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Landlords! Are your tenants in arrears?

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In the current financial economic climate, there are more and more cases of residential tenants defaulting on their rental obligations.  It is important that landlords are aware of their rights when seeking to recover possession of their property from a defaulting tenant.

With every residential occupier it is necessary to obtain a Possession Order from the Court.  Failure to do so may see the landlord committing the criminal offence of unlawful eviction and harassment.  Indeed, evicting a tenant without a Possession Order may also give rise to a civil claim by the tenant for damages as well. 

The majority of residential occupiers will be tenants under an Assured Shorthold Tenancy.  When faced with such a tenant, a landlord has two methods of seeking a Possession Order.

Section 8 Notice

The landlord may serve a notice pursuing to Section 8 of the Housing Act 1988 based upon the tenant’s failure to pay the rent.  Should the tenant fail to clear the rent arrears within 14 days, the landlord would then be entitled to commence Possession Proceedings.  The Landlord can claim for the outstanding rental within the claim for possession. The problem with this option is that it does not guarantee a Possession Order will be made.  The Court will often make a Suspended Possession Order where the tenant will be entitled to remain in the property on the condition that the rent arrears are paid by instalments.  It would only be if the Tenant defaulted on those instalments that the landlord could ask the Court Bailiff to evict the tenant.  Therefore if the Landlord’s sole aim is to get possession of the property then this may not be the best option. 

Section 21 Notice

The other option available to the landlord when faced with a defaulting tenant is to serve a notice under Section 21 of the Housing Act 1988.  This seeks to determine the tenancy upon the end of the fixed term period.  The disadvantage with this option is that the landlord has to give 2 months “clear” notice and wait until the fixed term has expired before Possession Proceedings can be commenced. So there will often be a delay before court Proceedings can be started. However, upon proceedings starting there can be no defence provided the technical requirements for possession are made out, for example that any deposit is held under an authorised Tenancy Deposit Scheme.  Provided the technical requirements are met the Court will make a possession order without the need for a hearing. As there is often no hearing the costs of obtaining a Possession Order based upon a Section 21 notice can be less than the costs of obtaining a Possession Order based upon a Section 8 notice.  However, the landlord cannot seek to recover any outstanding rental within the proceedings.  If the landlord wishes to recover any outstanding rental a separate claim would need to be issued.

Summary

Neither of the options available to a landlord when faced with a defaulting tenant are ideal.  There are advantages and disadvantages with both. What might be the best option in one situation may not be in another.  It is therefore essential that landlords seek legal advice immediately when faced with a defaulting tenant to ensure that the appropriate notice is served so that the landlord can obtain possession with the minimum fuss and delay in order that a paying tenant can be installed at the earliest opportunity.       

This is not legal advice, it is only intended to provide general information about current issues. If you would like any further information or advice regarding the issues raised in this article then please contact Justin Emerson on 01245 228113 or emersonj@gepp.co.uk