Some Landlords Perceive Fines as Running Costs

Some Landlords Perceive Fines as Running Costs

The Local Government Association (LGA) have reported that harsher fines and a more efficient prosecution system are needed to challenge rogue landlords who are putting their tenants’ lives at risk.

The LGA represent around 400 councils across England and Wales. They say that while the majority of landlords are respectable, a criminal few perceive fines as running costs, to be counterbalanced by their profits, earned by mistreating tenants through renting poor standard properties.

Chairman of the LGA’s Environment and Housing Board, councillor Mike Jones, says: “The current system for prosecuting rogue landlords is not fit for the 21^st century. Criminal landlords are exploiting this and endangering tenants’ lives. They are treating the fines as operating costs, which they are offsetting against the profits they are raking in. We need a system that protects the good landlords, whose reputation is being dragged down by the bad ones.

“Councils are doing everything they can to tackle the rising level of rogue landlords caused by the housing crisis. However, they are being hamstrung by a system wracked by delays, bureaucracy and feeble fines.”

The LGA are calling for an efficient arrangement that is simpler and grants appropriate fines to criminal landlords, as well as the full costs of bringing the trials to councils.

“We need a new streamlined system which is much fairer, faster, more efficient and treats the criminal abuse of tenants seriously,” says Jones. “Prosecution in its current state simply is not seen as an effective deterrent by rogue operators.”

He adds: “We are talking about properties with fire escape doors opening out onto three storey drops, and without proper front doors so tenants have discovered strangers sleeping on their sofas. Rogue landlords are calculating they can keep these going while the cash comes in and walk away after a year with effectively a slap on the wrist.

“While most landlords are reputable, and local authorities want to work with them, there are a growing minority of criminal operators and the current system simply is not designed to tackle them effectively.

Some Landlords Perceive Fines as Running Costs

“In many cases, councils are actually being left out of pocket because they are not even recovering the costs of bringing the prosecutions. It is imperative this changes because, at a time of unprecedented austerity, ultimately the taxpayer foots the bill.”¹

The latest LGA on the matter has found that it can sometimes take up to 16 months to prosecute a criminal landlord. In around 75% of cases, the average fine for a rogue operator, many of whom accumulate large profits every year while tenants are living in hazardous conditions, was £5,000 or less.

One landlord even received a fine of just £100; from a case where six tenants were living in a property for a year without fire alarms or safe escape routes. In another case, the house did not have secure front doors, and tenants found strangers sleeping on their sofas.

Evidence has also been uncovered by the LGA that some landlords are not showing up to property inspections, creating more delays as the council is required to apply for warrants.

The prosecution system in these cases is complex and administrative, with councils having a tangle of laws to abide by. Fines are inconsistent, and bear no correlation between housing conditions, or the number of tenants involved, and councils can be left out of pocket, due to courts not covering the costs of prosecution. Under the existing method, local authorities can only claim costs in court from the point of which the offence is discovered.

Councils are doing everything they can to work with landlords to improve dangerous properties, and prosecution is very much regarded as a last resort. Alongside, the LGA supports the Government’s proposals to raise the limit of fines that magistrates can inflict. However, it wants them imposed consistently, and proportionately to the crime and threat to life from unfit housing.

It was found recently that another two landlords have been fined, one by over £13,000, after they failed to observe local council regulations.

Paul Atha and his Yorkshire-based company Atha Properties Ltd suffered the £10,000 fine following a trial in Bradford, together with two £250 surcharges, and costs of £2,734.

Improvement notices imposed by Bradford Council failed to be complied with by Atha, on two of his 20 properties. The court was told that the issues included damp, mould growth, corroded windows, as well as problems with smoke alarms, rotten wood and damaged walls, polystyrene ceiling tiles, broken tiling and glass.

The court heard that Atha received about £1,662 a week in rent from his Bradford portfolio, although Atha claimed that his business made a loss of £40,000 in the last financial year.

Meanwhile, a landlord in Durham has breached the terms of his licence and has had to pay £770 following legal action by a local authority.

Durham County Council took the case against Patrick Jackson, 37, who did not obey the conditions of his licence in one of three selective licencing zones.

The case against Jackson was confirmed in his absence. Darlington Magistrates’ Court was told that despite demands from the council, Jackson had rented out a property for two-and-a-half years, without applying for a licence.

He was ordered to pay a £400 fine, £330 costs, and a £40 victim surcharge, amounting to £770.

¹ http://www.local.gov.uk/media-releases/-/journal_content/56/10180/6275704/NEWS