Landlord Action's Legal Director answers letting agents' questions on the new possession process

Landlord Action's Legal Director, Tim Frome, talks to Goodlord's Oli Sherlock about how possession cases are faring since the reopening of the courts, with insights from on the ground for letting agents and landlords who are going through the new process.

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Before we start, let's talk about what the situation was in terms of serving notice before Covid-19.

Pre-Covid-19, there were two types of notice that you might serve on your tenant if you want the property back. The most common notice was a Section 21 notice, and that was basically an end of tenancy notice. As long as four months had elapsed within the tenancy, you were able to serve Section 21 notice, which  would end the tenancy at the end of the fixed term of the tenancy, with at least two months notice. Say for example you had a six month tenancy, you'd be able to serve after four months and you'd then be able to get your property back after six. 

There's also a Section 8 notice. A Section 8 notice is a breach of tenancy notice. This is where the tenant has generally either done something that they shouldn't have done, or you're using one of the grounds set out under Section 8 of the housing act 1988 to be able to get your property back. With these, the grounds varied, but the most common one was when a tenant was in two months of rent arrears. If a tenant fell into two months rent arrears you could serve a Section 8 notice and that would only give the tenant 14 days to rectify the situation. They would have 14 days to either pay up the amount that was owed, or at least bring it under the two months. Then depending on the situation, you would be able to issue the claim after that.

What is the situation now?

When Covid-19 hit, there was a lot of clammer around this issue. Obviously, everybody was concerned about the fact that, maybe with the situation occurring, people losing their jobs, and tenants and landlords having to work together more closely,  there was  thinking that these timeframes were a bit too short, particularly if people are going to evicted quickly in the middle of a pandemic situation and when we all didn't know exactly what was going to be happening in the future. The government quickly introduced an extension to both of these notices to three months. It then sort of drifted along a little bit and then we had lots of backwards and forwards, and those that remember, lots of Friday evening announcements from the government.

What we then have come up with is, from the 29th of August until the 31st of March 2021, all Section 21 notices now have to give six months notice. What that means in practice is if you serve a Section 21 notice, you have to wait six months before you can   issue a claim, but you've only got a four month window before that Section 21 notice   expires. that will take us well into March so we'll have to wait and see what happens after that.

What about serving a Section 8 notice?

With a Section 8 notice, depending on the ground that you're using, the timeframes have changed as well. Basically if you're going to serve a Section 8 notice, because they're two months of rent arrears, again, is following the Section 21 process and you have to   give six months notice in that situation. We're talking about potentially up to eight months of rent arrears before you can issue a claim. Interestingly what they also inserted into the new rules was that if a tenant is in six month of rent arrears, this notice only has to be four weeks.

We're going to have an interesting situation where if you serve the Section 8 notice as soon as the tenant hits the two month arrears, you'll then going to have to wait six months, but once the tenant gets into six months of arrears, you can serve a new notice which is only four weeks. What that does is shaves a month off the time period you'd have to wait before you can issue a claim if necessary. I'm sure you might be seeing this with your rent guarantee providers, where they're obviously very keen to try and deal with the matter as quickly as possible. you might find your solicitors will be looking to serve two notices in this situation. 

We are seeing that and I think it shows how challenging this is - if you're left on your own to manage this, it's a minefield  - and what we're also seeing is some of those processes are being rigorously challenged, making sure every single step is being done. The courts are being ultra specific on this, aren't they?

They are. It's more important now than ever to make sure you get professional advice about the serving of a notice, because these time periods are not easy. You've got to make sure you're using the correct forms as well. The prescribed forms were changed a number of times throughout this period as well, so if you did serve a notice previously and you're getting to a stage where you think you might have to issue a claim, I would recommend you get that notice checked out to make sure it was served correctly. You don't want to get to a situation where you issue a claim and then it's found that the notice was served incorrectly, because you're going to be on the hook for some costs from the tenant if they defend it, as well as just the cost that you're going to incur yourself, and the fact that you wouldn't have been able to get your property back as quickly as you would like.

As with the notice periods, there are a couple of grounds that have been changed as well, is that right?

I think the most pertinent ones are probably around antisocial behaviour, domestic violence, and nuisance. If there is real evidence of anti-social behaviour or  nuisance that has occurred in the property, and nuisance has quite a wide definition, you have to have very good evidence to persuade a judge that the nuisance is of a sufficient nature to be causing a real problem either to other flatmates and other tenants in the property or just in the building generally, then there's no notice required at all, so you can serve the notice and you can   issue the claim straight away, but you have to have very good evidence to be using that ground. If there's evidence of domestic violence you can serve a two week notice -  I'm not too sure really why they didn't do the same for that because domestic violence is a lot more serious than just standard nuisance. 

Then there's other things. If the tenant unfortunately dies in the property, and you're trying to work out whether someone else is there, or whether anyone has a right to automatically reside in the property after the death of a tenant, then there's   a three month notice period. What that does is that buys a bit of time to work out the situation in the meantime. If there are any issues over right to rent, that's a three-month notice period as well. it's going to be interesting to see what happens after the first of January in terms of Brexit requirements and right to rent.

