How Landlords Can Avoid Court When Repossessing Their Property

A trustworthy long-term tenant is the holy grail

After all, we are in the business of providing homes, right? Nobody gets into this game to wrangle with repossessions and the court system

However, it is not a perfect world, and sometimes, even the most perfect-on-paper situation can tumble into a troublesome time, and landlords can find themselves having to navigate complex repossession procedures. 

When done correctly, this process can be relatively painless – when not handled correctly though, court can beckon, and frankly, that’s a nightmare for all involved. So, what steps can you take to help steer clear of court?

In this episode:

  • We speak to Carly Jermyn, CEO and founder of Woodstock legal services and specialists in residence and tenancy law, about what steps landlords can take to avoid finding themselves in court
  • Why upcoming changes may mean you may need to brace for some court time
  • We debate whether the courts are prepared for what’s coming?
  • Eviction without court: is it possible? 
  • We check in with Mashroom’s George Sinclair about new products available that can give you an additional safety net, to back up your preparations.
  • Insurance guru Chris Potts helps clear up questions about 

Courting controversy

The way you repossess your property is changing. Those of you who caught up with our Rental Reform episode a few weeks ago will remember Carly giving us the lowdown on how Section 21’s are looking likely to be phased out at some point this year, to be replaced by a more comprehensive Section 8. 

This is going to really change the game for landlords, and will mean a bit of re-learning may be needed, to ensure you are issuing eviction notices correctly. There is concern that failure to understand the new system could lead to some landlords getting caught out and finding themselves in hot water. 

‘[Section 21] was used as a simple method where landlords perhaps didn’t have all of the evidence, they needed to prove rent arrears, or they were moving back into property. It’s commonly used for that. 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,’ explains Carly. 

‘The changes will mean that landlords will need to establish grounds, and to establish grounds you need your day in court. So, I need to provide your evidence to the judge on the day. So instead of having Section 21s, where a judge can see on a paper based application that you’ve complied with your obligations, so you get your court order, they’ll pull you all into court (that includes tenants as well), ask to see the the evidence, and then they’ll need to establish that you’ve got that ground for possession.’

It is true however that until the changes are announced, we are guesstimating on what is to come – nothing has been formally announced on the changes to the eviction process when Section 21 is scrapped. It is a highly educated guessing game that we are currently playing (and one which we are fairly confident in). 

Will it take a while to have your day in court?

Along with the majority of services across the UK, the pandemic saw courts grind to a halt. Whilst most services are now back up and running as they should be, clearly there is a huge backlog that is being worked through and frankly, the waits are lengthy. 

The legal service has been vocal in its concern about the impact this has had not only on civil matters like landlord and tenant law, but also on criminal cases. Carly agrees that moving eviction proceedings to a court-based system is likely to slow the process down significantly. 

I think that’s my main concern about the reforms, 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. It’s quite a problem.

Can you speed this process along? 

‘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 all over again,’ stresses Carly. 

‘Additionally, you’ve got to remember that these hearings are quite often the list of like 1015 minutes, most of the time, not always being heard by a housing judge. You might be sat in front of someone who quite often is listening to family cases. So you’ve got to make sure that you’ve got really clear evidence there, that there’s no wiggle room, and that you’re confident they will give you that order for possession.’

Can I swerve court?

If the thought of this is making your head spin, don’t worry, You’re not alone! 

With so much to think about and seemingly too many ways to trip up, it might be appealing to just swerve the official route altogether and try and evict your tenant via another method. 

Is there any other way of doing it that safeguards you, keeps the property police happy and gets the job done? A surrender of the tenancy, for example – where both tenant and landlord mutually agree to end the tenancy agreement early, thus voiding the contract. 

‘I’ve had well intended landlords that think they’ve agreed to surrender,’ mused Carly. ‘They’ve shaken hands with their tenant, the keys have been returned. And then they faced a claim for unlawful eviction. And again, that’s about 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.’

