Housing Law – the bigger picture – bad tenants (1)

Over the past few weeks in this housing law series I have been exploring the question of longer fixed terms.

There is no doubt that some tenants, mainly older tenants and those with families, would prefer this.

However landlords (and their lenders) are unwilling to grant longer fixed terms, largely due to the fear of being stuck with a bad tenant.

Lets take a look at this issue.

Getting rid of a bad tenant

The main housing law act regulating tenancies today, the Housing Act 1988, provides for bad tenants to be evicted under the various ‘grounds’ set out in Schedule 2.

These are divided into ‘discretionary grounds’ and ‘mandatory grounds’.

As you would expect from their names:

• discretionary grounds are where the Judge has a discretion to refuse to make an order for possession, and
• mandatory grounds are where he has no such discretion.

Then there is the section 21 procedure which allows a landlord to evict a tenant willy nilly, so long as the fixed term has ended and the proper form of notice (giving not less than two months notice to the tenant) has been served.

Using the schedule 2 grounds

• Discretionary

As a solicitor advising landlords, my advice is NEVER to use the discretionary grounds. If tenants defend they can become long drawn out and expensive.

Why should a landlord spend thousands of pounds in lawyers fees for drafting up witness statements, complex court forms and dealing with a contested trial (should the tenant decide to defend – which they probably will) when, if they wait a couple of months, they can get them out quicker and with considerable less hassle and expense via the section 21 procedure?

I am rapidly coming to the view also that the mandatory rent arrears ground should also be avoided, if section 21 is available.

• Mandatory – rent arrears

Although I have had many successful rent arrears cases, it is all too easy under housing law for a tenant to de-rail a claim by putting in a defence and counterclaim.

Sometimes this will be justified, but often it will be a complete fabrication. Resulting in the case being delayed giving the tenant a further rent free period in the property.

For example I can remember one serious rent arrears case where the tenant claimed that he had paid the rent and had not received the possession notice. Both of which were total lies.

As a result the Judge adjourned the hearing which was then set down by the listing department for a date three months hence.

The poor landlord was tearing his hair out.

But I can see it from the Judge’s point of view too. At these initial hearings, many possession claims are listed at the same time. If a Judge is going to get through his list, he simply does not have time to consider a contested claim. An adjournment is the only option.

But this can delay the final resolution of the case for many months. With no prospect of the landlord being compensated for his lost rent.

The problem with schedule 2 grounds

Private sector landlords with a bad tenant, particularly a non paying bad tenant, will want them out as soon as possible.

If they are not receiving rent for example, this puts their entire business at risk. Or they could be a pensioner where the rent is their sole income. Yet tenants, simply by putting in a factious defence can (sometimes, not always) obtain a further three months or more free accommodation.

Surely this is wrong?

I’ll be looking at this further next week.