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

by Dr Rosalind Beck

11:18 AM, 15th September 2020
About 2 weeks 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

Chris @ Possession Friend

17:59 PM, 16th September 2020
About 2 weeks ago

Reply to the comment left by Cathie Hawkins at 16/09/2020 - 17:15
Since the lack of take-up, the stalwart originators of the Alliance I'm told have withdrawn and its been taken over by a money-making venture that has no interest in 'rocking boats'

Cathie Hawkins

18:07 PM, 16th September 2020
About 2 weeks ago

Reply to the comment left by Luke P at 16/09/2020 - 17:44
November 2019 last paid with another payment due this November

Chris @ Possession Friend

18:15 PM, 16th September 2020
About 2 weeks ago

Reply to the comment left by Cathie Hawkins at 16/09/2020 - 18:07
I know a few Landlords who've told me they've cancelled their Direct debit since the change of management.

TheBiggerPicture

18:53 PM, 16th September 2020
About 2 weeks ago

Reply to the comment left by David at 16/09/2020 - 15:28
Your MP has to tow the party line. The MP can't justify the policy, so points you all over the place and brushes you off.

How accurate is the survey 87% of Tennant's are paying? They didn't ask me.

Even so, that's at least 260k landlords not getting rent, and not putting money back into the economy.

What they are evading is landlords are not getting 87% of rent, some are getting NONE.
How are politicians helping these people.
They are NOT. They are making their situation worse!

If you are a sheep, going to the wolf to help is madness!

David

20:45 PM, 16th September 2020
About A week ago

Reply to the comment left by at 16/09/2020 - 18:53
At least by contacting my MP I am displaying my dissatisfaction so she can not say later, why didn't you contact me, we thought all landlords were satisfied with our action bla, bla, bla. The "independent" survey she quotes is as accurate as their CV19 statistics. Hamilton Fraser's survey shows only 49% of landlords have received full rent so I doubt any survey reveals the true answer.

Cathie Hawkins

21:18 PM, 16th September 2020
About A week ago

Reply to the comment left by Chris @ Possession Friend at 16/09/2020 - 18:15
Not just change of management but a complete abandonment of what we signed up and paid for. But coated in a nice gloss that hid that. No wonder landlords don’t trust or subscribe to ‘organisations’

wanda wang

21:30 PM, 17th September 2020
About A week ago

Reply to the comment left by Dr Rosalind Beck at 15/09/2020 - 16:56
Dr Rosalind Beck
I read your article, spot on; you have a clear understanding on how tough be the landlord now days. We need a body to fight for us. I think you are the right person can take this on. Why don’t you form some body take this further. Your article has attracted much discussion in the forum. A lot of people just said we need this or that but no one stands up.

The Secret Landlord

8:38 AM, 19th September 2020
About A week ago

I agree with you. I am so frustrated at the laws being stacked against landlords. We had a case where the tenant was not paying rent and was also anti-social. Court lost papers (get to the back of the queue), so then waited 4.5 months for hearing, then another 3 for bailiffs...and that was apparently a 'quick' section 8

Dr Rosalind Beck

9:16 AM, 19th September 2020
About A week ago

Reply to the comment left by The Secret Landlord at 19/09/2020 - 08:38
Yes, and Polly Neate says tenants are afraid of being evicted 'at the drop of a hat.' Usual sensationalist nonsense, completely misrepresenting what actually happens. As you say, Section 8 is supposed to be really quick but the court system has always allowed it to be abused, with spurious reasons given for adjournments.

What's more it was based on the assumption that 2 months arrears is a clear sign the tenant is no longer paying and 2 months was seen as serious enough arrears to permit action. This has increased overnight to a minimum of 12 months arrears being considered serious. No explanation has been given of why or how this amount of arrears has been decided upon. Do they think all landlords have that money in the bank and that if they do have such savings they should use them up on subsidising their tenants, even if many of the latter are effectively criminals, guilty of fraud or theft as far as the landlord is concerned?

NEIL T

11:24 AM, 19th September 2020
About A week ago

A number of interesting comments here, unfortunately, none showing a chink of light at the end of the tunnel.
After 45 years as a LL and now in my 70's, I fortuitously sold off all but one of my domestic lets. I now own commercial property of which 10% are not paying but still busy trading! They'll be immediately repossessed at the end of the moratorium.
Looking forward. My business associate has over ninety lets and everyone has a guarantor! He's laughing.
So, suggestion number 1. Always demand a guarantor.
2. Spend your government Business Loan on making your property the most desirable in the street, and then offer it at slightly under market rent. Prospective tenants will be queuing up - with their guarantors.
3. Defund the Alliance (as well as the BBC) and let them know why. You don't need them and their forms; there are plenty of places on the net that supply all you need. Then simply wrap them all up in one pdf file; How to Let, gas/electrical certs et al.
I look forward to any helpful suggestions making up 4, 5, 6 and more, that you may have. You're never too old to learn! God bless.

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