Simon Fletcher & Anor v Portsmouth City Council [2026] UKUT 234 (LC)

[2026] UKUT 234 (LC)

Case No LC-2025-331

IN THE UPPER TRIBUNAL (LANDS CHAMBER)

AN APPEAL AGAINST A DECISION OF THE FIRST-TIER TRIBUNAL (PROPERTY CHAMBER)

Ref: CHI/00MR/HML/2024/0001 & 0002

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Between

SIMON AND IVA FLETCHERAppellant

PORTSMOUTH CITY COUNCILRespondent

26 June 2026

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

HOUSING – HOUSE IN MULTIPLE OCCUPATION – whether licence conditions appropriate – whether regulation 15(1)-(3) of the Provision of Services Regulations 2009 applies to the licence conditions – approach where the same conditions are included in all licences

1 Sheffield Road, Fratton, Portsmouth, PO1 5DP

His Honour Judge Johns KC

Hearing Hearing date: 21 April 2026

Written submissions: 28 April 2026

Michael Field (instructed by Freemans Solicitors) for appellants

Mathew McDermott (instructed by Portsmouth City Council, Legal Services) for respondent

The following cases were referred to in this decision:

Hussain (Nasim) and others v Waltham Forest London Borough Council[2023] EWCA Civ 733

R (Gaskin) v Richmond upon Thames LBC[2018] EWHC 1966 (Admin)

R (Hemming) v Westminster City Council[2015] UKSC 25

Hemming v Westminster City Council C316/15

Harmsen C341/14

Kirchstein C-393/17

Cali Apartments SCI C-724/18

Nottingham City Council v Parr[2018] UKSC 51

Date 2026-06-26

Introduction

[1]Part 2 of the Housing Act 2004 (the 2004 Act) requires every house in multiple occupation (HMO) to which the Part applies to be licensed. There are specified conditions which must be included in such a licence – see the 2004 Act at s.67(3) and Schedule 4. The local housing authority also has the power to include other conditions it considers appropriate – see s.67(1). This appeal is about conditions included by the respondent local housing authority, Portsmouth City Council (the Council), in an HMO licence (the Licence) granted to the appellants, Simon Fletcher and Iva Fletcher (the Fletchers), in respect of 1 Sheffield Road, Portsmouth PO1 5DP (the Property).

Factual background and FTT Decision

[2]The Licence was granted to the Fletchers on 29 January 2024. It included 36 conditions. On the evidence before the First-Tier Tribunal, Property Chamber (the FTT), those conditions are in a standard form which is applied across the city of Portsmouth and which aligns the Council’s mandatory licensing of HMOs with its other licensing schemes. They were arrived at after consultation.

[3]The Fletchers appealed to the FTT against many of the conditions in the Licence. The FTT also dealt on the same occasion with an appeal by Mr Fletcher in respect of like conditions in a licence granted to him for another HMO, 38 Hudson Road, Southsea, PO5 1HD.

[4]Some variations to the conditions in the Licence, as well as in the licence for 38 Hudson Road, were made by the FTT in its decision which, as reviewed, is dated 30 June 2025 (the Decision). But the majority of conditions challenged were not varied on appeal.

This appeal

[5]The Fletchers now appeal with the permission of this Tribunal given by the Deputy Chamber President on 19 September 2025.

[6]There are six grounds of appeal, each relating to one or more conditions in the Licence challenged by the Fletchers. It is convenient to tackle each ground of appeal in turn, identifying which of the conditions in the Licence such ground applies to, and setting out, so far as necessary, in full or in summary the substance of those conditions challenged.

[7]But first, it is helpful to describe the proper approach to appeals against licensing decisions and outline the relevant statutory framework for those decisions.

Approach to appeals and the statutory framework

[8]The task of the FTT on appeals from a licensing decision under Part 2 of the 2004 Act has been clarified by the Court of Appeal in Hussain (Nasim) and others v Waltham Forest London Borough Council

[2023] EWCA Civ 733

. It is to determine whether the decision under appeal was wrong at the time when it was taken, where “wrong” means that the FTT disagrees with the decision despite having accorded it the deference or special weight appropriate to a decision involving the exercise of judgment by the body tasked by Parliament with the primary responsibility for making licensing decisions. Put simply, the question the FTT must address is, does the tribunal consider that the authority should have decided the application differently? The FTT is not asking whether the decision of the authority was within the range of decisions reasonably open to it, as might be done on a judicial review.

[9]As to an appeal to this Tribunal from the FTT’s decision, while the argument for the Fletchers described each of their complaints about the decision as an error of law, an appeal from the FTT on a decision under the 2004 Act is not confined to errors of law. An appeal also lies on other points under s.231C of the 2004 Act. In any event, as stated in the Upper Tribunal (Lands Chamber) Practice Directions at [10.3], what is a point of law is widely interpreted. The question for this Tribunal is therefore simply whether the FTT went wrong in its task as described in Hussain.

[10]Insofar as it is concluded on this appeal that the FTT was in error, it became common ground at the hearing that, in the interests of saving costs and avoiding delay, I should go on and decide whether the challenged conditions should be varied rather than remitting the case to the FTT to make those decisions again.

