Izmestyev -- who is currently awaiting trial on charges of ordering multiple contract murders, arson and bribery -- owns a 1,000-square-meter home located across the lake from Putin's Novo-Ogaryovo residence in the prestigious Rublyovka district west of Moscow.
In 2006, the Moscow Region Court ruled that Izmestyev had built the house illegally because it was not authorized by the Federal Guard Service, which protects Putin and other senior officials.
The court ordered Izmestyev to raze the mansion, but the former senator was arrested on numerous criminal charges in January 2007 and could not comply with the court ruling.
Izmestyev's lawyer, Alexander Mosin, told Kommersant that Izmestyev's family had hired a company to demolish the house in April but that local authorities did not issue the required permits on time.
The regional branch of the Federal Court Marshals Service then fined Izmestyev 100 rubles ($4) for not razing the house in time and appealed to the Moscow City Court for permission to tear it down.
The court last week rejected the request, however, arguing that Izmestyev and his family were capable of completing the job.
In an interview with Kommersant last year, Izmestyev said of all his legal travail stemmed from his refusal to sell the mansion "for peanuts" to individuals close to the Federal Guard Service.
National media reported in 2006 that Izmestyev had been launching fireworks in his yard, disturbing Putin's peace and quiet.
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