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‘Fit and Proper Person’

In London Borough of Waltham Forest v Reid, the Upper Tribunal dismissed the council’s appeal on the grounds that their policy was unreasonable.

The Law

In 2015 the council designated the whole of the LBWF as an area subject to selective licensing. Unless renewed this designation will end on 31st March 2020. On application, and for the payment of a fee, the council will grant a license where they are satisfied:

  • that the proposed licence holder is a fit and proper person to be the licence holder;
  • that the proposed manager of the house is a fit and proper person to be the manager of the house; and
  • that the proposed management arrangements for the house are otherwise satisfactory”.

A license can be granted for up to 5 years and can be subsequently varied or revoked. A person is committing an offence if they have control of, or manage, a house which should be licensed but is not.

Facts

Mr Reid, a landlord since 1990, owned a number of freehold properties which were let to residential tenants. In June 2016, Mr Reid pleaded guilty for failing to license 5 properties and was fined £10,000 plus costs.

In September 2016, the council granted Mr Reid licences for one year in respect of eight properties and reduced the term of a licence in respect of another property to one year. Mr Reid appealed to the First Tier Tribunal contending that the licences should have been granted until 31st March 2020. 

FTT decision

The FTT agreed with Mr Reid and extended the licenses to 31st March 2020.

The council’s policy in respect of shorter licenses is:

“The grant of a shorter licence … will in all cases reflect concern that the Council has regarding a “person” and/or a property to the extent that a full-term licence is not appropriate. The shorter licence period will penalise the landlord since a new licence application will need to be made at its expiry after one year. However, the grant of a licence will enable the address to be legally rented, allowing the landlord to remedy the issue that gave rise to the reduced-term licence or for a relevant conviction to become spent.”

The FTT held that the conviction was only relevant to the question of whether Mr Reid was a “fit and proper person” and not to the length of the licence. It did not accept that it was appropriate to grant a reduced licence term simply to allow “a relevant conviction to become spent”. Mr Reid had been renting properties for a very long period without complaint from his tenants or the council. Mr Reid made one error and that was failing to obtain licenses for his properties. However, when he became aware of the policy he applied immediately and was granted licenses which one assumes was because the council found he was in fact a “fit and proper person”. Thus, the council’s only justification under their policy for the grant of a one-year licence was unreasonable.

UT decision

At appeal, the Upper Tribunal held that the FTT were entitled to consider matters relevant to the question of whether Mr Reid was a “fit and proper person” when making a decision on the duration of the license. This case was fact sensitive and the UT found it difficult to understand how the council’s policy document was relevant. In Mr Reid’s case, there were no ongoing issues to be resolved and an unspent conviction was simply not relevant to the length of a license. If he transgressed again in the future his licences could be revoked and he would then be unable to rent.

The UT stressed that in their opinion the council’s policy was perfectly reasonable save for the reference to spent convictions. The FTT made no error in law and reached a conclusion based on the evidence before it. The council’s appeal was therefore dismissed.

Comment

Local authorities should not reduce the term of a licence as a matter of policy. The power is designed to take into account risks in allowing a specific landlord to be licensed and should be applied proportionately after considering each case. Revoking licences is for the purpose of ensuring that landlords that are not fit to rent properties are prevented from doing so. The system is not designed to punish someone for a mistake they made and have duly acknowledged where they do not pose a specific risk.

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