Avoiding the common pitfalls - Chartered Institute of Housing

1 Rent arrears and possession claims Avoiding the common pitfalls A workshop led by: Dean Underwood & Alexander Campbell Barristers Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB What can I expect? Identifying and understanding: common pitfalls in rent-arrears possession actions their consequences how to avoid them 4-stage approach: pre-action:- investigation, records, policies, protocol, notices pleading and issue:- forms, content, exhibits and location hearings:- what the judge wants to see special considerations:- vulnerable persons, disrepair Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls The legacy of Weaver, Barber, Pinnock etc: Public law, proportionality and the consequent need for: policy compliance proper pre-action investigation comprehensive record keeping transparent decision making Consequences of non-compliance: Discretionary' cases: possession refused as not reasonable or proportionate Mandatory' cases: public law defence decision to seek possession set aside Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls Welfare reform: Ensure that policies and protocols are suitably adapted.

2 When, if at all, will registered providers ( RPs') use Ground 8? in what circumstances will the landlord offer alternative accommodation? will arrears remain a bar to management transfer? Consider availability of debt management advice and mechanisms Consider whether alternative accommodation can or should be offered RPs: decide whether claim for possession on discretionary Grounds 10 and/or 11. will be accompanied by claim on Ground 9. Ensure policy compliance, reasoned decision-making and thorough record- keeping Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls Pre-action protocol ( PAP') for possession claims based on rent arrears (see materials pack, though awaiting amendment in light of welfare reform). Applies: to social landlords: local authorities, registered providers, Does not apply: to long leases or agreements lacking security of tenure, tenancies given to the homeless If PAP does not apply, follow its spirit in any event Aim: to encourage pre-action contact between landlord and tenant to ensure effective use of court time Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls Pre-action protocol for possession claims based on rent arrears Initial requirements: contact tenant as soon as possible to discuss: cause of arrears financial circumstances benefits entitlement timetable to repay by affordable sums, directly or via thereafter: provide quarterly rent statements assist with Housing benefits claims and liaise with department recommend seeking advice from , debt advice and other agencies consider vulnerability issues.

3 Age, disability, mental incapacity Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls Pre-action protocol for possession claims based on rent arrears Post-notice requirements in essence, repeat initial requirements postpone issuing if tenant complies with agreement to repay If tenant defaults, warn of intended proceedings allow tenant time to remedy default consider alternative dispute resolution PAP recommendation: not to issue proceedings if tenant can demonstrate he has: provided local authority with all evidence needed for Housing benefit claim a reasonable expectation of eligibility paid sums not covered by Housing benefits Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls Pre-action protocol for possession claims based on rent arrears Post-issue requirements inform tenant of hearing date and time, order sought and need to attend. no later than 10 days before the hearing: provide tenant with rent statement disclose knowledge of tenant's Housing benefit situation PAP recommendation: if tenant complies with post-issue agreement to pay rent and arrears, adjourn the claim if tenant ceases to comply, warn of intention to restore the claim allow tenant time to remedy default Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls Pre-action protocol for possession claims based on rent arrears Consequences of unreasonable failure to comply by landlord: court may impose an order for costs, or in cases not brought solely on mandatory grounds, adjourn, strike out or dismiss claim by tenant: court may take failure into account when deciding whether it is reasonable to make a possession order Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls Agreements and written notices Correct identification of agreement is crucial, determining.

4 The law that regulates the agreement common law, Rent Act 1977, Housing Acts 1985, 1988, 1996 etc the occupier's security of tenure introductory, secure, assured non-shorthold, assured shorthold etc the type of pre-action notice to be served on the occupier notice to quit, notice seeking possession etc the content of the pre-action notice statement of grounds for possession, expiry date etc the evidence needed to support a claim for possession Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls Social Housing is generally held on one of 10 types of agreement, governed by combination of common law and legislation Type Principal, applicable legislation Introductory tenancy Housing Act ( HA') 1996, s124 . Secure tenancy HA 1985, s79 . Flexible tenancy HA 1985, s107A . Assured tenancy HA 1988 s1 . Assured shorthold tenancy HA 1988 s19A . Demoted tenancy HA 1996 s143A or 1988 s20B. Family intervention tenancy Schedule 1 to HA 1985 and 1988. Housing & Regeneration Act 2008 s298.

5 common law tenancy Protection from Eviction Act ( PfEA') 1977 s3 . Protected tenancy Rent Act 1977 s1 . Licence HA 1985 s79 or PfEA 1977 s3 . Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls Agreements and written notices Introductory tenancy Notice of possession proceedings s128 HA 1996. Secure tenancy Notice of proceedings for possession s83 HA 1985. Flexible tenancy Notice (a) no further tenancy (b) requiring possession s107D HA 1985. Assured tenancy Notice of proceedings for possession s8 HA 1988. Assured shorthold tenancy Notice requiring possession s21 HA 1988. Demoted tenancy Formerly secure Notice of proceedings for possession s143E HA 1996. Formerly assured Notice of proceedings for possession s21 HA 1988. Family intervention tenancy Local Housing authorities Notice of intention to serve notice to quit s298 HRA 2008. Followed by notice to quit s5 PfEA 1977 (usually). Others Notice to quit ". common law tenancy Notice to quit ". Protected tenancy Notice to quit ".