[11]It is s.67 of the 2004 Act which governs the inclusion of conditions in HMO licenses. It provides as follows:

“67 Licence conditions (1) A licence may include such conditions as the local housing authority consider appropriate for regulating all or any of the following– (a) the management, use and occupation of the house concerned, and (b) its condition and contents. (2) Those conditions may, in particular, include (so far as appropriate in the circumstances)– (a) conditions imposing restrictions or prohibitions on the use or occupation of particular parts of the house by persons occupying it; (b) conditions requiring the taking of reasonable and practicable steps to prevent or reduce anti-social behaviour by persons occupying or visiting the house; (c) conditions requiring facilities and equipment to be made available in the house for the purpose of meeting standards prescribed under section 65; (d) conditions requiring such facilities and equipment to be kept in repair and proper working order; (e) conditions requiring, in the case of any works needed in order for any such facilities or equipment to be made available or to meet any such standards, that the works are carried out within such period or periods as may be specified in, or determined under, the licence; (f) conditions requiring the licence holder or the manager of the house to attend training courses in relation to any applicable code of practice approved under section 233. (3) A licence must include the conditions required by Schedule 4. (4) As regards the relationship between the authority's power to impose conditions under this section and functions exercisable by them under or for the purposes of Part 1 (‘Part 1 functions’)– (a) the authority must proceed on the basis that, in general, they should seek to identify, remove or reduce category 1 or category 2 hazards in the house by the exercise of Part 1 functions and not by means of licence conditions; (b) this does not, however, prevent the authority from imposing licence conditions relating to the installation or maintenance of facilities or equipment within subsection (2)(c) above, even if the same result could be achieved by the exercise of Part 1 functions; (c) the fact that licence conditions are imposed for a particular purpose that could be achieved by the exercise of Part 1 functions does not affect the way in which Part 1 functions can be subsequently exercised by the authority. (5) A licence may not include conditions imposing restrictions or obligations on a particular person other than the licence holder unless that person has consented to the imposition of the restrictions or obligations. (6) A licence may not include conditions requiring (or intended to secure) any alteration in the terms of any tenancy or licence under which any person occupies the house.”

[12]Paragraph 1 of Schedule 4 contains the principal conditions required by Schedule 4 to be included in licences under Part 2 of the 2004 Act. Additional mandatory conditions appear in paragraphs 1A to 1C. It is sufficient to set out paragraphs 1 and 1C (omitting the headings). “1(1) A licence under Part 2 or 3 must include the following conditions. (2) Conditions requiring the licence holder, if gas is supplied to the house, to produce to the local housing authority annually for their inspection a gas safety certificate obtained in respect of the house within the last 12 months. (3) Conditions requiring the licence holder–(a) to keep electrical appliances and furniture made available by him in the house in a safe condition;

(b) to supply the authority, on demand, with a declaration by him as to the safety of such appliances and furniture;

(c) where the house is in England, additionally— (i) to ensure that every electrical installation in the house is in proper working order and safe for continued use; and (ii) to supply the authority, on demand, with a declaration by him as to the safety of such installations;

(d) for the purposes of paragraph (c) "electrical installation" has the meaning given in regulation 2(1) of the Building Regulations 2010. (4) Conditions requiring the licence holder– (za) where the house is in England— (i) to ensure that a smoke alarm is installed on each storey of the house on which there is a room used wholly or partly as living accommodation, and (ii) to keep each such alarm in proper working order; (a) where the house is in Wales, to ensure that smoke alarms are installed in the house and to keep them in proper working order; (b) in either case, to supply the authority, on demand, with a declaration by him as to the condition and positioning of such alarms. (4A) Where the house is in England, conditions requiring the licence holder— (a) to ensure that a carbon monoxide alarm is installed in any room in the house which is used wholly or partly as living accommodation and contains a fixed combustion appliance other than a gas cooker; (b) to keep any such alarm in proper working order; and (c) to supply the authority, on demand, with a declaration by him as to the condition and positioning of any such alarm. (5) Conditions requiring the licence holder to supply to the occupiers of the house a written statement of the terms on which they occupy it. (6) In sub-paragraph (4A) “room” includes a hall or landing. (7) For the purposes of sub-paragraphs (4) and (4A), a bathroom or lavatory is to be treated as a room used as living accommodation. … 1C. Where the HMO is in England, a licence under Part 2 must include conditions requiring the licence holder to comply with any scheme which is provided by the local housing authority to the licence holder and which relates to the storage and disposal of household waste at the HMO pending collection” order and safe for continued use; and there is a room used wholly or partly as living accommodation, and

which is used wholly or partly as living accommodation and contains a fixed

[13]Also relevant to this appeal is the power in s.235 of the 2004 Act to give notice requiring the production of documents the local housing authority reasonably requires. That section is in these terms. “(1) A person authorised in writing by a local housing authority may exercise the power conferred by subsection (2) in relation to documents reasonably required by the authority–(a) for any purpose connected with the exercise of any of the authority's functions under any of Parts 1 to 4 in relation to any premises, (aa) for any purpose connected with the exercise of any of the authority's functions under this Part in relation to any qualifying residential premises within the meaning given by section 2B, or

(b) for the purpose of investigating whether any offence has been committed under any of Parts 1 to 4 in relation to any premises or under this Part in relation to any qualifying residential premises within the meaning given by section 2B. (2) A person so authorised may give a notice to a relevant person requiring him– (a) to produce any documents which– (i) are specified or described in the notice, or fall within a category of document which is specified or described in the notice, and (ii) are in his custody or under his control, and (b) to produce them at a time and place so specified and to a person so specified. (3) The notice must include information about the possible consequences of not complying with the notice. (4) The person to whom any document is produced in accordance with the notice may copy the document. (5) No person may be required under this section to produce any document which he would be entitled to refuse to provide in proceedings in the High Court on grounds of legal professional privilege. (6) In this section ‘document’ includes information recorded otherwise than in legible form, and in relation to information so recorded, any reference to the production of a document is a reference to the production of a copy of the information in legible form. (7) In this section ‘relevant person’ means, in relation to any premises, a person within any of the following paragraphs– (a) a person who is, or is proposed to be, the holder of a licence under Part 2 or 3 in respect of the premises, or a person on whom any obligation or restriction under such a licence is, or is proposed to be, imposed, (b) a person who has an estate or interest in the premises,

