nplaw acts for many local authorities on the enforced sale of all kinds of property.
Why enforce a sale?
The enforced sale of land or buildings by a local authority is useful in a number of situations:
• The recovery of a debt owed to the local authority,
• Enforcement against a nuisance or blighted property,
• A useful tool within an integrated Empty Homes program to bring properties back into use,
• ‘Ownerless’ or abandoned buildings can be managed and brought to the market; and
• It can also be used to protect Listed Buildings or sites in Conservation areas from neglect.
What is involved?
Many statutes allow a local authority to serve notice requiring the owner of a property to carry out works. If the owner fails to comply with the notice, the local authority has the right to carry out the works itself and, if it does so, under some statutes such as the Building Act 1984, the Environmental Protection Act 1990, the Town and Country Planning Act 1990 and the Housing Act 2004, it will automatically have a charge over the property for the cost of the works. An enforced sale arises where the local authority exercises the power of sale conferred by the charge. This power of sale is the same power that a bank or building society uses when it sells property after the owner has defaulted on mortgage payments. Provided that the property is unoccupied, the local authority can sell the property without first obtaining a court order, and the right of sale continues to exist even after the property has changed hands. In most cases, the local authority’s charge has priority over all other charges, which means that the local authority can sell the property without the consent of any other mortgage or charge holder.
The proceeds of an enforced sale must be used to repay the debt owed to the local authority and the costs of sale. Any balance then remaining must be paid to the holders of other mortgages or charges on the property or, if there are none, to the former owner.
If a sale results there is a fixed charge of £5,000 + VAT and disbursements, which you can deduct from the sale proceeds as a cost of sale. This fee covers:
• serving a preliminary notice demanding payment;
• serving a s103 Law of Property Act 1925 notice;
• preparing a resolution for sealing evidencing the charge;
• applying to the Land Registry to register the charge;
• preparing a sale contract and dealing with the sale.
Sometimes, the property is not sold. This might occur because we advise that there are other charges on the property that are in priority to the council charge, or it may be that the owner of the property pays the money outstanding. If the matter doesn’t proceed to sale, you will be charged at our hourly rate for the work already carried out by us with an agreed capped maximum fee.
How do we make best use of the powers available?
Our specialists have presented at conferences and provided training to relevant Local Authority teams on the powers available and how they can be best used; please get in touch to discuss or arrange a training programme tailored to your specific needs.