Lawyers are warning that government plans to outlaw so-called ‘no fault’ evictions whilst expanding what constitutes a good enough reason to evict may be counterproductive and unworkable.
In response to a recent consultation involving the Ministry of Housing, Communities and Local Government (MHCLG), the London-based firm Osbornes law has warned that a legal system that is already working to capacity will struggle to cope if there is an increase in disputes about the reasons for evictions.
The MHCLG proposes to abolish assured shorthold tenancies so that landlords cannot use section 21 of the Housing Act 1988 to evict tenants at the end of a fixed-term tenancy without providing a reason or avenue for challenge.
Instead, Section 8 notices will be more widely accessible to landlords, who can serve them if their tenant has breached the terms of their agreement or if they wish to sell the property.
The MHCLG also promises faster redress through the courts, but Shilpa Mathuradas, head of property litigation at Osbornes Law, points out that only a small minority of landlords have ever began the process of evicting tenants for no good reason.
Indeed, Residential Landlord Association (RLA) research shows that 84% of landlords who had turned to the Section 21 process did so because their tenant was in arrears, while 56% did so because their tenants had damaged the property or had been behaving antisocially.
‘If the process is to be abolished, then landlords need to be assured that a workable system is available to ensure that where landlords rightfully seek possession this is obtained quickly and efficiently without significant cost to landlords, who are often in a position where rent is not being paid where there are ongoing court proceedings,’ said Mathuradas.
‘If a landlord is rightfully claiming possession based on rent arrears or any another fault of the tenant, this is not going to stop because the section 21 process is abolished. Landlords will simply pursue the tenants through the more expensive and lengthier Section 8 process. This will not create stability and security for the tenant,’ she added.
Meanwhile, her colleague Alex McMahon, an associate solicitor in the property litigation team, explained that the government’s reforms will result in more court action, as factual disputes will be unresolvable without it.
‘Tenants must be allowed to defend allegations of fault, and to bring a counterclaim if appropriate. Judicial scrutiny is the safeguard for both sides, and unsuccessful parties to disputes can expect cost orders to be made against them,’ he pointed out.
‘In my view, the problem with delay is not found in the legal framework but in the overburdened legal infrastructure that applies it. Our courts are now so significantly clogged up with disputes that claims can take many months before they are listed for a first hearing.’
‘Lots of courts have closed their doors and this has added to the lists of the existing courts. Courts are also making more and more mistakes, adding to delays. So whilst expediency is welcome, it cannot come from these proposed changes alone,’ he added.
Current legislation dictates that landlords proceeding with Section 8 must prove that their tenant owes at least two months’ rent. However, tenants often ensure that their arrears amount to less than two months’ worth by the time the case is heard, leaving the landlord with extensive legal bills.
The consultation advocates reducing this to one month, and Mathuradas has sympathy with that sentiment. ‘At least a tenant will have to reduce much more of the arrears before a possession order is made. Indeed an argument can be made that the arrears should be zero by the time of the hearing to avoid a mandatory order,’ she said.
‘I would welcome a provision which allows a mandatory possession order to be granted where a pattern of behaviour emerges and the landlord has had to issue possession proceedings several times only to find at the date of the hearing only to find that the arrears have been reduced to below the requirement for a mandatory order,’ she concluded.