Avoiding Court: Is it possible?
No landlord wants to go to court, but can it really be avoided when looking to get your property back?
Going to court is a scary thought, and frankly, not something that anyone would really fancy doing on a regular basis.
However, with upcoming changes in place to reform the repossession process, landlords are likely to find themselves facing a judge more frequently than they ever imagined (and not through any wrongdoing)!
We caught up with Carly Jermyn, CEO and founder of Woodstock legal services and specialists in residence and tenancy law, to chat about why the scrapping of Section 21 will see landlord court appearances rocket, what you can do to keep the process as stress-free (and financially reasonable) as possible, and the steps you can take to help ensure a positive outcome.
All rise, interview in session!
Scrapping Section 21
Tenants come, and tenants go, that is the nature of the rental market. Nine-times-out-of-ten this will come at the end of a tenancy agreement and all will be simple. There’s always that tricky one though and understanding how to manage that is key.
Section 21 notices currently provide landlords with a simple option, but with upcoming changes on the horizon, this won’t be a solution for much longer. Is there a reason it is being scrapped?
‘Section 21 was originally designed as a bit more of a fast-track way to be able to get possession of your property. It was used as a simple method when landlords perhaps didn’t have all of the evidence, they needed to prove rent arrears, or they were moving back into property, you know, it’s commonly used for that,’ explains Carly, ‘It’s very black and white, as long as you’ve complied with your obligations, EPC, gas safety, all of that, you will get a possession order and it’s that control that you will get a possession order.
The proposal is to scrap section 21. It’s not particularly favourable amongst tenants and tenants’ rights groups, and I can understand why. I think the reality is that most landlords using section 21 had a reason to use section 21 and were just trying to avoid having to go to court having to have hearings and use a simpler method.’
A landlord’s day in court
So, if the simple method is going out the window, landlords are likely to be looking at a beefed-up Section 8 as their primary option for regaining possession.
What does this mean in real terms, are there going to be more landlords heading to court to try and address repossession issues?
‘More, much more. You need to establish grounds and to establish grounds, so you need your day in court to provide your evidence to the to the judge on the day,’ said Carly.
QUOTE: Instead of having Section 21s where a judge can see on a paper-based application that you’ve complied with your obligations, therefore allowing you to get your court order, they’ll pull you all into court, that includes tenants as well, and ask for the evidence. Then they’ll need to establish that you’ve got that ground for possession. […] Now they’ll have to go to court and prove that ground.’
Is going to court a lengthy process?
Going to court sounds lengthy, and painful! Surely it’s not going to be as complex as it sounds?
‘My main concern about the reforms is the courts’ ability to deal with it. The courts are archaic. Their systems and processes are not what you’d expect to see. They have problems dealing with their current caseload and current demand for hearings. So yeah, it’s quite a problem.’
Carly added: ‘I think, therefore, it’s really important that you get things right first time, because if you don’t get it right first time, then you have to start the process again.’
Making errors, causing havoc
Oh, glorious. OK, so, with that in mind, what on earth can landlords do to ensure that they don’t find themselves making one tiny error and ending up flipped straight back to the end of the queue?
‘Really important, you’ve got to remember that these hearings are quite often not in front of a housing judge. You might be sat in front of someone who is listening to family cases. So, you’ve got to make sure that you’ve got the evidence there, that there’s no wiggle room, and that they you’re confident they will give you that order for possession.’
QUOTE: And accept that it will be a lengthy process. It’s important to get it right.
What does the court process look like?
On paper, it is easy to understand the proceedings. But what does this process look like in real life?
Let’s imagine that we have a property that is home to an absolutely model tenant. They always pay their rent on time, and they keep the property immaculate. However, your situation has changed and you need to sell the property (in the current cost-of-living crisis, a situation that many landlords are finding themselves facing). How would you go about regaining possession of the property in order to proceed?
‘Currently, your legal mechanism is a Section 21. What I would always advise landlords to do is to protect your position. If you can serve your Section 21 notice, serve it. You don’t need to be aggressive in your communications, when you’ve had a good relationship with your tenant, you should be open and honest to them why you need to seek possession,’ Carly explained. ‘We do this a lot, you can maybe agree to surrender. And perhaps you need to think about agreeing terms that are attractive to them, and helpful to them so that they can move on and find a new property.’
What sort of options can you consider that might smooth the way?
