Call for evidence –   Submission by –  Possession Friend.uk

Impact of COVID-19 (Coronavirus) on homelessness and the private rented sector: Parliamentary inquiry    

Terms of Reference

The Committee invites written evidence on the impact of COVID-19 on homelessness, rough sleeping, and the private rented sector, as well as any other connected issues. In particular, the Committee is interesting in finding out:

• 1)   How effective has the support provided by MHCLG and other Government departments in addressing the impact of COVID-19 on those in the private rented sector, rough sleepers, and the homeless?
• 2)  What problems remain a current and immediate concern for these groups?
• 3)  What might be the immediate post-lockdown impacts for these groups, and what action is needed to help with these?

 

I’d like to explain that my company are Private Sector Housing Consultants dealing with legal issues across the PRS, mainly ( but not exclusively )  for Landlords.

Possession of properties from problem tenants is a large part of our work.  ‘Problem tenants’ are actually a huge understatement, as the many cases that come to us are of serious and persistent rent arrears, damage or Anti-Social Behaviour, often serial bad tenants.

By the time our clients have actually decided it’s time to engage professional assistance, they’ve usually been trying to deal with the matter for a considerable time ( without success ) and the magnitude of the rental shortfall mandates that they need to take further professional steps.

Unfortunately for Landlords, the legal system around renting has become so complex, duplicitous and confused of the last decade and more especially since 2015 onwards, that Landlords are unable to successfully navigate the legal process without assistance.

45% of landlords own one property and it may have been acquired through a bereavement in the family and a decision to retain the property to bolster living income and also provide for a pension boost.

We have carried out work for Low-paid blue-collar workers who are single property landlords. During this Corona virus period, some of these blue-collar landlords have rightly been acknowledged by public, media and the government as ‘key-workers’

The rhetoric from Government and everything MHCLG publishes is to use the “Landlords and tenants” synonymously as being fair to both and even-handed, when actually, nothing is further from the truth. I’ll use one recent [ of many ] example MHCLG Press release 18^th of March, 2020

“ The government has announced a radical package of measures to protect renters and landlords. “ and …  recognising the additional pressures the virus may put on landlords, we have confirmed that the 3 month mortgage payment holiday announced yesterday will be extended to landlords…”

Radical, yes but protecting landlords – absolutely NOT. The only ‘charade’ of landlord protection was a 3 month mortgage payment holiday. The inference being that the government had somehow agreed or instructed private mortgage lenders to allow a 3 month deferment from mortgage payments.   What landlords have subsequently found from many lenders is either an outright refusal or restrictions associated with a deferment ( such as credit damage and no further mortgages issued by that lender to any landlord applying for a deferment. )   Clearly then there had been no such agreement, and of course, government is in no position to instruct private businesses [ mortgage lenders]  on their loan arrangements, unlike what has been engineered against landlords.

Effectively, private rented property has been sequestrated by government for 3 months which has been achieved by the removal of established  justice procedures.  This will come home to roost post Corona, see my opinion (3) below.

 

1 )

Let’s take an example of this, by looking at the first of the three areas of the enquiry support provided to those in the Private rented sector, rough sleepers and homeless.  Landlords are noticeable by their exclusion.

Of the Landlords that have sought our services, rental losses have been a personal and significant impact upon them. Many have talked about how they would have to adjust and cut back on their personal spending as a result of the tenants not having paid rent.  In our experience the rent is used as a critical part of the landlord’s financial commitments. With single- property landlords, we’ve known cases where the tenant’s income has ‘exceeded’ that of the blue-collar landlord.

 

2)

Regarding current and immediate concern for these groups, I’d suggest you enlarge your ‘group’ to include all participants, i.e.  landlords who have lost rent during the  so called, no need to pay –‘holiday’ period. What a damaging faux pas that was !  We are hearing of many instances of landlords being refused mortgage deferments. ( see 3)  below.

The reason that the enquiry should be concerned about the impact of non-paid rent during Covid-19 to landlords, is that a number of them will be forced to exit the market, and a number of others simply choosing to do so.

It shouldn’t have escaped anyone’s notice that the number of private rented properties available over recent years has been declining.

I can give you an example of a landlord that isn’t financially forced to have to ‘take any – the wrong tenant‘.  Over the course of 2 months advertising, the property was let to the 79^th applicant. When asked where they were staying presently, a number said with friends or family but that it was over-crowded. ( but don’t get accurately recorded )  Many were asking to rent a property that their finances clearly could not sustain.

The government’s statistics of declining accommodation is a charade that deceives the reader and damages tenants and Landlords alike, in that there is no discrimination.  In 2011 government  introduced  The New Homes Bonus, a grant paid by central government to local councils to reflect and incentivise housing growth in their areas. It is based on the amount of extra Council Tax revenue raised for new-build homes, conversions and long-term empty homes brought back into use.

