Housing Bill

House of Commons

Session 2003 - 04
Internet Publications
Other Bills before Parliament

Housing Bill

Housing Bill
Part 4 — Additional control provisions in relation to residential accommodation
74

Interim management orders: variation and revocation
105
Variation of interim management orders
(1)
The local housing authority may vary an interim management order if they
consider it appropriate to do so.
(2)
A variation does not come into force until such time, if any, as is the operative
5
time for the purposes of this subsection under paragraph 31 of Schedule 6 (time
when period for appealing expires without an appeal being made or when
decision to vary is confirmed on appeal).
(3)
The power to vary an order under this section is exercisable by the authority
either—
10
(a)
on an application made by a relevant person, or
(b)
on the authority’s own initiative.
(4)
In this section “relevant person” means—
(a)
any person who has an estate or interest in the house or part of it (but
is not a tenant under a lease with an unexpired term of 3 years or less),
15
or
(b)
any other person who (but for the order) would be a person managing
or having control of the house or part of it.
106
Revocation of interim management orders
(1)
The local housing authority may revoke an interim management order in the
20
following cases—
(a)
if the order was made under section 97(2) or (3) and the house has
ceased to be an HMO to which Part 2 applies or a Part 3 house (as the
case may be);
(b)
if the order was made under section 97(2) or (3) and a licence granted
25
by them in respect of the house is due to come into force under Part 2
or Part 3 on the revocation of the order;
(c)
if a final management order has been made by them in respect of the
house so as to replace the order;
(d)
if in any other circumstances the authority consider it appropriate to
30
revoke the order.
(2)
A revocation does not come into force until such time, if any, as is the operative
time for the purposes of this subsection under paragraph 31 of Schedule 6 (time
when period for appealing expires without an appeal being made or when
decision to revoke is confirmed on appeal).
35
(3)
The power to revoke an order under this section is exercisable by the authority
either—
(a)
on an application made by a relevant person, or
(b)
on the authority’s own initiative.
(4)
In this section “relevant person” means—
40
(a)
any person who has an estate or interest in the house or part of it (but
is not a tenant under a lease with an unexpired term of 3 years or less),
or
(b)
any other person who (but for the order) would be a person managing
or having control of the house or part of it.
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Housing Bill
Part 4 — Additional control provisions in relation to residential accommodation
75

Final management orders: making and operation of orders
107
Making of final management orders
(1)
A local housing authority who have made an interim management order in
respect of a house under section 97 (“the IMO”)—
(a)
have a duty to make a final management order in respect of the house
5
in a case within subsection (2), and
(b)
have power to make such an order in a case within subsection (3).
(2)
The authority must make a final management order so as to replace the IMO as
from its expiry date if—
(a)
on that date the house would be required to be licensed under Part 2 or
10
3 of this Act (see section 60(1) or 82(1)), and
(b)
the authority consider that they are unable to grant a licence under Part
2 or 3 in respect of the house that would replace the IMO as from that
date.
(3)
The authority may make a final management order so as to replace the IMO as
15
from its expiry date if—
(a)
on that date the house will be an HMO other than one to which Part 2
applies, and
(b)
the authority consider that making the final management order is
necessary for the purpose of protecting, on a long-term basis, the
20
health, safety or welfare of persons occupying the house, or persons
occupying or having an estate or interest in any premises in the vicinity.
(4)
A local housing authority who have made a final management order in respect
of a house under this section (“the existing order”)—
(a)
have a duty to make a final management order in respect of the house
25
in a case within subsection (5), and
(b)
have power to make such an order in a case within subsection (6).
(5)
The authority must make a new final management order so as to replace the
existing order as from its expiry date if—
(a)
on that date the condition in subsection (2)(a) will be satisfied in
30
relation to the house, and
(b)
the authority consider that they are unable to grant a licence under Part
2 or 3 in respect of the house that would replace the existing order as
from that date.
(6)
The authority may make a new final management order so as to replace the
35
existing order as from its expiry date if—
(a)
on that date the condition in subsection (3)(a) will be satisfied in
relation to the house, and
(b)
the authority consider that making the new order is necessary for the
purpose of protecting, on a long-term basis, the health, safety or welfare
40
of persons within subsection (3)(b).
(7)
The authority may make a final management order which is expressed not to
apply to a part of the house that is occupied by a person who has an estate or
interest in the whole of the house.

