A sub-letting HMO managing agent has had a whopping £136,000 fine reduced to £31,500 after a judge ruled Epping Forest District Council had come down on him too harshly.

The First Tier Property Tribunal agreed that Darius Endriukaitis was guilty of failure to licence, failure to comply with HMO management regulations and failure to provide information on fire safety measures to tenants.

But it said the council hadn’t taken any personal factors into account and had calculated each penalty in excess of the statutory maximum.

It heard that Endriukaitis worked with fellow Lithuanian Ceslovas Sasnauskas, the sole director of property management company New Property Move.

In September 2019, Endriukaitis signed an assured shorthold tenancy agreement for 7 Hainault Road, Chigwell, that contained a rule against sub-letting.

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A month later he started renting rooms out, with rent paid to New Property Move, and up to nine people later lived in the three-bedroom property.

He did the same at 105 Queens Road, where the four-bedroom property was sublet to about nine people and at 17 Palmerston Road, both in Buckhurst Hill, where the six-bedroom house was sublet to a number of people shortly after the tenancy was signed.

‘Not liable’

Although Endriukaitis admitted he rented out all three properties, intending to use them as HMOs, he said that as an employee of New Property Move he could not be liable for the penalties.

The council argued that the arrangement was a joint business venture between Endriukaitis and his friend Sasnauskas.

The tribunal ruled that Endriukaitis could easily have done some research about HMO regulation and should have known that sub-letting the properties without notifying the agent or owner was dubious conduct.

It was satisfied that his involvement with the tenants was on the basis of a joint business enterprise, however, it challenged the council’s penalty of £136,232, and added that it should also have served notice on Sasnauskas personally rather than just the company, which is being dissolved.

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