Case Study 1: Legislation: Building Act 1984 & Enforced Sales Procedure

Radio Interview

Legislation

Section 78: Building Act 1984 – Dangerous Buildings – Emergency Measures

Recovery Method

Enforced Sales Procedure: Section 103 Law & Property Act 1925

Background

The property at 77 Eastern Esplanade has been a key target of Thanet Borough Council's empty properties campaign over the last few years.
 
After the owner died in 1981 the four storey Victorian building, which is divided into three two bedroom flats and a one bedroom flat, started to fall into serious disrepair and was finally vacated in 2003.  The property has been subject of repeated vandalism and has been the regularly squatted in.
 
The Council then became involved with the building when it was classed as a dangerous structure, under Section 78, Building Act 1984.  If it appears to the Local Authority that:
 
(a)     a building or structure, or part of a building or structure, is in such a state, or is used to carry such loads, as to be dangerous; and
 
(b) immediate action should be taken to remove the danger.
 
They may take such steps as may be necessary for that purpose.
 
Consequently, over a number of years two chimney stacks were removed, the property was boarded up and protective scaffolding put up by the Council's Building Control team to remove the danger to the public.
 
After the previous owner died, there were difficulties in establishing the ownership of the property.  The owner’s estate was left to a range of beneficiaries in Saudi Arabia.  Consequently, the Solicitor acting for the estate could not sell the property on the open market, as the ownership of the property could not be fully established.
 
The condition of the property was such that, if significant and substantial remedial works were not carried out, there was a very real concern that the property would deteriorate to such a point that it was beyond economical repair and demolition would have to be considered.

Enforced Sales Procedure

Where there is a debt to the Council, created as a result of the Council undertaking works in default, as in this case, the Council can use the Law & Property Act 1925 (Power of Sale), to recover the debt.
 
The Law of Property Act 1925, states that a Local Authority with a debt on a property can, under certain circumstances, register the debt as a first charge with the District Land Registry.  This would even take precedence over a mortgage, if there was any.
 
Once registered, the Council can then ask for the debt to be paid in full.  Where the Owner fails to pay the debt, the Council can enforce the sale of the property, just like a mortgagor in possession.
 
The property was sold at market value to one of the Council's preferred affordable housing partners, the Town and Country Housing Group.  They have fully refurbished the property to a very high standard and have created four, one and two bedroom apartments, which were offered on a shared ownership basis.
 
This allows people on a low income to own part of the equity of the property and acquire more at a later stage when they can afford to, thereby helping them onto the property ladder.  They pay the rent on the share of the property they do not own. All the apartments have subsequently been sold to local people.
 
The Council has recovered their reasonable costs out of the proceeds from the sale and the rest of the monies will be held in trust for the Owner.  Once the ownership of the property has been resolved, the funds will be transferred to the owner.