6 Licence Notice to quit (if any) ". (The above table assumes the tenancies referred to (save for the flexible tenancy) are periodic). Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls Agreements and written notices Failure to serve correct type or valid notice can be fatal, notice to quit of no effect in respect of secure and assured tenancies invalid notice to quit will not terminate a common law tenancy court must not entertain a possession claim in respect of a secure or assured tenancy unless either proper notice has been served or the court thinks it just and equitable to dispense with service of a notice: HA 1985 / HA 1988. Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pre-action pitfalls Agreements and written notices If unsure of correct type, serve more than one, each without prejudice to the other If unsure of correct content, contact a solicitor! Use methods of service identified by agreement and always complete a certificate of service (Form n215 ).

7 And remember: check for existing possession orders tenancy may already have ended because of an existing order, obviating the need for a new notice Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pleading and issuing pitfalls Specific forms for county court possession claims Claim form N5. Claim form (accelerated possession procedure) N5B. Particulars of claim (rented residential premises) N119. certificate of service n215 . Court can impose sanctions, costs, for non-use Particulars of claim should comply with Parts 16 and 55 of the Civil Procedure Rules ( CPR'). See in particular Practice Direction 55A (paras. and ) to CPR 55. Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pleading and issuing pitfalls Particulars of claim should generally:- contain sufficient information to enable occupier to understand the claim Including address, type of agreement, commencement, rent, daily rate, level of arrears etc identify any statutory grounds for possession Grounds 8, 10, 11 Schedule 2, HA 1988 or Ground 1 Schedule 2 HA 1985.

8 Detail the type of notice served on the occupier attach relevant documents (see below). disclose pertinent information about occupier's circumstances, household composition, employment details, benefits entitlement, disabilities detail landlord's efforts to avoid litigation, including PAP compliance following Pinnock, explain briefly why an eviction is proportionate (?). Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Pleading and issuing pitfalls Relevant documents? tenancy or licence agreement statement of rent account for last 2 years or longer if relevant correspondence and file notes demonstrating PAP compliance the notice served on the occupier evidence of service, certificate of service in Form n215 . Issue: in the court for the district where the property is located: CPR Failure to do so can result in claim's dismissal Issue in the High Court at your peril: Enfield LBC v Pheonix [2013] EWHC (tbc) (QB). Court can remedy error, see CPR , but may impose a sanction, costs Don't forget: 3 copies of the papers plus a cheque for the issue fee!

9 Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB pitfalls at the hearing The difficult job of the county court judge: busy county courts, with block-listed hearings usually 5-10 minutes allocated for first possession hearing little time to absorb facts and parties' positions What the judge wants to see: well prepared and easily accessible paperwork well prepared landlord:- original documents ready and available: agreement, notice and statement of account up-to-date knowledge: occupier's circumstances, rent account and benefits issues decision as to the order sought a realistic approach Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Special considerations Vulnerable persons: children and protected parties' require litigation friend: see CPR 21. protected party' = party who lacks capacity to conduct proceedings landlord may issue and serve claim against child or protected party and apply for appointment of litigation friend but until litigation friend is appointed, no further step may be taken without court's permission Remember: check occupier's age when agreement was made if the tenant was a child at the date of agreement, the legal owner of the tenancy will have to be served with notice and proceedings Alexander-David v LBHF [2009] EWCA Civ 259 [2009] HLR 39.

10 Kingston-upon-Thames RLBC v Prince (1999) 31 HLR 794. Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Special considerations The relevance of disrepair landlord's failure to comply with repair covenants in tenancy agreement may give tenant a remedy in damages against landlord unless the right is excluded by clear wording, tenant may set-off recoverable damages against arrears of rent tenant will usually counterclaim against landlord's claim for possession if damages are sufficient to extinguish arrears, arrears are treated as if they never existed and tenant as if he/she never defaulted As a consequence, possession claims may fail or result in a lesser order than landlord expected. Pre-issue precaution: check for outstanding issues with disrepair team /. contractors Hardwicke Building, New Square, Lincoln's Inn, London WC2A 3SB Special considerations Debt relief orders principal points to remember No remedy in respect of the debt' during 12 month moratorium period Debtor released from debts at end of DRO moratorium DRO does not prevent possession order on grounds of arrears but the court cannot enter judgment for the arrears or make suspension of the order conditional on payment of the arrears Suspension should be conditional on payment of current rent Court can enter judgment for and suspend on repayment of post-DRO arrears and order payment towards landlord's costs.