Empty Dwelling Management Orders

 

 

 

Response of the Chartered Institute of Housing

to the

ODPM consultation on Secondary Legislation for Empty Dwelling Management Orders

 

 

October 2005

 

 

Chartered Institute of Housing

Octavia House

Westwood Way

Coventry

CV4 8JP

 

Tel. 02476 851700

Fax. 02476 695110

 

For further information on this response please contact Abigail Davies, Policy Officer, at the above address or email abigail.davies@cih.org .

 

 

Response to ODPM consultation on Empty Dwelling Management Orders

The Chartered Institute of Housing (CIH) is the only professional body for individuals working in housing. Its primary aim is to maximise the contribution that housing professionals make to the well being of communities. Membership status is dependent on completion of a professional qualification and a track record of professional achievement. CIH has over 19,000 individual members working for local authorities, housing associations, Government bodies, educational establishments and the private sector.

Introduction

CIH supports the broad principle that empty homes are a resource which are not being used to their full potential, and therefore measures to support the re-use of empty homes are valuable. CIH is currently undertaking a major piece of work on the ability of local authorities to act strategically in relation to housing in their areas, and we welcome EDMOs as a tool which will assist local housing authorities to deliver their strategic function.

Main Points

The secondary legislation proposed in this consultation should be used to create a flexible system which best suits the needs of local authorities but is as free as possible from loopholes which owners can use to avoid an order being made.

Some of the proposed exception classes do still leave loopholes, and these must be closed if the orders are to operate effectively. The regulations governing the exceptions must also allow flexibility for local authorities and Residential Property Tribunals to take account of the individual circumstances of each case as blanket rules may not be workable in practice.

Detailed guidance on the operation of the scheme should be issued alongside the commencement order. At present several of the concepts relating to the orders are unclear and could lead to inconsistent application. Guidance will encourage good practice during the use of an order. There is a notable lack of emphasis on the steps local authorities should take before they make an EDMO, and guidance on these matters would put a focus on using a range of voluntary rather than compulsory means to bring properties back into use.

Question 1    We agree that all dwellings should be exempt from Empty Dwelling Management Orders (EDMOs) for six months from the time they become unoccupied. This gives a reasonable period of time for the local authority to locate the owner and work towards bringing the property back into use through voluntary means e.g. by providing advice on options or loan/grant funding to improve physical standards. It also allows the owner sufficient time to investigate options, decide what they want to do with the property and to raise finance if further investment is required. Provisions should be made for how to measure the six month period in cases where there is insufficient information, such as Council Tax records, for a local authority to determine when a property became empty.

Question 3    It is inappropriate for an EDMO to be made where a dwelling is unoccupied for more than 6 months due to the absence of the relevant proprietor. The circumstances of a proprietor who must temporarily live elsewhere for work, healthcare or other reasons are clearly different from individuals who own empty investment/rental properties and from those whose properties cannot be occupied due to poor physical condition. When the proprietor has an intention to return to their property they will need a guarantee that they can return, so letting the property would not be an option in many cases, and they must retain the right to store their possessions in their own house. Likewise an elderly person who is in residential care must be able to sell their home to fund their care if necessary when it becomes evident they will not return. Whilst EDMOs are not suitable in these circumstances, empty properties can still have a negative effect on an area whatever the reason for their being empty. Therefore in some circumstances it may be good practice to encourage the proprietor to rent out the property if they are certain of the duration of their absence, or at least to ensure they have arrangements in place to ensure the property is maintained in their absence.

Without clear definition and guidance it is possible that this exemption could be abused by those who want to avoid getting an EDMO. It is feasible that the proprietor of an empty dwelling could argue that they are temporarily absent and do intend to return. Authorities who suspect that a dwelling is not the main residence of the proprietor must be able to require them to give credible proof of their residency and have powers to challenge this information in order that they do not have to exempt properties which should really be subject to the level of intervention which an EDMO permits.

Question 4    Liability for Council Tax due to residency certainly seems a good indicator that a proprietor should be exempt from an EDMO. It is a ready-made source of information for empty property teams and prevents duplication of information gathering. However it should be recognised that a Council Tax department’s focus will be on proving that a person is resident at a property rather than that they are not. Whilst Council Tax data may provide evidence that a property really is empty, systems may be open to abuse by proprietors who would rather claim to be a resident and pay Council Tax than be subject to an EDMO.

Question 5    Residential Property Tribunals should be able to consider other evidence which may have a bearing on residence. Whilst good liaison between empty homes teams and Council Tax departments should lead to adequate and harmonised information, it would be unhelpful to protect those seeking to avoid EDMOs by limiting the evidence which the RPT can consider to prove residency.

Question 6    It is inappropriate for an EDMO to be made where a dwelling is a second home or holiday home, but provision must be made to enable empty homes teams and Residential Property Tribunals to determine when a property is genuinely a second home or holiday home so that the exemption cannot be exploited.

Question 7    Dwellings which receive a Council Tax discount on the grounds that they are no-one’s sole residence but are furnished should not automatically be exempt from EDMOs. The award of this Council Tax discount does not solely apply to second homes or holiday homes and so is not a good indicator that a property is used for such purposes. Evidence that this discount has been claimed could be used in conjunction with additional information to show that a Class B exemption applies. Guidance should be issued on what evidence can be used to prove that a property is a second home or holiday home.

Question 8    Residential Property Tribunals should be able to consider evidence that conflicts with Council Tax information, for the reasons given in Question 4.

Question 9    A dwelling which attracts Business Rates should be exempted. Whilst properties which are genuinely used as holiday lets but are empty out of season should not receive an EDMO, local authorities should be encouraged to work proactively with their owners to secure use of the properties as emergency or temporary accommodation out of season where appropriate.

