Episode Transcript
[00:00:10] Speaker A: Let's Talk, let's an original podcast from the Lettings Hub. Hello. Welcome to the latest episode of our podcast, let's Talk. Let's. I'm Heidi, the CEO of the Lettings Hub, the tenant referencing business that got good at tech. Let's Talk, let's is our regular roundup of news and views on a whole range of subjects spanning the private rental sector. Today I am delighted to be joined by Ryan Heaven, who is a consultant solicitor from our legal services partner, Woodstock. Woodstock Legal Services are a really important partner for the Lettings Hub as they provide all of the legal support and advice when our agents or their landlords need to make a claim on their rent and legal protection policy. Ryan is also an expert in evictions legal, tenancy documentation and compliance and all. Sounds very exciting, Brian.
So let's get started.
Ryan, thank you so much for joining us. Please introduce yourself to our listeners and tell us a little bit more about you and your role at Woodstock.
[00:01:11] Speaker B: Oh, hi Heidi. Thanks so much for having me on. I think you did a nice, nice summary. To be honest, I've been doing this sort of thing for the last 10 years. I remember being around when the Deregulation act came into force and I actually can't believe that's 10 years ago.
And over that time, like you say, I've been doing an awful lot of evictions, but also been branching out to basically do anything that a landlord or a letting agent might need. So that, that would be things like tenancy agreements, terms of business training.
Yeah, basically whatever you guys need I probably can provide in some, some form or another, or at least know someone who can sort out for you, if not me.
[00:01:48] Speaker A: Okay, fabulous. Now it's become a subject that's impossible to avoid, which is obviously the Renters Rights Bill. So let's start by talking about that because obviously it's pipped to be the biggest change in 30 years to our sector. Now, we know we've obviously been talking about rental reforms for years and we've definitely been expecting some, but I don't think any of us were prepared a year ago, let's say, for the amount of change which is coming our way. So what is your views on the bill as it stands at the moment and what do you think are going to be the biggest challenges or the biggest changes for our industry?
[00:02:24] Speaker B: Well, we all know the headlines, don't we, of what renters rights is bringing in? We have removal of Section 21 notices, removal of fixed term tenancies, and to be fair, we did Have a dress rehearsal of this with the last government and Labour probably could have done more and maybe would have done more if they had a completely blank slate to start from, but I think they were probably prioritising getting something done nice and early and, dare I say cheaply, because this doesn't require very much Government money at all to push something like this through.
So they probably just took the skeleton of renters reform, redressed it as renters rights, made a few tweaks around the edges, which, particularly when it comes to rent advance, has caused a lot of consternation in the industry. But, yeah, like I say, we've been talking about this for a very long time now, because renters reform, renters rights have blurred into one great big, long thing. It's been, well, the last two or three years talking about this, basically.
[00:03:19] Speaker A: Yeah, I know. I kind of feel that we're getting bored of talking about it and it's kind of like, not that I'm willing it to come early, but I'm kind of more action than chatter. And it's kind of like if we actually knew exactly the form that it was going to come in and exactly when it was going to come in and how it was going to be introduced, we'd all obviously probably stop talking and start doing a bit more. But for now, we are going to keep talking about it because we still obviously trying to talk to the government, lobby them, to try and make some changes. I know I'm going to the House of Lords on Tuesday, actually, and talking to some other Lords about what they've asked and it is all about rent in advance. So let's talk about some of the specifics. What are going to be the biggest problems when the bill comes in?
[00:04:01] Speaker B: When the bill comes in, it is inevitable and I don't hold out much hope, to be honest, that lobbying the Lords is going to do that much at all. I don't want to reign your parade with that.
The House of Lords is a talking shop and whilst it can certainly suggest changes to legislation and they have been putting through amendments, there's a whole list of amendments proposed in the House of Lords. And I certainly think that the industry should be trying to make it clear that they would like further changes made, I'm not actually expecting anything to happen with the best will in the world. Even if the House of Lords come up with some amendments that they can agree on, the Government's under no obligation at all to take that on board. They don't have to change anything. So unless something specifically gets Government support. I'm not actually expecting the version to change from the third reading in the House of Commons to Royal Ascent. I think we're 99% of the way there and any other changes will be pretty minor. I don't think think we're going to get something like the, the rent in advance changes, which, like I said, cause. Yeah, cause a major issue. And if, as we're still talking about renters rights, a good portion of what we're talking about is this whole rent in advance issue. What are we going to do with foreign students? How are we going to take people who can't pass referencing and can't provide guarantors? What are we going to do?
That's the main type of conversation. I don't think there's going to be another headline like that. I think this is basically what we're going to get as the final product.
[00:05:29] Speaker A: Yeah. Okay, so we mentioned rent in advance, but there are other challenges, aren't there, with the legislation? So let's kind of talk about Section 21. Obviously it's commonly used at the moment. How common, you know, when you're evicting tenants at the moment. How often is a Section 21 used over a Section 8? And why, why is that?
[00:05:53] Speaker B: Well, the Section 21 is, I think, just a tool for any given job and it's attracted a lot of bad press, particularly from tenants rights organizations because obviously you don't need a reason to serve a Section 21 notice. But I think this is one of the better arguments from the lettings industry is that, yeah, okay, you don't need a reason. But also you don't just get up in the morning and decide you're going to evict your tenant. There is a reason behind it and some of these reasons are being covered in the new grounds, the Section 8 grounds. So you have, for example, selling the property. Yeah, a lot of landlords, if they're wanting to liquidate their assets, they're sick of being landlords. And to be fair with the ever increasing regulation, I quite understand that position where if they want to sell the property, currently they have a Section 21 notice to do that. They don't need to tell a tenant that's the reason, but that is the reason going forwards, we'll have a section 8 notice using ground 1A and it will tell the tenant categorically the property is going to be sold. That doesn't change the tenant's position. They were always going to be evicted under a section 21 or under a section 8 for the exact same motivation. It's just that now they have a piece of paper where it says this is the reason.
