The Tynwald Commissioner for Administration says it's not his place to say whether it would be better to demolish the Castletown Golf Links Hotel.
Advocate Paul Beckett's report into the row between a developer, local residents and Malew Commissioners will be laid before Tynwald in December.
Langness Golf Course Limited, which bought the hotel in 2011, complained that the local authority had failed in its duties because it hadn't ordered the building demolished.
However, Mr Beckett said that decision wasn't unreasonable - but said Malew Commissioners needed to be more transparent.
Well-known farm in the west up for sale
Pet foodbank needs your help!
How much cash can government raise in 10 days, asks MHK
LegCo considers meeting on a different day
Extra promenade bus facilities would cost estimated £735k
Medieval cross returned home to Royal Chapel
Arbory MHKs in "parasite politicians" spat
Tyson Fury's boxing glove sold for £7k in charity auction