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‘Follow the rules’ warning to property developers after landmark legal ruling

An expert in commercial property is warning property developers and landlords to follow the necessary planning rules or face ‘proceeds of crime’ including rent being confiscated.

The stark warning comes after a court in London convicted a developer who proceeded to rent out property as flats despite three failed planning applications.

Lambeth Council, the local authority involved, issued a Planning Enforcement Notice demanding the unauthorised use be stopped, and when this was ignored brought a claim under the Proceeds of Crime Act. The company was ordered to pay more than £175,000 in fines, which included £143,000 in rent it had collected.

Martin Long, partner in the Commercial Property team at Lancashire law firm Napthens, warns that the legal action demonstrates an increasing trend by local authorities to confiscate the proceeds of criminal action.

He said: “In this case the criminal action was a property developer failing to observe a Planning Enforcement Notice and the proceeds was a significant amount of rent. The planning rules are there for a reason, and developers must ensure they are followed.

“The case should serve as a warning to property developers and landlords who might consider proceeding with a development or operation without the requisite consents.

“It is clear now that heavy fines and confiscated profits await for those who flagrantly disregard the planning system and, where there is uncertainty, it is always wise to contact a solicitor for advice.”

Napthens Solicitors Employee Martin Long