For all intents and purposes, this seems a laudable initiative. Its when you look at the enhanced vigour  which the Valuation Office Agency has pursued the disaggregation of council tax banding in Houses in Multiple Occupation that the sleight of hand is apparent. Much needed shared housing accommodating tenants at the most economical end of housing is being ‘council-taxed’ out of existence to produce new ‘units of accommodation,’ as defined by the additional council tax bands ‘created.’

 

The effect of this is either the accommodations rent becomes more expensive for the bedsit tenant, or the landlords providing these multiple units of accommodation withdraw from   the market.  Such deception is ‘right up there’ with the double-counting of PPE gloves for front-line workers during Covid-19.    Meanwhile the units of accommodation figures are manipulated from reality.

 

3)

As for what might happen, ‘post-Lockdown’ – I’d think pretty much the same that’s going to happen in many other countries,  as has already been published.   I would also suggest you don’t  ask anyone’s opinion who isn’t a landlord – ‘got skin in the game’.     Having a Minister ( or Ministry ) of Housing that doesn’t have Landlord experience, is about as dangerous as having a carpenter carry out heart surgery.

A significant number of renters will be in arrears,  some of these will be genuine cases whilst others will have ‘jumped on the bandwagon’ hoping to ride the free wave.

There will be a noticeable number of [ further ] landlords exiting the market – less accommodation.

Less available resources will have the inevitable price effect on any scarce resource

There will be more ( legally justified ) evictions.

These evictions will take much longer than the 5 – 8 month current time frame          (  from issue of notice to bailiff eviction ) partly due to the backlog of the 20,000 existing cases in the system and also to the more than usual number about to be instigated for rent arrears on the lifting of the eviction ban.

County courts will be overwhelmed, not only will there be a massive delay in justice for those Landlords that have real Rogue tenants (  concept unfamiliar to government )  but this will have a knock on effect to other civil justice issues competing for the courts time. The government (MHCLG’s) request to the Master of the Rolls to periodically change all existing Assured Shorthold tenancies into  Assured tenancies, by virtue of applying Social Housing Pre-Action Protocol will have temporary effect but longer term consequences. The rate of successful rent arrears evictions will slow, but this will only serve to encourage even more Landlords withdraw and many of those that remain effectively close-off their properties to a larger economic section of society.

The only answer I can see to this is for a streamlined Possession process to be devised, and devised quickly.

There will  always be a proportion of tenants who will appear before a court on only one occasion, possibly having fallen  into  rental default, ‘relatively innocently’.   What I mean by that term is that through genuine efforts to make ends meet, they have had to prioritise essential living expenses and rent arrears have accrued.

There will be far more of these post-Corona and they will deserve to be treated distinctly from the serial rent defaulter, who prioritises 65 inch flat screens and sky premium packages over paying rent, or even passing on tax-payers housing benefit. This should be a concern to all tax-payers and a responsibility of government to address, which its not under Universal credit.  Tenants who are multiple defaulters and defendants in possession proceedings need to be separated from the genuine  Corona rent defaulters.   To understand this concept, there has to be a realisation ( quite aptly ) that some Tenants are ‘Rogue’, and play the system like a banjo.

At  times of scarce resources, Equality does not mean that all tenant defendants are treated equally, but fairly.   There also needs to be a realisation that there will always be a proportion of tenants who, dare it be said,  don’t deserve a home – until they can begin to behave as though they should do.  Meanwhile, the ‘banjo tenants’ are competing for resources amongst  the ‘relatively innocent’.  When the ship SS Corona has sunk, it’s important that ‘women and children’ are in the lifeboats.’  – there aren’t enough lifeboats and banjo tenants have no place in them. ( Read Houses for lifeboats )

The orchestrators of their own misfortune must fend for themselves. They should not be abusers of Legal Aid, let alone a second tax-payers gratuity to Shelter or Citizens Advice. In short, I think the term is ‘ Responsibility for one’s own actions’.  Our society, and in particular housing, is encouraging irresponsibility where there is no ‘room’ for such. [ No pun intended ]

 

Everyone taking responsibility is fair, but keeping those that don’t in accommodation they’ve abused whilst others who have acted responsibly isn’t ‘fair’.   Yet our legal aid & Shelter / Citizens Advice funding is out-weighing the scales for those that it should not.  To be blunt, its money that could be spent creating a lot more accommodation.

Tenant support groups and governments are actually placing tax-payers money and injecting undeserving tenants into a pool of ‘relatively innocent’, and genuinely innocent people seeking ever-increasing scarce accommodation. Strange notion of equality – fairness.

To summarise, less properties available, higher rents, ever more cautious landlords.   My company are seeing ( and indeed advising ) landlords to expect guarantors in many situations of working tenants, let alone those in receipt of benefit.   This is no stigma or prejudice, so let’s not ‘guild that lily’.  Its occurring amongst Landlords who have always rented to benefit tenants but are now turning huge numbers away without guarantors. If basic business principles are understood, this isn’t difficult to comprehend and blaming landlords for ‘No DSS’ isn’t going to solve the problem.

