R2R Company Owes Landlords £400,000 Housing Benefit Payments
Around £400,000 (GBP) in housing benefit payments have mysteriously disappeared after being paid to London Housing Solutions one of London’s biggest property agents, who specialise in letting property to tenants claiming benefits, Channel 4 News have revealed.
Channel 4 News attempted to trace both the present and former directors of the company, who admitted that the money had gone astray, but neither would accept responsibility for its disappearance.
Local Housing Solutions, an offshoot of London Housing Solutions, who until recently shared offices and staff in Catford also denied benefiting from the missing payments.
Channel 4 News understands at least 100 private rented sector landlords are owed rent by London Housing Solutions and the tenants spoken to by Channel 4, fear eviction as a result of the non payments.
The two rent 2 rent companies were originally set up by Keith MacGregor, who failed to respond to Channel 4 News’ accusations.London Housing Solutions is being put into administration by Darren Saunders, a former employee and now the current owner of the company following its purchase in November 2013.
Local Housing Solutions have prospered by taking on many of the landlords left out of pocket by the apparent collapse of London Housing Solutions, while refusing to accept its former partner’s financial liabilities.
In 2013, both London Housing Solutions and Local Housing Solutions collectively controlled over 700 properties around London and the South East of England, earning five and six-figure payments every month from a number of local authorities.
The “LHS” companies operated as a link between individual landlords and housing benefit tenants, offering landlords “guaranteed rent” for periods of between three and five years in exchange for the ongoing management of their rental properties.
The investigations by Channel 4 News discovered that almost £400,000 (GBP) paid by local authorities in housing benefit to London Housing Solutions had not been passed on to its landlord clients.
Current owner, Darren Saunders, claims he contacted local authorities to halt further HB payments as soon as he took control of the company last November. Mr Saunders said: “It’s a great big mess, I believe by me stepping in I’ve stopped it getting worse. I’ve taken over the company, very quickly seen how bad it is and said to all the Councils, please do not pay me this money. Do not pay money into this account.”
One PRS Landlord, Charlie Robinson signed a three-year “guaranteed rent” agreement with London Housing Solutions for his four bedroom property in Belvedere, however he has not received rent from the company since July 2013.
Channel 4 News understands London Housing Solutions continued to receive housing benefit payments on Mr Robinson’s property from Bexley Council for at least a further seven months as they were unaware of any problems with London Housing Solutions until they were informed by Channel 4 News.
Mr Robinson’s rental property remains tenanted by Eileen Wager and Lea Spencer and their family of 14, whose rental contract is with London Housing Solutions.
However despite winning a court case for damages against London Housing Solutions six weeks ago, the tenants say they are unable to contact the company to request essential repairs as the living area of the property is in darkness, after an electricity failure, and the boiler no longer produces hot water.
Mr Robinson said “We trusted this company to take responsibility for our property for three years and pay us guaranteed rent. We’ve held out our side of the bargain and they’ve left us in the lurch.”
London Housing Solutions’ financial irregularities appear to have been caused by a dispute between Keith MacGregor, and fellow director of London Housing Solutions, Andrew Jeffrey. Following the row early last year, Mr Jeffrey and his wife assumed control of London Housing Solutions while Mr MacGregor turned his attention to Local Housing Solutions.
Both parties blame each other for disappearance of the £400,000 (GBP) housing benefit payments. However, Mrs Jeffrey told Channel 4 News that the money was “certainly not with me, nor with my husband”.
Mr MacGregor would not communicate directly with Channel 4 News, despite repeated attempts to contact him, but in an email forwarded to Channel 4 news by a former employee, Mr MacGregor insisted Local Housing Solutions had not benefited from the disappearance of any housing benefit payments.
Lewisham Council, which is understood to be the biggest single client of “LHS” paying around £300,000 a month in housing benefit to the two companies, said: “If property owners are owed money by their agents, then they need to pursue recovery with them.”
Giles Peaker, a partner in the housing and public law team at Anthony Gold Solicitors in South London, said “There is nothing at all to stop companies disappearing with hundreds of thousands of pounds of housing benefits. It’s simple to set up and one of these companies can simply go bust and the money vanishes. There’s no way to get that money back without great difficulty.”
If you have been affected by the events described in this article, please email firstname.lastname@example.org
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