Court Provides More Clarity On Landlord Banning Orders
Banning orders are one of a number of measures which can be used against landlords. However, as they are by no means in widespread use, they are often not well understood. But a recent legal case has provided some more clarification on how banning orders should operate, and we will look at what it involved here.
A closer look at banning orders
Local authorities can deploy a number of measures against what they consider to be rogue or deficient landlords. They can give advice, issue improvement notices, issue civil penalties, prosecute in court where substantial fines may be levied and apply for banning orders. Banning orders, which are court orders which legally prohibit someone from letting property, are generally something of a last resort measure.
The Housing and Planning Act 2016 introduced new powers allowing local housing authorities in England to apply for banning orders on landlords and letting agents, along with other measures.
The Act sets down a specific procedure for the use of banning orders which is explained in non-statutory government guidance here. In simple terms a landlord or agent must first be convicted of a banning order offence before a banning order can be applied for.
Banning order offences include (but are not limited to) unlawful eviction, harassment, failing to comply with an improvement or prohibition order, fire and gas safety offences. They also include HMO licensing and management offences for landlords of this type of property.
When considering applying for a banning order local authorities must consider a number of factors. They must consider the seriousness of the offence or offences, a landlord’s previous relevant convictions, the harm caused to the tenant, and the deterrent effect on the offender and on others if the order is made. The local authority must serve the notice of intent to seek a banning order within six months of the landlord being convicted of the relevant offence.
Banning orders are made following an application by the local authority to the First-tier Tribunal (Property Chamber) which has legal powers to grant banning orders.
Once a banning order is made it must last for at least 12 months, but there is no maximum ban period.
The Act sets down how the First-tier Tribunal should consider an application, including that it should take account not just of the fact that an offence has been committed but also the seriousness of the offence. It also outlines what letting activities a convicted landlord is actually banned from performing.
According to research by The Guardian newspaper only 39 landlords and letting agents received banning orders in the first three years of their existence.
The Knapp and Bristol City Council case
Now let us look at the case which led up to this important ruling as regards banning orders.
Landlord Naomi Knapp has been a landlord in the Bristol area for many years. However, Bristol City Council in its role as local housing authority had apparently been concerned about the standard of some of this landlord’s properties since at least 2016. More recently, following Bristol City Council’s introduction of additional licensing in 2019, a number of the landlord’s HMOs came under the remit of additional licensing for the first time.
In recent years Bristol City Council had given advice to the landlord and obtained undertakings that the issues would be resolved. They had issued penalties and subsequently pursued a prosecution for management and licensing offences in the magistrates’ court. In 2021 the landlord pleaded guilty to these offences and was convicted of eight charges at three properties, all of which were banning order offences. They were fined £22,000 as a result.
The council subsequently informed the landlord that it intended to apply for a banning order. In January 2022 the council applied to the First-tier Tribunal for such an order. After several months of legal deliberations a five year banning order was granted in August 2022, subject to a six month stay of execution for existing tenancies.
The landlord subsequently decided to appeal to the Upper Tribunal (Lands Chamber) against the banning order and her legal representatives pursued a number of grounds in support of this appeal. Essentially these questioned whether the First-tier Tribunal had followed the correct procedure in granting the banning order.
The most important of these grounds concerned a requirement in the Act that, in deciding whether to make a banning order and what order to make, the First-tier Tribunal must consider the seriousness of the original offences and that this had not been done correctly.
Another ground surrounded the effect of a banning order on letting property. The landlord’s legal representatives argued that this only applied to new lets and not existing, established tenancies.
The decision of the Upper Tribunal (Lands Chamber)
In determining the appeal the Upper Tribunal (Lands Chamber) considered various aspects of how the First-tier Tribunal had reached its decision to grant the banning order. It looked at their assessment of the seriousness of the offences, whether the level of fines imposed by magistrates is a permissible guide and at the tribunal’s use of its own knowledge of these fines.
At the end of May 2023 the Upper Tribunal issued its decision. The landlord’s (or appellant as they are known) appeal was dismissed on all grounds.
The decision can be read in full here.
In summary, the Upper Tribunal decided that there was nothing inappropriate in the way the First-tier tribunal had made its assessment including the seriousness of the banning order offences, the sentences originally levied by the magistrates’ court and drawing on its own experiences.
The Upper Tribunal decided that a ban on letting properties does apply to existing tenancies and not just the activity of letting a property to a new tenant subsequent to the ban.
The landlord was given until 1 December 2023 before the banning order will take affect relating to their existing tenancies.
As with all other cases, the parties involved are entitled to apply for permission to appeal this decision in the Court of Appeal. So potentially there may be further developments in this case.
What we might learn from this case
The banning order procedure does have teeth. Landlords can be banned from their business activities.
A key takeaway from this case, however, is that the idea of banning orders on landlords (or for that matter letting agents) seems simple in concept but it is not so simple in practice. In particular, as they only came into force in 2018 and are not extensively used, there is relatively little case history out there illustrating how they work, or are supposed to.
The legalities behind banning orders are, as perhaps might be expected, very complex. Not only that but the courts have had only limited opportunity to consider them. In particular, this is apparently the first time the Upper Tribunal has heard an appeal against a banning order under the Housing and Planning Act 2016.
Different local councils have different views on the use of banning orders with some being more enthusiastic and some less so. But it would be safe to assume that even the more enthusiastic authorities lack extensive experience in their use, and that some have none.
Although it has been decided it was not the case with this landlord, the fact that banning order procedures are to some extent immature means there is likely the potential for them to be imposed wrongly. Also, any errors are likely to be extremely difficult to untangle. Therefore any landlords faced with the prospect of having a banning order being made against them should certainly take expert advice at an early stage.
Lastly, it will be interesting to see what if any impact the Renters (Reform) Bill might have on the numbers of landlords who may face banning orders, and if it will change the way in which they are pursued.
The Renters Reform Bill: What’s In It And What Does It Mean For Landlords?
