Landlords and letting agents should be aware that a new breed of online self-employed sex worker is targeting privately rented properties as ideal premises for their businesses, which two recent cases handled by my team have highlighted.

In both cases the sex workers had hidden the true source of their income when applying for the tenancies, and subsequently operated the properties involved as brothels which is both illegal and in breach of their tenancy contracts.

And as both cases highlighted, it soon became obvious to neighbours what was going on because clients were coming and going at all times of the day and night.

The most serious of the cases handled by the team here at the Property Redress Scheme involved a landlord with a terraced house in a well-known Southeast coastal resort.

Compensation

He was asking for compensation after claiming that his letting agent had not adequately referenced a tenant who turned out to be running a brothel from his buy-to-let property.

The tenancy agreement made it clear it could not be used as a place of business and therefore the landlord claimed the tenant had breached her tenancy agreement, and that running a brothel at the address was in any case against the law.

The landlord made some effort to get the facts after a tip off, by phoning up the tenant and pretending to be a potential client, and establishing that the ‘appointment’ would be at the house.

This, the landlord contended, was proof that the agent had not referenced the tenant properly or been aware of her activities at the house.

Also, the landlord said a quick Google of the tenant’s name revealed that she was a sex worker and using the property to run a brothel.

But this is a tricky case – when referencing self-employed potential tenants, their monthly income is revealed but not the type of work they do.

But this is a tricky case – when referencing self-employed potential tenants,their monthly income is revealed but not the type of work they do.

It’s also difficult for agents to pick up what’s going on during inspections – legally tenants must be given 24 hours’ notice of property visits, giving a tenant plenty of time to hide anything that might indicate sex worker activity.

Our authority is limited to looking at the standard of service the agent provided and in this case, if the reference carried out was adequate.

Therefore, when landlords ask for compensation from an agent, if the referencing was properly carried out and the report contained no ‘red flags’ it is unlikely that any compensation would be awarded. It is only by sheer luck, for this landlord, that such activity is brought to an agent’s notice, rather than being picked up by referencing or property inspections.

What are the key lessons here?

* Landlords and letting agents should be more diligent than normal when referencing self-employed tenants with profiles that might suggest they are sex workers.

* Proper referencing should be carried out for each tenant, however if they have no cause for concern and the agent has done all that is reasonable to verify the tenant, then their duty to their landlord client has been fulfilled.

* Remember that the only clause that applies here is that a tenancy agreement will make it clear running a business of any sort from the property is a breach.