Rogue Landlords in Hammersmith and Fulham. Margaret Cabo, Francesco Grasso and Top Holdings Limited
Ms Cabo was the freehold owner of 6 Bellamy Close in West Kensington, a house let to 5 or 6 occupiers. This made it a House of Multiple Occupation (HMO). HMOs are required to be licenced. Where they are not licensed the landlord can be criminally prosecuted by the local authority and an occupier can claim a Rent Repayment Order (RRO) of up to 12 months’ rent.
Rogue landlords often make it difficult for tenants (and local authorities) to discover who they are. This frustrates enforcement.
Ms Cabo entered into a written management agreement with Top Holdings Limited, a company of which her husband, Mr Francesco Grasso, was the sole director and shareholder. Later Ms Cabo would claim to be separated from Mr Grasso and that this was a purely commercial agreement, a statement undermined by evidence of social media posts by Ms Cabo announcing that the couple had recently celebrated their 22nd wedding anniversary “in style at home”. The couple’s pre-Covid anniversary seems to have been even better:
“21 years ago today I walked down the aisle & there he was waiting for me (heart) (heart) & here we are today still blah blah ing around. #truelove #marriage #partnership”. Mr Grasso’s recent birthday celebrations were marked by more public declarations of affection: “My Francesco another day another birthday (heart)(kiss)(kiss) #love #husband #lovedoeslast”.
There were a number of fire deficiencies at 6 Bellamy Close. The local authority took enforcement action against Margaret Cabo, Francesco Grasso and Top Holdings Limited and all three were convicted of housing offences. On appeal, the key conviction that between 23.9.16 and 14.2.20 each were controlling or managing 6 Bellamy Close, contrary to s.72 of the HA 2004, a house in multiple occupation (HMO) and without the necessary licence, was upheld.
As a result of the criminal proceedings Francesco Grasso and Top Holdings Limited were each fined £10,000 and Margaret Cabo £7,000. Costs of the appeal were awarded against them: Francesco Grasso: £15,000; Top Holdings Ltd: £15,000; Margaret Cabo: £7,500.
One of the occupiers, Karen Dezotti, who lived in a room in 6 Bellamy Close as her only home, claimed a rent repayment order. The First Tier Tribunal awarded her £9,600.
There is a lot of comedy in the decision. Ms Cabo stated during the hearing that she did not want to know about property law, the Tribunal dryly noted that however we do not consider that this constitutes a reasonable excuse. The tenants were given sham ‘holiday let’ agreements. Mr Grasso, who manages ‘Airbnb’ lets, gave evidence, summarised by the judge:
“On the question of the terms of the letting, he indicated that in his view nobody wanted a six-month AST as they did not want the commitment. They could stay for as long as they liked. Asked about whether the Property should be licensed, he appeared to accept it was a borderline case, but he did not want that burden or the hassle and therefore did not wish to consider the Property was one for which a licence was necessary. In his view the management agreement obviated the necessity for an HMO licence.”
However, Mr Grasso had sent emails to prospective tenants stating:
“The licence may sound like a “concentration camp” but please don’t get spooked by those draconian rules. Ultimately, I don’t live in the flat and I certainly do not want to interfere with your lives. I cater to young professionals like yourself who are mainly focussed on their careers and therefore need a peaceful and tranquil home where they can retire after a long day at work, a home where there is structured environment in place to avoid any potential disturbance.
“I still want this flat to be your home where you must be comfortable and feel free to do whatever you want, still with the full respect towards your fellow tenants who will have the same respect towards you.”
Ms Cabo denied that she received any income from the rents at all, so was not managing or in control of the HMO. Despite the fact that she paid about £2000 per month in mortgage and council tax, she was apparently happy for her ‘estranged’ husband to receive some £5000 per month in rent income under the management agreement and not see a penny of it.
It certainly did not help their case on estrangement that Mr Grasso and Ms Cabo gave video evidence from the same room!
Almost inevitably all three appealed to the Upper Tribunal. Legally, the waters were muddied by the fact that at the time of the first decision the Court of Appeal not yet considered a case called Rakusen v Jepsen, but the Upper Tribunal appeal was heard before Rakusen v Jepsen was heard in the Supreme Court (another case in which the law Centre acted pro bono).
The Upper Tribunal found the evidence of Ms Cabo and Mr Grasso implausible and that the relationship between Top Holdings and Ms Cabo was that of agent and principal.
Undeterred, Ms Cabo appealed to the Court of Appeal. The Law Centre acted pro bono for Karen Dezotti, as did Justin Bates KC and George Penny (and it should be noted Zane Malik KC, Asad Maqsood and Lamptons Solicitors acted for pro bono the Appellant). Indeed it was Simon Mullings, the head of the housing team at the Law Centre who took the case on. Very sadly Simon died suddenly at the beginning of September 2024 and so didn’t see the outcome of the appeal.
The Court of Appeal dismissed a further appeal by Ms Cabo. In letting the rooms, Top Holdings Ltd was plainly acting as agent for Ms Cabo. It followed that Ms Cabo was indeed the landlord and the FTT had been right to make a Rent Repayment Order. Therefore, Karen Dezotti finally got her money.
Dealing with rogue landlords in Hammersmith and Fulham is central to the work of the housing team at the Law Centre. It was also a central concern of our much-missed colleague Simon Mullings. This case is dedicated to his memory and hopefully sends out a powerful message to rouge landlords everywhere that their obfuscation and use of smoke and mirrors will not fool local authorities or the courts.
Tony Martin