News

Landlord civil financial penalty quashed following successful appeal

Sunday, June 21st, 2026 - London Property Licensing

On 21 September 2023, a housing officer from Waltham Forest Council undertook an inspection of a flat on Lea Bridge Road, London E10. During the inspection the officer found the property was let to three friends without the correct licence, in breach of the council’s additional HMO licensing scheme.

Unusual set of circumstances

The circumstances were somewhat unusual. All the landlord’s other flats were correctly licensed and they had appointed a reputable managing agent to ensure regulatory compliance.

An additional HMO licence application had been submitted for this flat in September 2021. During the seventeen months it took the council to process the licence application, the flat had changed from three sharers to a single family and so the council refused what was by then the wrong type of licence application.

This coincided with the single household moving out. The flat then remaining empty for several months whilst undergoing a full refurbishment. On 20 July 2023, the property was relet, this time to three sharers. Due to an administrative oversight by the managing agent, no new additional licence application was submitted.

The council’s inspection took place two months into the new tenancy. Strangely, having identified the licensing breach, no one from Waltham Forest Council notified the landlord or managing agent. As a result, the licensing omission continued unnoticed.

Six months after the council’s inspection (20 March 2024), council officers visited the post office and sent the landlord a notice of intent to impose a penalty of £19,500 for operating a licensable HMO without a licence. This was the council’s first communication with the landlord or agent since their inspection. Whilst it is accepted the notice was sent by first class post, it was not received by the landlord, so no representations were submitted.

Another six months passed before the council sent the landlord a final financial penalty for the reduced amount of £15,600. This time, the notice was received, London Property Licensing were instructed to represent the landlord and an appeal was lodged with the First-tier Tribunal.

First-tier Tribunal hearing

Whilst the appeal raised concerns about the decision to impose a penalty and the amount of the penalty, London Property Licensing also raised concerns about whether the notice of intent had been given in time.

The legislation requires:

“The notice of intent must be given before the end of the period of 6 months beginning with the first day on which the authority has sufficient evidence of the conduct to which the financial penalty relates.”

Following an adjourned First-tier Tribunal hearing in June 2025, a full hearing took place on 11 September 2025. Given the significance of the case and the intricacy of relevant case law, London Property Licensing worked with Karol Hart, Solicitor Advocate at Freemans Solicitors who represented the landlord at the hearing.

In a decision published the following day, the First-tier Tribunal agreed the notice of intent had been given out of time and cancelled the penalty. The Tribunal subsequently ordered the council to pay the landlord’s application to appeal and hearing fees.

Upper Tribunal appeal

Believing the Tribunal had misinterpreted the relevant legislation, Waltham Forest Council requested leave to appeal which was rejected by the First-tier Tribunal. The council then petitioned the Upper Tribunal and were granted leave to appeal. It was, after all, an important legal issue without determinative case law.

The Upper Tribunal appeal took place at the Rolls Building in London on 9 June 2026. London Property Licensing attended the hearing together with Karol Hart who represented the landlord.

In a decision handed down on 12 June 2026, His Honour Judge Neil Cadwallader found the council had misinterpreted the time limit for serving a notice of intent. The Judge found the corresponding date rule does not apply and the council’s appeal was dismissed. It is unknown if the council will request leave to appeal to the Court of Appeal.

Second financial penalty also withdrawn

Running in parallel with this case was a second civil financial penalty served on the managing agent for the same breach. As a preliminary issue, the managing agent supported by London Property Licensing submitted representations explaining the notice of intent was invalid as it had been served on a trading name, rather than the correct legal entity.

It took Waltham Forest Council twelve months to respond to the representations, which they rejected. A final penalty notice of £15,600 was issued in May 2025 and London Property Licensing lodged an appeal with the First-tier Tribunal.

Having sought legal advice, Waltham Forest Council accepted this notice of intent was invalid and withdrew the penalty notice served on the managing agent.

Richard Tacagni, MD, London Property Licensing commented:

“This case demonstrates how the civil financial penalty regime is becoming ever more complex and litigious. High penalties are often imposed for minor indiscretions without any prior warning.

“With new statutory guidance supporting even higher financial penalties under the Renters Rights Act 2025, I’m concerned the regulatory model is out of balance. We need better and more proportionate regulation of the private rented sector.”

A more in depth briefing on the Upper Tribunal decision is available here.

London Borough of Waltham Forest v Great House (Buildings) Ltd [2026] UKUT 218 (LC)

Our free guide containing information about property licensing and HMO planning rules in Waltham Forest is available here.