[00:07:04] Speaker A: Yeah, I suppose, though I've heard it over time. If there is the opportunity to serve a section 21 or a section 8, it's like, well, let's go for a section 21 because it can't really be challenged. It's not controversial. It's, I suppose, less damaging maybe between the relationship between landlord and tenant, where the tenant then might argue back.
Is that kind of how you would use it as a solicitor? Would you kind of look to see what your options were and opt for a section 21 over a section 8 for that reason, or does it very much depend on circumstance?
[00:07:40] Speaker B: Yeah, that's true. We do always have to consider it at the moment. So if I have an inquiry that comes through and say there's antisocial behaviour at the property of a tenant subletting or basically some other undesirable behaviour, well, the avenue for that is either a section 8 notice on discretionary grade grounds. And with discretionary grounds you can't guarantee possession. That's not to say that discretionary grounds don't have a place. If there is serious antisocial behavior going on or a breach of a tenancy that the court can't possibly condone, like let's say, for example, drug dealing, brothels, that sort of thing, and that comes up fairly regularly, then I think a court would probably evict that person even on discretionary grounds. But with Section 21, you simply remove the ambiguity so long as you've done all the compliance things that you need to do with section 21. And there's a finite number of things that can invalidate a Section 21 notice. As long as you've ticked all those boxes, you will get possession of the property because the Section 21 notice you serve will be valid. I think landlords like that security blanket and like I say, that may mean that Section 21 notices are being served in circumstances where they could rely on a section 8 notice under different grounds.
The only real grounds that I see landlords really going for are mandatory grounds. So rent arrears. That nearly always is a section 8 notice just because it gets the matters court sooner and you end up with a money judgment as well at the end of it. But where there's any doubt at all, landlords don't like discretionary grounds. Now, they're going to have to get used to that in the future because discretionary grounds are going to be one of the few ways they can get them out, unless it's got a very good reason, like, for example, selling the property or they're going to move back into the property. But yeah, they're just going to have to get used to using discretionary grounds in circumstances where they're currently using Section 21s.
[00:09:24] Speaker A: So what our listeners would love to know is what actually goes in, you know, what is the process, I suppose, behind an eviction? Because although it's become, you know, your day job for some agents, they've never been through a process like that, they've never been to court and they don't necessarily know what it entails. And landlords, you know, again, lucky landlords definitely don't know what it entails. So can you kind of do us a little bit of a paint by numbers on how does it start and how does it work at the minute through the course?
[00:09:55] Speaker B: Yeah, of course, of course. And obviously, if a landlord letting agent, you've never had to do this. Well, you're very lucky.
I tend to only see. Well, by the very nature of the thing, I'm only seeing the situation where there needs to be an eviction, either because tenants can't rehouse themselves and the local authority won't step in until much later in the eviction process, or there's been a breakdown, antisocial behavior, rent arrears, that sort of thing, or like I said earlier, quite benign issues like the landlord just wants to sell up, wants to stop being a landlord, and they really have no route other than to evict the tenants so they can ensure they get the best value for their property.
So the process is basically broken down to three stages. You have the notice, which is basically just the vehicle to get the matter to court. Then you have the court process to get a possession order, and then the possession order, if the tenant doesn't leave in accordance with that, you have to strike Bayless to evict.
I'll go through that a little bit slower. So the notice, the first stage, like I say, Section 21s, if you can serve one, provide you with a lot of certainty of outcomes income. So landlords like to go for that, but that won't always be possible, even because you have, for example, a, a long fixed term, but sometimes it's not possible because you cannot serve the right compliance documents. There's been a lot of issues recently to do gas safety certificates and there's still a void in law where we don't really know what, whether or not it's ever, ever fixable. If you haven't got a gas safety certificate for big periods of time during the fixed term, or you don't have one at the outset, in which case, if you can't serve a valid section 21 notice, you basically have an assured tenancy. You basically already have a renters rights tenancy agreement because you can't use section 21 at all. So yeah, your notice depends on circumstances, what you want, what the tenant's done, what options you've got. But long story short, you are basically saying, saying to a tenant, leave by a certain date and that certain date will depend on the notice period required. But Section 21, that's at least two months. Section 8 notices vary from no notice at all, which is antisocial behaviour, all the way up to two month notices. And again, these are the current rules. Renters rights are going to increase a lot of these notice periods. So when I've spoken about the sale ground, ground 1A and the landlord move back into the property ground, which is ground one, those are going to be four month notices in the future. But when that not expires, if the tenant hasn't left, then the LAM needs to consider, do they go to court?
They probably do want to go to court because there's a reason why they serve a notice in the first place. They weren't just doing it to bluff. In which case, if the tenant's still there, then they'll need to go on to stage two.
[00:12:41] Speaker A: So it's absolutely critical that the right notice is served with all of the relevant supporting documents. Otherwise when you get to stage two, there becomes a problem.
