DECISION
The appeal is dismissed
REASONS
Introduction
- The appellant, Mr Naveed, appeals against a penalty notice issued to him by the respondent, the City of Bradford Metropolitan District Council ("Bradford"). Bradford issued a penalty notice on 6 November 2023 (the "Penalty Notice") to Mr Naveed on the basis that he is the owner and landlord of 110 Cross Lane, Bradford BD7 3LB (the "Property") which is situated in the City of Bradford Metropolitan District. Bradford believes that Mr Naveed has let the Property to a tenant since at least 2 June 2023. Mr Naveed is appealing against the penalty of £4000 in the Penalty Notice, which was issued to him by Bradford for a breach of Regulation 23 of the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (as amended) (the "2015 Regulations").
- The Penalty Notice states that Bradford was satisfied that Mr Naveed was letting a domestic property which had an energy performance certificate ("EPC") with a rating of less than band E. Bradford stated that they were issuing a penalty charge as Mr Naveed was the person responsible for letting a substandard property with an EPC rating of F. Bradford stated the following in the Penalty Notice:
"1. The City of Bradford Metropolitan District Council (the Council) is satisfied that you are the landlord of a sub-standard domestic privately rented property, namely 110 Cross Lane, Great Horton, Bradford, BD7 3LB] and is also satisfied that regulation 25 or one or more of the exemptions in Chapter 4 of the regulations does not apply.
2. The Council may serve a notice on the landlord of a sub-standard domestic privately rented property (a "penalty notice") in any case where it is satisfied that the landlord is, or has been at any time in the 18 months preceding the date of service of the penalty notice, in breach of Regulation 23 by letting the substandard property and impose a financial penalty, a publication penalty, or both a financial penalty and a publication penalty, in accordance with Chapter 6 of the regulations.
3. The Council is satisfied that the substandard property has been let since the [02 June 2023 and therefore imposes a fine of £4000 as the substandard property has been let for a period of more than 3 months.
4. Under Regulation 39 the Council also intends to issue a Publication penalty and the relevant details prescribed by Regulation 39 will be published on the
PRS Exemptions Register for a period of no less than 12 months.
5. The Council also requires you to carry out such works so as to make all the relevant energy efficiency improvements in order that it will achieve an Energy Performance Certificate of Band E or above before 06th December 2023 (less than 1 month from the date of this notice)."
- On 18 February 2024 Mr Naveed submitted a notice of appeal against Bradford's decision of 6 November 2023 to issue the Penalty Notice. On 12 July 2024 Judge Worth rejected an application to strike out the appeal as being out of time and agreed that the appeal should be admitted.
- Mr Naveed stated in his notice of appeal that he had bought the Property by mistake from an online auction. He then found out that there were some restrictions on the property imposed by Bradford that he hadn't been aware of. The Property was occupied but in a bad state. He said that he managed to get the Property vacated and asked someone to renovate the Property, who asked to live in it whilst he was renovating it. He gave this person a temporary contract to stay in the Property and half way through this the person left. He then gave the property to someone else to renovate it who was in the same situation as the person who had left. This person also left after a short period of time. Mr Naveed's notice of appeal went on to say:
"In the meantime new grant came out and property become qualified for the grant work to be done when they carried out the work they were supposed to provide the EPC Certificate and in the meantime I were in contact with Elizabeth burr the officer for the council for housing and I provided Gas and Electricity certificate and she asked me to produce the EPC certificate.
I tried to chase the company who carried out the work but first the company agreed to loge the EPC report and then refused and saying they don't do that anymore and it is my responsibility to lodge EPC.
So I managed to receive the EPC in early December and sent certificate to Elizabeth in early December but all of a sudden I received an email on 26tg of January 2024 that I have been fined and I have to speak to first tear tribunal.
I can confirm I haven't received any letter saying notice or final notice in regards to providing EPC report and I have trying to fully cooperate and provide all certifications."
