Communities and Local Government CommitteeWritten evidence submitted by Allan Murray

Landlords Who Steal Their Tenant’s Deposit

There are more people renting property today than ever before. Figures suggest there are about 800,000 private landlords with around 3,500,000 tenants (with their families some 10 million people) renting properties from them. These people are often the most financially vulnerable in society. With an average deposit of £500 this means that there is about £1,750,000,000 (1.75 BILLION pounds) of deposit money, some still in the hands of landlords and not deposited as required.

Sections 212 -215 of the Housing Act 2004 were written to put an end to the age-old habit of rogue landlords “unlawfully” keeping some or all of the deposit money, often by claiming that there was some damage or other loss he had to make good. Where the tenant believed this to be false and made a complaint to the Police he was dismissed with “It’s a civil matter, take your own action.” I know this to be true because, as a former police officer, this was how I was told to deal with these complaints—and I had quite a number of them.

While the tenancy deposit scheme has—hopefully—reduced the incidence of such complaints it has not solved the case where a landlord fails to protect the deposit in accordance with the tenancy deposit scheme and then pockets the deposit money.

Unfortunately, what the Act has done is provide the Police with a different excuse to complaints of theft, because they now believe that ALL MATTERS involving landlords’ actions are covered by the Housing Act 2004 and they are ALL, therefore, civil matters.

My daughter’s case is a classic example of the skewed thinking by both Police and the Crown Prosecution Service. The property she rented was filthy, dangerous and flea infested and she never moved in. After two weeks she told her landlord she wanted to leave. He subsequently agreed and promised to return her rent (£675)and deposit (£675). When he failed to return her money, she took action through the County Court and obtained a Judgement that he repay the money. He failed to pay, and, in two further County Court financial hearings, he admitted spending the deposit money (Theft). He also deliberately told a number of important lies on oath (Perjury) and produced a forged tenancy agreement showing his common law wife, with whom he lives, to be a private landlord with whom he has no connection (Forgery). You may see some similarities with the former M.P. David Chaytor case, after which Simon Clements, then head of CPS serious crime, proudly boasted on the steps of the High Court “ “No-one, no matter what their position, should be allowed to take money they are not entitled to”.

According to the North West CPS this does not apply to landlords!

I have been helping my daughter pursue this landlord through the courts, then the Police and the C.P.S. since November 2007.

Neither the Police nor the CPS recognise the fact that the Housing Act 2004 (ss 212–215) DOES NOT deal with the situation where the deposit is unlawfully appropriated by the landlord for his own use. Such appropriation is Theft.

Greater Manchester Police have consistently refused to acknowledge that the aforementioned are crimes. A Police Sergeant even accused me of “masquerading these circumstances as a criminal matter to achieve a quicker remuneration of the monies that are under debate” and added “when there is a specific area of civil law designed to deal with this issue we will not shoehorn these circumstances into a criminal definition because of your dissatisfaction with the actions or lack of in the civil courts.”

These statements not only show a woeful lack of understanding of the role and powers of the civil courts, a total lack of understanding of the Housing Act 2004, and a more worrying lack of knowledge of the criminal law, viz. the Theft Act 1968 and the legislation regarding Perjury and Forgery. These are arrestable offences and, in the case of Perjury, lead to a custodial sentence.

I made a formal complaint to Greater Manchester Police but this was not recorded as such and was merely passed to the above mentioned Sergeant’s Inspector. (In response to my complaint about this to the I.P.C.C. they stated that GMP had now recorded the complaint and my complaint to them had been marked “invalid”. I was bemused.)

In his reply the Inspector conceded that the fact that the legislation does not address the situation whereby deposit money is already spent is not something within the control of the police” but, incredibly, still did not recognise that Theft had been committed.

My further complaint to the I.P.C.C led to an informal resolution procedure by a Detective Inspector at the same Police Station. In summarising his findings, the Detective Inspector clearly believes that:

Landlords are immune from prosecution for theft of a tenant’s money.

A piece of civil legislation (The Housing Act 2004) usurps a piece of criminal legislation (The Theft Act 1968).

If someone is awarded compensation in a Civil Court this prohibits any criminal prosecution.

If someone is “successful with her case in civil court” it doesn’t matter what lies the “defendant” tells under oath in a later hearing.

Admitting, on oath and in a court of law before a judge, that he has taken and (intentionally) disposed of someone else’s property does not prove intent to deprive that person of it.

GMP would have difficulty proving that someone who has spent another’s money (impossible to recover) did not intend that the owner would never get it back.

Producing a bank statement (his only account and with no other assets) showing he is overdrawn by £2,000 does not prove he does not have possession of my daughter’s money.

The Police have no interest in protecting the property of the millions of people who live in rented accommodation.

Even though they have all the details of the two witnesses (who live in their force area) and all the details of the perpetrators (who also live in their force area) GMP do not have the ability to investigate an obvious theft of £675.

When any defendant pleads “not guilty” he commits perjury—even though this is not under oath—and that this is the same as someone lying on oath and signing a contemporaneous record of his statements as being true.

Perjury in a County Court is not a crime.

A judge must stop a civil hearing and refer it to the police at that time for any action to be taken for perjury. (Jeffrey Archer?)

The lies someone will tell on oath in court are usually known before he says them.

Although GMP DO have the authority to investigate perjury (per ACPO guidance) it’s not important.

Making and producing a forged document in a court of law is not a criminal offence.

I think you will be as horrified with these responses as I was. I spent 27 years as a Police Officer to the rank of Inspector and several of those were spent teaching law, practice and procedure to officers.

His response was so staggeringly incorrect in so many areas of law and practice that I again complained to the I.P.C.C. They replied that they were not concerned with the accuracy of the response but only with the fact that the informal resolution procedures had been followed.

