Council's Appeal Dismissed: Tribunal Right to Quash Damp & Mould Improvement Notice

Neutral Citation Number: [2026] UKUT 237 (LC) Case No: LC-2025-397 IN THE UPPER TRIBUNAL (LANDS CHAMBER) AN APPEAL AGAINST A DECISION OF THE FIRST TIER (PROPERTY CHAMBER) Ref: BIR/41UD/HIN/2024/0017 Birmingham Civil Justice Centre 25 June 2026 TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007 HOUSING – IMPROVEMENT NOTICE – challenge to FTT’s assessment of validity of improvement notice – whether evidence demonstrated that mould was caused by damp rather than by poor ventilation and inadequate heating – relevant date for assessment of validity of improvement notice – Schedule 1, Housing Act 2004 – appeal dismissed BETWEEN: WALSALL METROPOLITAN BOROUGH COUNCIL Appellant -and- VR INVESTMENTS LIMITED Respondent [REDACTED] Martin Rodger KC, Deputy Chamber President 2 June 2026 Mr Appollo Fonka for the appellant Mr Sanjeev Kumar for the respondent © CROWN COPYRIGHT 2026 The following cases are referred to in this decision: Curd v Liverpool City Council [2024] UKUT 218 (LC) Hussain (Nasim) v Waltham Forest LBC [2023] EWCA Civ 733 Manaquel Co Ltd v London Borough of Lambeth [2025] UKUT 97 (LC) Introduction 1. This is a local housing authority’s appeal against the decision of the First-tier Tribunal, Property Chamber to quash an improvement notice served by the authority under Part 1 of the Housing Act 2004 ( the 2004 Act ). The appellant is Walsall Metropolitan Borough Council (the Council). The respondent is VR Investments Ltd, a property investment company which owns the building containing the flat in respect of which the Council served the disputed improvement notice. 2. 39 Lysways Street in Walsall is a block of 6 flats constructed in the 1960s or 1970s. There are two flats on the top floor, including flat No.5 (the Property), which has been let by the respondent to the current tenant for many years. The roof of the building fell into disrepair and in 2023 the Property suffered from water ingress which caused damage to ceilings. In November 2023 the Council served an improvement notice on the respondent, requiring it to repair the ceilings in the bedroom and living room and to remedy damp and mould which was present in those rooms. The respondent carried out the work required to the ceilings but the Council was dissatisfied with its treatment of the damp and mould which appeared to have spread to other areas.

3. On 6 June 2024 the Council withdrew the original notice and served a second improvement notice requiring the respondent to remedy what it considered to be a category 1 hazard to health caused by damp and mould growth in the living room, bedroom, kitchen and bathroom of the Property. The notice required the respondent to obtain a report from a damp specialist and to undertake the remedial work suggested by that specialist, which was to include removing the mould and treating affected walls and ceilings.

4. The respondent appealed to the FTT against the second improvement notice, maintaining that the Property was no longer affected by damp and that the presence of mould was caused by the tenant’s failure to heat or ventilate the Property adequately. After inspecting the Property and finding no current evidence of damp the FTT quashed the second notice. It did so on the basis that the original hazard scoring wrongly assumed the walls and ceiling surfaces were damp and was accordingly too high and that, at most, the dampness and mould growth present when the notice was served gave rise to a category 2 hazard.

5. The Council now appeals against the FTT’s decision of 16 April 2025 quashing the notice. Permission to appeal was granted by the Tribunal, having been refused by the FTT.

6. At the hearing of the appeal the Council was represented by Mr Appollo Fonka, its Strategic Housing and Standards Lead. The respondent was represented by its director, Mr Kumar. Relevant legislation 7. Chapter 1 of Part 1 of the 2004 Act provides a scheme for assessing housing conditions by reference to the existence of category 1 and category 2 hazards. A “hazard” is defined in section 2(1), as: “any risk of harm to the health or safety of an actual or potential occupier of a dwelling or HMO which arises from a deficiency in the dwelling or HMO or in any building or land in the vicinity (whether the deficiency arises as a result of the construction of any building, an absence of maintenance or repair, or otherwise)”.

8. Category 1 and 2 hazards are classified by reference to a numerical score assessed under the Housing Health and Safety Rating System (England) Regulations 2005 and known as an HHSRS assessment. By section 2(1), 2004 Act a category 1 hazard is a hazard of a prescribed description which achieves an HHSRS score above a prescribed amount; a category 2 hazard is a hazard which achieves a score below that prescribed amount. A category 2 hazard is therefore less serious than a category 1 hazard but it is not simply a defect or deficiency; to be a hazard of either category there must be a “risk of harm … which arises from a deficiency in the dwelling or HMO”.

