The Ultimate Cost of Housing Repossessions

Adrian Czajkowski

Adrian Czajkowski

I am, among other areas, a specialist in residential repossession claims: landlords recovering their properties from tenants. Sometimes these claims arise from rent arrears or other breaches of the lease terms. In other cases they are based on the landlord’s basic right to recover possession of the property after the end of the fixed term – most commonly 6 months (this right is given in the Housing Act 1988 and applies to Assured Shorthold Tenancies, which form the majority of private short-term lettings these days).

As a brief rundown, possession proceedings of this sort generally follow the pattern of: service of notice giving at least 2 months to vacate the property; issue of possession proceedings at court; granting of a possession order by the court; instruction of bailiffs to evict, if the tenant has not left by the date given in the possession order.

For a tenant, of course, the threat of repossession can mean a desperate scramble for alternative housing. For a landlord, the process can be expensive and protracted if the tenant does not leave of their own free will. Unfortunately, in several cases I have dealt with recently, it’s this issue of free will that causes the problems.

For tenants who are truly out of options, there is always the local authority to turn to. The council’s duty to house is set out in the 1996 Housing Act, and is set out nicely here at Reading Borough Council’s website.

The difficulty that arises is that the duty to rehouse does not apply if someone has made themselves homeless – such as by simply leaving a perfectly good property in the expectation of being given a better one. Local authorities do not have the same duty to rehouse those who are “voluntarily homeless”, unless there are other risk factors involved.

Before writing this blog I have spoken with the housing departments of Leeds, Reading and Enfield and the below information is based on my own professional experience and confirmed by staff at those departments as still being current policy.

Before moving to Leeds I practised law in Reading, and this meant that once the notice had been served, whereby the landlord required the tenant to give up possession, that duty would be activated. The tenant would be able to apply to be rehoused, and often the landlord would not have to issue proceedings at all.

Moving to the Leeds area back in 2007 I discovered that this no longer applied. Tenants were refusing to leave properties, not because they were intent on thwarting their landlords, but because they had been advised that if they left the property before there was a formal court order requiring them to do so, then they would be counted as “voluntarily homeless”, and not rehoused. This therefore resulted in far more cases going to court, with the delay and expense that involves for both the landlord and the tenant (although the tenant may be entitled to Public Funding – thus a further drain on public resources).

I have recently been dealing with several possession proceedings in London, primarily in the Edmonton area under Enfield council and, in at least some boroughs there, a local authority will not consider a tenant involuntarily homeless unless there is an actual bailiff’s appointment to evict them, thus putting the landlord to further expense and lost time.

As well as hurting the landlord’s pocket, policies such as these cause additional stress to tenants, and generally result in tenants having court judgments made against them for that portion of the court costs that the landlord is permitted to recoup. Although such judgments are seldom economical to enforce, they can potentially blight the tenant’s credit record for years afterwards.

So therein lies the dilemma. Neither the landlord nor the tenant are in a win situation and for that matter neither is the Government. Is it not high time that the Government considered this dilemma and stream-lined the process both in terms of speed and costs? After all, the landlord, the tenant and the Government would ultimately benefit from an improved system.

Adrian Czajkowski
Legal Executive
Commercial Dispute Resolution Department
0113 227 9296

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