A non-profit organisation called Justice For Tenants has spearheaded a campaign which has ultimately led to a Rent Repayment Order being served on a rogue landlord.
A group of tenants in south London claimed that their landlord had rented them an unlicensed property which did not confirm with the licensing scheme imposed by Southwark council.
The renters were supported by the local council and an organisation called Justice For Tenants - its website says it has provided training on new enforcement powers relating to the rental sector to government and council staff, and it has been involved in forums to advise landlords on regulation and the consequences of breaking the law.
A tribunal judge instructed the landlord to pay £18,660 in rent repayments to the four former tenants - this was the amount gathered by the landlord in rent while the property was wrongly let while unlicensed.
Al Mcclenahan, an outreach and training spokesperson for Justice for Tenants, says: “This application succeeded thanks to the joined-up hard work of the tenants, Southwark council's housing enforcement team and Justice for Tenants' Rent Repayment Order Team.
“It's vital that landlords do not believe they can make more money operating outside of the law, and this Rent Repayment Order helps break that business model.
“An HMO licence helps ensure that tenants have the bare minimum safety standards in their property. Southwark's willingness to work together with tenants and Justice for Tenants makes a huge difference to the quality of life of its residents in the private rented sector.”
And a spokesperson for Southwark council adds: “We are proud that our property licensing scheme enabled these tenants to raise their complaint at the tribunal. With valuable support from Justice for Tenants they secured a rent repayment, because their landlord had failed to register with our scheme.
“We know that the majority of reputable Southwark landlords who let good quality properties, are already compliant. However, we hope that any who are not, take note of this result and hasten to license their property with us.”
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I'm sure this guy knew full well he should have had a licence, so no sympathy.
LLs gets punitive RROs while rogue tenants skip away free leaving huge debts and trashed properties - where is the level playing field?
Yes absolutely true. RRO’s delivered as consequences whilst the usual mob fight to stop us from using similar moves to badly behaved tenants
As professional landlords like most of us on here leave the market because of all the barriers in our way to doing a good job for a fair return, these are the kind of conmen who will be left behind clearing up on the supply shortage. For every conviction there will be 10 making a fortune whilst flouting the laws and taking advantage of desperate tenants too scared to take action for fear of becoming homeless. But this is what the government wants right??
Calling ' Justice for tenants ' Non-profit ' is like calling Shelter a Housing charity !
JFT take 30% of RRO's as their ' Payment ' or fee or commission, whatever they might choose to call it.
I think that an inevitable consequence of improving the condition of PRS properties so they meet minimum legal standards is that casual landlords may be driven out.
Dominic, I think the fact that you are reading about this information suggests you will be proactive about complying with your obligations. The removal of the landlords who operate substandard properties will level the playing field by preventing bad landlords from undercutting those who have spent the money bringing their properties up to the required standard.
PossessionFriend - it seems you may disagree with the definition of a 'Charity' and 'non-profit'. Shelter is a registered charity and JFT has consistently lowered its Success Fee as it has benefitted from economies of scale.
The cost of running the service is recouped, but there are no profits made. The tenants who are living at the bottom of the PRS and have been unlawfully evicted or living with category 1 hazards have been exploited for profit enough as it is.
If we get a pot of funding to carry out RROs, then the tenants are not charged a success fee.
If an organisation is paying it's management £100s of thousands then in my book that's profit , all that money has to come from some where
As one of the largest HMO landlords in the country I have to take my legal obligations very seriously and now have to act on a more defensive basis. It would, give me some satisfaction if I thought any of this legislation had any value but I can see no benefit in any of the legislation on a cost risk basis apart from fire safe furniture. Everything else has no value on a cost risk basis. Competition would be the biggest driver of standards but what is happening is reducing competition.
The money spent by landlords on pointless safety and housing standards neither wanted by the tenants or the landlord will be far better off being spent on road safety or dealing with hygiene in hospitals. I believe every year 50,000 people are killed or seriously injured on the roads and over 140,000 people die due to poor hygiene in hospitals. How many people die in the private rented sector due to poor housing standards?
To take one example the gas regulations which cost landlords a lot of money is estimated two save two lives a year!
The unintended consequences of this over regulation, Draconian fines, rent repayment orders and licensing is that it will reduce the private rented sector as those who come into conflict with the authorities generally sell up and it is putting people off entering into the residential property business. Whether this will lead to a massive property shortage I am not sure as the government is currently pumping billions in to funding social landlords who are gradually buying up HMO properties.
The social landlords get enormous funding and many of the properties are underutilised or even empty as they do not have to make a profit. Social landlords are also largely exempt most of the legislation the private sector have to comply with and council housing standards generally leave them well alone.
Efficiently run private sector housing is going to be squeezed out and social housing will take its place at enormous cost to the taxpayer. In the meantime private sector landlords are getting a massive boost in rental income due to the shortage of housing. Whether this will last I do not know. It depends how quickly the social sector has capacity to pick up the shortage. I would like to think that the government would realise the folly and irrationality of what it is doing but I do not hold out much hope.
