Different types of Management Orders in a nutshell
Management orders are a legal device used to allow a council to take over the running of a property. The manner in which they are used depends on the situation in which the council applies.
Empty Dwelling Management Order
To reactivate vacant dwellings, the local housing authority or the local council can issue an empty dwelling management order.
It is usually applied to properties that have been vacant for some time but are in a reasonable condition. A news report from 2015 revealed that only one such order was issued in London in 2014, making them not the first choice since they are complicated and easily revoked.
Interim Management Order
Whilst they are still rare, but more common, we will now look into interim management orders. There are conditions that apply to IMO’s before they are issued.
Health and safety concern
It is necessary to make an IMO in order to protect the health, safety, or welfare of the occupants and/or adjacent occupiers and/or owners. It is important to note that evicting the occupiers can constitute a threat to their welfare if they are threatened to be evicted to avoid being required to be licensed.
IMOs may also be used in cases involving anti-social behaviour. An HMO can be enacted with this condition if the landlord is unable to evict a criminal gang or a troublesome tenant from the building. In such a case, neighbours are left in fear of their lives and possessions due to fear or inability to deliver the eviction notice or simply incapacity to serve the notice.
The failure to license a HMO (or house where selective licensing applies); there is no reasonable prospect that it will be licensed in the future.
Bare in mind that it is a criminal offence if you fail to license an HMO. To speak to someone about licensing, please speak to the Lofti team.
Un-expected disputes & IMOs
It’s possible that there is a legal dispute over the property, perhaps following the death of a loved one, and none of those with an interest want to do business with the situation.
There are times when there has been a breakdown in the family or the breakdown of a relationship and this can all be one of the main reasons for the order. It is illegal for the tenant or landlord to continue to letting a property despite being caught operating without a license. It is possible for the council to apply for an IMO.
A landlord faces a large financial risk when the council gains an IMO and takes over control because the landlord is unable to carry out the necessary evictions. Depending on their rental income, they may not be able to pay off their mortgage payments. A property manager, an agent, and contractors are likely to be paid by the council for their time and effort.
When the tribunal is able to gain confidence in the new license holder, the interim management order can be revoked and this lasts up to 12 months.
Final Management Order
In the event that a licence is not granted by the expiration date of an IMO, the local authority can issue a management order as a final measure. It is possible for the council to request the finalization of the initial IMO. As you may have guessed, this is a final management order. Houses not requiring any licensing can also receive FMOs when necessary
Whilst this article has not covered all the different management orders in depth, we would recommend visiting the government website to get further guidance on each management order to remain compliant with all relevant details. Lofti property management software suggests looking into this further when necessary.