Proceeds of Crime Act used for first time to punish lettings licensing breach

A London council has been the first in the country to use the Proceeds of Crime Act for a breach in a lettings licence. 

A case at Harrow Crown Court ordered that POCA could be used to recover criminal assets that a family obtained from cramming 31 tenants into a letting property in breach of the licence from Brent council. 

Harsha Shah, daughter Chandni Shah and brother-in-law Sanjay Shah now face paying a confiscation order for financial benefit gained or saved as result of contraventions of the Management of HMO Regulations 2006 and breaches of licensing conditions that could amount to hundreds of thousands of pounds. 

This covers repairs that they neglected to fix and financial gain made from what the council calls ”their racketeering.”

On January 5 this year, Sanjay Shah lost his appeal against the charge of aiding and abetting the breaches of a term of the selective licence attached to the property in Wembley. He also lost his appeal against his conviction for contraventions of the Management of HMO Regulations 2006.

Jaydipkumar Valand, who collected around £112,000 rent from the tenants for the Shah family in 2015 to 2016, may also be ordered to repay any financial benefit gained under this POCA ruling.

Brent council officers discovered one woman living in a lean-to shack next to the four-bedroom property in Napier Road during a raid in July 2016. The shack had no lighting or heating and was made out of wood offcuts, pallets and tarpaulin.

A council spokesman says this is a landmark legal decision. 

“We will use all the powers we have to put an end to tenants living in misery, and this includes the Proceeds of Crime Act. We want to work with landlords and agents to improve the standard of living in the private rented sector, and we urge those responsible to licence their properties and comply with licensing conditions."