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

by Dr Rosalind Beck

11:18 AM, 15th September 2020
About a month 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

David

11:45 AM, 19th September 2020
About a month ago

Reply to the comment left by neilt at 19/09/2020 - 11:24
seems as easy as pie. If as you suggest you have a guarantor and at the end of a 12 months SAT the tenant refuses to move and the guarantor has only agreed to cover that period, then what.
Does your friend have longer SATs.

NewYorkie

12:48 PM, 19th September 2020
About a month ago

I believe this signals the end of BTL for anyone other than larger Ltd companies. The fallout from this for private landlords will be immense, with mortgage and lease defaults, bankruptcy, illegal evictions, mental breakdown, illness, death and suicide. A landlord will find it impossible to cope and commit suicide, while the tenant will live for free in a property until such time as he/she can be evicted. At least the landlord will be 'free', but I envisage a huge knock-on with issues like probate. I hope the government is ready for the deluge!

Luke P

14:35 PM, 19th September 2020
About a month ago

Reply to the comment left by David at 19/09/2020 - 11:45
You have an agreement that lasts beyond the fixed term…or they don’t get the property.

David

14:40 PM, 19th September 2020
About a month ago

Reply to the comment left by Luke P at 19/09/2020 - 14:35
Thanks Luke, I wish my letting agents could come up with something positive like this, rather than negatives.

NewYorkie

16:26 PM, 19th September 2020
About a month ago

Reply to the comment left by at 16/09/2020 - 09:59
We are there to provide for others in return for a fair rent. We are not there to provide free accommodation to those who can pay but refuse to pay.

At some point, these tenants will get what they deserve. They think they are being clever, but through their greed, stupidity and ignorance they have lost sight of the fact they will need somewhere to live for the rest of their lives, and because most of these morons are typically young, that's an awful long time. They will never again be trusted by another landlord. There is no social housing for their likes (my sister is a London housing director and says she wouldn't take them on). Their credit rating will be trashed. They won't get a mortgage. They won't get a legitimate loan. They will be forced to live in sub-standard housing and paying extortionate rent, without the safety net of the law. They will be evicted with no consideration of the law, and can't expect to go through the eviction process. They will be dumped in the street, in the rain, with their belongings. That's what they deserve and they can thank Shelter and Generation Rent.

Gromit

16:36 PM, 19th September 2020
About a month ago

Reply to the comment left by NewYorkie at 19/09/2020 - 16:26
......but only if Landlords make the effort to blacklist them (using, say, https://www.landlord-referencing.co.uk), but how many will?

NewYorkie

16:50 PM, 19th September 2020
About a month ago

Reply to the comment left by Luke P at 19/09/2020 - 14:35
I don't understand what you are saying. Is this a previously unknown way around this mess?

NewYorkie

16:55 PM, 19th September 2020
About a month ago

Reply to the comment left by Gromit at 19/09/2020 - 16:36
I used to use it but it doesn't appear to exist any more. Landlords and agents must be far more rigorous in their referencing, especially with previous landlords' feedback and payment records. I would rather take a DWP tenant knowing I will get my rent paid! I have one who was laid off 4 months ago. She had never claimed UC and was really worried about not paying her rent. We helped her to claim and she hasn't missed her rent by as much as a day!

Luke P

17:51 PM, 19th September 2020
About a month ago

Reply to the comment left by NewYorkie at 19/09/2020 - 16:50
A guarantor’s liability doesn’t (have to) end after the fixed term.

Whiteskifreak Surrey

19:23 PM, 22nd September 2020
About 4 weeks ago

Reply to the comment left by at 16/09/2020 - 09:57
Happy to offer £5 if there is anybody who would take this government to court.

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