Property licensing has become a cornerstone of local government efforts to regulate the private rental sector. For landlords, the consequences of non-compliance are severe and may even include Rent Repayment Orders (RROs) that require the return of thousands of pounds in rent to tenants. However, a significant legal question has emerged: what happens when a landlord tries to comply, but the technology of the local authority (LA) prevents them from doing so? A recent appeal in the Upper Tribunal (UT) addressed this exact scenario, providing a landmark ruling on the "reasonable excuse" defence and the limits of landlord liability when faced with administrative failure.

Background:

Mrs. Isobel Okoye, Mr. Okoye's wife, became the registered proprietor of a property in 2003, and she and her husband occupied it as their family home.  In its original configuration, the property was a two-storey terraced house. As Mrs. Okoye emigrated to Canada and Mr. Okoye spent much of his time in Nigeria, the couple decided to subdivide their family home into two separate units in 2018: an upper flat for Mr. Okoye’s use during his UK visits and a ground-floor flat, designated ‘1a’ to be let to tenants.

Although the subdivision was completed with the oversight of the LA’s building control department—which issued a certificate of completion in 2019—a significant administrative gap opened. The certificate failed to include a detailed description of the works, meaning that the council’s central database was never updated to reflect that "1a" existed as a distinct dwelling. In 2021, the borough introduced a selective licensing scheme, requiring all private landlords in the area to obtain a licence for their properties.

In 2022, the ground-floor flat was let to tenants, but when the family attempted to use the council’s mandatory online portal to apply for a licence, the system blocked them. Because the address "1a" was not in the database, the portal refused to accept the application. For four months, the family pleaded with the council to update the system, but by the time the address was added and the licence granted in November 2023, the tenants had already moved out and filed a claim to reclaim over £8,800 in rent. The First-tier Tribunal (FTT) ordered, under Section 40 of the Housing and Planning Act (HPA) 2016, to repay rent of £8,844.95 to the respondents. The couple appealed.

Decision:

The UT allowed the appeal and set aside the previous decision, ruling that the Lower Court had been distracted by irrelevant "blame-shifting". The Judge noted that there is no specific legal duty for a landlord to verify that a council’s internal databases are synchronised years before a licensing scheme is even conceived.

Crucially, the UT held that, once the landlord made a genuine attempt to apply on 27 September 2022, and was thwarted by a faulty portal configuration, a "reasonable excuse" was established. The law does not require a person to do the impossible; if the only way to apply is through a portal that rejects you, you cannot be found to be "unlawfully" managing the property. Consequently, because the offence effectively stopped the moment the excuse began, the tenants’ claim was filed too late to meet the strict 12-month statutory deadline for rent repayment.

Implications:

This decision is a major win for landlords who find themselves caught in the "gears" of local government bureaucracy. It confirms that the "reasonable excuse" defence is not a narrow loophole but rather a necessary safeguard against administrative failure. For property owners and managers, the cautionary lesson is that the court values documented effort over perfect results. If you are faced with a technical barrier, whether this be a broken website or a missing database entry, your protection lies in creating a paper trail of your attempts to comply.

This ruling reinforces that a landlord is not responsible for the internal communication failures between different council departments, such as Building Control and Licensing. Further, it highlights the importance of timing in RROs, as if a landlord can prove a reasonable excuse for even a portion of the tenancy, then this can shift the legal "end date" of the non-compliance, often rendering a tenant’s claim void due to time limits. In an era where "Digital-First Government” is becoming the norm, this case ensures that when the "digital" fails, the "human" is not unfairly penalised.