Applicants Oaktree Supported Services, based at Waterloo Road in Blackpool, had applied for the certificate to allow a property on West Drive to be used to accommodate up to four persons over 18 years old with supported needs.
A Certificate of Lawfulness would allow the proposals to proceed without the need for planning permission.
However the application, which attracted a string of objections from nearby neighbours, was refused by a planning officer at Wyre.
In refusing the move, the officer stated: “The proposal as described in the application is considered to involve a use that does not fall within Class C3(b) of the Town and Country Planning (Use Classes) Order 1987 (as amended).
"The proposal by virtue of the method of its use, involves a material change of use from the existing lawful use which is within Class C3.
"Accordingly the proposal is not lawful and planning permission is required for the proposed use.”
Residents in Cleveleys met up with Blackpool North and Cleveleys MP Paul Maynard earlier this year to express fears that the proposed scheme could lead to anti-social behaviour problems in a quiet residential neighbourhood.
The scheme put forward by Oaktree was listed as providing accommodation for people who require nursing or personal care, have learning disabilities, mental health conditions or substance misuse
During the meeting at the Park Club on West Drive, one resident said: “How will the place be run, what sort of staff will be there to oversee things?"We haven’t been told anything about these plans.”
But Matthew Bond, director at Oaktree, said there were no plans to house people with substance misuse issues, although he would not elaborate further on the proposals.He said at the time: “We don’t have any plans for drug rehabilitation, the neighbours are jumping to conclusions.
"I believe house prices are the main concern here and that is why they are so against it."They have held a meeting but they didn’t invite me to it, so I haven't been able to discuss things with them.”