(d) a person who is, or is proposing to be, otherwise involved in the management of the premises,

(e) a person who occupies the premises.” power conferred by subsection (2) in relation to documents reasonably required by the authority– which is specified or described in the notice, and in legible form, and in relation to information so recorded, any reference to the within any of the following paragraphs–

Ground 1

[14]Ground 1 for this appeal concerns condition 18 in the Licence. Condition 18 should be set out in full. “The licence holder is to ensure that the requirements of landlord and tenant legislation are properly adhered to. In particular, the licence holder will ensure that written terms of tenancy are to be provided for all occupiers. These terms will describe and give details of:a. The type of tenancy, its duration and terms of notice.

b. The amount of rent due together with dates and method of payment, and the circumstances when the rent may be reassessed.

c. The amount of deposit taken, how it is held and the terms for its return.

d. An inventory of contents and condition at the commencement of the tenancy.

e. The means of contacting the property owner and/or property manager to report repairs, etc. The Licence Holder must, on demand, ensure that the Authority is provided with a copy of the written terms of tenancy described above*”

[15]The asterisk appears to be designed to draw attention to a note at the foot of the conditions in the Licence. “Note: Where on demand is stated within these licence conditions, this means within 7 (seven) days from the written request by the licensing authority.”

[16]A number of points are advanced under this ground and for which permission to appeal was granted by this Tribunal. One, that condition 18 is contrary to s.67(5) and s.67(6) in that it will involve altering existing tenancy terms and oblige the tenants to agree those terms. Two, that it does not properly reflect the condition in Schedule 4, para.1(5). Condition 18 refers only to tenants, not occupiers more widely. Three, that condition 18 also fails to reflect the para.1(5), Schedule 4 condition in going well beyond it. Condition 18 specifies the substance of tenancy terms, not merely requires a written statement of such terms as there are.

[17]The FTT dealt with condition 18 in this way in the Decision. “176. Condition 18: We would not vary the same. 177. We are satisfied that the condition as worded provides a clear explanation as to what requirements the Respondent considers suitable for such lettings. We agree. We note Mr Fletcher does provide agreements. Equally he provides inventories. We do not accept this condition would provide any additional administrative burden and in fact contains requirements which aid and assist good management.”

[18]At the hearing of this appeal, the Council submitted that the FTT was right in the Decision not to vary condition 18. Mr McDermott, appearing for the Council, argued that condition 18 did exactly what para.1(5) of Schedule 4 requires; that the licence holder supply to the occupiers a written statement of the terms on which they occupy. He submitted that Schedule 4 does not set out the text of conditions but rather specifies goals. It is for the local housing authority to decide how to achieve those goals and to frame conditions accordingly. Nor did condition 18 offend s.67(5) or (6). He pointed to evidence before the FTT from the Council to the effect that the condition would only be applied to new, not existing, tenancies. He also pointed to the evidence as an answer to the complaint that condition 18 referred to tenants, not occupiers. The evidence before the FTT was that the occupiers at the Property were tenants, the rooms being used as student lets, save for occasional short visits by members of the Fletchers’ family.

[19]The reasoning of the FTT appears to regard condition 18 as extending to the substance of the arrangements between the licence holders and the tenants. I take the same view. For example, condition 18 specifies that the terms of the tenancy will include detailing an inventory of contents and condition at the commencement of the tenancy. It follows, in my judgment, that the condition is not justified by the list of mandatory conditions in Schedule 4, contrary to the submission for the Council. Mr McDermott is right that Schedule 4 does not set out the precise text of conditions, but it is plain from para.1(5) that it is concerned only with a requirement to supply a written statement of terms, and does not extend to prescribing the substance or scope of those terms. That condition 18 does so extend also means, in my judgment, that it offends s.67(5) and s.67(6). In that regard, I do not consider it can be read as applying only to new lettings. There are no words in condition 18 which confine its operation in that way. That it is not limited to new lettings is rather underlined by the Council’s case that the condition is intended to give effect to para.1(5) of Schedule 4. The requirement to give a written statement of terms could be expected to apply to all occupiers, not only new occupiers.

[20]It follows from these conclusions that it is my judgment the FTT did go wrong in its task when dealing with condition 18 and that the Council was wrong in the different sense that I disagree with its decision. The appropriateness of a condition must be judged, it seems to me, in light of the justification offered for it. Here, the points said to justify condition 18 in the Licence do not point to it being an appropriate condition.

[21]It is unnecessary to decide whether it is fatal to condition 18 that it refers to tenants rather than occupiers. While it is plainly safest for local housing authorities to follow closely the wording in Schedule 4, conditions should generally be chosen and framed having regard to the particular property being licensed. Here, paying occupiers at the Property were, on the evidence, tenants. It may be that, in those circumstances, condition 18 did properly reflect para.1(5) of Schedule 4. As to the terms of a licence going beyond the mandatory conditions, I would not go so far as saying that any extension to the mandatory conditions in Schedule 4 is illegitimate. As long as those mandatory conditions are included in a licence, that there are also further requirements included might not necessarily be fatal. If those can be regarded as additional conditions which have their own justification, they may be appropriate within s.67(1) and (2). That is consistent with the explanatory notes to the 2004 Act at para.197. It is there said of conditions under s.67(1) and (2) that, “Any such conditions will be in addition to those laid out in Schedule 4 which sets out mandatory conditions”.

