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.”
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