I can foresee, that ‘some’  landlords ‘may’ be persuaded to accept a Local Authority as guarantor ( and I’m not taking about the ‘paper bond-deposit charade ‘ ) but many will not. A significant number of  the tenants perceived as riskier, will end up at the Local Authorities ‘Emergency Accommodation door’.  With more tenants evicted for rent arrears, even more if Section 21 is abolished, Local Authorities will be turning vastly increased numbers away on grounds of them being intentionally homeless.

The sooner bad tenants are evicted, the easier life will be for good tenants, landlords and Local  Authorities.

In short, expect mayhem !

 

Chris Daniel

Director

Possession Friend.

23/4/20

Landlords and Corona – Covid-19 virus Free Advice.

The Virus situation has thrown most of life into turmoil and various measures have been put in place by the government. Some are more helpful to sections of society than others. ( i.e. Tenants rather than Landlords )

The focus for this article is on how Landlords are faring under the measures that government have introduced. ( see below )

I’m going to set out in summary and comment on those measures and I realise that what landlords ( myself included ) need is some hope or positivity and I will get to that eventually. However it would be dishonest and patronising if I didn’t level with you and share what I believe Landlords are facing.

To use the words of the Prime Minister recently when he spoke of the virus, which is certainly apt for Landlords, is that ‘ its going to get worse before it gets better. ‘ and some Landlords, justifiably are asking themselves if its ever going to get better. I’ll come on to that.

I’ll also be outlining what Possession Friend are going to be doing FREE of charge for Landlords during the Corona period.

 
What the Government ( in England & Wales ) have done. ( 1. ) & ( 2. ) see full references at end.

[ But more seriously and not widely reported ( 3. ) Assured Tenancies, see later. ]

Stopped all On-going Possession cases, and

Created a 3 month Notice period for any cases [ either Section 21, or Section 8 ] from 27th March, 2020. The government have reserved the right to continue this until 30th of September, should the virus conditions dictate necessity.

MHCLG said, “At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account tenants individual circumstances.” ( in other words, ‘play nicely’ )

 
What Should the Government have done ?

Allowed existing cases to continue, as they have nothing whatsoever to do with the Corona virus. If a tenant who has earned the courts decision that eviction is lawfully justified, ( not easy ) the ‘natural course of justice, which everyone is subject to, should continue. Evicted tenants would either have to find their own alternative rented property, or become the responsibility of the Local Authority if qualifying in priority need.

New cases should be allowed where the judge is satisfied that more than 2 months worth of rent lawfully due, is outstanding Without the impact of the Corona virus.

In terms of issuing new Section 21 notices, these take an average of 7 to 8 months from service of notice, so would not take effect during the virus strategy period.

 
Why didn’t the government do this ?

In my view, because they needed all available resources from L.A’s to fulfil another part of their strategy of finding accommodation for every rough sleeper.

Having totally suspended and removed all civil justice for Landlords, several implications have resulted and its yet again shown a total lack of understanding of the Private rented sector.

 
What has the government done ?

Well, to be fair, they have put a number of measures in place to safeguard tenants but very little for landlords.

A } Employed renters will receive 80% of wages, up to £2.5 k / month

B } Self-employed will receive income support. ( Landlords are not classed as self-employed ! )

C } Universal Credit increased by £1 k / year.

D } Housing allowance ‘increased’ to cover the lower 30% of market rent. [ It was at 30% when in 2015, the Government imposed an increase freeze, whereupon it started to decline. Shelter calculated 2019 that 95% of Housing benefit did not meet market rate. ]

 
For Landlords, the only measure was to seek a 3 month mortgage deferral, incur interest charges, [ interest on o/s rent being rigidly controlled by the Tenant Fee Act 2019 ] and credit rating damage for subsequent re-mortgaging.

Some lenders have agreed to offer a deferment period of up to 3 months for buy-to-let mortgages. This very unhelpfully, has been publicised by the government as a mortgage ‘holiday’

 
Such careless terminology has led many tenants to believing that landlords have been given 3 months relief from paying their mortgage and are campaigning ( even the labour party has joined them ) in demanding 3 months rent-free. Students in Bristol have been making demands for free rent or abandoning Tenancy agreements, besieging a letting Agent ( see – https://thebristolcable.org/2020/04/bristol-coronavirus-students-letting-agents-rent-strike/ )

London Renters Union are hosting a petition of 103,000 signatures to government demanding a rent amnesty during Corona.

https://you.38degrees.org.uk/petitions/suspend-all-rent-payments-no-coronavirus-evictions?bucket=&source=whatsapp-share-button&utm_campaign=&utm_source=whatsapp&share=a211ae72-524e-4129-8a08-a1516e4f2c1e

