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

Neil Patterson

8:27 AM, 2nd May 2019
About 2 months ago

Comment from Paul Shamplina of Landlord Action:

"For me, scrapping Section 21 could have an even greater impact than Section 24, particularly if the only alternative, the Section 8 process, is not fully reformed with updated grounds added.

We have had numerous landlords calling our Landlord Action advice line panicking about this. My prediction is that we will see a surge of small landlords, those with one and two properties, exiting the market or wanting to serve Section 21 notices prior to the new law coming in which. The result? More evictions and more homelessness – the very opposite of what the government was is trying to achieve!

It may well create opportunities for other landlords to make purchases, but I think that landlords on the whole will be much more diligent in the refencing process, meaning tenants who may previously have been granted a tenancy, could be refused. In addition, I worry for tenants in receipt of housing benefit, who will likely be the victims of such a change – and don’t even get me started on Universal Credit!

Rents are still strong, and people still need somewhere to sleep, but the landscape of buy-to-let has changed significantly in the last 10 years and landlords must adapt. Sadly, some are struggling to keep up with the vast number of changes and this could be the final straw to break the camel’s back!

In theory, having specific Housing Courts would be great, but what about in practice? The Ministry of Justice has the smallest budget and does not have any investment. Where would these Housing Courts be situated? How far would a landlord/tenant have to travel? Recruitment of Judges is also very challenging, and morale of Judges is at an all-time low according to feedback I received when attending the Housing Court Consultation in Leeds.

Then we come on to bailiffs. The number of bailiffs has been cut to the bone, they are overworked and under paid, expected to carry out landlord and tenant evictions as well as mortgage repossessions and carry out process serving family papers. It’s impossible for them to try and collect County Court Judgements. I do agree with David Smith that the bailiff system needs a total overhaul and they should consider making it private. There is currently a consultation about using High Court Sheriffs.

When we can obtain leave at court to transfer up to the High Court, it takes us approximately 2 weeks to carry out an eviction rather than 8 to 10 weeks. Section 21 forces landlords to be more compliant under the Deregulation Act and knowing that a Section 21 notice cannot be served in the future, forces the landlord to serve an EPC, Gas Safety Certificate, How to Rent Guide, along with protecting the tenant’s deposit, and where applicable a section HMO licence. How will this change in the future? It will be interesting to see how it plays out.

I urge Property 118 readers to complete the Government Consultation into the banning of Section 21’s when it comes out in May/June time - the Government needs to see the impact it will have from the voices of those it will impact. If it is going to go ahead, then we all need a say in how it is shaped going forward. As landlords, let’s remember all we want is a good tenant, who can pay the rent on time, look after the property and make sure we can have access to carry out inspections."

Larry Sweeney

8:43 AM, 2nd May 2019
About 2 months ago

Hi Neil.
The alliance has proposed and written to the MOJ with a very simple proposal re Bailiffs/enforcement agents. Our solution is to allow all certificated enforcement agents to enforce posession orders. There are thousands of these EA's already enforcing Ct liability orders, enforcing magistrates court orders, commercial rent etc. This would completely negate the need for costly transfer up to the high court and also remove the backlog from the county court bailiffs. There is absolutely no barrier what so even to allowing all certificated enforcement agents to enforce posession orders. The fact that they currently cannot as the system creaks ,just demonstrates the inability of this currently useless government to deal with the issue or perhaps demonstrates how little the useless Tories care about protecting the rights of hard working tax paying property owners.

Mandy Thomson

8:55 AM, 2nd May 2019
About 2 months ago

Reply to the comment left by Neil Patterson at 02/05/2019 - 08:27
Although there is little funding to establish a housing court, in his webinar David Smith said he does not believe it's the intention of government to diminish the PRS, if anything the opposite, and while they ARE determined to scrap s.21, they are also very open to ideas from the PRS community on how a viable alternative to s.21 could be achieved.

Therefore, back to my argument, why must straightforward possession cases be decided by a judge (especially one who doesn't know the first thing about housing law...)?

Fully trained and competent case officers (once trained and it's fully implemented) would be much cheaper going forward than judges as they would command a lower salary than a judge or a solicitor and would be more knowledgeable and efficient as they would be highly specialised in possessions and the related housing legislation.

Mandy Thomson

11:26 AM, 4th May 2019
About a month ago

Thanks to everyone for your contributions, in particular to @DavidM, @PJB, @Carol McEvoy, @Ian Narbeth and @John Dace for sharing your experiences of your particular niche markets and raising awareness of the unique issues involved.

