Don’t assume landlords are always the villains in disputes with tenants

Housing disputes through the looking glass

It comes as no surprise that the main suppliers of housing are private landlords.

One may then come to assume that the words ‘success’, ‘wealth’ or even ‘profit’ are synonymous with ‘residential landlords’ and the misconception of easy money becomes every Joe’s retirement plan. Yet 62% of those landlords disagree.

In designing the mechanics to shape landlord and tenant law, the legislator fell victim to conventional thought that the stronger party is the proud owner of a mortgaged property. The end result: a powerful and unscrupulous tenant.

Stage 1: circumstances

Suppose a potential tenant meets with a prospective landlord to enquire about moving into his refurbished property in a matter of days. The landlord will proceed to ask for:

• A reference
• Rent history
• If a deposit is payable
• Advance rent
• Future plans for employment, etc

In response, the potential tenant is not able to provide any of the aforementioned information. There is however a good reason which may include: a bad landlord, in receipt of job seekers allowance, no savings, and guaranteed homelessness if the deal breaks through.

The landlord here has the only option of selecting the lesser of two evils: a prospective tenant who may or may not pay rent over mortgage repayments and council tax for an empty property. The landlord has been coerced by circumstantial and financial pressures.

Stage 2: rent arrears

Almost a couple of months into the six-month assured shorthold tenancy agreement and the council reiterates its policy. The tenant must be in two months’ rent arrears for it to proceed with making direct payments to the landlord. The landlord’s only avenue is to communicate with his tenant and request for the payment of rent.

Over at the Citizens Advice Bureau, the tenant is being informed of her legal rights and her contractual rights under the tenancy agreement. The tenant learns that:

• A series of phone calls, voicemail messages, text messages, letters and knocks on the door may allow the tenant to bring a claim for harassment if this were to cause significant alarm and distress.
• The landlord cannot force entry into the property or use physical violence to eject the tenant as this will amount to an illegal eviction that may also carry with it a hefty financial penalty of £20,000 and above and let’s not forget about the possibility of assault claims.
• The landlord may not initiate proceedings in the county court to evict a tenant using either procedure in s8 or s21 of the Housing Act 1988 unless it meets the criteria and under the current set of facts it would not.

Stage 3: recovery and eviction

The tenant is now in eight weeks’ of rent arrears (or savings) and this will present the landlord with a few options:

1. Redirect housing benefit
The landlord may choose to pen a letter to the council with the tenancy agreement enclosed therein to make a request for the housing benefit to be paid to the landlord directly and usually this is the outcome.

2. Evict the tenant under s8 of the Housing Act 1988
The landlord may decide not to endure further grievance or even gamble with this particular tenant who may in the near future threaten to bring or bring a claim for harassment and serve a s8 notice on the tenant on one or more of the 17 grounds in which a landlord can seek possession of the property.

3. Evict the tenant under s21 of the Housing Act 1988
Alternatively, the landlord may choose to continue to allow the tenant to reside in the property until the end of the tenancy agreement. A section 21 notice will put the tenant on two months’ notice at the end of which the tenant is required to vacate the property.

Does this protect the landlord?

It has been reported by the largest landlord association in the UK that 36% of landlords have their properties abandoned. We will consider the example of the tenant mentioned earlier who will now be in eight weeks’ rent arrears.

The council will now pay rent to the landlord and this will be the tenant’s cue to either surrender the tenancy or abandon the property. Much of this may come as a relief to the landlord who will go in to change the locks with the hopes of re-leasing.

What could go wrong? Well:

• The landlord who accepts a notice to surrender will forfeit any entitlement to rent and will find himself liable to pay council tax for a vacant property.
• The tenant may exit the property and move in with close family. In doing so, any claim for housing benefit will come to an end. In turn, this means even if the landlord were to reject the surrender of tenancy and/or abandonment he could no longer claim rent from the council. A claim against the tenant is quite possible but completely frivolous.
• If the landlord was to change the locks to prevent re-entry during the tenancy period he will have committed the crime of illegal eviction should the tenant return.
• There is no silver lining if by stroke of luck the landlord found gold left by the tenant at the end of the tenancy. He must keep this property for the tenant to collect and if it is not collected he may be entitled to sell this and any proceeds will be held on trust for the tenant.
• An application to evict the tenant is costly. A judgment in favour of the landlord does not necessarily lead to a reimbursement. The landlord may never be able to recover his legal costs from a tenant let alone rent.

An introspective moment

It all seemed so simple. I would purchase a property and then lease it out. I would find a working tenant against all odds. He or she would pay the mortgage and be like a son or daughter to me. In coming into old age, I would sell the property and secure my grandchildren’s future.

It baffles me that the only tenant I could find in a recession was one in receipt of housing benefit. Government policy then intends to teach a tenant how to manage money and so it will be my tenant who will receive rent. They may or may not decide to pay me rent.

The tenant will report me to the council to carry out repairs to the property they themself damaged and my s21 notice would be rendered invalid. I cannot evict them unless I get a court order which will cost me money. I then cannot ask them to leave as the legislator calls this harassment. I cannot change the locks as I would be committing a crime.

If I accidentally accept a notice to surrender I would forfeit any incoming rent and I would be liable to pay council tax. Once they leave, I cannot sell their property and if I do the money will not belong to me. I am then responsible to carry out repairs around the property using the money I received as rent and I wouldn’t know any of this unless I hired a solicitor with what was left in my savings.

Conclusion

The landlord is left using the rent money he received at the honeymoon phase to repair the damage caused to the flooring, the electrics and the plumbing in order to refurbish the property to the standard expected by the council before the next tenant arrives and has a story that repeats the cycle.

The law around the area has coddled the notions of a tenant in so far that it has failed to identify the unscrupulous tenant. Legislative reform that would favour the landlord is long desired.

Mohammed Saleem Tariq is a former paralegal at Lexis PSL who has recently taken up a new position as a writer for LPC Answered. He has studied at the University of Nottingham and the University of Liverpool.