[00:12:50] Speaker B: Yeah, absolutely. This is with Section 21s in particular. Like I said, there's a finite list of things that can go wrong with it. As long as you've ticked all those boxes, then the notice you serve will be correct. So it is worth spending the time making sure everything's done properly. Because what you don't want is to have served the notice, waited two months, then issued a court claim, waited some more months for the for the court to process it, and then a judge simply says, oh, you didn't do this thing correctly. And it would usually be a minor and fixable thing. For general rule, apart from gas safety certificates, like I said, they are their own kind of special category of problem when it comes to section 21s, some gas safety certificate issues cannot be fixed, all the others can be fixed. So for example, if you didn't protect the deposit, then you can return the deposit to the tenant. And if you do that, then that's no longer a barrier to serving in section 21. Notice.
[00:13:45] Speaker A: Yeah. Okay, so let's assume then we've issued the notice, the notice has expired. Because I suppose what the notice is doing is saying to the tenant, this is what I would like you to do. And if they then fail to do it, you're going to move on to the next step.
[00:14:00] Speaker B: Yeah, essentially that. This has always been a common question for landlords, but they read the Section 21 prescribed form, so it's called Form 6A, and you can download it from a government website and it says on there you, the tenant must leave the property after, and then you insert the date in there. And I've had no shortage of landlords ask me and agents, to be fair, asked me, well, I don't want to leave after that day, I want to leave on that date. What happens if they don't leave? And it's kind of implicit that if they don't leave on that date. Well, that you have to go to stage two, issue a possession claim at court to obtain a possession order. And if they don't leave in accordance with the possession order, then you construct Bayless to evict and that will be the end of it. When the eviction happens, they gone. But. But yeah, the first step is you have to say, I want you to leave by a certain date and if you don't, then we will go to court.
[00:14:52] Speaker A: Okay, so how do you get a court date?
[00:14:55] Speaker B: Well, you apply to your local county court. Now, this is part of the problem really, is that the talking point here is that there is a lot of delays in the courts. Now, I think there's a London bias here because a lot of the big players and the big industry, and obviously the London rental market is absolutely enormous just by virtue of a number of houses in it. That tends to mean that when people talk about court delays, they're actually talking about court delays in London. And that isn't the picture across the country. Now, I live in the Midlands. My local county court is Derby County Court. And I've been waving the Derby County Court flag vigorously for years now because it's really, really quick. You can get to hearing about four to six weeks after you issue proceedings, which is great.
I've issued accelerated proceedings there and I've got possession of about three weeks after I sent the claim to court. It's lightning fast. So not every experience of the court system is necessarily the same. The bigger the city. So Manchester is slow, Birmingham slow. But that's really by virtue of the fact they are massive areas. They have one court, London, Slow, because it's an even bigger area. And even though it's got, even though it's got courts, there's simply not enough, not enough people there to do the work, not enough judges, not enough admin staff.
And that could only really be fixed by money.
[00:16:13] Speaker A: I was describing it on another podcast. It's a bit like the postcode lottery, you know, you could strike lucky or not.
And I can see over time the insurers starting to link pricing to Postcode because it's a completely different scenario, like you say, where you live compared to what it might be in Shoreditch in London.
[00:16:36] Speaker B: That makes a lot of sense really, because if you have a rent guarantee product that's going to indemnify a landlord for, say, 12 months, well, they might well be pushing up against that 12 months if they are in parts of London. Whereas in Derby, if you can get the eviction done from, from, from serving Section 8 notice to getting them out, bearing mind they would already have to be in two months arrears before you serve a Section 8 notice. That whole process is perhaps five months worth of arrears. So the insurer is less exposed if you have a, if you have a case out in the, out in the. I don't, I don't want to describe Darby as the sticks, but you know what I mean? It' not, it's not affected in the same way as other, bigger cities are by these, by these major delays. So, yeah, like I said, the, the court delays, I think, is a regional thing. And unfortunately with the postcode lottery, you can't decide which court is going to deal with your case because ultimately what has to happen is the bailiffs evict and the bailiffs have to be local. So even if it were possible to have something like the small claim score, and the small claim score is based out of Northampton, so all the money claims in the country go to Northampton to be processed at some point. If anything needs to be done locally, then it has to go to a local court and you just don't get a say in which local county court that is.
[00:17:53] Speaker A: Yeah, and it's like the courts, isn't it? You know, somebody goes off sick, the judge is off sick, it gets delayed. Like it's just, it's just business really. So there, there is things. I think it's interesting though, even when you're describing it right and how, you know, the best case scenario is about five months arrears. Well, if you actually, if we stand back and think about that. It's still a bonkers situation, isn't it, really? Like, you know, five months of the landlord not receiving rent just to get to court is crazy.
[00:18:19] Speaker B: And that's the best scenario as a best case. I know it's a tricky pill to swallow that.
[00:18:25] Speaker A: Yeah, but I hear you, I hear what you're saying. Absolutely.
Okay, so we apply to go to court. How quickly do you get your court date back? Is it quite a quick process to know when you are going, even if it is a delay?
[00:18:38] Speaker B: Well, there's two ways to issue proceedings with rent to his cases. You can issue it online. There's a thing called possession claims online pcol and with that they usually give you a hearing date pretty much immediately. And the main advantage to that over sending in say a paper bundle to the court is that there needs to be admin staff at the court to process it and then liaise with the diary and just basically sort it all out. If you skip that entirely by using pcol, you are skipping however long it takes the admin staff at a particular court to deal with it. And in.
