Prosecution of an unlicensed HMO landlord

Feb 24th 2010

Nottingham uses Proceeds of Crime Act to seize rent in HMO landlord prosecution

Nottingham uses Proceeds of Crime Act to seize rent in HMO landlord prosecution




Nottingham City Council was granted a POCA Confiscation Order allowing seizure of rent from the landlord of an unlicensed HMO. 

Councils are increasingly using the Proceeds of Crime Act 2002 as part of their enforcement/ intervention measures aimed at cracking down on rogue landlords.  In a recent prosecution against an unlicensed HMO landlord, Nottingham City Council successfully applied to the court for a Confiscation Order.  The Court ordered the confiscation of more than £37,500 being the equivalent of the rent the landlord received during the time he let unlicensed HMO accommodation.  An earlier Liverpool City POCA case also saw a significant £23,000 seizure of rent.

The landlord concerned was prosecuted for a “basket of breaches” of the Housing Act 2004 and associated HMO Management Regulations.  The offences were aggravated by his unlawful eviction of two tenants who he had locked out of their accommodation, contrary to the Protection from Eviction Act 1977.  Upon inspection by the Council’s Environmental Health Officers, the unlicensed properties were found to have potentially life threatening hazards including dangerous untested wiring and obstructed escape routes.  One property also had a rodent infestation.

Fines of £14,700 were imposed in relation to the HMO offences along with £15 victim surcharge.  The Court found that the landlord had benefitted financially from these offences and, in addition to the fines, confiscated £37,516.70 – equivalent to the rent he received for illegally letting the properties.  A four month prison sentence (suspended for a year with supervision from a parole officer) was handed down for the illegal eviction offence.

Objectives and purpose of the intervention
To take proportionate enforcement action in respect of a landlord who was attempting to evade mandatory HMO licensing of his properties, and operate outside the law to the harm and detriment of his tenants.

How the intervention was delivered and promoted
The prosecution of the offences under the Housing Act, HMO Regulations and Protection of Eviction Act was developed and supported in-house by the council’s Private Sector Housing and legal teams.  The services of an external Accredited Financial Investigator were engaged to deal with the POCA confiscation proceedings.

Resources: funding, staffing, equipment, value for money
The case involved investigation by an accredited financial investigator as well as preparation by the council’s Environmental Health and Legal Officers.  The costs awarded to the council in this case were £10,000, as opposed to £19,781 originally sought.  The money confiscated was apportioned 50% to HM Treasury; 18.5% to the investigating authority; 18.5% to the prosecuting authority; and 13% to the court collection agency (HMCS).  Accordingly on balance, the council considers that the return on resources invested to prepare and present the case represents fair value for money.  Of course, the value in terms of public protection and safeguarding residents from harm cannot easily or reasonably be measured in such terms.

Evaluation and measuring success
The case sends a strong message to local landlords that attempts to disregard the law, operate beyond it and ride roughshod over tenants’ rights and wellbeing will not be tolerated and could attract significant financial as well as custodial sentences.  Success measures could be the extent to which this message deters other unscrupulous landlords from similar conduct and encourages them to comply and fulfill their responsibilities.

Benefits to local communities
Decisive and hard hitting enforcement action such as this can have far-reaching benefit for local communities.  Not only does it safeguard tenants’ rights and protect their wellbeing.  But it also acts as a very effective deterrent to the more unscrupulous landlords operating in the community.  Or indeed to those rogue landlords in neighbouring communities who might be thinking of setting up business or opening properties in the area.  The message to them is clear – that the local housing authority will pursue them vigorously through the courts and make the business, financial and personal costs of offending as unattractive as possible.  The effective use of POCA powers raises the game considerably in the fight against the worst landlords and can help to drive them out of the private rented sector.

Lessons learnt
That thorough detailed preparation and investigation of the case with specialised input from an accredited financial investigator is required to deliver the best positive outcomes for the council and community.  The case is also a great example of collaborative working between Environmental Health and Trading Standards Services.  Clearly, effective and constructive working among officers across these departments as well as the legal department is needed for success. 

Future developments
That appropriate use of POCA powers will be considered in future cases against rogue landlords.

Contacts for further information:

Michael Latter,     
Accredited Financial Investigator,   
Trading Standards Service,   
Tel :   0115 915 6530    
(JavaScript must be enabled to view this email address)  

Duncan Newbutt,
Senior Environmental Health Officer
HMO City Wide Team
Tel: 0115 915 6762
(JavaScript must be enabled to view this email address)

The postal address for both officers is:

Nottingham City Council,
Lawrence House,
Talbot Street,
Nottingham NG1 5NT.