HMO Prosecutions- Not as Clearcut as People Think
I have recently found myself acting for a client who was being prosecuted by his local authority for not having an HMO licence. Without naming names, it is the city council for a well-known university town in the Midlands. In this case my client was the owner and manager of an HMO. Due to an additional licensing designation by the local authority the property was licensable. He had not applied for a licence. The local authority discovered the situation and duly took proceedings against him in the magistrates court.
My client had no licence and the property was licensable. On the face of it he was guilty of the offence of failing to hold an HMO licence under s72, Housing Act 2004. However, it is not that easy. There is a statutory defence to the prosecution which is that the person involved had a reasonable excuse for not having a licence.
And so my client did. He had used the advice given on the website of the relevant local authority to determine if he needed a licence. He had been clearly told he did not. Local authorities are under a duty to ensure their staff know the law and to be able give correct advice to members of the public. This duty extends to publications of those authorities. In addition, there is a case relating to the original law on HMOs, the Housing Act 1985, which shows that the actions of a local authority which directly contribute to a landlord committing an HMO offence are relevant to considering whether or not he had a reasonable excuse.
Once a strong case was put to the local authority they offered to withdraw the prosecution if my client accepted a caution. This involved him admitting guilt as part of the caution process but the consequences of a caution are pretty minor as compared to being found guilty. There is no fine, no obligation to pay prosecution costs, the tenants cannot claim rent back, and he will be able to apply for other HMO licences in future. In addition, he now has the chance to claim back his legal fees spent on his defence.
In a lot of these sort of cases a landlord will plead guilty very early on. This is often on the basis of advice from a lawyer who is no doubt a good criminal lawyer but does not have enough experience in the unusual world of HMOs. These landlords think that they don’t have a case and therefore a guilty plea is the best solution. However, this case shows that it can be worth putting up a fight.