By Gabriel Princewill-
The London Borough of Greenwich is facing renewed questions over the fairness and proportionality of its housing enforcement practices, after a subcontracted company was issued with a £2,500 financial penalty over a none licensed property. This was despite the fact the subcontracted company( First capital housing) it had been led to believe—through written assurances—that the property owner held the licence required under the council’s licensing scheme.
The dispute, which was ultimately resolved through mediation to avoid the escalating costs and uncertainty of litigation, has raised wider concerns about whether enforcement action was directed at the most appropriate party and whether sufficient weight was given to evidence that the contractor says demonstrated it had acted in good faith.
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At the heart of the case lies a straightforward but significant question- whether a subcontractor can be penalised for carrying out work after relying on written information from a managing agent stating that the landlord possessed the necessary licence, only to discover later that no such licence existed. According to the company’s account, it had been engaged as a subcontractor by a property management company to undertake work connected with a rented property within Greenwich. Before carrying out the work, the company says it received written confirmation from the management company indicating that the landlady held the relevant property licence.
The contractor contends that there was no reason to doubt those assurances and that it proceeded on the basis of information provided by the party responsible for managing the property. It later emerged, the company says, that the landlady did not in fact possess the required licence. Rather than focusing enforcement solely on those responsible for the licensing position, Greenwich Council imposed a financial penalty of £2,500 on the subcontracted company.
The contractor argues that it became caught between inaccurate information supplied by others and the council’s decision to pursue enforcement against a business that says it neither owned nor controlled the property and had relied on written representations from those who did. The case has prompted broader questions about the purpose of local authority enforcement powers and the extent to which councils should distinguish between deliberate non-compliance and parties who may themselves have been misled.
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Housing licensing schemes play an important role in regulating standards in the private rented sector. Local authorities have statutory powers to enforce licensing requirements and to take action where landlords fail to comply with legal obligations designed to protect tenants and improve housing conditions.
Those powers exist to safeguard the public interest and to encourage compliance across the sector. Equally, however, public law principles require enforcement decisions to be exercised fairly, rationally and proportionately. Businesses facing regulatory action frequently argue that decision-makers should consider the surrounding circumstances, including whether the recipient of a penalty acted honestly, whether reasonable checks were undertaken and whether responsibility may lie elsewhere.
In this case, the contractor maintains that it did precisely what many businesses would regard as reasonable due diligence by obtaining written confirmation from the management company responsible for overseeing the property.
They argue that, having received those assurances, it had no reason to suspect that the licensing position had been inaccurately represented. The central issue, therefore, is not simply whether the property required a licence ,but whether it was fair to penalise a contractor that says it relied on information supplied by those engaged to manage the property on the landlord’s behalf.
The dispute also raises wider questions about accountability within increasingly complex contractual arrangements. Property owners commonly appoint managing agents, who in turn engage contractors or subcontractors to perform work.Each participant relies to some extent upon information provided by others.
Where that information later proves incorrect, determining where legal responsibility properly rests can become a matter of considerable dispute.The case for regulators highlights the importance of carefully considering the role played by each participant before determining whether financial penalties are an appropriate enforcement response.
The company maintains that, despite believing it had a strong basis to challenge the penalty, it ultimately chose to resolve the matter through mediation. According to its account, the decision to settle was driven not by an acceptance of wrongdoing but by the practical realities of litigation.
Like many small and medium-sized businesses, it says it faced the prospect of substantial legal costs, management time and uncertainty had the dispute proceeded through the courts.
Mediation has become an increasingly common feature of civil disputes. Allowing parties to reach commercial resolutions without incurring the expense and delay associated with contested proceedings settlements achieved through mediation, do not necessarily represent admissions of liability by either party and are often reached because they offer a pragmatic conclusion to disputes that might otherwise consume considerable resources.
Even so, the circumstances surrounding this case continue to raise legitimate public-interest questions about proportionality in regulatory enforcement. Local authorities possess significant statutory powers to impose financial penalties in appropriate circumstances, and those powers are intended to secure compliance with housing legislation rather than to punish indiscriminately.
Each enforcement decision must for that reason be capable of withstanding scrutiny as being fair, evidence-based and proportionate to the facts of the individual case. Critics of regulatory enforcement have long argued that businesses can sometimes find themselves facing substantial financial penalties despite having acted in good faith or relied upon inaccurate information supplied by others.
Councils, for their part, maintain that robust enforcement is necessary to ensure compliance with housing standards and to protect tenants from unlawful or unsafe accommodation. The balance between effective regulation and fairness to those affected remains an issue of continuing public debate.Cases such as this illustrate why that balance matters.
Where evidence exists that a party relied upon written assurances provided by another participant in the transaction, questions inevitably arise as to whether sufficient consideration was given to that reliance before enforcement action was taken.
The contractor says that the written statement from the management company formed a central part of its understanding that the property complied with licensing requirements. Whether that evidence should have altered the council’s approach is a matter likely to attract differing views, but its existence is likely to be regarded by many as relevant to any assessment of responsibility.
The resolution of the dispute through mediation means there has been no judicial determination of the competing positions. Nevertheless, the issues raised extend beyond the circumstances of a single enforcement action. They touch upon broader questions concerning transparency, proportionality and the exercise of regulatory discretion by public authorities.
Councils across England continue to make greater use of civil financial penalties within housing enforcement, rendering disputes over where responsibility properly lies likely to become increasingly common. Businesses operating within the sector may therefore look closely at cases such as this when assessing their own due diligence procedures and contractual protections.
Public confidence in enforcement depends not only upon ensuring compliance with housing law but also upon demonstrating that regulatory powers are exercised fairly, proportionately and with careful regard to the individual facts of each case.
Where a business says it acted in reliance on written assurances from those responsible for managing a property, questions about whether enforcement was directed at the most appropriate party are likely to remain part of the wider public debate, notwithstanding the commercial settlement that ultimately brought this dispute to an end.
Nathan Hancox from First Capital Housing told The Eye Of Media.Com: ” Greenwich Council were aware that we were misinformed as to the licensing state of the property in question , but when ahead to fine us heavily for something that was not our fault. We settled in mediation for a reduced fine, only to save the legal costs of proceeding to a full hearing
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