And how the law is unable to stop them
I read this article recently on an FOI request conducted by the National Landlord’s Association, revealing that 53% of local authorities have not prosecuted any letting agents and that 32% have prosecuted only three or fewer letting agents.
CEO Richard Lambert said
“This must stop”.
Regular readers, perhaps Richard himself, might fall off their chairs when I say
“I completely agree with the NLA”.
Perhaps the biggest change I have seen in three decades is the explosion in the past 8 years or so, in the number of letting agents and in particular, the worst kinds of dodgy shysters that you can imagine.
At the bottom end of renting this type of letting agents absolutely dominate the market where people are the most desperate to rent and the downmarket landlords happy to pay cheaper fees, where all transactions are done on a nod and wink.
Letting agents – a growing trend
Last year the lovely Marion Money, herself of the NLA, pointed an officer from the Serious Crime Squad to Safer Renting, who were seeking some input on a problem they noticed, that whenever raiding a brothel, or a property used for people trafficking, nine times out of ten there was a letting agent involved in it.
My crew has been working for three years in five London boroughs, dealing with around 350 referred families, usually in illegal rent to rent scams and in virtually every single case a dodgy letting agent was at the heart of the shenanigans. Back when I started, you usually had the odd one or two agents, who you dealt with on a weekly basis, now its nearly every case and there’s an army of them.
So why are so few letting agents being prosecuted?
Well, I’ll give you the view from the frontline, as a someone who has to get up at 5am and raid these properties under warrants with the police.
Enforcement staffing issues
The legislation used to tackle rogue agents is down to Trading Standards, not housing. Whilst I regularly bemoan the problem of lack of staff and resources in housing enforcement, the stark fact is there are even fewer Trading Standards officers than there is of us.
Also, unlike housing enforcement, a TS officer’s role isn’t just housing, or even letting agents. They are responsible for under-age sales, counterfeit tobacco, fake booze, DVD factories, fraud and as I am reliably informed, their biggest problem, doorstep crime. The sort of people who fleece your granny out of her pension.
Thanks to the complexity of letting agent regulations, they are well down the list of achievable goals. Most London boroughs will have several hundred letting agents, most of the newer crop, complete crooks. Dealing with all of this is perhaps two Trading Standards officers in your borough if you are lucky.
I recently attended a meeting of the Lettings Industry Council where around 150 concerned letting agents gathered to share information on the criminals who blight their industry. There were more individuals in that room than the entire Trading Standards compliment of every London borough combined.
Bureaucracy
The law is not designed to deal with the sorts of outright frauds being perpetrated by the rogue agents. Laws are, as usual, designed for the average Joe, the person who obeys them and would be horrified to know they had broken them.
Running a fraudulent agency is a lucrative business, that’s why it attracts those sorts of people and the law doesn’t matter to them.
The public often woefully misunderstand enforcement of any type, presuming that the council can just hand out tickets, like parking offences and that’s the end of it.
But, in reality, every sanction given to Trading Standards and housing comes with a complex set of appeal procedures, caveats, standards of proof and get out of jail free cards, rendering the road to a successful prosecution, as fraught with pitfalls as a game of Snakes and Ladders.
When you read a story in a paper of a rogue landlord or agents being fined it doesn’t go anywhere near explaining how much work, how many hours went in to even a small result. Hours that are not available, given the size of the problem and the few remaining people left doing the job.
It can sometimes take literally years to put a full case together, while new ones come through the door on a daily basis.
The dodgy letting agents who just shut down
The other huge problem faced when dealing with rogue agents is what happens when you do finally get them on the ropes.
They simply shut up shop.
If they are a limited company they dissolve and any liabilities evaporate along with the limited company status. Many of them are so brazen they don’t even bother to move offices, simply having a shop front makeover and a new name and start all over again.
Of course, all enforcement officers know who they are and were but the slow wheels of bureaucracy have to be put into gear once more. If they weren’t even a limited company it is even easier for them to disappear in a puff of smoke.
Or maybe they are part of the increasing trend of being an online agency based in another country, using Facebook, Gumtree and Spareroom.com to procure tenants from Spain, Georgia or Bulgaria to occupy cheap rooms in London, located in overcrowded, unlicensed, unauthorised death traps, until the council cotton on and the illegal evictions start.
