The director of a north London lettings agency has been ordered to pay out more than £42,000 to victims and the council after the company claimed it was a “membership club” to get around deposit rules.
Gian Paulo Aliatis, the director of Lifestyle Club Ltd, pleaded guilty to three counts of unfair commercial practice on July 30 after Islington Council Trading Standards challenged his firm’s claim that it was not bound by the legal regulations for letting agents.
Snaresbrook Crown Court heard that the company, based on White Lion Street, Islington, advertised its services on SpareRoom.co.uk as a membership club.
Rather than charging tenants a refundable deposit which must be registered with a tenancy deposit scheme, Lifestyle Club charged residents a non-refundable “joining fee”.
Islington Council says that Lifestyle Club admitted to pressuring customers into signing a “membership agreement” without giving them time to read and understand the document.
Some tenants were not given the chance to view properties before agreeing to live there, according to the council.
Rental payments were described as a “monthly contribution fee” to stay part of the club.
Lettings agencies are legally required to sign up to a redress scheme, but Lifestyle Club directed tenants who complained to a fake mediation company called the “Shared Accommodation Providers Association”.
Aliatis has been hit with a bill for £42,273 following the prosecution by Islington Trading Standards.
This includes a £2,000 fine for each of three offences, a £600 victim surcharge, £3,790 in compensation to the victims and Islington’s full legal costs.
Islington Council executive member for housing and development councillor Diarmaid Ward says: “This is a major victory for private tenants, not just in Islington but right across the country. “Our determined Trading Standards team has led a landmark prosecution that sends a clear message to unscrupulous letting agents – simply changing a few words in your paperwork does not put you above the law.
“With this prosecution, the courts have shown they are more than willing to clamp down on membership club scams, and there is simply no legal loophole that allows dodgy agents to sidestep the legal regulations, which are there to protect the rights of both tenants and letting agents.”