In relation to such an order, a reference in this Part to “the house” does not
45
include the part so excluded (unless the context requires otherwise, such as
where the reference is to the house as an HMO or a Part 3 house).

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Part 4 — Additional control provisions in relation to residential accommodation
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(8)
In this section “expiry date”, in relation to an interim or final management
order, means—
(a)
where the order is revoked, the date as from which it is revoked, and
(b)
otherwise the date on which the order ceases to have effect under
section 100 or 108;
5

and nothing in this section applies in relation to an interim or final
management order which has been revoked on an appeal under Part 3 of
Schedule 6.
108
Operation of final management orders
(1)
This section deals with the time when a final management order comes into
10
force or ceases to have effect.
(2)
The order does not come into force until such time (if any) as is the operative
time for the purposes of this subsection under paragraph 27 of Schedule 6 (time
when period for appealing expires without an appeal being made or when
order is confirmed on appeal).
15
(3)
The order ceases to have effect at the end of the period of 5 years beginning
with the date on which it comes into force, unless it ceases to have effect at
some other time as mentioned below.
(4)
If the order provides that it is to cease to have effect on a date falling before the
end of that period, it accordingly ceases to have effect on that date.
20
(5)
Subsections (6) and (7) apply where—
(a)
a new final management order (“the new order”) has been made so as
to replace the order (“the existing order”), but
(b)
the new order has not come into force because of an appeal to a
residential property tribunal under paragraph 24 of Schedule 6 against
25
the making of that order.
(6)
If—
(a)
the house would (but for the existing order being in force) be required
to be licensed under Part 2 or 3 of this Act (see section 60(1) or 82(1)),
and
30
(b)
the date on which—
(i)
the new order, or
(ii)
any licence under Part 2 or 3, or
(iii)
a temporary exemption notice under section 61 or 83,

comes into force in relation to the house (or part of it) following the
35
disposal of the appeal is later than the date on which the existing order
would cease to have effect apart from this subsection,

the existing order continues in force until that later date.
(7)
If—
(a)
the house is an HMO other than one to which Part 2 of this Act applies,
40
and
(b)
on the application of the authority, the tribunal makes an order
providing for the existing order to continue in force, pending the
disposal of the appeal, until a date later than that on which it would
cease to have effect apart from this subsection,
45

the existing order accordingly continues in force until that later date.

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Part 4 — Additional control provisions in relation to residential accommodation
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(8)
This section has effect subject to sections 113 and 114 (variation or revocation
of orders) and to the power of revocation exercisable by a residential property
tribunal on an appeal made under paragraph 24 or 28 of Schedule 6.
109
Local housing authority’s duties once final management order in force
(1)
A local housing authority who have made a final management order in respect
5
of a house must comply with the following provisions once the order has come
into force.
(2)
The local housing authority must take such steps as they consider appropriate
with a view to the proper management of the house in accordance with the
management scheme contained in the order (see section 112).
10
(3)
The local housing authority must from time to time review—
(a)
the operation of the order and in particular the management scheme
contained in it, and
(b)
whether keeping the order in force in relation to the house (with or
without making any variations under section 113) is the best alternative
15
available to them.
(4)
If on a review the authority consider that any variations should be made under
section 113, they must proceed to make those variations.
(5)
If on a review the authority consider that either—
(a)
granting a licence under Part 2 or 3 in respect of the house, or
20
(b)
revoking the order under section 114 and taking no further action,

