August 10, 2020

Landlords: more new changes to affect your possession claims

Buy-to-let property

Practice Direction 55C, which comes into force on 23 August 2020, requires a private landlord to comply with ‘the relevant Pre-Action Protocol’. There is however currently no Pre Action Protocol for private landlords!

The Government is exploring the possibility of creating a new protocol, but in the meantime, to comply with the Practice Direction all we can suggest is that private landlords comply, as much as possible, with the Pre-Action Protocol for Possession Claims by Social Landlords (“the Protocol”). Unfortunately, this is unfamiliar territory for private landlords.

The Protocol is designed to facilitate discussions between landlords and tenants in order to avoid litigation. Instead, they are encouraged to communicate and exchange information prior to issuing possession proceedings, and to consider the possibility of alternative dispute resolution rather than jumping straight into litigation.

If the Protocol is not followed by either the landlord or the tenant, the Court will take this into account when considering whether to issue a possession order. It could also impose cost penalties for either party. In the worst of case the Court may even strike out the claim completely.

A landlord must take reasonable steps to ensure their tenant understands the information given, particularly if the tenant has difficulty in reading or understanding, and must also be able to demonstrate to the Court that these steps have been taken.

Vulnerable tenants and the impact of coronavirus

The Protocol requires a landlord to take greater care when dealing with particularly vulnerable tenants. The landlord must consider:

  1. whether or not the tenant has the mental capacity to defendant proceedings and the extent to which children / protected parties are involved;
  2. whether any issues arise under the Equality Act 2010; and
  3. whether or not there is a need for a community care assessment in accordance with the Care Act 2014.

If a tenant is being forced to shield due to the effect of coronavirus, and their income is affected by a disability or illness causing them to be required to shield, they are likely to be classed as vulnerable and Equality Act issues may arise.

Rent arrears – initial contact

The Protocol requires a landlord to contact a tenant as soon as reasonably possible to discuss the reason for the tenant’s rent arrears, financial circumstances and entitlement to benefits. If there is more than one tenant, the landlord should communicate with each tenant separately. Rent statements showing the date of the rent arrears, amount due, dates and amounts of payments made and a running total of the arrears should also be provided to the tenant.

The landlord and tenant should try to agree an affordable payment plan for the tenant to pay the rent arrears within an agreed time limit.

A landlord should also consider if the tenant is entitled for the arrears to be paid by the DWP via deductions from any benefits the tenant receives, and the landlord should offer to assist the tenant in any claims they may have for benefits, universal credit or housing claims.

If the tenant can demonstrate the local authority or DWP have been provided with evidence to process a benefits claim and there is reasonable expectation of eligibility for benefit, the landlord should not start possession proceedings against the tenant.

For cases where statutory notices have been served but proceedings have not yet been issued, a landlord is required to make reasonable attempts to contact the tenant to discuss the rent arrears position. This must include a discussion as to whether any benefit claims have been made before proceedings are started.

Court proceedings

In accordance with the Protocol, at least 10 days before the possession hearing a landlord should provide the tenant with up-to-date rent statements and disclose to the tenant any knowledge it has regarding the benefit position of the tenant.

What next?

Although the terms of the Protocol should be followed by both parties, the obligations placed on the landlord are much more onerous than those for tenants. The current guidance, such as it is, is still very muddled and subject to change.

Our Property Disputes team can assist landlords in dealing with their new obligations and will also provide further updates as and when the position becomes clearer.

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