New law on abandonment of residential property 06/04/18

New law on abandonment of residential property 06/04/18

10:42 AM, 5th April 2018, About 3 years ago 16

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Below is a summary of a larger detailed explanation of this complex piece of legislation, due to come into force tomorrow!

I thought it would be of interest to Property118 readers.

“The Housing and Planning Act, 2016  Part 3 Chapters 57 – 63 set a legislative, if not complex process for recovery of a property by a landlord where a tenant has abandoned it without notifying the end of a tenancy.

This can be time consuming, cause financial expense and delays to a landlord, but also, often missed is the lost opportunity to re-let that property to numerous other prospective tenants on an increasing waiting list for dwindling property stock.

The reason the legislation was brought by the government was to put some legal framework around what was a fraught process for landlords in trying to take back their properties where a [genuine] belief they had been abandoned, without  falling foul of illegal eviction claims.

Whatever the intention, the resultant legislation has ended up of practically no use to landlords ( and those tenants that might have taken up possession of those properties at an earlier point. – Why of little use ?

Because the opposition to the bill ( see Parliamentary debate where some M.P’s had choice opinions on landlords – ) resulted in such amendments and additional provisions that Housing Barristers describe it as ‘incredibly stringent’ and ‘fiendishly complex’ Another opines, Unless your very very confident, don’t even bother.

So why is this legislation as much use as a chocolate tea-pot ?

Because there are three notices that have to be served in a very specific manner That is to every, email address and postal address for any person given previously by the tenant as a means of contact. The Notices must contain certain information ( which has not been set out by parliament in a prescribed format )  If that wasn’t complex enough, there are set timescales that the 3 notices must be served, the second only after 8 weeks rent is outstanding.

If there is any contact by the tenant, or any rent paid at any stage between the 1st and 3rd notice, this renders the process invalid.

For a detailed description of the process, copies of the 3 notices and a you tube link to the timescales explanation, see www.PossessionFriend.uk/abandonment”



Comments

by Giles Peaker

12:03 PM, 16th April 2018, About 3 years ago

Reply to the comment left by Robert Mellors at 15/04/2018 - 11:05
Robert - as I said, following this process would mean that the landlord would have evidence in support of their belief that the property had been abandoned being a reasonable belief. There is no particular magic in the process though, not until it is in force. I have no idea why MHCLG have not brought it into force yet.

A formal abandonment process is a good idea. But it does have to have precautions built in. Previous commenters expressed surprise that any payment to rent during this period would void the process - well of course it would, as it would mean the property was not abandoned!

Hence the caveats in the process, because otherwise people mistake it for an easy way to take back the property where there are rent arrears, and/or the tenant is away, but there has been no actual abandonment.

Hence also the time scales - because a tenant away on a month's holiday, say, is not abandonment.

Why this is languishing on the statute book without being brought into force, I have no idea. That is up to the government.

by Chris @ Possession Friend

0:20 AM, 18th April 2018, About 3 years ago

Reply to the comment left by Robert Mellors at 15/04/2018 - 11:05
Quite right Rob,
Have you seen my response to Housing Ombudsman consultation on http://www.PossessionFriend.uk/housing-ombudsman where I quote approximately 32,250 tenants could be housed each year in the time spent by landlords awaiting legal Possession proceedings. This is 'lost' on the government and 'other' organisations who moan about housing provision.

by Robert Mellors

10:56 AM, 18th April 2018, About 3 years ago

Reply to the comment left by Giles Peaker at 16/04/2018 - 12:03
Hi Giles

Thank you for your response and clarification. Just one point though..... you say that payment of rent shows that the property has not been abandoned, and I would agree with that statement in cases where the tenant is paying the rent themselves, i.e. from their own bank account (or as cash payments), but this is not the case where the rent is paid by Housing Benefit direct to the landlord (and/or via the DWP or other organisations). When a HB tenant abandons a property (and HB is paid direct to the landlord), the tenant does not bother cancelling the HB claim so HB continues to be paid by the Council for the rent, so in that situation the rent is still being received (via HB) but the tenant has still abandoned the property (and as such, receipt of rent does NOT indicate that the property has not been abandoned). - This situation does not appear to have been taken into consideration in the drafting of the legislation.

In the situation above, i.e. HB paid direct to landlord, the landlord has no option but to continue charging rent to the tenant even though the property is believed to be abandoned, and the landlord also faces the possibility of the HB for that period being recovered from him. This results in the landlord having a huge shortfall in rent, and the tenant facing huge rent arrears for the property he has abandoned, plus legal costs, plus HB overpayments. If the landlord is unable to recover the rent arrears and other costs, then this business cost has to be recovered from future rent charges (thus forcing landlords to increase their rents to cover these costs).

I do not comprehend how successive governments are failing to understand that each time they implement a policy that causing additional costs to be incurred by landlords, then that will force the rents up for tenants (and in turn force up the national Housing Benefit expenditure). In my opinion, Governments should be working with private landlords to identify cost pressures and then try to reduce the costs faced by landlords in exchange for lower rents, thus increasing housing affordability for everyone.

by Robert Mellors

11:14 AM, 18th April 2018, About 3 years ago

Reply to the comment left by Monty Bodkin at 16/04/2018 - 09:21
Hi Monty

I'm not sure that any of the housing charities are opposing bringing abandoned properties back into use, I guess they are just concerned about protecting tenants' rights not to have their homes re-possessed if the tenant is away for a while, e.g. in hospital or prison etc. However, the legislation already has those safeguards, because the tenant can respond to the letters (and pay their rent) to let the landlord know that the property is not abandoned. - At the end of the day, as landlords we want to keep good tenants who pay their rent, so landlords would not try to use the abandonment process unless the landlord genuinely believed the property to be abandoned.

If the property has been abandoned, then it is in the tenant's own interest for the landlord to have an effective means of ending the tenancy, so as to reduce the rent arrears debt and legal fees debt that will be owed by the tenant.

by Robert Mellors

11:15 AM, 18th April 2018, About 3 years ago

Reply to the comment left by Chris Daniel at 18/04/2018 - 00:20
Thanks Chris, I'll take a look at this.

by Giles Peaker

13:58 PM, 18th April 2018, About 3 years ago

Reply to the comment left by Robert Mellors at 18/04/2018 - 10:56
Hi Rob

The position that you raise on HB direct payments wasn't addressed for the simple reason that it can't be. There is no way for the landlord to ascertain if the tenant has actually abandoned the property and not told the benefit authority, or if they are simply away from the property for some reason.

But I don't think it is such an issue.

In most such cases, there would be likely to be another HB claim elsewhere, so the HB payments would stop pretty quickly.

If the tenant has left the property and not informed the benefit authority, it is the tenant's fault, but then unless the tenant has claimed for another property in the meantime, it should not be a recoverable overpayment, either. As you say, the tenancy continues, and so does the tenant's rent liability for which the HB is payable.

If the tenant has abandoned, then from the point the HB direct payments cease this proposed process should still be quicker than a s.8 or s.21 possession claim. At least when it comes into force.


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