Rogue homeowner couple fined £ 190,000 for scamming ‘ghost tenant’ in Walthamstow
A rogue landlord couple who rented out their properties to ‘ghost tenants’ to avoid paying thousands of dollars in council fees have been fined nearly £ 190,000.
Mohamed Lahrie, 55, and his wife Shehara, 51, claimed they were renting six of their staggering 600 properties to a single tenant, who was in fact their rental agent.
This meant the Waltham Forest Council was unaware that they were multi-occupancy homes, so authorities did not inspect them or charge HMO licensing fees.
Between eight and 16 people were crammed into each “bed”, the Wimbledon Magistrates’ Court said.
Lahries’ defense attorney, appealing for leniency, told District Judge Andrew Sweet that the properties represented only “1%” of their real estate portfolio, which they have now been forced to sell.
But Mr Lahrie was fined £ 126,500 and Ms Lahrie, who failed to appear in court, £ 60,500 on eight counts of failing to obtain an HMO license. It is believed to be the biggest fine in the UK for such a scam.
Justice Sweet said, “With all of these cases there is an erosion of public trust and it is having a detrimental effect on society.
“It appears that Mr. and Mrs. Lahrie have now accepted full responsibility, but all of these disputes would have been avoided some time ago if they had made the decision they have now.”
He added that he had to choose a “fair and proportionate” financial sanction that would deter other violators.
The couple, who live on Hoe Street, owned 600 properties in north and east London through a network of at least 28 companies.
The court heard one at Eastfield Road, Walthamstow housed seven people under four rentals, which they said were one household.
Mr Lahrie’s lawyer, Imran Khan QC, insisted that the financial benefit of not reporting these six HMOs was “tiny”.
He said: “Mr. Mohamed arrived in this country with little money in his pocket and built up a portfolio over two or three decades, thanks to hard work with his wife.
“This real estate portfolio is committed to providing safe and suitable housing for many residents of Waltham Forest and these six represent one percent of this portfolio. The financial benefit to him was minimal.
“Mr. Mohamed, as a result of this affair, sold his portfolio of properties, he sold them all.”
The Waltham Forest court case began in 2017 but was delayed for four years due to an unsuccessful legal challenge by the Lahries.
Councilor Louise Mitchell, Cabinet Member for Housing and Homelessness Prevention, said: ‘This case was of vital importance not only to Waltham Forest, but to local authorities in London and the country as a whole. .
“There is a desperate shortage of affordable family homes and by turning those six houses into bedrooms – so they could make more money – they weren’t available for families to rent. “
Council Counsel Dean Underwood added: “The purpose of the licensing regime is to protect the health and safety of those who occupy the most at-risk private premises, namely HMOs.”
He added that the couple had profited “much more than market rent” by renting to separate tenants, although the exact figure was not revealed in open court.
For example, for a Leytonstone property in Napier Road, they received over £ 33,000 in rent per year without having to pay the £ 1,000 license or management fee.
Mr. Lahrie appeared in court, seated in a black suit with his arms crossed.
Outside, he told the Local Democracy Reporting Service: “I learned my lesson and I regret what I did.”
The addresses concerned were Eastfield Road, Chelmsford Road and Thorpe Road in Walthamstow; Napier Road and Leasowes Road in Leyton; and Ashley Road, Chingford.
At the start of the hearing, Rental Agent Station Estates Limited was formally cleared of the charges against them after council failed to present any evidence.
According to Companies House, the agency went bankrupt in May 2019.
While there have been concerns about overcrowding at some properties, no safety or quality issues were noted in the buildings.
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