Online rental platforms should do more to stop criminal scams – call

4 September 2020 | Renting

A new report demands that online rental platforms and portals allowing direct advertising by clients do more to deter fake landlords conning tenants.

The call comes from a new report – called Journeys in the Shadow Private Rented Sector, published by the University of York and Cambridge House Research – which wants online platforms that allow direct advertising by landlords to up their game.

Specifically it calls for checks on the existence and ownership of properties listed, chiefly through Unique Property Reference Numbers  In July this year the government opened up the UPRN system to more users. 

UPRN allows each address in the country to have a unique identifying number and can have ‘attached’ to that number the sort of activities and characteristics tenants and agents need to know about – for example, planning permission for when it was first built and subsequent extensions, building regulations, council tax payments, utility providers, EPCs, health and safety checks on rental properties, and so on.

The Journeys report, which covers all aspects of the private rental sector, has a key recommendation that the government should “place a legal requirement on online platforms that host private rentals adverts to police criminal activity by disabling offending accounts and give clear advice on how private tenants can protect themselves from criminal landlord and letting agent behaviour.”

The report – written by a group of housing academics including the respected Julie Rugg – says problems of illegality and unfairness are now growing rapidly in the burgeoning private rental sector. 

“The shadow PRS includes letting agents who may act in concert with landlords, or defraud both landlords and tenants,” it says. “It is also evident that letting agents can also be involved…often involving some level of fraud with regard to deposit holding or rent collection.”

Rugg says: “Our current regulatory framework is failing to deal with the kind of landlords and letting agents who have no intention of complying with the law…Too often these are criminals who have no intention of operating within the legal framework, and for whom this is a business model.”

She describes many of the operators as sophisticated and ruthless.

The tone of the 67-page report can be measured by this segment of the introduction:

“Landlords in the shadow PRS aim to evade detection through the use of identity fraud, use of unconventional tenancy agreements where there may be uncertainty around tenancy rights, and often use non-standard properties or subdivided properties to increase rental yield through high-density overcrowding.

“These landlords can be distinguished from landlords who may be well-intentioned but not fully conversant with their responsibilities.

“The shadow PRS also includes letting agents, who may act in concert with landlords or defraud both landlords and tenants.

“In the last ten years, London has been a favourable context for the growth of criminality in the PRS: rents are high relative to property quality; market pressures create a tolerance for overcrowding amongst tenants; there is a growing population of economic migrants; cutbacks in enforcement; an unwieldy legal framework; poor support for tenants seeking legal recourse; low penalties for convicted offenders; and growing use of the internet where identities are harder to verify.”

You can see the full report here.

        

This post has originally been featured in Letting Agent Today.