[22]There was a further argument made for the Fletchers on condition 18 at the hearing. It was that, in extending to the substance of the arrangements with occupiers, it went beyond “the management, use and occupation of the house” and so fell entirely outside s.67(1) of the 2004 Act. This point did not form part of the grounds of appeal so there was no permission for it. It is best addressed in a case where it arises squarely and is fully argued. I therefore say no more about it.

[23]Condition 18 will be varied so that it simply mirrors the mandatory condition in Schedule 4, as proposed by the Fletchers before the FTT (in the addendum to their statement of case). “The licence holder must supply to the occupiers of the house a written statement of the terms on which they occupy it.”

Ground 2

[24]Ground 2 is a challenge to conditions which require documents to be given to the Council on request or on demand. It is said that these subvert s.235 of the 2004 Act. The conditions specified in the grounds of appeal are conditions 18, 20 and 32.

[25]Condition 18 has already been set out. Conditions 20 and 32 are as follows:

“20. The Licence Holder must ensure that references are requested from persons who wish to occupy the house and wherever possible, are obtained. When referencing consideration must be given to the tenant’s history, credit and right to rent checks. The Licence Holder must, on demand, ensure that the Council is provided with a copy of any such references and records.” “32. A written record of visual inspections of the property undertaken by the licence holder relating to the overall condition of the property and Management Regulations shall be maintained by the licence holder and produced to the council when requested.”

[26]These must be read with the note at the foot of the conditions already set out at [15] above.

[27]By s.235 Parliament has provided for a right to demand documents and has taken care to ensure that the notice specifies very clearly how it is to be complied with (s.235(2)(b)) and warns clearly of the possible consequences of non-compliance (s.235(3)).

[28]Given s.235 and its safeguards, it does seem to me that conditions which provide for production of documents on demand outside of s.235 at the very least need particular justification. Such particular justification is lacking here. In those circumstances, I would expect the FTT on appeal to strike down at least those parts of the conditions requiring production of documents on demand or request.

[29]The FTT nevertheless upheld these conditions. It dealt with the s.235 argument as follows in the Decision at [151]. “We do not accept this argument. We are not satisfied there is any reason why a condition cannot or should not require a licence holder to keep and retain records. We accept the evidence and explanation given by Mrs Hardwick that this places a positive requirement upon a licence holder which goes beyond Section 235 of the Act. We do not find that any conditions requiring a landlord to keep and retain records which could be requested under Section 235 of the Act subverts the intent of that section. To the contrary we can see how this furthers the aim by placing a positive duty on licence holders to retain and hold such documents so if a request is made they produce the same.”

[30]I agree with that, so far as it goes. The keeping of records makes much sense as a condition. But this does not meet the s.235 point; focussing instead, as it does, on the requirement to keep records.

[31]Mr McDermott sought to support these conditions by pointing to the fact that some of the mandatory conditions in para.1 of Schedule 4 require the production of documents to the local housing authority on demand. That is true. But they are of a different nature. They are declarations to be made by the licence holder, not underlying records. Those mandatory conditions are not therefore in any tension with s.235 of the 2004 Act. Unlike conditions 18, 20 and 32 in the Licence. I would add that while it must be acknowledged that there is one mandatory condition requiring production to the local housing authority of an underlying document, namely the condition in para.1(2) of Schedule 4 concerning a gas safety certificate, that is in a different form; requiring, as it does, production annually, not on demand.

[32]Mr McDermott also rightly emphasised the broad discretion given to the local housing authority by s.67(1) of the 2004 Act to impose appropriate conditions. This was a submission he made generally on the appeal. But individual conditions must still be justified as appropriate. Here, no real justification is offered for conditions which cover like ground to s.235 but without its safeguards.

[33]For these reasons, I consider that the FTT was in error in upholding these conditions and also that the Council was wrong to include them to the extent that they went beyond the keeping of records and gave the right to demand their production outside of s.235 of the 2004 Act.

[34]Conditions 20 and 32 will be varied so as to remove the obligation to produce the documents to the Council on demand or request, but not otherwise.

Ground 3

[35]Ground 3 for the appeal relied on regulation 15(1)-(3) of the Provision of Services Regulations 2009 (the Regulations). “(1) An authorisation scheme provided for by a competent authority must be based on criteria which preclude the competent authority from exercising its power of assessment in an arbitrary manner. (2) The criteria must be—… (b) justified by an overriding reason relating to the public interest, (c) proportionate to that public interest objective, (d) clear and unambiguous, (e) objective, (f) made public in advance, and (g) transparent and accessible. (3) The conditions imposed by a competent authority for granting authorisation for a new establishment under an authorisation scheme must not duplicate requirements and controls—(a) to which the provider of the service is already subject in the United Kingdom, and

(b) that are equivalent or essentially comparable as regards their purpose.”

[36]It was contended before the FTT for the Fletchers that the conditions in the Licence had not been shown to be based on the criteria set out in regulation 15(1), and some duplicated requirements and controls in existing legislation contrary to regulation 15(3). For the applicability of these regulations to licensing conditions under Part 2 of the 2004 Act, the Fletchers relied on R (Gaskin) v Richmond upon Thames LBC

[2018] EWHC 1966 (Admin)

, a decision of the Divisional Court.

[37]The FTT rejected these contentions, preferring the argument for the Council that regulation 15 did not apply to these Licence conditions; Gaskin being a case about payment of a fee which could be distinguished. There were no such restrictions on the s.67(1) discretion.

[38]The Fletchers renew their complaint on this appeal. Their list of conditions to which this ground of appeal relates is: 8, 10, 11, 15, 25, 26, and 32.