I had already sought advice from the academics at Sheffield University, and three solicitors (civil and criminal) and been assured that Theft had been committed.

I consulted the Government’s own website

http://www.direct.gov.uk/en/HomeAndCommunity/Privaterenting/Tenancies/DG_189120

which carried the following statement:

“Under insurance-based schemes, the landlord or the landlord’s agent holds the tenant’s deposit and pays a fee to insure it (against the landlord illegally keeping the deposit).

Unfortunately the website as been re-designated as gov.uk and does not carry this and lots of other information it used to.

At this point I consulted my MP who agreed with my assessment and wrote to the Chief Constable of GMP. In his reply the Chief Constable supported the position of the Detective Inspector. (From my own experience I know that the Chief Constable will not have seen any of the relevant correspondence but his Staff Officer will have drafted the letter for signature.)

My MP then wrote to the head of CPS North West, Mr Nazir Afzal, expressing his concerns. In his reply Mr Afzal stated that CPS had not formally been consulted about the matter, he had no knowledge of the circumstances but, nevertheless, agreed with the Chief Constable’s view. He then declared that for it to be theft the landlord must intend to permanently deprive the tenant of that money AT THE TIME he receives it and not later. In his words:

“This requires that at the time the money was taken (not at any later time) the property must be taken dishonestly, with the intention that it will not be returned. There is no evidence...... to demonstrate that Mr Wakelin dishonestly intended to permanently deprive at the time that the money was lodged with him. If he formed the intent later, that does not suffice.”

This is:

totally at odds with the wording of the Theft Act, viz :

Section 3. “Appropriates”.

(1) Any assumption by a person of the rights of an owner amounts to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it, any later assumption of a right to it by keeping or dealing with it as owner.

Section 6 “With the intention of permanently depriving the other of it”.

(1) A person appropriating property belonging to another without meaning the other permanently to lose the thing itself is nevertheless to be regarded as having the intention of permanently depriving the other of it if his intention is to treat the thing as his own to dispose of regardless of the other’s rights; and a borrowing or lending of it may amount to so treating it if, but only if, the borrowing or lending is for a period and in circumstances making it equivalent to an outright taking or disposal.

(2) Without prejudice to the generality of subsection (1) above, where a person, having possession or control (lawfully or not) of property belonging to another, parts with the property under a condition as to its return which he may not be able to perform, this (if done for purposes of his own and without the other’s authority) amounts to treating the property as his own to dispose of regardless of the other’s rights.

at odds with legal advice I have received;

at odds with the decision of the Judges in Ruse v Read 1949; and

at odds with the Judge’s decision in the Leeds Crown Court who, in March 2012, convicted and sentenced landlord [***] for stealing his tenants’ deposit money.

I have spoken with the arresting officer in the [***] case and she tells me that it was a barrister in the West Yorkshire CPS who decided to charge [***] with theft (he had been arrested on suspicion of money laundering). There was no evidence provided or asked for regarding when [***] intended to permanently deprive the tenants, because none is needed.

Under Mr Afzal’s ruling it would be impossible to prove theft under almost any circumstances, eg a man hires a car for a week intending at the time to return it. On the eighth day he sells it and pockets the proceeds.1

I wrote to Mr Afzal setting out clearly why he was incorrect in his interpretation of the law of theft. He replied saying he did not agree with me.

I then formally complained to the CPS about the matter. Complaints to CPS must follow a prescribed path—namely First Stage, Second Stage and Third Stage. I am greatly concerned with the responses I have had to my complaint.

The reply to my First Stage complaint (via the CPS website) was from the Area COMPLAINTS Co-ordinator, a subordinate of Mr Afzal. He merely referred me to Mr Afzal’s earlier response to my letter. It was the content of that letter I was complaining about.

My Second Stage complaint was to Mr Afzal’s deputy who advised me that my complaint should be addressed to the CPS communication unit as he was Mr Afzal’s deputy and not in a position to deal with it.

When I contacted the CPS Communication Unit I was told I could not make a Third Stage Complaint as my complaints had been recorded as FEEDBACK and therefore I could not pursue this any further. My complaints were clearly marked “Complaint” and the letter from the Deputy Head referred to my “complaint”.

I wrote to the Attorney General’s office and they replied saying that because the full complaint procedure had not been completed (because I had been prevented from making a Third Level complaint) they could not assist.

On the 16 November 2012 I wrote directly to the Attorney General—but I have not had a reply. I have written again, but more in hope than expectation.

This suggests closing ranks, protectionism, and corruption. It is very worrying and suggests a cover-up. It does not equate with the recent statement by the Director of Public Prosecutions, Mr Kier Starmer, regarding CPS having to look again at cases where they have failed to take appropriate action.

I believe that there is already sufficient legislation to address this problem—as evidenced in the Leeds trial of [***]. What is lacking is guidance to the Police Service, the CPS and some wider general publicity to increase public awareness.

Until the Police and the CPS are advised that the Housing Act DOES NOT cover all aspects of landlord and tenant, more vulnerable people will be victims of similar rogue landlords.

If just 1% of landlords keep or dispose of their tenant’s deposit, ie steal, that equates to 8,000 x £500.

That’s FOUR MILLION POUNDS.

Unfortunately, because complaints of this nature are dismissed out of hand by the police, there is no record of how many tenants have already been victims. I cannot believe my daughter and several Leeds University students are the only victims. This is a hidden crime.

Shelter are aware of this particular issue but their ability to do anything about it is limited by their charity status.

I would appreciate the opportunity to appear before the Commission and expand on the details I have given above, as well as produce the mass of correspondence briefly referred to above.

January 2013

1 Landlord’s name redacted.

Prepared 16th July 2013