 
Not all lenders are offering the mortgage deferment, and where it is available, the interest accrues and there are credit implications for re-mortgaging. Barclays, for example refuse. A survey of Landlords on Landlord Today reveal 76% of Landlords expect to be seeking a mortgage deferral.

https://www.landlordtoday.co.uk/breaking-news/2020/3/barclays-refuses-to-offer-buy-to-let-borrowers-a-payment-holiday#polls

 
Housing secretary Robert Jennick said, [ in MHCLG Press release 18/3/20 ( 4. ) ] … ‘no renter who has lost income due to corona virus will be forced out of their home, nor will any landlord face unmanageable debts.’ Absolutely nothing has been done by the government to financially mitigate Landlords expenses. ( other than the limited support mentioned above that some tenants may access to possibly part fund their rent. The withdrawal of Justice however has made it impossible for Landlords to pursue the deliberate but capable, non-payers. )

The government suspension of housing justice however goes far further. It prevents anyone previously lawfully liable to eviction, totally unrelated to the virus, and a number of possession applications during the virus period that are NOT related to financial circumstances, to be postponed. Its estimated there are 20,000 such cases pending that have been postponed for at least three months.

Possession applications include grounds such as Domestic violence, Damage to the rented property, Anti-social behaviour which blights neighbouring residents. Such tenants do not deserve any postponement and neither does it warrant further suffering by the victims. Had the Labour party been in government, there wouldn’t have been much surprise, but two shocks were that ;

The Labour party had prepared a draft piece of legislation written mainly by Justin Bates and Giles Peaker ( of Fitness for Human Habitation Act fame ) that actually proposed what I set out above in ‘What the government should have done’ viz ; that the court decide if rent due between the period 1/3/20 – 1/9/20 is Coronavirus -related may not be treated as lawfully due for the purposes od Sections 8, 10 & 11. [ although still a financial debt. ]

The second shock that it was actually a Conservative government that went as far as totally suspending justice !

Government publication 18th March, 2020 announcing at that time, suspension of new evictions and no new possession proceedings ( under Any grounds ) was commented by the Chief Executive of the National Residential landlord Association, Ben Beadle who said, “ Landlord groups welcomes government support. ! We recognise the exceptional circumstances and we will work collaboratively with government to ensure these measures protect both landlords and tenants. “ !

We would like to hear from any landlords who ‘welcome government support’ but don’t all email at the same time in case you crash our web site.

The MHCLG Coronavirus (Covid-19) Guidance for Landlords and Tenants, 28/3/20 ( 1. )
In summary, its about what tenants can do, what landlords can’t, together with a reminder of our responsibilities. There are a number of FAQ’s and answers.

 
Who are Landlords ?

45% of Landlords are single property owners, many blue-collar workers. Shop assistants, health workers, public sector employees etc who have inherited a family property and are maintaining it as a pension supplement. ( ask the government why they do this ! )

 
What are the early effects ?

Comments I read on property forums from Landlords is they’re angry that the rhetoric ‘Landlords ‘and’ Tenants’ has been used again when really its all about Tenants. The typical phrase many have written is ‘landlords thrown under the bus, again’

On the positive side, there are reports of a number of tenants making effort and paying their rent or volunteering short and manageable arrangements. The English Housing survey shows that 87% of tenants are satisfied and no doubt a similar number of landlords.

The problem in the PRS is lack of effective means of dealing with the small number of can’t pay, won’t pay, particularly serial rent defaulters who flit between rented properties defaulting on £ 000’s of Landlords money. This is why an effective civil justice system is needed, not that I’m saying the justice system before its recent suspension was effective, as landlords know.

One story we’ve heard is that ‘ tenants in some cases of genuine hardship are working with landlords to make payment plans and manage arrears, as they don’t want to build up a load of debt while this situation continues. ‘

Another tenant, referring to the landlords’ ‘mortgage holiday’ stating that as the landlords was getting 3 months off, so should they. One tenant admitting that he and his girlfriend were both on the 80% top up but only to the limit of £2.5 k / month ! extorting ‘we earn much more than that’ They informed they would not be paying their £700 rent, as they needed the money for other things !

Its these circumstances that governments ‘ play nicely’ strategy is useless and legal measures are needed. The virus hasn’t made anything Free.

 
The Times newspaper 3rd April 2020, section ‘ Can landlords evict tenants during corona virus.’

https://www.thetimes.co.uk/article/can-landlords-evict-tenants-during-coronavirus-your-questions-answered-nt3g85tns

Tales of woe from many landlords who have been significantly impacted by the withdrawal of justice and left stranded by the governments ‘help for landlords and tenants.’

See Property forum – Property118 for many other stories. E.g.

https://www.property118.com/government-have-created-chaos-in-the-prs/#comments

 
Government figures state there were approximately 20,000 possession cases already in the court system before the corona virus.

How many notices, albeit with a delayed 3 month notice period will accrue by the end of court suspension ? From the end of suspension new cases will continue to be submitted.

