Law News

The Law is Failing to Stop Rogue Landlords, the Guardian and ITV News Reveal

Rose Jinks - October 25, 2018

Rogue landlords who have been ruled unfit to let their properties are continuing to operate by exploiting loopholes in the law, which is designed to protect the most vulnerable tenants.

These rogue landlords are collecting rents – often funded through housing benefit – despite being convicted of housing offences and failing to pass the fit and proper person tests required by lettings legislation in England and Wales, reveals an investigation by the Guardian and ITV News.

Worryingly, the study found that, due to 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 onto the Government’s new database of rogue landlords in the six months since its launch.

Prior to the introduction of the database, the Government estimated that there were 10,500 rogue landlords operating in England and said that it expected more than 600 of the worst offenders to be entered onto the blacklist. The contents of the database are being kept secret from the public, with the Government stating that it was “not in the public interest” to explain why.

The Guardian and ITV News have highlighted several convicted landlords that have been judged unfit, but are still in business:

  • Bernard McGowan boasts a £30m property empire, but has been convicted six times of housing offences since 2014. He has failed the fit and proper person test in Brent, north London, but his properties continue to be let there, alongside other London boroughs (Camden and Newham) and in Hertfordshire.
  • A local councillor described Gary Fixter as a “despicable” landlord after he was 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” letting property, due to the “totally unacceptable” conditions of his rental homes. Since then, he has been letting properties in Chester and Wirral.
  • Adrian Webb, a former firefighter, was convicted of letting a Liverpool property that breached fire regulations in 2016. He has also failed the city council’s fit and proper person test. He is currently letting 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 is a landlord who let a home described as a “shed in the back garden of a shabbily converted bedsit property” in 2012, and is one of 28 individuals Newham says that 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 let by a third-party agent.
  • Katia Goremsandu, once named the “country’s worst landlord”, has been convicted on multiple occasions. Goremsandu has now been banned from managing two 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 let to tenants, and someone is occupying a luxury flat that 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 to legally let properties in other boroughs.

The law also allows landlords to continue letting homes in the borough where they are banned, so long as an approved third party manages them. Failing a fit and proper person test does not mean that all or any of the landlord’s properties are unfit.

Landlord licensing 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 let property to tenants.

The Law is Failing to Stop Rogue Landlords, the Guardian and ITV News Reveal

The Law is Failing to Stop Rogue Landlords, the Guardian and ITV News Reveal

In order to decide whether a landlord is fit and proper, the legislation states that 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 tenant charity Advice4Renters, says: “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.”

One leading housing academic believes that legislation governing the country’s private rental sector needs 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 rental sector, says: “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 research found that 250,000 families in England were bringing up babies and infants in private rental accommodation that failed to meet the decent homes standard.

The scale of that finding suggests that more than just a small minority of rogue landlords blights the private rental sector.

The authors of the report back the introduction of a “property MOT” – similar to 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 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 letting property anywhere in England.

The Minister for Housing and Homelessness, Heather Wheeler MP, comments: “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 adds: “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, gives her opinion on McGowan’s case: “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 the Guardian and ITV News’ requests for comment, and, when approached outside of his Hertfordshire office, he hid in a café toilet for half an hour to avoid questions, before calling a taxi to pick him up outside.

Webb did respond: “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.