Rent 2 Rent scammers
I am writing this article for Mr Christopher Chope MP. I shall explain why later on.
I have written several times about the generally unknown world of rent 2 rent scammers and how they are blighting the bottom end of the property market, at least in London but I hear similar stories from other areas of the UK.
It’s not illegal and in many instances, it is how housing gets provided, for instance where local councils take a property off of private landlords and use it to discharge a range of homelessness duties.
In its benign form all parties are aware of and in agreement with, the arrangement and nobody gets hurt. But the criminals have seen an opportunity to exploit and in the process, wring as much cash as possible from the property.
Those on low wages, unable to afford high rents are often the target, whereby say a 4 bedroom house is procured and let to 10 people at £350 per month. What would have brought in £2,000 rental income as a family home suddenly becomes £3,500, with people sharing rooms.
If you put up stud walling to further divides you can squeeze more people in and raise the rental income to around £4,000 and then, if you start renting out to day and night shift workers, you are seriously getting into big money.
Run 5 or 10 of these properties and you are getting into even bigger money, which is why it is attracting the criminals.
Of course in running such set-ups the landlord’s are in breach of regulations on overcrowding, fire safety, property licensing, management regulations etc, so it is absolutely vital that the local authority doesn’t know anything about the letting.
This is why the criminals avoid renters inside the system, by which I mean those claiming benefits, families with children in schools or anyone reliant in any form on public assistance. If there is any form of letting contract you will commonly see clauses insisting that the occupants are not allowed access to anyone from the local authority without the landlord’s permission.
If anyone does involve the local authority the usual response is a swift illegal eviction.
Young professionals and undocumented migrants
These are sometimes a good harvest, being financially solvent and fairly independent, more keen to rent a property handy for the tube and save money for more important things. At the other end of the market are the documented and undocumented migrants, earning £5 an hour cleaning hotels or working in construction for cash in hand and often part of a human slavery/organised exploitation arrangement.
These people live under constant fear of eviction, some work for people connected to the landlord, so it isn’t just their homes they lose if they complain to the local authority.
So who benefits from these scams?
Well, sometimes the owner genuinely doesn’t know and is horrified to find out what has happened to their property and find that they are suddenly in the frame for enforcement action, for a letting arrangement they didn’t create.
90% of the time there is a dodgy letting agent involved, who when approached plays innocent and blames the person they rent to. You could give credence to such a story if it wasn’t for the fact that in nearly every property managed by that agent the same thing is going on.
Nobody is that unlucky.
Then as you get to know the tenants better over the subsequent weeks, you find out that some have rented from the same person before. They give you addresses which you also check out and find, lo and behold, the same agents involved. These same agents that tell you they genuinely thought he was living there with his family.
Also, when talking to the tenants, you often find that the owners are frequent visitors, the same owners proclaiming complete innocence, meaning that the extra rental income is being split between, owner, agent and tenant/fake landlord.
So where does Christopher Chope MP fit into all this?
Well, said Minister is behind a private member’s Bill currently wending its way through Parliament, called the:-
“Sublet Property (Offences) Bill”
This is aiming to do what the “Prevention of Social Housing Fraud Act 2013” did for the subletting of council and housing association property.
At the time of writing, the Bill is awaiting a second reading and there is little in the way of written guidance other than this:-
“A Bill to make the breach of certain rules relating to sub-letting rented accommodation a criminal offence; to make provision for criminal sanctions in respect of unauthorised sub-letting; and for connected purposes.”
In principle and with the size of the problem very much in mind, I am very much in favour of it but my fear is that it might over-simplify the way things work and look on it as being solely the offence of the ‘Tenant/fake landlord’.
Before the usual suspects start hopping up and down let me be clear. Yes, I know in many instances this is exactly the case but also in many instances it isn’t. The criminal activities being engaged in often do have the participation of the owner and it’s all down to the tenant/fake landlord.
I know this because I work exclusively in this end of the rental market and it is my job to investigate the machinations as part of my enforcement work, as it is also the job of the various EHO’s Trading Standards and Planning officers I work alongside.
If the Bill ends up on the statute books and the reality of the situation isn’t acknowledged, then we will be in the same boat as with other regulations, where all involved parties play musical chairs, making it difficult to identify the right person to go after.
The most obvious perpetrator might seem to be the ‘Tenant’ who advertises online and crams the place with occupants. But these are the hardest of the lot to trace, being creatures of the night, using aliases and with no discernible contact or address. Also as I said above, they are more often than not, colluding with the agent and sometimes landlord.
Given that 90% at least of these arrangements have a letting agent driving it I would suggest to Mr. Chope that reference be made to s45 0f the Serious Crime Act 2015 whereby a letting agent can be guilty of being an ‘Enabler of crime’, whether or not they benefit from the crime itself.
The SCA 2015 refers to enablers of activities of “Crime groups” who are described:-
“ (a) has as its purpose, or as one of its purposes, the carrying on of criminal activities”.
(b) consists of three or more persons who act, or agree to act, together to further that purpose.”
What would be most unhelpful is for any statute resulting from the Bill to come from the perspective that the only villain of the piece is the tenant/fake landlord, as this would not reflect the reality on the ground and would present a perpetrator who will likely never be found.
Given the potential of the Bill to seriously harm this most pervasive of rental scams, it would be disappointing if the wording of it was insufficiently “Street-aware” and did not reflect the real world practices.