Prosecution of agency over 'sham licences' is first of its kind

This month’s prosecution of a letting agency for issuing ‘sham licences’ that suggested occupiers had no right to challenge eviction and gave no statutory protection for deposits, is believed to be the first of its kind in England.

Green Live Ltd, trading as Green Live Estate Agents, now faces a bill of £20,500 including £3,000 compensation for the two victims of the sham licences.

A statement from Islington council in London, which mounted the prosecution, says 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.

In this case, the victims of the sham licences first contacted the council last year because they were not able to recover their deposits. In turn, the local authority contacted Trading Standards to alert it to concerns about the sham licences issued to the victims, which triggered an investigation culminating in prosecution.

Earlier this month 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 £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.

“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” says a council spokesman.