The Government is being urged to alter an anomaly in legislation that means housing benefit is being paid – legally – to landlords convicted of housing offences.
One landlord has been receiving thousands of pounds in housing benefit from the same council that has previously prosecuted him.
Brent Council, in London, is now calling on the Government to change the law that currently allows landlords to be paid housing benefit to cover their tenant’s rent, even if they are illegally renting out properties in areas where they require a licence.
Brent Council is itself under fire for continuing to pay housing benefit to notorious landlord Bernard McGowan despite him losing his HMO licence in 2015.
McGowan was fined £41,488 in 2017 for failing to license a property in Harlesden that was found to have evidence of broken windows, damp and mould on walls, broken electrical sockets, insufficient heating, and gaps in the front door allowing cold air, rain and vermin to enter the property.
He was also separately fined for licensing breaches of another property he owns in Wembley.
McGowan was featured in an ITV News investigation into rogue landlords in October when he hid from a TV reporter in a cafe toilet.
An investigation by The Guardian has also found he has still been receiving housing benefit payments for renting out properties.
A council spokesman said that while it has powers to fine McGowan and remove his licence, the housing benefit payments to him cannot be stopped due to how Government legislation is written.
A spokesman told EYE: “The reason he is still permitted to receive housing benefit payments while being barred as a licence holder is related to central Government legislation. We are calling on the Government to change this.
“Benefit regulations are different from those covering licensing, and it is possible for different decisions to be made under the different legislation.
“From the housing benefit side, regardless of whether the property is correctly licensed, there is a legitimate rental liability, and so there is a duty for the council to pay housing benefit.”
Cllr Eleanor Southwood, cabinet member for housing and welfare reform, said: “It’s completely unacceptable that landlords who flout the rules and cause misery for thousands of tenants across the country receive housing benefit.
“I have written to the housing minister urging him to act on this issue.”
However, landlord groups have suggested the local authority should use its enforcement powers more effectively.
Chris Norris, director of policy and practice at the National Landlords Association (NLA), told EYE: “Whilst the NLA agrees with the sentiment of the London borough of Brent’s call for more to be done to prevent rogue landlords, it is slightly odd that they should choose to highlight the issue a day after being outed in the press for paying £500,000 to a landlord whom they had recently prosecuted.
“It is up to local authorities to use every enforcement power available to them to drive criminal landlords out of the market. If they succeed in this, where and to whom housing support is paid will become less of a pressing issue.”
Comments (4)
In Scotland they have Rent Penalty Notices. Wales have Rent Stopping Orders. Both of these legally permit the tenants to continue living in the property but stop paying rent and both would serve to stop any drip feed of housing benefit. England should have similar, but (of course) it doesn’t. Westminster lawmakers would rather keep paying all that money and then try to recover it after the event. Cos that’s what incompetence looks like.
Its called housing allowance, but in theory it can be spent on anything.
People who get child benefit, are not restricted to spending it on their child.
Legislation needs to be amended, to ensure that housing payments are only made for housing purposes and that the landlords who receive such a payment are fit for purpose.
Councils should only pay Housing benefit direct to legitimate landlords, landlords should be audited for tax and provide evidence each year to the councils, or councils could insist landlords use a regulated letting agent that Housing benefit could be paid direct to. This would help the government to trace unpaid tax as, every year agents have to provide HMRC with T19 report. This is probably the best way of getting rid of rogue landlords.
I don’t think I understand this story. This chap has been fined in the past for not being compliant with HMO regs. The Council is paying HB to him for tenants that are in a house that I presume doesn’t need a licence or is compliant. What is wrong with that?