Q&A: Landlord Action's Paul Shamplina answers questions on the pre-action protocol

    21 September 2020

    Landlord Action's Paul Shamplina joined Goodlord's Oli Sherlock in a webinar, Everything you need to know about the pre-action protocol, to discuss the latest developments in eviction proceedings, including the serving of notices, reactivation notices, and the wider effects of the changes over the past six months. 

    Landlord Action's Paul Shamplina joined Goodlord's Oli Sherlock in a webinar, Everything you need to know about the pre-action protocol, to discuss the latest developments in eviction proceedings, including the serving of notices, reactivation notices, and the wider effects of the changes over the past six months. 

    What are the most recent changes to possession proceedings?

    The notice period on a section 8 notice depends on rent arrears. If the tenant is in more than six months rent arrears, which is a lot of money, it's a four-week notice period now. If they are less than six months in arrears, it's a six-month period. So if they’re in three months of rent arrears, you've got to wait six months for the notice to expire. Other grounds have different notice periods:

    • Death of a tenant - 3 months
    • Serious antisocial behaviour - 4 weeks (periodic tenancy; 1 month (fixed term tenancy)
    • No right to rent in the UK - 3 months
    • Domestic abuse - 2 weeks

    You will see a lot of landlords try and go down the antisocial behavior route, but of course, we haven't talked about the court system - the courts are going to be open on 21 September, and we're going to have a big backlog, I'm sure.

    Now, if you're serving a section 21 notice, it's a six-month notice period. When that six months runs out, you've got four months to issue the claim. Otherwise, it's invalid, you have to re-serve. With that six-month notice period coming in, that really devalues and dilutes what a section 21 notice is all about. I personally think that section 21 will be abolished in the next 12 to 18 months.

    Given that there's no prescribed form for pre-action protocol, how do we identify the minimum information that is needed to be sent to the tenants and provided to the courts?

    The pre-action protocol is to show that you've done and made every attempt possible to engage with the tenant, to understand why they've got into arrears. Do they understand English? Can they read the tenancy agreement? What payment plan can you put in place? Can they apply for housing benefit? Are they vulnerable? There has to be a paper trail. That is in place with regard to the social housing sector. It's not in place for the private rental sector. So it is going to happen because the government wants to see you try to do everything within your means. And if you haven't done everything within your means, then you won't get anywhere.

    There's a sneaking suspicion, I think, that actually, the courts will be looking for some kind of two-way partnership here, at the point where they're trying to grant eviction. So would your advice be that they start in earnest, and then obviously look to amend when the pre-action protocol is released?

    At the moment, pre-action protocol is not officially in place, as I said, So you do need a paper trail. What will happen is, on the claim form, there will be a tick box to say, "Has mediation been done?" I can tell you now, as someone that's been helping landlords for 28 years, that I've never seen landlords and letting agents engage with tenants like they have done at the moment.

    Your client is the landlord, but of course, the tenant is also a client. Without the rent, you don't get your fees, the landlord doesn't earn money with regards to paying his mortgage and seeing his investment work. So, have a paper trail, don't leave it long, because the reality is, you've got a six-month notice period, at this moment in time, which is in place at the end of March. I reckon they'll bring an announcement about section 21 going by the end of March.

    I've got a really good mate who lives in Brighton, he's the third biggest landlord in Brighton, he got almost 900 tenants. He now makes sure that he has a guarantor on every let, and that was in place after the announcement. So keep a paper trail, but when it comes to the point of can the tenant afford to pay the rent? Don't wait six, seven, eight months, and then try and do the mediation. You've got to do that after one or two months.

    From the mediation point of view, what's realistic, here? If a tenant comes along and says, "Paul, I can pay 10% of my rent for the next three or four months, but nothing else. I've got a job, I'm on furlough at the moment, so I'm getting 90% of my wage, but I can only pay 10%." Who does it come down to, in your opinion, that should make that judgment as to whether that's viable or not?

    It's down to the landlord if they accept. At the end of the day, there's a contract in place. Have as much mediation as possible and avoid courts at all costs, because it's going to take you a year to 14 months to evict a tenant. I'm sorry to break the bad news, but we haven't talked about the courts yet, and backlogs. But that's the reality.

    We've settled half our cases for mediation. We draft the notice, but what we also do is introduced another service where a landlord pays an extra £80, and then we start mediation seven days after serving the notice, to say, "How can we work with this? And how can we avoid you staying in the property or at least making sure there's a payment plan until the notice period runs out, to avoid court?"

