A letting agency has been told to pay back £31,435 in rent after a tribunal found it should have known about a council's licensing scheme.

A First Tier Property Tribunal heard that the freeholder had granted a tenancy agreement to the respondent - Mio Real Estate - which appointed it as both manager and tenant with the power to sublet. It had received the rack-rent of the six-bed ground-floor flat in Paris House, Old Bethnal Green Road, London - which was unlicensed - but director Marco Scanu, who represented the firm at the hearing, said it was passing on the rent and so was merely an agent.

Scanu argued that it had a reasonable excuse as it acted throughout on the instructions of the owner, who retained responsibility for the property.

Instructions

Scanu said the owner’s daughter visited the property two or three times a week and gave instructions directly to the tenants – a claim they denied. The tribunal rejected his argument that the owner was the landlord as there was no mention of him in any of the tenancy agreements with the occupants. It said Scanu's firm had exclusive possession.

The tribunal also said it had no doubt that Scanu knew, or at the very least, ought to have known, about the existence of Tower Hamlets Council’s additional licensing scheme.

Acted

The judge said: “Whilst the respondent may well have acted neither deliberately nor with reckless disregard of the legislation, this in itself does not amount to a defence. Mr Scanu had shown himself to be somewhat naïve in his dealings with the owner of the property.”

The five tenants said their deposits were not held in a deposit protection scheme and/or were not returned, which Scanu did not challenge. The tribunal considered this to be poor conduct and made the Rent Repayment Order, ordering the firm to pay back 70% of the rent claimed.

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