Can you talk about serving notices during the lockdown, and the actual physical process?

The post is still working, so there's no reason why you shouldn't still use the post, depending on how your tenancy agreement is worded. Anyone that puts in the tenancy agreement that the notices have to be hand delivered, or some kind of personal service is implemented, I would recommend against that, because you're just putting more pressure on yourself to undertake something more than you   need to. I'd also advise against recorded delivery or special delivery as well, because these kinds of things don't necessarily get signed for, and then you're then in the situation where the notice didn't   get served. Normal first class post is fine, but what you might need to do is a certificate of service if it comes to court proceedings to say that you did do this. That's generally considered, by the judge, enough evidence. As long as you've got a letter with the date and the notice, and you're willing to do a certificate of service. That's what we do here at Landlord Action.

There is still the possibility of doing personal service, but you've got to be very careful. You've got to follow Covid-19 guidelines in terms of going to the property - if someone is personally delivering it, they might need to put it through the letterbox, take a picture of themselves doing so, and then a statement to confirm that they did that. What undertaking personal service in that way does is it just protects you in terms of giving further evidence of the fact that the notice was served and the day of the notice being served, because you don't want to get yourselves in the situation where you've given a six-month notice and then there's a doubt as to whether that notice was   served correctly or not, because that's just going to cause you more problems. We always advise, if possible, that the notice is served personally as well as in the post, but you've got to take into consideration the guidelines around doing that.

What's clear is this process is more convoluted than it was before. From a landlord perspective, there may be other avenues to go down without having to go through this process, and that's exactly where mediation fits in. 

What we have noticed, is that the pandemic has brought landlords and tenants together more than ever before. You see some rhetoric in the media with the landlord is often seen as the negative party, the one that is just only after money and has no empathy for the plight of the tenant in this situation, but that's not really what we've seen at all. We've seen the landlord community really rally around this situation and embrace the need to discuss matters with tenants, to understand their situation, because let's be frank - tenants, they don't go bad overnight. Tenants, they're living in the property, they pay their rent, they look after the property in 99% of cases. There's no problems there really.

The Covid-19 situation is something that none of us have really ever had to deal with before, and although we’ve seen a lot more engagement between the parties, the government realises they need to provide some guidance - you can't just rely on the goodwill of everybody. In the early days there was talk about whether some kind of pre-action protocol would be formally put into the process, and that would have   meant that some form of mediation was required to take place, either before a notice was served or before a claim was issued.

We were very positive about this as a very good step to introduce, just because what it would do is it would at least put some pressure on the parties to require them to have a discussion first, and at the very least what it would do is it provides evidence to show that they have tried this. What has come out of the requirements is they didn't make it a mandatory requirement to mediate, but it was very strongly placed into the guidance. 

In terms of a change to pre-action protocols, my expectation was that they would be changed, with a view that it  benefits all parties throughout the whole process.

Just serving a notice just puts people's barriers up and basically stops the  talking because they're scared at that point. The introduction of some form of mediation before that event occurs should show some really good results for the parties, and it's also  the way that all litigation is going now.  it does work in a lot of cases, and you   manage to get a lot of cases resolved prior to the claim being dealt with, or because mediation is   linked formally into the claim process as well, it gives the parties an opportunity to have a chat with a mediator before it   goes to a hearing, and quite often the matter will get resolved at that point in time.

What's interesting is there are a lot of cases where the tenants have been there two, three years, paid their rent absolutely fine all the way up until recently. It really is the effect of coronavirus. There is a willingness, from a lot of tenants I think, to get themselves back in a situation that's right. we see around 30-40% engagement in the first instance from tenants. 

What we're seeing is that the judges want  to see evidence of the fact that the parties have tried to communicate with each other and discuss this, so if you have gone through a mediation process. if the landlord does have to go through the legal method eventually, then at least it just strengthens their case to show that they were willing to be reasonable, they did want to engage, that they've tried to go through that process before taking action. I think that's what could get built into the process in the future.

How long do you think it will take landlords to get their properties back?

During the court stay, they weren't progressing cases but you could still issue claims. That was something that was slightly misunderstood, some people didn't   realise that you could still service notice -  they thought that everything had stopped. What happened is there were cases with bailiff evictions due on the 20th, 21st, 22nd of March, and they literally just got stopped. These landlords that were expecting their property back at that period in time and nothing has happened.

What was supposed to happen when the courts reopened was that they were going to prioritise the cases that were either furthest back in terms of the timelines or the most serious. The situation with different tier levels across the country, and Lord Chancellor's guidance on dealing with the actual bailiff has had an impact there as well. Really the overriding issue that we need to deal with in the majority of cases now is the fact that an extra hearing has to take place. any case that is currently live, if it hasn't already been done, then you might want to ask your solicitor or if you're doing it yourself think about this now but you have to serve what is known as a reactivation notice on the court for your claim. What that does is that explains to the court that you still want this claim to continue.

