HMO & Housing Offences: New Draft Sentencing Guideline Explained (Video)

Introduction to Robin Stewart and Sebastian Cox

Robin Stewart: Hello, I’m Robin Stewart. I’m a partner in the Housing and Property Disputes team at Anthony Gold. And today I’m joined by criminal barrister Sebastian Cox from Crucible Chambers, and we’re going to talk about the new draft sentencing guideline for housing and HMO offences.

Seb, you’re a criminal barrister, so your normal day-to-day work involves just standard criminal practice, doesn’t it?

Sebastian Cox: Yes, I deal with all sorts of criminal law, from very serious crimes, white collar crime and everything, including corporate crime.

Robin Stewart: But you do have a background in housing as well, starting off working with us at Anthony Gold.

Sebastian Cox: Yeah, I was in the housing team, housing and property disputes team as a paralegal from, I think, 2016 until 2018.

Housing and HMO offences, and why sentencing guidance is needed

Robin Stewart: What we’re talking about today is criminal offences relating to housing, so offences generally committed by landlords or letting agents. And up until now, those offences, when they’re prosecuted in the criminal courts, haven’t had any specific sentencing guideline, have they?

Sebastian Cox: No, that’s right. So the courts have been effectively left to deal with sentence on a case-by-case basis, which to some extent leads to uncertainty for defendants, but also it can lead to confusion and inconsistency for the courts.

Robin Stewart: So most of the time, there is a guideline. If you’re representing a defendant in criminal proceedings, when you get to sentencing, there normally would be a guideline.

Sebastian Cox: Yeah, so in almost every common criminal offence, there is a statutory guideline drawn up by the Sentencing Council, and the courts are bound by law to follow those guidelines.

Robin Stewart: This new guideline, or draft guideline — it’s still only a draft at this stage — relates to houses in multiple occupation, HMOs, HMO licensing and selective licensing as well, safety and maintenance standards for rented property, and illegal evictions as well.

A lot of people have been asking for a sentencing guideline on these offences for some time. Is that something that you felt was necessary as well?

Sebastian Cox: So when these cases do go to the criminal courts and there are prosecutions brought, quite often, up until now, you have been left in the dark in terms of advising your client what sentence they might expect, but also making reasoned submissions to a judge, particularly in this sort of case where the sentences almost always are fines.

Robin Stewart: At the moment, at the time of filming, it’s still a draft guideline. So is it something which the courts can take into account yet?

Sebastian Cox: Well, unfortunately not. So the courts are not permitted to look at draft guidelines, despite how tempting it may be, both for practitioners and sentencing judges. There are quite clear authorities saying they are only draft guidelines and not for real practical use.

How the draft sentencing guideline may work in practice

Robin Stewart: There’s probably no point in us going through all of the detail of the guideline because it may change slightly. And if people want to read it, they can find it online and we’ll link to it. But in general, it goes through various stages, doesn’t it? So we start by looking at the offence itself and get to a starting point. And then the court looks at the specific circumstances of the offence and the offender to work out what would be an appropriate fine.

What sorts of things are going to be the most important factors to a criminal court when trying to assess a fine? Say, for example, an offence of managing an unlicensed HMO — how is the court going to go about assessing what the level of the fine should be? Which factors are going to be important in that decision?

Sebastian Cox: Yeah, so this guideline follows the standard route where they first look at the culpability — so the seriousness of the offence, but also that individual’s personal culpability in the context of that offence — and they look at the harm it could have caused overall. And in this sort of case, they will look at, for example, the length of time that the property was unlicensed, they’ll look at the potential harm or the risk of harm that could have been caused to tenants, and they’ll weigh up the various factors in the case, which will of course vary on a case-by-case basis. They will also have to look at the individual landlord or agent’s personal circumstances and any personal mitigation that they might have.

Financial circumstances, economic benefit and POCA considerations

Robin Stewart: I think something we both have experience of is landlords who are being prosecuted are still very cagey about their own financial circumstances and quite reluctant to share that information with the court. Is that something they’re just going to have to live with?

Sebastian Cox: Yeah, the difficulty is criminal proceedings are public and I can well understand why individuals feel cautious about putting their personal financial situation out before the court. In reality, because the court is going to be looking at the person’s financial circumstances when considering a fine or any benefit from the offending, they will have to consider very carefully putting that in front of the court.

Robin Stewart: One aspect of the guideline which we’re both very interested in, and we think is going to be difficult for the courts to apply, is the stage that looks at the financial benefit which a landlord has gained through their offending. Because the guideline asks the court to look at that and try to make sure that the person who’s committed an offence isn’t in a better-off financial position as a result of committing an offence. Do you think that’s going to be difficult for the courts to apply in practice?

Sebastian Cox: I think it will. This guideline is unusual and interesting in that, currently in the draft, the court is required to add to the fine that they’ve already settled on the economic benefits of the offending. Now, ordinarily, that might be the sort of thing that is covered by the Proceeds of Crime Act — what we would call POCA proceedings. So it’ll be really interesting to see how that all works in practice and how courts work out what the benefit could be. It could be the benefit of not paying the licence in that sort of case, or it could be other benefits that prosecutors feel that defendant has had. It would be interesting, if the draft proceeds as it currently stands, to see how courts deal with that.

Robin Stewart: And there’ll be a temptation there for courts to try and do a speeded-up version of confiscation under POCA as part of the sentencing exercise, which would be unusual, wouldn’t it?