‘For example, returning a deposit, and perhaps another incentive. If you look at what court proceedings may cost you, you may prefer to give that to the tenant so that they can move on. We do that a lot, and it can be really quite successful. It’s about the communication you have with your tenant.’
‘Be open, honest and say, I’m going to have to serve a Section 21 just to protect my position. But I’m really hoping we don’t have to go down that route. We can either negotiate on your behalf, or you may have negotiated terms with them. We can make sure that they (the negotiated terms) are put into a document where everybody’s rights and obligations are protected.
With so many potential pitfalls to watch out for, how do landlords make sure that they’re not unwittingly breaking any rules? We’ve all seen programmes of unscrupulous landlords turfing their tenants out on the streets, is this an easy trap to fall into simply by mucking up your paperwork?
Agree to surrender
‘I’ve had well intended landlords that think they’ve agreed to surrender. They’ve shaken hands, the keys have been returned. And then they faced a claim for unlawful eviction. And again, that’s about having not having the legal document properly drafted and signed, and evidence that everybody understands what that document is and their rights and responsibilities under that document and the agreement.’
Changing the locks
‘We then have also had it when they get the court order, they think they’ve (the tenant) gone and they go and change the locks but actually should have waited for the bailiff appointment. They (the tenant) haven’t vacated and until that bailiff is there and you’ve got that bailiff appointment, then you’re not able to change those locks.’
‘Obviously, in the tenancy agreement, there’s a requirement to notify if they’re going to be away in most tenancy agreements, or if they’ve gone to prison as an example. So, if there is a potential that a property has been abandoned, we’ll assess it on a case by case basis. You have to look at all of the evidence, and you communicate, and you protect yourself with that communication, inspection of the property, gathering evidence from neighbours, that sort of thing. But you know, it’s still a little bit of a grey area. And you know, the safest way is to get your court order and a bailiff and make a judgement call,’ stressed Carly.
It’s a tricky one to call though, as the penalties for a landlord who gets the call wrong are pretty hefty…
Penalties for errors
‘I remember a case I had, you know, a few years ago, where a landlord had a guy who couldn’t afford to live there. They’d had a decent relationship as landlord and tenant. I think the claim value that the landlord ended up paying the tenant was £10,000 – not an insignificant amount of money, and it could have been much more. So, it really is worth getting all your ducks in a row.’
So, how can a landlord prepare?
Clearly there is a real need to understand exactly what you need to do, get it right the first time, prepare for it to be a lengthy process and understand that it might not always go the way you hope it will. Sounds utterly baffling.
So, putting your best foot forward, what exactly should landlords be doing in order to ensure that they give themselves the very best chance of a successful outcome in this game of cards?
- Ensure your Section 8 notice is properly drafted. If you’re relying on rent arrears, you need an accurate rent schedule and you need to be sure that the notice itself is completed properly. ‘Quite often we see the notice is fine, but the evidence or service is not correct, or the date might not be correct. It’s really important, those details are checked,’ says Carly.
- Collect the evidence. If you’re relying on other grounds, make sure you can back that up. t’s harder to gain possession on other grounds, such as antisocial behaviour. And it’s also harder to gain on other breaches as well. Carly’s advice: ‘always to put in all of the grounds that you want to rely on and make sure that you gather all of the evidence. I quite often put that evidence with the notice as well, so the tenant knows at that stage. They can think ‘okay, they’ve done their homework. I need to deal with this’.’
- Come to an agreement. Your solicitor can communicate with the tenant, even when there’s rent arrears and they haven’t been the model tenant, there’s still opportunity to come to an agreement. As Carly points out, ‘Quite often [these tenants’] might retaliate with a claim for disrepair, and you can wrap it all up together.’
If communicating with your tenant about their upcoming repossession makes you squirm, or the thought of drafting notices is a little overwhelming, there’s no need to panic. Legal professionals like Carly are on hand to help – and yes, whilst there is a fee, it may well be the best money you could spend.
‘Our proceedings are based predominantly on fixed fees. So, you know, they’re not as astronomical as you’d expect!’ laughed Carly. ‘Obviously, you are paying for people’s years of experience and dealing with this and navigating the best route for you – so not just ploughing through court proceedings and having the experience to negotiate a surrender!’
You can hear the whole conversation on the latest episode of the Mashroom Show now.
In the meantime, why not head over to the Mashroom Landlord Community on Facebook, where we’re courting controversy and chatting about how these changes are going to look for us. We’d love to hear your thoughts!
See you there!