A letting agent who traded in Milton Keynes has just been handed a ten month prison term for fraud offences involving both landlords and tenants. The agent took deposits from unsuspecting tenants but failed to protect them as required by law. If he had done this they would have been safe but his failure to protect the deposits meant that when his business collapsed there was no way to ring fence them. The agent was made bankrupt with debts of more than £100,000, meaning that his creditors who include landlords and tenants are unlikely to receive anything.
Landord insurance clients will be very familiar with the rules about protecting tenants deposits but it is clear from the court cases in the media that there are some landlords and agents who either do not understand the law or are prepared to flout it. Deposits must be protected within a minimum period and the tenant must be given information about the way this has been done.
Another area that gives rise to many legal actions is Houses in Multiple Occupation (HMOs). Landlords seem to think that they can get away with letting out rooms to several different families in the same house without obtaining the necessary consents. A Harringey landlord has been prosecuted for running HMOs without the proper licences. Not only has the local council prosecuted the landlord, it has also succeeded in using the Proceeds of Crime Act to confiscate the rents he charged. The council’s cabinet member for the environment said: Hopefully we will now see justice done. The extra rent accrued while people were living in illegally converted flats may now be confiscated. I hope this is a lesson to all landlords who try to take shortcuts or hope to dodge planning laws.”
The HMO rules are primarily concerned with ensuring that tenants live in safety. Any landlord ignoring the rules is likely to be putting tenants at risk.
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