So I issued one in Central London County Court via PCOL a few days ago and I got the hearing date back one day after I sent it. That's pretty unheard of. If I was sending a paper copy, I might be expected to wait about three or four weeks and obviously that's going to affect when the hearing actually takes place because if it's taken that long to move through the mail room and to arrive on, on like on a listing clerk's desk and for them to consult the diary. If I use the PCR system, we'd already be in the diary. But they're looking a few weeks later into the future because that, you know, simply the PCOL gang have already got in there, they've already, They've already taken up slots.
Yeah, exactly, exactly. So that alone will save several weeks. And then like I say, it really comes down to the speed at which the admin staff are able to handle these cases and that's going to vary from. From place to place.
[00:20:04] Speaker A: So you get your court date and then what has to happen in between? Is it a case of keeping up to date schedule of rent arrears? Let's use a rent arrears case for this example. Or what other things have to happen in that time to prepare to go to court?
[00:20:20] Speaker B: Well, so when you get this hearing date in, there are a few things that you'll need to do and one of them is going to Be you have to prove your case. So I assume at some point you would be. I do think it's right by the way. Let's just say this is a section 8 ground, a rent arrears case. Let's also just say for simplicity, the tenant's not going to pay any more rent for the remainder of the tenancy.
They were in two months worth of arrears when you served the Section 8 notice. And I mean now's probably a good time as only to say the renters rights is going to change that. It's going to be a three month threshold to use ground eight. It's also going to be a four week notice period. So it's going to add even more arrears onto the total number of arrears that we've just been talking about.
If we're serving that notice on ground date, then they were two months in arrears when we served for notice. By the time we get a hearing date through, we may well be into three months arrears. The hearing date may well be a month or two in the future. We may well be looking at kind of that five months arrears figure. But what you have to do is you have to be prepared or someone has to be prepared to go for you to court. And when you go to court you will stand up and say the rent arrears are X. And then the judge can say okay, they are X. Five months worth of arrears, that's more than two months. Therefore I have to make an order for possession.
There might be circumstances where the court can't make an order for possession straight away. And that would be for example if a tenant turned up and says that they have some kind of claim against the landlord. So that's called a counterclaim. Common counterclaims will be things like the deposit not being protected, correctly prescribed information not being served, disrepair in the property. I say those are kind of the big three when it comes my boiler.
[00:21:59] Speaker A: Wasn'T working and therefore.
[00:22:01] Speaker B: Yeah, yeah. And, but basically what that means is, is that if you, if a tenant owes you five months worth arrears but you potentially owe them some money, but that, that money is a big question mark. Then what the court has to do is basically say okay, I'm going to give the tenant opportunity to basically plead their counterclaim, say how much the tenant thinks that they are owed by the landlord and then they can offset the two claims against each other. So that five months of entry is, that's worth a certain amount of money. If the tenant's deposit has been protected, then that's worth up to three times the value of a deposit. So what they could do is they could say, okay, those two figures against each other, that might reduce your ears to below two months. The court therefore can't make an order for possession straight away. So they adjourn a hearing and it will go to another hearing at a later date. And a lot of this stuff is just going to be about the landlord's case is still going to be the same. They're still just going to have to turn up a rent stand statement. They might be able to defend themselves. They might be able to say, well actually I did protect the deposit or yeah, I did serve correctionalization. There might be some things they could do to mitigate it. But ultimately the big question mark here, the uncertainty is is the tenant going to be able to justify their claim? And if they can justify it, how much is it worth? When we know how much the tenant's claim is worth, the two claims could be offset and then you're either above two months or you're below two months and then the court can make the order accordingly.
That's basically the entire court process for landlord these cases is bring along a rent statement to court. If a tenant doesn't attend court, that's good news for landlord. The tenant doesn't have to attend and it's simply one fewer thing that can go wrong. That's not to say that you will automatically get an order for possession if the tenant doesn't attend. The judge is a very experienced legal practitioner and they can spot things of their revolution that are wrong. So if they say you weren't actually in two months arrears when you serve this notice, then they then that basically removes ground date, that removes the manager ground entirely. In which case you might have discretion. The court might still say, okay, you weren't in two months at that time, but now you're in five months. There is, it's quite clear the tenant's never going to actually pay you any more rent. They can still decide whether or not they want to make an order, but they don't have to. And again, going back to what I said earlier, landlords likes it certainty, they like knowing what's going to happen before it happens. And discretionary grounds make them make them nervous.
[00:24:28] Speaker A: And in your experience, how many tenants do turn up to court versus not it's quite rare.
[00:24:33] Speaker B: And I do think that I know landlords are obviously the ones exposed to the, exposed to the risk and they're the ones who are not getting paid their rent and they may or have mortgages and it's a stressful process. Litigation I need to battle constantly, and I try to remind other lawyers to do this too, that you can't be desensitized. I think if you lose the fact that you are dealing with a tenant, a human tenant on the other side, then I think you're going to lose a part of yourself in that process. You've got to remain aware and empathetic to people's circumstances. So generally speaking, if a tenant stops paying rent, they can kind of fall into a few broad categories of people. One, they're a wrong and. And they were always going to do that and they're a fraudster and a scammer and all that kinds of thing. And a lot of landlords will think that their tenant falls into that category, but often they don't. Often there might be some personal circumstances, there might be a loss of job, that people's lives are full of fluctuation. And sorry if I'm getting philosophical here, but I think things happen in people's lives that they don't always or can't always anticipate. So if something serious happens, like for example, you're in a couple and one of you gets seriously ill, is no longer able to work, then you're probably going to end up a renter is and you're probably going to end up evicted.
