Landlords in despair about failing courts system

County Courts:

The English County
Court system is failing landlords, that’s according to the results of a major
survey carried out by the Residential Landlord’s Association (RLA).

The RLA says that
79% of landlords who had had recent experience of the courts processes, those
who had needed to repossess their properties, were dissatisfied with the experience
they had.

Given that the
government is currently working towards removing the no-fault Section 21
eviction process, the main plank of the assured shorthold tenancy (AST), and
seemingly putting little in its place, the statistic is a very worrying one for
buy-to-let landlords.

The RLA claim that their survey is “one of the largest ever
surveys of landlords and letting agents,� which found that 91% of the respondents
felt strongly that if the Section 21 procedure is removed a dedicated housing
court, similar to the overhauled Scottish system, is urgently needed.

In a letter to the new Justice Secretary, Robert Buckland
MP, the RLA has warned him that with “Ministers pledged to scrap Section 21 ‘no
explanation’ repossessions, the courts are simply unable to cope with the
increased pressures they will face.�

The Government has said it will review the grounds for
possession to help streamline the possession process, with no mention of
overhauling the English court system.

All that can be expected with this is that it will marginally
expand the circumstances in which possession can be obtained, but landlords
fear that with such a major change in the approach to residential tenancies and
tenure, it will prove highly disruptive to the lettings market.

The change will mean that there may be no absolute guarantee
of a landlord being able to recover possession. In addition, with costs and the
time involved in trying to obtain possession, even when the tenant is clearly
in breach of contract, it may take substantially longer than it currently takes
using the Assured Shorthold Tenancy notices.

The other side of the coin is that tenants also find the
courts’ system difficult to use. Research published by Citizens Advice found
that 54% of tenants said they found the complexity and the length of the
process puts them off taking landlords to court.

The RLA says that with the planned changes threatened, “…simply
tinkering with the existing system is not good enough.� It is calling on the
Government to establish a single, dedicated housing court that is properly
funded and properly staffed.

At present, landlords can repossess properties using two
routes:

1 – Section 21, which
is under threat, enables landlords, after giving two-months’ notice, to regain
possession at the end of a tenancy without providing a reason for the eviction.

Adverse publicity created by a minority of rogue landlords has led to the media being flooded with stories about landlords terminating tenancies either to replace the tenant with a more “acceptable tenant�, or in revenge against tenants who have raised complaints.

The threat of eviction in some cases has allowed landlords to impose rent increases much higher than the prevailing market rents, on the basis that the disruption to a tenant’s domestic and family life gives them little choice but to pay.

The other side of this coin is that a legitimate claim can
takes month to progress, judges can award extra time to leave and court
bailiffs are slow. And it is common for tenants to request that their landlord serve
them with a Section 21 possession notice in the hope that they can convince their
local authority that they are being evicted, and therefore the notice will make
them eligible for social housing.

2 – Section 8 of the Housing Act 1988 gives landlords restricted grounds on which they can claim possession. These grounds are difficult to prove, and unlike a straightforward Section 21 claim, always require a court hearing.

This puts the onus on the landlord to produce compelling evidence of a breach of contract, and would in most cases require professional representation to convince a judge of the veracity of any case. Cases are often adjured and reschedule for more evidence, and cases drag on for months, if not, in some cases years. The outcome therefore in both costly and uncertain. Worryingly, this is the system which the government is suggesting, with some tweaks, it will be relying on in future.

David Smith, Policy Director for the Residential Landlords
Association, said:

“Ministers are proposing some of the most far reaching
changes the private rented sector has ever seen. If the new Government decides
it wants to proceed with these it is vital that significant and bold reforms
are made to the court system.

“With landlords and tenants failing to secure justice in a
timely fashion when things do go wrong, anything other than wholesale changes
with proper funding to support it will lead to chaos.â€� 

The RLA research report can be accessed here

The Ministry of Justice’s Mortgage and landlord possession statistics can be accessed here

Table 6a shows that in the first quarter of 2019 the average
time taken for a private landlord to make a claim to the courts to repossess a
property and it happening was to 21.6 weeks.

The Citizens Advice research can be accessed here

A New Deal for Renting Resetting the balance of rights and responsibilities between landlords and tenants: A consultation, which can be viewed here

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