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homeFriday 22nd September 2017

Letting agent found guilty over sham tenancy

Stuart Spear23/08/2017 - 15:46

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GreenLive Estate Agent Holloway Rd
GreenLive Estate Agent Holloway Rd

In what is thought to be the first case of its kind Islington Council has prosecuted a letting agent for issuing ‘sham licenses’ that denied tenants protection against eviction or security for their deposits.

The case first came to the council’s attention in 2016 when tenants of Green Live Estate Agent in the Holloway Rd, north London, contacted the (Housing) Preventions and Options Team at Islington Council claiming that they were not being allowed to recover their deposits.

Inspectors investigating the case suspected that ‘sham licenses’ had been issued to the victims that were unsuitable for an assured tenancy because they were designed for live in nannies or lodgers.

Under the licenses the occupiers were made to believe that they had no right to challenge eviction or to have a legally defined notice period or minimum occupancy term period. These agreements also provided tenants with no protection under the statutory deposit protection scheme.

Working with colleagues from trading standards the council started to put together a case against the letting agency run by company director Adis Karahodza, 38, and his wife Mirela, 35, who acted as company secretary.

Investigators also found that the company was claiming to be part of the UK Landlords Accreditation Partnership despite not being a member. 

On August 10 at a hearing at Highbury Magistrates’ Court, Green Live Ltd 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 Ltd was fined £11,000 for the two sham licences issued and £5000 for the misuse of a logo. The two victims of the sham licences were awarded compensation totalling £3000 and the Islington Council was awarded costs of £1500.

Diarmaid Ward, Islington Council’s executive member for housing and development, said: ‘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.’

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