Kathryn Gilbertson

+44 (0)1733 887621 kgilbertson@greenwoodsgrm.co.uk

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Time to get your house in order: key regulatory housing updates for landlords and letting agents

Property Guardianship / 02 March 2021

In this Regulatory update, we discuss the recent confiscation order secured by Brent Council against a landlord in Willesden and the current London-wide enforcement operation to crackdown on letting agents for housing breaches.

Recent confiscation order for £739,000
On 12 February 2021, Brent Council secured a confiscation order against a landlord, Mohammed Mehdi Ali, who rented out multiple properties in Willesden in breach of planning enforcement notices.  Pursuant to the confiscation order, Mr Ali must pay back £739,000 in illicit earnings within 3 months or face imprisonment, in one of the largest confiscation orders of its kind.  A confiscation order is an order made against a convicted defendant ordering him to pay the amount of his benefit from a crime.

Investigations by the local authority’s enforcement team found that three London properties had been illegally converted and operated as houses in multiple occupations (“HMOs”). This included finding in one property alone, a family of four in one room, a family of three in another and three single men in another. Many of the renters were from Eastern Europe and Brazil.

This breach followed an earlier £544,000 confiscation order against Mr Ali’s father, Salah Mahdi Ali, in 2014. This incident involved two of the same properties and that he had converted four homes into 38 flats without planning consent.

Mr Ali must also pay Brent Council £30,000 in legal costs and also face further sentencing in respect of the HMO breaches.

Cracking down on letting agents
Last month, London Trading Standards and the National Trading Standards Estate and Letting Agency Team launched an enforcement operation across London. It is being funded by the Ministry of House, Communities and Local Government. The aim is to clamp down on letting agents that fail to comply with the law on protecting tenants’ and landlords’ money and other legal requirements.

In particular, the operation will target letting agents who have failed to:

—  To belong to an approved Client Money Protection (“CMP”) scheme;

—  To belong to an approved Redress scheme; and/or

—  Publish their CMP certificate and other required information on their website and in their offices.

The Trading Standards bodies plan to identify breaches of the above, serve formal ‘Notices of Intent’ including potential financial penalties. These penalties can be up to £30,000 for failure to belong to a CMP scheme or up to £5,000 for other breaches.

Comment
The confiscation order penalty against Mr Ali and the announcement of the enforcement operation makes it very clear that rogue landlords will not be allowed to get away with ignoring planning laws or protecting money in the event of business failure. Nishi Patel, Chair of London Trading Standards, has warned ‘…any London agents out there who think they can get away with failing to comply with the law that they need to think again and get their affairs in order without delay.’

It’s not just the Trading Standards group to be mindful of, but also as a firm, we are seeing a rise in the number of disgruntled tenants/licensees tipping off their landlord’s/licensor’s poor behaviour/compliance to local authorities and also claiming for rent repayment orders.

Our highly experienced Regulatory team can help get your house in order with a route map of the law in terms of your obligations as a landlord or letting agent, from HMO licensing and CMP schemes to planning. We can also help robustly defend any confiscation proceedings, enforcement notices and/or claims for rent repayment orders. Please do get in touch.

 

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This update is for general purposes and guidance only and does not constitute legal or professional advice. You should seek legal advice before relying on its content. For advice, get in touch with your usual Greenwoods GRM contact or scroll down to complete our enquiry form.

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