The Empty Dwelling Management Order grants the local authority possession and the right to deal with vacant houses
Why have so many residents of Hong Kong acquired residential property in Britain? Of course, there are many reasons, not least of which is the opportunity for attractive capital gains, usually free of British tax. But there is another factor that to many landlords is almost as important: the comfort that comes from investing in a country with long established property laws and a liberal tax regime.
While it is true that the legislative and tax climate is appealing, two new laws - of which I suspect most Hong Kong investors are unaware - could give some property owners pause for thought.
Imagine a landlord who is intentionally keeping a house or flat unoccupied, perhaps because he or she intends to sell at some point over the next few months and does not consider it worthwhile installing a tenant for a relatively short period. In such a case, it is now conceivable that the property could be seized by the local authority, who could then either sell or let it.
Taking possession in this way may sound startlingly un-British but, on the face of it, that is what the law permits. The relevant measure is the Empty Dwelling Management Order, which came into force earlier this year as part of the 2004 Housing Act.
The order does not actually give the local authority ownership of the property, but it does grant it possession and the right to deal with it as it wishes. Surprisingly, a property does not have to be uninhabitable or boarded up to be affected. The fact that it has not been lived in for more than six months may be enough. There are some exceptions - if, for example, the property is normally the main residence of someone who has sound reasons for being absent, or if it is genuinely on the market for sale or let.
In the latter case, it would have to be offered at a realistic price. If none of the exceptions apply, the authority will ask the owners about their intentions. If officials are not satisfied, they may seek an order to allow them to bring the property back into use.