is the best alternative available to them, the authority must grant such a licence
or revoke the order (as the case may be).
(6)
For the avoidance of doubt, the authority’s duty under subsection (2) includes
taking such steps as are necessary to ensure that, while the order is in force,
25
reasonable provision is made for insurance of the house against destruction or
damage by fire or other causes.
110
General effect of final management orders
(1)
This section applies while a final management order is in force in relation to a
house.
30
(2)
The rights and powers conferred by subsection (3) are exercisable by the
authority in performing their duty under section 109(2) in respect of the house.
(3)
The authority—
(a)
have the right to possession of the house (subject to the rights of
existing occupiers preserved by section 116(2));
35
(b)
have the right to do (and authorise a manager or other person to do) in
relation to the house anything which a person having an estate or
interest in the house would (but for the order) be entitled to do;
(c)
may create one or more of the following—
(i)
an interest in the house which, as far as possible, has all the
40
incidents of a leasehold, or
(ii)
a right in the nature of a licence to occupy part of the house.
(4)
The powers of the authority under subsection (3)(c) are restricted as follows—

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Part 4 — Additional control provisions in relation to residential accommodation
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(a)
they may not create any interest or right in the nature of a lease or
licence—
(i)
which is for a fixed term expiring after the date on which the
order is due to expire, or
(ii)
(subject to paragraph (b)) which is terminable by notice to quit,
5
or an equivalent notice, of more than 4 weeks,

unless consent in writing has been given by the person who would (but
for the order) have power to create the lease or licence in question;
(b)
they may create an interest in the nature of an assured shorthold
tenancy without any such consent so long as it is created before the
10
beginning of the period of 6 months that ends with the date on which
the order is due to expire.
(5)
The authority—
(a)
do not under this section acquire any estate or interest in the house, and
(b)
accordingly are not entitled by virtue of this section to sell, lease, charge
15
or make any other disposition of any such estate or interest;

but, where the immediate landlord of the house or part of it (within the
meaning of section 111) is a lessee under a lease of the house or part, the
authority is to be treated (subject to paragraph (a)) as if they were the lessee
instead.
20
(6)
Any enactment or rule of law relating to landlords and tenants or leases applies
in relation to—
(a)
an interest created by the authority under subsection (3)(c),
(b)
a lease in relation to which the authority are to be treated as the lessee
under subsection (5), or
25
(c)
a lease to which the authority become a party under section 116(3),

as if the authority were the legal owner of the premises (but this is subject to
section 116(5) to (7)).
(7)
None of the following, namely—
(a)
the authority, or
30
(b)
any person authorised under subsection (3)(b),

is liable to any person having an estate or interest in the house for anything
done or omitted to be done in the performance (or intended performance) of
the authority’s duty under section 109(2) unless the act or omission is due to
the negligence of the authority or any such person.
35
(8)
References in any enactment to housing accommodation provided or managed
by a local housing authority do not include a house in relation to which a final
management order is in force.
(9)
A final management order which has come into force is a local land charge.
(10)
In this section “enactment” includes an enactment comprised in subordinate
40
legislation (within the meaning of the Interpretation Act 1978 (c. 30)).
111
General effect of final management orders: immediate landlords, mortgagees
etc.
(1)
This section applies in relation to—
(a)
immediate landlords, and
45
(b)
other persons with an estate or interest in the house,

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while a final management order is in force in relation to a house.
(2)
A person who is an immediate landlord of the house or a part of it—
(a)
is not entitled to receive—
(i)
any rents or other payments from persons occupying the house
or part which are payable to the local housing authority by
5
virtue of section 116(3), or
(ii)
any rents or other payments from persons occupying the house
or part which are payable to the authority by virtue of any
interest or right created by them under section 110(3)(c),
(b)
may not exercise any rights or powers with respect to the management
10
of the house or part; and
(c)
may not create any of the following—
(i)
any leasehold interest in the house or part (other than a lease of
a reversion), or
(ii)
any licence or other right to occupy it.
15
(3)
However (subject to subsection (2)(c)) nothing in section 110 or this section
affects the ability of a person having an estate or interest in the house to make
any disposition of that estate or interest.
(4)
Nothing in section 110 or this section affects—
(a)
the validity of any mortgage relating to the house or any rights or
20
remedies available to the mortgagee under such a mortgage, or
(b)
the validity of any lease of the house or part of it under which the
immediate landlord is a lessee, or any superior lease, or (subject to
section 110(5)) any rights or remedies available to the lessor under such
a lease;
25

