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.
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Mark Alexander - Founder of Property118
9:49 AM, 20th September 2012, About 11 years ago
Could it be that the collapse of a few Social Landlords might alert the government to the issues associated with Universal Credit and policies of paying housing benefits directly to tenants perhaps? Casualties of war to prove a point??? RSL's will bail each other out to a point and DJ's will be aware of that. Might the DJ's even be happy to see a few cash strapped RSL's fail to prove their point and stop the potential catastrophe we all see coming our way in terms of UC?
10:54 AM, 20th September 2012, About 11 years ago
Blimey no Mark. Judges arent signed up members of the SWP or Class War. The ramifications would be catastrophic. Many RSLs (Now called PRPs) have 10s of thousands of properties. I dont think that is their strategy.
It may be that the problems created by not granting outright possession might force PRPs to lean on government but will government listen? Shapps certainly didnt and looking at Mark Prisk's CV he looks even less likely to listen to calls from the industry, despite his recent exhortations that he will
11:59 AM, 20th September 2012, About 11 years ago
I think the thing here is that the legal system for all it's faults has been a catalyst of change and thank god we do have an independent judiciary;....well allegedly!!?; but these decisions based on legal precedent wouid have massive implications.
I think it would be taking localism too far if justice was different dependent on what the the local DJ political persuasions were.
DJ are supposed to be above politics.
That is why most people respect and abide by what judges decide.
They are perceived to be impartial and assess things on the merits of the case.
To have such a fundamental attack on the principal of recoverable housing as laid down by statute just strikes at the whole issue of housing and the supply of such to the population in all it's guises.
It just doesn't make any sense.
I know judges are sometimes ridiculed for not being in touch with society but even I cannot believe that these DJ don't understand the possible ramifications of what they are doing.
Effectively they are defying the law.
This just seems contradictory to me.
I'm no legal expert; but surely it is recognised in society that we have to obey the law.
That is a fundamental social covenant which the majority of the population signs up for.
I am not denying the DJ have a point but surely making it a different way rather than impose impossible financial burdens on the providers of social and private rental housing should occur.
Yet again we who are providing a socially useful service are being penalised by authority.
Taken to the enth degree all PRS LL and social LL could give up and leave the economy in tatters.
The concept of paying your way and not causing the person you have't paid , for whatever reason to possibly lose their livelihood because you couldn't be bothered to or weren't able to pay is surely NOT the message we should be sending out to the feckless and also people in genuine financial difficulty.
There WILL always be people in financial difficulties; are we as LL; private and social supposed to cover their circumstances until they are able to cope.
NO I don't think so.
It is nothing personal; but I am NOT a charity., it's business.
Why should these DJ effectively regard and treat me as a charity.
The business models for housing in the UK in all its' guises are reliant on recept of rental income from whatever source.
To deny effective receipt of such rent undremines the whole business model.
And yet it seems these DJ are prepared to cause massive financial detriment to a LL who has had the temerity to invest in housing provision; with the govt seemingly just prepared to sit on the sidelines and watch the slow treain crash occur on their watch.
Do they have an comprehension over what they could be presiding over.
It would make them unelectable.
Perhaps that might concentrate their minds!!!!???
13:02 PM, 20th September 2012, About 11 years ago
16:13 PM, 20th September 2012, About 11 years ago
Ben this IS happening in the PRS - this was why I wrote this article http://www.property118.com/index.php/mary-latham-questions-landlords-rights-to-reposess/31629/
My question in the article was
“Why are landlords being denied our legal right to repossess a “dwelling house” Under Section 21 of the Housing Act 1988?”
Judges appear to be using a discretion that the law does not give them?
18:20 PM, 20th September 2012, About 11 years ago
From a legal perspective is there anything a LL can do to ensure that a DJ complies with the law and grants a possession order following successful serving of a Section 21 or 8.
Should the LL have a legal representative in maybe the form of a barrister.
Even at say £500 an hr it would be worthwhile to guarantee the DJ complies with the law.
It is a sorry state of affairs when we need legal representation to ensure a judge complies with the law.
I presume that DJ have been geting away with things to date as most LL don't expect to be denied possesssion and are somewhat flummoxed when the possession they had expected to be granted as a foregone conclusion is denied by the DJ.
Would a LL representing themselves argue the point with a DJ that if they refuse to grant possession they are breaking the law anf the LL will refer the matter to higher legal authority which could have severe ramifications for the DJ continued employment and on that basis he might like to reconsider the judgement in light of perhaps viewing the Housing Act relating tp Section 21 0r 8 as appropriate
This is what I will be doing shortly if I am denied possession or the RGI company is.
I'd like to see what a stupid DJ would do if the reality of his situation was pointed out.
Most would realise they have been sussed and comply and grant the posssession order.
We shall see.
Knowing how long it takes to get a court date I reckon early next year sometime which will mean £9000 of rent arrears by then.
0:46 AM, 21st September 2012, About 11 years ago
You would have to request an appeal and argue that the judge has no discretion in such cases to suspend but its a pain to have to do it every time. Social landlords often have several cases a day in court
19:51 PM, 22nd September 2012, About 11 years ago
Okay, this is very simple. District Judges MUST grant possession if the mandatory grounds for possession under Section 8 (2 months rent arrears), or a validly served Section 21 are established. - You can create free correctly completed Section 21's here; https://aqs.infusionsoft.com/go/NPGs21/NPGL36/
However, having presented possession claims for lenders and landlords and can say with certainty that District Judge's will try to grant suspended orders contract to the Housing Act - When I was employed as a lawyer, this was rare (they knew I was aware of the law). Now I'm out of the business and representing myself as a landlord - I'm perceived as being a lay person - and the approach is to try and play on my perceived ignorance. They will also do this with landlords and social housing staff.
Whenever faced with these try ons - I simply point out the Housing Act rules which offer no discretion, beyond extending the possession order to a maximum of 56 days. That does it. If I was ever to receive a suspended order - I would seek leave to appeal.
The best thing to do, would be to never await an order and then appeal - but to suggest to a Judge - "Sir, it is my clear understanding that there is no discretion to be applied in this case. If you are so minded as to make a suspended order, I would have to seek leave to appeal on this basis".
A fore warning will get the message across.