[39]Before considering the arguments in response for the Council on this appeal, some detail should be given of the decision in Gaskin. That case was a challenge by way of judicial review to the requirement to pay a fee when applying to renew an HMO licence under Part 2 of the 2004 Act. It was argued that the fee should not be the same as that payable on an application for a first licence and that it wrongly included a contribution to the costs of running and enforcing the licensing scheme (contrary to the decision of the Court of Justice of the EU (CJEU) on the question referred to it in R (Hemming) v Westminster City Council

[2015] UKSC 25

). The Divisional Court decided that the council’s licensing scheme under Part 2 of the 2004 Act was an “authorisation scheme” within the meaning of Directive 2006/123, being the directive which was implemented by the Regulations. And that the council was not entitled, under the directive, to charge its fee which included a contribution to the costs of managing and enforcing the scheme. The court described the primary issue before it as being whether Mr Gaskin, in letting and managing the HMO, was providing a service so as to engage the directive. It considered the answer to be clear. Mr Gaskin was providing a service. The further question as to whether the fee was lawful as being in accordance with the directive was answered more shortly and in the negative. The court emphasised that Mr Gaskin was “somebody who has been refused a licence due to his refusal to submit to an unlawful demand for a fee which was not limited (as it should have been) to the application stage of the renewal process.”

[40]The Council sought to meet this ground at the hearing of the appeal by contending that regulations 15(1)-(3) did not apply by reason of regulation 14(3)(a). That is in these terms: “This regulation and regulations 15 to 20 do not apply to authorisation schemes to the extent that they are governed, directly or indirectly, by— (a) a provision of an enactment other than assimilated direct legislation which, immediately before IP completion day, implemented an EU obligation, where the enactment is passed or made before the day on which these Regulations are made …”.

[41]It was submitted that the Council’s licensing scheme was governed by another enactment, namely s.67 of the 2004 Act, so that regulation 15 did not apply. I was unable to accept that submission. The exclusion in regulation 14(3)(a) is expressed to apply only to enactments giving effect to EU directives. I was not aware that Part 2 of the 2004 Act represented such an enactment. And if this point were a good one, it is surprising it were overlooked in Gaskin. Having considered these points, Mr McDermott conceded that regulation 14(3) did not apply and so did not exclude the operation of regulations 15(1)-(3) in this case.

[42]He did, however, maintain his main argument against this ground of appeal, which was this. That the authorisation scheme with which the Regulations is concerned does not extend to the content of conditions attached to a licence obtained. Those are instead about how the service activity is to be performed. The Regulations bite instead on the procedures for obtaining a licence.

[43]There is high authority for the drawing of a distinction, when considering the effect of the Regulations, between an authorisation scheme on the one hand and conditions attached to the exercise of the permitted service activity on the other. Hemming, already referred to above, was concerned with the licensing by the local authority of sex shops under Schedule 3 to the Local Government (Miscellaneous Provisions) Act 1982. As in Gaskin, the challenge was by way of judicial review to a fee for the licence. That challenge relied on the Regulations and their requirement that there must be a proportionate relationship between the fee and the cost of the authorisation procedure; the complaint being that the fee charged in the case also included the cost of enforcement against unlicensed operators. That part of the fee was refundable if the application was refused. In setting out the relevant parts of the directive as part of its judgment, the Supreme Court said this at [11]:

“Section 2 thus suggests that conditions attaching to the actual exercise of a service activity, once any necessary authorisation has been obtained, are a separate matter from the authorisation scheme and authorisation procedures and formalities. Similarly, Chapter IV, headed ‘Free movement of service’, provides that member states may not make access to or the exercise of a service activity in their territory subject to compliance with any requirements which do not respect general principles of non-discrimination, necessity and proportionality set out in article 16(1) or which involve certain requirements set out in article 16(2). Again, this suggests that the actual regulation of access to or the exercise of a service activity is a distinct matter from any prior authorisation scheme and its procedures, with which Section 1 of Chapter III is concerned.”

[44]That distinction is apparent again in [15] of the Supreme Court’s judgment. “Article 13(2) is not concerned with fees which may be required to be paid (e g annually) for the possession, retention or renewal of a licence, once the authorisation stage is satisfactorily past. The ‘charges which the applicants may incur from their application’ to which article 13(2) refers cannot sensibly embrace fees of this nature payable by successful applicants for the licence or its retention or renewal after the authorisation stage.” The court went on to posit at [18] two types of scheme. “Type A: Applications for licences are made on terms that the applicant must pay:(i) on making the application, the costs of the authorisation procedures and formalities, and

(ii) on the application being successful, a further fee to cover the costs of the running and enforcement of the licensing scheme. Type B: Applications for licences are made on terms that the applicant must pay: (i) on making the application, the costs of the authorisation procedures and formalities, (ii) at the same time, but on the basis that it is refundable if the application is unsuccessful, a further fee to cover the costs of the running and enforcement of the licensing scheme. Westminster City Council has until now operated a scheme of type B”. The court was very clear that the further fee was not, in a type A scheme, any part of the authorisation scheme within the meaning of the directive, saying at [19], “I have no doubt that it is not. It is a mere provision that, if and when authorisation is successfully obtained, the actual grant or renewal of a licence will be subject to payment of a fee to cover enforcement costs. Once it is accepted .. that article 13(2) permits a licensing authority to levy on a successful applicant, in respect of the possession or retention of a licence, charges enabling the authority to recover the full cost of running and enforcing the scheme, it would be incongruous if an application could not refer to or include a requirement to pay such charges on the application being successful. The inclusion in the application of a requirement to pay a licence fee for the possession or retention of a licence, if the application is successful, does not turn that requirement into an authorisation procedure or formality or into a charge incurred from the application. It remains a licence fee incurred for the possession or retention of the licence.”