Smoke screens
The problem is the law itself. It just doesn’t work.
The use of aliases is standard practice and you can’t get a successful prosecution unless you can prove, to the court’s satisfaction, that the person subject to the action is genuinely the person who breached the vast range of laws, which all have their own standards of proof.
Then trying to gather information for a prosecution, every witness you talk to has been given a different name by the same employees of the agency and if you do manage to cobble together two accounts where the same name has been used, you call the agents and get told:
“They no longer work here”
The law is a complete joke. It is not designed to protect anyone from the exploitation of it by criminals, who operate in the bottom end of the market to such an extent that they are literally an epidemic, similar to Ebola.
So what can we do?
The NLA are right. It must be stopped but the legal machinery put in place to stop it is an illusion and where tiny rays of light might exist the councils lack the resources to enforce because the government hates local authorities and have been attacking them for years.
Blaming councils is the same lazy ploy being used by so many these days, including the NLA in this instance.
Look to the law-makers and to government as well as a rental system gone mad for profit and investment over the notion of homes. The bottom end of the private rented sector is dominated by letting agents who are no more than thugs, drug dealers, fraudsters and people traffickers. Which wasn’t the case before austerity measures kicked in.
I know.
I’ve been involved in it since the 2nd February 1990 and I’m still there.
Peter Jackson says
July 11, 2019 at 11:45 PMYou seem to be generalizing from your experience in London to the whole of the UK, but London is not typical. Indeed its housing market is peculiar.
I would like to know who used to dominate the bottom end of the rental sector before austerity measure kicked in. Your description seems to fit Rachman who was active 60 years ago.I know the specific law he exploited (rent control) was reformed, and I know of a another specific law that was fixed in the 80s (a form of benefit fraud). I don’t beleieve that the crooks weren’t active before and after those times.
I suspect that the places where the crooks are most likely to use companies and other means to avoid prosecution are the places where prosecution is most likely. Maybe you are partly responsible for the number using letting agents as a front in the areas you work in.
Ben Reeve-Lewis says
July 12, 2019 at 8:19 AMPeter in the 7 or so years I’ve writing for Tessa’s blog I have made it abundantly clear that I am positioned uniquely and solely at the gutter end of renting in London. Regular readers, of which I know you are one, all know what I write about and the stories that inspires my contributions. I know nothing of the renting world of Penzance or Tadcaster and I agree, London is peculiar.
On your point about historic criminal activity. Of course there were crooks around back in the day. The difference is it was the same groups of depressing bullies that all enforcement officers knew through repeated exposure. Since austerity, coupled with sky high rents and the laying off of so many enforcement staff this sector has exploded in numbers looking to make a low risk, fast buck. If this were the 60s, Rachman would have been pushed out of business by the organised gangs operating there now.
In the two and half weeks since I returned from holiday I’ve dealt with 7 illegal evictions, including a 64 year old carer, currently sleeping on the sofa of her 70 year old dementia patient and a lady currently in hospital following a suicide attempt due to the fear campaign launched against her by her landlord. I’ve been in court on two cases and raided a disused petrol station carved up into 16 hospital style cubicles being used for people trafficking. Nothing like my average working week until austerity kicked in and a world away, I am sure, from the days of Peter Rachman..
On your last point about me perhaps being responsible for increase in criminal activity, you may be right. And maybe the police are responsible for rapes and burglary. Maybe the fire brigade are responsible for warehouse fires and to correct you there, I am not saying landlords using letting agents as fronts, I’m saying its the agents who are criminals in their own right. Sometimes with the connivance of criminal landlords and sometimes without, ripping off landlord and tenant alike
Tessa Shepperson says
July 12, 2019 at 8:35 AMPeter, Ben is not alone in reporting growing crime see the item in todays newsround https://landlordlawblog.co.uk/2019/07/12/tessa-shepperson-newsround-106/
Peter Jackson says
July 12, 2019 at 5:04 PMI wasn’t saying you were responsible for an increase in criminal activity, just an increase in criminals using techniques like you describe to protect themselves.
