THE PROPERTY FILTER TAKE
A retrial at City of London Magistrates' Court on 30 June 2026 reduced the combined fine against Mohammed Rasool and Blackstone Properties Management Limited from £480,000 to £50,000 - each convicted on eight charges relating to an unlicensed 22-room HMO in Kensington and Chelsea.
For HMO landlords, the case shows that headline-grabbing council fines can be dramatically reduced on retrial, weakening the deterrent effect that enforcement depends on - but convictions still stand regardless of the final penalty.
You may wish to review your management agreement to confirm who carries licensing responsibility, as councils are pursuing retried cases all the way to conviction.
A property management company and its landlord had their combined fine slashed by 90 per cent after forcing a retrial over an unlicensed 22-room HMO in London. The Royal Borough of Kensington and Chelsea (RBKC) had originally fined the pair £480,000 in 2023. Following a retrial at City of London Magistrates' Court on 29-30 June 2026, the combined fine dropped to £50,000 (City of London Magistrates' Court, June 2026).
What Officers Found at 36 Hyde Park Gate
The case began with a tenant complaint in 2020. RBKC officers, returning with the Met Police and London Fire Brigade, found a four-bedroom property that had been converted into 22 rooms and operated as an HMO (house in multiple occupation, a property let to three or more people from separate households) without a mandatory HMO licence.
The conditions were serious. Defective fire doors, inadequate fire separation between bedrooms, and covered fire alarms put tenants at direct risk. Electrical sockets were burnt out and loose. Tenants were cooking in their rooms using camping-style equipment due to the lack of proper kitchen access. Rising damp and mould ran throughout the building. Single-glazed windows had rotten frames. The damp was severe enough that mushrooms were growing on upper floors, according to RBKC's prosecution (RBKC, July 2026).
Despite repeated warnings and a formal improvement notice (a council instruction requiring specific hazards to be remedied within a set timeframe), landlord Mohammed Rasool did not apply for the mandatory HMO licence the property required. He and Blackstone Properties Management Limited were each convicted on all eight charges in 2023 - managing an unlicensed HMO, failing to comply with the improvement notice, and six breaches of HMO management regulations.
How a Retrial Cut the Combined Fine by £430,000
The defendants challenged the original 2023 proceedings. The retrial, on 29 June 2026, resulted in conviction on all eight charges again - but with markedly lower penalties.
Blackstone Properties Management Limited was fined £30,000 plus full prosecution costs of £12,176.68 (City of London Magistrates' Court, June 2026). Rasool was separately fined £20,000. Combined fines total £50,000, versus the original £480,000.
Cllr Johnny Thalassites, RBKC's lead member for resident services, planning and enforcement, said: "Mr Rasool and Blackstone Properties Management Limited were given opportunities to put things right, but the court found they chose not to. We will continue to take action where landlords fail to follow the rules, because everyone in Kensington and Chelsea deserves a safe place to live."
If you want to understand how licensing conditions and room count affect HMO value, the Property Filter HMO valuation calculator is a practical starting point.
What the Sentencing Gap Means for Deterrence
The gap between £480,000 and £50,000 raises a direct question: do large HMO fines actually deter non-compliance?
The theory behind heavy penalties is that they make licensing violations economically irrational. When a fine of that magnitude can be cut on retrial to a fraction, the calculus shifts. At £50,000 across 22 rooms, that is roughly £2,275 per room - a very different figure to what the original sentencing implied.
RBKC is not alone in facing this challenge. Councils across England set HMO penalties using their own enforcement policies, and courts apply their own sentencing guidelines. The outcome can vary widely by jurisdiction. If you are building an HMO investment strategy, the enforcement environment in the specific council area matters alongside yield figures.
The clearest lesson from this case is that councils will pursue convictions through retrial. A lower eventual fine does not mean non-compliance pays. RBKC secured eight convictions against both defendants. Those convictions stand. Understanding what your specific council requires before you operate is non-negotiable. The free resources at Property Filter include licensing guidance to help you check the requirements in your area. If you are searching for compliant HMO deals to buy, Property Filter's deal sourcing software filters by location and property type.
Key takeaways
- The combined fine for both defendants dropped from £480,000 (2023) to £50,000 (2026) following a retrial - a reduction of £430,000. - The property at 36 Hyde Park Gate was converted from 4 bedrooms into 22 rooms and operated as an HMO without a mandatory licence from RBKC. - Blackstone Properties Management Limited was fined £30,000 plus £12,176.68 in prosecution costs; Rasool was separately fined £20,000. - Both defendants were convicted on all eight charges at retrial - convictions survive even when sentences are reduced. - At £50,000 across 22 rooms, the per-room cost of non-compliance came to approximately £2,275 - a fraction of the original headline penalty.
