The owners of unauthorised bedsits in Aldershot have had their appeal requesting permission to keep them in place dismissed.
In July last year, Rushmoor Borough Council (RBC) served enforcement notices on Jan Mandozai and Mohammed Choudhary (known as Syd) after it came to light they had created 14 bedsits at Grasmere House in Cargate Avenue.
The pair appealed against the enforcement notices, arguing planning permission should be granted for the bedsits, but an independent inspector has now ruled against them.
The decision should have little practical effect, however, as they were granted permission by RBC in March to create five flats at the former care home, listed as a "building of local importance".
The formal plans, which include seven off-street parking spaces, were approved after a council officer said the flats would create a "satisfactory living environment" at the property.
A council report on the appeal said the enforcement notices were issued because the bedsits "intensified the use of the property", within the Cargate Avenue Conservation Area.
Their ongoing use was “likely to result in increased noise and disturbance to neighbours and to attract indiscriminate, dangerous and obstructive parking in the streets nearby”.
The inspector found the unauthorised use of the building "did not in itself adversely affect the character of the conservation area" and no proof had been shown of bad parking.
However, he found the lack of planning permission breached European environmental laws enforced by RBC, to safeguard the Thames Basin Heaths Special Protection Area (SPA).
Developers seeking planning permission from the borough council have to contribute towards SANG (Suitable Alternative Natural Greenspace) to mitigate any damage to the SPA.
The plans for flats at Grasmere House attracted nine objections from neighbours.
One described the proposal as "poorly-conceived" and another claimed it was a ploy by the owners to stall the council until the appeal was decided.
Mr Mandozai and Mr Choudhary own the former Beehive pub in High Street, Aldershot, while Mr Choudhary is also the landlord of The Old Warehouse, off Victoria Road, which were converted into six and 18 unauthorised bedsits respectively.
Enforcement notices were also issued by the borough council requiring these to be shut down.
In early April, council officers reported that work to close the bedsits had made "substantial progress" at the Beehive and were "all but complete" at The Old Warehouse.
Get Hampshire tried to contact Mr Choudhary for comment but has yet to receive a response.