Proceeds of Crime Act used to enforce breach of planning by Developer

A developer, Lexadon Ltd, converted a property in Trent Road, Brixton into four flats whilst it applied for planning consent. Having submitted three planning applications without securing a planning consent they decided to rent out the flats, having completed the works.

The local planning authority. Lambeth issued a planning enforcement notice demanding the unauthorised use of the property be stopped. Failure to comply with this notice led to a claim by Lambeth under the Proceeds of Crime Act. At a hearing at Inner London Crown Court early in September Lexadon have been ordered to pay more than £175,000 as a result.

Lambeth’s Deputy Leader (Finance & Investment), Cllr Paul McGlone, said: “Our planning system is there for a reason – to ensure any development is in the best interests of Lambeth – and anybody caught flouting the rules will be prosecuted.

“This particular case is a great result and the money we’ve been awarded can be used to tackle other breaches of planning in the borough.

“We are not afraid to use POCA powers – people benefitting from criminal behaviour will have to repay any ill-gotten gains as well as fines and legal costs.”

At sentencing, Mr Recorder K King is reported to have commented that Lexadon flagrantly pressed ahead and deliberately flouted the regulations.

He ordered Lexadon Ltd to pay £143,134 that they made from renting out the property as flats, as well as a £13,000 fine and Lambeth’s £6,812 costs. The director of Lexadon was also fined £13,000.

The Proceeds of Crime Act is increasingly being used by local authorities to confiscate the proceeds of criminal action and this case should serve as a warning to property developers and landlords who are considering proceeding without the required permissions. Heavy fines and confiscated profits could result for those who flagrantly disregard the planning system.