Sunday 5 August 2012

Labour housing policy fail (1)...

The Labour Party have launched a policy review on the private rented housing sector. Calling for yet more pointless regulation and town hall bureaucracy, it really misses the mark. Let's start with on of their case studies.

Page 6 - Submitted by Newham Council

"Letting Agent X agreed to rent out a ground floor flat to a tenant. Letting Agent X took the tenant’s deposit and a month’s rent and gave her the keys. A few days later the “real” Letting Agent (Letting Agent Y), entered the flat and was surprised to find the new tenant. Letting Agent Y said to the tenant that she had to leave as she was trespassing and he had no knowledge of Agent X. The tenant could not contact Agent X. Agent Y agreed to let her stay in the flat but she had to pay a month’s rent. The tenant, who had very little money was left with little option but to stay on Agent Y’s terms. The tenant had to pay the equivalent of £1,650 rent for the first month, instead of 550 and lost her deposit in the process."

How this scam works

This is a simple scam, whereby the criminal has access to the keys for the property concerned. It is easy to get keys cut and there are lots of ways they can can get them. Previous tenants is the most obvious answer. A less obvious, but not unknown modus operandi is that many lettings agents are happy to employ sub agents on a commission only basis. They allow sub agents to advertise the property themselves, come to the office, collect the keys and show prospects around. A dodgy sub agent may have cut keys they obtained from a legitimate lettings agent.

Once you have the keys you falsify the paperwork, take the first months rent, deposit and fee (usually well over a grand these days, and in cash) and hey presto you have made an average months wages tax free. It is also conceivable that agent X defaulted on agent Y, preferring to stuff the tenants deposit up his nose, and that agent Y are unlawfully taking it out on the tenant.

The law and the consequences

If the tenant reports this to the Police they will most likely be told it is a 'civil' issue. If they report it to the council they will most likely be told to report it to the Police. Very few public authorities bother to investigate these kind of 'petty' thefts.  Yet they will happily arrest and prosecute shoplifters for stealing much less.  Tenants are seen as fair game in today's Britain.

In the case study, letting agent X has probably committed offences under the Theft Act 1968 (for stealing the tenants deposit that should have been kept in a custodial or 'insurance backed' scheme as per the Housing Act 2004). Newham council can prosecute Theft Act offences if it wants to. Agent X would have also most likely committed trading standards offences under the Consumer Protection from Unfair Trading Regulations 2008, which councils like Newham already have ample powers to investigate.

If agent X had obtained the keys on the black market, and disappeared into the night then any investigation would most likely be a wild goose chase unless disproportionate police resources were deployed. However, if agent X was a sub agent of agent Y, and was authorised to make such contracts by agent Y, the tenants contract should stand and agent X simply owes agent Y the money.

The YPP stance

The Theft Act 1968 did not stop theft, just like the Misuse of Drugs Act 1971 did not stop misuse of drugs. More town hall regulation and bureaucracy will not stop dishonest people stealing keys to bedsits and trying on this scam via the small ads. It will provide more pointless jobs for Labour's paymasters, the folk who pay public sector union subscriptions and draw an often handsome salary from the town hall coffers. It will not protect tenants, who in reality have to be careful about who they hand their cash over to.

YPP councils will champion tenants' existing rights and prioritise the investigation and prosecution of dodgy lettings agents and landlords under existing legislation. Labour will create more pointless regulation and bureaucracy for their town hall paymasters to administer, while doing nothing to catch criminals or legislate to create a better deal for tenants. Don't let Labour trick you into voting for more of the same old nonsense. It didn't work last time and it sure as Hell won't work this time.

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