The Sun reports that Fadi Fawaz, 45, who grew up in Brisbane, has been in the Regent’s Park home since the Wham! singer died at Christmas 2016 aged 53.
The Sun claims to have seen Mr Fawaz return to the premises with a mystery man.
A source close to George Michael’s family said: “Fadi is being a real pain about all this.”
“He has refused to leave despite several letters and requests in the last 18 months. He is blanking them out and it appears he now has squatter’s rights.
“It’s been going on for such a long time that it’s hard to know what to do next. The lawyers are seeing what can be done. It would be a lot easier if Fadi just upped sticks and left.”
The house is close to up-market Regent’s Park, central London, and near the star’s home in Hampstead. Michael also owned a home in Goring, Oxon, where he was found dead by Mr Fawaz.
“Squatting” is when someone deliberately enters a property without permission and lives there or intends to live there.
It is thought Mr Fawaz, who had an on/off relationship with Michael, won’t go as he believes the star gave him permission to live there.
George’s family can pursue him through the courts and if convicted of squatting he faces a six-month jail term and £5,000 (A$9100) fine.
Another option is an interim possession order. Once served, squatters must leave within 24 hours.
A squatter can become the registered owner of a property if they occupy it continuously for 10 years.
The Sun says it is not entirely clear how Fadi is surviving as he appears to have no job although he claims to be a photographer.
He had hoped to inherit the place but that has been dashed. Last year The Sun revealed some of Michael’s belongings were being repossessed after Fadi fell behind with payments.
It also emerged Mr Fawaz was given £250,000 (A$460,000) by Michael’s family and spent a lot of it on a holiday back to Australia.
In February 2018, Mr Fawaz announced he was selling the black Range Rover Michael had given him.
A neighbour said: “He comes and goes mostly at night. I hardly ever see him during the day.
“I know he sold the black Range Rover but I don’t really have much to do with him.’”
Mr Fawaz refused to comment and no-one from the singer’s estate was available for comment.
Originally published in The Sun and printed here with permission.