Thanks also to @Larry Sweeney for sharing your idea of allowing landlords free choice of whether to use a county court or high court bailiff to enforce possession orders instead of having to submit a writ as at present.

Even without the withdrawal of s.21, it is clear we need special grounds or some other legal device to remove anti social HMO tenants whose inconsiderate behaviour would not present such an issue were they not sharing with others. Although this scenario is more likely to occur with tenants on separate agreements, this can does also occur among housemates on joint tenancies.

As for student tenancies, this is one known area the Scottish PRT doesn't cater for, and again, even with s.21, a landlord still has to wait 2 months before starting possession proceedings to remove a really stubborn tenant - it's not often, but it does happen (I had a scenario referred to me where the student dropped out then didn't get a job so became stuck in his student accommodation without paying rent).

Also, the issue of property that is used for both holiday lets and ASTs is being overlooked - thanks for pointing out that this is not such a small niche market as originally thought, particular in coastal and rural areas.

Grounds to deal with tenancy breaches in general need to be much more easily enforceable, and there should be certain situations in which the landlord has right of access after perhaps three written warnings - for example, gas safety inspection, suspected subletting or evidence of illegal activity.

In addition, if there is a police incident and witness statements as supporting evidence, a landlord should be able to swiftly remove a tenant who has vandalised the property or been involved in a violent incident - an actual conviction should not be necessary.

Last but not least, sometimes landlords, especially hands off ("property investor only") and "accidental" landlords, can be their own worst enemies by sleep walking into letting property then finding they can't so easily evict (as they haven't complied with pre-requisites and don't understand the process full stop) when they find the tenant that wasn't rigorously vetted is rogue.

Some may disagree, but I believe such landlords should be stopped for their own good and the good of the wider community - therefore, I firmly believe a Rent Smart Wales style scheme should be adapted in England (where landlords can only self manage if they can demonstrate a fair understanding of housing law or use an approved letting agent).

Moreover, mortgage and insurance providers should be made to act as gatekeepers (no registration/licence, no mortgage etc) to maximise compliance.

JB

17:41 PM, 4th May 2019
About a month ago

Yet again POOR tenants:

Less supply of housing
Substantially Increased rents
Homelessness for those on benefits or with less than squeeky clean credentials

They will feel the results of these ill conceived policies even more than landlords. After over 20 years of supplying good homes for thousands of people, I am planning my exit. I've got better things to do with my life.

Michael Barnes

18:16 PM, 6th May 2019
About a month ago

What about the effect on licencing requirements ?

Mandy Thomson

6:36 AM, 7th May 2019
About a month ago

Reply to the comment left by Michael Barnes at 06/05/2019 - 18:16
See my earlier comment on here made at 8:30 AM, 30th April 2019 in which I reference the Nearly Legal blog which raises pretty much this point - s.21 is currently used as a means of ensuring landlord's compliance with certain obligations and would/should the new no fault grounds brought in to replace it also allow their use subject to compliance only?

Ian Narbeth

10:09 AM, 8th May 2019
About a month ago

Reply to the comment left by Mandy Thomson at 30/04/2019 - 13:29Mandy, sorry for not replying to this sooner. I don't think it will work. A tenant does not need to give a NTQ and can leave on or before the last day of the contractual term without giving any notice. So giving "notice to quit" on the last day of the contractual term is unnecessary and the courts are unlikely to treat it as NTQ for the purpose of charging double rent.
That being the case, why on earth would a tenant sign a NTQ at the outset to expire AFTER the end of the contractual term? They would rightly say: "I want a tenancy for X months, not X months minus Y days. Why are you asking me to sign a tenancy for the shorter period but immediately to give notice to quit at the expiry of X months?"
Any landlord proposing this is likely to appear very tricky.

Mandy Thomson

10:20 AM, 8th May 2019
About a month ago

Reply to the comment left by Ian Narbeth at 08/05/2019 - 10:09
Thanks, Ian. I was meaning it as a workaround to the withdrawal of s.21 where the tenancy would otherwise be open ended but the landlord wants to ensure the tenancy will only last a specified time (such as a student let).

Similar to the old practice of issuing a s.21, expiring on the last day of the fixed term, at the start of the tenancy.

Ian Narbeth

10:36 AM, 8th May 2019
About a month ago

Reply to the comment left by Mandy Thomson at 08/05/2019 - 10:20
As I suggested in my post on 30 April at 12:17, you could grant a much longer lease with a break clause which the tenant operates immediately.

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