Nasar Shaikh, of Coleshill Road, Birmingham, was fined £5,000 after failing to obtain a licence from Waltham Forest Council to rent out a two-bedroom flat on Theydon Street, Walthamstow.
The landlord let the property to a young family who had been living at the house since 2010.
The council identified the address in 2017 as one that needed a licence, but when officers contacted Shaikh, after initially saying he would apply for a licence, he instead applied for an exemption saying he intended to move into the property.
Mr Shaikh then took a room back from the tenants and padlocked it in an attempt to show that he was living at the property, forcing the family of four to live in cramped conditions.
Council officers concluded that Mr Shaikh was settled in Birmingham and that his claim to be living in the property was a sham to avoid his legal responsibilities.
On Thursday November 1, the authority took possession of the property. The tenants’ rent will be paid direct to the council and the money used to fund essential repairs and safety work.
Mr Shaikh was fined £5,000 for his failure to get the required licence.
Cllr Louise Mitchell, cabinet member for housing, said: “Mr Shaikh tried to get around his obligation to obtain a licence for this property, and when challenged refused to accept any responsibility but instead illegally changed his tenants’ agreement so as to remove their access to parts of the property.
“Tenants should not find themselves at the whim of their landlord. They had signed a tenancy agreement in good faith, but because of Mr Shaikh’s irresponsibility found themselves being penalised.
“Ensuring that residents have a decent roof over their heads is a top priority for the council and we will continue to hold rogue landlords to account in Waltham Forest.”
Mr Shaikh at first appealed the £5,000 fine, but a London Residential Property First-tier tribunal on November 26 and 27 dismissed this, finding his actions amounted to “nothing other than an attempt to circumnavigate the impact of the financial penalty.”