Currently a 5 or 7 month waiting time for a possession order will likely be doubled, and take a considerable time to work through the backlog.

The increased court work load is unmanageable ( can barely be managed at present )

A lot of evicted tenants are going to be seeking accommodation that just won’t be available.

Local Authorities current emergency accommodation figure, on an exponential rise, will explode, as will their budgets. Will this financially encourage more to use licensing schemes and will the impossible position they’re in, persuade government to rubber stamp their approval. Would it be the tipping point for a National Licensing scheme ( well, its another tax-raising scam to hit the fall-guys – landlords with ? ) God knows the governments going to need the finances after the cost of this pandemic.

This is where it might get better for landlords. Property will be in more demand and landlords will have more choice of ‘wheat from chaff’. The chaff will have to be picked up by the already creaking Local Authority, might well see some more up front payments to take on certain tenants. With the extra choice of tenants ( more of them ) Guarantors, whether it be Local Authority or anyone else, will be a demand from landlords, especially if Section 21 disappears. To be honest, I don’t ever see it going back to 2 months notice.

The best landlords could hope for, and the above scenario might help ’swing-it’, is retaining the 3 month Notice for Section 21, or possibly 6 months such as the Welsh government are introducing.

 
However, the less widely reported step MHCLG have take is in a document published on 26th March, 2020. ‘ Government support available for landlords [sic] and renters reflecting the current coronavirus ( COVID-19 ) outbreak ‘ ( 2. )

This two page document goes much further than merely delaying a Section 8 rent arrears claim for 3 months. MHCLG say… ‘We are working with the Master of the Rolls to strengthen the pre-action protocol requirement and also extend this to the private rented sector.’ This will help [ Read -Force ] Landlords and Tenants to agree reasonable repayment plans.

The Pre-Action Protocol for Possession claims by Social Landlords ( 3. ) [ who operate Assured tenancies ] is very onerous on the processes for possession for outstanding rent, far moreso that a Section 8 claim for Assured Shorthold tenancies.

Just a quick summary:

1. After service of statutory notices ( Section 8, Form 3 ) but before the issue of proceedings, landlords should send the tenant a copy of this protocol ( 4 pages. Note the word ‘should’ is frequently used, but where a court finds the landlord hasn’t complied, there are possible outcomes, one of which is case can be dismissed. So safer to ‘read Should, as Must’)
2. If the tenant agrees to pay a ‘reasonable’ amount towards arrears, landlord should agree to postpone issuing court proceedings. For so long as tenant keeps to the agreement.
3. Parties may be required to provide evidence that alternative means of resolving the dispute were considered. Courts take the view that litigation should be a last resort.
4. Not later than 10 days before any court proceedings, landlord should
   1. ) Provide the tenant with up to date rent statements.
   2. ) Disclose what knowledge it possesses about tenants Housing benefit or U.C.
5. Landlord inform tenant of date and time of court hearing and provide an up to date rent statement and terms of the order being applied for. Should also advise tenant to attend the court hearing as their home is at risk. Records of such advice should be kept.
6. If the Landlord unreasonably fails to comply with terms of the protocol, the court may ;
   1. ) Make order for costs.
   2. ) An order adjourning the claim, or
   3. ) Order a striking out or dismissing the claim ( other than a claim based on a mandatory ground.
7. If the landlord proves its case the court must, in principle { this isn’t inspiring me, I don’t know about you ? } grant possession.

 
To summarise, Section 21 is suspended for 3 months, requiring 3 months notice, and Section 8 is going to be ( when the Master of the Rolls approves ) the same as a Social housing ( Assured Tenancy ) As mentioned earlier, the government have previously given an undertaking to abolish Section 21 and I can foresee this happening sooner rather than later given the alignment with Social tenancies. ( Pre Action Protocol – I don’t see that ending after Corona either ;-(

For Section 8 rent Arrears – Notice from 27/3/20/- is at least 3 months since issue not 14 days ( and this might continue until 30/9/20 )

At that stage, ( Pre Action Protocol ) all private rented sector tenancies will effectively become Assured tenancies.

 
So, I promised some uplift to the doom and gloom. ( well, some )

MHCLG have published ;

Coronavirus (COVID-19) Guidance for Landlords and Tenants. ( 1. )

A number of FAQs, quite useful.

COVID-19 (Coronavirus ) and the enforcement of standards in rented properties. Non-statutory guidance for local authorities on enforcing standards in rented properties during the COVID-19 outbreak. ( 5. ) This suggests authorities take a ‘pragmatic’ approach and inspections for Category 1 hazards should continue, alternative inspections methods suggested ( tenants providing photographs etc. )

New Electrical Safety Standards in the Private Rented Sector will continue ! to apply to all new tenancies from 1/7/2020 and for existing tenancies from 1/4/2021 &

Gas safety inspections. … ‘ if a landlord can show they’ve taken reasonable steps to comply, they will not be in breach of their duty. ‘ evidence of such steps is required.

