In previous articles in this series I have discussed the changes taking place in housing – the greater part that the private rented sector is expected to play, with fewer people able to buy their own homes.
However if people are going to have to live in the PRS for a greater proportion of their lives, they are not going to want to move home every six months. They will want and need longer fixed terms.
How troublesome tenants inhibit longer fixed terms
However, most landlords (or their letting agents) do not offer longer fixed terms. In previous articles I have suggested that the main reason for this is fear of not being able to get rid of a troublesome tenant.
Despite the fact that the statutory possession grounds in Schedule 2 of the Housing Act 1988 cover most ‘bad tenant’ situations, it is often very difficult to bring a claim to a speedy resolution – sometimes even if the tenant is in serious arrears of rent.
So landlords are left with section 21 being the only reliable and quick means to evict bad tenants. But as section 21 can only be used after a fixed term has come to an end, this rather militates against having longer fixed terms.
How can we resolve this conundrum?
This biggest problem is with unpaid rent. A landlord can perhaps put up with a badly behaving tenant, but if his rent is not paid, this puts his whole business at risk.
Yet Judges, given half a chance, will routinely consider a tenants right to a home as being more important that the landlords right to rent.
In a way they are right, but it results in massive injustice to landlords. Why should private landlords be expected to house unsatisfactory tenants free of charge?
Here are some suggestions as to how this could be dealt with.
Fast tracking rent claims
I would suggest that if a landlord has a claim for unpaid rent which is in excess of, say, two months, he be entitled to use a special fast track procedure.
This would be like the accelerated procedure in that there would normally be no court hearing. If there is no defence put in, the landlord would be entitled to an order for possession after 28 days.
The tenant would not be able to obtain any extension unless they paid a an amount of rent equal to the amount of time they required, to the landlord in advance.
Or perhaps it could be paid into court (to avoid disputes), to be paid out to the landlord as soon as the cheque has cleared. So in effect a tenant would be ‘buying’ an extension of time. With a limit of say, six weeks.
If the tenant was able to pay off the whole of the arrears and fixed costs, BEFORE any bailiff appointment, then the possession order could be set aside.
Dealing with rent and disputes
If on the other hand the tenant was withholding rent because of some other issue, such as disrepair, then they would only be allowed to proceed with a defence if
- they paid their rent into court, to ‘abide the event’ or
- if they were able to produce receipts covering the cost of any disrepair work along with proof that they had followed the proper procedure of notifying the landlord in advance of these works being carried out.
If the courts did not want the extra administration of dealing with payments into court, no doubt other organisations such as banks, credit unions etc could provide this service.
As with the accelerated procedure, a Judge would be able to set the claim down for a hearing if he considered it appropriate.
So far as bailiffs appointments are concerned, landlords should be entitled to apply for this as soon as the possession order has been granted. Rather than having to wait until the date for possession has passed – which often gives the tenant a further 2-8 week rent free period.
If a system like this was in place, then landlords would have less to fear from granting a longer fixed term.
Assuming the registration and accreditation suggestions made earlier in this series are implemented, this fast track procedure should only be available to accredited landlords or those using an accredited agent.
Other problems can be dealt with by always giving new tenants an initial provisional tenancy of say six months to a year. In most cases if a tenant is going to be a troublemaker of some kind, this will manifest itself within this initial period of time.
After this, a longer fixed term of several years could be granted to those tenants who wanted them. The rules for repossession on bad tenant grounds (other than rent arrears) could be similar to those available today.
I will be re-visiting the subject of longer fixed terms next week.