Question 10 It is inappropriate for a dwelling which is undergoing repair or renovation which is progressing at an appropriate speed to be the subject of an EDMO.

Question 11 Residential Property Tribunals should have discretion to authorise interim EDMOs where work has commenced but is unlikely to be completed. They would need guidance to enable a reasonable judgement to be made on whether work is likely to be completed, and local authorities would need guidance on how to monitor the progress of work on a property for which an EDMO was refused. The creation of an EDMO on such a property is likely to require the local authority to undertake significant repair or renovation work which requires a substantial up front investment and a long timescale to recoup the costs from rental income. Therefore, in order to avoid circumstances where the local authority must take on properties because repairs cannot be completed due to the scale of the task or lack of finance, empty property teams should provide advice to proprietors on timescales and cost of works and target grants/loans appropriately.

Question 12 In principle it is inappropriate for an EDMO to be made where a dwelling is awaiting planning or building regulations approval because in genuine cases the application is an indication that the proprietor is taking necessary steps to bring the property back into use. Good joint working between local authority departments should enable a coordinated approach to be taken to empty properties awaiting permissions.

Question 13 Residential Property Tribunals should have discretion to consider applications for interim EDMOs where planning applications may have been made simply to avoid an EDMO. Again, clear guidance will be required to help identify what is and is not a genuine planning application.

Question 14 In many cases it will be inappropriate for an EDMO to be made when a dwelling is on the market for sale or letting as an order would not increase the likelihood of it coming back into use.

Question 15 Residential Property Tribunals should have discretion to award an EDMO where they agree that the proprietor does not really intend to sell or let the property. Guidance should be given on how ‘not being actively marketed’ is defined so that those genuinely trying to sell in a stagnant market are not penalised, and those not intending to sell do not find loopholes. Properties targeted at a residential buyer where an investor may be more appropriate (e.g. because significant remedial work is needed) could be a good example of a property not being actively marketed. A contract with an agent may not be sufficient evidence of intention to let/sell as many agents will market a property at the rent or sale price requested by the landlord even though they have advised that it is too high for the local market. Properties which are in poor condition will be extremely difficult to let or sell in many areas, and so whilst the proprietor may genuinely hope it will become occupied, an EDMO may help them to make the steps to make a reasonable prospect of a sale/letting taking place.

It should also be expected that local authorities have provided advice on the use of auction houses and vacant property databases before an order is made, as many vendors will assume that using an estate agent is the best or only way to sell a property.

Questions 16           Where the relevant proprietor has died, the dwelling should not be exempt from an EDMO for longer than the standard 6 month period. After the 6 month period has passed EDMOs should be used carefully. In most cases inheritance will be straightforward and six months will be sufficient time for the new owner to decide whether to move in, rent out or sell the property. It is to be expected that local authorities will deal sympathetically with cases where the new owner’s distress because of the bereavement makes it difficult for them to decide what to do with the property.

Where a property has been empty for longer than 6 months but the current owner has only recently had the estate transferred to them, the local authority should use their discretion to decide when to pursue an EDMO and the Residential Property Tribunal should refuse to grant an order where the owner has not been given a reasonable amount of time or sufficient advice to help them to decide how best to bring the property back into occupation.

Whilst it may be true to say that ‘there is no reason why an EDMO cannot operate prior to resolution of inheritance issues’, we would urge caution before making a decision to allow their use in such cases. Where legal disputes over inheritance take many months or years to resolve, use of an EDMO seems prudent. However the eventual owner must deal with the implications of the order even though they will have had no involvement in the making of an EDMO. Examples of implications are: a local authority may incur costs to bring the property up to what they consider an appropriate standard which will then be passed on to the owner; if the estate is transferred before the end of a fixed tenancy the new owner has to wait before they can get possession of their property; and if they do not want the tenancy to continue they have to accept responsibility for making someone homeless. Given these issues, the use of EDMOs in cases where inheritance is not resolved should be given further consideration.

Question 18 It would be worth considering whether an exemption is needed for empty properties which are subject to court proceedings, for example following a relationship breakdown. It may also be necessary to extend the class E exception to include properties which have been sold subject to contract but are empty because the vendor has already moved and the purchaser cannot complete because of a chain.

Question 19 It may be necessary to prescribe requirements for the purpose of s134(2)(e) at this time.

Question 20 It should be required that local authorities have made significant efforts to get the proprietor to bring the property back into use by voluntary means before they can get an EDMO. Section 133 (3)(b) does not ensure this will happen. In most cases the administrative burden which an EDMO places on the local authority should be sufficient to deter authorities from using the orders as anything but a last resort, but a safeguard is necessary to prevent authorities from going straight to the enforcement option. Without this safeguard, authorities are at risk of being accused of using the orders to increase their own, or RSLs’, housing stock at the expense of private owners.

Question 21 There should be a requirement on a lessor of a dwelling subject to an EDMO to serve notice on the LHA before they exercise a right or responsibility relating to the lease of the dwelling. If an LHA is responsible for the management of a dwelling, it must also be party to all information relating to the dwelling.

Question 22 The LHA should operate in accordance with the wishes of the displaced lessee wherever possible. An EDMO should not remove the proprietor’s sense of responsibility for the dwelling, and acting in accordance with their wishes will promote good joint working.

Question 23 The LHA should be able to grant dispensation for a displaced lessee to exercise a right or responsibility relating to the lease, for the reasons given in Q22.

Question 24 The LHA should be under a duty to grant a dispensation unless it considers that doing so would negatively affect the operation of the management order. Guidance on acceptable reasons for refusal should be given to help reduce the number of challenges to such decisions.