You are referring to the Enforced Sales Procedure Have a look on this website at articles concerning enforced sales which is a commonly used practice. Google Manchester City council Enforced Sales procedure good practice guide and that should help

In the ODPM "Empty Property - Unlocking the Potential" guide Westminster Council are quoted as using CPO's since 1995 maybe worth asking them for advice.

Hi Elliw

We're just looking at this as well.  It is indeed possible apparently - It involves getting a Liability Order (from Council Tax where someone has a debt) - passing this on to your legal team to convert to a Charging Order via County Court.  This converts it from a personal debt to a property debt.  Apparently it is non-defendable (because it's a County Court Order) - although obviously as with any enforced sale there is the option for the owner to just suddenly find the funds and pay - and if it's a debt against the propery we can do an Enforced Sale on it!   We are looking at this for properties where the condition is not too bad so other action is limited. Another useful option for EPOs.

Dave Stott - ex-Manchester (now Empty Homes) has great knowledge of this and you may be able to contact him via Empty Homes or the other EH/HCA forum thingy (which i assume is till going but I haven't been on it myslef for a while).

If your legal team have just dealt with Enforced sale using another method I would get them into a meeting with the right person in Council Tax and see what system can be set up for this.  That's what we are planning to do.  Be interesting to hear your progress - and I'll let you know how we get on as well.

All the best
Emma Kumar
Empty Property Officer
Brighton & Hove City Council

Hi Elliw

We are just putting a CTAX enforced sale through now and I have two Works In Defaultgetting to that stage (invoices are outr).

We've previously been to the court stage but just before we went into Court to get the order they found the money. It may be worth your legal person talking to our solictor for the process, esp. if they are unsure.

Regards

Rebecca

E: rebeccalawlor@rossendalebc.gov.uk

We were pursuing this option for one property with a debt of over £4,000.

Just before we had the liability order converted to a charging order the owner paid & is now is discussion with me about the property. So, it does open doors

Hi Elliw

Building on everyone’s comments so far.

The procedure for Council Tax recovery  is primarily the same as for any other debt.

Usually, your Council Tax Department will send a number of reminders /final demands for payment of the Council Tax, then as a matter of course they  will go to the Magistrates Court to obtain a Liability Order – confirm debt is lawfully due (Summons to Court to explain why you have not paid).

The LA then has a number of remedies through the  to the County Court. This is the same procedure whether the debt is as a result of non payment of CT or a landlord trying to recover on payment of rent by a tenant, non payment of utilities etc

The remedies available through the County Court are as follows:

Bailiff (levying distress):  threatening to take or actually taking goods from the property to the value of the debt. This is the main way that LAs try and recover the debt. The only problem with this approach is that empty properties by their very nature do not have goods of any value. In addition, the bailiff does not have any power of entry and have to gain access through peaceful entry.  So in reality this approach is ineffective against empty homes, but the threat may encourage some owners to pay.

Attachment of Earnings Order: if debtor is PAYE, then can apply to their employer for deductions to be made to their wages (level of deductions is set by Statute for CT). If debtor self employed, earns less than £75 per week or £300 per month before tax or lives on a pension or investment income then deductions cannot be made. There is a sliding scale on how much you can take based on their income. Generally suitable for smaller debts.

Bankruptcy, debt must be a minimum of £750, prerequisite to show that the Council has secured a liability order and serve a Statutory demand (explains debt), if debt remains outstanding after 21 days or no arrangements made. Official Receiver (Licensed Insolvency Practitioner (LIP)) – secure assets for the benefit of the debtors

This is a very expensive approach for the debtor as the cost of the LIP are charged as well as the debt and depending on the level of co-operation from the owner will influence the overall cost.

Charging Orders – can secure the debt against someone's property, although the debt will not be given priority. In addition, if the debt is small or someone is living in the property, then the Council may be unsuccessful in securing an Order of Sale.

Committal Hearing (Magistrates Court), usually after the bailiff has failed, debtor can be committed for wilful refusal to pay. Can send debtor to prison or more likely set up a fresh payment plan. If debtor does not attend court, the Council cannot obtain an arrest warrant.

For some reason the main approach adopted by LAs  is Bailiff and then going for Bankruptcy, it does not seem to be common practice to use the charging order route.

From our point of view  and previously mentioned by Emma  we want to turn the personal debt (CT) into a property debt, through the Charging Order approach. Obviously, the debtor has to be the owner of the property.  If the property was rented out then you cannot use the tenant’s liability to enforce the sale of the landlords property.

Procedure

• ·        Liability Order (Magistrates Court)
• ·        Interim Charging Order (County Court) – Owner given an opportunity to pay
• ·        Final Charging Order (County Court) – Owner given an opportunity to pay
• ·        Order of Sale

You then sell the property, usually at auction (accepted market value), you recover your debt and then the rest of the monies is paid into Court or to the Owner.

However, your Charging Order will not take priority over the mortgage and there may be other priority charges before the Councils. Often when you obtain a title from the Land Registry you see charging orders to the benefits of other banks, individuals or Companies. This shows that the owner is in financial difficulties. These charges will generally sit behind the mortgage and often will be settled in date order (exceptions).

Therefore, my advice to LAs is to obtain an interim Charging Order at the earliest stage, this ensures that your interests are protected and the charge will sit on the title forever and a day, earning interest. Recent case law confirms that the Limitation Act does not apply.

Usually with money debt  i.e, non payment of rent you have 6 years to recover them, unless the LA has taken steps to recover the debt or the debtor acknowledges the debt. So If the owner owned 10 years of CT but had never pursued the owner, the LA could only go back 6 years.

An additional benefit to obtaining a charging order and registering it against the title, is if the owner wishes to sell the property or wants to raise a mortgage then he/she will have to deal with the Charging Order.

This process is quite convoluted when compared to the Law & Property Act 1925 approach (District Land Registry) for other appropriate statutory charges. It depends on how efficient your Legal Services are but can often take 12-18 months.

Obtaining a Charging Order through the County Court is fairly straight forward, but obtaining an Order of Sale can be more difficult depending on the individual circumstances of the case. At all stages you will have to convince the judge that this approach is reasonable and proportional (Human Rights: Article 6 Right to fair Hearing,  Article 8 Protection of Private and Family Life (qualified right) & Article 1 first protocol (qualified right)).

Therefore,  you would be more likely to obtain an Order of Sale if there is a significant debt and the property is a long term empty that is causing significant problems to the neighbourhood, rather than if there is a small debt, when the property was currently occupied by an elderly occupier.

From memory the guidance indicates that there needs to be a minimum debt of £1,000 to obtain a charging order. However, in practice I would suggest that you need a few years debt outstanding and have tried a number of ways to recover the debt (bailiff),  to be successful. But would obtain a charging order against the property as a matter of course.

One of the other difficulties is the service of the paperwork or where the land is unregistered. You will have to satisfy the Court that the debt is recoverable from the property owner and that they have been notified etc. This can often be difficult with empty property owners, how do we establish that they have been served, if we cannot find them. There are various methods for service and there are ways around it,  but may not be straight forward.

There is an excellent book on the debt recovery procedure through the Count County, it is geared towards the legal profession with example paperwork (heavy going and not cheap £90).

Debt Recovery Through the Courts Claire Sandbrook, Publisher: Sweet & Maxwell

We have done a number of enforced sales for CT debt and other debts in Kent, but often it is a good way to bring people to the table,  the threat of taking someone’s property is far more effective than threatening  a bailiff.

However, it is a draconian step so must give the owner every opportunity.

I hope the above information gives a bit more guidance on the subject.

Regards

Andrew Lavender, Empty Homes Training Ltd.