a pure expense to him from which he receives no gain.[46]We do however consider that the Service Charges due on the Property can and should be taken into account as reducing the profit made on the letting. The Service Charge for the year covering the period in question was £1,523.03. We have taken a daily rate for that Service Charge and applied that to the period of re-claim. The adjusted expense of the Service Charge for the period of re-claim is therefore £761.51. In the circumstances of this case, we consider that the proper approach is to reduce the Rent Repayment Order by this sum.[47]In looking at the amount of the repayment order in general, we have taken into account that, from the evidence disclosed by the Respondent, he does not appear to be impecunious. 48.. As to the criticisms of the Local Authority’s lack of assistance and delay we comment as follows; as we have said above, Mr O’Meara should have employed his own resources to cope with the licensing requirements for the Property; so far as delay is concerned, the Local Authority has to deal with a vast number of properties with an increasingly tight budget and cannot be expected to operate without some delay, that delay was in not any event, in our view, unreasonable. A comment on the evidence and the Local Authority’s conduct[49]We feel compelled to make a comment regarding some of the evidence in this case. The Local Authority included in its bundle, what appears to be an online news report regarding the alleged use of illegal workers by Mr O’Meara’s company, Lorclon. Quite what the relevance or probative value of this material is, we are not sure. The inclusion of this material appears to have been solely for the purpose of discrediting Mr O’Meara. A Local Authority should not be acting in this way, it has a duty as a public authority to be, so far as it is possible, even handed. Mr O’Meara was quite rightly upset at the inclusion of this material and we share his concern.[50]As a result of Mr O’Meara’s late licensing of his property, when the licence was granted to him, the license was for a period of just one year whereas and, as far as we understand it, the normal period would be five years. There is no suggestion that Mr O’Meara is a bad landlord or that there are any concerns regarding the Property or the tenants. Given that Mr O’Meara has had to pay the Respondent’s costs when signing the caution, that he has received a caution and that he now has to repay Housing Benefit, we can see no reason other than, what may be seen as, an arbitrary vindictive approach, for only granting the licence for one year. Mark Martynski, Tribunal Judge 23 March 2016