I am delighted to see that at last a local Trading Standards Office has brought a successful prosecution against a letting agent for unfair practices under the Unfair Trading Regulations 2008.
Sham Licenses
The two victims originally contacted the Council because they could not get their tenancy deposit back from letting agents Green Live Ltd in Holloway Road in London.
The Council then discovered that the tenants had been given ‘sham licenses’ telling them that they were licensees without rights when in fact under the law they had an assured shorthold tenancy.
The tenants were falsely told that as they were licensees they had no right to challenge eviction or to have their deposit protected in a statutory scheme.
Misleading consumers
All tenants (and indeed genuine licensees) are consumers and are therefore protected under consumer law.
If they are given false information and led to believe that they do not have rights when in fact they do – this will be an offence under the Unfair Trading Regulations 2008 – the basis of this prosecution (see here for more on consumers rights) .
This act also gives consumers various rights under the civil law, including the right to end the contract early and to claim compensation.
Prosecution
The prosecution, brought by Islington Trading Standards is thought to be the first in the country on this basis. Green Live pleaded guilty to two offences under the Consumer Protection from Unfair Trading Regulations and also using a letting agency association logo, although it was not a member.
Green Live was
- Fined £11,000 for issuing two licences, and
- £5,000 for the misuse of a logo
- The two tenants were each awarded £3,000 compensation.
Islington housing boss Cllr Diarmaid Ward said:
“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.”
Tenancy Deposit Claim
Note that the tenants can also bring a claim under the civil law against Green Live and the landlord of the property (if this is not Green Live themselves) for the penalty of up to 3x the deposit sum under the deposit protection rules in the Housing Act 2004.
I think it is fair to say that in these circumstances they would almost certainly be awarded the maximum penalty of 3x the deposit sum by the Judge.
Have YOU been given a sham license?
If you are living in rented accommodation and have been given what you are told is a license – this may be wrong.
For example take a look at this article.
If you think you have been wrongly given a license and are being refused rights you are entitled to (for example if your landlord is trying to evict you without getting a Court Order first) – contact your Local Trading Standards Office and show them this article and also this report in the Islington Gazette.
When banning orders (under the Housing & Planning Act 2016) come into force in due course this is also something which could be the subject of a banning order.
