LB Camden v 1) Simple Properties Management Ltd 2) Mr MIguel Cabeo Cespedes LON/00BA/HBA/2020/0011 (not on Bailii yet. Copy of decision here.)

A banning order! One of – if we are being honest – far too few to date (even taking into account the time lag for relevant offences, prosecutions and applications). But one that can be heartily celebrated as thoroughly deserved, featuring as it does Simple Properties Management Ltd and its sole director, Miguel Cabeo Cespedes. We have come across SPM a few times in the past, as will become apparent, and sometimes it is a pleasure to see such acquaintances get their just deserts.

Camden brought the application based upon the convictions and fines of Simple Properties Management Ltd and Miguel Cespedes at Highbury Corner Magistrates Magistrates Court in February 2020 for a) having control or managing an unlicensed property – Flat 5, 18 – 18a Acton Street WC1X 9ND,  b) failing to comply with Regulation 4 of the Management of Houses in Multiple Occupation (England Regulations) 2006 for fire safety breaches (including an unsafe partition between two ‘rooms’, and c) failing to comply with Regulation 7 of the Management of Houses in Multiple Occupation (England Regulations) 2006 by leaving a washing machine in the communal area with unsafe, exposed wiring. SPM was fined £40,000 and Miguel Cespedes was fined £30,000. These are all banning order offences.

Notices of intention to seek a banning order were served in July 2020. There was no response from either respondent, and indeed there continued to be no response from the respondents through the proceedings and no attendance at the (remote) hearing. A banning order of 5 years was sought.

Camden set out:

that the First Respondent either sub-lets properties with the knowledge of the Freehold owners (known as a ‘rent to rent’ arrangement), and carry out alterations to make those properties into HMOs (with or without the Freeholders’ consent), or assert ownership and residency in connection with them as demonstrated in the First Respondent’s ‘booking summary’. The Second Respondent is the sole Director of the First Respondent, and has been since 20 March 2019, when the former sole Director, Hannah Bellin, resigned.

The ‘booking summary’ said

“The Host either owns or is the person/entity authorised to arrange the use of the accommodation…”.

(yes, this was another ‘accommodation club’ set up, handing out sham licences – more on this later.)

As well as the specific banning order offences, Camden raised a previous conviction in June 2019 against SPM:

in the Highbury Corner Magistrates’ Court on 6 June 2019, in which the First Respondent was convicted (once again in absence) of being in management or control of an HMO which was required to be licensed but was not so licensed, namely 56B Cricklewood Broadway, NW2 3ET contrary to section 72(1) and (6) of the Housing Act 2004

In the course of gathering information for that prosecution, Camden’s officer had taken a statement from a tenant, Mr Jerome Soloman, which set out:

details of the First Respondent sending a ‘mediator’ to the property once the LHA’s investigation was underway, who had attempted to persuade the tenants to move out of the property, so that new electrics and windows could befitted. The tenant was told that if they didn’t move out, they would live with no electricity and no windows. It transpired that the ‘mediator’ was an employee or agent of the First Respondent. The work did not start, and tenants did not leave.

In December of 2018, Mr Soloman told the First Respondents’ employees or agents to stop letting themselves into the property without prior notice. That was followed by a serious of intimidating acts, including the employees or agents once again turning up and letting themselves in (resulting in a telephone call to the police), telling the tenants to leave, monitoring the property through the window of the house next door (also owned or managed by the First Respondent), and culminating on 30 January 2019 in two males entering the property and ‘kicking in’ the door of the tenant’s room, ‘dragging [him] into the corridor’ and telling him he had to leave that night. When the tenant resisted, one of the men grabbed him by the neck and the other punched him in the chest. They then left and told him not to call the police.

A prosecution had not been proceeded with as the officer had left and Mr Soloman had subsequently left the property.

Lambeth Council provided evidence of its investigation into another property run by SPM:

that tenants at the property had been forcibly evicted in the course of her licensing investigation, and that when she had attended the property she had met with an individual with the same name and telephone contact details as featured in that unlawful eviction. The property had smelt of fresh paint, partitioning had been taken out, and a door had been put back on backwards (room number facing in) and padlocks removed. The implication is that the unlawful eviction was to allow the First Respondent to put the property into a state whereby it no longer required licensing.

And then there was Del Rio Sanchez v Simple Properties Management Limited. Central London County Court sitting at Oxford Combined Court. 24 February 2020, which we reported in detail, again featuring harassment, unlawful eviction, sham licences and spurious counter allegations, resulting in an award of damages of £56,675.91 being awarded against SPM.

In this and others of the properties in these convictions and complaints and claims, Simple Property Management Limited had simply (and largely spuriously) purported to take over properties and ‘licences’ previously managed/granted by Lifestyle Club London Ltd (another dodgy ‘accommodation club’ set up that went into voluntary liquidation at about the time that Lifestyle Club LSC Ltd (trading as Lifestyle Club London) and Lifestyle Club Ltd were both prosecuted for sham licences by Trading Standards and also went into liquidation).