A property management company and its landlord had their combined fine slashed by 90 per cent after forcing a retrial over an unlicensed 22-room HMO in London. The Royal Borough of Kensington and Chelsea (RBKC) had originally fined the pair £480,000 in 2023. Following a retrial at City of London Magistrates' Court on 29-30 June 2026, the combined fine dropped to £50,000 (City of London Magistrates' Court, June 2026).
What Officers Found at 36 Hyde Park Gate
The case began with a tenant complaint in 2020. RBKC officers, returning with the Met Police and London Fire Brigade, found a four-bedroom property that had been converted into 22 rooms and operated as an HMO (house in multiple occupation, a property let to three or more people from separate households) without a mandatory HMO licence.
The conditions were serious. Defective fire doors, inadequate fire separation between bedrooms, and covered fire alarms put tenants at direct risk. Electrical sockets were burnt out and loose. Tenants were cooking in their rooms using camping-style equipment due to the lack of proper kitchen access. Rising damp and mould ran throughout the building. Single-glazed windows had rotten frames. The damp was severe enough that mushrooms were growing on upper floors, according to RBKC's prosecution (RBKC, July 2026).
Despite repeated warnings and a formal improvement notice (a council instruction requiring specific hazards to be remedied within a set timeframe), landlord Mohammed Rasool did not apply for the mandatory HMO licence the property required. He and Blackstone Properties Management Limited were each convicted on all eight charges in 2023 - managing an unlicensed HMO, failing to comply with the improvement notice, and six breaches of HMO management regulations.
How a Retrial Cut the Combined Fine by £430,000
The defendants challenged the original 2023 proceedings. The retrial, on 29 June 2026, resulted in conviction on all eight charges again - but with markedly lower penalties.
Blackstone Properties Management Limited was fined £30,000 plus full prosecution costs of £12,176.68 (City of London Magistrates' Court, June 2026). Rasool was separately fined £20,000. Combined fines total £50,000, versus the original £480,000.
Cllr Johnny Thalassites, RBKC's lead member for resident services, planning and enforcement, said: "Mr Rasool and Blackstone Properties Management Limited were given opportunities to put things right, but the court found they chose not to. We will continue to take action where landlords fail to follow the rules, because everyone in Kensington and Chelsea deserves a safe place to live."
If you want to understand how licensing conditions and room count affect HMO value, the Property Filter HMO valuation calculator is a practical starting point.
What the Sentencing Gap Means for Deterrence
The gap between £480,000 and £50,000 raises a direct question: do large HMO fines actually deter non-compliance?
The theory behind heavy penalties is that they make licensing violations economically irrational. When a fine of that magnitude can be cut on retrial to a fraction, the calculus shifts. At £50,000 across 22 rooms, that is roughly £2,275 per room - a very different figure to what the original sentencing implied.
RBKC is not alone in facing this challenge. Councils across England set HMO penalties using their own enforcement policies, and courts apply their own sentencing guidelines. The outcome can vary widely by jurisdiction. If you are building an HMO investment strategy, the enforcement environment in the specific council area matters alongside yield figures.
The clearest lesson from this case is that councils will pursue convictions through retrial. A lower eventual fine does not mean non-compliance pays. RBKC secured eight convictions against both defendants. Those convictions stand. Understanding what your specific council requires before you operate is non-negotiable. The free resources at Property Filter include licensing guidance to help you check the requirements in your area. If you are searching for compliant HMO deals to buy, Property Filter's deal sourcing software filters by location and property type.
Key takeaways
- The combined fine for both defendants dropped from £480,000 (2023) to £50,000 (2026) following a retrial - a reduction of £430,000. - The property at 36 Hyde Park Gate was converted from 4 bedrooms into 22 rooms and operated as an HMO without a mandatory licence from RBKC. - Blackstone Properties Management Limited was fined £30,000 plus £12,176.68 in prosecution costs; Rasool was separately fined £20,000. - Both defendants were convicted on all eight charges at retrial - convictions survive even when sentences are reduced. - At £50,000 across 22 rooms, the per-room cost of non-compliance came to approximately £2,275 - a fraction of the original headline penalty.
Frequently asked questions
Frequently asked questions
Does winning a retrial mean the original conviction was overturned?
What HMO licence does RBKC require?
If I use a management company, am I still personally liable for HMO licensing?
