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To anyone who has even the most basic understanding of how possession claims work, the blanket extension to the ban on evictions makes the government look like it is scratching around in a panic. A better way is possible, writes Emily Orme
Last Friday, housing minister Robert Jenrick bowed to pressure to extend the suspension of evictions. A quick rundown of the rules of this new extension reveals that this is a desperate plan thrown together at the 11th hour:
The problem with this approach is that it treats all tenants and all tenancies as equal, when they most definitely are not.
“So why, when it comes to evictions, has the government not planned properly for the easing of lockdown and is still carrying on as if we are still in full lockdown?”
It ignores the very real differences between social housing tenants and private tenants. It fails to recognise that some people were in arrears before lockdown and should probably be treated differently to people who have fallen into arrears during lockdown. It treats people in temporary homeless accommodation in the same way as a tenant committing harassment and anti-social behaviour.
The need to avoid people being evicted during the initial phase of the national lockdown was undeniable, with cases of and deaths from COVID-19 rising alarmingly every day with a consequent impact on individuals’ and families’ financial circumstances. But time has moved on.
We are no longer restricted to being outside our homes for less than an hour a day. Pubs, restaurants and shops are open again. People are socialising in bubbles. Society and the economy are moving much more freely.
So why, when it comes to evictions, has the government not planned properly for the easing of lockdown and is still carrying on as if we are still in full lockdown? What appears to be a knee-jerk reaction needs exploration. What could and should it be doing now to adapt its approach and the system to deal with the many problems that have arisen for landlords and tenants since lockdown was first imposed on 23 March?
Different tenants, different landlords
It might help if the government recognised the very many differences that exist between different types of tenant and, just as importantly, the different types of landlord.
Not all landlords are penny-pinching, evil scrooges out to milk their properties and tenants who live in them for every last penny, although they do exist. Social landlords and local authorities between them own around 4.15 million housing units. That equates to about a fifth of the housing stock in England.
The whole purpose of social landlords and local authority housing is to provide affordable rented accommodation for those who need it the most. They source their tenants from the local authority housing waiting lists and rely on their rental income to maintain cash flow.
“Social housing tenants, whether they are the tenants of a local authority or a social landlord, are by and large very well insulated and protected from being evicted”
It is a hard reality that not everyone living in social housing pays their rent. Sometimes, that is because they have financial difficulties and they need help, support and understanding. Sometimes, however, it is because they just don’t feel they have to.
Social housing tenants, whether they are the tenants of a local authority or a social landlord, are by and large very well insulated and protected from being evicted. In the vast majority of cases, the tenant has either an assured or a secure tenancy, which means there is a whole series of checks and balances in place and requirements that the landlord has to meet before a bailiff gets anywhere near evicting them from their home.
There is one very notable exception where social landlords do not have to prove it is reasonable to make an order for possession. That is Ground 8, Schedule 2 of the Housing Act 1988, under which a landlord can obtain an outright order for possession if they can prove that the tenant was in two months of rent arrears at the date the notice seeking possession was served and two months in arrears at the date of the court hearing.
I’ll come back to this.
Tenants who rent from private landlords are in a more precarious position. Private landlords almost always use assured shorthold tenancies. This means that in addition to using the same “notice seeking possession” route that social landlords have to use, they can also use what has become colloquially known as the “no fault possession” route or what lawyers call Section 21.
This means that landlords can serve notice on their tenants for any reason they like after the first four months of the tenancy. After a further two months, they can then apply to court for a possession order using the “accelerated” possession procedure.
Theoretically, this is meant to be a quick, paper-based route for a landlord to get a possession order; in practice, it is a highly technical process that even experienced landlords very often fall foul of.
“It is inconceivable that judges would suddenly start throwing people out onto the streets in droves”
If a landlord has not protected the deposit, not served the right information at the commencement of the tenancy, or not served the gas safety certificate or electrical safety certificate on a tenant, their claim for possession will fail.
If a tenant puts in a defence or if a judge spots a defect with the landlord’s claim, the case is taken off the “accelerated” procedure and a full court hearing is listed.
