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Landlords hit with £187k fine after failing to license houses in multiple occupation

A pair of landlords have been fined £187,000 over their failure to license houses in multiple occupation (HMOs), after a four-year legal battle with Waltham Forest Council 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 following a four-day trial in April at which the defendants were found guilty of eight counts of failing to license six HMOs.

After the trial, the defendants agreed to pay the London borough’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.

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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.

Cllr Louise Mitchell, Waltham Forest's Cabinet Member for Housing and Homelessness Prevention, said: “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.”

She said that the case was difficult to piece together and but was helped by Waltham Forest’s large-scale property licensing schemes, which highlighted the wrong-doing. Without them the local authority "may never have reached the successful conclusion that has been reached,” she added.

The councillor stated that the case was vitally important not just for Waltham Forest but for local authorities across London and the country as a whole. She said: “There is a desperate shortage of affordable family homes and by turning these SIX 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.”

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