Residents initially refused entry to inspection teams after being pressured by the agency, but access was gained after warrants were issued by the magistrates' court. The director of the agency went on to harass tenants and try to evict them without following the proper process.
Appearing at Portsmouth Crown Court, the director pleaded guilty to multiple offences under the Protection of Eviction Act 1977 as well as managing unlicensed HMOs, and failure to comply with HMO Management Regulations.
For the harassment and eviction offences, the director was sentenced to 200 hours of community service and told to pay £114 victim surcharge. The agency was fined £1,000 and told to pay costs of over £9,000 to the council. For the offences relating to the properties being unlicensed, the director was personally ordered to pay £19,150 and the agency was ordered to pay £5,750. The tenants were awarded the equivalent to two months’ rent as compensation.
What is rent-to-rent?
Sometimes known as guaranteed rent, it is where a landlord or property owner agrees to rent their property to an individual or business for a specified time and for a guaranteed monthly income. The renter, also known as the guaranteed rent provider, then sublets the property on to a tenant.
Although it’s a current hot topic in the sector, rent-to-rent remains a niche strategy. It is increasingly being adopted by local councils as a way of supplementing social housing stock, and in the private sector it offers investors with limited capital a way into the market.
Potential for exploitation
Unfortunately, the lack of regulation and minimum qualifications needed to enter the industry means rent-to-rent can also be a tempting target for unscrupulous operators without property management experience.
Propertymark has long campaigned for the regulation of property agents, which will professionalise the industry, help stamp out bad practice, and give consumers greater power and protections.
Change highlights the need for professionalism
As well as adapting to new business models, like rent-to-rent, the private rented sector must prepare for the biggest overhaul in a generation when the Renters’ Rights Bill becomes law.
With significant changes to tenancy agreements and eviction procedures, it's crucial to have competent and qualified professionals managing these complex processes. Ensuring letting agents are adequately trained to navigate the new legislation would secure their role in upholding both landlords' and tenants' rights, and their contribution to a fairer and more transparent PRS.
Supporting agents to adapt
Propertymark is supporting property agents to adapt to changes in the sector with reliable information, training, and resources.
We urge agents to utilise our upcoming webinars, courses or Regional Conferences to understand how the Renters’ Rights Bill might affect them and keep up to date on any further legislative proposals.
Members can also sign up for email updates on legislation by setting their preferences in their online account, visiting our online Knowledge Hub, and joining our hugely active and supportive Facebook Group.