Even if the county courts did open up on 24 August and started to list possession claims again, there would not be a flood of evictions by any stretch of the imagination. With all the hoops that landlords have to jump through, it is inconceivable that judges would suddenly start throwing people out onto the streets in droves.
Apart from anything else, since lockdown was implemented, the rules that govern possession claims in the county court have been amended. Landlords now have to wait longer for the notice seeking possession to expire – it was three months but it has now been extended to six months. They also have to provide additional information to the courts about if and how the pandemic might have contributed to any rent arrears.
Case-by-case determinations
Perhaps more importantly, judges are often very sympathetic to the plight of tenants in arrears. Legislation also gives them very wide discretion to adjourn hearings to give tenants a chance to sort things out – and they invariably will do this if they can find any reason to do so. They are the people best able to deal with possession claims, quite literally case by case.
They will be able to see the difference between the tenant who simply won’t pay and the tenant who is trying desperately hard to pay but just needs a bit more time to sort out their benefits claim/furlough payment/self-employed grant application.
“It is utterly pointless to simply shift the burden of debt up the food chain”
The financial stability provided by tenants and being able to remove tenants who simply won’t pay is of huge importance for the vast cohort of buy-to-let landlords out there. Many small landlords rely on one or two rental properties for their income, or the property is acting as a pension pot. They cannot afford to wait for 12 months of rent arrears to accrue before the courts prioritise their cases. Many of them won’t survive six months.
Giving private tenants free rein to run up rent arrears without allowing the courts to look at the reasons why simply passes the debt up from the tenant to the landlord. The landlord might then find it difficult to pay the mortgage on the property, which would put it at risk of repossession by the mortgage provider.
It is utterly pointless to simply shift the burden of debt up the food chain. That helps no one. It just means more people get into debt and mortgage providers that don’t get paid will come after the tenants for possession of the property themselves. The end result? The tenant is still evicted, only now the landlord is forced into debt and loses their often hard-earned asset.
And what of those cases that are not based on rent arrears? Well, here, too, judges are best placed to decide what happens. Here are just some of the real-life situations that will now play out up and down the country while this blanket ban on evictions continues:
All of these are an appalling waste and show how much-needed social housing is being blocked from being recycled back into the system and reallocated to people on the waiting list.
What could the government do to protect vulnerable tenants from less moral landlords and neighbours and victims of anti-social behaviour and domestic abuse from continuing to live their nightmare, while also keeping the flow of social housing circulating?
A simple proposal
My suggestion is to allow all possession claims to continue other than those relying on Section 21 or Ground 8.
This would protect tenants from no-fault evictions and so every claim for possession that went to court – other than claims against trespassers, who ought not to be protected for obvious reasons – would require a judge to be satisfied that it is reasonable to make an order for possession. Judges would therefore be the arbiters of what is the right thing to do in each and every claim for possession.
Extending the blanket ban on evictions and possession hearings just kicks an already very big and unwieldy can down the road, to be dealt with at a later date when there are even more cases in the backlog and the already creaking county court lists will have even less time to deal with them.
To anyone who has even the most basic understanding of how possession claims work, the blanket extension to the ban on evictions makes the government look like it is scratching around in a panic, attempting to shore up popular support at a time when it seems to have failed on so many other fronts in its handling of the COVID-19 crisis.
“It is possible, by suspending Section 21 and Ground 8, to create a system that is capable of protecting both tenants and landlords”
A better approach would be to allow the courts to begin dealing with cases sooner rather than later, but with legislative protections in place to stop no-fault evictions for, say, 12 months, thus giving time for the backlog of cases to clear. This would also require a significant injection of funds to enable the courts to have more judges sitting, conducting hearings by video link and making best use of all court rooms available.
It also, arguably, requires more financial resources, to offer support to those who have fallen into arrears during the pandemic through the discretionary housing payment scheme, for debt counselling services and other support.
I hope that the government begins to realise that housing is a complex issue, with many subtleties and nuances already built into the system. It is possible, by suspending Section 21 and Ground 8, to create a system that is capable of protecting both tenants and landlords.
Emily Orme, head of housing, Housing Solutions