That doesn't mean you're a bad, it doesn't mean you're a bad person. But the simple reality is if you can't afford the rent and you have to balance up heating and food and essentially the essentials to live, people will often choose not to pay the rent and then see, see what comes of that. So, so quite frequently tenants will know that they're in arrears and they may not contest it. There are some tenants who are trying to game the system and they want a council house and they know that they can only get that if they are evicted from the property. I would say usually if a tenant is evicted for rent arrears, the local authority are not going to put them on any kind of priority rehousing list. They'll be in temporary accommodation. And quite. I've known this to be the case and so I'm going to assume it's the case still and continues to be nationwide. If tenants in rent arrears, I've known local authorities to say, you've got to clear those areas before we're going to put you on a proper rehousing list. Otherwise you're basically going to be stuck in limbo. Because that's quite right. Like the taxpayer shouldn't be underwriting tenants who are gaming the system, not doing what they're meant to be over tenants who perhaps have a genuine housing need and are simply unable to afford a market rent. That's where social housing steps in and that's where social housing is not really or hasn't been properly funded for decades now.
[00:27:16] Speaker A: So going to court, what's it actually like? Because I'm sure in people's minds it's this massive courtroom judge sat really high.
[00:27:24] Speaker B: With wicks and hammers and things.
[00:27:26] Speaker A: Is it in reality? And you know, do you. Are you kind of turning up a very set time for your hearing or do they run on time?
Tell us about kind of how it actually looks.
[00:27:37] Speaker B: It's remarkably mundane to be honest. Now I was once called to be. So I've argued my clients cases in court so I've done the advocacy. I have also been called as a witness before and that was basically I served the notice. The landlord chose different firm solicitors to take the matter to court, which they're entitled to do. I don't progress on that but it was basically the tenants said that they didn't receive a notice so I had to personally attend court to say this is how I serve a notice. That was in the Central London County Court which is also. Which is where the Royal Courts of Justice are. So whenever you see any major crime or major cases going on, if you see any kind of the outcome of a big case on the news, they usually stood outside a very grand look. It looks a bit like a cathedral. That's the Royal Courts of Justice.
I tried to think about, for example the post office scandal. If you ever saw them talking about it, they're outside the Royal Courts of Justice. Anyway, I was very excited as a legal nerd to go down to the Royal Courts of Justice for any reason at all because I'm not local to the area. This was my opportunity to go down there and you walk through the atrium and it's so impressive and I said okay, can I get to Central London County Court please? And I'd give you some directions because it's a massive building. Anyway, you soon leave the cathedral and you end up in a brutalist 1950s office block and that's the Central London County Court and it's just an office and you go in there and you've got a judge who sat behind a desk and they've got loads of paperwork on there and they're just like, right, what's this case about? Because they list these things in, they're called blocks. So basically you might get a notice of hearing through from the court to say your hearing date is on the 10th of March at 10 o'clock.
There will be maybe 20 other cases all listed for 10 o'clock on the, on the 10th of March, but they list them a block. So basically just say if you turn up at that time the court will take whoever's there. It's not necessarily done on any kind of priority basis and you just have to sit and wait. And the block usually lasts for about an hour. So ideally by 11 o'clock your case should have been heard. But this is again just part of the scheduling of the thing. If they designate each case their own 10 minute slot, then if those people don't arrive then that's 10 minutes of dead time. And again it's quite frequent that people don't turn up either because the tenant has left and louder says, oh, I don't need to go to court anyway, I won't bother and just hasn't told anyone about it.
Or again, you have these, you have these scenarios where Valada will show up and offer tenant, but if the court lists it one by one by one with each of their own bespoke slot, the delays would be even worse. So this is their way of getting, getting around that. So that might mean your hearing doesn't happen at 10 o'clock, but if it was the other way around, you might not have your hearing on 10 March, it might be on 1 April because I have to squeeze in all these bespoke slots for people who will never show up.
[00:30:34] Speaker A: Yeah, fine. So you do have that as a landlord or an agent or the person representing the landlord. You have a speaking slot, the judge is saying, tell me about it.
[00:30:45] Speaker B: Yeah, basically because it's for the claimant, so the landlord in a possession case to prove their case. So the first thing you have to say is they were in two months worth arrears, we served them a Section 8 notice. You might be, you might highlight a statement or a certificate of service. So that's basically the person who served the notice saying that they serve the notice. So you know, when, when I went to, when I went to my case as a witness, I said I sent it via first class post as that's what the tenancy agreement allowed. And then once it goes in the post you kind of assume it's served. That's actually One of the few areas where the courts will give the claimant the benefit of the doubt is to say if it goes in the post and there's a clause in the contract saying you are allowed to serve it, that way they generally assume that it has actually been delivered. Otherwise every tenant in the country could simply say, I didn't receive it.
And then the system breaks down, doesn't it? So that's kind of the one freebie the court might give the claim. Renters were two months will be served the notice. Renters are at least two months notice this now the renters can dip, by the way. So in between the notice being served and their possession hearing date, the tenant might reduce those arrears. But as long as they are two months at the date of the notice and at the hearing date, then ground date applies.
[00:32:04] Speaker A: Okay, so the judge, like you said, they're dealing with lots of cases every hour. You know, this is a fairly quick, short, evidence based submission really. And if you have got any of your facts wrong or the tenant has done something, I guess just before, you know, we all hear cases all the time where the tenant has reduced the balance to just under two months. On the day of court, the judge is likely to say, right, not today, you need to go away, do X, Y and Z and come back and you have to wait again in the system for your next court date. Is that how it works?