[45]It was the answer to the different question whether a type B scheme was permitted by article 13(2) which was considered unclear and was referred to the CJEU accordingly; the CJEU then ruling in Hemming v Westminster City Council C316/15 that the type B scheme also offended article 13(2).

[46]The distinction spelled out by the Supreme Court in Hemming and that court’s view on a type A scheme provides, in my judgment, the answer in this case. The challenged conditions in the Licence are not requirements to be met in order for the Licence to be granted but rather conditions attached to operating the licensed HMO. They are not therefore part of the authorisation scheme governed by regulations 15(1)-(3) of the Regulations.

[47]In arguing for a different result, the Fletchers also relied in written submissions filed after the hearing on CJEU decisions on the directive, namely C341/14 Harmsen (16 July 2015), C-393/17 Kirchstein (4 July 2019), and C-724/18 Cali Apartments SCI (22 September 2020). But I do not read those as undermining the distinction in Hemming. Harmsen perhaps comes closest and so deserves fuller explanation.

[48]In Harmsen there was a refusal by the Mayor of Amsterdam to grant authorisation to Mr Harmsen to operate a prostitution business. Article 3.32 of the relevant domestic regulations placed a series of obligations on operators of such businesses, and under article 3.30(2)(b) the Mayor may refuse authorisation if, in his opinion, it is not sufficiently likely that the operator will comply with those obligations. The refusal relied on official reports which indicated that Mr Harmsen’s business was not conducted in such a way as to prevent abuse. Whereas Mr Harmsen stated in his application he would not rent out rooms to prostitutes with whom he could not communicate in English, Dutch or any other language comprehensible to him, Mr Harmsen had in fact rented rooms to prostitutes from Hungary and Bulgaria not able to communicate in languages Mr Harmsen could understand. The CJEU did consider whether article 10(2)(c) of the directive precluded a measure whereby an operator of a window prostitution business is allowed to rent out rooms only to prostitutes who are able to make themselves understood by the operator in a language which he understands; concluding that it did unless such a requirement was shown to be necessary for effective verbal communication. Article 10(2)(c) is the provision matched by regulation 15(2)(c) of the Regulations. I do not consider this CJEU decision undermines the distinction in Hemming. The challenge was to a refusal to authorise Mr Harmsen, not to a condition in a licence granted to him. And insofar as consideration was given to obligations on him were he authorised, that seems to me to have been because the authorisation process was forward looking; the Mayor assessing at the authorisation stage whether Mr Harmsen would comply with his obligations.

[49]I would add that the written submissions for the Fletchers do not address the sea change in the use of EU law by domestic courts effected by the Retained EU Law (Revocation and Reform) Act 2023 as at 1 January 2024; ending the principle of supremacy of EU law. The Licence being considered in this case was granted on 29 January 2024. Had there been CJEU decisions going in a different direction to Hemming, I would have sought further submissions as to the effect of the 2023 Act on the significance of that EU law for this case.

[50]The written submissions on EU law for the Council pointed to article 10(5) of the directive as an aid to interpretation of the Regulations. “The authorisation shall be granted as soon as it is established, in the light of an appropriate examination, that the conditions for authorisation have been met.” I note that is anyway largely reproduced in the Regulations at regulation 15(7). “(7) A competent authority must grant an authorisation under an authorisation scheme as soon as it is established, in the light of an appropriate examination, that the conditions for authorisation have been met.” I would expect the directive being implemented to remain an aid to statutory interpretation of the implementing regulations, notwithstanding the doing away with the supremacy of EU law. That approach to statutory interpretation is a matter of domestic law, not relying in any way on the supremacy of EU law. And this part of the directive, article 10(5), has anyway found its way into the Regulations. I consider the provision does fit with and support the distinction in Hemming as well as its application in this case. The conditions challenged in this case are not conditions to be met before the grant of an authorisation, being the Licence, is made. appropriate examination, that the conditions for authorisation have been met.”

[51]Finally on this, the Fletchers also pointed to March 2021 Government advice in the form of the “UK Guidance on the Provision of Services Regulations”. But these do not undermine the key distinction drawn in Hemming.

[52]It follows from all the above that the FTT was not, in my judgment, in error in rejecting the challenge to the conditions to the Licence based on the Regulations.

Ground 4

[53]Ground 4 is a complaint that conditions 10, 15 and 18 do not properly reflect the mandatory conditions; their wording deviating from that in Schedule 4, para. 1.

[54]Condition 10 is concerned with disposal of household waste and includes detailed provisions for the arrangements to be made in relation to refuse and the information to be given to tenants. Condition 15 is concerned with electrical installations and has detailed provisions which include requiring an electrical installation condition report.

[55]Waste and electrical installations are the subject of mandatory conditions in Schedule 4. Paragraph 1(3)(c) of Schedule 4 set out above deals with electrical installations. And paragraph 1C, again set out above, is concerned with waste.

[56]Condition 18 has already been set out. And dealt with above. I there indicated that, in my judgment, as long as the mandatory conditions are included in a licence, the fact there are also further requirements included might not necessarily be fatal. If those can be regarded as additional conditions which have their own justification, they may be appropriate within s.67(1) and (2).

