Government forcing landlords to house non-paying tenants for lengthy periods

by Dr Rosalind Beck

11:18 AM, 15th September 2020
About A week ago

Government forcing landlords to house non-paying tenants for lengthy periods

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Government forcing landlords to house non-paying tenants for lengthy periods

When Robert Jenrick made his shock announcement on the 21st of August of a new 6-month notice period in England (copying ‘socialist’ Wales) he further abrogated the state’s responsibility. How could it be right that private citizens are now made to house non-paying tenants whom they ordinarily would have been able to evict after ‘only’ losing about 7 months’ rent? As seen in the table below, these losses will now run to at least 14 months, but realistically for many landlords, the losses will be greater still.

As if this wasn’t bad enough, on the 10th of September this seemingly monthly attack on private landlords continued with an announcement of further delaying tactics in the possession process which will ratchet up landlords’ losses even higher: click here

This announcement – so far unremarked by the organisations representing landlords – of a new ‘review’ hearing which must be held before a ‘substantive hearing’ has legislated in at least another month of rent-free accommodation for the criminal element in tenants’ ranks.

The new likely timeline – with conservative estimates – is illustrated in the table below.

Average timeline and landlord losses pre- and post- the Government’s new ‘6-month notice period’ in possession cases. Average monthly rent (excluding London) of £800pm is assumed.

  Under previous 2-month notice period. Under new 6-month notice period. Running total of arrears when rent not being paid.
January 2020 1st January tenant doesn’t pay rent. 1st January tenant doesn’t pay rent £800
February 2020 1st February tenant doesn’t pay rent.  2nd February, landlord issues 2 months’ notice. 1st February tenant doesn’t pay rent.  2nd February landlord issues 6 months’ notice. £1,600
March 2020 WAIT WAIT £2,400
April 2020 3rd April: Tenant has not moved out. Landlord applies to court (£355 fee).  16th April: court sends letter saying court case will be 16th June. WAIT £3,200
May 2020 WAIT WAIT £4,000
June 2020 16th June: Judge issues 2 weeks’ notice to tenants (can be 4).

30th June: tenant still in situ. Landlord applies to bailiffs.

Appointment available for 30th July.

WAIT £4,800
July 2020 30th July: Bailiffs evict tenant. WAIT £5,600
August 2020 New tenant found and rent being paid 3rd August: tenant has not moved out. Landlord has to implement new protocol- or case will be thrown out. £6,400
September 2020 Rent being paid 3rd September: Landlord applies to the court (£355 fee) £7,200
October 2020 Rent being paid Delays due to court backlog mean earliest court date is 3 months from court letter (3rd October) £8,000
November 2020 Rent being paid WAIT £8,800
December 2020 Rent being paid WAIT £9,600
January 2021 Rent being paid 3rd January: Court case – new ‘review hearing.’ Case is automatically adjourned for at least 4 weeks.
February 2021 Rent being paid 3rd February: ‘substantive hearing’ held.  Tenant given further 2 weeks to vacate (is often 4). 17th February: Tenant not left. Earliest bailiff appointment is 2 months’ time. £10,400
March 2021 Rent being paid 17th March: Bailiff evicts tenant. £11,600
Total loss to landlord (usually unrecoverable) £5,600 arrears, plus other costs. £11,600 arrears, plus other costs.  

It will be interesting to see what is supposed to happen in the ‘review hearing.’ I am imagining proceedings something like:

Landlord: Hello.

Judge: Hello. What can I do for you?

Landlord: I don’t know. I just want my non-paying tenant out of my house.

Judge: Okay. Come back in 6 weeks. Case adjourned.

The Government stated that this entirely unnecessary stage must be inserted at least 4 weeks before the second hearing in a transparent and farcical delaying tactic to allegedly ‘protect renters’ on top of the 6-month rent-free period already gifted (we all know the second stage will take place possibly considerably later than 4 weeks after the ‘review’).

They also snuck in further delays stating evictions would not be enforced in local lockdown areas and that there would be ‘a truce’ (a strange military term) on enforcement ‘over Christmas;’  they later stated they won’t be enforced ‘in the run-up to and over Christmas,’ which could be a matter of weeks or months, depending on how it is interpreted.

Of course, the previous announcement dictated also that landlords must be fully cognizant of any effect of covid-19 on our tenants. Logically, however, people who renege on their tenancy agreements are not the type to help a landlord gather information for a court case in which the tenant faces eviction.

So when the landlord invariably fails to gather this knowledge, are they to then be penalized because the tenant has refused to cooperate? In any case, how and why are tenants’ experiences of covid-19 to be taken into account? Tenants have often in the past lost their jobs for any kind of reason and this didn’t mean that the landlord had to grant them more time rent-free in their property. It also didn’t mean that judges could prevent possession from taking place. The Government has given no explanation of the point of this charade.

