Member Article

The Manchester Crown Court made an order confiscating a landlord’s rent under the Proceeds of Crime Act 2002 for breaching a planning enforcement notice.

Manchester’s Curry Mile is home to one of the largest concentrations of Asian eateries in the UK.

Until recently, the Mile had also been the home of ‘Dubai Café’. The Café had planning permission to operate as a restaurant; however, the tenant was operating the building as a shisha bar and had made unauthorised alterations to the premises to facilitate this use.

In response to the breach of the permitted planning use, Manchester City Council issued an enforcement notice on the tenant - requiring the unauthorised use to cease and for the alterations to be removed. The tenant did not comply.

As enforcement notices attach to the land upon which the planning breach has occurred, the tenant’s inaction was also consequently the responsibility of the landlord.

Breach of an enforcement notice is a criminal offence and so criminal proceedings were brought against the landlord for the continued breach of the enforcement notice. The landlord pleaded guilty to the charges and received a fine.

The Council also applied for and obtained a confiscation order against the landlord under the Proceeds of Crime Act 2002 in respect of rent received by the landlord from the tenant during the period in which the premises were operating in breach of the enforcement notice. This was on the basis that these monies represented proceeds of crime. The landlord was ordered to repay £174,074.

On the takeaways for landlords arising from this case, a Council spokesperson said: “Landlords can’t hide behind their tenants – they will be held responsible for criminality in their property.”

It is a misconception that rent can only be confiscated from a landlord in instances where a landlord is complicit in a tenant’s illegal activity. A confiscation order does not require dishonest conduct on the part of a landlord – it simply requires the landlord receiving rent to know or suspect that the money received represents the proceeds of criminal activity.

Where a landlord knows or suspects that its tenant is using premises illegally, turning a blind eye to the illegal use can prove costly. A landlord should take affirmative action to prevent the illegal activity by enforcing the terms of the lease including, if necessary, forfeiting the lease.

 

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