[00:32:39] Speaker B: Yeah, basically. So like I say, they pack these cases in and the judge is very aware of the number of people waiting outside to be heard and they want to get through these things as quickly as possible. That simply means they cannot not give the time to each case at the first hearing that they perhaps would like to.
So they will often adjourn a hearing if there's any even a sniff of there being something wrong because they just don't have the time to, to go into it. If the landlord's paperwork is not in order, if you're lucky, you'll give given a second opportunity. If you're unlucky, they might just strike you out and just say go away and do it again. The case is fundamentally wrong and it the cost involved in appealing a decision like that and the time it takes to appeal it is often longer than just starting again. So even if you feel like you've been struck out for a really bad reason, the sensible thing to do may still be just, okay, well I'll just serve another section 21 then just start section 8 notice.
So yeah, the judges I think are stressed out and overworked and they will expect things to be as they should be and they're not going to spend and they're not going to waste their time on people who are.
Yet I've got like the handwritten rent statements and don't know what's going on and I can't. If they haven't got the facts on the tip of their tongue, they'll be given quite short shrift.
[00:33:56] Speaker A: Yeah, fine. So possession is given. Let's just say in, in the case that we're talking about, what does the judge give the decision there and then to landlord, you know. Yes, yep.
[00:34:10] Speaker B: Yeah, it's, it's quite, it's quite straightforward. So you do sometimes in complicated cases where you have these big, big multi day trials, the judge might say, I'm going to have to go and think about this and I will tell you when I have, when there is an outcome and I can off that can take weeks and months.
But for a little hearing like this where the facts are very straightforward and again, if we've got possession at the first hearing then the facts were straightforward as far as the judge were concerned. They were in two months arrears, when we serve a notice, they're at least two months rears. Now I'll make an order for possession. So they will say the tenant must leave by a certain date. That date is usually 14 days from the date of the hearing. They can award up to 42 days from the date of the hearing on a manager ground. But that has to balance because obviously in our scenario the tenant isn't paying rent. So any, any extension to them being at a property is going to cause a lot of financial hardship. So the reason that would have to be pretty good. And I, they don't use it very often when it, when there's rent arrears involved.
I will say if they do use their discretion at all, it's nearly always medical in nature. So the tenant is receiving some form of medical assistance. And if, for example, if you see something, I don't want to be a flippant here but if a tenant turns out a piece of paper saying that they have cancer or a particularly serious disease, they will nearly always get the full 42 days because the court must make an order for possession. But they have discretion over how quickly that can happen. And judges our people, they see the tenant in the flesh, they take sympathy on them and they will often go out of their way to, to assist the tenant. It can feel slightly one sided but ultimately we did just get an order for possession. So we did get what we wanted. Yes, it could have been quicker, but we shouldn't really look at a gift horse in there in the mouth like that.
[00:35:54] Speaker A: And if they're not out within the 14 days, 42 days, depending on how much the judge gives, what happens then?
[00:36:01] Speaker B: Then it's for the landlord to make an application for bailiffs. Now, there's a couple of other things on the. On the court order I should probably go through to make this make sense. So as well as a possession order, the court will make an order for the money. So the renter is whatever that happens to be. The landlord will usually claim interest. They need to turn up with an interest calculation to make the judge's life nice and easy, otherwise you'll just get a figure. Yeah, they might say, oh, 20, call it 20 quid because they just don't have the time. Interest calculations are surprisingly labour intensive for what is actually quite a small amount of money. And then they might also award legal costs. So at the very least, they will usually award the landlord the cost of going to court. So issuing proceedings in the first place, that's £391. If they've used legal representatives, then the legal representative will need to file a statement of costs that will basically say, we charge the landlord X amount of money. The court can then say that's too much and then it can knock it down. But like I say, at the minimum you'll get 391 pounds. Best case scenario, you'll get 391 pounds plus what you paid your solicitors.
If your solicitor doesn't go to court, you may have to instruct a third party. So you can get barristers, you could get advocates to do the legal argument for you. They charge a fee and again their fee could be claimed back. The other part, the other thing that might be on the order will be permission to transfer to the High Court.
That is to do with bailiffs. So there are two routes for bailiffs. The default route is county court bailiffs. And again, if we're going back to delays in the county court, particularly in London, county court bailiffs are the source of the delays in parts of London. I've known evictions take over a year from when they were first instructed. Some parts of London, about six to eight months. And again, this is from the possession order, by the way. Like, we've gone through court, we've got the possession order. This is just waiting for someone to knock on the door and, and to get the tenants out.
The delays in the county court system are remarkable. So some landlords are taking the choice to use the high court system. So these are bailiffs and they usually have a program on Channel 5. There's a few different, they have a few different programs, a few different firms. They would do broadly the same thing. They basically transfer the matter to the High Court. They get what's called a high court writ and then they sent their bailiffs down there. And those evictions usually take about, about four weeks from when you instruct them. So again, imagine a scenario for tenants if renter is not going to pay rent until they're evicted from the property. If it's, if a high court bailiff costs slightly more money but they get the tenant out six, seven, eight months soon, then wow, that pays for itself several times over, doesn't it? The downside is you have to request permission from the county court. You can't just instruct the high court bailiffs, you have to get the court's permission to use it. And it's not always a given that they'll do it even in London. London, where they know that the delays are bad, they will not always grant that permission. And I'll be honest, I don't get it.
They obviously have to balance up the rights of a tenant.
What they're doing. If they grant permission to High court bailiffs to evict, they're saying to a 10, you are going to have less time into this property than you expect.
