A landlord who rented out a storage basement as self-contained accommodation for £975 a month after it was declared substandard has been ordered to pay back £70,000 in rent under the Proceeds of Crime Act.
Andrew Panayi, one of Britain’s most controversial landlords, who lets out 180 properties mostly on the Caledonian Road in north London, pleaded guilty to renting out the unlicensed basement despite an earlier council ruling that it was “an unsatisfactory and substandard unit of residential accommodation ... with inadequate light and outlook and poor living environment”. He was also fined £2,000 and ordered to pay £16,000 costs by a judge at Blackfriars crown court.
Panayi let the space beneath a cafe for 14 years after buying it in 2000. He claimed in court that he did not know council inspectors had ruled that it should not be used as a self-contained accommodation unit.
The action was taken by Islington council, which sought a confiscation order of £103,000 reflecting 14 years’ rent gained. That was negotiated down to £70,000. Accounts filed last year showed Panayi’s company, Ploughcane, had net assets of £17m and turnover in 2013 of £2.7m, of which £2.3m was operating profit.
“It wasn’t a fantastic place to live and there were damp issues,” one former tenant said. “But a lot of places are not that nice, and that is the reality of the rental situation in London at the moment.”
The payment will be made to the courts service and is not expected to be redistributed to tenants.
Panayi declined to comment. His lawyer, Joseph Reeves, said: “His position remains that he was unaware of the existence of the enforcement notice because he was not notified about this by his solicitors at the time the property was purchased. It was accepted by the prosecution and the court that this was far removed from matters involving a criminal lifestyle. This was not the case here. The only benefit my client gained was receipt of rent, which was repaid.”
James Murray, Islington council’s executive member for housing, said: “More and more people in Islington are renting privately, and we are determined to help make sure they have decent homes to live in. Most landlords act lawfully – but when rogue landlords break the rules, we will go after them.”
Panayi’s property business became the subject of scrutiny when he starred in a 2012 BBC documentary about the area, in which he boasted of flouting planning procedures and talked of “milking” his properties.
His conviction is the latest stage in a running battle with the council over the suitability of many of his rental properties. Last year, 19 of his bedsits squeezed above a McDonald’s were declared a “category one hazard” under health and safety regulations in terms of crowding and space.
Tenants were paying up to £258 a week through housing benefit for accommodation measuring nine sq metres, with a bed, shower and kitchen all in one space. The council ordered the tenancies to be voided, but Panayi blamed the tenants for making the homes too cramped by piling in furniture.
In the last year, Islington has rejected applications by Panayi for certificates of lawfulness on 28 of his properties. The landlord is appealing against the decisions.
