Rent Arrears and Possession
Getting possession of a rental property when your tenant falls into rent arrears
The Section 8 Notice is used by landlords to secure ‘fault based’ possession. This includes where a tenant is in rent arrears. Rebecca Brough from solicitors Fidler and Pepper looks at what landlords need to do if they are faced with rent arrears and want to get possession using a Section 8 Notice.
Tenant owes you rent
Your tenant now owes rent but is ignoring your calls and hiding when you turn up at the property – so what do you do?
The action you can take depends on the amount of the rent arrears, if the rent arrears are less than two months rent I would advise sending a letter informing your tenant that if they don’t vacate the property you will take steps to obtain possession.
If your tenant owes two months rent or more I would then advise taking formal action to end the tenancy. The first step is to serve your tenant with a Section 8 Notice. This is a formal notice giving your tenant notice of your intention to seek possession of the property.
When completing the Section 8 Notice you must include the grounds for possession, these can be found in Schedule 2 of the Housing Act 1988, but are also helpfully listed in the Landlord’s Bible.
Section 8 Notice – grounds for possession
There are three grounds that are applicable to rent arrears:- two months or more rent arrears; some rent arrears and persistent delays in payment of rent. The first ground is mandatory, meaning that if your tenant owes two months rent when you serve the notice and two months rent when you go to Court a Judge must order possession of the property. It is for this reason that I advise waiting until there are two months rent arrears before serving a section 8 Notice.
The other two grounds are discretionary, often a Judge would order suspended possession on these grounds, allowing a tenant to remain in the property provided they pay the current rent plus a regular contribution towards the arrears.
I would advise including all three grounds in your Section 8 Notice, this would mean that you would at least come away with a suspended possession order if your tenant paid some of the arrears before a Court hearing and owed less than two months rent.
When completing the Section 8 Notice you must give a date after which you will commence Court proceedings, you must give a minimum of 14 days, if you intend to serve the Notice any way other than by hand you need to add a couple of extra days onto this.
Section 8 Notice – after service
So you have served your Section 8 Notice – what happens now. If you are lucky your tenant will contact you, apologise for the arrears and you will agree a payment plan. You should note that your Notice is valid for a year from when it is dated so if your tenant slips back into their old ways after a couple of months you do not need to serve a new Section 8 Notice.
Tenant ignores Section 8 Notice
However, in the majority of cases I see the tenant ignores the Notice and continues to default on rent. If this is the case, the day after the Notice expires you can issue Court proceedings and ask the Judge to make a possession order.
This is done by completing the Court forms N5 and N119 which can be found at the HMCTS justice websites forms page.
There is a Court fee of £175 which you will have to pay.
Possession proceedings – the hearing
Unfortunately this is not a quick process, the Court will send the papers to the tenant and will give you both a date for the hearing, this hearing is generally eight weeks after the Court have received the papers.
So your hearing date arrives – what happens now? If your tenant does not turn up at the hearing, which believe it or not is quite common, you will have a short hearing before the Judge. You will need to advise the Judge on the level of rent arrears and if the Judge is satisfied he will make an order for possession. When making that order the Judge can give the tenant between 2-6 weeks to move out of the property. If your tenant has not turned up they will be given two weeks to move out.
If your tenant turns up at the hearing they will be directed to see the Duty Solicitor. The Duty Solicitor may want a quick word with you to verify that the Notice has been served and the amount of the rent arrears. All of you will then go before the Judge for a short hearing, again if the Judge is a happy he will make a possession order. In this instance you may find that the Duty Solicitor will argue that your tenant should be given longer than two weeks to move out of the property. The Judge will listen to these representations and if he is happy that there are reasons of extreme hardship he will allow the tenant longer to vacate, the maximum the Court can give is six weeks.
Possession Order / occupation order & costs
When making a possession order a Judge will give a date that the tenant must vacate the property, you will also have judgment for the amount of the arrears outstanding. You can also ask for an occupation order, which is basically rent from the date of the hearing to the possession date. The Court will also order that the tenant pay your costs – unfortunately this may not be your full costs, you will get £175 for the Court fee, and if you have used a Solicitor you can get some fixed costs but it is very unlikely that these won’t be the same as charged by your Solicitor.
Defence of Disrepair – be aware!
I must however warn you of the Defence of Disrepair. Your tenant can defend your claim for rent arrears and possession proceedings on the grounds of disrepair. If the tenant raises this Defence the Court will not deal with the possession order and will make Directions as to actions that are needed to proceed, such as filing a formal Defence, obtaining a Surveyor’s evidence of the disrepair, exchanging statements. The Court will then give a date for trial, this can be 7-8 months from the date of the hearing, so can be a long drawn out process, and very costly both in the terms that your tenant probably won’t pay rent during this period and you will have legal costs to pay.
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