What’s more, as landlords tend to be older than tenants, they are statistically more likely to have been severely affected health-wise by covid-19.  For example, they may have been seriously ill or lost their spouse or another elderly relative. At this difficult time for them, they may have had to also find the resources to subsidise their non-paying tenant and had the stress of having to attend court. They may be at their wit’s end like the 78-year old widow who faces losses of £57,000 because of her rogue tenant.   https://www.telegraph.co.uk/property/buy-to-let/rogue-tenant-has-cost-57k-eviction-ban-leaves-no-way/

However, the judge does not have to know about this as it is only the tenant who matters – and it is the responsibility of the landlord to have an in-depth knowledge that they can’t possibly obtain.

‘Fraud’ was also mentioned for the first time in the latest announcement as a special case for obtaining a swifter eviction, but I don’t think landlords should get too excited.  For example, arguably, non-payment of rent by ‘can pay, won’t pay’ tenants would fall into this category, whether they are employed or receive Housing Benefit intended for the rent and don’t pay it to the landlord.

Why are these tenants not prosecuted for fraud, either for misrepresenting themselves prior to gaining the tenancy as someone reliable who will pay or in the case of benefit recipients for having fraudulently obtained taxpayers’ money? Is this trickery and cheating not fraud?

Sub-letting is a further case in point.  For example, there was the recent report of the landlord who is so far £60,000 out of pocket while his non-paying tenants have raked in an estimated £75,000 by subletting his house; his losses – and their gains – are likely to multiply now, with no eviction insight. https://www.landlordzone.co.uk/news/exclusive-landlords-60000-loss-highlights-huge-problem-with-covid-evictions-ban/

Why has the Government not done one single, solitary thing for landlords in this position or even for justice’s sake, by outlawing these practices or at least clarifying that they will be explicitly included in its definition of ‘fraud?’ The answer is that there is now nothing separating the Government’s ideological view of landlords from that of the far left of the Labour Party and the misguided zealots at Shelter.

However, as it stands, there is no landlord body in the UK willing to take legal action against the Government for these invidious attacks.  This is in contrast to the USA for example, where landlords are at least trying to use legal means to fight back.   The flip side of Trump’s eviction ban: Landlords face big crunch

If we are to see any reversal of this war on landlords, we need to demand of our professional bodies that they immediately look into legal action.  If they don’t, and we continue to lie supine in the face of these constant attacks, it will just be misery heaped on misery for UK landlords for as far as the eye can see.


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Comments

WP

12:13 PM, 15th September 2020
About A week ago

Agree, agree agree!
Why aren't the professional bodies NOT taking this up on behalf of their clients (ALL of whom will be suffering directly or indirectly ) on this constant legal battering of Landlords?
Can't they all band together and form a challenge?

MoodyMolls

13:17 PM, 15th September 2020
About A week ago

Spot on article.
Unfortunately the landlord bodies don't have the stomach to fight the government, we need a proper fighting union.
I think every landlord should be legally made to pay say 100 per year for a fighting fund. Landlords are tight and don't stand together, look at raising the money for S24 so many did not contribute.
Of course government would never bring this in as it would be them we would be fighting.
But they are more than happy to tax us and bring in so much regs all at landlords expense.
Conservative government I don't think so they have lost their way

Luke P

13:21 PM, 15th September 2020
About A week ago

Reply to the comment left by WP at 15/09/2020 - 12:13
I'll tell you why...because I am absolutely convinced the NRLA are a Govt. stooge. Since the days of union strikes, Govt. will never allow the great unwashed masses to hold power against them. If LLs were to a industy body like the firearms owners of the US are the National Rifle Association, we'd be the most powerful people in the country, for everyone needs a roof over their heads and Govt. would have to jump to *our* tune (nothing-more-than-fair...i.e. pay your rent and be responsible for all arrears/damages).

The NRLA are very clever in providing a few forms and an advice line, which a lot of LLs love, whilst using their membership money effectively against them, if only by their inaction.

IMO the NRLA is first and foremost a business that will put profits ahead of the concerns of its membership. They don't want to risk a load of money on Judicial Review. Not least of all they're too scared to be locked out from Govt. talks -the scraps Govt. throw them occasionally- by speaking out.

The one thing I urge all LLs to do is DITCH YOUR NRLA MEMBERSHIP. Stop being lazy when it comes to forms and knowledge, for you are hurting yourself in the long-run!!

Gromit

14:34 PM, 15th September 2020
About A week ago

Landlords are their own worst enemy. The vast majority are apathetic and just shrug their shoulders each time the Government sticks another knife in. However, the lack of a militant Landlord association willing to take on the Government doesn't encourage Landlords to get organised and stand up for themselves.

