Workers currently residing at the former Bracklesham holiday park have been given 28 days to leave the site, according to Chichester District Council.
South Downs Holiday village closed in January this year and was purchased by Chichester based housing developer, Seaward Properties for £2.5m.
Management company and leaseholder Cre8 moved 120 Eastern European workers onto the site in a joint venture with Pro-Force.
Chichester District Council was made aware of the situation and issued a planning contravention notice stating that Cre8 was ‘in breach of planning control’.
In a statement from the council, a spokesperson said: “We’ve now gathered the evidence that we require and have assessed the current use of the accommodation against the current planning permission.
“Taking account of this information we have served a breach of condition notice on the management agents, Cre8.
“This requires the company to stop using the holiday accommodation for residential purposes within 28 days from the day the notice is served.
“We are aware that two petitions have been started. We feel that we need to make people aware that we already have consultation processes in place for all licensing and planning applications and so we do not accept petitions relating to these areas of work.”
Cre8 has been contacted for a comment.