What the court is then required to do is set what is known as a review hearing. A review hearing is somewhere between 5-10 minutes for a judge to have a look through the paperwork for the case, because before this review hearing you have to submit a bundle to the court which sets out the claim, any defence, all the paperwork, tenancy agreement, updated rent statement if the renter is in arrears and also a statement from the landlord explaining the impact of Covid-19 on their own personal circumstances, and anything they also know about how Covid-19 has impacted the tenant.

What the judge can do is ring the parties during this review hearing to see whether he can either get the matter resolved and   grant an order at that point in time, or if he's happy that the paperwork is all in order, he'll then issue a more substantive hearing, which is basically the old hearing that would have been in place whereby the parties turn up and have to set out their case. What's happened is this extra review hearing is a further step in the process, which wasn't there previously. That is naturally going to extend how long it's going to take to get a possession order in the first place. That's happening in all of the cases.

What we're also seeing is that some of the more regional courts - not Central London or any of the busier London courts, Birmingham, Manchester, Newcastle, all of the city centre courts. The more regional ones are dealing with these things quickly as well, so we've got a lot of review hearings set for these, at these courts. What we're seeing is in the majority of cases the judges are not telephoning anyone, even though they have the ability to do so, and they're just setting substantive hearings afterwards.

It's interesting to understand that there is disparity in regions, because I think sometimes that's missed, or not understood. Is that mostly down to the backlog of cases and simply the volume of people within that region?

We did some research on the amount of cases that were going through the courts during the stay period which hadn't been resolved. We estimate that they're somewhere in the region of ten thousand Section 8 claims stuck in the court and  around 14,000 Section 21 claims. On top of that, there's another 30,000 social possession claims. This is something that isn't always appreciated  - It doesn't get as much publicity.  This puts a lot of pressure on the courts in terms of the social housing providers requiring legal means to obtain possession of their properties back as well. This is generally spread across the country, but you are seeing higher levels of backlogs in the more city centre type courts.

A couple of weeks ago the Lord Chancellor tapped the bailiff association and groups on the shoulder and said, "Excuse me guys, you wouldn't mind just not evicting people or carrying these possession orders through, would you, just for awhile? I don't know how long, but in these tiers." That has now turned into the same over lockdown. 

The Lord Chancellor went a bit nuclear I guess we could say, wrote to the county court bailiff association and the high court association,  said he would highly recommend that nobody undertakes any in person bailiff services in tier two and tier three areas, and that obviously encompassed a large proportion of  the country. Then obviously we then went into full lockdown and there was a further change in policy around that and the Lord Chancellor then decided to extend it to all areas during the lockdown period. The other thing to take into consideration here is also there's always been a kind of convention that bailiffs would not carry out evictions over the Christmas period, and this is the period from around about the 11-12th of December, to the 11-12th of January. 

Some of the language that was used, particularly by the ministers around this, was they're calling it a Christmas truce between landlords and tenants, and I really don't find that kind of language helpful, because that's not what this is about. This isn't an us against them situation. This is just following a legal process for a reason. No landlord evicts a tenant out of spite or because they're just against or personally against the person. There's been a reason why that situation has occurred.

Interestingly there's been a little bit of a change in the Lord Chancellor's view. Obviously he's been advised, or re-looked at the situation  from a legal point of view and has  given guidance that in certain situations where the bailiffs should be able to act, and this follows a similar principal to what was discussed around the grounds, where there's a shorter notice period than the six months. It's where we're talking about situations of a legal trespass and squatting. Already that was kind of outside of this process and if you've got your order around that, then the bailiffs are allowed to operate.

Unfortunately the restrictions to that process being finalised compounds the backlog, so in addition to the backlog in the courts, we're going to have a potential backlog in the bailiffs. I do note some questions around whether we're talking about six months prior to the date of possession or indeed at the point the bailiff is instructed. At this point in time we simply don't know, honest answer, because the Lord Chancellor hasn't confirmed the position on that. 

I think for the key takeaway it's fair to say that what we're seeing now is an elongated journey. In terms of what you foresee going into next year, what are your expectations there, because I think it's been forgotten by many that the coronavirus legislation that supports all the things we've talked about today,   is due to expire on 31 March, and it would take an amendment to that act in order to extend it. What's your expectation moving forward in 2021?

It's hard to say. This is linked to a lot of other policy decisions that the government are going to have to make, so they've extended furlough to this period. The stamp duty holiday is to this date as well, so I think what's going to happen is we're going to have to see what the situation is just generally in the economy in the health situation of the nation, really, whether the vaccine manages to take place and get rolled out more successfully than test and trace has. Then we're in a situation where all we can do as people who are engaged in the industry is provide information and evidence to the policymakers who are ultimately making these decisions. I know the National Residential Landlords Association have been really influential and been able to assist with policy decisions. For example, things like just bringing down the notice period from the six months to the three months with  their explanation of the situation.

We'll have to wait and see, but something further on the horizon and the agents are now going to have to take into consideration is what was really supposed to happen this year was the Section 21 process was supposed to be gotten rid of. That was what was likely to happen this year. The Renters’ Reform Bill had already been drafted in late 2019. This was a policy manifesto pledge of the Tory party, believe it or not, before the election. What we might see is a complete reform of the possession process in 2021.