In a cautionary tale for letting agents, despite subletting a property to a rent-to-rent company, Stoke Newington agency Next Location has been fined £10,000 for running it as an unlicensed HMO.

When Haringey Council’s inspector Camelia Filipescu visited the property at 69 North Grove, N15 (main picture), she found it was occupied by five tenants from at least two households who shared a kitchen and bathroom.

With no contract in evidence, the council served the freeholders, Dov and Pearl Vogiel, with a notice requiring them to provide further information about who was managing the property.

Rent guarantee scheme

The freeholders replied, stating that they had “a rent guarantee scheme with a managing agent (Next Location) who have tenants in the property and take care of all the needs relating to the property”.

Without their knowledge, Next Location had then sub-let the property to rent-to-rent company Come to London.

At the first Tribunal hearing, it was decided that both the companies were the managing agents and they were fined £10,000 each.

At the appeal hearing, Next Location asserted it was not managing the property at the time as it had entered into a Company Let Agreement with Come to London Ltd.

Tribunal disagreed

The rental agreement granted a Non-Assured Tenancy of the property at a rent of £2,000 per month for a 12-month term with the rent guaranteed to be paid to Next Location.

As it did not mention the freeholders but instead named Next Location as the landlord, the Tribunal disagreed.

Instead, it ruled that Next Location was the sole managing agent from the date of its agreement with the freeholders and that it benefitted from its collection of rent from Come to London Ltd, only part of which was passed onto the freeholder. Its fine therefore remained, although Come to London’s was rescinded.

Read more about HMO fines.

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