Commercial Litigation

Buying property to let has for some time been considered a viable long term investment with the potential of significant long term rewards.  Keeping an eye on how the property market is faring is only one aspect that requires close scrutiny.  It is also essential to manage your property correctly, with or without a managing agent, which includes finding a good tenant.
 
Ok, you have found a good tenant and you have entered into an Assured Shorthold Tenancy Agreement with the tenant providing for the tenant’s obligations and the landlord’s obligations and the consequences should you default.  You have received the deposit and placed it into one of the three designated tenancy deposit schemes, namely Deposit Protection Scheme, Tenancy Deposit Solutions and The Tenancy Deposit Scheme as required by the Housing Act 2004.  You have received the first instalment of the rent and you are confident everything is in place.
 
Unfortunately, the tenant stops paying the rent, sometimes deliberately or sometimes due to events outside of the tenant's control for instance, they are made redundant from their job or suffer long term sickness.  Regrettably due to the present economic climate there are a number of reasons why a tenant maybe experiencing financial difficulties.

 
Obtaining possession of the property can be a costly exercise and can take time so it is always worth considering whether it is possible to come to an arrangement with the tenant which may work for both of you.
 

 
1.    if the tenant has become unemployed or is unable to work due to sickness you could suggest that the tenant apply for housing benefit to be paid directly to you.;
 
2.    if the tenant defaulted in paying their rent but now has a regular income you could agree to accept payment of the arrears in instalments;
 
3.    you could agree not to pursue the rent arrears if the tenant leaves by a specified date;
 
4.    you could offer a sum of money for the tenant to leave.  Due to the tenant not being bound by such an agreement it is recommended that the settlement sum should be paid at the time the tenant leaves.  At the time the tenant leaves you should ensure that the tenant removes all their possessions, they return your keys and it is recommended the locks are changed.    

 
If it is clear that a compromise is not possible between yourself and the tenant then steps need to be taken to obtain possession of the property with careful consideration of the Housing Act 1988 (as amended by the Housing Act 1996).  The tenant is protected by statutory provisions and procedural requirements need to be followed to avoid a claim for unlawful eviction.  As the landlord you are not entitled to use force to re-enter the property you must obtain a court order for possession (section 1 of the Protection of Eviction Act 1977) otherwise the tenant may have a claim for an injunction requiring you to allow the tenant to return to live in the property and claim compensation.  

Also, you may not pursue a course of conduct which may amount to harassment otherwise you may find that you are on the receiving end of a claim under the Protection from Harassment Act 1997 which not only gives rise to criminal liability but also a claim for a civil injunction to restrain you from continuing the acts of harassment and claim compensation.  The basis of a tenant’s claim for an injunction or damages is the breach of the covenant that the tenant is entitled to quiet enjoyment of the property.  Examples where the Court has found the tenant’s right to quiet enjoyment of the property has been breached is removal of doors and windows, cutting off gas and electricity or knocking on the tenant’s door and shouting threats of physical eviction and writing letters threatening to evict them immediately.
 
The first step is to serve the correct Notice.  When seeking possession of a property for rent arrears in accordance with Ground 8 of Part II of Schedule 4 of the Housing Act 1988 as amended by section 151 of the Housing Act 1996, the correct Notice is a section 8 Notice.
 
At the time the Notice is served the tenant must be 8 weeks in rent arrears if the rent is due on a monthly basis, 2 weeks in rent arrears if rent is due on a weekly basis and 6 months in arrears if the rent is due annually.  The Notice must be served no later than the day before the next rental payment is due for the Notice to be effective.  
 
The tenant is allowed 14 days to leave the property before a court order for possession can be sought.
 

 
The tenant has until the end of the Notice period to leave.  If there is a suggestion that the tenant has left the property re-entry of the property should be treated with utmost caution and it is always recommended that a court order for possession should be obtained in any event.  Even if it appears that the tenant has left it only takes a small amount of evidence, for example a pair of shoes has been left behind, for the tenant to prove otherwise and then you are at risk of being on the receiving end of a claim for unlawful eviction.
 

 
A court order must be obtained before possession of the property may occur.  A claim form (Form N5) and the Particulars of Claim (Form N119) must be completed and sent to the nearest county court of the rented property.  Thereafter, the court will list a hearing upon which you or your legal representative must attend.  
 
The court must order you possession of the property if you rely on Ground 8 (substantial rent arrears), however, the court does have discretion to postpone possession for 6 weeks in exceptional circumstances.  The court will state the date upon which the tenant must leave.  If the tenant fails to leave then you must return to the court for a warrant of execution which provides for a further date upon which the tenant must leave, failing which the court bailiff with the assistance of the police, if required, can remove the tenant.
 
From the time the Notice is served until possession takes on average 3 months.