“Landlords, Lettings & Litigation”

Compliance and Eviction Notices

When I post a blog as a follow-up to an interview I’ve done with a guest on my Radio Reverb show ‘Let’s Talk Property’ it’s because I think the information is so interesting it deserves as wide an audience as possible.  And what could be more interesting and critical than Landlords Lettings & Litigation as a topic of discussion.

It’s rare that a guest has so much to say that it gets split into two blogs, however property litigation expert Alex Cook was so interesting that this is actually the third instalment to come out of our chat!

My colleague and co-host James Duffy also had some great input on the subject of Landlords, Lettings & Litigation as it is one of his own specialist subjects.

Eviction – A Sensitive Subject

Talking about a landlord going to court to evict a tenant is an emotive subject.  Sadly, non-payment of rent is a reality that has to be dealt with one way or another.

Another problem is that the goal posts keep changing about when you can evict and when you can serve a notice.  It’s terribly complicated for the uninitiated.

“I agree”, says James, “I actually think that it’s set up to fail.”

“What they’re just looking for is a tick box exercise, that when it does get in front of a decision maker ideally, the judge or whoever is making the decision will just look for something that’s not quite right, and you don’t always have enough time to actually always prove it,” he explains.

“My advice to anybody who is self-managing looking to serve any type of notice, is that you cannot cut corners,” James adds. “What you might save in not paying someone to do this professionally is absolutely pennies compared to what potentially you’re going to lose if you’re not doing it properly.”

I ask Alex if he has an overview of the rental sector in general?

“This is a conversation in itself, I’ll be honest with you,” Alex replies. “The number one thing I might mentioned here, but I guess if I take a high level, my aim, and I think this is a shared aim generally, is to encourage investment in property.”

“We need more housing, and everyone seems to be agreed on that,” he continues. “But nobody really seems to want to pay for it. And yet, here we have a sector in terms of private landlords who they’ve already got skin in the game.”

Mediation

As we are all happy to repeating, going to court to settle any kind of dispute really should be a last option. So what does Alex think about mediation?

“I’m a little bit on the fence about it,” he tells me. “I really like mediation in commercial disputes, I think it works. There is obviously an awful big push to advocate more mediation between landlords and tenants. Why I love it is that it’s a great way to resolve problems, and if you can mediate resolution, you don’t need to litigate.”

“When you don’t need to incur costs and take the time, then fantastic, everyone’s a winner, quite literally,” Alex expands. “But where I think it’s a potential problem in property is that fundamentally the landlords do try to resolve issues already.”

“It would be naive to think that landlords are just firing off matrices and issuing claims. That may fit a certain narrative but the reality is that’s not what I see.”

“I see landlords who have tried already and so, adding in mediation, you’re kind of making potentially another hurdle that everyone has to jump over. So, I’m a little bit nervous about that.”

A landlord’s dilemma

“If the tenant says ‘I’m going to go in a month‘, you start planning, you might have viewings, you might have works arranged and so on,” Alex points out. “But actually that’s not legally binding and if the tenant turns around a couple of days beforehand when you’re saying, ‘Oh, can I turn up and collect the keys? We’re happy to do an inspection,’ and they say, ‘sorry about that, we’ve changed our mind,’ then you have absolutely no legal recourse at all.”

“I think that at the moment there are no consequences to that for tenants, so there does have to be a little bit more give and take on this,” he concludes.

Eviction notices

One of the biggest areas of conflict for both landlord and tenants are eviction notices, Section 21 or Section 8. Even more emotive is bailiff-enforced evictions. So I ask Alex what his take is on Section 21 notices?

“Section 21, for those that don’t know, is a no fault notice. So, I’m the landlord, you’re the tenant, I’d like the property back, I’m sending a notice,” Alex begins.

“These notice periods, for very understandable reasons, have been all over the place in the last 18 months. They’ve been up a number of months, they’re brought back down again*,” Alex says.

“They were at two months pre-Coronavirus, they’re now at four months. So, that’s where we are right now, I would say to anybody, we’re in a very fluid situation here.”

“We receive almost no prior notice of changes in the law in this area,” he adds.

“There is in this parliament a plan to remove Section 21 notices as a method of giving notice to a tenant in a property. Fundamentally, I think that’s bad news for tenants, then bad news for landlords.  It is what it is and we have to play to the rules of the game, whatever they are.”

DIY dangers

“If anyone’s looking at the Section 21 notice, which is a form 6A, a very straightforward notice on its face value, it’s pretty straightforward,” Alex continues. “But the killer is in what’s not in that document itself, and that’s to make sure that it’s actually valid.”

“Where people come unstuck is when they try and have a go themselves. Unfortunately they may not have ticked all the boxes that nobody mentions that must be ticked.  And I say “must,” there’s no discussion on this.”

“If you don’t tick these boxes before you serve this notice, that notice will not be valid, and there’s no discretion, it just doesn’t apply. It’s not going to be valid, and you’re back starting the clock again on four months notice” he explains.