9. Where a local housing authority becomes aware that a category 1 hazard exists in residential premises it has a duty to take action (section 5(1), 2004 Act); where it finds a category 2 hazard it has a discretion to do so (section 7(1)). In either case a range of powers is available to it including the service of an improvement notice under sections 11 or 12 of the Act (for category 1 and category 2 hazards respectively).

10. An improvement notice is “a notice requiring the person on whom it is served to take such remedial action in respect of the hazard concerned as is specified in the notice” (section 12(2), 2004 Act). Non-compliance with an improvement notice is a criminal offence.

11. Section 13(2), 2004 Act provides for the contents of improvement notices. The notice must specify the nature of the hazard and the residential premises on which it exists, the deficiency giving rise to the hazard, the premises in relation to which remedial action is to be taken and the nature of that remedial action.

12. Paragraph 10(1) of Schedule 1, 2004 Act provides for a right of appeal to the FTT against an improvement notice. The effect of an appeal is to postpone the date on which the improvement notice becomes operative until after the completion of the appeal process (including any onward appeal to this Tribunal) (section 15(5) and paragraph 19(2) of Schedule 1, 2004 Act).

13. Paragraph 15(2) and (3) of Schedule 1, 2004 Act set out the powers of the FTT on an appeal. The appeal is to be by way of a re-hearing but may be determined having regard to matters of which the authority were unaware. The FTT may confirm, quash or vary the improvement notice.

14. In Hussain (Nasim) v Waltham Forest LBC [2023] EWCA Civ 733 , the Court of Appeal considered the identically-worded paragraph 34 of Schedule 5, 2004 Act (concerning appeals against local authority decisions relating to licensing). It was common ground that although an appeal was to take the form of a re-hearing, that did not mean that the FTT should disregard the views of the local authority and begin its own consideration entirely afresh. On the contrary, because the local authority is the body entrusted by Parliament with the primary responsibility for making such decisions, the FTT should accord its views special weight or deference and should only conclude that one of its decisions is wrong if it disagrees with the decision despite having accorded it that special weight.

15. The Court of Appeal also concluded in Hussain that the FTT was required to consider whether the decision under appeal was wrong at the time when the decision was taken (and not at the date of the appeal). The matters to which it was entitled to have regard therefore comprised only those which had occurred by the time the decision was taken and which could have been taken into account by the authority if it had been made aware of them.

16. The Tribunal confirmed in Curd v Liverpool City Council [2024] UKUT 218 (LC)  that the approach taken to appeals in Hussain is also the correct approach in appeals against improvements notices. The improvement notice 17. The improvement notice of 6 June 2024 was served under section 11 of the 2004 Act and recorded that the Council was satisfied that category 1 hazards existed at the Property. The particular hazard identified was damp and mould growth located throughout the Property. The cause of the hazard was not precisely stated and the deficiency which was said to give rise to it was described simply as “evidence of damp and mould growth” on the ceilings and walls of each of the four rooms in the Property.

18. Two remedial actions were specified in the notice. The respondent was first required to instruct a suitably qualified and competent damp specialist to carry out a damp survey of the Property and provide a copy to the Council by 12 July 2024. Secondly, the respondent was required by 5 August 2024 to: “Undertake all remedial works specified in the damp report to include removing the mould and treating all specified walls and ceilings to the living room, kitchen, bathroom and bedroom together with other applicable areas throughout the property with anti-mould treatment. Once this is completed make good the affected areas throughout the property and paint with anti-mould paint.” The FTT proceedings and its decision 19. The respondent’s appeal to the FTT was filed on 20 June 2024, two weeks after the second improvement notice had been served. In its grounds of appeal it asserted that the necessary repairs to the roof of the building had been carried out and the work required by the first improvement notice had been completed. The presence of mould was said to be due to the tenant’s failure to ventilate or heat the Property and was said not to have been caused by damp. A report had been obtained from a damp specialist which confirmed that the ceilings were “bone dry”. No copy of that report was provided with the appeal, nor was a copy sent to the Council within the time required by the improvement notice (which had not yet become operative). An undated report was subsequently supplied when the parties exchanged documents at the FTT’s direction.

