Environmental health officers in South Tyneside have seized control of a rented property where the landlord tried to evict his tenants.
South Tyneside Council claimed it was the first local authority in England and Wales to use tough new powers to tackle rogue landlords.
The authority said the owner was trying to avoid complying with new regulations by reducing the number of tenants.
The landlord must improve conditions before the property is returned to him.
Worked quickly
A spokesman for South Tyneside Council said: "An owner is not allowed to evict tenants in order to reduce the number of occupants to avoid having to get relevant licences.
"The Homelessness Team alerted the Environmental Health Service to the situation - something they are required to do under the new Housing Act, which was introduced in April."
Councillor Michael Clare, lead member for environment, housing and transport, said: "Not only have environmental health officers worked quickly and efficiently but, as far as we know, this is the first such action in England.
"It proves that South Tyneside is prepared to use the latest laws to protect people." Under the interim management order, the council takes management control, but not ownership, of the dwelling.
It then works with the landlord to improve conditions for both the tenants and neighbours of the property.