If you want to know the sort of problems that landlords can get themselves into, see this email I recieved from a Landlord Law Blog reader. It has been edited to remove identifying names and places.
Our estate agents arranged for council tenants to live in our property but it has taken around £15,000 of our money to go through the existing legal channels and evict them.
Although we finally have achieved this, we find ourselves in a position were we have to pay our tenants legal fees even though they were claiming legal aid assistance. This situation has arise due to legal discrepancies rather than common sense.
As part of the process, we had to issue a ‘section 21’ to give the tenants 2 months notice. Unfortunately for us, the process was complicated as the tenants solicitors claimed the section 21 application was issued against a contract that had been superseded by a revised version.
This had been adjusted as there were 2 names on the original contract and consequently our tenant had eventually received a bill from the DHSS for £19,000 as she had claimed benefits as a single person living at our house. The DHSS revised their accounts when the new contract was received with only the female tenant as the sole tenant – we later found that her son was actually living at the house all along and thus she was illegally claiming more benefit from the taxpayer. Unfortunately, when we informed the council of this fact no department took further action.
We were advised by our legal representatives that if we wanted to continue the process of evicting the tenants out of our house, we had to stop the legal proceedings at the time and start the process again. We now find ourselves with a legal challenge by their solicitors for their costs which equates to £4,750 and a threat of taking us to the bankruptcy court proceedings if we do not pay this amount.
The tenants solicitors also challenged our initial court proceedings on the day of the court case which we beleive was illegal. The tenancy contract stated any legal challenge needed to be given to our solicitor 48 hours before the court hearing and not a few hours before. Unfortunately for us, when we did go into the court room and the judge questioned the the tenants barrister they simply stated their actions were commonplace and the judge decided to adjourn the case rather than uphold the law.
Furthermore, as the council will only act and find alternative accommodation when a court order is issued, this results in lengthy delays which caused additional legal costs to us and I am sure other landlords who go through the same process. Even though the tenant should legally pay for certain bills such as the court order, if they do not pay, the landlord has no option but to take this cost on and add it to the sums already charged by solicitors to represent the landlord. These charges have been added to the rent of £4,500 that our tenant still owes us plus costs in damages to our property that consequently made it difficult to sell.
I have also contacted my MP who believed we could simply give two months notice and then the tenants would leave but this was not the case – I replied to him to explain the true circumstances that many landlords find themselves in but my explanation was ignored.
I believe we are not alone in our predicament. Can any action or discussion take place to challenge these legal representatives as they are purposely creating inefficiencies in the UK law with the cost of their actions being bourn by individuals such as ourselves and the taxpayer. They work on bleeding the system to help a tenant that has subsequently cost us personally and yet the system currently continues to allow this to happen at the expense of innocent tax payers.
A bit of a nightmare. It sounds to me as if your solicitors have not been dealing with the case properly:
- They should know that you need to issue a fresh section 21 notice after a new tenancy agreement has been given tothe tenants, plus
- All litigators should know that cancelling legal proceedings makes the claimant automatically liable for the other sides costs (which will inevitably be claimed if the defendant has legal aid), and that you do not do this if it can possibly be avoided.
You may have a claim against your solicitors therefore. Worth investigating. No possession proceedings based on a section 21 ground should ever cost that amount of money. If the case is done properly it is rare for total costs to exceed £1,000.
The MP’s view of things is rather quaint isn’t it? Bless! Looks like some housing law training is called for, for our MPs (maybe they should all go on my Easy Law for Landlords course …).
What do you make of it all?
I would endorse Tessa’s comments here. It sounds like you need to have a chat with your own lawyers before blaming the tenant’s. Any clause in your contract that said a tenant had to file a legal challenge 48 hours before the hearing would not be enforceable anyway.
It is important that all landlords understand that a possession hearing is a summary process and is not a trial. Where an arguable defence is entered then the Court must adjourn the matter so that there can be a proper investigation of the issues. This is unfortunate as it can lead to additional costs but landlords should also bear these potential costs in mind and factor them into their calculations when deciding who to instruct.
Going for the cheapest option on an eviction is a false economy if the lawyer involved lacks the skill and experience to deal with complex situations.
That is very true. However it is difficult sometimes for landlords to know which solicitors are experienced in this area of work and which are not.
Strangely it may sometimes be the cheaper firms who are better (assuming they are proper solicitors firms and not just a claims management company), as they know precisely what they are doing, and can offer a fixed fee.
I have heard horror stories however where a case has been slightly non standard (as this is), an unqualified advisor has not recognised this, and then the case has got snarled up and become an expensive defended claim.
My heart goes out to the landlord here. this is as bad a case as has ever ended up dumped in my lap, and I’m not a lawyer.
It is a very cautionary tale about the legal world that landlords get into the moment they exchange keys for money and yet so many buy to let amateurs (I’m not saying the poster is one) do everything on a handhsake and trust and think that is enough. Again I’m not saying that is the case here. Its an extraordinary muddle.
Cases like these really damage the relationships between landlords/tenants and the legal/advice world.
I cant think of another area of everyday life where there is such a yawning gap between practice and legal procedure.
Been away and probably too late for the following to be of any interest but:-
1. David Smith is 100% correct in all his comments
2. Tessa the easy way for any Landlord using an agent to be directed to a L&T expert solicitor is to use a L&T expert agent – and not, withy due respect, a non spcialist agent.
3. Landlord – start with the agent. Did you actually agree to take a LHA tenant? If you did not, and especially if you instructed the agent NOT to accept one, then start by suing the estate agent