Jim Haliburton
The HMO Daddy
Justice for tenants - May I ask you a question? What is the point of what you are doing? Yes landlords are often unsophisticated, lack knowledge and often inept and going for rent repayment orders is a bit like shooting fish in the barrel and I could see it could be very profitable for you.
The same applies with taking of deposits with the four times repayment order that can be obtained if a deposit does not comply with the very strict rules surrounding the taking of deposits. Knowing landlords as I do I was tempted to set up a business suing landlords on behalf of tenants whose deposits had not been properly protected. I hope I am not giving you any ideas, it’s not my intention. I can see the profit in what you are doing. What I cannot see is the injustice you say you are fighting against.
Am I getting you wrong you are a fighter for justice? Then I apologise but I would have thought there were far more harm out there to fight against than having a turkey shoot against landlords.
How about the criminal justice system - how many sub postmasters had theirs lives ruined by faulty evidence? How many innocent people in other walks of life are having their lives ruined by justice system that is obsessed with targets?
How many kids in care are having their lives screwed up by appalling care?
I could go on but I would have thought there is far more greater injustice around than picking on landlords who have overlooked a technicality of being licensed. Being un licensed does not automatically mean the property is unsafe and see my earlier post as to what I think of all the so-called housing standards that are imposed upon landlords. Tenants are not forced to live in in these properties they are free to live where they want.
I cannot understand the logic of suing or prosecuting landlords when the tenant decides where they want to live. It would be different if you were seeking justice for prisoners. That would be a worthwhile thing to do.
Jim Haliburton
The HMO Daddy
Hi Jim,
Good points that you make. JFT doesn't know enough about foster care or the criminal justice system to have an informed opinion about that I'm afraid.
It sounds like you would class yourself as a proactive landlord who complies with minimum standards for your properties and your tenants- which comes at an expense.
Part of the justification for maintaining standards is because the NHS spends over £1 billion per annum as a result of poor housing conditions.
Unfortunately, there are a number of landlords who operate a business model which depends on avoiding these minimum standards. Often this involves jamming as many tenants into a small flat or house in cities in an old property with faulty electrics that haven't been inspected for decades and with disrepair. A good example might be a 2 bedroom/1 bathroom flat with a partition wall in the living room creating 4 bedrooms let to 2 individuals and 2 couples.
These landlords undercut landlords who operate lawfully making an uneven playing field. These landlords operating this business model have made a financial calculation that the low incidence of enforcement means that this is a more profitable business model. It is not uncommon to run across the same landlords carrying out the same offences on a yearly basis through different parts of their portfolio. The good news is that most landlords change their business model if they are operating in this way after an RRO, bringing their properties up to a safe standard and having the legally allowed level of occupancy for Human Habitation. If RROs did not have a positive effect on standards, JFT wouldn't be assisting tenants with them.
Tenants do have a choice about where they live, but it is more similar to choosing what bus to take to get into work if you cannot afford a car or the tube. There is a mismatch between the demand for socially rented properties and the supply, forcing many into the PRS, where there can be a shortage of landlords accepting LHA rates.
I don't think many tenants choose to rent a room in a house with strangers out of preference, it is a forced choice due to financial necessity. I suspect many would rather live in their own homes.
If a landlord is choosing to operate their property as an HMO or choosing to take a deposit, they must comply with the legislation that is put in place to protect those experiencing the effects of that choice.
If a landlord doesn't protect the deposit, the tenant may feel unable to get their deposit back. If there is no penalty for doing so, it creates an environment where landlords, from a financial calculation, would be better off never protecting their tenants' deposits. A similar logic can be applied to HMOs.
However, I think you are right that there can be those who are inept and unaware, rather than setting out to avoid regulation and legislation. It is for this reason that there is discretion given to judges in these cases. A judge decides between 1x and 3x the deposit as compensation for when a landlord has not protected a deposit. A judge decides what % of the rent to repay when a landlord has breached a banning order, operated an unlicensed HMO or unlawfully evicted their tenant.
This discretion allows for the worst offenders to be penalised more heavily than those who perhaps were simply ignorant or adopted a laissez-faire attitude - though I would submit this is also an unacceptable approach.
In a situation where the property is safe and compliant in all ways other than being unlicensed, one would expect to see less awarded, much like where a landlord has returned a deposit the penalty for not protecting it is likely to be lower in general.
The reason JFT carries out RROs is because they are not profitable. You do not see solicitors enter this space because the Tribunal is largely a costs-free jurisdiction (apart from exceptional circumstances). The amount of work involved is such that there is no realistic way a business could turn a profit, and the tenants are inevitably drawn from the poorest demographic so are unable to afford legal representation. RROs do not fall into scope for LASPO.
