MP Commons call for clampdown on “malpractice in the private rented sector” citing case of Hackney councillor’s charity

Michael Desmond, photo credit Gary Manhine

Michael Desmond, photo credit Gary Manhine - Credit: Archant

An MP has called for a clampdown on “malpractice in the private rented sector” – citing the case of a charity founded by a councillor to house the homeless, which refers tenants to his estate agency and then places them in properties he owns.

Laura Sandys, MP for South Thanet in Kent, where Hackney Downs ward Michael Desmond owns around 20 flats, made the comment at Communities question time in the House of Commons on Monday.

Ms Sandys became aware of the issue after the Gazette flagged up a potential conflict of interest between House the Homeless, which was founded by Cllr Desmond, and the estate agency he owns, On The House.

The Charity Commission is looking into the matter.

Ms Sandys asked Housing Minister Kris Hopkins if he thought it was an “abuse” of the housing system and his response was that he was aware of the matter but would not comment any further until the Charity Commission completed its assessment.

The body has now confirmed it has “identified regulatory concerns about potentially unmanaged conflicts of interest at the charity”, which it is currently following up with trustees.

House the Homeless refers clients who are in social need and are struggling to find a property to the estate agents owned by Cllr Desmond, On the House, which is next door to the charity in Crystal Palace, South London.

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The agents can charge homeless clients an admin fee for finding them a property, but has “only done so twice in the past year” according to Cllr Desmond.

Both business and charity operate out of premises owned by Cllr Desmond, who was elected by his fellow councillors for the honorary year-long post of Speaker in May 2013, to fulfil the ceremonial and public duties traditionally associated with the mayor.

Cllr Desmond was listed as one of the charity’s trustees on the House the Homeless website until the Gazette contacted him last year.

Cllr Desmond’s mobile number was listed as the only point of contact on the charity’s website.

HM Revenue & Customs documents show that Cllr Desmond is the person registered to handle money for the charity.

Cllr Desmond told the Gazette that he had stood down as the charity’s co-ordinator, but still works there in a voluntary capacity, adding: “Trustees did not believe there was a conflict of interest but to avoid any possible perception, no tenants from the charity are now referred to my company.”

He denied there was any malpractice or inappropriate behaviour, and said he wished Ms Sandys would help homeless people too.

He added: “What I have done over the years is purchase property at auction to house people with social needs. Only two tenants [at the properties he owns in Thanet] were referred directly by House the Homeless. Neither were charged any fees, deposits or rent in advance.

“If a property is rented by my private company On The House, normally the commission is 10 per cent of the rent.”