Licensing, authorities should ‘consider’ pausing these at an appropriate point. Continue with existing schemes, taking landlords circumstances into account.

Coronavirus Act 2020 and renting Annex A – technical guidance for landlords on the provisions of the Coronavirus Act 2020. ( 6. )
Contains the detail of 3 month suspension and notice periods for Section 21 and Section 8.

 
If landlords are:

Experiencing rent problems with tenants,

Tenants wilfully withholding rent, or

Landlords require possession of their property for any reason.

Options for the foreseeable future are limited, ( But, not non-existent )

Depending on the particular individual circumstances, there are some [legal] strategies that we can use to help landlords get out from ‘underneath the bus.’

 
What Possession Friend are doing during this stressful time for landlords ( and during this time only ) is offering Free advice on a case by case basis.

 
We will advise you and can assist where possible.
To get Free advice, email ‘ YourCase@PossessionFriend.uk ‘

subject heading “ Your surname – Corona “ and leaving your telephone contact number with a best time to contact during next 24 – 48 hours. And short summary of your situation.

( Call back will be from a withheld number )

 
We post regularly on Facebook – https://www.facebook.com/possessionfriend

 
To forward your views – opinions, please email ‘ YourCase@PossessionFriend.uk with subject heading “ Corona – your surname “ [ views / opinions subject Corona first, then your surname ]

 
( 1. ) The MHCLG Coronavirus (Covid-19) Guidance for Landlords and Tenants, 28/3/20
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/876500/Consolidated_Landlord_and_Tenant_Guidance_COVID_and_the_PRS_v4.2.pdf

 
( 2. ) Government support available for landlords [sic] and renters reflecting the current coronavirus ( COVID-19 ) outbreak
https://www.gov.uk/guidance/government-support-available-for-landlords-and-renters-reflecting-the-current-coronavirus-covid-19-outbreak

 
( 3. ) Pre-Action Protocol for Possession claims by Social Landlords
https://www.justice.gov.uk/courts/procedure-rules/civil/protocol/pre-action-protocol-for-possession-claims-by-social-landlords

 
( 4. ) MHCLG Press Release, 18/3/20 Complete ban on evictions and additional protection for renters.
https://www.gov.uk/government/news/complete-ban-on-evictions-and-additional-protection-for-renters

 
( 5. ) COVID-19 (Coronavirus ) and the enforcement of standards in rented properties
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/876501/Local_authority_rented_property_COVID_enforcement_guidance_v2.2.pdf

 
( 6. ) Coronavirus Act 2020 and renting Annex A – technical guidance for landlords on the provisions of the Coronavirus Act 2020
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/877744/Technical_Guidance_COVID_19_PRS_v4.pdf

Visit our Facebook page

 

Section 21 Housing Act, 1988.

1. Brief History

2. What is it

3. Why is it used, and

4. How often

5. Impact on

1. Brief history.

Sec 21 was introduced at a time of High ( relative at the time ) Housing demand and low housing provision.
At the time tenancies were governed by the Rent Act where repossession of properties and control of rent were so restrictive that as a means of encouraging the Private sector to invest, Housing Act tenancies were established.

30 years on and the ‘tide has come in and is already ebbing’ assisted by Tax and incessant regulation. Landlords are exiting the market and the funding or properties for sale are often not suiting or affordable to FTB’s.
Amongst the little known about Section 21, is the proportion of use per tenant in receipt of benefit, or in employment.
For Section 21 used for rent arrears ( more below ) – one of the many factors is the freezing and changes to LHA ( U.C ) The recent 16th April House of Commons Briefing Paper, number 7008 showed specific reasons why landlords have and are at an increasing rate, exiting the Benefit tenant market. Its purely a business – financial one and not any form of discrimination.
Shelter’s own submission to the Work and Pensions Select Committee in February reveals a shortfall in LHA for two bedroom properties in 97% of areas in England. !

Nevertheless, Shelter and the Government continue to press for no restrictions on letting to tenants in receipt of benefit, despite a 2010 Department for Communities and Local Government (DCLG) Private Landlord Survey which found: “The most cited reasons for not letting to HB or LHA recipients were disturbance or anti-social behaviour (19%), expected delays in payment (17%), unpaid rent and damage to property or furnishings (both 16%).