[57]The FTT made a limited variation to condition 10 and decided not to vary condition 15. It expressed its conclusions on these conditions as follows:

“170. Condition 10: We would vary and delete the following words only: ‘by purchasing appropriate bins and payment of collection charge.’ 171. We are satisfied that it is reasonable to include a condition that Licence Holders will remind tenants that there are penalties for fly tipping. We are satisfied the purpose is to try and ensure that fly tipping of waste does not occur and the measures contained within the condition are in our judgment, on the basis of the evidence we heard orally and within the bundle, reasonable. We would however delete the words as set out above as we are satisfied these go beyond what is required. We can see that a licence holder may make other arrangements (including collecting the waste themselves, being what Mr Fletcher tells us effectively he does). We are not satisfied that such condition should be prescriptive beyond the need to ensure proper procedures are in place for collection and disposal. … 174. Condition 15: We would not vary the same. 175. We are satisfied the wording used is reasonable and appropriate in ensuring a licence holder is aware of their obligations to have an electrical certificate. We heard argument that there may be occasions when, if the property is unoccupied such as during the Summer, there could be a delay in obtaining a new certificate. We agree with the Respondent that if this was the case then it is likely such circumstances would give rise to a reasonable excuse defence but this does not in our determination give rise to a requirement to vary the words as suggested or at all.”

[58]I am not persuaded that the FTT went wrong in relation to condition 10. What I gather from its reasoning in relation to that condition is that it accepted that there was justification for the requirements in the condition which went beyond the limited scope of Schedule 4, para. 1(3)(c). It was therefore open to the FTT to agree with or defer to the Council as to such requirements being appropriate.

[59]I have reached a different view in relation to condition 15. The Fletchers made before the FTT and repeat on this appeal a number of criticisms of condition 15. Most significantly, those include pointing to detailed legislation in this area, being the Electrical Safety Standards in the Private Rented Sector (England) Regulations 2020 (the 2020 Regulations). As put in the skeleton argument before the FTT, “The condition as drafted replicates the landlord’s obligations imprecisely. The effect of the misstatement is to distort the duties in the ESR. The remaining text is unclear generally: - it deviates in some points of detail from ESR20, makes reference to redundant regulations and is unclear on the distinction between Class A or B recommendations from Class C in EICR reports which is crucial given the boundary between a satisfactory EICR and an unsatisfactory one hinges on Class A or B recommendations and not on Class C”.

[60]Neither the reasoning of the FTT nor the Council’s skeleton argument on this appeal really engage with these significant criticisms. The oral submissions for the Council also failed to answer them. On a comparison of the 2020 Regulations and condition 15, they have real force. I do not consider it is necessary or appropriate to use a condition in a licence merely to ensure a licence holder is aware of other obligations, such as to have an electrical certificate. And condition 15 is not, anyway, on its terms, just there for information. It imposes its own requirements. Those reflect to some extent but do not match the detailed duties set out in the 2020 Regulations. That is prone to create confusion. Including as to enforcement. The 2020 Regulations have their own enforcement regime, which is put in the hands of the local authority. It can require remedial action, and issue financial penalties. For those reasons, I do consider the FTT was in error in not varying this condition and that the Council was wrong to regard the condition as appropriate.

[61]Condition 15 should be varied so that it contains only its opening words, being the mandatory condition required by para. 1(3)(c) of Schedule 4 to the 2004 Act. “The licence holder is to ensure that every electrical installation in the house is in proper working order and safe for continued use; and to supply the authority, on demand, with a declaration by him as to the safety of such installations”.

Ground 5

[62]The FTT dealt at [159] of the Decision with the Fletchers’ criticism of the Council in applying the same conditions in all its licences. “It was the evidence of Mrs Hardwick that the scheme was adopted to apply to the whole City. It was designed in this way to address issues, some of which had been identified by consultations. Equally we find that the conditions were drafted and imposed to ensure certainty across the City and to ease the administration for the Respondent. Equally the Respondent considered the wording carefully to ensure that the conditions were intelligible to all licence holders and generally. We find nothing wrong with this approach.”

[63]Under ground 5, it is said that the FTT was in error in finding nothing wrong with the Council’s blanket approach of including the same conditions in all its licences. As explained in oral submissions by Mr Field, appearing for the Fletchers, this was a point made in aid of the other grounds of appeal. The argument was that, when considering the challenges to the conditions criticised under each of the other grounds, the Tribunal should give little weight to the decision of the Council to impose them because there was simply a blanket policy.

[64]I accept that argument. Mr Field referred to Nottingham City Council v Parr

[2018] UKSC 51

as authority for the proposition that licence conditions must be justified by reference to the particular property and mode of occupation. While I was not taken to any statement of such a proposition in that case, it does in my judgment lend support to his overall submission. The local housing authority had imposed conditions in two separate HMO licences prohibiting the use of small attic rooms for sleeping. Those were varied first by the FTT, then this Tribunal, and finally the Court of Appeal, to allow use for sleeping by students, having regard to the communal living space available in the subject properties. While making a further variation (deleting the requirement for occupation for only ten months in the year), the Supreme Court otherwise dismissed the appeal. The approach of the Supreme Court to the conditions being considered involved taking account of the accommodation available in the particular property and its mode of occupation. That is perhaps most obvious in the judgment at [26] & [27]. “26. It seems to me to be entirely appropriate, therefore, that in considering the suitability of accommodation in an HMO regard should be had to the proposed mode of occupation. Furthermore, in appropriate cases effect may be given to such considerations by the imposition of conditions in the licence. This is not inconsistent with the statutory scheme. As the Deputy President of the Upper Tribunal pointed out in his judgment, certain types of accommodation may lend themselves to different styles of occupation and it would be surprising if the 2004 Act did not reflect that. The various guidelines referred to earlier in this judgment refer in different ways to the need for flexibility in their application. In that regard, account should be taken of the proposed mode of occupation where it is likely to influence the quality of the accommodation made available to the occupant. It must be emphasised that this does not permit the application of lower standards than would otherwise be applicable. On the contrary, it is simply that there will be certain circumstances in which, as a matter of common sense, it will be appropriate to have regard to the mode of occupation when applying the same objective standards which apply to all HMOs. 27. For these reasons, I consider that the power to impose conditions under sections 64 and 67, Housing Act 2004, in order to make an HMO suitable for a particular number of households or persons, can be used so as to limit the class of persons for whom the HMO is suitable.”