20. The FTT inspected the Property before the hearing on 12 March 2025 and recorded its observations in its decision. Signs of historic moisture ingress, condensation, damp and mould growth were noted but on testing surfaces with a damp meter low readings were recorded, indicating that the surface plasterwork was dry. Parts of the ceilings had been replaced and redecorated but other affected areas remained. The Property was cold and the heating was not switched on. Quantities of the tenant’s belongings were present in the Property and restricted the circulation of air, especially around external walls.

21. At the hearing the respondent relied on an unsigned and undated letter from a firm of damp proofing and plastering contractors which referred to an inspection at which the writer had observed “black spot mould condensation to ceiling area and walls to a majority of rooms within the flat”. When the walls and ceilings were checked with an electronic moisture meter they were found to be dry. Photographs of the moisture meter showing those readings were attached to the letter.

22. The Council relied on a witness statement prepared by its Housing Standards Officer, Ms Gavriliuc, who had inspected the Property on four occasions between October 2023 and 23 May 2024. She exhibited photographs, including of the condition of the Property on 23 May which showed that waterlogged and sagging ceilings had been replaced in the living room and bedroom but confirmed the presence of mould and staining on walls throughout the Property and on the ceilings of the kitchen and bathroom. She explained her dealings with the respondent, including a request she had received in March 2024 for an extension of time to comply with the first improvement notice and an email from the respondent on 16 April 2024 saying that all work required by the first notice had been completed.

23. Ms Gavriliuc was explicit in her witness statement that she had observed evidence of damp on her inspection on 23 May 2024. She inferred that the damp was the result of rainwater ingress in the autumn of 2023 while the roof was being replaced and was temporarily uncovered. She thought it likely that loft insulation and damp plaster had not been fully removed and that these explained the residual moisture in the structure. She did not mention any inspection of the loft area or suggest that she had seen damp insulation or tested for the presence of damp plaster.

24. In the course of the hearing Ms Gavriliuc was questioned by the FTT which recorded her responses in its decision. She confirmed that whilst it was her opinion that the roof leak and the remains of water affected material was the cause of the mould growth “there was no proof to this effect” and the moisture readings taken by the respondent’s expert and by the FTT itself recorded that the walls and ceilings were dry. She also agreed that the respondent had instructed a suitably qualified and competent damp specialist and had commissioned a competent decorator who had removed the mould and treated all the walls and ceilings prior to the service of the second improvement notice on 6 June. She had been “unable to state with confidence, contrary to the Appellant’s expert, that on service of the 6th June 2024 Improvement Notice, the walls and ceilings, in the stated rooms were damp”.

25. The substance of the FTT’s decision is explained in the following passages from paragraphs [48] to [50]: “… [T]he Respondent had determined that a category 1 hazard in respect of dampness and mould growth was present at the property. The calculations undertaken in this assessment resulted in a “hazard score” of 1,630.00 (band C) and were based on the assessing officer’s determination that the “likelihood” [of harm] was 1 in 3. This “high level” likelihood figure was based on the presence and extent of dampness (from the leaking roof) and mould growth at the property. As the Respondent conceded that the applicant had undertaken the roof repair (and other works) and could not confirm that wall and ceiling surfaces were actually damp, prior to the service of the Improvement Notice on the 6th June 2024, then this likelihood figures is considered unreasonably high.

49. Given the methodology of the HHSRS, any “lower” likelihood figure used in the rating system calculation, would produce a “hazard score” of less than 1000, (e.g. a likelihood figure of 1 in 6 would result in a hazard score of 815) so a category 2 hazard would be present (and not category 1).

50. The significance of the above is that the Local Housing Authority have served the Improvement Notice under section 11 of the Housing Act 2004 , which relates only to category one hazards. At most, on the 6th June 2024 the dampness and mould growth present at the property would have been a category 2 hazard and therefore the Local Housing Authority should have served an Improvement Notice under section 12 of the Housing Act 2004. In short the wrong notice has been served.

26. The FTT refused a request by the Council for permission to appeal. In its refusal it reiterated the responses given by Ms Gavriliuc to the panel’s questions. In doing so it added one point of detail not included in the original decision, namely, that in complying with the first improvement notice the respondent had not only removed damaged and fallen plaster but had installed fibreglass insulation in the roof void before replastering and painting the ceilings. The evidence about new insulation must have been given at the original hearing although it was not recorded in the decision. The appeal 27. Permission to appeal was granted by the Tribunal on four grounds. These were set out at some length in the application and overlapped. I summarise them as follows (ground 1 being an amalgam of grounds 1 and 2 in the application):

1. The FTT misdirected itself as to the date on which it should focus attention and allowed itself to be influenced by steps taken before and after the service of the improvement notice rather than considering whether the decision to serve the notice was wrong at the time it was made.

