A new scam appearing
So here’s an interesting new scam I’ve not come across before.
A letting agent pretending to run an exclusive membership club instead of a letting agency, whereby the signatories, referred to as ‘club members’, as opposed to tenants get given a membership certificate instead of a tenancy agreement.
Why do these scams abound?
Well if you create a tenancy then you are bound by a raft of legislation, including the Law of Property Act 1925, The Protection from Eviction Act 1977, The Landlord and Tenant Acts, both 1985 and 1987 to name but a few, not to mention deposit protection regulations and local authority licensing schemes.
If what you are setting up isn’t a tenancy agreement then you avoid these restrictions.
The trouble is….
What they fail to understand is that a landlord or agent cannot contract out of statutory legislation. In short, calling something a licence, or in this case ‘Club Membership’ doesn’t make it so and doesn’t excuse you from the law. Although it might work well in hoodwinking foreigners or the generally gullible into thinking they have no occupancy rights.
Which is the sole name of the game.
I love this passage from the contract that was shown to me:
“Membership fee £400 (so deposit or admin fee….hmmmm) “Additional monthly membership contribution £780”
…..er that would be the rent then.
And it comes with the usual clause, variations of which I have seen countless times:-
“The membership resulting in the approval of this application does not confer exclusive possession of any club property and it does not crate the relationship of landlord between the parties whatsoever. The member shall not be entitled to an assured shorthold tenancy, nor a statutory periodic tenancy under the Housing Act 1988, or to any other statutory security of tenure now, or upon determination of the agreement on any club properties or any claim arising out of the aforesaid claims. The member accepts that this does not confer any statutory protection and/or rights that would otherwise be applicable to an assured tenancy or statutory periodic tenancy”
Nice try lads but just another version of a ‘fingers in the ears’ and la-la-la approach.
All in a day’s work
You see this is the kind of rubbish that enforcement officer has to deal with every day.
Dodgy lettings agreements, drafted by dodgy people to evade laws and regulations in the hope that they won’t have to spend any time or money doing things the right way and meanwhile treading on the rights of ordinary renters and pushing them around.
To be honest I doubt I will get very far with these jokers.
I will provide advice on tenant’s rights, even contact the clowns issuing these agreements but when I get back to the client they will have been moved, either voluntary or involuntarily and will have been so brow-beaten by the people providing their homes that they will prefer the advice of the agents to mine.
After all, the agent has control over where they sleep tonight, whereas I just present them with a set of inconvenient truths. And the comedy rolls on
Rogue landlord database?
Don’t make me laugh. These guys will just dissolve the limited company and start up under a different name doing the same thing.
Many of them buy limited companies off the peg in advance of any action and when the heat gets too much they just fold and start again.
I recently had a meeting with HMRC where they told me they have the same problem.