Another risk area where Landlords sometimes rely on Section 21 is tenants not declaring they have a pet, or after commencing a tenancy, keep one without the landlords consent. It was less than a year ago that government were pressing for Landlords to accept more tenants with pets. The Tenant fee Ban 2019 limits Deposits to 5 weeks rent that prevents a Landlord from being flexible enough to cover any additional losses by asking for a slightly higher deposit for a pet. ( given a tenant tactic of not paying the last months rent, in lieu of their deposit in anticipation of not having it returned )

In business and life in general, we quickly have to come to conclusions about people we deal with and make decisions based on trust. One of the tell-tale signs is contradiction or incongruity. With the government announcement by Mr Brokenshire on 23 April that he was going to ‘bring to an end so called no fault evictions…. and that the PRS must remain a stable and secure market for landlords to invest in… that landlords have confidence in the court system… so that it can be quicker and smoother for landlords to regain possession are quite frankly paradoxes ! Added with the Government use of tenant campaign group terminology ‘ no fault ‘ [ even using it on the Tenancy Prescribed Information, How to Rent, a Checklist for renting in England ]
These highlight some of the reasons for lack of trust by landlords and the feeling that any consultation is in bad faith.

2. What is it.

Section 21 allows ‘Recovery of possession on expiry or termination of an assured shorthold tenancy.
Sec 21(1) Without prejudice ( my emphasis, more on that later ) to any right of the Landlord under an assured shorthold tenancy to recover possession of the dwelling house let on the tenancy… on or after coming to the end of a fixed term, a court shall make an order for possession… if the landlords has given the tenant not less than two months notice stating he requires possession of the dwelling.
What this means is that other than a lengthy two month period of notice ( irrespective of any matter or conduct of the tenant ) a Landlord can apply to the court for possession. The legislation does NOT state a landlord has to provide any reason for the requirement to regain possession of his or her OWN property.

Section 21 is one of two main routes for possession of AST’s, the other legal process being under Section 8 of the Housing Act.
Section 8 has 20 grounds which have to be shown – proven to achieve a possession order. The first 8 ground allow for mandatory possession if adjudicated in the landlords favour.
Ground 8, of Section 8 is a common ground where at least two months worth of rent, lawfully due, is outstanding.
Section 8, is the process where a ground must be shown and proven to acquire possession, conversely to Section 21, which does not.

Some Tenant support groups have been referring, tactically to Section 21 Possession processes as, ‘ No fault ‘ when accurately the term should be without any ground having to be shown ( proven )
Whilst this may seem a small derivation or play on words, nothing could be further from the truth. Landlords legal and legitimate use of the legislation since 1988 has been maligned as to evicting tenants for ‘No fault’.

This is not a small derivation but a massive leap into another solar system.
Landlords have in the main invested 6 figure sums of their own – families finances to speculate in the property market sometimes due to the adverse pension provisions prevailing.
They take on significant risk, as with any business venture and seek their returns from a legally binding contract with significant onus upon both parties.
Whilst there is onus for the landlord, breaches which in a number of cases can result in Criminal offences ! – there are considerably less, Civil law sanctions which are of very limited effect for tenants.

A landlord will be seeking two main things from any tenant ( aside from adhering to the contracted tenancy agreement ) which are mainly, paying the rent due, and looking after the property.

For the vast majority of Landlords and tenants, this arrangements works well, with 9 out of ten tenants staying in their rented property until They wish to leave which averages over 4 years.
When a tenancy ends, there are inevitable void periods which can be months and sundry costs to a landlord, including the payment of Council tax and of course, the finance repayment of the business, i.e mortgage. These will not be recoverable.

Consequently it is in the landlords interest to keep a tenant for as long as possible. If a landlord seeks to obtain possession via a court order, it is a lengthy and expensive process
Section 21 possession requires 2 months notice, and then the MoJ claim time for average orders is currently 20.6 weeks NOT including the Two months Notice under Section 21.
For anyone to claim that tenants are ‘suddenly being turfed out’ after over 28 weeks is ludicrous.

Section 8 claims, for rental default of at least two months, require a 14 day Notice and a court possession claim which online ( PCOL ) can achieve a court hearing in some cases within 5 weeks.
All Housing Possession cases attract legal Aid and its usual for a solicitor to raise an objection to some part of the case which will usually be a minimum of 6 – 8 weeks sometimes a lot longer. Deposit disputes are raised that ( should be dealrt with as a separate claim ) is allowed to be off-set against outstanding rent. Minor issues of disrepair many times hitherto unknown to a landlord will be raised. I once overheard a solicitor asking a tenant if there was ‘anything wrong with the property whatsoever’.

3. Why is Section 21 used ?

There are no official statistics collated, which, if there is a concern, would be the logical place to start. Perhaps a targeted solution could then be found, rather than setting off like a loose canon, for which there will be innocent casualties. Landlord Associations surveys of members have shown over half of Section 21 notices are for rent arrears.

Why are those landlords not using Section 8 ( despite the pitfalls in that process ? ) it may be that a landlord has commenced the Sec 8 notice but the tenant has paid off some rent, just enough to bring the outstanding amount below 2 months worth of rent and possibly on more than one occasion.
In my experience, many landlords are slow to increase rent, which reflects their preference for a continuing tenancy, all other conditions of the tenancy being met.
Also, slow to take action on problem tenants. I suspect this more often amongst less experienced landlords who are not aware of the procedure and timescales. In addition, landlords are ‘apprehensive’ of the process.

