There are dangers with using the Section 8 possession claims process under the Housing Act 1988 which are not always apparent to landlords and agents.
There is always a temptation to use section 8 because the shorter notice period (usually 2 weeks) is much quicker to court than the alternative – section 21.
Section 21 is much safer because there’s no possibility of counter claims, although there’s a 2-month notice period and the section 21 procedure can only be used when the fixed term has ended.
These guidelines apply primarily to England and Wales. Other regions and jurisdictions are similar but there may be important differences. This is not a definitive interpretation of the law, every case is different and only a court can decide. If in doubt seek expert advice.
Section 8 is a breach of contract court action. This means that to win your case you need to prove that your tenant is in breach of the terms of your agreement. If you are successful you should obtain a possession order under one of 17 specific statutory grounds (Housing Act 1988, section 8, schedule 2), plus if there’s debt involved, a you can also obtain a money order (CCJ). However, it’s not always so straightforward.
Once you commence a legal action there’s no turning back. You must see it through to its conclusion, or pay the other side’s legal costs to back out. If your tenant decides to defend the case or brings a counter claim against you, then you could be in for some serious costs, especially if your tenant has legal aide and legal assistance. If you lose the case all the costs could fall on you and the whole process can take up to 12 months.
Recently a landlord related this tale of woe to us: “We have a tenant owing us over £10,000 in rent. The new 12 month tenancy still had 3 months to run when I took the tenant to court using the rent arrears ground 8 – section 8. Hours before the hearing the tenant’s solicitor (tenant is legally aided) filed a counter claim, claiming damp in the property. Because of the counter claim the hearing was adjourned and a new one fixed for next year – 6 months away. I am concerned about the cost of all this as my solicitor has estimated legal costs of around £15,000 if I lose.”
“To end the process now I am told I will need to pay the defendant’s legal costs to-date and as he is represented these are already substantial.”
This is not the first time I’ve come across this situation of tenants bringing what appear to be spurious last minute counter claims when landlords have taken court action using the 1988 Housing Act Section 8 procedure for rent arrears.
Section 8 has a short notice period (2 weeks) so when tenants are in arrears landlords are often tempted to go for the quicker route to court using s8 instead of using the much longer 2 months notice, but far safer and more predictable Section 21 route.
Section 8 should come with a government health warning – a successful counter claim to the action, when the defendant is represented by a solicitor, and especially if legal aid is granted, can result in costs awarded against the landlord claimant running into thousands of pounds. Furthermore, the landlord will usually fail to get a possession order.
It seems in most cases the defendant tenant is allowed to raise these issues at the very last minute, even in court, and I’ve even come across one case were a disrepair claim was issued on appeal against a s8 possession order.
According to Paul Shampalina of Landlord Action there has been a developing trend of tenants bringing defences in eviction cases and of appealing judges’ decisions. The figures show a 4% increase this year.
The other side of the coin is that some judges are showing a surprising degree of sympathy with tenants in arrears. In other cases it would seem the tenant is just more knowledgeable about the law than is the landlord, or is legally represented against an amateur landlord.
When a possession and money claim is issued using s8, the ensuing hearing is normally fixed for 10 to 15 minutes of court time. If any complications arise like a defence or a counter claim, the case must be referred for trail and a further hearing of perhaps 2 to 3 hours will be set, usually months down the line.
From the landlords’ point of view, it is crucial they are fully prepared at this second hearing – if they lose they will usually be directed to pay the defendant’s costs in full.
With dampness it is difficult to prove who is at fault because there are three scenarios here: (1) there is a property defect allowing water to enter, (2) there is a design deficiency and the dampness is inherent, or (3) it’s condensation which is (a) caused by the way the tenant lives, or (b) due to a deficiency in the property (e.g. poor heating system, poor insulation or inadequate ventilation methods) or (c) a combination of a & b.
Property defects should be easy for an expert to spot and could be cleared up before any future hearing. The landlord is not liable to remedy design deficiencies. Nine times out of ten condensation and mould in rental properties is caused by a tenant’s lifestyle: insufficient heating and not ventilating steam at sources – drying clothes, cooking and washing steam.
Before any future hearing you should request access to the property to assess the defects. Take along an experienced trades person with a view to correcting any defects as soon as possible. It will be useful to get a statement from your trades person and if necessary you should try to agree with the tenant & the solicitor to agree to a joint expert report.
Section 8 gives a mandatory possession order where the arrears are more than two months’ rent. If the tenant’s claim in court does not bring the arrears below 2 months then you should be prepared to point out that a mandatory possession order must be made. In the meantime it might be prudent to pursue an s21 possession route.
As a general point on this: social landlords have a further hurdle on possession claims in that judges must take into account the principle of “proportionality” under article 8 of the European Convention on Human Rights. Some fear that this broader principle may in future start to be applied in private sector cases. As with all legal matters landlords should ensure they have a “cast iron” case before getting involved in litigation.
A further concern here is the recent calls for extended tenancies. The opposition have committed to the introduction of a five-year tenancy and there have been moves by the coalition government towards this on a voluntary basis. Without some other form of protection landlords need to be wary about granting long-term tenancies and my view is that a 6-month tenancy is long enough, certainly initially.
By Tom Entwistle, LandlordZONE®
21 February 2014
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©LandlordZONE All Rights Reserved – never rely totally on these general guidelines which apply primarily to England and Wales. They are not definitive statements of the law. Before taking action or not, always do your own research and/or seek professional advice with the full facts of your case and all documents to hand.