Section 8

The Section 8 notice can also be used, but how is that going to make it clearer to a tenant that they have to go?

“Well, the reality is they’re both next to seeking possession,” Alex answers. “From my perspective, there is currently breaking news talk around amending the Section 8 regime.”

“A Section 8 notice requires particulars of grounds to support that notice, so typically a ground will be the property is in disrepair, or there might be antisocial behaviour, or most common it’s rent service,” he explains.

“So again, these are different grounds that are triggered that you then use to support the Section 8. There is talk about with the removal of Section 21, there’ll be additional grounds added, including for example, I’m the landlord, I’d like to move back into the property.”

Uncertainty

“I think all of that just creates inherently uncertainty, which makes it very unattractive in terms of really getting involved in the letting of property,” says Alex.

“I don’t like advising landlords and investors to rely on Section 8 as things stand right now. But in a world where you may not have any choice, it’s just more fundamental than it ever has been that you are absolutely on top of all of this, not least, because Section 8 takes a lot longer as matters stand. And then Section 21, this give you an access to what’s known as – don’t shoot the messenger – ‘accelerated possession rate claim’.”

“The average turnaround time for Section 8 claim pre-Coronavirus is 12 months, so that gives you an idea of what you’re into if you are a landlord having to issue a claim, it’s a lot longer,” Alex goes on.

“So thinking ‘Oh, well, don’t worry, Section 21’s going, we’ll still have Section 8’, well I think that’s the wrong view, the wrong analysis.”

Bailiff-enforced evictions

I can remember as a child hearing “Oh, the bailiffs are coming” and it just sends a shiver down my spine. So, how has that changed over the last 18 months?

“Well, first things first, I think the number of bailiff evictions in the last 18 months has been at historic lows. They just haven’t happened, they have been suspended, they’ve been delayed, and the delay has been extended. And I don’t think many people can take issue with that,” Alex states.

“It’s understandable, we’ve had a lot going on and there are other things to deal with and I get that. So, if we could just park the last 18 months to one side, at the moment a landlord has two options.”

Alex paints a picture of “where landlords have been forced issue claims”. Then they have to go through the court process, that has taken months and incurred costs. The court has found in their favour. So in other words, you’re the landlord, you’re absolutely right, I’m a judge, I’m agreeing with you, you’re entitled to your property back, someone’s done something wrong here or they’ve not gone when they should have. They’ve still not gone, so they’ve now ignored a court order, so what’s your remedy then?”

“It’s either via county court bailiffs, employed by the courts, or the alternative is High Court Enforcement Officers.”

More magic wands

When discussions touch on such sombre subjects I always like to lighten the mood towards the end of an interview with my guests, often by asking them the ‘magic wand’ question.

So, if Alex became Secretary of State for Justice and Law Chancellor tomorrow morning, what would he do?

Plan for bad, hope for good

When you’re drawing up a budget of any kind it’s worth taking the old adage about ‘planning for bad times, hoping for good’ into consideration.  So when it comes to an investment rental property does Alex think people should put in anything for legal costs in case things go wrong?

“It very much depends on who it is and how sophisticated you are or you might be,” he answers.

“I think at the one end, you might have to say someone who has inherited a property and they deal with certain things in a certain way. Whereas at the other end you might have a portfolio landlord, a company and fund, a trust and they deal with things along very different lines.”

“With a huge spectrum of my own experience, I can actually say looking at things like rent guarantee insurance and how that could work, I know portfolio landlords who used to say ‘rent down to insurance’ and they’d pay 10% on the rent.”

“But actually many have stopped doing that, but they will then keep that money in a fund available if they ever need it.”

“That way they’re not incurring the premium, not having the problem with having to deal with an insurer, but still having access to available funds to deal with things,” Alex explains.

“It really is about approaching it in a commercial business way, isn’t it?” Alex adds. “You’re not immune from these costs as a landlord or as an investor. You’re absolutely in the midst of the business and you need to act in that way.

Expert help

In our great conversation with Alex we’ve only really scraped the surface of everything around property and litigation in three blogs.  If you have any property problems or disputes that you’d like resolve, how do you get in touch with Alex?

“In terms of the best way to get hold of me, you can either check our website which is www.helix-law.com or send me an email at ac@helix-law.com.”

“I’m also on social media, all of them!” Alex adds. “You can find me, I can’t hide unfortunately.”

These three blogs including ‘Property Litigation Three Steps’ and ‘Property Litigation, Pros Cons Financial and Emotional Impact‘ have all been the result of having Alex as a guest on my radio show ‘Let’s Talk Property’.  It just goes to show how much ground we can cover in an hour’s episode!

Let’s Talk Property is broadcast on 97.2FM, DAB+. The show is also available from the Radio Reverb website as ‘live’ and ‘listen again’ streams. Join me to hear what really interesting industry figures have to say about things that really matter to everyone involved in property.

* Eviction Notices – please check the current up-to-date legislation.  The show was aired prior to additional changes in legislation