[65]Mr Field’s argument finds further support in government guidance issued in 2010. The guidance, entitled “A guide to the licensing and management provisions in Parts 2, 3 and 4 of the Housing Act 2004” and no longer current, gives at paragraph 242 a list of examples as to what a local housing authority can do by way of conditions in a Part 2 licence. It then says this about the list. “The above list is not exhaustive and what conditions are appropriate to impose will depend on the individual case. The LHA should not adopt a blanket policy of licensing conditions to be applied, no matter how inappropriately, to every licensable HMO in its district. Each case must depend on its own merits”.

[66]This issue is one which must be answered by reference to the 2004 Act. Not later apparently withdrawn guidance. But I consider the guidance is nevertheless a useful reference point. It reflects, as does the approach of the Supreme Court in Parr, what might be expected under the 2004 Act, namely that the appropriateness of conditions must be judged by reference to the property being licensed for use as an HMO.

[67]As might be expected, the focus of the key provisions of the 2004 Act for this purpose is on the particular house. Section 64(3)(a) of the 2004 Act sets out one of the matters of which the local housing authority must be satisfied before it may grant a licence. It is “that the house [my italics] is reasonably suitable for occupation by not more than the maximum number of households or persons mentioned in subsection (4) or that it can be made so suitable by the imposition of conditions under section 67”. Section 65, in dealing further with that test, again refers to the suitability of “the house”. “65(1) The local housing authority cannot be satisfied for the purposes of section 64(3)(a) that the house [my italics] is reasonably suitable for occupation by a particular maximum number of households or persons if they consider that it fails to meet prescribed standards for occupation by that number of households or persons. (2) But the authority may decide that the house [my italics] is not reasonably suitable for occupation by a particular maximum number of households or persons even if it does meet prescribed standards for occupation by that number of households or persons.” And section 67(1), set out in full already, itself refers to “the house concerned” and “its” condition and contents, with many of the descriptions of the permitted conditions in s.67(2) also referring to “the house”.

[68]Accordingly, where the local housing authority has imposed conditions without reference to the particular circumstances represented by the particular house being licensed but rather because those are the conditions it imposes in every case, it is likely to follow, in my judgment, that less weight is to be accorded by the FTT and this Tribunal to that decision of the local authority as the primary decision maker. I do not ignore the practicality for a local housing authority of having standard conditions. But, in my judgment, the need to have regard to the house being licensed means they should represent a suite of conditions to choose from and modify as appropriate; not a one-size-fits-all regime.

Ground 6

[69]As explained orally, ground 6 is a challenge to condition 20, already set out above, for failure properly to respect confidentiality. The point, as I understood it, was that the effect of this licence condition would be to render lawful under the UK General Data Protection Regulation (Regulation EU 2016/679) the sharing of tenants’ financial history by the Fletchers with the Council.

[70]The Council sought in its oral submissions to meet that point in two ways. One, that condition 20 reflected the mandatory condition in para.2 of Schedule 4 to the Act. That mandatory condition is one for inclusion in licences under Part 3 of the 2004 Act; Part 3 being concerned with selective licensing of houses in areas designated for such licensing by the local housing authority. “A licence under Part 3 must include conditions requiring the licence holder to demand references from persons who wish to occupy the house.” Two, that the Council suggested before the FTT that the Fletchers as licence holders may redact particulars.

[71]The FTT did not vary condition 20. It addressed the Fletchers’ argument based on the requirements of the UK General Data Protection Regulation in this way at [154] of the Decision. “Overall we were not persuaded that a condition requiring provision of documents held by the licence holder would fall foul of these requirements. Such a condition is imposed under statute and is a statutory obligation. It is for a licence holder to make clear to all persons supplying data to them the basis upon which he might be required to disclose the same. Equally if no good reason is provided by the Respondent for its request as they acknowledged such data may be redacted or would provide a reasonable excuse defence to the licence holder. For these reasons we were not persuaded that conditions fundamentally breached GDPR requirements imposed upon the licence holder.”

[72]I do not consider that the Council’s points give sufficient justification for this condition. With respect, I therefore take a different view of condition 20 to the FTT and do not regard it as an appropriate condition under s.67(1) of the 2004 Act. The mandatory condition for inclusion in Part 3 licences gives some support for requiring the taking of references. But it does not support that which is objected to in condition 20; namely, the requirement to supply copies of references to the Council. As to the possibility of redaction, the condition gives no right to redact.

[73]Accordingly, had I not varied condition 20 for the reasons given under ground 2 above, I would have varied it on this different ground. His Honour Judge Johns KC 26 June 2026 Right of appeal Any party has a right of appeal to the Court of Appeal on any point of law arising from this decision. The right of appeal may be exercised only with permission. An application for permission to appeal to the Court of Appeal must be sent or delivered to the Tribunal so that it is received within 1 month after the date on which this decision is sent to the parties (unless an application for costs is made within 14 days of the decision being sent to the parties, in which case an application for permission to appeal must be made within 1 month of the date on which the Tribunal’s decision on costs is sent to the parties). An application for permission to appeal must identify the decision of the Tribunal to which it relates, identify the alleged error or errors of law in the decision, and state the result the party making the application is seeking. If the Tribunal refuses permission to appeal a further application may then be made to the Court of Appeal for permission.