Landlords – Beware Of Planning Breaches By Tenants!

A 2023 case has highlighted the risks to landlords arising from breaches of planning laws by their tenants.

T&M Property Investment Limited (“TMPIL”) let café premises in Manchester to a tenant. During the course of the lease t,he tenant made changes to the shop frontage and operated beyond the unit’s lawful use, becoming a shisha bar. No planning applications were made to authorise the works or approve a change in use, as are required by the Town and Country Planning Act 1990 (the “Act”).

Manchester City Council issued an enforcement notice, requiring reinstatement of the premises and cessation of unlawful use. This notice was ignored by the tenant and TMPIL.

While unlawful development carried out by a tenant is not a criminal offence, failing to adhere to the terms of an enforcement notice does carry criminal liability. Enforcement notices attach to the land upon which the planning breach has occurred, meaning that inaction of the tenant is consequently the responsibility of the landlord, regardless of any lease provisions.

In this case, the city council prosecuted TMPIL for non-compliance with the enforcement notice – this being a criminal offence under section 179 of the Act – leading to conviction and a fine of £18,750. Additionally, an application was made under section 6 of the Proceeds of Crime Act 2002, requesting that gains made from the criminal activity be recovered. Rents collected amounting to £174,074 were considered such gains and therefore confiscated.

This decision and its consequences have important lessons for landlords. Whilst a landlord that does “everything he could be expected to do to secure compliance with the notice” has a defence to criminal prosecution for non-compliance with the enforcement notice under section 179(3) of the Act, simply relying upon the presence of the usual statutory compliance provision in a lease will be not be sufficient.

Landlords should actively monitor their tenanted properties for planning compliance to get ahead of enforcement action by a local authority. Where there is an identified breach that has moved into the ambit of local authority action, landlords should take steps to enforce the statutory compliance provisions in the lease. Where compliance is not forthcoming from the tenant, a landlord should consider exercising forfeiture rights where available.