EDMOs - insight needed by LLM student

Dear EHN members

I am a Master of Laws student currently completing my LLM dissertation. My focus is on 'buy to leave' in the London property market. I'm currently researching the proposed implementation of public registers of beneficial ownership and I am also exploring the use of Empty Dwelling Management Orders on properties suspected of being buy to leave investments.

Thanks for letting me pose a question I have been struggling to find the answer to. I've been trying at length to find out if EDMOs can be used on properties that are owned by companies registered in secret jurisdictions, such as the British Virgin Islands, where the identity of the owners is obscured. Would you be able to advise me on whether this is possible or whether because you cannot identify the owners of the property the EDMO process cannot be used. Are you able to serve an interim EDMO to an overseas company who owns property that is suspected of being empty for the required period?

Thanks very much for your help and I look forward to making my research available at a later date.

Marco Anderson, Bristol  University

Forums: 
EDMOs

,When considering an Interim EmptyDwelling Management Order the Tribunial will have to be satisfied that. " there is no reasonable prospect of the dwelling becoming occupied in the near future" (S134 Housing Act 2004). So it will be relatively easy for a  Relevant Proprietor to make a case that a typical 'buy to leave' can be occupied in the near future. They could say, they (or anyone) will live in the property. They could say they intend to let the property. Some will say that this means the property will no longer be vacant. But will it? Who will check? What is 'occupancy'? Would it be worth a Local Authority's  time and effort?

My understanding is that you don't have to make contact with the Relevant Proprietor, but you do have to make 'reasonable enquiries'  to contact them. However, I refer you to this website's case studies and the "Warrant of Entry Issue" which suggests "full enquiries" may be necessary.

All contested EDMOs seem to involve owners swearing blind that they are about to bring properties back into use. The evidence though is what they are doing about it. True, if there are building works, then it may be clearer whether progress is being made. But as for buy-to-leave, either they are marketing it or letting the dwelling or they are not. If they are not, then there is no reasonable prospect of it coming back into use. If they are warned that they need to be marketing it, either they do or they don't. If they don't they are not in a good position to argue that they are about to do so, having already been given the opportunity and failed to take it - just like other empty homes owners.

If they state explicitly that they have bought to leave in order to benefit from increased property values, they will tie themselves in knots if they are in parts of London where prices are demonstrably declining.  Again, either they do market to stop their losses, or, if they do not want to crystallize their losses, then clearly they are not going to be able to make a case that there is a reasonable prospect of the dwelling coming back into use 'in the near future'.

Until these sorts of arguments are tested out in a Tribunal situation, we are not going to know. But buy-to-leave does not seem to me immune in principle from being tackled. In my reading of EDMO cases, historic inaction by owners constitutes the main evidence that a property is not going to come back into use in the near future against which any assertions to the contrary must carry limited weight.

The RPT can also use the Interim/Final structure as giving owners a fallback if they really do want to do something. In my understanding Interim EDMOs have often been successful in achieving outcomes without proceeding to a Final EDMO.

I´ve seen a decision based soley on what was presented at the tribunial. The LA were commended  on taking the action, but the Tribunial did not authorise the IEDMO on the grounds (based on recent (but very late in the whole process) activity on the owner´s part) that the dwelling may become occupied in the near future. The LA was reminded it could make another application. EDMO´s are difficult, I think the typical´buy to leave´ may be too difficult. I´d be happy to be wrong.

Pickles' changes have left us with anomalies though. All the PR was about properties needing to be 'nuisances' (in broad if not statutory terms). But the way they changed the legislation was completely different.

The changes did NOT introduce any new critieria around properties being nuisances, which would have been the obvious and easy thing to do. Instead they changed the procedural part of the legislation to say that councils had to supply such evidence as they had available (if any?) of any such nuisance issues - ditto support of the local community.  That is a completely different matter and one that leaves the substantive criteria intact.

The problem is that no one has yet attempted (as far as I know) EDMOs on non-nuisance buy-to-leave properties. Until they do, we are not going to know.

Even then, the outcome may not be definitive. Anecdotally, different RPTs have very different takes on EDMOs, with some being positive and some not. So it might depend which RPT considered the case - and it might need an appeal to a higher Tribunal to provide a more definitive ruling.

BTW use the Issues tag-cloud (under the Search menu) and select EDMO to see all our relevant documents.

I´ll not use, ´typical but to leave´. But lets say, a long term empty property vacant at least 2 years. It would attract premium rents on the open market. Are there any views on how, Section 134 (3) a) interests of the community and b) ...rights of  the Relevant Proprietor... could be viewed by a Tribunal?. In appications where the market  rent is low because of the condition of the dwelling at the time a management scheme is made it can be argued that authorising an order, is in the wider public interest and out weighs the relevant proprietors rights in that dwellings of this type will increase the supply of much needed housing in araes of high demand. Could the same argument be made for a dwelling that attracts premium rents and would therefore only benefit those that could afford premium rents?