Waltham Forest ‘Rent to rent’ landlord hit with massive fine after five-year case

Tuesday, October 19th, 2021 - Waltham Forest Council

Waltham Forest landlord prosecution 2021

A pair of landlords who ran rent-to-rent scams across Waltham Forest have been fined £187,000 in a landmark ruling after a four-year legal battle including two judicial reviews.

The fines – among the largest in the country – were imposed at a sentencing hearing at Wimbledon Magistrates Court on 29 September 2021 following a four-day trial in April at which the defendants were found guilty of eight counts of failing to license six Houses in Multiple Occupation (HMOs).

After the trial, the defendants agreed to pay the Council’s full costs in bringing the prosecution proceedings, amounting to £67,362.62.

Mohamed Lahrie Mohamed and Shehara Lahrie claimed that each of the properties were let out to single family households but in fact each was let out in multiple occupation to between 8 and 16 individuals via a network of letting agents in a ‘rent-to-rent’ arrangement.

The husband and wife, who had some 600 houses across several north east London boroughs, run their property business through more than 30 different companies based from an office in Hoe Street Walthamstow.

Councillor Louise Mitchell, Cabinet Member for Housing and Homelessness Prevention, said:

This sentence ends a five-year battle to bring this criminal matter before the Courts and for the Court to pass judgment on defendants who sought to get around housing regulations that protect both tenants and their neighbours.

We hope this case demonstrates the Council’s commitment and determination to pursue serious breaches of the law, however long it takes to intervene to protect the health, safety and welfare of our residents, many of which live in the private rented sector.

This was a difficult case to piece together and one that was largely helped by Waltham Forest’s large-scale property licensing schemes, which highlighted the wrong-doing and without it which we may never have reached the successful conclusion that has been reached.

She added: “This case was vitally important not just for Waltham Forest but for local authorities across London and the country as a whole. There is a desperate shortage of affordable family homes and by turning these 6 homes into bedsits – so that they could make more money – they were not available for families to rent.

The Government introduced the mandatory licensing of HMOs as it recognised the increased risks to occupying tenants. Through the licensing process, Councils are able to ensure that safety standards are met, to set a limit on the number of tenants who can occupy the property and to ensure that proper management arrangements are in place.

By not applying to license the property as an HMO, the landlords avoided the scrutiny and safeguards provided by the licensing regime.

A free guide containing more detailed information about property licensing and HMO planning rules in the London Borough of Waltham Forest is available here.

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