Peter Jackson says
July 12, 2019 at 5:09 PMThough I forgot about the landlord who still owes my sister her deposit from when she was a student. I was told he had about 20 aliases.
Ben Reeve-Lewis says
July 12, 2019 at 5:42 PMPeter I still dont get your point. How on earth am I responsible for criminals protecting themselves?
Peter Jackson says
July 13, 2019 at 5:39 PMIf someone threatens the way that criminals are making their money they will respond. Either by taking measures to defend themselves (such as aliases) or by attacking those threatening them,. You say that the criminals you deal with are using methods to make prosecuting them difficult, so they must feel there is a real threat of that happening. You and your colleagues are the source of that threat. Your work is making a difference, making life a little more difficult for the criminals.
Ben Reeve-Lewis says
July 13, 2019 at 8:18 PMOh right. The penny drops.
It certainly doesnt feel like that Peter.99% of the time these little scamps walk away Scot free into the sunset.
What keeps me going is the 1% who dont.
I do get really jaded and wonder why I bother a lot of the time.Same as I get demoralised by Aazon or Google getting away with paying hardy any tax. Nobody seems to care of they get away with it. Even when caught out and fined the penalties are often paltry and you know that the publicised result is only 10% of what they were really up to.
Thanks to my job I know so many scams and frauds and how to get away with them but I cant bring myslef to do them. Ok, some of it is the fear of being caught, my parents drummed that in haha but a bigger part is I just cant bring myself to treat other human beings that way and drive around in a Porsche while I leave a trail of misery, even though, in rental terms, its really easy.
Dave M says
July 12, 2019 at 11:55 PMthe only way to prevent this is licencing. I note that a lot of agencies in my area open and close on a regular basis . in a lot of cases these businesses operate from the same premises, trading for a year or so before disappearing. this often follows rumours of malpractice. a new company then opens up amost immediately after which the whole cycle starts again..
Ben Reeve-Lewis says
July 13, 2019 at 8:26 AMYeah thats exactly it Dave.
Last year we had a meeting with HMRC about this and they said that they notice in their investigations that often they bulk buy limited company names in advance, ready for when they have to close up suddenly.
We’re currently working with a consultant on using fraud laws to go after individuals independently of limited liability protection and also looking into the use of s222 of the Local Government Act 1972, which allows a council to take out injunctions against individuals who are a public nuisance to the community. The type of nuisance is not defined in law, just the fact that their activities have a negative effect on people living in a district, so dodgy letting agents may well fit the bill
Peter Jackson says
July 15, 2019 at 12:03 PMThere is something I don’t understand.
As far as I am aware Lprincipals are almost always liable for the actions of their agent., in particular landlords are almost always liable for the actions that letting agents make in their names. It seems that the intent of the law is that you go after the landlord. So how does closing the letting agancy protect the landlord from prosecution? (obviously it will protect the agent from being sued by the landlord) Given that the landlord should normally be on the land registry, and changing the owner requires paying SDLT
Michael Barnes says
July 15, 2019 at 1:41 PMEveryone should email their MP, pointing them at this article (and others of Ben) and asking them to push the government to tackle the real issues of criminal agents and LLs.
Maybe needs things like:
* directors of companies (agencies or landlord companies) to be personally liable for criminal and civil penalties
* Councils able to take over the running of properties that are operated in a criminal manner for, say, 5 years, keeping the proceeds, and at the end of the term requiring the LL to pay for improvements made or the property is sold to cover improvement costs.
Ben Reeve-Lewis says
July 15, 2019 at 2:25 PM@Peter there isnt the space to reply on all the variables and the different laws I’m afraid, although as you will see Michael makes a similar point on personal liabilities, which is one of Safer Renting’s manifesto points.
But @Michael too, There is already the machinery for what you suggest, in the form of an Interim Management Order, that allows the council to take over the management of properties but only when they dont have a licence. Another Safer Renting manifesto point we are campaigning for IMOs to be available for the kinds of sleazeballs we deal with, harassing and illegally evicting tenants.
AND…………….one thing I am particularly keen on, is pushing for local authorities to claim damages from people who have illegally evicted families where the council have been forced to provide temporary accommodation and re-house. Why should the tax payer cover the costs?