S21 ban: Should straightforward possession cases be decided out of court?

by Readers Question

10:38 AM, 29th April 2019
About 2 months ago

S21 ban: Should straightforward possession cases be decided out of court?

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S21 ban: Should straightforward possession cases be decided out of court?

As we are all aware, the government intends to remove the option for landlords to use the no fault eviction notice under Section 21 of the Housing Act 1988, which with our current system would leave only grounds under Section 8, similar to the system recently introduced in Scotland.

Unlike Scotland, however, there is currently no plan to introduce a specialist housing court as such, only to add two “no fault” grounds – landlord needs to sell property and tenant or a member of their family needs to move into the property themselves (my understanding is they won’t need to have lived there before).

The government is set to announce its consultation soon.

However, as many of us know only too well, before a government body announces a consultation, the issue has already been decided, so I don’t believe we will persuade them to change their mind on the broader issue, but I do believe we may be able to persuade them to give us something that is as good as or even better than Section 21, while still being fair to tenants.

Dr David Smith believes that while government are committed to abolishing Section 21, they are prepared to take on board other proposals to reform the possession process, even reforming Section 8 completely. A webinar he took part in with Tessa Shepperson earlier in the week can be heard here and there’s a note of the main points.

I believe an alternative to Section 21 and reform in general could be achieved by making the new grounds and other more straightforward grounds accelerated (meaning it’s normally decided without a hearing), including the existing Ground 8 for arrears, provided the evidence is clear cut and the tenant is unable to refute it.

Moreover, instead of such cases being decided by random district judges who often have no knowledge of housing law, why not use trained case officers to decide on straightforward possession claims? There is at least one other example of case officers deciding on important legal property matters in another government agency; Land Registry uses highly trained case officers to determine legal title to land (with the option to refer cases to inhouse lawyers where necessary) and has done so throughout its long history.

Using trained case officers would be much more efficient and cost effective, not to mention fairer both to claimants and defendants, than the present system where cases are being decided by people who, though highly qualified and competent in other aspects of law, know absolutely nothing about the finer details of possession legislation.

These are just a few of many examples of where judges’ lack of knowledge has resulted in possession cases being thrown out for no good reason:-

• A judge took one look at the perfectly valid Form 3 Section 8 notice the landlord had served on the tenant, and immediately dismissed the claim on the basis the notice was invalid because it referred to agricultural occupancy.

• A Section 8 was thrown out because a Section 21 notice was not served at the same time. Section 8 and Section 21 are completely separate from each other and one does not require service of the other. A housing barrister checked the paperwork afterwards and found everything in order.

• Another example was where a Section 8 was thrown out because the expiry date was not the last day of a tenancy period (this is only applicable to Section 21 notices, and was in fact changed to allow just two straight months under the Deregulation Act 2015).

• Yet another: an overseas landlord instructed a fully qualified and regulated solicitor to attend his Section 8 hearing in his absence, and the solicitor produced his client’s instruction, but the case was still thrown out by the judge. Solicitors and barristers have a right of audience to attend court in their client’s place.

Unsurprisingly, there is a total lack of morale amongst district judges at the moment…

Good tenants would benefit as a more efficient possession system would give existing landlords more confidence to remain in the housing market and encourage responsible new ones to join, meaning less depletion of housing stock, which we all know is already in short supply.

If the abolition of Section 21 goes ahead without being replaced with another viable means of obtaining accelerated possession where appropriate, it goes without saying that housing stock for middle and lower income groups who need to rent will decline further.

In addition to the new grounds, and a new form of accelerated possession, there must also be a option for tenancies to have an end date where there is a good reason to do so; for example when letting to students, and a ground for possession where the tenant doesn’t leave at the end.

This is one failing under the new Scottish Private Residential Tenancy system. Another is the insistence that every case is given a whole half day’s hearing – a laudable aim in theory but not in practice. The Scottish Housing Tribunal currently has a massive backlog of cases – exactly why straightforward cases need to be kept out of court and decided without a hearing.

I would appreciate comments and feedback from anyone (in any capacity) with experience of the current possession system – especially if you had to attend a hearing; for example, was the judge knowledgeable and did you believe you had a fair hearing, or not…. I would also particularly appreciate comments from any lawyers in housing law practice.

Thank you for your time.

Mandy



Comments

Rob Crawford

14:10 PM, 29th April 2019
About 2 months ago

I'm not sure where this housing law (PRS) expertise in sufficient competence and volume will come from, heaven forbid the Council!

DavidM

15:41 PM, 29th April 2019
About 2 months ago

Thank you Mandy for this excellent article.

My wife and I, who are accredited landlords with the NLA and licensed by Rent Smart Wales, specialise in providing HMO accommodation for students.

