In a recent case, Manchester City Council has secured a confiscation order in the sum of just over £174,000 from a landlord where its property was being used as a shisha café in breach of a planning enforcement notice.
Landlords have been suitably alarmed by this recent case where a landlord has been penalised for the illegal actions of its tenant.
T&M Property was the tenant and owner of a 999 year lease of premises on Wilmslow Road in Rusholme. The property was let to a party who carried out a number of alterations to the premises and used it as a Shisha Café (which is a sui generis use) in breach of planning laws.
Manchester City Council issued an Enforcement Notice in October 2018 requiring the use to cease within 7 days, the removal of various works and all paraphernalia, the shop front restored to its original position and all building materials, rubble and waste taken away within one month. This appears to be one of a number of enforcement notices served by the Council in a crackdown on illegal Shisha bars in the area known as the “Curry Mile”, which the Council described as being “characterised by crime, anti-social behaviour and the fear of crime”.
Despite the enforcement notice and attempts by the Council to stop the use, the trade continued and four years later the property was still being used as a Shisha Café. T&M Property was eventually prosecuted for failing to comply with the Enforcement Notice and fined £18,750 plus costs.
The Council was unimpressed with the fact that the Landlord sat back and accepted rent from the “flagrant” law breaking at the property. Unfortunately for the Landlord, the Council used the Proceeds of Crime Act 2002 to confiscate a significant sum representing the rent received between the date the Enforcement Notice was served, and the date the lease was eventually brought to an end by forfeiture.
Landlords should remember that whilst a full repairing and insuring lease usually means that the tenant is obliged to comply with all planning laws, nothing in the lease will protect a landlord from prosecution for a criminal offence (in this case failure to comply with the enforcement notice) for which there is an unlimited fine.
The Council sent a clear message to property owners that not only will they prosecute for failure to comply with an enforcement notice, but they will also recoup ill-gotten gains where there is a clear causal connection between the conduct in question and the benefit obtained.
Landlords are reminded of the importance of active management, including keeping the Land Registry title up to date with their current address so that they receive all important notices.
Susanne Hinde is a Partner in the Commercial Property Team at Howes Percival in Cambridge who specialises in advising Landlord & Tenants on their investment / occupation requirements. You can contact Susanne for advice at [javascript protected email address] or on 01223 791026.
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