Special confiscation of rent in case of renting out a building without a permit
October 2022 – Construction offence ... As the term implies, anyone who constructs or alters a building without the required permits commits an offence. Such an offence not only gives rise to fines and a reinstatement order, but also to confiscation of the proceeds. In effect, the crime cannot pay. The question is, however, what income can be confiscated.
Construction crime
One building consists of a ground floor used as a commercial area and four floors with one flat each. In 2005, the owner converted the building into ten flats without a building permit. The ten flats are rented out. In 2007, the owner was called to order.
In 2008, he sold the building, and the new owner continued to rent out these flats.
After an on-site inspection in 2014, a municipal official found that nothing had changed since 2007. After consultation, the parties agreed in 2015 that there was a construction offence and that it should be regularised.
Shortly afterwards, the new owner submitted an application for alterations, which is however refused in 2016.
In 2017, he submitted a new application, which was approved, and in 2019, everything was in order.
The owner is nevertheless prosecuted for the period 2014-2015.
There is not much to complain about here: the planning violation is a fact, and it is established that the landlord was receiving rental income from ten flats during this period.
Since the crime cannot pay, the judge decides to confiscate the rental income.
The judge considers that the landlord received 40,000 euros in rental income during this period. According to the judge, if he had not committed the offence, he could have received about 30,000 euros of income for the commercial area and four flats. An amount of 10,000 euros of revenue from the offence is therefore confiscated.
Special confiscation
The legal basis for this confiscation is found in Article 42 of the Criminal Code. This provision deals with special confiscation. Under this provision, a trafficker can, for example, have the car in which he was smuggling goods confiscated.
In the case of renting out after a construction offence, the lessor can therefore also have his income confiscated.
The article states that a special confiscation applies in particular to property benefits derived directly from the offence, to property and assets substituted for them and to the income from these invested benefits.
In the above case, the Court calculated the pecuniary benefits by deducting from the income actually received what the building could have earned if it had not been converted.
However, it seems that the Brussels Court of Appeal has thus gone against the view of the Court of Cassation in a 2018 ruling.
Patrimonial advantage
In the case before the Court of Cassation, the owner had converted several buildings into flats without a building permit. The court ruling on the case again found that a construction offence had been committed, but this time not with the intention of acquiring property benefits. It was established that the owner, who rented the buildings via a social real estate agency, could have received more income if he had rented the buildings in their original state.
The judge was, therefore 'lenient' and ordered a special confiscation of the entire rental income, but half of it was suspended.
"Stop, this is not right", said the lawyers. If, on the one hand, it is accepted that there was no intention to acquire property benefits (because it is accepted that the income could have been higher without the offence), on the other hand, property benefits cannot be confiscated. There are two reasons for this:
a) the absence of intent; and
b) the absence of an advantage.
However, the Court of Cassation interprets the law differently. First, the Court states that Article 42 of the Penal Code does not require an intention to acquire pecuniary benefits. The mere offence is sufficient.
Furthermore, the article provides that all pecuniary benefits derived from the offence are confiscated. The law does not mention net benefits.
The Court of Cassation therefore fully accepts the court's decision.
The crime cannot pay, that is obvious. But it is not yet clear whether the person concerned can suffer a loss or not.
