Landlord ordered to pay over £550,000 in confiscated profits following conviction of planning offence
The London Borough of Barnet has recently been successful in prosecuting a landlord guilty of breaching a planning enforcement notice. Wood Green Crown Court granted the council a confiscation order, pursuant to the Proceeds of Crime Act 2002, in the sum £555,954.49 for profits generated from the landlords criminal conduct. The landlord was also ordered to pay a £65,000 fine for the planning offences and £80,000 in costs.
The Proceeds of Crime Act 2002 enables a local planning authority to bring a claim in the Crown Court to recover any profits generated by a defendant as a result of an illegal development following conviction of a planning offence (such as breach of a planning enforcement notice).
The present case arose form the landlord's conversion of a semi-detatched home in Cricklewood into nine flats. In 2006, the landlord had applied for planning permission for the change of use but such application was refused by the council. Regardless, the landlord proceeded with the conversion and subsequently rented out the rooms.
The local planning authority served a planning enforcement notice in March 2007 which resulted in Court proceedings. However, during such time he continued to rent out the property. He was eventually found guilty of the planning offences in August 2015 and was subsequently referred to the Crown Court for a confiscation order under the Proceeds of Crime Act 2002.
Pursuant to the terms of the confiscation order, the landlord faces a default prison sentence of five years and four months if he fails to comply with this confiscation order within three months.
Lesson: Landowners who profit from development activity in breach of planning control run the risk not only of conviction of a criminal offence but also risk such profits being confiscated by way of an order of the Crown Court. Landowners served with a planning control notice (such as planning enforcement notice) will need to consider this risk when determining how they wish to respond to such notices.