Sebastian Cox: Well, it would — not least because confiscation proceedings tend to have a much deeper look at a person’s financial affairs, and it could very well lead to points of appeal. So it will be, as I say, interesting, and it’s to some extent uncharted territory for the criminal courts.

Rent repayment orders and avoiding double counting

Robin Stewart: Another interesting aspect of sentencing and fines in this particular area is that, in addition to any fine imposed by criminal courts or by the local authority, tenants have the power to apply for a rent repayment order if their landlord has committed one of a number of specified offences. So where that applies, a tenant would apply to the First-tier Tribunal for a rent repayment order, and under the Renters’ Rights Act, the maximum amount of that order is two years’ rent. How can the courts take that into account when they’re imposing a fine, if someone is being both prosecuted and is, or potentially is, the subject of a rent repayment order?

Sebastian Cox: That is a very interesting question indeed. And the reason I say that is because courts, when sentencing, can already make an order for compensation to tenants in certain cases. And the guideline says not to double count. But there is a risk, I think, that there will be a sort of “double bubble,” as it were, if rent repayment orders are sought in these cases. The difficulty is the sentencing judge might not know if they’re going to be applied for by the tenants, but they still have to make a decision about economic benefits. So we could see cases where there is a conflict, in a way, between these two jurisdictions.

Robin Stewart: And this is an area of law that I know you know about because we used to work on these cases together, but I think the average criminal barrister probably has never had anything to do with a rent repayment order, and it might not occur to them to ask the court to take that into account. So I think this is going to be an area where people with a real interest and specialism in housing law, housing legislation, and how that interacts with criminal law will have a real advantage.

Sebastian Cox: Yes, and the same is probably true of district judges and magistrates who will, at the end of the day, be passing sentences in these cases. And it will be the job of those representing the person accused to make people aware that there is this separate regime with rent repayment orders and how they could interact.

Criminal fines compared with local authority civil penalties

Robin Stewart: The other thing that we’ve talked about is the contrast between fines in the magistrates’ court, or in the Crown Court on appeal, and the financial penalties which local authorities can impose for the same offences. So a landlord who has been managing an unlicensed HMO can be the subject of a penalty imposed by the local authority of up to £40,000. And we were just discussing earlier some fairly recent guidance issued by the government about those penalties, which have a completely different system for setting them. The offence we’ve been talking about, managing an unlicensed HMO, under those guidelines has a starting point of £17,000, which the council would then adjust up or down based on the particular factors of the case. That’s a completely different approach, isn’t it?

Sebastian Cox: It is. And fines in the magistrates’ court, and all the criminal courts in fact, for individuals are based on a percentage of a person’s income. So they are completely different. I imagine they will result in completely different levels of fine, depending on whether a person is prosecuted or whether a council goes via a civil penalty. That will, I’m sure, influence decisions made by local authorities and whether they prosecute people. But it will lead to some interesting — I don’t know whether they’ll be inconsistent or not — but it will lead to some interesting results at the end of the day.

What the final guideline could mean for landlords and advisers

Robin Stewart: And taking a step back, just looking at this in context, I think we’re both expecting that the Sentencing Council will publish this guideline as a final version, and there might be a few tweaks here and there, but it will be basically what we have in front of us now. It’s going to make sentencing in some ways simpler for the courts because they’ll have a guideline to follow, but it throws up lots of other issues, some of which we’ve talked about. Is it going to mean overall fines are higher or lower, or just a bit more complicated? Do you have any thoughts on that?

Sebastian Cox: I think we all will welcome the predictability that a guideline can offer, because you know the things they’re looking for. And that means when you are arguing and mitigating a sentence, you know what points are going to apply on the guideline. What I think remains to be seen is whether there will still be a very broad range of inconsistency in terms of how the guideline is interpreted. And guidelines are not tram lines, as barristers like to say — courts do not have to take the same approach necessarily in every case. But I can foresee, as currently drafted, there is scope on this guideline for submissions made by counsel to make a very big difference to the level of fine being imposed.

How to get advice

Robin Stewart: Thank you very much.

If you’re a landlord or a letting agent and you would like advice about a regulatory issue or a criminal prosecution, you can contact our solicitors on 020 7940 4060, or you can find more details about our services at anthonygold.co.uk. You can also contact Sebastian’s clerks at Crucible Chambers.

About the Speakers

Robin Stewart, Partner, Housing and Property Disputes

Robin Stewart is a Partner in the Housing and Property Disputes team at Anthony Gold Solicitors, specialising in property litigation, landlord and tenant disputes, and the regulatory law relating to rented property. He is a member of the steering group of the National HMO Network and the Property Redress Scheme Advisory Panel, and is a regular speaker at HMO Network conferences and training events across the sector. Robin advises landlords, letting agents and housing professionals on licensing, regulatory enforcement and compliance, and has written extensively on the Renters’ Rights Act and its impact on the private rented sector.

Read Robin Stewart’s full profile →

Sebastian Cox, Barrister, Crucible Chambers

Sebastian Cox is a criminal barrister at Crucible Chambers, with experience across criminal law, corporate and white-collar crime, and housing-related criminal offences. Before joining the Bar, Sebastian worked as a paralegal in the Housing and Property Disputes team at Anthony Gold Solicitors, giving him a grounding in housing law that continues to inform his criminal practice today.

Find out more about Sebastian Cox at Crucible Chambers →

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