Lettings agency fined £60k for bullying student tenants it wanted to illegally evict

A lettings agency which tried to bully student tenants out of their shared houses with illegal eviction notices, baseless legal threats and even withholding gas, electricity and wifi has ended up with a court bill of more than £60,000.

Following the first such prosecution by Brighton and Hove City Council for more than ten years, SB Lets admitted three counts of harassing tenants Alex Schwartz, Natalie Halasy and Sophie Sutherland.

As well as frequently coming into the shared houses and issuing invalid eviction notices, the company threatened to take their guarantors to court – even starting proceedings at Southampton County Court against one.

SB Lets’ owner, Shadi Baja, originally faced the same charges, but Brighton and Hove City Council is not pursuing these after Baja signed an agreement not to act as a lettings agent with them.

Sentencing, Judge Stephen Mooney said SB Lets had miscalculated the end date of the tenancies and feared unless it could persuade the tenants to leave early, it would not be able to let out the houses for the next academic year.

But when persuasion failed, the company adopted a “campaign of bullying and intimidation designed to force them out”.

He said: “This behaviour was appalling. It included the issuing of spurious court proceedings against either the tenant or the guarantor, serving invalid possession notices, entering the premises and acting aggressively, withholding wifi and removing the key and card to allow gas and electricity to be be paid for.

“To add insult to injury, when the defendant finally succeeded in forcing out one of the tenants they withheld £200 from a security deposit to compensate for an apparently broken lock.

“A decision which I regard as being motivated by spite at the inconvenience they had been caused rather than by a reflection of any damage caused.”

He added: “There is a substantial imbalance in power between the defendant and the tenants affected by their action.

“Landlords and letting agents have an obligation to understand that they are providing one of the most basic requirements of society, namely a place to live.

“It appears there is currently a shortfall in the number of rental properties available and so by their actions they created the risk that each tenant would become homeless.

“They created that risk out of greed and fear that they would miss a year’s rental income. The three tenants were simply collateral damage.

“It is important that this defendant and others in the letting industry are deterred from putting their economic interests over that of tenants who have a legitimate expectation that the documents they sign actually earn something.

“Tenants should not fear they will be harassed and abused in their homes by their landlord of letting agent.”

The court heard Mr Swartz had previously successfully taken Mr Baja to the Property Tribunal, which had awarded him £5,900 and that this had already been paid.

Therefore, he awarded Miss Sutherland and Miss Halasy £8,000 compensation each, and Mr Swartz £2,100. He also fined SB Lets £41,900 and ordered it to pay a victim surcharge of £181, payable in the next 18 .

Prosecuting, Wesley Potterton said the council had decided to drop the charges against Baja himself in return for him agreeing to stop acting as a letting agent, which was the quickest and most effective way of protecting tenants.

He said: “Failure to comply with that agreement would be contempt of court which could potentially lead to two years’ imprisonment.

“The letting business has been transferred to another company, but SB Lets has been kept active so it could be sentenced.”

Judge Mooney asked what would happen if Baja simply liquidated SB Lets to avoid having to pay the money.

Defending, Imran Mahmood said Baja wanted to be rehabilitated in the lettings business in the future, and the only way to do that is to “make good his name with the local authority”.

He said that under the agreement with the council: “He personally will have no face to face or direct dealings with any tenant. He wants to do the right thing and be a decent landlord in the future.

“It’s hoped that this arrangement will mean all parties are satisfied.”

He added: “The local authority have a number of different ways of skinning this cat.”

He said SB Lets had made losses every year, but said Baja had spent up to £50,000 on his defence costs, as well as paying the council £9,000 to cover its costs – which Judge Mooney said he would use as an indication of how much Baja could afford to pay.

Mr Mahmood said Baja, whose father was a lettings agent, had started to build his property portfolio as a teenager, and built his letting agency business from scratch.

He said he had not been given proper guidance and this had led him to make mistakes.

Mr Swartz and Miss Halasy lived in the same shared house in Lansdown Place and Miss Sutherland lived in a shared house in Norfolk Square – just across from SB Lets premises.

In victim impact statements read out in court, they both said SB Lets’ actions had left them feeling intimidated and anxious.

Mr Swartz, who had paid £590 per month, said he still has nightmares about waking up and finding Baja in his bedroom, and the baseless legal claims made against him and his family as guarantors had caused distress.

Miss Halasy, who paid £600 per month, said the stress had led to her having to repeat her first year at university, which meant she had to borrow another £15,000 in student loans.

She said: “Moving and finding places to live has become very hard for me now.”

Miss Sutherland, whose £500 a month room Baja once walked into when she was undressed, said she was left scared of leaving the house or even going into the shared areas of the house in case she bumped into Baja.

Following the verdict, Mr Swartz said: “Cases like this highlight the need for landlord licensing in Brighton and Hove.”

Miss Sutherland said she wanted to particularly thank Councillor Gill Williams, who had supported her and who had even turned up before the police on one occasion.