Smoke and Mirrors Ltd

by | Jul 23, 2020 | Safer Renting

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A slick polished property letting scam has been in operation across London and beyond for the past few years and its wreaking havoc on an innumerable number of renters. It is a clever operation specifically designed to evade detection and obscure the lines of accountability.

Worryingly it is growing, we have heard from numerous London local authorities and even authorities as far as Cambridge that they have seen this scam in operation. Various other publications have also covered the same scam in operation elsewhere.

The company presents as a professional outfit, with a neatly designed website that advertises hundreds of rooms to London’s unsuspecting renters and sells itself as specialising in properties in the trendiest areas of London. One of the most recent victims is a Mr Gomez, who found a property advertised by Company A.

Before moving into the property Mr Gomez was required to sign a ‘booking agreement’, in this agreement Mr Gomez was referred to as a ‘guest’ and the commencement of the tenancy referred to as ‘check in’.

This is not a case of playful wording, the agreement was intentionally designed to resemble a hotel booking. The agreement also deceptively claimed that the landlord ‘reserves the right to remove [Mr Gomez’s] possessions and refuse [him] access to the accommodation without prior notice’.

Despite what the agreement suggested, Mr Gomez was not a guest. He paid rent, for a fixed term, for a room that he had exclusive position over, therefore he was an assured shorthold tenant. To legally evict Mr Gomez, the landlord would have required a possession order from court. As has been discussed in previous Safer Renting articles the practice of supplying tenants with sham agreements is carried out in order to dupe the renter out of their tenancy rights and thus the legal protections to which they are entitled.

To add to the confusion, the company named as the landlord on the agreement was not Company A, but another company, Company B.

The tenant never had any knowledge of Company B despite it being named as his landlord.

After signing the sham agreement, Mr Gomez moved into the property on 15th October 2019. He paid his rent monthly up until May 2020 when as a result of the Covid pandemic he lost his job.

He contacted Company A to inform them of this and promised to pay £400 of the £700 rent, which was all the money he had. The swift response of Company A was to send fake bailiffs to the  property, who removed Mr Gomez’s possessions and changed the locks, a stark case of illegal eviction. Mr Gomez was left now not only jobless but also homeless.

On behalf of Mr Gomez, Safer Renting attempted to contact both Company A and Company B, but each attempt was met with radio silence. A land registry check identified the owner of the property. He informed us that he had signed an agreement with Company C who had taken responsibility for the property and paid him a monthly rent.

It is a slightly confusing arrangement, so to be clear we are now aware of 3 different companies involved in Mr Gomez’s case.

•             Company A: Responsible for dealing with the management of the property and advertising the property.

•             Company B: Named as landlord on the agreement.

•             Company C: Assigned control of the property by the owner and makes monthly rental payments to the property owner. The renter was not aware of the existence of this company, only the property owner.

A similar case was referred to the Safer Renting team shortly after Mr Gomez’s case, this time two renters, Mr Brown and Mr White, had been illegally evicted.

It did not appear immediately obvious that the two cases might be connected. The names of the companies were different. However, the case did have very familiar components. There were the sham tenancy agreements masquerading as hotel booking summaries and the involvement of multiple companies in the letting of the property. With one company advertising and managing the property and a separate company named on the agreement.

It was also a strange coincidence that the websites of the companies involved had the same template, fonts and wording as the companies in Mr Gomez’s case.

We followed the same protocol and contacted the owner, he informed us that his agreement was with Company C. The same company who had an agreement with the owner of the property that Mr Gomez had rented.

He also provided us with the names of the staff of Company C. This provided us with the missing piece in the puzzle. We were able to relay the names of the staff members to Mr Gomez who confirmed he had been communication with these same people, but in his communications with them, they worked for Company A. Draw your own conclusions, but does anybody else smell gunpowder?

But why go to such an effort to seem separate?

Appearing to be separate actors is a vital part of the scam as it enables them to effectively evade accountability. One tool available for renters who have been victims of illegal eviction to claim compensation is the rent repayment order (RRO). To make a successful RR0 claim, the renter must name the landlord as the respondent but the confusing nature of the scam makes it almost impossible for the claimant to put down the correct respondent.

The company named on the tenancy agreement has no other relation to the tenant. It is likely that if any action were to be brought against them, they would fold. The company involved in managing the property does not receive rent and is not named on the agreement, therefore it is difficult to argue that they are the landlord.

The company that receives the rent and has an agreement with the property owner has no relation to the renter, in fact the renter is not ever even made aware of their existence. As a result, the renter is left homeless but with no route of redress. The same smoke and mirrors trick can be used to evade any prosecution from local authorities.

Whilst the operation is now stating to become more known to local authorities, there has even been successful prosecutions of the individuals involved by the London Boroughs of Islington and Camden, these prosecutions have proved not to be a successful deterrent as its victims continue to be referred to the Safer Renting service. Until legislation is brought in that properly addresses these loopholes, these scammers will continue to exploit renters, leaving an unknown amount of people living in precarity.

Legislation that makes the property owner responsible for the actions of those letting their property would be a start. If the property owner were to be held responsible, they would be motivated to stop turning a blind eye to the actions of these criminal actors that supply them with their monthly rent. The ability to obscure responsibility would be done away with as all that would be needed is a simple land registry check.

Clearly, as things currently stand, the criminals involved believe that there is more money to made in operating above the law than operating within it.

  By John-Luke Bolton













By Ben Reeve Lewis

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About Cambridge House Safer Renting

The Cambridge House Safer Renting team present the ‘go-to’ blog on the world of the Shadow Private Rented Sector.

We monitor the world of rogue landlord and agent activity, publicise developments, circulate innovative ideas, keep readers abreast of changes in laws and regulations, raising awareness of criminal trends and scams, celebrate successful actions and interview people working in the field, connecting up anyone involved, from tenants and their advisers, to enforcement officers, lawyers and journalists.

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