Property News

UK Courts are Failing Landlords and Tenants

When it comes to ending a shorthold tenancy, seventy-nine percent of private landlords with experience of using the courts to repossess their properties are dissatisfied with the way they work, a new survey* has found.

There are currently two main methods for landlords in England and Wales to evict a tenant on a shorthold tenancy. Firstly, by using a Section 21 notice – sometimes referred to as ‘no-fault’ eviction that enables a landlord to regain possession at the end of a tenancy period without providing a reason and only requires two months’ notice to be given and secondly by issuing a Section 8 notice if the tenant has broken the terms of the tenancy. It currently takes an average of over five months from a landlord applying to the court for a property to be returned to them under Section 8.

Government statistics show that only eleven percent of tenancies are ended by the landlord and, of these, nearly two-thirds regained their property because they wanted to sell it or use it. In other cases, landlords have sought possession because of tenants committing anti-social behaviour or failing to pay their rent.

In this minority of cases, landlords either have to seek a ‘Section 8’ notice which new research from the Residential Landlords Association shows takes around six months and costs over £2,500 for landlords to regain possession of their property. The alternative is to wait until the end of the contract and use a Section 21 notice without having to give a reason. This has led to section 21 notices being used for evictions where the tenant really is at fault because Section 8 is widely considered to be ‘not fit for purpose’.

On 15 April 2019, the government announced that it will put an end to so-called ‘no-fault’ evictions by repealing section 21 of the Housing Act 1988. Under the new framework, a tenant cannot be evicted from their home without good reason.

David Smith, the Residential Landlords Association’s (RLA) Policy Director, said: “Section 21 notices are not used for no reason; our research found that of those who had used the process, 84 percent had used it because of tenant rent arrears, 56 percent because of damage to a property and 51 percent because of anti-social behaviour. They are mostly used as the Section 8 process and court system is [sic] not fit for purpose.”

In a letter to the new Justice Secretary, Robert Buckland MP, the RLA warned 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. They argue that in Scotland when similar reforms were undertaken, the Government had to invest new money and provide more staff after it underestimated the increased pressures brought on the court system.

The RLA says that what is needed is a new ‘housing court’ to speed up access to justice for both tenants and landlords when things do go wrong.

Smith explained: “No good landlord will want to evict a tenant unless there is a major issue around rent arrears or anti-social behaviour. But where things do go wrong, landlords need to have confidence that they can regain their property. This is why we believe a new process, a dedicated Housing Court, needs to be established to speed things up and why there needs to be a six-month break clause in the proposed three-year tenancy.”

According to one of the largest ever surveys* of landlords and letting agents conducted by the RLA, 91 per cent of landlords said they would support the establishment of a dedicated housing court.

It is not just landlords who find the system difficult to work with. According to previous research published by Citizens Advice, 54 percent of tenants said that the complexity of the process puts them off taking landlords to court where their landlord is failing to look after their property. 45 percent of tenants said that the time involved put them off taking action through the courts.

The Government has published a consultation about abolishing Section 21. The consultation includes proposals to improve the court system and alternative process for regaining possession of a property using Section 8, something the RLA has been calling for.

Smith said of the consultation: “Landlords’ concerns over scrapping Section 21 remain unchanged unless and until a new system is in place that provides the confidence and certainty needed that they can regain possession of their property in legitimate circumstances.

“We have engaged extensively with the Government over these proposals and we are pleased to see that many of our points have been taken on board. This includes on improving the court system and alternative process for regaining possession of a property, known as section 8, to account for how landlords can be certain they can regain their property when faced with rent arrears or anti-social behaviour.”

HAVE YOUR SAY: The consultation seeking views on implementing the government’s decision to remove Section 21 of the Housing Act 1988 while improving Section 8 closes on 12th October 2019.

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Alex Wright, Editor