The fight against organised crime

Drug production, human trafficking, slavery, prostitution… heavy stuff, and not the everyday concern of your average landlord, right?

Wrong. Criminal gangs are moving away from busy city hotspots and out into quieter residential areas, where they operate out of rented properties – exactly like yours.

But what exactly should you be looking out for, and how can you protect you and your property falling foul of these savvy gangs? If you fall victim of one of these criminal gangs, their activities will leave your insurance invalid, so we’ve asked Property Quote Direct to provide some insight into exactly what you should be looking out for:

What types of organised crime are landlords falling foul of (and leaving you uninsured)?

The most common criminal activity you hear about as a landlord is the production of cannabis in your property.

An average residential property obviously isn’t designed for industrial agricultural production, so if you fall foul of a cannabis factory, you will really know about it – the damage is really significant.

The production and distribution of drugs has links to much more shocking activities, such as human trafficking, a very sinister criminal act that often preys on the rental market.

The National Crime Agency announced in August 2017 that human trafficking and modern slavery impacted ‘every large town and city in the UK’, with ‘tens of thousands’ of people being brought to the UK and forced into prostitution, labour, begging, criminality, slavery, marriage and even organ removal.
The violent criminal underworld often successfully dupe an unaware landlord into believing they are letting their property to a respectable tenant (usually a couple or family) before moving huge numbers of exploited people in. Research has identified that traffickers frequently rent properties in areas where rental rates are lower and are prepared to house 10-15 people in a two-bed property, using a system called ‘hot-bedding’, whereby the victims sleep on beds or mattresses in shifts.

In some instances, the property may be being used as a brothel as well. If you think your property is being used as a brothel (whether it is being used by people who are being forced to work against their will or not), this is an additional concern, as it is an offence in the UK to own or manage a brothel.

Any warning signs to look out for?

Whilst criminal gangs are continually evolving to become smarter and slicker, it is impossible to carry out large scale illegal activities without leaving any trace – as long as you know what you are looking out for.

There are a few things that you can be aware of early on in the lettings process that can help you protect your property from becoming a target.

• Be alert if someone is willing to pay a large amount of rent upfront – this is common practice when looking for a property to use for criminal means can often means a landlord is less likely to look too deeply into the tenant’s background
• Make sure you carry out appropriate referencing checks – employment checks, previous landlord checks and credit history checks all help build a picture of the person
• Don’t forget Right to Rent checks on everyone who will be living in the property who is aged over 18 – not only is this the law, but also a useful tool to clarify that they are who they say they are. If your tenant is reluctant to have a R2R check you should be concerned, or if you are unsure that the ID provided is theirs, or is legitimate, you can contact the landlord’s helpline on 0300 069 9799
• Ask yourself sensible questions and follow your instinct – if they are a couple with full-time office jobs in London and two teenage children in London schools, why are they interested in renting your two-bed cottage in Cwmbran?

If you have a tenant in situ, being aware of a few tell-tale signs can be invaluable. Keep them in mind for when you are carrying out routine maintenance visits, or even to keep your eyes open if you drive past your property occasionally:

Cannabis production

• A strong, sickly sweet smell
• A low hum/buzzing noise (the lights often emit this)
• Additional lighting or ventilation equipment (or evidence of offcuts/waste that may show a recent installation)
• Curtains drawn/windows blacked out all the time
• Condensation at all of the windows
• Discarded plant matter
• A reluctance to allow entry for maintenance etc.
• Requirement to meet off site for discussion
• Lots of visitors coming and going through-out the day and night, but only staying for a few minutes at a time

Human trafficking

• Lots of movement in and out of the property
• Neighbours unable to identify the tenants correctly
• People present with signs of general physical neglect
• People being escorted in and out the property and never seen leaving/arriving alone
• Poor living conditions within the property
• Evidence of more people living in the property than are on the tenancy agreement
• Additional security measures on doors/windows designed to keep people in, not out
• Evidence of anti-social behaviour
• Reluctance to allow Right to Rent checks

Prostitution

• Lots of visitors to the property during the day and night
• Neighbours unable to identify the tenants correctly
• Curtains closed/windows covered
• Minimal furniture inside the premises
• Little equipment/food in the kitchens
• Few of personal effects in the bedrooms and bathrooms

Make sure you have a good relationship with your neighbours. They are your eyes and ears when you are not there and they are the people who are able to report instantly if there is anything not-quite-right with your property, or your tenants. A bottle of wine at Christmas and a chat every now and then could go a long way.

My suspicions are raised. What can I do if I think it something untoward is happening in my property?