But the bailiffs still have to adhere to certain statutory timeframes. They still have to give at least two weeks notice that there is going to be an eviction. It sometimes takes a little bit of time to get the possession order typed up by the court reconstruct until you get the possession order through. So there are still delays inherent in the system. But I don't understand why a county court in London with these delays wouldn't grant possession, particularly on a renter ears case. Now I'm not saying you'll get it on an accelerated claim where there's no renter is being complaint at all. There's no reason to think that you would get that because the court again has to balance off those rights. They say okay landlord, you want to sell the property, I get that, but that means this person is going to be evicted that much sooner. And I don't think I'm going to allow that. Particularly where you're not suffering any financial loss as a result of them staying. You know, the tenants paying rent, that's what you agreed to. You know, you said you would let the person live in the property in exchange for rent. So we'll let that carry on. But yeah, I think the High Court Bayless system, system being easier to utilize would be a big solution to a lot of these things. And I think it's also a system the government should endorse. And the reason why I think that's because the government, it doesn't cost the government money to do that. The government, as we know, is on a limited budget. They don't want to spend money on anything. They would much rather do things like, well, tell other people to spend their money doing things. Yeah, we have things like the drive for EPCs to be improved. That's, that's a cost that's ultimately going to be borne by landlords, but the consequence of that is going to be better properties for tenants. I mean, obviously there's some benefits for landlord for investing in their property, but the end game here is the government did not have to put their hand in their pocket to improve things for tenants. With High Court bailiffs, the landlords are the ones paying money to the bailiffs. They're the ones who have to pay for the service. So it's a freebie as far as the government's concerned. If they want to improve the court system, which they say that they do, then this is a, a free one for them. I don't see why they wouldn't do it.
[00:41:22] Speaker A: And there's lots of things I kind of want to say now that the very final bit of the process though, which is often not completed, is lodging a CCJ against the tenant because that is another process that the landlord then has to invoke and it costs the landlord money. Again. Can you just tell us a little bit about that part of the process?
[00:41:44] Speaker B: Yeah, sure. So at the end of the. So let's say you've evicted the tenant at this point and you know how much they've left you. And you might also have things like damage to the property beyond fair wear and tear. You might have a deposit you can offset, but the end result is play it all out, get the repairs done, get the deposit released and you will know how much the tenant owes you. Now, going back to what I was saying earlier, if a tenant is in rent rears, there's often a reason for it. And if a were not able to pay the rent at the, at the time of the court case, then what's to say their financial situation has at all improved afterwards? What I don't like doing for landlords is wasting their money and their time on enforcement. That's never going to be successful.
So the first step to do would be to try and find the tenant. And there are, there are organizations, companies out there called inquiry agents where if you just think of like a private detective, basically they'll check out publicly available information, find out whether tenants living and most importantly of all find out their employment status. Because if that person is long term unemployed then why would you spend any more money enforcing it? You might do it and I've heard this said quite frequently, you might do it to get, to give them a CCJ so that other landlords are not, are not exposed to these people as well. And that's fine, fine. But I do often say that principles cost money. You're doing something there, you're taking enforcement action, you're spending money for something that's not going to directly benefit you. And so it's very, I nearly always say, yeah, you sure you want to do that? You don't have to.
I mean if a tenant is employed. Yeah. Or you know, they're earning in some way, then there might be some prospects of enforcement through debt recovery. But it isn't always a given. And the tenants who leave in rent arrears are often the ones who are not able to pay it. I think most people would, would choose to pay their rent if they were able to.
[00:43:35] Speaker A: And that's a frustration for landlords for referencing companies. Let's just kind of use us as an example because if a CCJ is lodged when they come back through the system we can at least warn the new landlord of the circumstances. And obviously if there is rent arrears seen on their credit file, that obviously is very alarming for a landlord because it's not lodged. That whole process that Ryan has just described is actually hidden. No one then really knows about it. And the tenant might be in tens of thousands of pounds worth of arrears are never going to pay it. But they come back through the system to rent the next house and nobody knows it's important.
[00:44:14] Speaker B: I actually expand on that. So I said that as part of the possession order there would be an order for the, for the money. So you, whatever is owed at that time.
Now it's a government policy that, that is not automatically registered as a ccj. It will only get registered if you try to enforce the judgment in some meaningful way. And I think the policy here is if you had a big portion of the population all with CCJs against their record, I mean so let's just imagine that every tenant who is evicted under a section 8 notice for interiors has CCJ against their name. That's going a fairly significant portion of the population who is going to house those people. It will only be the local authority who can house those people.
And that's a burden for the government. So I think that the reason why this policy of it not automatically being a CCJ exists is just to try and keep the wheels turning. And if that means that another ladder is burned because they were not forewarned about this dodgy tenant, then I think the government's okay with that. If they weren't okay with it, they could change it quite easily.
[00:45:22] Speaker A: Yeah. Oh, I, I 100 agree with you. It, it just feels quite unfair.
And I think that's kind of, you know, we have taken a whole pod, which has been brilliant, just to talk about a process for possession. And remember, the example that Ryan gave was a fairly simple one. We said this is a tenant with rent arrears under, under a section 8. And the tenant's not really defending, you know, they're just, they're kind of accepting that and they can't pay or they're not paying any of it. There's obviously a whole host of circumstances and different reasons. There's obviously a whole load of kind of numbers that have been banded around. You know, there's £391 in court fees, let alone what it would cost for a legal person to represent. But even now, and especially in the new world, to actually serve a section notice is close to £300. And again, it's just a reminder for all of our listeners, for any landlord, for any agent, there is rent and legal protection policies out there. Obviously the lettings have them, but other companies have them too. And I'm just an advocate for landlords making sure that they are protected. The court system is only going to get worse.
