Criminal HMO owners could now be forced to pay back all earnings

Criminal HMO owners could now be forced to pay back all earnings

A landmark legal decision taken against a rogue landlord in north London could set a precedent for owners of properties that fall below legal levels of health and safety.

Harrow Crown Court in north-west London has ruled against members of the Shah family who were found to have been renting a single property out to as many as 40 people at once in “squalid” conditions. The council has now been given the right to use the Proceeds of Crime Act (POCA) against them – meaning the perpetrators could be forced to pay back any proceeds they made through their activity.

The family earned hundreds of thousands of pounds through what the court described as “racketeering”, and the confiscation or recovery of proceeds from the crime could amount to hundreds of thousands of pounds, according to the council.

The case relates to a semi-detached house in Wembley, which was said to be generating an income for the family of around £6,000 a month – compared to average rents in the area of around £1,765 per month.

Grossly overcrowded

Edmund Robb, counsel from Prospect Law who represented Brent in the hearing, said: “This judgement represents a landmark ruling from the Crown Court which allows local authorities to initiate confiscation proceedings under POCA 2002 for criminal offences linked to safety and amenity regulations.

Rogue landlords cannot now hide behind previous case law to avoid being required by the courts to pay back rents and other benefits obtained whilst their tenants lived in squalid and dangerous conditions.”

Tenants in the Shah-owned house were found to be paying around £60 to £70 a week to sleep on bunk beds or even the garden shed, with one shared kitchen and two bathrooms in the “grossly overcrowded and unsafe” property that housed between 25 and 40 people at any one time.

According to the Guardian, as many as 120,000 people in England and Wales could be inhabiting illegal houses in multiple occupation (HMOs), as incomes are squeezed against rising rents forcing some to adopt extreme conditions in order to lower costs.

Until this latest ruling, local authorities have only had the power to levy fines, which can be just a tiny proportion of the gains made by the rogue landlords.

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