Judge rules that letting agent which only handled deposits and took first month’s rent was ‘managing’ illegal property

Two agencies have been hit with a total bill of over £42,000 after being found guilty of managing three unsafe flats that required a House in Multiple Occupation (HMO) licence but were not licensed.

One of the agents argued that as it only took tenants’ deposits and the first month’s rent, it was not managing the properties, but the court decided otherwise.

The ruling could have implications for other letting agents.

The prosecution was brought by Camden Council in London, with the case heard last Friday at Highbury Magistrates Court.

The local authority prosecuted the managing agent Leycam and the letting agent Citydeal Estates (London) for 12 charges arising from offences relating to the failure to license as HMOs three flats in the same building in Fortress Road, London, and nine other offences under the HMO Management regulations relating to the condition of the flats.

Together they received a fine of £25,050 for failing to have a licence while Leycam received a further £6,975 for breaching regulations. Costs and victim surcharges brought the total bill up to over £42,000.

Council officers were first alerted to the properties last summer when tenants complained about a rat infestation and poor housing conditions, including rotting windows, dampness and fire safety issues. The tenants had to place saucepans in a bedroom of one of the flats to catch leaking bathwater.

Despite the agents being aware of the council’s HMO licensing scheme, they ignored tenant requests for issues to be resolved, says Camden Council on its website. It adds that Citydeal Estates (London) had argued that they were not responsible as they only received the tenancy deposits and the first month’s rent.

However Judge Newton ruled they were managing the property.

Cllr Meric Apak, cabinet member at Lambeth Council for better homes, said the authority would not hesitate to take legal action when there is sufficient evidence.

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11 Comments

  1. smile please

    This is why we go nowhere near HMOs or letting rooms.

    Can of worms that can cost you a fortune.

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    1. jackoTLG

      But it can also make you a fortune if you do it well

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      1. smile please

        £25,000 fine is enough to scare me off. Also most the landlords I have come across with these types of property are a nightmare to deal with.

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  2. P-Daddy

    It’s cases like these that add to the momentum to the anti agent and landlord lobby that is out there in @angry of the internet land’ and Which/Daily Express/Mail readership. I’m glad that these agents and the properties have been held up to proper action, may others learn.

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  3. CountryLass

    So is this just because it is a HMO property? I have lots of unmanaged properties where I collected the deposit and registered it and processed the first months rent. The properties were all compliant (when I took them on anyway!) so if I am not managing the tenancy or having anything to do with it, how could problems be my fault?

    When the new money laundering stuff came in and I contacted my unmanaged ones, some got shirty saying it was nothing to do with me and where had I got their details from?!!!

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    1. smile please

      I am guessing they cut corners, the main one being no license was in place on the property

      The shirty emails you got we indicative on tenant find only landlords. They just want the ££££ without the responsibility.

      Instead of cracking down on agents in the PRS they need to be looking at the landlords. If you ever watch the TV programmes on nightmare landlords nearly all are privately let.

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  4. David M

    Tenants want the security of paying their deposit and rent to an agency, but situations such as this will encourage agents to say to the Landlord sorry we can’t help you.

    With the introduction of additional & selective licensing  – HMO’s that require some form of license are becoming more and more common; which will multiple the consequences of such a problem.

    The outlook –  not affordable rental properties for Tenants to share…….well done law makers!!

     

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  5. Wanderer

    While I don’t like some of the prices that are required for licences I do feel that they are required to maintain the standard of many HMOs, time after time we are shown that (some) landlords of HMOs just don’t want to do the work required to provide good quality housing unless they are beaten about the head with the rules! The fact that these agents took the landlords’ money and didn’t provide a knowledgeable (any) service is not acceptable and they should be fined as a result, they are bringing the whole industry down when we are already struggling to justify ourselves and the work that we do. It’s bad enough that rogue landlords of HMOs bypass their responsibilities by not engaging an agent in the first place but to have landlords let down by their agent is worse. I don’t believe that it will stop good agents from dealing with HMOs, it’ll just stop the ones that are happy to take landlords’ money and do nothing in return – the very agents we want removed from the industry.

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    1. CountryLass

      In this case, and regarding HMO licensing I agree with you. The Agent doesn’t seem to have checked for the appropriate licensing, or any checks/inventories etc from reading the above.
       
      If they had got a copy of the license and checked that the property was compliant and safe, then they should not have been found guilty or fined, as they would have done their job and protected both the Tenant and the Landlord. As they don’t seem to have, they got what they deserved.
       
      An Agent that has done the appropriate checks and has proof that the property was legal and safe when the Tenancy started, should not be held accountable for the Landlord refusing to fix issues if the Tenancy is unmanaged. Even if it is managed, it the Agent can prove that they have tried everything to get work carried out and the Landlord has refused, the responsibility for that les squarely with the Landlord.

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      1. Wanderer

        I agree. An agent should always be aware of what they are advertising or providing a tenancy for – if they have been to the property and have advertised something that is not safe and doesn’t have a licence then they only have themselves to blame. It isn’t very nice when you go to a property and have to back out (or tell the landlord exactly what needs to be done) because it is not up to standard but you are preserving your reputation (and a*se!!) in doing so, the thought of a whopping great big fine and the resulting drop in reputation should be all the motivation you require to stand up for yourself during valuation visits, and if the landlord won’t take your advice then to back away at a rapid rate!

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  6. jeremy1960

    We have a tenant who needs to move out as splitting with partner. Trying to help him, I enquired via an online diy letting agent about a room in a 5 bedroom shared house. I asked whether the property would be  licensed in time for October. The agent ignored the question, I asked again, was referred to the landlord. The landlord called me and so I asked her the question – she knew nothing about changes to HMO licensing?

    In this case agent should be held to account as clearly not advising

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