A LETTING agency run by a Newbury couple has been ordered to pay more than £20,000 in fines and costs after issuing ‘sham licences’, which led tenants to believe they had no right to challenge eviction nor provided protection for their deposits.
Green Live Ltd, based in Holloway Road, London, pleaded guilty to two offences under the Consumer Protection from Unfair Trading Regulations 2008, following an investigation by trading standards.
The firm was made to pay £20,500, including £3,000 compensation to the two victims of the sham licences, by Highbury Magistrates Court, at a hearing on August 10.
It is believed to be the first such prosecution of its kind in England.
Company director Adis Karahodza and Mirela Karahodza, who is listed as the firm’s secretary, from Newbury, were not personally prosecuted or convicted of any offences.
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.
In this case, the victims of the sham licences first contacted the Housing Preventions and Options Team at Islington Council in 2016 because they were not able to recover their deposits.
In turn, the team contacted Trading Standards to alert it to concerns about the sham licences issued to the victims, which triggered an investigation, culminating in the prosecution.
Following the investigation, 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 £5,000 for the misuse of a logo.
The two victims of the sham licences were awarded compensation totalling £3,000 and Islington Council was awarded costs of £1,500.
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.”
A statement from Green Live Ltd read:"Green Live Limited pleaded guilty at the first opportunity to three offences at Highbury Corner Magistrates Court on 10 August 2017.
"Mr Karahodza, director of the company, was not personally convicted of any offences.
"The offences related to issuing licences to two tenants in circumstances where the company should have issued assured shorthold tenancy agreements instead.
"The licences were issued by employees who worked for the company at the time. These employees no longer work for the company.
"The third offence related to use and display of an organisation’s logo on company paperwork in circumstances where accreditation with that organisation had lapsed.
"This was an oversight on the part of the company and the company accepted responsibility for this at court accordingly.
"Mr Karahodza and Green Live Limited have nothing more to say on this matter at this time."