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Substantial fine for Camden lettings company that tried to evade their HMO licensing responsibilities

Monday, April 8, 2019 - Camden Council

A lettings company that failed to comply with HMO licensing responsibilities and failed to comply with legal notices served by Camden Council was fined £22,299.33 at Highbury Corner Magistrates Court on 7 March 2019.

The properties in question were multi-occupied flats in Candida Court in Kentish Town and on Cricklewood Broadway.

In December 2017, Camden Council received information from the London Fire Brigade that a fourth floor flat at Candida Court was occupied as an HMO by seven unrelated people with inadequate fire precuations.

On 10 January 2018, Camden Council inspected the property finding the lounge had been poorly converted into two bedrooms. There were four other bedrooms with a total of seven residents. Rent was paid to Lifestyle Club LSC Ltd though the occupants had club membership agreements and licences to occupy as opposed to tenancy agreements.

There was only one working battery operated smoke detector in the property that had been fitted by London Fire Brigade. The partition in the lounge was poor quality and had gaps through which there were wires and did not provide 30 minutes fire protection. As an HMO, the property should have been licensed, but no application for a licence had been made.

On 24 January 2018, Camden Council inspected another property on Cricklewood Broadway which was on the second and third storeys of a four storey building. The council found the lounge had been poorly converted into two bedrooms. There were four other bedrooms with a total of five residents. Statements were taken from three residents who paid rent to Lifestyle Club LSC Ltd.

Once again, the occupants had club membership agreements and licences to occupy as opposed to tenancy agreements. There was only one battery operated smoke detector in the property that did not work. The partition in the lounge was poor quality and had gaps and a large hole. The light switch in the kitchen was not connected to the wall. The doors were poorly fitted and did not provide the required separation from the spread of fire. As an HMO, the property should have been licensed, but no application for a licence had been made.

Following these inspections, Camden Council served statutory notices under section 16 of the Local Government (Miscellaneous Provisions) Act 1976 and section 235 of the Housing Act 2004 on Lifestyle Club LSC Ltd and the owner of the flat in Cricklewood Broadway, Mr Assad Ghafoor.

These legal notices required the recipients to provide information about who was involved in the control and management of the properties under investigation and for the recipients to provide requested documentation such as agreements between owners and agents and agents and tenants. The notices are a vital investigative tool for councils when determining who may be responsible for offences such as managing unlicensed HMO’s and determining breaches of HMO Regulations in matters such as fire safety. It is an offence not to respond to the notices that carries an unlimited fine.

None of the statutory notices served on Lifestyle Club LSC Ltd and Mr Ghafoor were returned.

At the trial on Monday 28 January 2019 at Highbury Corner Magistrates Court, District Judge Rimmer found the three defendants guilty in their absence.

He also found that both properties were HMO’s in poor and unsafe condition and that the use of the membership agreements and purported licences to occupy were entirely contrived arrangements the effect of which was to deprive those occupiers of the benefits enjoyed under a normal landlord/tenant relationship such as security of tenure.

At the sentencing hearing, Lifestyle Club LSC Ltd were fined £6,532 for each of their three offences.

The sole director of Lifestyle Club LSC Ltd Tiina Lehtla, 30, of Argyle Square, was fined £1,760 for each of her three offences.

Assad Ghafoor, 48, of Ashford Road, NW2, owner of the flat in Cricklewood Broadway, was fined £1,760 for both of his two offences.

Each defendant also has to pay £2,533.33 costs and a £170 court surcharge.

The total fines and costs awarded were £22,299.33 for Lifestyle Club LSC Ltd, £7,983.33 for Tiina Lehtla and £6,223.33 for Assad Ghafoor, making £36,505.99 in total.

None of the defendants attended court or sent in representations at either the trial or sentencing.

District Judge Rimmer made the following comments before sentencing, on 7 March:

I consider the defendants to have high culpability and this was a case of medium harm based on risk to the tenants because of the poor state of the two properties.

This was a cost-cutting exercise by the defendants. They did not apply for licences to avoid an inspection which would have resulted in expense to bring the properties up to standard.

Defects in the properties included inadequate fire detection, poor quality partition walls, no kitchen door, dampness and mould.

The tenants were from abroad and the most in need. They were given membership agreements instead of tenancy agreements to try and curtail their rights.

The obstruction of the local authority by not returning the statutory notices was deliberate and a commercial decision to try and frustrate the investigation by EHO’s.

Councillor Meric Apak, Cabinet Member for Better Homes at Camden Council, said:

The ‘club’ residents living at these properties signed up to did not offer an exclusive, luxury experience – its occupants were living in illegal, dangerous and unhealthy conditions. Without our investigation, they may have continued to remain voiceless and in this  vulnerable state.

Camden Council is committed to ensuring all our residents, whether they are council tenants or rent in the private sector, live in safe, accessible and affordable homes. We are here to work with private landlords to ensure they have the correct licences and keep their properties to an appropriate standard. If they refuse, we will not hesitate to pursue them through the courts on behalf of the tenants.

For more information on the property licensing requirements in Camden, you can read our free guide here.

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