I remember a case I had a few years ago, where a landlord had done a handshake on the day – this guy couldn’t afford to live there, you know, and they’d had a decent relationship as landlord and tenant, and shaken hands. And I think the claim value that he ended up paying the tenant was £10,000. Not an insignificant amount of money and it could be more.

Eeek! So, whilst on paper, surrender of tenancy should be a great option, it clearly isn’t a catch all solution for a simple, stress-free end. Frustrating!

Representing yourself

You may feel perfectly prepared for your time in court, ready to take the stand and fight for what’s right. Of course, you are perfectly able to manage your own case, and take on the process yourself, there is no reason why you can’t. However, you may find that there are a few legal niggles and loopholes that trip them up on this journey, and many are choosing to take expert advice instead. 

But is it bank breaking stuff? Surely hiring a legal team for a simple eviction seems a tad excessive, no?  

‘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!’ 

Boris Johnson brings right to buy back

Carly’s top tips on repossession

Ok, so whilst this all sounds pretty overwhelming, it needn’t be. Carly has got some great tips to put into place now, which will help you in the future should you ever find yourself facing this process. 

  • Prep from the start. Keep up to date with paperwork from the start of the tenancy so you have a paper trail should you need it
  • Don’t hold back. When filing a claim, include all of the grounds that you want to rely on (as long as you have evidence)
  • Keep talking. Whilst going through the process, keep communicating with your tenant. They may be as keen as you are to avoid court. 
  • Make it foolproof. If you do have to go to court, your judge may not be clearly briefed on letting legislation, so spell out any evidence as simply as possible
  • Don’t rely on hearsay. Back up any claims with clear documentation which is simple to understand, and clearly sets out the issue you are claiming
  • Double-check. In fact, triple-check! Make sure there are no errors in your submission, even the tiniest mistake could catapult you back to the end of the queue

Avoid avoid avoid! 

In an ideal world, of course, you wouldn’t have to think about repossession at all, and court wouldn’t even be on your radar. We caught up with Mashroom’s George Sinclair to chat about if there were any steps that landlords could take to try and ensure that they keep themselves, and their tenants, as far away from the repossession situation as possible. 

‘I think one of the biggest things that we take pride in at Mashroom is the fact that we help educate all of our landlords. In my opinion, prevention is way better than cure. So first, go back, find our YouTube channel, go onto our community page, ask the questions!’ explained George. 

The second thing is plain old referencing. I don’t think we’ve ever had a landlord that hasn’t conducted referencing beforehand. It’s very easy. Here at Mashroom we find out the tenant’s affordability, we find out their background, so you know that the person walking into your investment, into your property, into your blood, sweat and tears, is the perfect person for you.’

The last piece of the puzzle is Rent Guarantee Insurance. the cost-of-living crisis is affecting landlords and tenants; petrol prices are through the roof; utility bills have gone crazy, and everything in between. But equally, if your investment property is not receiving an income, then Rent Guarantee Insurance is your best bet.

So to sum up George’s practical advice:

  • Understand the changes and don’t be afraid to ask questions (no question is too daft!)
  • Have a clear picture of the person you hand over your property to and trust that they can afford it
  • Make sure you are backed by a solid insurance policy

Seems so simple when you put it like that! 

Average house price

Bracing your bottom line 

Talking of insurance, no show touching on it would be complete without the expertise of Chris Potts, our favourite insurance guru. Carly and George both touched on how a repossession and its repercussions can hit you hard in your pocket, so we spoke to Chris about if there was anything he could suggest to prevent the impacts of a court process causing real financial pain.  

‘If there has been a claim where the insurance have provided settlement, then it may affect the premium moving forwards,’ said Chris. ‘As far as the insurers are concerned, it’s something that they would think about, it depends what payments have been made in respect of that, and what the outcome of the claim was, it’s all down to the specifics of the incident involved. You’ve got to let your insurer know – failing to tell them that you’ve ended up going to court with a tenant could end up biting you on the bum. It would be classed as non-disclosure, and that can be expensive.’

