Enforced sales could be an important tactic to help local authorities in their efforts to tackle empty homes, freeing up thousands of empty homes for families in housing need, writes Lyndon Campbell.
The issue of empty homes is in the spotlight during Empty Homes Week (15-21 February). The latest statistics from Shelter show 280,000 people in England are homeless, while the number of empty homes stands at more than 648,000, of which 225,845 have been empty for longer than six months.
There is growing frustration among local authorities that while the number of homeless people remains stubbornly high, there are still thousands of homes lying unoccupied. Enforced sales are currently under-used as a way of tackling this problem.
Social and financial benefits of enforced sales
Empty homes can have a hugely detrimental impact on communities, denying vulnerable families a home and if left vacant can fall into a state of disrepair, attracting vandalism, vermin infestation and causing damage to adjacent properties.
Enforced sales can bring both financial benefits to local authorities and social benefits to the wider community, including:
- Social impact – enforced sales can free up homes for families in housing need.
- Council tax - once the property is sold, the new occupier will pay council tax generating additional revenue and unpaid council tax could be recoverable.
- Recovery of costs - councils can recover all costs from the sale including cost of works and sale costs.
- New homes bonus - the local authority can also take advantage of the New Homes Bonus Scheme, which enables a local authority to claim the new homes bonus for bringing an empty property back into use.
- Speed - The enforced sales process is often faster than other routes such as compulsory purchase.
The legal process
Many laws, including the Public Health Act 1936, allow a council to serve a notice on an owner of property demanding that the owner carry out repair or improvement works. If the owner refuses to comply, the council can carry out and pay for the work itself.
Any notices that have been served on an owner, which result in the local authority completing work on the property in default, will incur a land charge. If the incurred costs are not paid, the council may impose a local land charge and subsequently register a legal charge on the property. In the event the owner refuses to pay for the costs of the works then the debt owed to the local authority can be registered as a Local Land Charge by virtue of the Local Land Charges Act 1975.
In the event the owner of the property fails to pay for the costs of the works then the Law of Property Act 1925 enables local authorities to recover charges and debts owed to it through the sale of a property, just as a mortgagee in possession would do.
Inevitably, complications may arise around issues including Land Registry, proof of property ownership and any outstanding mortgages or loans. However, the enforced sale process is relatively straightforward – and has considerable benefits for local authorities.
Enforced sale as part of an empty homes strategy
Bevan Brittan has helped Hinckley & Bosworth Borough Council in Leicestershire tackle the problem of empty and dilapidated homes using enforced sales.
Steven Connor, Environmental Health Officer, from Hinckley & Bosworth Council, said: “The property Bevan Brittan have recently worked with us to sell had been a blight to the surrounding area for some time and had no realistic prospect of changing under the previous owner. Added to that, the council were owed not an insignificant amount of money for works it had previously carried out and had little hope of ever recovering those costs without positive action being taken.”
Bevan Brittan’s empty homes service sees experienced property lawyers helping local authorities with the enforced sales process, providing expert advice and the necessary legal and contractual documentation to expedite the sale.