I want to emphasize how removal of Section 21 would cause us problems. As you say there can be legitimate unconflicted reasons to issue Section 21 notices and students are a good example.

We rent out to students on a fixed 12 months' term, eg from 1 July 2019 to 30 June 2020, and before 30 April each year, giving at least 2 months' notice, we issue Section 21 notices to terminate the tenancies on 30 June and prevent them automatically rolling over into statutory periodic tenancies. Why is this important? To make sure that the existing student leaves on 30 June and frees up the room for the new incoming student on 1 July. Issuing the section 21 is unconflicted because we, as landlords, want the student to leave, and the students also want to leave (to graduate, change house, go to different university, go home etc) and not have the obligation to continue to pay rent into a statutory periodic period. Of course, the students don't understand Section 21 notices - realistically why should they - and they think that they've only signed up for 12 months and no more. As caring landlords we try to guide the students through these processes and look after their best interests if we can.

Timing is everything in the student market, and so in the January to March period each year we are signing up new students for 12 months' term starting on 1 July. During this period we complete all of our start up tenancy processes - eg parent guarantors, taking holding fees & deposits and signing ASTs, etc - knowing with certainty that the existing tenancies can be terminated on 30 June via Section 21 notices. In short we have certainty that the existing student leaves as they had planned, and the new student arrives the following day as they also planned.

Roll forward into the brave new world of without Section 21. We sign up new students Jan to March, and come 1 July new student arrives, often from abroad and in the UK for the first time, and the existing student in the house decides at the last minute to stay on over the summer. New student arrives at midnight from abroad, often by coach from a distant cheap flight airport, and has no room and the existing student stays in the room until end of Sept effectively blocking the main academic arrival period July - Sept. And we as landlords can do nothing timely about this - issue section 8? On what grounds? No forget it - this doesn't work.

Ah you might say 2 months before the end of the fixed tenancy you ask the student to issue notice of termination. Even if we create all the paperwork and the means to deliver back to us, experience tells us that 40% of students will immediately oblige; 40% will oblige after a lot of time (over several months) and effort to persuade them; and 20% won't be bothered following the least path of resistance of doing nothing. Contrast with issuing Section 21 - we issue these notices, keep proof of delivery and we don't need their explicit consent or approval - which perversely students like because they don't need to do anything. And why should they have to worry about this?

And so for the student market specific provision needs to be made for these unconflicted legitimate terminations. Are politicians really interested in looking past the headlines of removing Section 21 to stop rogue landlords? No because it's not a vote winner.

Dr Rosalind Beck

8:17 AM, 30th April 2019
About 2 months ago

Reply to the comment left by DavidM at 29/04/2019 - 15:41
I would add that as it is likely that tenants will be able to give notice willy-nilly - eg a one or two month notice, they will be able to give notice eg in February that they are leaving in April (many courses finish then) and landlords will have to leave the houses empty - losing rental income for any period from April to September - as they will not be able even to issue short-term tenancies to cover the void period. Students would sign indefinite tenancies which only commit landlords for the 'long term'; the tenants will be able to leave whenever they want, regardless of whether they told the landlord verbally they would rent for 12 months or not. The student market is so different from the rest of the market - but the proposed legislation is largely being based on catering for 'families' who want long-term accommodation; and not based at all on the needs of professionals, students, mobile or migrant workers or of course on the sustainability of landlords' business models.

Mandy Thomson

8:30 AM, 30th April 2019
About 2 months ago

The Nearly Legal blog (published yesterday) is raising the issue of s.21 being a means of enforcing certain legal requirements such as proving issue of EPC and gas safety certificate, and complying with landlord licensing (meaning non compliance of any pre-requisite renders s.21 unenforceable).
The underlying message is the new no fault s.8 grounds (and possibly even other grounds) should be similarly unenforceable without evidence of compliance with other non related procedures.
Where this is something critical, such as service of gas safety certificate or compliance with mandatory HMO licensing, I would whole heartedly agree, but I do NOT think any grounds under the new s.8 should be subject to something that adds little value to tenants such as service of the EPC or How to Rent and where the deposit is concerned, I would agree with failing to protect at without good reason but NOT simply protecting late or forgetting to serve the PI.

David Price

8:50 AM, 30th April 2019
About 2 months ago

Reply to the comment left by Dr Rosalind Beck at 30/04/2019 - 08:17
It all points to the need for different types of agreements for different situations, something this government seems to totally ignore.

PJB

8:57 AM, 30th April 2019
About 2 months ago

I think that most agree that if S.21 in its current form is to be scrapped then S.8 needs to evolve to be fit for propose for the landlord as well as the tenant.
A dedicated housing court or tribunal service could be used in the first instance where claims are only referred up to the county court if it felt it could not make a safe decision or if there were criminal issues (such as theft, fraud, damage, threats, etc.).