So let's just kind of finish and actually you can buy rent and legal protection policy for less, less than the court fees and less than a section notice on their own. So that's the reality.
Let's kind of just do a final question then, if I may. So when the Renters Rights Bill in its current form comes in, legal costs are going to go up, I assume quite rightly. But also, what else is going to change? Is there anything else to that process that we've kind of just gone through, apart from potentially delays that are going to change now?
[00:47:05] Speaker B: I don't think so. I'll just answer the second part first. I don't think there will actually be that much of a change in the process.
There will still need to. Every court case will require a hearing because the only cases that didn't require hearings were accelerated possession cases. And you can only do that on section 21s. So the process itself won't change. And I do think that whilst time scales might well get worse because of the fact that you're having to go to court for hearing instead of just going down the accelerator route, I think the idea, and I'm sure the government factored this into their calculations, is simply that there will be fewer evictions. If the notice given is say a four month notice, that kind of throttles the pace at which these claims are going to reach court. So it may just be that there are fewer evictions or at least those evictions are slightly more spaced out.
I like to think that they've thought about this because if I don't think that that then what I think instead is that they're just forcing it through anyway with complete disregard for what's going to happen. And I would like to think their ruling government would not be so cavalier as to do that. So perhaps I'm being deliberately naive about that. In terms of, in terms of the big changes though, it is also with notices and notice periods and that is going to have an impact on costs now if I can. So there's two reasons for that. That one, Section 21 notices have been around for a very long time. Everyone, every litigator in the country, so not necessarily a landlord, tenant specialist, every litigator country can probably serve a section 21 notice. They are a known quantity. The new grounds inherently are new. So what are you going to do differently with them? Well, the two new grounds I'm focusing on, grounds 1 and 1A require the landlord to prove their intention about something. So the landlord is saying I am going to do something when the property is empty.
There is a bit in renters rights which basically says if a landlord or an agent serves a notice recklessly, then they can be fined.
So so agent in this context doesn't just be letting agent, it means, it means solicitors. I, I'm an agent of a landlord, I'm doing something on their behalf. So if I serve a notice recklessly, I'm putting myself out there, possibly ending my career. So why would I want to do that? Well, the only way I'm going to do that is if I have some real assurances that the landlord is genuinely are going to do the thing they say they're going to do. As part of my process, I'm going to be taking witness statements from landlords before I serve any notice on Ground 1 or Ground 1A, so that if it does go to court, we can show that the landlord told me this. If land subsequently turns out to be a liar, then I've at least I won't have served the notice recklessly. You don't need, you know, with the sale ground, the property doesn't need to be on the market, it just needs to be. Vallon has an intention to sell and that that intention can only be in the landlord's head. They might have taken steps to act on that intention. But as a baseline, if a landlord's willing to stand up in court and say the magic words, I intend to sell, then he will get an order for possession. That way. We just need to protect ourselves as an industry against that kind of thing. So, yeah, costs are going to go up because I'm going to need to do more work on those notices, but I currently need to DO on Section 8 or Section 21.
[00:50:18] Speaker A: And it's new territory. It's going to be new territory for everybody and there's going to be some test cases that change things along the way. Ryan, thank you so much for kind of talking us through the process. I think hopefully everybody that's listening understands that there is loopholes that, you know to the process and ways you can get tripped up. So, you know, getting the right legal support at the right time is absolutely, absolutely critical.
Now, as all of our listeners know, before we end every session, we ask all of our guests for a funny story or anecdote. Do you have one for our listeners, please?
[00:50:52] Speaker B: Ryan, My, my line of work is not inherently littered with funny stories. I've got to be honest. So I, if I go for an interesting story, that might be the best I can, the best I could do. I want to tell you about the oldest tenancy I've ever ended. Now, this was a. Before the assured. Well before the Housing Act, 1988, for assured tenancies, there were Rent act tenancies. If you're old enough to remember them, then I'm sorry, but they, they are tricky things and by that nature they can't be created. You can't get new Rent act ten tenancies anymore. The ones that are still around are from tenants who had them back in the 70s, 60s and even earlier. And rent out tenants could be inherited. So what I dealt with was a tenancy which originally started in the 1930s. And it had been inherited, I think, twice.
Trying to remember the exact details of it, but basically it was super old. But the nice little bit about this one is we didn't have the original agreement. Agreement. And the reason we didn't have the original agreement is because it was locked up in a safe office in Oxford, I think it was, or it was reading somewhere in. In the center of England and it was bombed by the Luftwaffe during World War II. So we had to explain to the court the reason why we don't have the. Why we don't have a tenancy agreement is because of Adolf Hitler.
[00:52:11] Speaker A: Yeah.
[00:52:11] Speaker B: And I haven't had to make many. Haven't had to make many arguments like that before.
[00:52:15] Speaker A: Wow. What a story.
[00:52:17] Speaker B: I bet we got possession, by the way.
[00:52:20] Speaker A: You did.
[00:52:21] Speaker B: Yeah. They were perfectly fine with that.
[00:52:23] Speaker A: I wouldn't expect anything else. Ryan, thank you so much for your time today and for all of our listeners. To ensure you never miss an episode of let's Talk, let please follow us on Spotify or wherever you listen to your podcast. Leave us a review if you like what you hear, and thank you all very much for listening. Let's Talk lets an original podcast from the Lettings Hub.
