David Smith gives advice on what you can do if you have a rogue Lettings Agent.

Landlords are being put at risk of criminal prosecution – and the prospect of unlimited fines – by tenants who are intent on fraud, a leading housing solicitor has revealed.

David Smith said he has seen a ‘huge increase’ in civil and criminal cases where residential landlords are being held responsible for the fraudulent actions of their tenants.

“The number and nature of so-called ‘rental frauds’ have grown massively over the fifteen years I’ve been working in this field”, Smith said.

“Local authorities and superior landlords are increasingly likely to take legal action against landlords for what are effectively the misdeeds of their tenants.

“The impact on residential landlords can be devastating. They can have to pay thousands of pounds in legal fees and fines – not to mention that, in certain circumstances, some may be left with criminal records”.

According to Smith, a partner Anthony Gold solicitors, the boom in the number of actions brought against landlords has mainly been driven by a rise in sub-letting.

“If your property is sublet, then you may not know the terms under which this is done, who is living in your property, nor what the tenants are doing. Sub-letting marks the beginning of a landlord’s legal issues.”

Smith outlined the three main ways in which residential landlords are finding themselves in court:

– Action by a superior landlord. “This is usually where a neighbour complains to the property’s freeholder, perhaps about noise or disturbance. The first the landlord knows about a problem is when he receives legal notice about a breach of freehold conditions.”

– Local authority action against London short lets. “The so-called ‘Airbnb’ problem. When a local authority writes to let you know that your property has been rented out on a holiday short let platform for more than 90 days a year”.

– Environmental Health action against HMOs. “Where your property has been turned, without your knowledge, into a House of Multiple Occupancy – something for which you need specific planning permission”

“These are all technically frauds. Landlords are being put in a position where they are being held responsible for breaches of agreements through no fault of their own” Smith said.

All of these frauds come with a cost.

“Just receiving a letter from a superior landlord will typically cost between £1,000 and £2,000.

“Breaching the law on HMO can be very serious. It’s a so-called strict liability offence, which means that if the breach happened, there are limited possible defences. If found guilty the landlord can be issued with an unlimited fine. They would also be left with a criminal record.”

David Smith, who wrote one of the first legal books on HMOs, said rental fraud has only really emerged as a significant problem for landlords in the past three years.

“It’s taken a while, since the introduction of the 2004 Housing Act, for local authorities to realise the extent of their powers under the Act”, he said.

“Over the past three years I’ve seen the number of prosecutions rise enormously.”

This video has been recorded for Property Fraud Awareness Week 2017 in partnership with Property Tribes. If you think you have been a victim of property fraud please contact us 0207 940 4000.

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