A view from the courts: how are possession claims working in practice?
As part of our campaigns and policy work, the NRLA has been attending a number of housing listings at civil courts to see how they are managing with the current possession workload. Policy Officer Dan Cumming reports on his findings.
‘Rent arrears total £17,100 as of today. No rental payments have been made since April last year.’
I am here in Manchester’s county court, one of the busiest in the country for housing claims, to see how the courts are currently handling possession claims. Due to the extreme size of the arrears, the landlord’s solicitor is making a successful case for a possession order, a money judgement and a transfer up to the High Court. The tenant is not in attendance to offer a defence.
As one of the busiest courts in the country Manchester currently has three judges working three separate blocks of housing cases. Almost all are possession hearings on the basis of a Section 8 notice served because of rent arrears. There are a few isolated cases where a Section 21 notice has been served, but these typically don’t require a hearing unless there is a problem with the initial paperwork, or the tenant is asking for additional time in the property.
It is widely recognised that the courts in the UK are in crisis and the county courts are no exception.
Over the last 12 years, the number of judges has shrunk by around 10 per cent and reports by the Law Commission, the Law Society and many others have highlighted ongoing problems with delays, inadequate facilities and insufficient access to legal aid.
The impact of resource constraints
While the court’s staff continue to do an excellent job with the resources they have, it is clear that the constraints have an impact on the efficient running of the courts.
Even though most claims were not contested, block listings still regularly overran their scheduled times by around an hour. This is likely because the courts do not have enough resources to allocate sufficient time to an area of the law that one judge described to us as ‘surprisingly technical, where minor mistakes can have serious consequences.’
Finding and allocating enough time for hearings is set to get worse. At the moment, around half of all possession claims do not require an in person hearing because the accelerated possession route does not require a hearing where a judge is satisfied the requirements for a valid Section 21 notice are met.
The accelerated possession route is set to go away alongside Section 21 notices, and many of these claims will subsequently require an in-person hearing. Given the courts appear to be struggling to fit the current caseload in, it is not clear where the courts can find the additional capacity to cope with an influx of more in-person possession hearings.
It may be necessary for the Government to look at ways in which their reforms could identify cases that do not require an in-person hearing before the Renters (Reform) Bill comes into force.
For example, I observed a number of hearings that would not have been necessary if there had been a sifting process to check the validity of notices or the status of breathing space debt moratoriums.
In addition to this, once the Renters Reform Bill adds the new landlord circumstance grounds, where a landlord can provide compelling evidence they intend to sell or move a family into the property, there will be little prospect of a possession order being rejected.
In addition to this, guidance for claimants and defendants on their rights and responsibilities could help to prevent cases from progressing to court as the guidance could make it clear where a possession claim is likely to succeed or fail and help to motivate people into mediated settlements instead.
Representation for tenants
Very few tenants had secured representation prior to the day of the hearing. Of the hearings we watched, only 11 per cent of tenants had employed a solicitor to represent them ahead of the hearing date. A further 20 per cent spoke to and received representation from a duty solicitor on the day.
Unfortunately, not all tenants who were present for their hearing managed to access a duty solicitor. Manchester is relatively lucky to have some duty solicitors but even so, with two duty solicitors covering three simultaneous listings, it was impossible for them to represent everyone. This problem is worse in other areas of the country, known as legal aid deserts, where access to legal aid and duty solicitors is often unavailable.
I saw how the lack of duty solicitors also led to delays, as hearings could not commence until claimants had confirmed they were happy to proceed without one, or whether the hearing needed to be delayed until a duty solicitor became available. In some cases, hearings were started without a duty solicitor and then paused as it became clear that it would not be right for the tenants to proceed without legal advice.
It is vital that tenants get access to legal support where they need it. However, given the difficulties with accessing on-the-day legal advice, the Government may want to look at ways to ensure that tenants are accessing support at a much earlier stage.
Earlier intervention would ensure they can be given correct advice at a stage where they have the chance to address any issues, identify any available defences, and potentially sustain the tenancy.
In at least some of the cases, it appears tenants did access this advice prior to the hearing as they had paid off some arrears on the day to bring them below the mandatory threshold for possession, giving them the opportunity to negotiate a repayment plan instead of a possession order.
Representation for landlords
Significantly more landlords were represented by a solicitor, with 75% of landlords having legal representation. This is likely due to the relative complexity of making a possession claim under a Section 8 notice and the risks to the landlord where a mistake is made.
Landlords who were unrepresented, or were represented by their agent, tended to have a much higher chance of the case being adjourned due to errors in the paperwork. I witnessed landlords or agents using the Possession Claim Online (PCOL) process to apply under a Section 21 notice, leaving spelling errors in the paperwork, and in one case applying to court during a breathing space debt moratorium.
Given this, it is likely that fewer landlords will be able to self-represent successfully when Section 21 goes away. Many landlords at the moment use the Section 21 notice because they can complete the forms themselves and have a good chance of success with it. This is unlikely to be the case post-rental reform unless there are significant improvements to the guidance provided to claimants.
This has potentially negative consequences for tenants as well. Most of the Section 8 claims where landlords were represented were successful. Almost all of the successful claims included a money judgement for the landlord’s legal fees, usually adding £1,000-£2,000 on to the costs owed by the tenant. In a number of cases, the solicitor also successfully argued to allow the case to be transferred up to the High Court to ensure that the possession order could be enforced relatively quickly.
Early intervention
There were several cases from landlords and housing associations alike where a substantial level of arrears had built up, over many months of non-engagement by the tenant. In several cases, arrears of more than £10,000 had accrued before the hearing date. These cases inevitably led to a possession order and a money judgement, but it is unlikely the tenant would ever be able to pay it off.
In contrast, where the landlord had acted early to apply for possession, there were a number of cases where the arrears were manageable enough to pay off some and then agree to a suspended possession order while the outstanding debt was repaid.
This suggests that court delays may be contributing to the growth of unsustainable debt, preventing tenants and landlords from being able to find a solution to sustain the tenancy. It also suggests that there is a clear need for early intervention before rent arrears grow to an unsustainable level.
Attendance in person
Around 60 per cent of tenants did not attend the possession hearings and did not have legal representation, leaving the cases uncontested. In almost all of these cases, the landlord was successful in applying for a possession order unless the case needed to be adjourned due to errors in the procedure or the paperwork.
Where tenants were present, and no agreement was reached between the parties, most cases resulted in a possession order but the tenants were usually able to argue for a longer stay in the property. The tenants typically didn’t raise a defence as they accepted the arrears but wanted to stay for an additional 42 days after the hearing rather than the minimum.
This suggests that many tenants accept that a possession order is justified but may be willing to forgo a hearing if they are able to choose a longer time before the possession order applies to them. This could potentially be explored as an option if the Government were keen to reduce the number of hearings required post-rental reform.
