A landlord’s guide to the Proceeds of Crime Act 2002

Ask any police officer to single out their favourite piece of legislation from the past 20 years, and the Proceeds of Crime Act 2002 will come up more often than just about anything else.

Before the act came in, criminals could be punished for their crimes, but police officers, victims and the CPS were often faced with the galling situation of watching someone emerge from prison to live a comfortable and luxurious life, courtesy of their ill-gotten gains. They could be ordered to pay fines or compensation, of course – and stolen stuff could be reclaimed – but in many cases this was a drop in the ocean compared to the profits they’d made from criminal activities.

The Proceeds of Crime Act 2002 changed all that. When someone is convicted of a crime, the police can now sit down and work out how much they think someone has profited from their criminal lifestyle, and a court can then award a confiscation order. This could include sums of money, but might also include stuff like cars, houses or business assets.

What is its relevance to private landlords?

Council environmental health officers and other housing officials have long been frustrated by the fact that the fines they can levy on rogue landlords often don’t reflect the huge amounts of cash you can accumulate by operating as a slumlord. There are rafts of rules about maximum occupancy and the state of repair you need to keep your property in – most of which are aimed at protecting the physical comfort and safety of your tenants – but for many unscrupulous landlords, the benefits far outweigh the potential penalties for flouting the rules.

At least, that was the case until February of this year, when Brent Council successfully used the Proceeds of Crime Act against a family of local slumlords who had more than 30 people shoehorned into a home that was licensed for 7 people. Conditions were squalid, and some tenants were even living in the shed. The council’s paltry enforcement powers meant there wasn’t much financial incentive for the family in question to follow the law, but the Proceeds of Crime Act ruling means Brent Council can now potentially go after them for more than £100,000 in back rent. The stick has suddenly got a great deal longer and harder, and you can expect other councils to start following suit.

How might the Proceeds of Crime Act affect you?

The simple answer is that the Proceeds of Crime Act won’t affect you at all unless you’re a persistent criminal. Ultimately, the only people who really need to worry about it are the very worst landlords who are deliberately flouting the law in order to exploit vulnerable people for maximum profit.

Some landlords are concerned that councils will start using it to help them enforce minor violations like incorrect HMO licences or unintentional environmental health violations, but this has yet to happen in practice. For the time being, so long as you keep on top of maintenance issues and comply with any enforcement orders served on you by the council (or appeal against them through the proper channels), you’ve nothing to fear from the Proceeds of Crime Act.

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