The agency presented itself as a members club in an attempt to sidestep regulation, using various ruses to rob tenants of their rights in the first prosecution of its kind in the UK.
Lifestyle Club Ltd director Gian Paulo Aliatis was sentenced at Snaresbrook Crown Court on 30 July having pleaded guilty to all three charges of unfair commercial practice at an earlier hearing.
He was ordered to pay £42,273, comprising fines, compensation and costs, including a £6,000 fine for the three offences, a £600 victim surcharge, £3,790 in compensation to the victims and Islington Council’s legal costs.
Councillor Diarmaid Ward, Islington Council executive member for housing and development, said: “This is a major victory for private tenants. Our trading standards team has led a landmark prosecution that sends a clear message to unscrupulous letting agents that changing a few words on paper does not put you above the law.”
Rogue agent
The first charge covered the company presenting itself as a private members club, including billing rental payments as monthly membership fees.
The company demanded a non-returnable joining fee in place of a conventional deposit, which by law must be paid into a tenancy deposit protection scheme and is refundable.
It pressured tenants into signing a membership agreement in place of a tenancy contract, without giving them time to read and understand the document.
And it refused to allow tenants to view properties before agreeing to move in.
The second count was for misrepresenting the company as a members club.
The third covered the company’s failure to sign up as a redress scheme member.
It was advertising properties on SpareRoom.co.uk.
Ward added: “The courts have shown [they are] more than willing to clamp down on membership club scams. There is no legal loophole allowing dodgy agents to sidestep regulations, which are there to protect the rights of tenants and letting agents.
“Islington is at the forefront of fighting rogue agents and we’re not afraid to tackle new scams,” he said.
CORRECTION: This article was amended on 5 January 2021. It has been brought to our attention that no charges of fraud were proceeded with against Gian Paolo Aliatis and that there was no finding by the court that people were directed to a “fictional” mediation company.
