Southwark’s Cabinet Member for Housing resigns after not having the same licence as Rachel Reeves

Southwark's Cabinet Member for Council Housing has resigned after two his properties in Peckham were found not to have a selective licence, citing the same reason as the Chancellor of the Exchequer - who also fell foul of the rules last month.

Following the national controversy surrounding Chancellor Rachel Reeves’s letting agents' failure to obtain the correct £945 licence to rent out her family home in Dulwich, the Southwark Liberal Democrats contacted the News and suggested that Southwark’s Cabinet Member for Housing Cllr Michael Situ had also not complied with the rules.

The Southwark Liberal Democrats said they had 'investigated' and 'subsequently logged a formal complaint with the council’s monitoring officer.' .

The News then contacted Southwark Council to ask whether the Cabinet Member had applied for selective licences on two properties in Peckham listed on his Register of Interests.

Days after we put through our request, we were informed by the council that Cllr Situ had written to the Leader of the Council, Sarah King, tendering his resignation as Cabinet Member for Housing.

In the letter, dated today (Thursday, 13 November), Cllr Situ explained that he chose to resign from his cabinet post after revisiting his property arrangements in light of the controversy which enveloped the Chancellor last month - and said he found that his letting agent had 'allowed these properties to be let out without the appropriate licences.'

Explaining why he decided to resign, instead of simply issuing an apology, like the Chancellor did, he said: "Whilst this is a failure on behalf of my letting agent, these are my properties and I take full responsibility for allowing this situation to arise."

In his resignation letter he writes: "In light of recent media scrutiny of Southwark’s housing licensing scheme, I took it upon myself to review my own arrangements as an owner of rental properties in the borough.

“I have a contractual arrangement with a local letting agent who manage properties on my behalf which sets out that they are responsible for letting, licensing and maintaining those homes.

“The homes that I own have always been properly declared publicly in my Register of Interests.

"However, it has come to my attention that despite their contractual obligations, the letting agent has allowed these properties to be without the appropriate licences at various points and that the agent’s accounts have fallen into council tax arrears.

"Whilst this is a failure on behalf of my letting agent, these are my properties and I take full responsibility for allowing this situation to arise.

“Moving forward I have ensured that all necessary licences are being sought and that all obligations on the properties are met."

Situ's explanation mirrors that given by Reeves, who claimed she had not been made aware by her letting agent that the property in Dulwich required a selective licence.

Rachel Reeves. Image licensed under Creative Commons

Southwark Council requires landlords who own properties in certain parts of the borough to apply for a £945 licence, a scheme it introduced back in 2020 to crack down on rogue private landlords.

In a week that Labour turmoil has dominated both national and local news, the resignation of Situ will further add to a picture of a political party beset by crisis.

As rumours swirl nationally about disillusioned government Cabinet Members reputed to be on manoeuvres to oust the beleaguered Prime Minister, local Labour politics remains equally tumultuous.

We reported yesterday (Wednesday November 12) the resignations of two disaffected suspended councillors who slammed the party’s culture of ‘silencing’ of internal dissent.

https://southwarknews.co.uk/news/news-plus/two-suspended-labour-councillors-quit-party-claiming-independent-or-dissenting-voices-are-crushed/

And the week before, the former chair of the party Kath Whittam jumped ship to the Greens after resigning from Labour in the summer following the row over its leadership election, making her the first councillor affiliated with the party in Southwark for fifteen years.

https://southwarknews.co.uk/area/southwark/ex-southwark-labour-chair-defects-to-greens/

Situ continued that he had chosen to resign because he did not want his oversight to become a "distraction" and said he had also referred himself to the council’s Monitoring Officer to independently review the situation.

Council leader Sarah King responded in a letter to him by praising Situ's "integrity" and said he had been let down by the 'incompetency' of his letting agent.

She said: "It is my view that you had arrangements in place to properly look after the homes that you own, but that nonetheless the company you employed has fallen seriously short.

"Like too many in our borough and across the country, it appears you have been let down by the incompetent approach from some in the sector to their responsibilities as custodians of private sector homes."

She added the council would "review its enforcement activity to ensure that both landlords and letting agents are more vigorously held to account for failing to meet the standards we require, especially in light of the government’s new Renters’ Rights Act."

It comes a day after the leader re-iterated that the council would not be pursuing enforcement action against Chancellor Rachel Reeves for failing to initially apply for the licence.