- In the appeal Mr Naveed asked the Tribunal to reverse the penalty imposed on him in the Penalty Notice.
The Law
- The 2015 Regulations were intended to improve the energy efficiency of certain private rented property in England and Wales.
- Part 3 of the 2015 Regulations prescribes a minimum level of energy efficiency for private rented properties. It provides that, subject to prescribed exemptions, a landlord of a domestic private rented property must not grant a new tenancy of the property after 1 April 2018 and must not continue to let the property after 1 April 2020, where the energy performance of the property, as evidenced by the EPC for the property, does not fall within or above Band E.
- A property is a "domestic PR property" if it is let under an assured tenancy (see Regulation 19(1)) and, by virtue of Regulation 22, it is "sub-standard" where the valid EPC expresses the energy performance indicator as being below Band E.
- Regulation 23(1) of the 2015 Regulations provides that a landlord of a "sub-standard domestic PR property" must not let the property on (among other things) an assured tenancy for the purposes of the Housing Act 1988 unless certain exemptions apply. These exemptions are set out in Chapter 4 of the 2015 Regulations.
- Regulation 38(1) of the 2015 Regulations provides that a local authority may serve a penalty notice on a person who is a landlord in any case where it is satisfied that that person is or has been at any time in the previous 18 months, in breach of Regulation 23 and /or Regulations 37(4)(a). A penalty notice may impose a financial penalty, a publication penalty, or both a financial penalty and a publication penalty. A 'publication penalty' involves publication of certain information about the landlord's breach (or breaches) on the PRS Exemptions Register for a period of at least 12 months (see Regulation 39).
- Where a landlord has failed to comply with a compliance notice in breach of Regulation 37(4)(a), any financial penalty imposed for that breach may not exceed £2,000 (see Regulation 40(5)).
- Under Regulation 40, where a landlord has breached Regulation 23 and, at the time the penalty notice is served has, or had, been in breach for three months or more, the penalties are—
(a) a financial penalty not exceeding £4,000, and
(b) the publication penalty.
- Where the landlord has been in breach for less than three months the penalties are—
a) a financial penalty not exceeding £2,000, and
b) the publication penalty.
- The financial penalties in a Penalty Notice may not in aggregate exceed £5,000.
Role of the Tribunal
- Regulation 43 of the 2015 Regulations permits a landlord on whom a penalty notice has been served to appeal to the Tribunal. They may do so provided that a request for a review of the decision to serve a penalty notice has first been made to the local authority (under Regulation 42).
- An appeal to the Tribunal may be made on the grounds that—
(a) the issue of the penalty notice was based on an error of fact,
(b) the issue of the penalty notice was based on an error of law,
(c) the penalty notice did not comply with a requirement imposed by the 2015 Regulations, or
(d) in the circumstances of the case it was inappropriate for the penalty notice to be served on the landlord,
and the Tribunal has the power to quash the penalty notice, or to affirm the notice, whether in its original form or with such modifications as the Tribunal sees fit (see Regulation 44(2)).
Conclusions on the facts and law
- I conclude from the papers submitted by the parties and their evidence and submissions in the hearing that there is common ground between them on some of the facts that are relevant to the outcome of this appeal. In particular it is not in dispute that:
a) Mr Naveed was the owner of the Property prior to 2 June 2023 and has continued to own the Property since then.
b) The Property is in the City of Bradford Metropolitan District.
c) The Property had an EPC showing it was assessed as band F during the period from 19 January 2019 to 9 December 2023.