Keep in contact with your neighbours and local businesses

• If you have any concerns, don’t be shy in contacting your local Safer Neighbourhoods community policing team (previously Community Policing PCSOs. They will be trained in exactly what to look for and may do a few patrol near your property, or speak to a neighbour.
• If you are concerned that anyone is in danger, do not hesitate to contact the police immediately.
• You can seek to end the property with a section 21 no-fault possession notice. However, you must make sure that your tenancy checklist is complete at the start of the tenancy (prescribed information sent, and if a deposit was taken, it must have been protected correctly) in order to ensure your section 21 notice is valid. In Scotland, for tenancies that start after December 1st this system is changing, so do be aware of the new rules.
• Don’t forget to keep a check of any vacant properties you own. If a criminal gang gets wind of an empty property in the area they may see it as an ideal opportunity!

Useful numbers

- If someone is in immediate danger, always call 999

- Local police force: 101

- Crimestoppers: 0800 555 111

- Modern Slavery Helpline: 0800 0121 700

What impact will it have on me, my property and my neighbours?

Cannabis production

Cannabis production is not a simple process, and requires significant changes to an average residential property.

In order to increase growth potential, ‘farmers’ install large, hot halogen lights, which blaze all day and night. Obviously, this would create a spike in electricity usage so meters are often tampered with in order to not arouse suspicion, and also to maximise profit. Huge vents will also be added to your property, with interior walls and ceilings often removed to make way for the complex tunnels. A combination of this heat, poor open-plan renovations, and flammable material can leave the property very vulnerable to fire, and compromise the structure of the premises.

All of these changes can be very pricy to correct, and it’s not a quick process. When your tenant has vacated the property (either with police assistance or voluntarily) you’ll face major structural work and a complete renovation before the property is fit for the rental market again.

Human Trafficking

It is likely that you are likely to be feeling fairly shaken by this experience, as are your neighbours. It is likely that the property is likely to have been a very unhappy place for quite some time, and any neighbours who have had any interaction to the property are likely to have been on the receiving end of some unpleasantness, either directly or simply in things that they have seen or heard.

Additionally, it is possible that there may be some publicity around this situation – if so, this may have a negative impact on trying to re-let your property. Once the property is associated with something so traumatic, it is understandable that people may be reluctant to consider it as a family home.

Prostitution

The primary issue here is that of reputation, and being able to re-let the property. It is likely that the property will have been fairly well maintained, however your neighbours are unlikely to be overly impressed with the turn of events, and it is likely to be very hard to let the property subsequently.

Additionally, if the property has been advertised as this sort of business, you may find that the reputation lingers, and any subsequent tenants become quickly fed up with unsolicited requests so you may find that the impact lasts for quite some time.

Will my insurance cover me if the worst happens? What’s my liability?

No. If illegal activity has taken place in your property - whether that is the production of cannabis, human trafficking or prostitution, it is unlikely that your insurance will cover you for this eventuality. Insurance policies contain an ‘illegal activities clause’ which will invalidate the policy. Also, your property would also have been being used for commercial purpose, which contravenes landlord policies.

There are some hefty financial risks too. With all criminal acts, it is unlikely that the person you have on the tenancy agreement is going to be the person living in your property. This means that you will not have up-to-date right to rent checks on the residents of the property, with is a legal requirement. You would stand to be fined up to £3,000 per tenant, and there is now a prison sentence of up to five years for repeat offenders.

It’s not just a financial impact that you need to be concerned about though. Although it’s highly unlikely that anyone would willingly invite a criminal gang to set up residence inside their property, the law doesn’t always assume innocence on the behalf of the landlord.

If your property is being used as a cannabis farm, you could face prosecution under Section 8 of the Misuse of Drug Act 1971. Knowingly allowing controlled drugs to be produced on your property can carry a maximum sentence of 14 years in prison and/or a fine.

If your property has been being used to house people who have been trafficked into the county and forced into labour, means that you could be facing a prosecution under Section 4 of the Modern Slavery Act 2015 – although it would have to be proved to a court that you were aware that the trafficking was taking place at the location and did nothing to stop it.

If you accept money which is the proceeds of crime or money laundering offences, you could also be prosecuted or have assets seized under the Proceeds of Crime Act. If you are offered above market rent for a property (which later transpires to be being used for trafficking) you could be seen to be accepting proceeds of crime. If this money is used to purchase an asset (a mortgage, for example) there is a risk that that the resulting asset could be seized.

If a property is used as a brothel, the owner/manager of the property is liable for prosecution under the Sexual Offences Act. The regulations are not very cut and dried, if one person is selling sexual services from a property it is not classed as a brothel, however if more than one at the same time is, and the landlord – whether they are aware of what is going on or not – can be held liable.

Finding yourself the victim of a criminal gang is every landlord’s worst nightmare – and nobody would dream of putting themselves, their neighbours, their community or their property at risk on purpose.

However, should you find yourself in a situation, it is comforting to know that Property Quote Direct can help provide comprehensive landlord insurance, ensuring that you and your property are well protected against this horrendous situation. Contact the team on 0800 515 381 to see how they can help.