A closure order is a court order which prevents anyone, including the owner or tenant, from residing or entering a property for between three and six months. The property will be boarded up by the police and entry without the police or court’s permission is a criminal offence. Such orders can obviously have financial consequences for property owners: boarding up costs, lost rent, court and legal fees etc. It is vital, therefore, that properties are actively managed and that landlords take timely action to stamp out anti–social uses of their premises.
There are three types of closure orders:
The closure orders are issued under the civil jurisdiction of the magistrates’ court and shared procedures largely apply to all three. The use of the first two types of closure order have been widely publicised as they deal generally with personal dwellings.
The third closure order, the brothel closure order, is less widely publicised, although in July 2013 it was reported that six flats in the Thames Valley area were closed using such an order. A brothel closure order is made pursuant to the Sexual Offences Act 2003 (the “2003 Act”) and is designed to tackle illegal commercially operated brothels. An order can be made where a specific prostitution offence (as defined in sections 47 to 53 of the 2003 Act) has been committed on the premises. The court must be satisfied that the making of an order is necessary to prevent the premises from being used in contravention of the 2003 Act and can be made in relation to either the whole or part of the premises, as is appropriate.
A landlord can minimise the potential financial and criminal risk it faces, particularly in respect of a brothel closure order, by taking some very simple practical steps:
Know the tenant: a landlord should take an active part in the management of its property. It should know its buildings and tenants and carry out regular checks. A managing agent can be employed to assist with this.
Issue proceedings without delay: where there is a concern or evidence that occupiers are using the premises for an illegal or immoral activity, the landlord should take immediate steps to require the occupier to desist or issue possession proceedings under section 8 of the Housing Act 1988.
Current address for service: a landlord should ensure that its address for service at the Land Registry is kept up to date, as a notice of a closure order (a “closure notice”) only gives 48 hours’ notice to the proprietor/occupier. This does not give a landlord much time to prepare a defence and they should seek an adjournment for the allowed 14–day period to better prepare for the hearing.
Assist the police: the closure notice gives details of the police officer dealing with the matter and a landlord is encouraged to enter into dialogue with the police and show that it will assist them with the prevention of the use of the property in contravention of the 2003 Act.
Comply with the order: if and when a closure order is made, the landlord should ensure that the premises affected by it are not entered or occupied until either the order expires or it is successfully discharged. The closure order can be discharged if it can be shown that it is no longer necessary. Evidence of the steps taken by the landlord to prevent the use of the property in contravention of the 2003 Act will be required and the landlord may additionally be asked to sign an undertaking to the court to take all such necessary steps. A note of caution here: the undertaking will usually apply for a 12–month period and a breach of the undertaking constitutes a criminal offence by the signatory. If the landlord is an overseas company, there is often a reluctance to discharge the order unless the company has a physical presence in England and Wales.
Seek compensation: compensation is available if financial loss is suffered as a result of a closure order, provided that the landlord can satisfy the court that it was not involved in the contravention of the 2003 Act.
Take care when collecting rent: care should be taken to ensure that rent is received from the named tenant and not from third parties. If rent is received from a tenant who has obtained the funds from participation in a criminal activity, the rent can amount to proceeds of crime as defined by the Proceeds of Crime Act 2002 (the “2002 Act”). Disclosure of such a suspicion should be reported to the authorities in order to obtain a defence against a 2002 Act offence and to minimise the risk of confiscation of monies received from tenants.
This article was published in Estates Gazette in May 2014.