Council pays rogue landlord £500,000 in housing benefit | Business

A repeatedly convicted landlord, ruled unfit to rent out property in a north London borough in 2015, has since received more than £500,000 in housing benefit payments from the same council that banned him.

The discovery that a local authority is directly paying public money to a landlord its own officers describe as “rogue” is the latest example of the ineffective regulations designed to police the private rented sector’s worst offenders.

In October, a Guardian and ITV News investigation revealed how a string of supposedly banned landlords were continuing to rent out properties, while the government’s new rogue landlord database was empty six months after its launch.

Bernard McGowan, who boasts a £30m property empire and was convicted six times under the Housing Act between 2014 and 2017, failed Brent council’s “fit and proper” test in 2015. The decision meant that McGowan was barred from directly renting out houses in multiple occupation (HMOs) across Brent, or any home in eight of the borough’s wards where landlords specifically require a licence.

However, after a freedom of information (FoI) request made by the Guardian, Brent has revealed how it has continued to hand McGowan public money for renting out homes since it banned him.

The payments have included publicly funded rents for McGowan properties in wards where no landlord is allowed to operate without a licence, meaning the legislation should prevent McGowan from directly receiving rents for homes in those areas.

Jacky Peacock, a director of the tenants’ charity Advice4Renters, which has helped residents bring cases against McGowan, said: “I simply despair. This is yet another example of one part of the council not speaking to another. Of course it has to be wrong for a landlord who cannot be defined as a ‘fit and proper manager’ to be receiving the rent. We will never see meaningful regulatory improvements in private renting until there is a joined-up, council-wide approach.

“There is absolutely no doubt in my mind that the circumstances have existed which should have created a duty for Brent to serve an IMO [interim management order] on most if not all of McGowan’s properties”.

Under the Housing Act, a council has the duty to impose an IMO on certain properties, in order to protect the occupiers or to take “steps the authority thinks appropriate with a view to the proper management of the house”. That includes unlicensed houses that cannot be licensed because they do not meet the licence conditions, as well as houses where the licence has been revoked. An IMO would usually mean appointing an approved manager of the properties who would collect rents.

McGowan is one of the country’s most notorious rogue landlords and was fined more than £100,000 for property offences in 2017.

He was convicted and ordered to pay £41,488 in respect of a property he was illegally renting in Harlesden, Brent, where a couple with two children lived in a flat with mice and mould on the ceiling caused by damp.

During the same year, he was also prosecuted again by Brent for a separate licensing breach at a property he owns in Wembley and received two further licensing convictions in neighbouring Camden, where he was ordered to pay a total of £68,435.

McGowan’s fines are large by the standards of the penalties levied under the Housing Act, but they are dwarfed by the rents he continues to receive.

Since the beginning of 2015, McGowan has received almost £1m in housing benefit from Brent alone, according to responses made by the council to the Guardian’s FoI requests. A previous request has shown that McGowan received about £4m in housing benefit payments from Brent between 1999 and 2015.

His property portfolio also spans the boroughs of Camden, Newham and Hertfordshire and includes numerous properties where the tenants do not claim housing benefit.

When McGowan was confronted last year by the Guardian and ITV News, he locked himself inside a cafe toilet for half an hour to avoid questions. In his rush to escape, he jumped into the wrong waiting car.

A spokeswoman for Brent said: “The level of housing benefit payments made to Mr McGowan have significantly reduced since 2015, and only two cases currently remain in payment … We are reviewing the two remaining cases to establish whether direct housing benefit payments remain appropriate.

“We believe that as a consequence of Brent council’s approach, Mr McGowan has outsourced the responsibility for managing all his properties in Brent, as well as selling many others. We believe that this approach, from a housing enforcement perspective, has been a success in making sure that this criminal landlord has felt the full force of the law.”

McGowan did not respond to invitations to comment.

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