Whilst landlords may be upset about the regulatory burden HMO conditions places upon them, most landlords believe their tenants have a right to a basic condition and standard in the place they call Home. If you look around and all you see are landlords who are making more money but operating unlawfully, then there is less incentive to act lawfully.
In an ideal world, JFT would not be carrying out Rent Repayment Orders, because there would be a lack of landlords who have committed criminal offences which give rise to Rent Repayment Orders.
We work with landlord groups and present at landlord forums to try and educate landlords about the risks of Rent-2-Rent and not being proactive about their obligations. The risk of enforcement action and the potential penal sum is a great encouragement tool.
I can understand how it might feel like landlords are being attacked, but I don't think there is that much of a divergence in views that landlords should provide a basic minimum standard of comfort, thermal insulation and safety to their tenants. I also think that most landlords would like to see those that save money and undercut them by breaking the law have their excess gains removed.
Perhaps if a National Landlord Register is brought in then some form of guidance can be given to all landlords to ensure that landlords are not caught out by lack of knowledge, so that enforcement action need only be taken against those that make a clear conscious business choice to operate criminally.
Where do I start JFT? Should I congratulate you for not doing the usual dump and run that I get once I scratch beneath the veneer of plausibility or is that to come? I find very little you say apart from there should be a minimum standard because of lack of choice stands up to critical examination.
Being an entrepreneur I can see the attraction of making money suing landlords for rent repayment orders and failing to protect deposits, both like PPI claims are very simple to do yet you say its unprofitable. I do not find your point credible, it is I suspect like shooting fish in a barrel but I have never done it, the whole idea repulses me. I leave that to the lawyers many of which I have met who make no pretense about being righteous. To them it is just a money making operation.
However, the main point is rent repayment orders are given mainly for the technical failure of not being licensed. Rent repayment orders do not equal poor standard of property. You are mixing two things up. Your point about discretion by the judges, this is a red herring, The guidance the tribunal have been given is that the penalty for not being licensed is meant to be harsh. I read the cases.
I would have more sympathy if rent repayment orders were given for poor standards of property which brings me on to the point of poor standard of properties. What does this mean? You make it sound like major disrepair like bare live electric wires hanging out of the ceiling and water pouring down the walls but in reality as a landlord it is failure to comply with a recommendation on electrical installation condition report or failure to provide a gas certificate within the 14 days the council demanded be provided.
You are refer to one billion being spent by the National health service because of poor standard of housing . I do not know where you get your figures from and for what and how this is calculated. Please fill me in on the secret. I suspect you are referring to the 30,000 deaths each year from cold. If we’re talking about the same thing I would agree please correct me if I am wrong. I would also put money on most of these deaths are in the social housing sector not the PRS. Oh, rent repayment orders do not apply to the social sector! I wonder why?
This is where operating HMOs can be an advantage because HMO landlords such as myself provide 24/7 central heating because we can afford to do so as we have six people sharing what was a two bedroom flat. Yet you make maximising occupation sound like a crime. No one forced them to live in that property and there is a desperate shortage of low-cost housing.
I provide central heating not only because I like to do it, but because I cannot escape the the reality that I would not get decent tenants who behave in a tenant like manner if I did not provide what the tenant wants which is a warm property. Yes there may be a shortage of property but there is a massive shortage of decent tenants at the blue-collar and DSS end of the market. We reject 90% of those who apply for housing with us.
If I did not provide central heating I would have a problem with tenants complaining about damp and mould because they do not heat or ventilate their property. My tenants do not understand the need to ventilate properties.. The other thing that tenants demand is a washing machine. Both of these are not a housing standard requirement in a HMO or a single let. As a landlord I do not have to provide 24/7 central heating just a fixed form of heating and I do not have to provide laundry facilities.
Instead of focusing on what matters ie heating housing standards officers are obsessed with window restrictors, door closers, intermittent seals amongst many other pointless things none of which are proven to be of any value on a cost risk basis.
Please JFT look very closely at EPCs and energy conservation. There are a lot of contributors to landlord today who will set you right on this. I have over 160 HMOs where I provide 24/7 central heating. I monitor the heating costs and the heating costs and the EPC is are not related. Nor does fitting energy conservation measures make any difference to heating costs in my HMOs. Energy conservation is a con!
Yes your rhetoric sounds initially very good but the reality for landlords especially HMO landlords is that we are being buried under a pile of pointless regulations which does nothing to benefit the tenants or the landlord but increases the cost and complexity of housing.
I come back to the main point - rent repayment orders merely for not being licensed cannot be justified. Good to talk to you come up and see me sometime spend a few days in my shoes and if you can listen and get over your preconceptions you will be amazed what you will learn about the real world of being a landlord. How many of the landlord today readers will bet that I will never see JFT?
JFT, so my bull sugar why don’t you go at have a lay down, try sleeping it off. Deposits used to be to protect the property, now nothing protecting the property. The Deposit is now all about protecting the Deposit it self and make money for outside organisations, hence its just another Landlords liability.
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