and in proceedings for the enforcement of any such rights or remedies the
court may make such order as it thinks fit as regards the operation of the final
management order (including an order quashing it).
(5)
For the purposes of this Part, as it applies in relation to a final management
order, a person is an “immediate landlord” of the house or a part of it if—
30
(a)
he is an owner or lessee of the house or part, and
(b)
(but for the order) he would be entitled to receive the rents or other
payments from persons occupying the house or part which are payable
to the authority by virtue of section 116(3).
112
Management scheme and accounts
35
(1)
A final management order must contain a management scheme.
(2)
A “management scheme” is a scheme setting out how the local housing
authority are to carry out their duty under section 109(2) as respects the
management of the house.
(3)
A management scheme is to be divided into two parts.
40
(4)
Part 1 of the scheme is to contain a plan giving details of the way in which the
authority propose to manage the house, which must (in particular) include—
(a)
details of any works that the authority intend to carry out in connection
with the house;
(b)
an estimate of the capital and other expenditure to be incurred by the
45
authority in respect of the house while the order is in force;

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(c)
the amount of rent or other payments that the authority will seek to
obtain having regard to the condition or expected condition of the
house at any time while the order is in force;
(d)
provision as to the payment by the authority to a relevant landlord,
from time to time, of amounts of rent or other payments that remain
5
after the deduction of relevant expenditure;
(e)
as to the manner in which the authority are to pay to a relevant
landlord, on the termination of the final management order, any
amounts of rent or other payments that remain after the deduction of
relevant expenditure (as mentioned in section 120(4)).
10
(5)
Part 1 of the scheme may also state—
(a)
the authority’s intentions as regards the use of rent or other payments
to meet relevant expenditure;
(b)
the authority intentions as regards the payment to a relevant landlord
(where appropriate) of interest on amounts within subsection (4)(c) and
15
(d);
(c)
that section 120(2) is not to apply in respect of an interim management
order that immediately preceded the final management order, and that
instead the authority intend to use any balance such as is mentioned in
that subsection to meet relevant expenditure incurred during the
20
currency of the final management order;
(d)
the authority’s intentions as regards the use of rent or other payments
collected or recovered during the currency of the final management
order to meet any deficit such as is mentioned in section 120(3) in
respect of an interim management order that immediately preceded the
25
final management order;
(e)
the authority’s intentions as regards the recovery from a relevant
landlord, with or without interest, of any amount of relevant
expenditure that cannot be reimbursed out of the total amount of rent
or other payments.
30
(6)
Part 2 of the scheme is to describe in general terms how the authority intend to
address the matters which caused them to make the final management order
and may, for example, include—
(a)
descriptions of any steps that the authority intend to take to require
persons occupying the house to comply with their obligations under
35
any lease or licence or under the general law;
(b)
descriptions of any repairs that are needed to the property and an
explanation as to why those repairs are necessary.
(7)
The authority must—
(a)
keep full accounts of their income and expenditure in respect of the
40
house; and
(b)
afford to each relevant landlord, and to any other person who has an
estate or interest in the house, all reasonable facilities for inspecting,
taking copies of and verifying those accounts.
(8)
In this section—
45

“relevant expenditure” means expenditure reasonably incurred by the
authority in connection with performing their duties under section
109(2) in respect of the house (including any reasonable administrative
costs and any premiums paid for insurance of the premises);