An Islington letting agency that tried to dodge tenancy laws through a “membership club scam” has been billed more than £40,000 in the first prosecution of its kind in the UK.
Gian Paulo Aliatis, director of Lifestyle Club Ltd, was sentenced at Snaresbrook Crown Court on July 30 after he pleaded guilty to three counts of engaging in an unfair commercial practice between October 2017 and April 2018.
The firm, which was registered in Green Lanes but operated from White Lion Street, marketed itself as a membership club on popular property rental website SpareRoom.co.uk, the court heard.
By wrongly claiming to be a members' club, the firm demanded a non-refundable "joining fee". But it should have charged neighbours a deposit, which is refundable and by law has to be paid into a tenancy deposit protection scheme.
The "club" also pressured customers into signing a "membership agreement" without giving them time to read and understand the document, and it denied people the chance to view a property in person before agreeing to live there.
Rental payments were also passed off as a "monthly contribution fee" to stay part of the club.
Islington Council's Trading Standards brought the case against the company, and last week Aliatis was required to pay £42,273, including a £2,000 fine for each of his three offences, a £600 victim surcharge, £3,790 in compensation to the victims and the council's legal costs.
Islington's housing chief Cllr Diarmaid Ward, said: "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.
"Islington is at the forefront of the fight against rogue letting agents, and we are not afraid to tackle new scams."
Letting agents are also required by law to sign up as a Redress Scheme Member, but Lifestyle Club Ltd instead directed anyone who raised a complaint to a fake independent mediation company.
Lifstyle Club Ltd went into voluntary liquidation in February, according to Companies House.
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