homeThursday 21st March 2019

Record fine using new housing powers

Stuart Spear08/03/2018 - 11:48

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Conditions were 'exceptionally poor'
Conditions were 'exceptionally poor'

The London Borough of Newham has successfully used new housing powers to issue a record fine on a letting agency running a severely substandard and overcrowded property.

The £22,500 penalty is thought to be the highest fine to date using powers that came into force in April last year under the Housing and Planning Act 2016.

Newham EHOs chose to use the new powers against the local letting agent, Your London Rooms, after a string of successful previous prosecutions for housing breaches had failed to deter the company’s continued illegal practices.

‘They had been prosecuted successfully seven or eight times and clearly it was not having the desired effect,’ explained principal EHO Paul Mishkin.

‘The way we are increasingly going is to use these new financial powers to disrupt the business model of rogue operators because that is ultimately what drives them.’ 

EHOs visited the two-story mid- terraced property after a London Borough of Newham counsellor was tipped off about the poor conditions being suffered.

The investigating officers discovered 14 people including children and babies crammed into each room with no adequate cooking or bathroom facilities, an absence of fire safety equipment and no gas safety certificate.

The case is part of a growing trend in an illegal business model whereby a letting agent will rent a property from another landlord and then cram as many young families as possible into the premises, with each family inhabiting a room.

‘We are coming across this quite frequently and seem to have a number of agents who choose to operate this way,’ said Mr Mishkin.

The agent will then issue the tenants with licenses designed for people who share facilities with the landlord, in bid to make the occupants feel they have no legal recourse. With rent charged at around £600 per month for each room the model can prove lucrative.

The new powers enable a council to issue fines of up to £30,000 for certain offences, including overcrowding, under the Housing Act 2004.

The new laws were introduced as an alternative to court action with the case being brought before the London Residential Property Tribunal (first-tier tribunal). The defendant has the right to appeal.   

In this case Your London Rooms appealed the fine on the basis that it was too high and that it would damage the local economy by putting them out of business.

Hearing the appeal the tribunal concluded the fine set by Newham was reasonable under the council’s own charging matrix. Under the legislation a council has to have set out transparent and justifiable charges linked to offences before being able to adopt the new powers.

‘This is the first time our charging matrix has been properly scrutinized which meant we had to spend a lot of time going through the system explaining how it was drawn up and the tribunal agreed, which is a massive vindication of our approach,’ said Mr Mishkin.        

In its evidence to the tribunal the council said: ‘..the conditions found at the initial inspection were exceptionally poor with little consideration given to the health, safety and welfare of the occupants.

‘The managing agents have been found to breach these regulations in other properties previously and have had legal action initiated against them with successful prosecution outcomes.

‘The business model followed by the managing agents appears to be designed to maximise rental income and therefore profit.’  

Mayor of Newham Sir Robin Wales said: ‘This is a great result for Newham council and its residents and I hope as a result of this fine and this case, this particular company will be barred from holding property licenses in the borough in future.’



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