Extortionate court fee increases will impact landlords seeking possession
Landlord Action has lambasted Government plans to increase court fees as “extortionate”. The planned changes, which take effect from 22nd April 2014, will see fees relating to Section 8 (PCOL) claims and Accelerated (S21) claims, increase by as much as 60%, which Paul Shamplina says are only justifiable if landlords are to receive a more efficient service in return.
Currently the application for possession, which is used after service of a section 8 notice, costs £175, the same as an accelerated possession claim used after service of a section 21 notice. From 22nd April, this will increase to £280.
The possession claim online (PCOL) service, which can only be used after a section 8 notice on rent arrears grounds, currently has a substantially discounted fee of £100. This will rise by 150% to £250, making the discount for using the online system far less appealing.
The Government has stated “the benefits brought by a simplified approach with a fee which reflects the average cost of issuing such proceedings justifies the change.”
Commenting on the extent of the rises, Paul Shamplina questioned “Are the Courts going to employ additional staff to warrant this massive price increase so that landlords are at least getting a more efficient service, such as an earlier hearing date on a Section 8 claim, or a Possession Order following a Request for Possession on a Section 21 case within two weeks rather than six?”
The increases are apparently justified in that the landlord will be able to apply for a costs order against the tenant to recover the costs incurred. Shamplina rejects this arguing that if a tenant can’t pay their rent, which is often why they are being served notice in the first place, it is unlikely that they will pay the costs order that is not even a County Court Judgment.
“The rises are ludicrous and will have a huge impact on those landlords and letting agents that find themselves in the unfortunate position of having to start eviction proceedings. Landlords who are seeking possession of their property are usually already in financial difficulty due to rent arrears or damage to their property, so increasing the cost of fighting this battle, and by such a significant jump, seems wholly unfair” says Shamplina.
He continues, “As a company that has fought for the rights of landlords from the start, we have always endeavoured to ensure our services are priced fairly and competitively. Whilst we will try to swallow some of these increases, at such a great hike, we will inevitably have to pass some of this on to our landlords and agents. It is actions such as these which discourage new landlords from entering the market, which is concerning at a time where there is a desperate shortage of rental stock.”
Landlord Action says there has been little public warning of the planned rises but suggest it could spark a stampede of possession cases in the next two weeks from landlords trying to beat the rises.
The only fee which is not rising is the warrant of possession when a bailiff is required, which remains at £110.