Landlord faces £ 150,000 bill after tenants turn homes into pharmaceutical farm | Money


When Shreena Shah went to check out one of her rental properties, she says she was greeted by an unlikely scene – a man taking apart equipment used to produce cannabis.

It wasn’t the first shock she had to endure. Not long before, police had discovered a cannabis farm on the other rental property she and her family own.

Now, she says, she faces bills amounting to £ 150,000 for repairs, and the rental agent has been accused of negligence by the family. The case comes amid concerns about the lack of regulation in the real estate sector, despite a government consultation that recommended tighter rules two years ago.

The properties, located in different parts of London, were used to cultivate drugs but, according to the family, they were unable to get help from any law enforcement agency.

“The house and apartment were pretty much destroyed under very similar circumstances, and I was shocked at how little recourse I have,” Shah says. “We were devastated financially and no authority wanted to investigate.”

Shah says she and her family usually manage the rentals themselves once their rental agent finds suitable tenants, but, when their tenants moved in 2019, the agency, ABC Estates, offered to take over. charge the management of both properties at no additional cost.

Shah says he was told that the two groups of new tenants had bruised with the landlords and that they wanted the agent to collect the rent and perform maintenance and inspections.

She claims that, despite repeated requests, she did not receive signed rental agreements and tenant references for both properties until January 2021, 18 months after the first tenants moved in. she says.

The cannabis farm at one of Shah’s properties.

In the summer of 2020, Shah claims ABC Estates informed her that the tenants in the house were leaving and paying rent instead of notice. Shah inspected it with the agent and found it to be in good condition. “A few weeks later, I was told the same tenants wanted to come back and I accepted,” she says.

The first cannabis farm was discovered by police in the house last November after concerns were raised by a neighbor. “Concerned about the second property, I immediately walked around and found a man dismantling some cannabis equipment,” she says.

Shah claims ABC Estates acted negligently in failing to protect its properties, a claim denied by the company.

His experience seems to show the lack of protections for buyers and sellers in an unregulated real estate industry. Two years after a government-appointed task force recommended a compulsory licensing scheme for real estate agents and an industry regulator with enforcement powers, there has been no word on reform.

Real estate agents don’t need to have any qualifications, even if they manage money and life-changing assets on behalf of clients. The only requirement is that they adhere to a redress system that can mediate individual disputes with clients.

Local business standards teams are responsible for investigating whether an agent is violating the Estate Agents Act 1979, and the National Estate and Rental Agencies Team (NTSELAT) can prohibit an agent from negotiating if the violations are serious. However, redress mechanisms have limited enforcement powers and complaints can take more than six months to be heard, while years of lack of resources appear to have left trade standards ill-equipped to act.

Additionally, the three agencies can only respond to individual complaints, rather than proactively monitoring officers to minimize the risk of potential misconduct.

Shah forwarded his complaint against ABC Estates to the Property Redress Scheme (PRS), a government-authorized service that examines consumer complaints about property issues. He told her her allegations were beyond her jurisdiction as they involved the cannabis farm and were criminal in nature, and referred her to commercial standards.

His local business standards department told him that since the properties were in two different local authority areas that couldn’t help and claimed it was the responsibility of the police.

Metropolitan Police said it would not be possible to identify cannabis producers and therefore his complaint was a civil matter.

When she contacted NTSELAT, she was referred to her local Trade Standards Department.

ABC Estates – which is registered with Companies House as Aldermartin Ltd – has three offices in London and has previously featured in daily commercials on LBC radio, including a video endorsement from presenter Nick Ferrari.

The agency insists it had no knowledge of cannabis production at the two properties it managed.

Documents seen by the Observer appear to raise questions about the officer’s procedures. The job reference she got for a tenant indicated that she worked for a company that currently has the same manager as ABC Estates.

Rent payments for both properties were made in cash to ABC Estates, which Shah says suggests he hadn’t asked for bank details for either party.

ABC Estates is one of a series of real estate companies of the same name created over the years by Richard (Raziel) Davidoff. In August, a trial court (real estate board) found that Davidoff had breached his fiduciary duty after overcharging tenants in a block run by ABC Estates for repair work that had not been done. Investigators found he had charged nearly £ 100,000 for work estimated at £ 10,000, and transferred the service charges and money from the reserve fund to a dormant company account he owned. He challenges the court’s decision.

In a statement in November, Davidoff told the Observer: “A lot of the facts as you describe them are distorted. The clients clearly did not inform you that after a whole year they asked the tenant to leave and at checkout found the property to be in immaculate condition.

“They then allowed the tenant to return shortly thereafter, after which the property turned out to be a cannabis farm. We cannot be held responsible for this. We were as shocked as they were and we do not tolerate such behavior. “

In the fall, questions about Davidoff’s record as a Leasehold Management Agent were raised in Parliament by Sir Peter Bottomley.

Bottomley, who is co-chair of the all-party parliamentary group on lease and condominium reform, urged the government to heed the allegations of whistleblowers from former ABC Estates staff and called for urgent regulatory reform for real estate agents. He told the Observer: “Police and business standards must work together effectively to avoid the exploitation of a fragmented system that does not work. “

The Ministry of Housing, Communities and Local Government told the Observer review the recommendations of the 2019 task force report.

A spokesperson for Nick Ferrari said: “These commercials were shot over five years ago as part of a standard trade deal. These are serious allegations and Nick will look for ways to get the ads removed. “

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