The Tribunal found that SPM was a property agent (as was Miguel Cespedes by his directorship), and also met the definition of a residential landlord.

On whether a banning order should be made, the Magistrates Court had clearly considered SPM and Miguel Cespedes as highly culpable in the Feb 2020 convictions and fines.

The description of the offences provided to us and as outlined above demonstrate a blatant disregard for living conditions and the health and safety of the occupants of Flat 5. We accept Ms Suarez’s evidence that the occupants were vulnerable and open to exploitation.

On MHCLG guidance, spent convictions such as the 2019 one, should not be taken into account. However

We are entitled, however, to take into account both the Respondents’ inclusion on the GLA/MoL database of rogue landlords for the subject convictions [M48 – 49] (section 16(4)(c)), and in the case of the First Defendant that it was previously included on that database for the period of 12 months from 6 June 2019. We note that the banning order offences on which this application relies were committed during the currency of that inclusion of the First Respondent on the database, and entry on the database can therefore be perceived to have had little to no effect on the First Respondent’s activities (as guided by its Director the Second Respondent).

We are satisfied that the effect of any banning order would firstly be to legitimately interfere with the Respondents’ business model, in which we are satisfied that the evidence demonstrates that the approach to the Respondents’ legal obligations is not to learn from previous experience, but to continue in what can only be described as activity described to circumvent the law, ignore any attempt by any authority to bring them to reason or engage with the issues being created by their behaviour (whether the LHA, other LHAs, the civil or indeed the criminal courts), and continue in their practice of shadowy let-to-let arrangements in which vulnerable individuals are exploited. Secondly, the individuals who might be exposed to the Respondents’ practices will be protected from risk to their health, safety and wellbeing from the continued deliberate flouting by the Respondents of their obligations.

On the length of banning order that should be made:

In the case of the First Respondent, it appears to us legitimate at this stage to take into account that it had been convicted only 8 months previously of another banning order offence of failing to license in respect of 56B Cricklewood Broadway.

On the risk and harm to tenants, and on the other tenant complaints, Mr Soloman and the other tenant had not given evidence, so what weight was given to their statements was in the context of the judgment in the Sanchez claim:

In that case, there are clear and cogent findings about the First Respondent’s behaviour, through its employees or agents. We prefer to give weight to the County Court Judgment given after a trial, and to simple note (though making no findings) the pattern of behaviour that the allegations of Mr Soloman and the other tenant might seem to support.

There was a consistent pattern of the first respondent refusing to engage with proceedings, save for threats to MS Sanchez in the civil claim

We consider that Her Honour Judge Clarke’s findings about the abuse of power and attempts to invert the process of justice through false reporting to the police about Ms Sanchez particularly troubling.

In terms of deterrence of the First Respondent, it is clear from all of the above that anything less than a banning order of significant duration will be met with the same failure by the First Respondent (by its officers) to make any change to its systematic failures to comply. As regards deterrence of others from committing the same offences, Mr Sarkis made it clear that the publicity of such an order might have the salutary effect required in the LHA.

A banning order of 5 years was made against Simple Property Management Ltd

On the second respondent, Mr Cespedes, he was the sole director of the first respondent, and there was consistent behaviour showing a failure to learn legal obligations and designed to circumvent the law. While the previous conviction of SPM could not be taken into account against Mr Cespedes, a banning order of significant duration was necessary as:

anything less than a banning order of significant duration will be met with the same failure by the Second Respondent (as officer of the First Respondent) to make any change to the systematic failures to comply in respect of which we cannot identify any change as a result of his Directorship.

A banning order of 3 years was made against Miguel Cabeo Cespedes

Comment

Of course Simple Properties Management Ltd is looking an at imminent automatic  strike off the Companies House register for failure to file accounts etc.. As is Simple Properties London Ltd (a co-offendor in the Magistrates). However, the track record of these set ups is such that one has to believe that ‘London Simple Properties Lifestyle Ltd’ or similar is currently writhing its way to the surface of a fetid pool to be born, with a different sole director.

The track record of all these setups – sham licenses, defrauded property owners, properties converted for more bedrooms without permission, unlicensed HMOs, illegal evictions and harassment and all – will doubtless keep going in some form. They usually prey on foreign students or others unlikely to be even slightly aware of English tenancy law.

But they rely on a supply of properties from naive, or greedy, or lazy property owners and managing agents for their wholly unlawful rent to rent activities. Until property owners realise that they are quite likely to be the ones facing licensing prosecutions and rent repayment order applications, while ‘London Simple Properties Lifestyle’ vanishes with the rent unpaid and a voluntary liquidation, and stop entering these arrangements, there will always be some shyster or crook of a ‘property entrepeneur’ happy to try it on.