One of my daughters did her degree at Kings College London and made what turned out to be a rather unwise choice of student accommodation. I avoid interfering in my children’s lives. I believe that they should, whenever possible, learn life’s lessons for themselves but this flat was one of the most horrid properties in London. However, it was cheap and she was happy to put up with squalid surroundings to have more money for the more important things in life like going out.

The problem started when she moved out. The landlord said that he was keeping the entire deposit to pay for “extensive damage that they had caused to the property.” They denied damaging anything. She asked me to intervene. I looked at the documentation, it was a complete mess. No prescribed information; no inventory; an HMO licence for four occupants but six people lived there, each in a separate bedroom; and a legal clause which required a month’s notice at the end of the statutory AST period.

The current regulatory system is a complete mess, it is time for a thorough review of the regulations controlling the letting industry.

Obviously, the landlord did not have a leg to stand on; we took the matter to the DPS. I prepared a detailed submission setting out why the deposit should be returned. The main argument was that there was no photographic inventory or an inventory of any sort. We wrote to the DPS. Unfortunately, by the time they replied, the lead tenant, who is a medical student, was in the middle of his end of year exams. He was revising 18 hours per day, seven days a week, and missed both emails. As a consequence, the landlord won the arbitration by default and won the right to retain the whole deposit with no right of appeal. I was furious.

Further action

There were, however, other ways to recover the money. We told the landlord that we would issue court proceedings for a payment of three times the deposit amount – payable because he had failed to issue the prescribed information. When we told him this he did not seem to know what prescribed information was. However, he must have taken advice because ten days later, he sent us a crudely forged and unsigned document with an affidavit that claimed that he had served it at the correct time. Legal advice was that we would need to prove this in court at a likely cost of £3,000. The risk to reward ratio simply did not justify this. Never mind, I thought, we’ll get him for housing six tenants in a house with an HMO licence for four. We telephoned the local authority. They were not interested in talking to us. We visited them, showing them bank statements that said “rent x six people” and showed them photos of six beds in six separate bedrooms. They said that there was insufficient evidence to prosecute the landlord. We invited them to visit the property which is almost certainly still rented out today to six tenants. They declined.

The outcome is that a sleazy landlord of a disgusting property who has broken almost every rule in the book has got away with it and there is absolutely nothing that can be done about this.

A complete regulatory mess

Meanwhile my clients, who are all reputable companies, live in constant fear of being hit with a huge fine for the smallest transgression of the most minor regulation. A client in the Midlands has been hit with a six-figure fine for technical breaches of the money laundering regulations. Another in London has been threatened with a substantial five-figure fine for failing to deduct tax from a landlord who had moved abroad and was using the ‘Care Of’ address in the UK.

I have long been of the opinion that most regulations target the wrong problems in the wrong way. Despite this, I always thought that they afforded some protection to the tenant. However, to see my clients struggle with the cost and burden of regulations only to see how easy it is for an unscrupulous agent to ignore them completely, well, that really does stick in the gut.

The current regulations are a complete mess, the time has come for a thorough review of the regulations that control the letting industry and how they are enforced. Until this happens, reputable agents will continue to struggle whilst the unscrupulous ones go unpunished.

Adam Walker is a management consultant, business sales agent and trainer who has worked in the property sector for more than 25 years.
www.adamjwalker.co.uk