Sunday 23 October 2016

Landlord forced to pay back €97,000 in rent after illegally leasing basement as flat

David Kearns

Published 23/10/2015 | 12:50

Andrew Panayi
Andrew Panayi

A London landlord who charged tenants €1,350 a month to rent out a storage basement has been ordered to pay back more than €97,000 worth of rent he earned from the illegal apartment.

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Andrew Panayi, who is believed to lease around 180 properties in north London, was hit with a £70,000 fine after pleading guilty to unlawfully renting out an unlicensed basement flat.

The flat had been declared “an unsatisfactory and substandard unit of residential accommodation” with “inadequate light and outlook and poor living environment” by Islington council but Panayi had continued to rent it for £975 a month for the last 14 years.

He was also fined £2,000 (€2,750) and ordered to pay £16,000 (€22,000) costs by a judge at Blackfriars crown court.

Panayi claimed in court that he did not know council inspectors had ruled that it should not be used as a self-contained accommodation unit.

He began renting out the space, which is beneath a café, as an apartment after buying it in 2000.

A picture of an apartment rented by Panayi - the image went viral last year Credit: BBC
A picture of an apartment rented by Panayi - the image went viral last year Credit: BBC

Former tenants described the site as “not a fantastic place” and said there was always issue with damp.

“But a lot of places are not that nice, and that is the reality of the rental situation in London at the moment,” they said in court, according to the Guardian.

One of Panayi's other flats went viral last year because of its £737-a-month price tag (€1020) despite potential tenants barely having any room to move.

The "studio apartment", just a few metres wide, featured a bed just inches away from kitchen work surfaces.

The £70,000 (€97,000) fine will be made to the courts service and is not expected to be redistributed to tenants.

Islington Council launched the legal action, seeking a confiscation order of £103,000 to reflect the 14 years’ worth of rent paid to Panayi by tenants of the property, after they learned he was still renting it despite it being declared not fit for purpose.

This payment was negotiated down to £70,000 (€97,000).

Following the ruling, 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.”

Accounts filed last year showed Panayi’s company, Ploughcane, had net assets of €23 million and turnover in 2013 of €3.4m.

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