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Playing For Time Pays Into Council's Coffers
Real Insights - Property Update

Real Insights - Property Update

Date
31 October 2016

Emma Herriman Associate

Barnet's council tax payers received an unexpected windfall in September when a landlord had his rent receipts confiscated after letting properties in breach of planning control for ten years.


Playing For Time Pays Into Council's Coffers

Barnet's council tax payers received an unexpected windfall in September when a landlord had his rent receipts confiscated after letting properties in breach of planning control for ten years.

A Cricklewood property was converted into nine flats, despite the landlord having failed to obtain planning permission for this.  The landlord continued to let the flats out.  The rent he received as a result of this breach of planning law must have made it seem worth playing the system for a few years. 

A council doesn't have to enforce every breach of planning control.  But pressure from residents to do so has become much more common in recent years, and cases where permission has been expressly refused are prime candidates for enforcement.

A planning enforcement notice was duly served.  It seems this was ignored and the flats continued to be let.  This became a criminal offence when the notice came into effect in 2006.

The landlord, Mr Rahmdezfouli, was taken to court for the offences on a few occasions but continued to let out the property.  He paid a number of fines but these were clearly not acting as any disincentive, despite the court being able to take profit motive into account when sentencing.

In fact, however, the rents he collected as a result of these planning offences amounted to proceeds of crime under the Proceeds of Crime Act 2002.  Strange though it sounds, the owner was involved in what the Act calls a "criminal enterprise". 

This autumn, the provisions of the Act were invoked.  On 21 September 2016, Wood Green Crown Court made a confiscation order against the landlord for £555,954.49, being the total financial gain from the illegal flats since 2006, as well as a fine of £65,000 for the planning offences and costs of around £80,000.

Confiscation orders under the Proceeds of Crime Act generally require the confiscated sum to be paid to the victims of the crime.  However, in planning breaches there is often no clear victim and the sum can be divided between the Treasury, the courts and the local council.

It is of course not just breaches of enforcement notices which are criminal in the planning regime.  Listed buildings, advertisements, protected trees and conservation areas can all give rise to offences without even a notice being served.

Mr Rahmdezfouli's actions are a warning to anyone who thinks that profit can be made from planning offences.  Other councils will have noticed the relatively large numbers involved for a fairly simple case and may be looking to their own enforcement books with a new-found enthusiasm.  The citizens of Barnet may well be glad of the additional contributions to their council's funds; except, perhaps, Mr Rahmdezfouli's innocent tenants.