- I understood from Mr Naveen at the hearing that he did not challenge the witness statement of Elizabeth Burr, an Environmental Health Officer for Bradford. Ms Burr stated that Bradford's Environmental Health department sent a letter to Mr Naveed at his home address on 12 January 2023 to inform him as the landlord of the Property that it is an offence to let it with an F rated EPC and that the Property's rating needed to be improved immediately or he needed to register an exemption. The letter said that it is an offence to let substandard accommodation and this could result in a Financial Penalty of up to £4,000. The letter explained that the landlord needed to take action within 28 days. Ms Burr also stated that a reminder letter was sent to Mr Naveed by the Environmental Health Office on 4 May 2023 as the EPC rating remained at an F banding. Ms Burr subsequently checked whether the property was still being let. Council tax records identified that the Applicant granted a tenancy agreement on 2 June 2023 for a period of six months. Bradford's Council Tax Department also received a change of tenancy reported by the landlord at this time. A further reminder letter was sent to the Applicant on 4 October 2023 as the EPC Banding of the property remained an F.
- In order to determine this appeal, it is necessary for me to decide if;
- the Property was a domestic private, rented property during the period 2 June 2023 to 6 November 2023;
- Mr. Naveed let the Property to a tenant during this period;
- The Penalty Notice was properly served on Mr Naveed and received by him.
- the Property falls within any of the exemptions in Chapter 4 of the 2015 Regulations and such exemption has been registered.
- Under section 42 of the Energy Act 2011 a property is a "domestic private rented property" if, subject to certain exemptions in subsection (2) which do not apply to the Property, it is let under a tenancy which is an assured tenancy for the purposes of the Housing Act 1988.
- Mr Naveen's evidence at the hearing was vague about the basis upon which the property was occupied by people in late 2022 and in 2023. He said it was occupied by individuals who were carrying out renovation work. He said that the work required was extensive and the EPC was just one issue amongst many. Work was required to the doors, kitchen, gas, electricity and other matters. When questioned, Mr Naveed said that he paid the individual who lived in the Property for some of the work that they did on the Property and they did not pay him rent to live there. He asked the first individual to leave the property as he was causing concerns and disruption to the neighbours. The second individual was asked to leave because he was too slow in getting on with the work that Mr Naveed required.
- Bradford provided a copy of an Assured Shorthold Tenancy agreement signed by Mr Naveen as the "landlord" and by a named individual as the "tenant". It is dated 2 September 2022 and it relates to the Property and has a duration of 12 months. Copies of the first page of a rent book was also provided that show the tenant making a £550 payment on 2 September 2022.
- In the course of Mr Naveed's evidence at the hearing he explained how, whilst the second individual was living in the Property and undertaking renovation work, a contractor had been appointed who said that they could apply for grants in order to carry out the work required to bring the Property up to appropriate standards. Mr Naveed said that the contractor had applied for the grant in the name of the tenant in the Property and not in his name. Mr Naveed was vague about the basis on which the grant was applied for and said that he had not minded as long as the appropriate work was carried out. Mr Naveed did not answer questions about whether he had agreed that the individual living in the Property was regarded as a tenant when the grant was sought. He knew that one of the aims of the grant was to get the Property a satisfactory EPC rating.
- Mr Naveed is an experienced landlord. He agreed that he owned a number of properties and said that these were managed by an agent on his behalf. The Property was not managed by the agent as it was not in a fit state and required work.
- The second individual referred to by Mr Naveed as carrying out renovation work, was asked to leave. Mr Naveed said that the Property was then let to a family that he knows.
- Ms Burr's evidence is that she;
"visited the property on 25 October 2023 and met the tenant of the property, I found that the property was currently let."
I accept Ms Burr's evidence on this point.
- I conclude on the balance of probabilities that the Property was let under an assured tenancy by Mr Naveed from 2 September 2022 through to the 25 October 2023 and beyond. As a consequence, I find that the Property was a domestic private, rented property during the period 2 June 2023 to 6 November 2023 and Mr. Naveed let the Property to one or more tenants during this period
- Under the provisions of the 2015 Regulations a domestic privately rented property is sub-standard where the valid energy performance certificate indicates that the energy performance of the property is below the minimum level of band E. The EPC issued on the Property was rated F. This rating should have been known by the landlord of the Property. Mr Naveed's evidence and submissions on when he became aware that the EPC rating for the property was below band E were evasive.