    We've had plenty of questions regarding cutting through the noise of the tenants that can't pay, versus the ones that won't pay. My suggestion would be that mediation process is critical to that, in terms of the assessment you carry out - we have templates available to help agents with this - then the followup work you do around that, to ask the right questions as early as possible to really weed out any potential tenants really trying just to try it on, really, and remove their liability for the rent. But are there any options that landlords and letting agents have at that point, that you think they could use, given the circumstances we're in?

    The problem is the landlord's in a weakened position now, because of the notice period. If a tenant does not want to talk, Oli, they don't have to talk. They can just ignore you. I think we've all learned that a good tenant doesn't turn into a bad tenant overnight. If it goes wrong, the landlord's going to come back to you and say, "What do you know about my tenant?" One of the biggest complaints that we had is a lack of communication. Now, a landlord needs to know if the tenant is still working, if they are on furlough, if they are self-employed. These are critical questions.

    You could issue them a small claim summons and say, "Fair enough, I've got to wait six months, I'll issue a small claims summons, I'm going to actually look at getting a County Court judgment against you, which will affect your credit rating.” So it is about pressure and it's about also being a bit wise, as agents, knowing your tenants.

    Where a tenancy has now ended with arrears and the tenant vacated a natural end date, is the small claims case the quickest way to recover the debt? What delay, if any, do you see from a small claims case being heard?

    Look, courts have got a big backlog. Realistically, if it's less than £3,000, a landlord really should not be looking at employing solicitors. A lot of tenants don't have any assets. Maybe you can get a car when you use a High Court writ. It's very, very hard. You've got to make an assessment. Does that tenant have a good job? Can I get an attachment of earnings? Do they have a car? Is it free of finance? if you can get up to date information and pass it onto your landlord, they will be really, really grateful.

    Another question in regards to the issue of a notice - are you able to issue a section 8 notice for rent arrears when the current tenant will not allow access to have an expired EPC renewed? Because of course, this was an update to the process. What's your view on that, Paul?

    You can still serve a notice for rent arrears, and you can put ground 12 in, breach of tenancy, for not giving access, because obviously there's access as a clause in there, but we also want to push that when the grounds change for section 8, when they make the announcement for the banning of section 21, there will be grounds for moving back in the property and selling the property.

    The biggest problem you have now with landlords is, because of the stamp duty change, landlords want to sell their properties and they want to try and sell high. What we're finding is, if there are tenants in the property where those relationships have broken down, they're not going to give them access to value the property. That's an issue as well, and what I do predict, I see a lot of landlords selling properties with tenants in situ because they're worried. They don't want to wait a year, in case the market comes down, so that's a worry for landlords.

    And of course that notice period affects those landlords who do want their property back and there's plenty of cases of people in the Armed Forces, for example, returning back to these shores and unable to get their property back in a relatively quick time, so it's a very tricky situation for landlords. From a landlord's perspective, are there any major don'ts they should not be doing? Obviously anything aggressive, anything untoward, but in terms of communication with the tenants, is it helpful to advice that any communication is always dealt with in a very polite manner? Because this is information that's going to go in front of the court potentially, at the point of the eviction being granted, right?

    As an agent, you can only do so much. If your landlord is on the phone to you, "I need my property back," you need to try and manage that expectation. The problem is breaking the bad news that if it goes to eviction, it could take a year, which is devastating for a landlord. So don't go around the property at 10:00 at night as a letting agent and start banging on the door, "Where's the landlord's rent?" Because all that's going to happen is, they're going to make a complaint against you.

    When serving the notice to begin with, let's say they fall into one or two months worth of arrears. Is there any logic in waiting and continuing to try and mediate until it reaches a point of six months? Or do you serve the section first, then retract and serve another section? How does that work for letting agents?

    I've got one landlord and he's got four months rent arrears, he goes, "I might as well wait," because obviously a month and a day is two months’ rent. So we're now doing that, but that's why I brought in our mediation service, which I think is really going to work well, where you serve the notice, they've got a six-month notice period over their head, now it's good to talk, let's do some mediation, get a payment plan in place. But of course, there's all different reasons why a tenant might not be able to pay.

    So in terms of notices, with the new guidance, that's the section 21 notice, now that's for 10 months before it expires, in terms of reactivating a notice already served, talk us through that process, Paul.

    Well I can tell you what, of all our cases in court, we had a pile of reactivation notices, which is basically a letter to the court, a letter to the tenant, with an updated rent arrears schedule. the reason they brought the reactivation notices in, was to whittle down the cases. So all these thousands of cases go down a few thousand because the tenants have left, or the case is withdrawn for whatever reason. That's what the reactivation cases are for. If you haven't served a reactivation notice, the case gets suspended, then eventually, it can be withdrawn.

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