132: Residential letting agency fined for issuing sham licences’

A residential letting agency has been prosecuted under consumer protection legislation for granting ‘sham licences’ and therefore denying its tenants the statutory rights which would be available if they had been given assured shorthold tenancies.

Facts

The case first came to the attention of Islington Council when tenants of Green Live Limited in Holloway Road, North London, contacted the (Housing) Preventions and Options Team, claiming that they could not recover their deposits. Investigators suspected that a ‘sham licence’ had been issued instead of an assured shorthold tenancy agreement.

The ‘sham licence’ was designed to convince occupiers that they had no right to challenge eviction, no right to have a legally defined notice period, no right to a minimum occupancy period, nor benefit from the statutory deposit scheme which protects residential rent deposits.

Islington Borough Council contacted the Trading Standards team, which led to further investigations. It was found that not only had the tenants been issued sham licences, but that Green Live Limited were also claiming to be part of the UK Landlord’s Accreditation Partnership, of which it was not a member.

Decision

Green Live Limited pleaded guilty to two offences under the Consumer Protection from Unfair Trading Regulations 2008. The first related to the issuing of licences to occupy as opposed to a tenancy. The second related to deceptively using the UK Landlord’s Accreditation Partnership logo.

Green Live was fined £11,000 for the two sham licences issued and £5,000 for the misleading logo. The two victims of the sham licences were awarded £3,000 and Islington Council was awarded £1,500.

The prosecution is the first of its kind in the UK and sends out a clear message to residential landlords that the use of licences to deny residential tenants statutory rights will not be tolerated.