Lettings agency to pay £20k-plus after prosecution over sham licences

A lettings agency has been ordered to pay more than £20,000 in fines, compensation and costs after issuing ‘sham licences’ to renters and using a letting agency association logo when it was not a member, in what is thought to be the first prosecution of its kind in England.

Islington Council took action after the licences suggested occupiers had no right to challenge eviction and gave no statutory protection for deposits.

The local authority said that when a sham licence is issued instead of a tenancy agreement, the occupier is made to believe that they have, in theory, no right to challenge eviction or be given legally defined notice periods or minimum occupancy term periods. Additionally, if the agreement is not a tenancy, the occupier does not benefit from the statutory deposit protection schemes.

The victims of the sham licences issued by Green Live Ltd first contacted the (Housing) Preventions and Options Team at Islington in 2016 because they were not able to recover their deposits.

In turn, that team contacted Trading Standards to alert it to concerns about the licences issued to the victims.

On 10 August at a hearing at Highbury Magistrates’ Court, Green Live pleaded guilty to two offences under the Consumer Protection from Unfair Trading Regulations 2008 relating to the issuing of licences to occupy where the fact gave rise to a tenancy.

The company also pleaded guilty to a further offence under the Regulations of using a letting agency association logo where it was not a member.

Green Live was fined £11,000 for the two sham licences issued and £5,000 for the misuse of a logo. The two victims of the sham licences were awarded compensation totalling £3,000 and the council was awarded costs of £1,500.

Cllr Diarmaid Ward, Islington Council’s executive member for housing and development, said: “We want everyone in Islington to have a decent, secure home, and to be protected from illegal and precarious housing conditions.

“This case, which we believe is the first of its kind in the country, shows we will take action where letting agents break the law and issue sham licences. We will not tolerate illegal practices like sham licences in Islington and if we become aware of any similar cases we will investigate with a view to prosecution.”