Problems with possession proceedings

One of the complaints about landlords, for example from tenant organisations, is that it is far too easy for them to evict tenants. And it is true that section 21 of the Housing Act 1988 does make it possible for a perfectly satisfactory tenant to be evicted on a whim.

However, I did possession proceedings work for over 20 years and my experience is that few landlords actually want to evict their tenants. The most common reason, by far, for doing so is that the tenants are not paying their rent.

Other reasons include:

• Tenants committing 'anti-social behaviour';

• Landlords wanting to sell up; and

• Tenants asking their landlords if they can be evicted so that they can get a 'council house' (this is more common than many people realise).

However, rent arrears is the big one.

Issues with rent arrears cases

Landlords are placed in a very difficult position.
In most situations in life where someone is not paying, their ability to use or access this thing is taken away. For example, diners who don't pay their restaurant bill are banned from the restaurant, shoplifters are prosecuted, and people who don't pay their phone or electricity bills are cut off.

However, if a tenant doesn't pay their rent, the hapless landlord is forced to let them stay there, effectively rent free, until they can get the tenant evicted through the courts, which can take a very long time. One landlord has just told me he currently has two section 21 claims going through the courts - one took 12 months to complete and the other is unresolved after nine months. That's a long time to be without rent.

During all this time, the landlord still has to pay their own outgoings on the property, such as mortgage, insurance, and maintenance costs, with no income to pay it from. Many people, including many tenants, think that this doesn't matter as landlords are 'rich' and so, by implication, it's all right if they don't get paid. However, although they are unlikely to starve, most landlords wouldn't put themselves in the 'rich' category. Indeed, for some of them the property may be their only asset - for example, for pensioners who have invested in buy-to-let properties instead of a normal pension.

The question is, is it right and fair that ordinary individuals should be forced to house people who have no intention of ever paying their contractual rent, for long periods of time, free of charge?

Local authority problem

If a tenant is unable to pay their rent - for example, if they have lost their job, or split up with their partner so that there is just one income rather than two - the standard advice is for them to go to the homelessness department of their local authority. If the tenant is pregnant or has young children, then, if they are at risk of being made homeless (for example, if a section 21 notice has been served on them), they are deemed to be in priority need and eligible to be re-housed by the council.

But, this is only unless they have made themselves 'voluntarily homeless' by moving out before they have to; technically, they are legally entitled to stay in their property until evicted by the bailiffs. So, the normal advice from the homelessness officer is to sit tight until the bailiffs come round. The result is:

• The landlord loses a lot of money and has to go to all the bother and expense of bringing court proceedings; and

• The tenant is at risk of having a county court judgment made against them for rent arrears, which will affect their credit rating.

This is bad news all round, with the tenant forced to stay and rack up a rent arrears bill when they would rather move out.

There has been a lot of criticism of this standard advice from councils, and I understand that councils have been asked to stop. However, the councils themselves are in a difficult position. In many cases they simply don't have spare properties available to offer to tenants in priority need. So, all they can do is put off the evil day as long as possible by telling the tenant to stay put.

This is a problem that is not going to go away until the supply of available homes increases, which does not look as if it is going to happen any time soon. Even if the planning permission and funding to build is in place, most builders want to build high-value properties (often destined for foreign investors) where they will get a higher return rather than cheap family homes for benefit tenants. There is a lot of criticism of this, but builders are businesses and naturally want to make a profit.

The best solution we ever had for housing people unable to afford standard rents was to provide 'council housing'. However, social landlords are now being forced to sell off their stock at discounted 'right to buy' rates and are discouraged from building new properties. Incidentally, we are told that some 30 to 40 per cent of right to buy properties eventually end up in the hands of buy-to-let landlords and are then rented out to people who would formerly have rented the same property from the council, but at a considerably higher rent - which we all end up paying for via housing benefit.

Problem of delay

Returning to the question of court proceedings - why does it all take so long? One reason is that landlords make mistakes with their paperwork. This is an inevitable result of the unnecessarily complicated landlord and tenant legal system, particularly with regard to section 21 claims. This does no one any good: it wastes court time, results in big losses in court fees and lost rent to landlords, and also causes a lot of stress and worry for tenants, who may be told by councils (seeking to put off having to re-house them) to challenge the claim and put in a defence.

But not all delays are down to landlord error. The court system is coming apart at the seams:

• More and more courts are being closed down, resulting in increased pressure on those remaining;

• Judges' time is often taken up with dealing with litigants in person who would previously have been represented under legal aid, leaving less time for other work; and

• Staff shortages and lack of training result in increased inefficiency and mistakes by court staff under constant pressure.

Years ago it was possible to telephone the court and speak to someone to resolve a problem. Now you are lucky if anyone answers the phone at all. Paul Shamplina of Landlord Action, who specialises in landlord eviction work, tells me he has to employ a special staff member just to ring up the courts.

The delays also extend to enforcement of possession orders. Tenants are entitled to remain until the bailiff is at the door and many local authorities will only re-house tenants when the bailiff's appointment is imminent. But in busy courts this can take eight weeks or more. Until recently, many landlords were paying extra to use sheriff's officers (or High Court enforcement officers). However, it now appears from the Nearly Legal website that many sheriffs were using a transfer procedure reserved for claims against trespassers. A practice direction is to be published making it clear that this must stop.

I am not condoning using an incorrect procedure. However, the effect of this is that many landlords, who have obtained a possession order in the proper way, will be forced to continue to house their tenants free of charge for a further two months or so, with no way of speeding up the process.

Advice for readers

What should readers take away from all this?

• Warn landlord clients that this problem may happen;

• Advise clients to be careful with their paperwork to avoid unnecessary delay if eviction proves necessary; and

• Finally, impress on them the critical importance of choosing good tenants in the first place so the problems that lead to eviction are less likely to arise.

 

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