2. Having focussed on the wrong point in time, the FTT gave insufficient weight to the Council’s original decision and placed unjustified weight on the “expert” report provided by the respondent.

3. The FTT’s decision to quash the notice was wrong; if it was satisfied that the hazard was a category 2 hazard the appropriate course would have been to vary the notice to require the same work to have been carried out to remedy the category 2 hazard. Ground 1 28. The proposition that on an appeal against an improvement notice the FTT should consider whether there were grounds for serving the notice at the time it was served, and not whether the notice remained justified at the date of the hearing, is not contentious in this appeal. In Curd v Liverpool City Council , at [14], I said that "the FTT was required to consider whether the decision under appeal was wrong at the time when the decision was taken (and not at the date of the appeal)." I repeated that view, after hearing fuller argument, in Manaquel Co Ltd v London Borough of Lambeth [2025] UKUT 97 (LC) at [43], a decision which is currently the subject of an appeal to the Court of Appeal.

29. Mr Fonka submitted that the FTT had fallen into the error identified in the earlier cases. It had focussed on matters which occurred after the service of the notice, including in particular its own observations at the inspection and the moisture meter readings it had obtained when it tested the walls and ceilings. It also appeared to give weight to the work carried out to replace the roof and make good the collapsed ceilings all of which had been completed by the time the improvement notice was served and was therefore irrelevant.

30. Some possible justification for Mr Fonka’s criticism of the FTT’s approach is provided by the list of questions it posed for itself at paragraph 46 of its decision. These began by asking: “Is [the Council] entitled to serve an improvement notice and is this the most appropriate course of action” and “Do hazards exist and if so what category?”. The use of the present tense suggests that the FTT intended to consider whether circumstances currently existed which made service of an improvement notice appropriate, rather than the correct question, which would have been whether the Council had been entitled to serve a notice on 6 June 2024, and whether hazards had existed at that time. This is the high water mark of Mr Fonka’s criticism, but it is clear on reading the decision as a whole that the FTT did not focus illegitimately on events after the service of the notice.

31. First, the list of questions which the FTT posed in its decision was lifted, with some adaptations, from a list of issues in directions given by a procedural judge on 23 July 2024. The procedural judge was not a member of the panel which reached the decision which is now under appeal. It may be that the list of issues is a standard list used when giving directions in cases involving appeals against enforcement notices; if so, it should be revised in the light of Hussain , but whether it is a standard list or a bespoke list the important point is not what question the FTT posed for itself, but what question it addressed in its decision and answered.

32. Secondly, it is apparent from paragraphs 48 to 50 of the decision, reproduced above, that the FTT focussed correctly on the state of affairs when the notice was given. That is clearest from the statement in paragraph 50 that “at most, on 6 th June 2024 , the dampness and mould growth present at the property would have been a category 2 hazard”. It was also the point of the FTT’s questions to Ms Gavriliuc from which the FTT concluded that she “could not confirm that wall and ceiling surfaces were actually damp, prior to the service of the Improvement Notice on the 6th June 2024 ”. It is clear that the FTT was not concerned with the condition of the Property in March 2025, when it inspected, but with its condition when the notice was served.

33. Thirdly, there was clearly nothing illegitimate in the FTT noting that the work required by the first notice had been completed. That was simply part of the background to the decision and there is nothing in the FTT’s reasoning to suggest that it was mistakenly treating the appeal as if it was against the first improvement notice and not the second.

34. Nor was there any reason for the FTT not to take its own damp meter measurements showing the condition of the ceilings and walls on the date of its inspection. As an expert tribunal the FTT is entitled to make such observations and measurements as it considers will assist it in determining the issues it has to decide, provided these are shared with the parties and they have an opportunity to consider them. The FTT’s measurements were taken in the presence of the parties, and Ms Gavriliuc was asked about them when she gave evidence. While it is true that observations made nine months after the service of the notice cannot record the condition of the property at the relevant time, there is no reason to consider that the FTT made use of its own measurements for that purpose. Had the walls and roof been found to be wet that would certainly have been significant. They were not, and that fact was also useful information. It showed that if the walls were damp in June 2024, they had ceased to be so by March 2025, and that that change had occurred despite no additional work having been carried out since the service of the notice.

35. For these reasons I am satisfied that the first ground of appeal has not been made out. Ground 2 36. Mr Fonka drew attention to the approach to the decision of a local housing authority on a licensing matter laid down by the Court of Appeal in Hussain and submitted that the same approach was required in an improvement notice case but had not been adopted by the FTT in this matter.