Just as benefit claimants get savvy at finding out all the ‘rules’, so do tenants, especially serial repeat criminal tenants who flea-hop between landlords.
Despite the longer time for a Section 21 process, the mental piece of mind that is sometimes traumatic for landlords, can be worth it for some ‘perceived’ certainty of Possession.
Also, because a Section 8 claim is usually defended by a legal aid solicitor, the landlords feels obliged to defend themselves by also employing at their personal cost, a solicitor. In some cases, this can be as much or more than the rent outstanding so a landlord embarking on Section 8 could ‘double their losses’ ( not an inviting prospect ! )

Many landlords cite Disturbances – tenant behaviour ( Anti-Social Behaviour ) or damage. Proving tenant behaviour inside the property, that often the landlord is denied access to, is very difficult. Interestingly, the RLA web site advertises the method of dealing with ASB is via Sec 21. ( which practically, is true )
Tenants who breach an AST can be subject to a Section 8, ground 12 application, however this ( rarely ) attracts anything other than at best, if proven, eventually a suspended Possession order.

Landlords experiences from property blogs, interaction with landlords associations and my own clients have very, very little confidence of success in legal proceedings.
Even where a case is 100% compliant, there are on occasions Rogue judicial decisions for which there is No recourse. There is no complaint procedure ( other than against their conduct ) against a judge’s decision. They are in effect, above the law.

The only choice open to landlords is to fund an exorbitantly expensive challenge to the court of appeal, or simply start the possession claim all over. Most landlords not having the option of circa £ 30 k for an appeal, resort to the latter which usually succeeds. ( without reimbursement, of course ) It is for the reasons above that landlords feel the justice (sic) system is prejudiced Against them.

There has been claims of Section 21 being served as retaliation for tenants complaints about the standard of the property. However, legislation was put in place to address this ( Retaliatory Eviction under the Deregulation Act 2015 ) If as Mr Brokenshire suspects, the legislation is not effective, and enquiry into that should be made.

4. How often is Section 21 used.

Well, MoJ statistics show its been declining year on year !
The starting point for analysis is data – fact. Given the declining use, the overwhelming majority of which the reasons are known, ( although not specific to each case ) a period of monitoring would allow an accurate diagnosis, as the old saying, still true, ‘ if it ain’t broke – don’t fix it. ‘
At the time an evaluation period runs on Section 21, re-design of the Section 8 process should be considered and implemented. Shouldn’t the aim be to make Section 8 less intimidating, not stacked against the landlord, that more possession claims progress via this route.

Section 21 Form 6A could be amended for a trial period to ask a reason. ( without prejudice to the claim ) This could be disclosed for comment by the tenant on the Form N11b they submit if there’s a desire to challenge the claim.

Letter to the BBC:

Well done to Catrin Nye for exposing the misery of tenants, the plight of Social landlords and Private landlords.

There was a little more emphasis on Social landlords, and the fact that government funding is going towards assisting claimants of Housing allowance for Council – Local Authority Housing as a priority (not private landlords), wasn’t picked up.

The knock on impact of Council Tax for all residents could have been calculated – even any reductions in Council services because of their income shortfall could have been touched upon.

The reason for this message is that Universal Credit is actually affecting everyone, including working families paying their Council Tax.

There were in the majority if not all the examples in the programme, failures by claimants to attend Job centre interviews regarding their claims (and in any fair system, some sanction should be expected) There was no explanation for these missed appointments.

A point where sympathy, of which there is considerable, weakened for some of the claimants portraying hardship (which there isn’t doubt) is that keeping a larger breed of dog, or large tropical aquariums, whilst other claimants mention difficulties with electricity bills, isn’t really congruent.

The interview with MP Alok Sharma wasn’t very forceful but despite this, he could be seen to squirm.

All said, the underlying aim of Universal Credit isn’t criticised. For any tax-payer, it would be ludicrous to suggest benefit claimants should be better off on benefit than in work.

However, until Universal Credit is working as intended (and there is a long, long way to go, if that ever happens), immediate relief (Direct Housing payment) without destroying the principles is required in a speedier and greater number of cases.

I spoke with some Department for Work and Pensions Universal Credit staff who said that where Direct payment was made, it was being reviewed after 3 to 6 months as a maximum, with a view to restoring full Universal Credit payment to the claimant (who are hardly likely to have recovered from arrears which caused the direct payment)

A follow-up programme of an hours duration is required.

Confirmed by Association of Residential Lettings Agents (ARLA) – but its not just ARLA – no other briefings from anyone representing landlords!

As landlords are being encouraged and its not been hard to condemn rogue / criminal Landlords, so to should agents censure those that charge the highest and most unjustified / unreasonable fees.

Whilst in no way supporting the total ban, you could see the impetus for the legislation as the industries bodies being unable to ‘keep its own house in order’