Skirting The Clink: A Landlord’s Tale
Camilla recently represented a multi-millionaire property landlord who had previously pleaded guilty to an offence under Section 189 of The Town and Country Planning Act 1990, namely a failure to comply with a Council’s Enforcement Notice that he return a four unit property to a single dwelling family home.
Upon conviction, a Confiscation Order had been made in respect to the benefit gained by the Applicant by virtue of having let four units unlawfully. The Order was to be settled within three months or the Applicant would have been forced to serve a default term of imprisonment.
Camilla successfully varied the terms of that Order to allow a further three months, thus avoiding the imminent activation of the default custodial term which would have seen her client serve time in prison.
This case highlights the financial implications of failing foul of an ever growing regulatory regime imposed on private landlords. Ignoring an Enforcement Notice does not simply lead to a conviction and fine – any rental income received from such a property in these circumstances constitutes criminal benefit for the purposes of the Proceeds of Crime Act 2002.
As such, a landlord who lets a property in breach of an Enforcement Notice or without an appropriate HMO licence, can be ordered to repay an amount equivalent to the gross rent received. Note the use of the word gross: the landlord cannot deduct any expenses, even if legitimately incurred. The regime includes any income tax paid on the rental income.
Landlords are advised to seek expert legal advice on their obligations: falling foul of the law can be expensive and even result in a prison stretch if a Confiscation Order is breached.