- On 14 December 2023 Mr Naveed sent an EPC for the Property to Bradford showing an energy rating of C. This was challenged by Bradford and the rating was subsequently reduced to D. Nevertheless, the EPC on the Property was in a fit state for it to be let from 14 December 2023. Mr Naveed suggested that the work required to achieve the acceptable rating had already been done by the time the Penalty Notice was issued, but that a new assessment of the Property had not been obtained. I accept that this is likely, nevertheless, it was Mr Naveed's responsibility to ensure that the Property had an EPC of band E or above when he let the Property.
- Mr Naveed argued that he had not received any notice or final notice notifying him of the need to obtain a higher EPC rating for the Property. Bradford provided a certificate of service dated 6 November showing that the Penalty Notice had been sent by first class post on that day to the address that Mr Naveed confirmed was his home address. Mr Naveed stated that he had been out of the country for two months in late 2023. He thought he was back before the Penalty Notice was issued. However, he was referred to an e-mail to Ms Burr dated 7 November 2023, in which he stated that he would not be back in the country until mid-December. Mr Naveed accepted that that e-mail may be accurate. He said that he had chased for the new EPC from the company that had obtained a grant to carry out the renovation work and this is what he sent through to Bradford on 14 December 2023.
- I conclude from the evidence that the Penalty Notice was properly served on Mr Naveed and that the earlier e-mails and letters referred to in Ms Burr's witness statement were also sent by Bradford to Mr Naveed's e-mail account or home address.
- It is clear from Regulations 31(2) and 36 (2) that Mr Naveed needed to register an exemption under the 2015 Regulations in order to rely on it when responding to Bradford about a breach of the 2015 Regulations arising from the valid energy performance certificate for the Property being below the minimum level of band E during the period for 2 June to 6 December 2023. It was not suggested, and I have seen no evidence, that he has registered an exemption at any time in respect of the Property.
- I conclude from the facts of this case and the evidence available to me that Mr Naveed was the landlord of a sub-standard property during the period set out in the Penalty Notice and was in breach of Regulation 23 of the 2015 Regulations and that he had not registered any exemption under chapter 4 of the 2015 Regulations.
- The sole matter that remains to be determined is the reasonableness of the size of the monetary penalty imposed in the Penalty Notice after taking account of any extenuating, mitigating or aggravating circumstances and the impact of any penalty on Mr Naveed's financial position. This breach of Regulation 23 for more than three months attracts a maximum penalty of £4000 under the 2015 Regulations. Bradford have imposed a penalty of £4000 and stated that whilst they would have reconsidered this if they had received representations from Mr Naveed within the timescales set out in the converting latter to the Penalty Notice, they had not received any such representations in time.
- Bradford accepts that the work required to improve the energy efficiency of the Property has been satisfactorily carried out and the EPC for the Property is rated at band D.
- In all of the circumstances of this case I conclude that the approach adopted by Bradford in calculating the amount of the penalty is reasonable and proportionate and takes due account of the facts in this case. Mr Naveed approach to meeting his obligations in respect of the EPC during 2023 was irresponsible. He is an experienced landlord and was aware of the need to renovate the Property to make it, in his word "liveable. But he did as little as he could, as cheaply as he could, whilst agreeing to tenants living in the Property and ignoring correspondence from Bradford.
- In all of the circumstances of this case, I see no need to adjust the amount of the penalty imposed by Bradford in the Penalty Notice.
Decision
- Having considered all of the documentation and arguments submitted by the parties I conclude that the Penalty Notice issued by Bradford was properly and correctly issued and the penalty of £4000 imposed by Bradford in the Penalty Notice is both reasonable and proportionate. The appeal is therefore dismissed.
Signed
PETER HINCHLIFFE
Judge of the First-Tier Tribunal
Date: 7 March 2025
Decision given on date: 13 March 2025
