8:43 AM, 18th September 2012, About 11 years ago 18
This article is largely based on possession claims brought by social landlords but I ask you, the PRS landlord reader, to think about the import of what this might mean for possible future repossessions in an environment where I just read today, the amount of homeless families in B&B accommodation has risen 50% this year.
I spend a large portion of my working day in court dealing with possession claims. I also train housing officers on the county court eviction procedures so they can take action against their tenants for rent arrears and anti-social behaviour and minimise their chances of a wasted journey when their paperwork or procedures are ill drafted.
The feedback I get from course delegates right across the country is on the frustration they feel in knowing that their case is properly drafted but they still get a knock back from the courts on both possession and warrant applications when tenants default on the terms of the suspended possession order.
I have previously explained this away on individual judge’s eccentricities and to an extent this is true but what I am also noticing is a fairly consistent approach to possession applications in a way that I haven’t seen before.
My sister, who is a housing officer for a Hampshire based housing association told me recently of a case she inherited where the tenant had defaulted 26 times on the terms of a suspended possession order and yet the judge repeatedly refused to grant a warrant, saying that the landlords, as a socially responsible organisation had to find an alternative to throwing people out.
Her experiences were brought back to me last week when I got involved in a case of a housing association tenant who had £11,000 rent arrears. The information as it came to me was that a warrant had finally been issued because they had breached the terms of a suspended order set in April 2012.
My immediate thought was that with a rent of £411 a month there were clearly much more than 2 month’s arrears, so why did the judge suspend the order?
I phoned the housing officer to discuss and she said it is routine for them. Judges just will not grant outright possession in any cases, taking the view that as social landlords they had to find an alternative to repossession.
I asked if they had appealed against the judge’s flagrant disregard of their lack of discretion in Ground 8 claims where there are more than 2 months arrears, but the defeated HO said there was no point. They use ground 8 but only ever get Suspended Possession Orders.
For those of you who may not know (regular readers can skip this paragraph) Ground 8 is a ground that a landlord can use where there are more than 2 month’s rent arrears. If proven the judge has no discretion, they have to grant a possession order. Often a judge will adjourn where there are housing benefit problems to be sorted or other outstanding issues, giving the tenant a bit of time to get things sorted but they generally shouldn’t be granting Suspended Possession Orders.
On the feedback I am getting from housing organisations and trainees it seems to be becoming a growing trend. Being a seasoned housing observer I have to wonder why that is.
Back to my first paragraph.
Homelessness applications have risen 38% in the last year or so and B&B placements 50% this year alone. Judges don’t exist in a bubble. They know what is happening in housing. What I hear regularly when defending people in mortgage repossession cases is judges saying “We aren’t in the business of taking people’s homes away and if there is a chance of saving the home we must give it to them”. It’s becoming almost a script that I can’t help feeling they hone in their tea breaks together.
Is this thinking transferring to possession applications for social landlords? Could it also extend to PRS landlords if homelessness applications continue to rise? Are judges tougher on social landlords than PRS ones in this respect?
I don’t know the answer to this.
Applications for possession based on rent arrears are rising in the PRS, particularly in London where rents are now 70% of average take home pay (9 months ago I recall it was 60%) Many small buy to let amateurs don’t have the requisite cash flow to help them through difficult patches. Rent arrears means they can’t pay the mortgage, and if judges extend this view how will it affect the PRS and the housing stock that councils are increasingly coming to rely on?
Admittedly this is me thinking ahead, so don’t panic. It may be that DJs restrict their reluctance to grant outright possession solely to social landlords. Having said that, none but the most determined of self-interested parties would not consider how councils and housing association will cope if this grows.
When Universal credit comes in next year, part of the strategy is that housing benefit payments will go straight to landlords, as it does in the PRS right now, but social landlords can’t simply avoid benefit tenants like PRS landlords can.
This element of the scheme is currently being tested in pilot and pathfinder schemes in different areas and the government’s reported good news is that in week one there was an 80% success rate. Well whoopee do. My local council’s ALMO have a rent collection rate of 96%. Every 4% drop represents £1.5 million on their annual budget. An 80% collection rate would most probably bankrupt the organisation, as it would many others. If DJs continue to refuse to evict for rent arrears what will happen?
At the very least that loss of income would seriously hamper their ability to respond to new housing minister Mark Prisk’s war cry today that social landlords should start investing in PRS properties
Once again government just doesn’t seem to have thought this through and the district judges seem to be playing the wild card.
It’s anecdotal evidence at the moment but is becoming fairly consistent anecdotal evidence that I don’t think is being measured anywhere but front line housing workers see it all the time.
I don’t know any DJs on such a personal level to ask them what is going on but I would love to know.
Previous ArticleReaders advice request - cellar keeps filling up with water