We knew long before we took over management that our block was subjected to uncontrolled sub-letting and our difficulty lay in establishing just how many landlords had council tenants and how many had private sector lets. A combination of an absent freeholder and old leases that don’t contain a key clause of not allowing the sub-letting the whole of the flat to a Housing Association, Local Authority, (or any other body whose objects include the provision of housing accommodation), meant that control of the block had been absolutely lost.

Whilst I could not establishe the ratio between council lets and private sector lets, what I did establish was the incentives offered to private landlords to get them to sign over their properties to the local authorities.

These incentives included:

  1. The authority paying the costs of leases;
  2. Making small one-off grants (“finders’ fees”) to landlords to encourage them to let dwellings to households owed a homelessness duty;
  3. Paying rent deposits or indemnities to make sure accommodation is secured for such households;
  4. Making one-off grant payments which would prevent an eviction;
  5. Discretionary Housing Payments (DHP) to give financial help to meet a shortage in a person’s eligible rent and the housing authority consider that the claimant is in need of further financial help. Such payments are governed by the Discretionary Housing Payment (Grant) Order 2001.

Note: Whilst there was no limit set on the amount of financial help that can be provided, authorities were obliged to act reasonably and in accordance with their fiduciary duty to local tax and rent payers.

These incentives were offered to private landlords under section s25 of the Local Government Act 1988 (consent required for the provision of financial assistance etc) so that they would sign an extended lease (3-5 years) to the  local authorities so they could house the homeless (or those who were about to become so) in the PRS.

Councils also place enormous reliance on agents checking out the standards of the property before they place tenants in the PRS which often translates to leaseholder landlords simply giving them a quick coat of paint to make them look acceptable,something I have seen on our block on more than one occasion.

These unsupervised agreements have lead to some horrendous situations for myself and the resident RMC freeholder because those homelss tenants who would have normally been housed by the council i.e. those with drink, drugs and violent tendancies, were placed in our private block of flats with what the press coined ‘rogue’ landlords and our first inherited experience of such an arrangement can be read here.

Another more recent problem is that since the introduction of landlord licensing, by signing an extended lease with the council, landlords are often exempt from the process because under Private Sector Leasing for example, the actual landlord is not named on the tenancy agreement. This is because that position is assumed by the LA’s managing department or agent. It is the LA who is responsible for the finding, vetting and placing of tenants and dealing with any later issues. If we don’t know which council is involved and problems arise, (and to date there have been several councils using our block) we have no idea who to approach as these landlords don’t just say ‘it’s not our problem’ but don’t wish to offer us any assistance whatsoever. A typical example of this attitude came from our second and third landlord and tenant nightmares which can be read here and here.

Today, as all those years ago, our RMC and the managing agent remain out of the loop.