Asked by Southwark Liberal Democrat leader Victor Chamberlain whether the council would be fining Reeves and offering a repayment to her tenants covering the year during which the property was unlicensed, she responded that the council does not take action if a landlord applies for a licence within 21 days, and did not address the rent repayment order.

The Southwark Liberal Democrats also said they wrote to Sarah King in August to check if all councillors were complying with licensing regulations but claim they did 'not receive a reply' and subsequently lodged a formal complaint with the council's Monitoring Officer.

The council's website states: “You can be prosecuted or fined if you’re a landlord or managing agent for a property that needs a licence and do not get one . ”

It also claims that tenants who have been living in an unlicensed property can apply to get 12 months of their rent back from their landlord – which in the case of Reeves’s home would amount to around £40,000.

Cllr Victor Chamberlain, leader of Southwark's Liberal Democrat opposition, had asked the then deputy prime minister Angela Rayner to intervene in Southwark Council over a report by the Regulator for Social Housing

Commenting on Situ's resignation, Cllr Victor Chamberlain alluded to the resignation of former leader Kieron Williams in June of this year months after a damning report by the Regulator for Social Housing accused the local authority of 'serious failings'.

He said: “This is the second Labour Councillor to have resigned from the Cabinet in less than 6 months over Labour’s housing crisis. They will now be forced to find their seventh housing cabinet member in just six years.

"Back in August, we asked the council leader to confirm that all Labour councillors were in full compliance with relevant landlord regulations. We did not receive a reply, and following our investigation we've found that the housing cabinet member has in fact been breaking their own rules.

"We subsequently logged a formal complaint with the council’s monitoring officer and asked her to investigate.

"Labour promised “zero tolerance” for rogue landlords. Yet when their own Chancellor knowingly failed to get a licence for more than a year, that zero tolerance became very forgiving. And now we learn one of the same councillors responsible for enforcing these rules was also a rule breaker.

"Labour have broken their promise time and again. They think it’s one rule for them and another for the rest of us.”

A Southwark Council spokesperson said: “Southwark Council requires private landlords to acquire a selective license in order to rent out properties in specific areas, and a licence in order to rent out a house in multiple occupation (HMO).

“This is to protect tenants and ensure landlords are complying with housing requirements, providing safe, well-maintained homes.

“Licenses are acquired by sending applications to the council, which we assess and approve subject to conditions.

“When we become aware of an unlicensed property, we issue a warning letter advising the landlord that they have a maximum 21 days to apply for a license.

“Enforcement action such as fines are reserved for those who still do not apply for a licence or where a property is found to be in an unsafe condition.

“We cannot comment on individual cases.”

The resignation letter in full:

Dear Sarah,

RE: Southwark’s housing licensing scheme

In light of recent media scrutiny of Southwark’s housing licensing scheme, I took it upon myself to review my own arrangements as an owner of rental properties in the borough.

I have a contractual arrangement with a local letting agent who manage properties on my behalf which sets out that they are responsible for letting, licensing and maintaining those homes. The homes that I own have always been properly declared publicly in my Register of Interests.

However, it has come to my attention that despite their contractual obligations, the letting agent has allowed these properties to be without the appropriate licences at various points and that the agent’s accounts have fallen into council tax arrears.

Whilst this is a failure on behalf of my letting agent, these are my properties and I take full responsibility for allowing this situation to arise. Moving forward I have ensured that all necessary licenses are being sought and that all obligations on the properties are met.

As the Cabinet Member responsible for council homes in the borough, it is imperative to maintain trust with our residents and to show that we mean what we say when we are committed to tackling the housing crisis in our borough and in our city. We must lead with integrity and not give the impression we are anything other than determined to improve housing in our borough - whether in the public sector or for private renters.

I do not want my oversight to distract from this critical work and therefore I will resign from Cabinet with immediate effect. In the interests of full transparency and openness I will also refer myself to the council’s Monitoring Officer to independently review the situation.

Southwark has always been my home and my family’s experience living in council housing has shaped my views today. It has been my honour to advocate for our tenants and leaseholders and serve residents across the borough. I have overseen the rollout of the borough’s Good Landlord Plan, and I fully believe it will transform the lives of the thousands of tenants we serve, but in order to deliver this crucial piece of work it is clear to me that I cannot stay on as the Cabinet Member responsible. I apologise for the disruption this will cause and want to assure that you will continue to have my support as we head into a critical period to secure the future of council housing.