Our staff here at Safer Renting are used to visiting buildings with appalling living conditions, but were surprised recently when we were called to a prime property in central London with an exclusive address. Viewed from the outside, you might assume that it housed bankers or art dealers.
Once inside, any such notions disappeared before we’d even closed the front door: a classic example of how the committed, organised criminal landlord market operates.
The property was spread over five floors and a basemen and housed 12 separate households in conditions so bad that the council had been forced to close it down under a Prohibition Order. UK Power Networks had also been compelled to cut off the electricity supply to the entire house from the street outside, such were the parlous state of the internal electricity fittings. Not before the landlord, however, had ripped out the fuse box (see main photo) in a row over rent, plunging the property into darkness on one of the coldest days of the year.
The occupants, chiefly migrant workers but also the elderly and a woman recently released from intensive care following major invasive surgery, had been renting from a company we’ll call Angelo Lettings for the purposes of this article.
The property owners are a large W1 based investors we’ll call Portmaster holdings, who had granted a 10 year lease to Angelo Lettings to let out as they saw fit, as long as they paid their annual rent of £130,000 p/a.
Upon interviewing the residents, we established that the annual rent being received by Angelo Lettings was £230,000, so a clear £100,000 profit per year, for 10 years. Not a rent receipt or tenancy agreement in sight. Angelo Lettings simply refused to supply any documentation when asked and for the migrant workers — all in low paid work in the vicinity — a home close to their work was more important than having everything above board. This situation was compounded by an environment where the Right to Rent makes it harder for certain groups to procure decent properties from ordinary landlords, who are fearful of breaching the madcap and officially discriminatory law, even though all occupants in this case were lawfully resident and working in the UK.
The property conditions were so bad that the tenants started withholding their rent in an attempt to force Angelo Lettings to carry out repairs. Instead of complying, Angelo Lettings began a campaign of harassment, initially through personal visits from the company director, who shouted at the occupants. When they began to organise into a supportive group, he arranged for three thugs to visit and start kicking in doors.
Recounting this, one of the residents played us a sound recording of the visit, in which a particularly disgruntled police officer angrily chastises the tenants for obstructing the activities of the thugs, simply because they worked for the landlord and therefore should be left to do their job.
On a similar re-match in the presence of environmental health officers, the responding police refused to act, trotting out the old maxim that disputes between landlords and tenants were civil matters— although council officers reminded them that at the very least, a breach of the peace was within their remit.
In an attempt to serve notices on Angelo Lettings it also became clear that their business registration and office address was fictitious: merely an empty shop front near the property. The true whereabouts of the officers controlling Angelo Lettings was going to take some investigation.
Meanwhile, and all on the same day, the boss of the company arrived and ripped out the electricity meter, the Prohibition Notice was served, and all 12 households fetched up at the homelessness unit, presenting yet another legal quandary.
Most of them did not have an evident priority need, such as dependent children or health problems, meaning that the council weren’t obliged to provide temporary accommodation when taken under Part VII of the Housing Act 1996.
We argued that that the Prohibition Order served by the same council meant that they had a duty to assist the occupants in securing other accommodation, regardless of any priority need issues.
That argument is still ongoing.
So why were we standing in a slum in one of the most expensive real estate districts in the world?
Angelo Estates could have been drawing in far more money by renting in a conventional way, with equivalent off the scale rents that only a well-heeled tenant could afford. But doing this would mean several things:
They would have had to spend money making the property presentable.
They would have to spend money carrying out repairs and maintaining the conditions.
They would have to meet all statutory licensing requirements, including adequate fire safety installations.
They would have to protect deposits.
They would have to issue tenancy agreements and receipts for rent.
All of which means that they would have to form relationships with housing professionals and just as importantly, would have to be paying tax on the rental income.
Angelo Lettings would have carried out a financial calculation and figured that despite increased rental income from a normal letting, they would probably make more running the place as a slum, let to desperate people with few choices, not needing to bother themselves with repairs or tax — and walk off each year with £100k in their back pocket, and a cool million at the end of the 10 year lease from this one property alone.
Any problems that arise could be easily dealt with by bunging a few hundred quid to some knuckle draggers who would go around and intimidate everybody.
Of course, the fallout of all this is the council stepping in to make the property safe and the intervention of Safer Renting to protect them from harassment. The 12 households previously living in the property are now homeless, and any redress that we might be able to bring to bear is dependant on finding the offenders, who are practised at staying out of the way and are probably using aliases anyway.
Even if the homelessness unit assist the occupiers with sourcing alternative accommodation, they might well lose some of their possessions in the process. At the time of writing most of their belongings are still on site and to be brutally frank, they most likely be forced to move on and put it all behind them, and knowing that with such low incomes, they are likely to have little option but to sign up with another incarnation of Angelo Lettings, of which there are thousands in all areas of the country.
In addition, any attempts to seek protection from the police will usually result in them siding with the landlord and threatening to arrest the tenants for causing a fuss – an all too often occurrence for tenants of this kind.
What about a council’s ability to take over management control of a property? Provisionally yes, but that reserved for licensing issues only, which of course wasn’t the case here.
One of Safer Renting’s recommendations in our upcoming report, ‘A Journey Through the Shadow Private Rented Sector’, will call upon the government to extend the remit for the application of Interim Management Orders, to include harassment and illegal eviction and situations like the one reported in this case study.
While committed criminals work hard at playing ‘Now you see me, now you don’t’ we need legal quick fix tools like IMOs. The Housing and Planning Act 2016 simply added harassment and illegal eviction to the remit of Rent Repayment Orders, why not do the same for IMOs?
This would prevent advocates and enforcement officers from being dragged into the mire of dealing with aliases, fake companies and fraud, and allow them to simply take management control and the attendant rental income off the people profiteering from it.