The housing court or tribunal service could now be flexible enough to handle situations where circumstances have changed. For example, mental status, infirmity, infants arriving, departing children, spousal changes, etc. In these cases, it could be argued that the tenancy is no longer a correct match to the property they occupy. The tenant is clearly not at fault and such evictees are able, if appropriate, to enter into a local re-housing programme.
.
The housing court or tribunal service could deal with cases that many judges have seemingly thrown out. For instance, it should be possible to include a reasonable amplification to the currently vague meaning of 'un-tenant like behaviour' in the AST agreement which the court/tribunal is able to take notice of. Examples could include refusing permission to enter the property to inspect for gas safety, electrical safety, damp, legionnaires, fire alarm certification, emergency lighting certification, essential maintenance, failure to communicate, condition of the property including cleanliness, damage and so on.

Further, email exchanges between the landlord and the tenant can be important in a hearing. If such exchanges have been copied to a virtual notary at the time of writing, the court has confidence that the exchanges are genuine. The notary service could be administered by the local council or by the housing court or tribunal service.

Carol McEvoy

9:16 AM, 30th April 2019
About 2 months ago

Reply to the comment left by David Price at 30/04/2019 - 08:50
Absolutely David, I have over 70 tenants in my professional houseshares (HMOs) and have never evicted tenants using a Section 21 without good reason. In the past 10 years those reasons have been:

• urinating on the bathroom floor and leaving the mess for other housemates to clear up
• smoking in the house (smoking is forbidden in the tenancy agreement, and is a fire hazard)
• having partners living with them when the tenancy agreement is for single occupancy of the room
• taking and storing drugs on the premises
• not paying rent
• having regular noisy parties that disturb the neighbours
• deliberately flooding the bathroom on numerous occasions late at night and in the early hours of the morning.

Apart from the drugs I don't believe any of those reasons are illegal, they are just breaches of the tenancy agreement. But they caused huge upset to the other people living in the house, as well as us as landlords (but hey, who cares about landlords like us who spend our lives doing our utmost to provide beautiful, safe, warm, comfortable homes for key workers and young professionals in London despite the numerous recent costly legislative changes introduced by the government over the last few years, eg Section 24).

I have no problem with the government banning the use of Section 21s but they must provide an alternative that deals quickly with situations like those above because the current laws do not. And they must base their decisions on sound and statistically significant evidence. In the recent press coverage I have not seen any, it's all anecdotal or based on very small (and probably selective) sample sizes. The government must listen to landlords and the professional bodies like the NLA and the RLA that know what they're talking about because they deal with landlords and their difficulties with problem tenants on a daily basis.

Let's not solve one problem for some people by creating more problems for more people.

John Dace

9:23 AM, 30th April 2019
About 2 months ago

One scenario never mentioned is when a property is a holiday let during summer and offered as a winter AST for 6 months. A common idea in tourist coastal areas. This kind of arrangement works well for tenants who like to travel / live in vehicles / boats during summer but want a warmer home for winter. It also suits people who just want somewhere short term for a variety of reasons. Winter only rent is usually much less. Presumably this will end. Landlords will just leave empty. The coastal villages / towns often moan about so many empty holiday homes to the detriment of village life and services (pubs / shops). There are so many reasons why a property owner should be able to control who if anyone is in their property.

Lindsay Keith

9:34 AM, 30th April 2019
About 2 months ago

Reply to the comment left by DavidM at 29/04/2019 - 15:41
I am not an expert in this minefield but would it be possible and effective legally to ask the incoming tenant to sign their year long tenancy agreement including a clause giving the notice to quit referred to? Then you don't have to badger them to give that notice later, possibly at a time when they are really swotting hard, let alone the risk they ignore the request anyway?

Ian Narbeth

10:23 AM, 30th April 2019
About 2 months ago

Reply to the comment left by Carol McEvoy at 30/04/2019 - 09:16
Hi Carol
You may have been luckier than we have but we have had several tenants who were just ANNOYING to the other tenants. Not doing enough that we could use s8 but being sufficiently obnoxious that other tenants threaten to or do leave. We had to oust the young tenant who never chipped in for communal meals, "borrowed" people's milk and who behaved immaturely - calling out inanities to passers-by - when his friend visited, the man with the voluble girlfriend who disturbed the tenants sleeping in the rooms below. Hell, we recently lost a tenant because the guy in the room below snores like a foghorn. (Haven't taken action yet and the new tenant hasn't complained yet.

As with student accommodation, HMOs are a special case. Unfortunately, this Government is not listening to landlords and seems to think that stealing Corbyn's clothes and parroting the Shelter line about rogue landlords will win them votes.

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