The biggest challenge over the next 12 months is the economic fall out from covid.
We anticipate that many tenants/shared owners/leaseholders will fall into arrears with rent and services charged – some significantly so. We predict that this will create a challenging environment for all RPs particularly due to loss of income and the increase in effort required to pursue rent and service charge arrears.
Changes to notice periods, civil procedure rules, court practices and delays generally plus the stay on warrants mean that landlords exposure to rent arrears will be greater and for longer periods resulting in significantly higher arrears by the time the matter comes before a court. In addition,
new legislation such as The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulation 2020 could mean that landlords are prevented from pursuing the tenant at all for the arrears during the period of the moratorium.
The likely abolition of no fault/section 21 evictions will cause further delays.
We believe that the above will have a number of consequences, for example:-
Increased staff time and costs for RPs
Pushing tenants into downward debt and poverty including fuel poverty and the impact that can have on property conditions.
Tenants looking to maximise income from elsewhere and potentially be tempted into dubious activities including embarking on disrepair claims
Reduction in other services to tenants, shared owners and leaseholders.
We await the result of the 2019 Minstry of Justice consultation into fixed legal costs for most civil claims with a value of up to £100,000. This would include disrepair and possession claims as well as injunction proceedings. Whilst costs are generally never recovered for possession claims and injunction applications, we anticipate that the consultation may lead to disrepair claims being placed on the same footing as personal injury claims where there is already a fixed cost regime in place. We would welcome this.
This leads us on to comment on the massive increase in disrepair claims. These have continued, unbated by the coronavirus pandemic. We anticipate that as more “no win, no fee” solicitors join the market, the amount of disrepair claims received by social landlords will increase. We are currently working hard on various plans to tackle these claims
We continue to face delays and frustrations with the courts over review hearings and substantive hearings. Some courts are better than others.
There is no consistent approach across courts:
- Some courts are listing priority cases quickly, others are not
- Some courts are holding substantive hearings in person; others by telephone and others as hybrid hearings (the tenant in person and Claimant by video). Cloud Video Platform is becoming more popular
- Court User Groups, where issues such as delay and procedure can be raised, have been suspended for the courts we commonly deal with.
- We have been able to obtain possession orders with the “magic wording” to enable a warrant to be executed but we recommend that the judge is prompted to add the wording because judges are not adding this automatically.
- Our applications for the magic wording are being dealt with without a hearing. There have been some issues with courts not understanding the application and asking for court fee but these have been quickly resolved.
- Our caseloads have thrown up all sorts of thorny technical issues. In a recent case, we were asked how to go about enforcing a pre March 2020 order which adjourned the possession claim on terms of payment of rent. These cases would have been automatically stayed due to the stay on possession claims from March 2020. Technically, the stay overrides any terms of the adjourned claim so we think those cases should be reactivated by Reactivation Notice to revive the terms of the adjournment. Do bear in mind that an adjourned possession claim on terms requiring the tenant in difficult to enforce other than by contempt of court/committal proceedings.
Our Affordable Housing team have over 25 years experience in this sector, forming close working relationships with their housing clients. To find out more about the areas they advise on and their bespoke services please visit their hub page or contact a member of the team.