The Upper Tribunal (UT) has upheld a landlord's appeal against a civil penalty imposed on him for managing an unlicensed house in multiple occupation (HMO).

The property had five bedrooms which were let to individuals who did not form a single household. It met the definition of an HMO under the standard test contained in Section 254 of the Housing Act 2004, and therefore required a licence if it was occupied by five or more persons. The local authority imposed a civil penalty of £15,000 on the landlord on the basis that, on 7 July 2022, he had been managing or had control of an HMO which was required to be licensed but was not, contrary to Section 72(1) of the Act.

He appealed to the First-tier Tribunal (FTT) on a number of grounds, including that on 7 July 2022 there were only four people living in the property and that one of the occupants did not live there as her only or main residence. However, the FTT was satisfied beyond reasonable doubt that there had been five people living in the property as their only or main residence on that date, and imposed a penalty of £7,500.

The landlord made a further appeal to the UT on the ground that, in respect of one of the five occupants, there was insufficient evidence before the FTT for it to conclude that on 7 July 2022 she had lived at the property as her only or main residence.

The FTT had considered evidence from two of the occupants and from two council officers. The council officers' evidence was that 'all the rooms they saw appeared to show that people had a settled intention to occupy the rooms as their main residence'.

The UT noted that, in such cases, it was not unusual for the FTT to have evidence from some but not all of the occupants. Direct evidence was not essential and inferences could be drawn from other evidence, but there must be some evidence from which an inference can be drawn. The council officers had not seen either the fifth occupant or her room, and the occupant who had said most about her had only lived at the property for about a month.

While observing that it would only rarely interfere with a finding of fact made by the FTT, the UT concluded that the finding that the fifth occupant lived in the house as her only or main residence on 7 July 2022 could not be justified on the evidence before the FTT. In consequence, only four people were found to be occupying the house as their only or main residence on that date. The finding that the landlord had committed an offence under Section 72(1) therefore could not stand, and no financial penalty could be imposed on him.