Blog - Loophole Allows Rogue Landlords to Rent Out a Bed in a Shed

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A joint investigation by the Guardian newspaper and ITV has found that many rogue landlords are still in business, despite being convicted and banned by the courts. Seemingly unfazed by their notoriety, these despicable landlords continue collecting rents from their vulnerable tenants. Amazingly, this is possible thanks to a loophole in the law.

Rogue Landlords Named and Shamed

The Guardian has named and shamed some of these landlords. One owns a £30 million property empire in the southeast. Despite being convicted of housing-related offences a staggering six times, he is still renting out properties. Another was named the ‘worst landlord in Britain’ and has multiple convictions to her name, yet she still owns rental property and has a tenant in at least one of them.

How are Rogue Landlords Getting Away With it?

Rogue landlords are able to exploit a loophole in the law. Even if they are convicted in one borough, which means they then fail the ‘fit and proper person test’, it doesn’t stop them letting out rental homes in a different borough. For example, one landlord was successfully prosecuted by Newham Borough Council for letting out a dilapidated ‘bed in a shed’. He also owns property in neighbouring Ilford, which is managed by Redbridge Borough Council. So far, he hasn’t been prosecuted there, so he’s allowed to continue renting out his properties using an agent.

Shockingly, landlords can also let out properties in the borough where they were banned, as long as they do so through an approved third-party agent.

Landlord Licencing not Driving out Rogue Landlords

The landlord licence scheme is supposed to drive out rogue landlords but based on the above evidence, it’s not working. Councils now have greater powers to prosecute rogue landlords and subsequently ban them, but in practice, prosecutions are rare. Very few landlords fail the ‘fit and proper’ test. Many experts believe this is because local authorities don’t have the funding to pursue bad landlords through the courts, even though they have the powers to do so.

“We see licences being issued even where a landlord has had previous convictions so shouldn’t reasonably be deemed to be a fit and proper person as the law requires. Even if he is prevented from holding a licence in one area, there’s a good chance he will be operating somewhere else,” says a leading tenant’s charity, Advice4Renters.

A recent study carried out by the University of York concluded that the legislation is not working as the government intended. Researchers discovered that a quarter of a million families were raising children in accommodation that didn’t meet minimum housing standards, i.e. not in reasonable repair, infested by vermin, and blighted by serious safety hazards like faulty boilers and dangerous wiring.

To make matters worse, there is no consistency in landlord licensing schemes; some local authorities are tougher than others.

A Blanket Ban for Rogue Landlords Exists But….

New legislation introduced this year aims to stamp out the practice of moving from one borough to another to escape a ban. If convicted of serious offences, rogue landlords will face a blanket ban that prevents them from letting out property anywhere in the UK.

Critics argue that this won’t work. They say that councils are not using the powers they have been given, so it’s unlikely that any landlord will be given a universal ban. Despite this, the government continues to claim its private rental sector reforms are working, even though the new rogue landlord database is still empty, six months after it was launched in a blaze of publicity.

It seems as if rogue landlords are not going anywhere just yet.

Have you had any experience with rogue landlords? Tell us more in the comments.