I would recommend doing background checks on the tenants including the credit and reference check, and maybe look at having a product like Rent Guarantee Insurance. So that would cover you if the tenant was unable to, or refuses to, pay the rent in the future.

Landlord Fines

We’ve mainly been focusing on landlords heading to court (or trying NOT to head to court) to fight for what is right. However, this week, the news is focused on some landlords who ended up on court for a somewhat different reason… and it’s not great. 

David Ravello, a landlord of a four-bedroom maisonette in the London Borough of Camden which is home to five tenants each paying £800 a month, found himself hit with an £11,000 fine recently for failing to licence the property correctly under the council’s HMO licensing regulations. 

The property was managed by a managing agent, however the buck stopped with Mr Ravello when it came to getting the correct licensing in place. Whilst the managing agent may have been responsible for organising maintenance, rent collection and any day-to-day hiccups, compliance and licensing ultimately falls to the landlord. 

Mr Ravello’s defence was that his managing agent had misinformed him of the current licensing status of his property, a defence that was thrown out by the Tribunal, upon hearing that he had a number of other properties that required licences and was therefore deemed fully aware of his requirements as a landlord. 

Whilst £11k is undoubtedly a hefty hit in anyone’s pocket, Ravello actually got away pretty lightly. He could have been hit with a bill of more than £20k, but the Tribunal must have been feeling charitable that day, as they deemed the offence ‘mid-range’ and set the fine accordingly. 

Estate Agent Fails

Another woeful tale is that of Green House Estate Agents Limited, based in Edmonton, North London. They were billed a massive £35,000 for (among other things) failing to licence three properties. 

The licensing issue prompted further investigation by Enfield Council’s licensing and enforcement team, where it was discovered that the properties in question not only were not licensed, but also had fire safety deficiencies and damp. The investigation also found that Green House failed to provide necessary information to the council and that its listing on Companies House shows filing of its latest accounts is overdue. 

All in all, a bit of a pickle!

Highbury Corner magistrate’s court ordered Green House to pay costs totalling £2,348, plus a surcharge of £2,000 for each offence, bringing the final amount to be paid to £35,000

Susan Erbil, the cabinet member for Licensing, Planning and Regulatory said that the council wanted to help the ‘many law-abiding landlords’ in the borough meet the required standards and secure the proper legally required paperwork.

‘Unfortunately, there are also landlords who break the law by not obtaining the legally required licence to let their properties,’ she added. ‘The council’s successful prosecution of Green House Estates should be a wake-up call to all unscrupulous landlords who do not comply with the law.’

So, two lessons to be learnt! 

  1. Always understand your own responsibilities as a landlord regardless of what you are being told (thank you, David Ravello) 
  2. And make sure you are keeping on top of maintenance and safety standards (looking at you Green House)! 

The ramifications for failing to do so are pretty hefty. 

The next episode of The Mashroom Show

The next episode of the Mashroom Show is airing on Friday 10th March, where we will be hearing an update on the mortgage industry from Stephen Smith – it’s one not to miss, so make sure to pop the date in your diary.

In the meantime, why not head over to the Mashroom Landlord Community on Facebook and join the conversation about the show, or air your views on the latest changes to repossession processes. As George pointed out, asking questions is key! We’re all chatting, and we’d love to hear your thoughts. 

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Mashroom is an appointed representative of Adelphi Insurance Brokers Ltd. Adelphi Insurance Brokers Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Their Financial Services Register number is 594620, with permitted business activities being introducing, advising, arranging, dealing as agent, assisting in the administration and performance of general insurance contracts and credit broking in relation to insurance instalment facilities. You may check this on the Financial Services Register by visiting the FCA’s website, or by contacting the FCA on 0800 111 6768

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