LANDLORDS EXPLOIT LOOPHOLES
Barred Operators with Housing Convictions Still Renting Out Properties
Convicted landlords who have been ruled unfit to rent out their properties are continuing to operate by exploiting loopholes in the law that is supposed to protect the most vulnerable tenants.
The rogue owners are collecting rents – often funded by taxpayers via housing benefit – despite being convicted of housing offences and failing to pass the “fit and proper” person tests required by housing legislation in England and Wales, an investigation by the Guardian and ITV News has found.
Because of the way the law is written, this is usually perfectly legal.
The Guardian and ITV News have also discovered that local authorities have failed to make a single entry on to the central government’s new rogue landlord databasei n the six months since its launch.
Prior to the database launch the government had estimated there were 10,500 rogue landlords operating in England, and said it expected more than 600 of the worst offenders to be entered onto the system. The contents of the database are being kept secret from the public, and the government said it was “not in the public interest” to explain why.
Convicted landlords judged unfit, but who are still in business, include:
• Bernard McGowan, a rogue landlord who boasts of a £30m property empire, and who has been convicted six times of housing offences since 2014. He has failed the “fit and proper” landlord test in Brent, north London, but McGowan properties continue to be rented out there, in the other London boroughs of Camden and Newham, and in Hertfordshire.
Gary Fixter, described as a “despicable” landlord by a local councillor after being convicted of housing offences in Scarborough, North Yorkshire, in 2016. He was convicted again in Wirral in April this year, when he was told by a judge to “give up” renting out property because of the “totally unacceptable” conditions in his homes. Since then he has been renting out properties in Chester and Wirral.
•Adrian Webb, a former firefighter convicted of renting out a Liverpool property that breached fire regulationsin 2016, who has failed the city council’s fit and proper person test. He is currently renting out property in neighbouring St Helens, where he was also successfully prosecuted in 2016 for failing to deal with damp and mould in one of his properties.
•David McGuinness, a landlord who rented out a home described as a “shed in the back garden of a shabbily converted bedsit property” in 2012 and who is one of 28 individuals Newham says it has “banned” after failing the council’s fit and proper person test. McGuinness owns property in Ilford which is licensed by the neighbouring London borough of Redbridge to be rented out by a third-party agent.
•Katia Goremsandu, once dubbed the “country’s worst landlord”, who has been convicted on multiple occasions. Goremsandu has now been banned from managing homes in two London boroughs – Westminster and Haringey – under legislation usually used to control gang members or prolific drug offenders. She continues to own property in London that is rented out to tenants and someone is occupying a luxury flat she owns in Kensington, west London.
Under the existing legislation, a landlord can fail the fit and proper person test in one borough but continue legally renting out properties in other boroughs.
The law also allows landlords to continue renting out homes in the borough where they are banned so long as they are managed by an approved third party. Failing a fit and proper person test does not mean that all or any of the landlord’s properties are unfit.
The licensing of landlords was introduced as part of the Housing Act, which came into force in 2006 and was billed as a way of forcing rogue landlords to clean up their acts. It gave councils the power to refuse a landlord a licence if the local authority did not deem them to be a fit and proper person to rent out property to tenants.
In order to decide whether a landlord is fit and proper, the legislation says local authorities must consider whether “the landlord has] contravened any provision of the law relating to housing or of landlord and tenant law”. However, it is rare for councils to judge that a landlord is not fit and proper.
The Guardian and ITV News’ findings have prompted experts to question whether local authorities have the resources to use existing laws, as well as recently enhanced enforcement powers.
Jacky Peacock, a director of the tenants’ charity Advice4Renters, said: “Having campaigned for many years to get [landlord] licensing on the statute books, we’ve been devastated that implementation has been so flawed.
“We see licences being issued even where a landlord has had previous convictions so shouldn’t reasonably be deemed to be a fit and proper person as the law requires. Even if he is prevented from holding a licence in one area, there’s a good chance he will be operating somewhere else.”
THE ROGUE LANDLORD'S LOOPHOLES: HOW THE LAW FAILS RENTERS
One leading housing academic said legislation governing the country’s private rented sector needed a complete overhaul.
Julie Rugg, a senior research fellow at the University of York’s Centre for Housing Policy who co-authored a study published last month on England’s private rented sector, said the legislation needed a complete overhaul:
“There is a lot to be said for saying: ‘You know what, can we just start again?’
“The more new legislation comes in, the chances of it not working in practice, with all the other legislation that’s in play, increases.
“At the moment, everyone is agreed that nothing is working.”
The University of York’s study found that 250,000 families in England were bringing up babies and infants in privately rented accommodation that failed to meet the decent homes standard.
The scale of that finding suggests the private rented sector is blighted by more than just a small minority of rogue operators.
The authors of the research back the introduction of a “property MOT” – like the system that exists for cars – in which all properties let for residential purposes would need an annual standardised inspection by approved experts.
Since 2013, landlord licensing schemes have expanded, but they vary hugely across the country, and even within the same local authority area there can be less stringent licence requirements in certain wards.
In addition to licensing, new legislation was introduced in April this year that could lead to the most serious offenders being banned from renting out property anywhere in England.
Heather Wheeler MP, the minister for housing and homelessness, said: “Everyone deserves a decent and safe place to live, and we are reforming the private rented sector to make it fairer for all.
“Through fines, banning orders and the new rogue landlord database – warmly welcomed by councils – we have provided authorities with new enforcement tools to help them crack down on the minority of landlords who exploit tenants.”
However, Peacock added: “Since April this year, the government has given local authorities the power to issue banning orders, which would prevent a particular landlord from letting any properties. But if they cannot [use existing powers to] take over control of a single property, why should anyone think they will adopt a far bolder approach?”
Eleanor Southwood, a councillor and cabinet member for housing and welfare reform in Brent, said: “We are appalled by the way Mr McGowan consistently failed to meet standards, which resulted in our two convictions against him. We take the rights of tenants incredibly seriously. We work with all landlords because this is the best way to ensure that their tenants are protected.”
McGowan did not respond to requests for comment and when approached outside his Hertfordshire office by the Guardian and ITV News, he hid in a cafe toilet for half an hour to avoid questions and called a taxi to pick him up outside.
Webb, who was ruled not fit and proper by Liverpool council, said: “I formally request that you do not bring myself and family any more upset on this matter by reporting this. I was a victim of circumstances and it has caused me much hardship in many ways. I am trying to put this behind me.”
Fixter, McGuinness and Goremsandu did not respond to efforts to contact them.
[The Guardian and ITV News 23 October 2018]