ALMOST THREE years after one of the most notorious episodes in the lettings industry, the Office of Fair Trading has banned Nottingham estate agent Parminder Johal - known as Paul Johal - from engaging in estate agency work.

However, on a legal technicality, he could only be banned using the provisions of the Estate Agency Act, which does not apply to lettings. While Johan will not be able to sell houses, there is nothing to stop him renting them out.

Johal was a director of Torngold which traded as Aaron Scargill, handling both sales and lettings.

Aaron Scargill closed its doors in August 2002 and a creditors’ meeting was held in September 2003. At that meeting, Johal told creditors that as he had no separate accounts for clients’ deposits and rents, it was pointless to sue him.

The unregulated firm collapsed owing nearly £500,000 to around 100 people. The victims included its unpaid staff, who claimed they had been given ten minutes to clear their desks, landlords and tenants whose rent and deposits disappeared, and also home purchasers who had paid £750 deposits to secure the exclusive option to buy.

Before its collapse, Aaron Scargill hit the headlines by agreeing to sponsor Notts County football club for £100,000.

Although landlords and tenants were affected, action was not taken on their behalf. On the sales side, the firm was found in September 2003 to have failed to pay client money promptly into a client’s account as required under the Estate Agents Act.

In October 2004, Johal accepted a six year disqualification undertaking under the Company Directors Disqualification Act on the grounds of unfit conduct in that he caused Torngold to retain thousands of pounds of clients’ money. He was also found by an OFT adjudicator to have breached the Estate Agents (Accounts) Regulations by failing to keep accounts and records relating to clients’ money.

In August 2003, Johal was convicted of assault on his then wife and ordered to do 120 hours of community service. Under the Estate Agents Act, agents can be banned if they have been convicted of certain offences, such as violence, dishonesty or fraud. Christine Wade, the OFT’s director of consumer regulation and enforcement, said: "It is vital that when consumers place money in the trust of their estate agent, they should be able to rely on the agent to safeguard and account for their money in accordance with the law. The OFT will take tough action against agents who do not do so."

However, the OFT confirmed to RPI that the banning order related only to residential sales. An OFT spokesman said: "The Estate Agents Act only applies to the buying and selling of property. The Act does not allow for us to ban agents from engaging in any other form of work."

Asked why it had taken so long to decide to ban Johal, the spokesman said that the OFT only became aware of his offences in June 2004: "So in effect, it took about one year to ban him."