At Snaresbrook Crown Court on Thursday 15th February, 2018, Bellview Estates and its sole Director, Jacob Friedman, found themselves £124,000 the poorer. The owners of 77 Osbaldeston Road had rented out four flats for a period of nearly four years in an illegally-converted house. They had pleaded guilty at Thames Magistrates Court in 2017 but were sent to the Crown Court because the Magistrates had insufficient sentencing powers.
The Guilty Path
2006: Bellview Estates purchase 77 Osbaldeston Road for £500,000.
2006: The owners begin to convert the single-family house into four flats without planning permission.
2009: They ignore repeated attempts by the Council to make them comply with the law.
2010: They rent out four flats in their now-extended and subdivided property.
They ignore the Council’s attempts to remedy the wrong.
2010: Hackney issues an Enforcement Notice to restore the house to its original state.
2010: The owners appeal to the Government Inspector but lose their appeal.
They ignore the Inspector’s Determination of the case for three years.
2013: They apply to fell a mature sycamore in the back garden.
2013: The application is refused and a Tree Protection Order is imposed.
2013: Bellview Estates finally submit a Planning Application to cover what they have created on the ground.
2013: They are granted Planning Permission based on revised drawings.
They fail to begin work based on that permission.
2014: A Hackney planning officer is unable to gain access to the property to inspect.
2015: An appointment is made with the owners to inspect. On arrival, the officer finds the owners have not turned up. No inspection is possible.
2017: They are summonsed to Thames Magistrates Court where they plead guilty.
2017: They seek the advice of the Rabbinical Court.
2017: They submit yet another planning application, a decision on which is expected in March 2018.
2017: They are sentenced at Snaresbrook Crown Court under Sections 179.2 and 331 of the Town and Country Planning Act 1190.
Meanwhile, nothing has changed on the building the Inspector visited in 2010.
The dates say it all. A stretched Planning Department is forced to use scarce resources in staff and budget to try to get owners to obey the law while the landlords rake in the rents.
Proceeds of Crime Act 2002
Hackney has been using the Proceeds of Crime Act more frequently and effectively against such landlords. Because the house had been converted without permission, all rents during the period from the issuing of Hackney’s Enforcement Notice to the granting of Planning Permission was money gained criminally. This case uses the same law that saw a £700,000 confiscation order in December 2017 over illegally built flats in Hoxton.
The money from the Confiscation Order in this case totaled £100,000 and will be split equally between Hackney, the Court Service and the Metropolitan Police. In addition both Bellview Estates and Jacob Friedman were fined £10,000 and £7,500 respectively. Costs were awarded to Hackney.
In assessing their ability to pay the Confiscation Order and the fines, the judge heard that Bellview Estates have assets of £13,000,000. Mr Friedman receives dividends averaging £53,000 a year together with an annual £7,500 in director’s fees. With this information in mind, the judge considered the fines to be affordable.
The Judgement
Mr Friedman began the hearing sitting in the Dock before the judge allowed him to sit with his lawyer. Beyond this kindness, however, the judge was trenchant in his criticisms of the actions of Bellview Estates and of its ‘controlling mind’ (as the judge put it) Mr Friedman.
The foundation of civil order is obedience of the law, he said. Unregulated building development carries risks in principle and sometimes in fact – although the judge did not regard the work at 77 to be a safety threat. Failure to obey, in this particular case however, endangered community harmony, he said. It creates resentment amongst those who daily see illegal works going unchallenged. In seeking to flout planning law – and in this case within a conservation area – the built environment suffers. But suffering in this case was most keenly felt by the four families of tenants who were evicted by Bellview to bring the property into compliance. The house has since been legally re-let.
By their actions, Bellview Estates and Jacob Friedman harmed themselves both in their finances and by gaining a criminal record. They harmed their neighbours. They harmed their tenants.
The owners also harmed the wider Hackney community whose taxes went to fund a twelve-year process to ensure compliance from owners who felt they could simply ignore the Council. It is to be hoped that they and others will heed the judge’s words and recognise the new resolve by Hackney Council to act strenuously against breaches through the skill and perseverance of its compliance officers.
Sometimes citizens can feel that officers do not act quickly enough to resolve breaches – and undoubtedly this has been so. This case shows, however, how a single obdurate owner can cause endless delays in bringing about a resolution. Yet 77 Osbaldeston Road is just one case in a long list. Bellview Estates and its controlling mind, Mr Friedman, have much to answer for. Perseverance, however, won out in the end.
Next Steps
The judge allowed the owners three months to comply once the current planning application has been determined. It is to be hoped that the owners have learned their lesson and will not engage in the delaying tactics that have dragged this case on for twelve years. The Council is ready to act again if they do.
The law applies to everyone: Bellview Estates is not exempt.
