Proceeds of Crime Act (POCA) - a powerful tool to challenge criminal landlords?

A major court ruling in January 2018 has given the green light to the use of Proceeds of Crime Act (POCA) for Housing crimes. In the ruling criminal assets obtained by landlords who had been housing tenants in overcrowded and dangerous accommodation, in breach of licensing conditions can be recovered1,2. Criminal landlords can now face substantial confiscation orders which is a significant development, as previous attempts at POCA confiscations had been unsuccessful3. The difference in this case was that it related to breaches in license conditions and management regulations, as opposed to a failure to licence a property. In this landmark case in Brent, up to 31 tenants were found to have been crammed into a filthy and dangerous property whilst the landlord reportedly obtained £6000 per month in rent. It was estimated that two of the defendants had been paid some £180,000 between 2011-2016 far more than any fine on conviction or fixed penalty notice which could be levied.

Brent Council successfully argued that the income derived from the excessive occupation of the property and the financial advantaged obtained by failure to execute works and undertake administration necessary to comply with the 2006 regulations should be considered as financial benefit as a result of criminal behaviour.

These types of cases are not uncommon in London. It is estimated that in some areas up to 20% of rental properties in London are now in the hands of criminal landlords as the potential financial gains from exploiting the most vulnerable tenants are significant.

Licensing has provided Local Authorities with an opportunity to identify these criminal landlords whilst raising the standards of accommodation and protecting the safety of tenants. However, criminal landlords adapt fast and Local Authorities need to keep ahead as shown by this new modus operandi of applying for selective (single household) licenses and then letting them as HMOs.

The challenge for Local Authorities now is how to identify these properties as they are very unlikely to receive complaints from the tenants themselves. Promising results are being seen where Councils are applying data analytics. This has enabled those councils to focus the deployment of scarce enforcement resources very accurately to where Housing crimes are being committed. The Brent case now provides an opportunity for an even greater financial deterrent and Local Authorities should take note of this case and now seek these orders after every conviction for serious breaches in licence conditions and or management regulations.

See the full article here

1Proceeds of Crime Act used for FIRST time against criminal landlords. Barker V, accessed 09/02/18
2Brent sets legal landmark in slum landlord case. 31/01/18
3Sumal & Sons v London Borough of Newham (2012)

Pip Watson

Pip Watson MCIEH

Director Metastreet Ltd

26th February 2018

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