In four weeks time Empty Dwellings Management Orders finally come into force. The power contained in the Housing Act 2004 allows local authorities to take temporary management control of empty homes. It allows them to carry out refurbishing works, let the property and recover their costs from the rent.
I've had a number of queries and questions from local authorities in recent days about these new powers that may be worth sharing:
q. The legislation says that we need to get the owner's permission before we can let the property is this really the case and if so what is the point of the legislation?
a. This question comes up remarkably often and I can only put it down to people having only read the first few sections in the act. There are in fact two types of EDMOs; interim management orders and final management orders. If a local authority wants to use an EDMO it has to apply to a residential property tribunal. If the tribunal finds in the local authorities favour it will make an interim management order. This can last for up to a year and transfers some of the powers of management of the empty property from the owner to the local authority. One power it does not transfer is the power to let the property. So if the local authority wants to do this it needs to seek the owner's permission. If the owner and local authority are unable to come to an amicable agreement over the future of the property the local authority can serve a final management order. This transfers even more management powers over to the local authority amongst them the power to let the property. So under a final management order the local authority is able to let the property without seeking the owner's permission - thus bringing it back into use. And that's the point of the legislation.
q. Can the local authority charge the owner for costs such as staff time, decorating the property, legal costs, gardening?
a. The legislation isn't prescriptive on these points. The local authority needs to take a view on what costs it has incurred and what it is going to charge to the owner from the rent it receives for the property. It should set out what it will charge in a management plan to which the owner has a right of appeal to the residential property tribunal. So the answer is if you have incurred costs directly related to the property, the costs are reasonable and you can justify them if challenged I would include them. If not - don't.
q. It looks as if local authorities will only be able to get an EDMO if they can demonstrate a need for the property so this legislation will only be any use in the South of England where there is high housing demand
a. The decision the residential property tribunal will have to make is - Is there a reasonable chance of the property being brought back into use if the local authority is granted the EDMO? Clearly there is no point granting an EDMO if the local authority leaves the property empty too. The question for the local authority is - can they let the property? Housing need isn't exclusive to the south of England and if the local authority can match up the property with people who need housing then I think this could be useful. Behind this question is an important point. The purpose of this legislation is to get empty properties back into use, it's not a compulsory procurement tool for local authorities wanting to expand thier housing portfolio.