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CPO and charging order

Submitted by SColes on 5 July, 2011 - 09:15

Hi All

We are putting together a proposal to CPO an empty property.  It has been empty for several years, the owner has totally vanished and we have no alternative address or contact details, although he is named on land reg as the owner.  We instructed a tracing agent to try and find him but to date they have not been able to track him down.  No council tax has been paid on the property since the owner vacated so it has debts of approx £3.5k and mounting....................Does anyone know if it is possible to obtain a charging order through council tax debts if the owner of the property cant be located?  and also if we went forward to CPO the property and the charging order was in place can the council recoup their monies owed?

Any advice would be really appreciated!

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Your Council Tax service

Submitted by Graham Everett on 5 July, 2011 - 12:47.

Your Council Tax service could enforce a sale of the property by either bankruptcy proceedings or obtaining a charging order on the property.  

 

Alternatively if the Council successfully compulsorily purchased the property, it could deduct from the owner's compensation entitlement any debt for which it held a charge.   If the Council cannot trace the owner:

  • the absence of any objection would make confirmation of the CPO simpler
  • the LA would need to pay the compensation into court for six years, in case an entitled person claimed it during that period.
Graham Everett

CPO Compensation

Submitted by CJones on 6 July, 2011 - 08:44.

I would endorse Graham's comments and add the following observations from our experience in Barrow.

Over the last three years we have carried out  a number of CPOs on vacant properties with unknown and untraceable owners, using both Housing Act 1985 and Town and Country Planning Act 1990 powers. These properties had considerable Council Tax debts against them.

The most thorough way of dealing with this would clearly be to get a charging order for Council Tax, go to the Lands Tribunal to get them to fix compensation and pay this into the Court Funds Office (less the Council Tax debt) to be claimed by any rightful owner. You can get this back after six years if it is not claimed, but you have to remember to do this, and I am not very good at diarising actions six years in the future...

What we did in practice was to get a valuation from the District Valuation Service, use this as the basis for compensation, pay the Council Tax debt out of this (whether or not there was a charging order), and hold the remainder of the compensation in an earmarked cost centre in our accounts. We would deal with any claimant directly. It is worth noting that claimants are entitled to interest at the rate presecribed in regulations, but this is currently zero.

I think at the end of the day, the approach you should take has to be based on pragmatism and an assessment of risk. How likely is it that the owner will return if you have spent a considerable time looking for them without success, and possibly withour even establishing their identity? Even if they do return, you can still enter into a negotiation on compensation, and in many ways you hold most of the cards. After all, you will have already acquired the property, and you are the one with the money. If the claimant does not accept terms that you think are reasonable he always has recourse to the Lands Tribunal.

We have never had anyone come forward who could substantiate a claim in these circumstances. It is also relevant to point out that our external auditors looked at this aspect of our work and were happy with our approach.