37. Hussain concerned an appeal to the FTT under paragraph 31 of Schedule 5, 2004 Act against a local authority’s determination that the appellant was not a fit and proper person to hold a licence authorising her to let property in the private rented sector. Such appeals must take the form of a re-hearing. At [77], Andrews LJ gave the following guidance to tribunals about re-hearings: “Where a re-hearing on appeal does not involve the appellate tribunal starting afresh, the appellate tribunal may still be required to make up its own mind on the application in place of the original decision maker. But even then, if the decision involves the exercise of a discretion, or judgment, by another person or body, the appellate tribunal will not interfere with the original decision unless, having afforded it what is variously described in the authorities as "great respect", or "considerable weight", it is satisfied that the decision was wrong. In making that evaluation the appellate tribunal must pay proper attention to the decision under challenge and the reasoning behind it. If the decision is based on the application of a lawful policy it must ask itself whether the impugned decision, and any different decision that it proposes to make, is in accordance with that policy. The burden lies on the party challenging the decision to satisfy the appellate tribunal that it should take a different view from the primary decision maker.” 38. Mr Fonka submitted that the FTT had shown no respect for the Council’s decision that the damp and mould had given rise to a category 1 hazard justifying the service of the second improvement notice and instead had accepted evidence provided by the respondent’s expert despite its obvious deficiencies.

39. I do not think these complaints are justified.

40. The issue on which the appeal to the FTT turned was whether the Property was still affected by damp at the time the second improvement notice was served on 6 June 2024. That was a question of primary fact, whose determination did not involve the exercise of a discretion or the application of judgment. The walls and ceiling were either wet, or they were not. The parties disagreed on that issue of fact. The respondent’s case, supported by the letter from its damp proofing contractor, was that the walls were not wet. Ms Gavriliuc’s evidence was that they were, but she had made no measurement and gave no evidence that she had put her hand on the surfaces to see if they were damp. Her evidence was that on her last inspection “there was still evidence of dampness and mould to the kitchen and bedroom ceiling”. She inferred that this was the result of retained moisture after rainwater penetration the previous autumn but she did not observe the saturated loft insulation which she believed the respondent had failed to remove. She was not able to prove that the walls were damp but it remained her opinion that they had been.

41. It was for the FTT to decide whether a category 1 hazard had existed. It is clear that it considered Ms Gavriliuc’s evidence carefully and gave her a fair opportunity to comment on what it observed at its inspection. The FTT was entitled then to consider the evidence pointing to a different conclusion. It could properly have regard to the photographs annexed to the letter from the respondent’s damp proofing contractor (the location of which it was able to verify on its inspection) and to the statement in the contractor’s letter that the walls and ceilings were found to be dry. Mr Fonka quite reasonably pointed out that the letter was unsigned and undated and was not the report of an independent expert. Those inadequacies limited the value of the letter but did not render it inadmissible. The FTT is entitled to have regard to evidence even if it would not be admissible in a civil court. The respondent had stated in its appeal on 20 June 2024 that it was in possession of a report confirming that the ceilings were dry. It was the respondent’s case that the letter from its damp proofing contractor was that report. The FTT was entitled to accept that case and to treat the photographs of moisture meter readings as evidence that the ceilings had been dry within two weeks of the service of the improvement notice.

42. The FTT was not required to accept Ms Gavriliuc’s evidence that the ceilings were damp at the time the notice was served. The weight which it was appropriate to give to her view does not require the FTT to make findings of fact contrary to other relevant evidence if it found that evidence more persuasive and more consistent with its own observations.

43. Mr Fonka criticised the letter from the respondent’s damp proofing contractor as an inadequate response to the condition of the Property. That may be so, but the disagreement between the Council’s staff and the respondent’s contractor highlights a different problem with the second improvement notice. It is for the Council to identify the work required to remedy the defect, yet the improvement notice in this case required that the respondent obtain a report from its own consultant and arrange for that work to be carried out. In Curd v Liverpool City Council , at [36]-[37], I suggested that an improvement notice requiring the recipient to undertake investigations to identify whether a hazard existed would not be valid. The notice in this case asserted the existence of a hazard without clearly identifying the cause and left the remedial work to be specified by someone instructed by the recipient (although it might be possible to read the notice as requiring at least a minimum amount of work). Such a notice creates a risk that the Council and the respondent’s consultant may disagree on what w