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Landlord Pays £700,000 Price after Unauthorised Flats Conversion

FlatsIn a case that stands as a warning to residential landlords that planning laws must be complied with, a man who subdivided a single family home into 10 self-contained flats without permission was prosecuted and hit with a fine, a confiscation order and a legal costs bill totalling more than £700,000.

The local authority had refused planning consent for the radical conversion of the suburban, semi-detached property. However, the landlord went ahead regardless and was served with an enforcement notice requiring him to return the property to its original condition as a single home. Much litigation followed and he was ultimately convicted of failing to comply with the notice.

Following the successful prosecution, he was fined £65,000 and ordered to pay £80,000 in legal costs. A confiscation order was also made under the Proceeds of Crime Act 2002, requiring him to pay £555,954. That sum represented his entire profit from renting out the flats.

The facts of the case emerged as he challenged the costs and confiscation orders before the Court of Appeal. He submitted that his rental income from the flats had come to no more than £350,000 and that the extent of his realisable assets had been overestimated. In dismissing his appeal, however, the Court found that profit and loss accounts put forward by the landlord were inadequate. There was no merit in any of his grounds of appeal.