Dr Rosalind Beck

16:56 PM, 15th September 2020
About A week ago

Landlord, Bansi Soni has explained the predicament she is now in:

'Ok So I have the tenant from hell. She hasn’t paid any rent for 5 months (totaling over £8k) and refuses to tell me what benefits she’s on etc. She says she doesn’t care if she gets a CCJ as she has bad credit anyway. She says it’s no skin off her nose and she’ll stay put till she’s thrown out. I offered to forgive her her rent arrears and return her full deposit if she leaves but she’s refused.'

Bansi goes on to say that she is unwell and on dialysis. At the
time of writing she had a fever of 40 degrees but instead of being able to sleep it off had to deal with all this.

Where is the Government's concern for landlords like Bansi who are ill like this and have to deal with these criminals, losing more money with every delay brought in by them? How can they call themselves Conservatives?

Chris @ Possession Friend

19:57 PM, 15th September 2020
About A week ago

Reply to the comment left by Dr Rosalind Beck at 15/09/2020 - 16:56Landlords have to have 'alternative' strategies ( legal ) to deal with defaulting tenants during the Governments sequestration of private rented property, off-loading housing welfare responsibility debt onto landlords.

Dr Rosalind Beck

20:44 PM, 15th September 2020
About A week ago

Experienced landlord, Neil Robb offers a word of warning to all English landlords and has given me permission to copy his words here. He advises we to look at the Scottish first tier tribunal system, where landlords don't need to use the courts to evict or deal with a housing matter. Instead they have to use this alternative method. As Neil says, it was sold to landlords as a much quicker and easier way to get property back.
Then the PRT private rental tenancy agreement came in. With this, one has to give the tenant 28 days notice if the contract is in the first six months and 84 days notice if it is over (plus three days to read it).
However, when you need to take a tenant to court for repossession, it is taking 6 to 8 months just to find out if you will get a hearing. Then the tenant can use any excuse to kick the case out. Many cases have gone over a year, never got anywhere near a hearing and the landlord has then had to re-start the process. In the meantime, as Neil says, 'the tenant takes the piss not paying rent and damaging the property.'
Also, if the landlord says they are selling and then for whatever reason doesn't, they are liable to pay the tenant 12 months' rent as compensation for an 'illegal eviction.'
He says that out of the 18 clauses one could use to end a tenancy only two were in landlords favour.
Neil has heard that there are now calls to introduce a similar system in England, which is why it is so important that those of us not in Scotland understand what is happening there.
For the tenant, it is a very different story. The tenant can move in Monday, give notice Tuesday and leave 28 days later with no penalty, completely leaving the landlord in the lurch - who may have turned out genuine long-term tenants.
This was pre Covid, so it will be a lot worse now.

Chris @ Possession Friend

21:11 PM, 15th September 2020
About A week ago

Reply to the comment left by Dr Rosalind Beck at 15/09/2020 - 20:44We have just completed a Possession in the Scottish tribunal and its worse than the English system ( if you thought that could be possible ! )
1) 3 Months rent arrears, and
2 ) 30 days notice, ( not 14 days )
3) When a Possession order is granted ( yes they adjourn cases which cause delays as well ) the tenant gets 30 days to Appeal, before the order takes effect ( Not 14 days as is sometimes the case in England )
4) I found the tribunal were Not robust with Tenants ' stories ' and a particularly Bad tenant that my client had, absolutely used and abused every step of the Tribunal process. As much as I could protest on behalf of the landlord, the tribunal seemed to want to give At LEAST, or more than 50% of lee-way to the tenant. If they thought that gave Tenants a sense of 'fairness in the legal process,' I don't know.
If the Tribunal is Scotlands idea of Justice, God help them.

steve p

21:59 PM, 15th September 2020
About A week ago

In the long run though Tenants will pay for these decisions.. Renting at the lower end to more risky tenants will die and those most vulnerable people will suffer.

TheBiggerPicture

9:57 AM, 16th September 2020
About A week ago

Reply to the comment left by WP at 15/09/2020 - 12:13
If there were enough funds, I would quit my job and take this on.

Sources indicate there are approx 2.5mill private landlords in the U.K
In one in 5 contributed £2 that would be 1 million pounds.
That should be enough to fund a campaign, a manager and 2 staff.
once organised there are plenty of think tanks and organisations that could be leveraged to give a fighting chance.

It is not only an inconvenience to landlords, but an injustice, and we have the moral advantage. Most of us wouldn't stand for the government stating people could just take funds out of our pockets. But that is just what is happening indirectly via our properties.
Even the normal system of eviction is very harsh on landlords. Other countries have a much quicker eviction regime. I am talking weeks, not months.

£2 each, for a chance of concessions or compensation, that's less than the price of a euromillions ticket.

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