There is no doubt that our landlord community is coming under increasing pressure to bear the cost of tenant arrears.
A report in The Telegraph earlier this year said that the eviction process in the civil courts in England and Wales was 155 times slower than it was in 2019 – pre-pandemic. We don’t expect by the end of this year, December 2022, that that figure has improved!
According to this same report, landlords are “forfeiting tens of thousands in lost rent as a bailiff shortage and massive court delays grind the eviction process to a halt”. You may very well find yourself in this situation if you are reading this article. We already know from talking to our community of landlords and landlord advisors that wait times for evictions are at record highs. The exodus of good professional landlords from the rental housing market is a real concern as they have driven forward the opportunity for more rental housing space to be available whilst the Government seems unable to get a cohesive plan in place to build more affordable homes.
Worse than this reports are growing of landlords writing off arrears, and paying off tenants to leave properties rather than stick with the legal process to obtain an Order for Possession and then enforce it where necessary. There is no doubt in our minds that the system is in crisis.
And yet …. there is a glimmer of hope – certainly coming from TEAM Shergroup to solve your dilemma of the tenant who is not paying you – and you yourself are now finding yourself in a tight corner.
Over the last 14 years, we have been helping landlords to transfer their Orders for Possession to the High Court under a discretion given to District Judges to allow the Order for Possession to be transferred to the High Court for enforcement. In deciding whether to exercise his or her discretion, the Judge must be satisfied there is a real reason for a faster transfer – and of course, if you are in a financially tight spot that needs to be explained to the Judge who can then look to make an order allowing the enforcement of your possession order to be transferred.
The upside for you is immediate if we can get the Judge onside. There are NO delays or backlogs in the High Court system. A Notice of Eviction will need to be served on your tenant giving them 14 days to move out, but after that time has elapsed, we can set a date to fit with your timeline for the eviction. No delays, no more paperwork, just a simple count down to the day of the eviction – which we will help you organise to ensure you have everything you need for a peaceful transfer of possession back to you.
So, What’s The Catch We Hear You Ask?
Our response to that is none – if you follow our process and take our advice. But the status quo on legal advice in this area is lacking. Here’s what we think goes wrong for landlords ….
Landlords, their agents, and advisors are encouraged by Government information and various other stakeholders to use the PCOL system to recover rent arrears which certainly streamlines a claim for possession – making it super simple to issue a claim and end up with a possession order – although it’s not as fast as it could be due to the delays in the county court system. Where this system falls down is that it doesn’t allow the claimant landlord to add additional information into the claim asking the Court to exercise its discretion under Section 42(2) of the County Courts Act 1984 so that the eventual order for possession can be transferred to the High Court for enforcement.
On this aspect of seeking permission, we offer a half-hour “legal clinic” through Shergroup Legal with a fixed fee of £150 plus VAT. A landlord can call us (or contact us through CHAT, email or message on social media) and book an appointment to speak to our property lawyers about whether all the reasoning necessary to make a request for permission to transfer to the High Court is present. Judges are increasingly aware of these applications, and want to see more than just “I want my property back”. We can help you craft a suitably worded request which will give you the best chance of getting the permission and then onwards to a more efficient enforcement process.
This means that a landlord can achieve an order for possession – but because the PCOL form doesn’t give enough space for the additional application to be made to transfer to the High Court enforcement, the landlord has to make a separate application – either orally at the final possession hearing or after the possession order has been made. From our own trial data in this area of our solutions business, we know that the likelihood of a landlord achieving permission to enforce in the High Court once a possession order has been made – drops from 80% to 40%.
In asking the Court at this point to make an Order allowing the enforcement to be transferred to the High Court enforcement, a landlord needs to explain fully why such an Order is needed. Delay in enforcement is a cost of lost rent multiplied by the time the Bailiff Manager of any given Court says it will take for an Order to be enforced. The longer the period the more lost opportunity cost for the landlord.
With average UK-wide rent is £977 with the average rent in London at £2011. These figures are based on the Homelet index which keeps tabs on changes on rent values month on month. You can see from these figures, particularly in London, that any delay in the court system is going to add significant and almost unmanageable amounts of arrears to the final amount for enforcement. This aspect of the court delay situation makes it unfair to tenants as well as Landlords.
On top of the problem of the amount of rent if the tenant is not paying rent there is also the concern that the property is falling into disrepair the longer that the property is not being looked after. An increase in disrepair means that not only is there a greater outlay for the landlord in getting the property back up to scratch, but the repairs also delay getting the property back on the market and getting the rent paid.
Shergroup’s Enforcement Strategy
So, let’s deconstruct how everyone else does it – and let’s create a better process for you as part of our community.
In our process for landlords and those supporting landlords, we will ask you to complete our questionnaire on why you need a timely eviction (we tactfully don’t use the word “speedy” because Judges don’t want to know that it’s going to be a speedy process, but timely is probably something they can live with). We have to show that you yourself are in a tight spot so do any of these situations apply to you?
- Perhaps you are servicing a mortgage on the property and need the rental income to pay the mortgage
- Or you need the property back to liquidate some of your investment portfolio to bolster your own financial position – particularly relevant if you are pensionable age
- Or you want to redevelop the property to achieve a better return
- Or, you have evidence of substantial arrears and/or anti-social behaviour of your tenant
Our clear approach is to navigate the legal system for you with the end game in mind – an early eviction and eventually the enforcement of any arrears.
We will issue your claim for possession with a careful review of your Notice and accompanying legislation so you can confidently navigate the county court system without being limited by PCOL.
We will issue the claim in the tenant’s home county court, and we will ask in the claim form for the enforcement of any eventual order to be transferred to the High Court for enforcement where it makes sense to do so – i.e., a court which has more than 4 weeks to give you an eviction date. We will verify this timeline with the Bailiff Manager at the court concerned.
We then increase the odds of satisfying the District Judge that it is fair to you to enforce your order for possession in the county court by adding the request under Section 42(2) to allow you enforce in the High Court and side-step all the delay which is inherent in the County Court system.
And the great news is that both these areas can be handled using Shergroup’s enforcement arm – as our CEO is herself a High Court Enforcement Officer. As a result, we can provide a solution to manage your possession claim to give you the best chance of an early eviction and look to recover your arrears using our enforcement strategies.
Instead of writing off arrears and paying tenants to vacate properties we want to put you in a position where you get back your property as soon as your possession order is granted – and to recover any rent that you have lost.
We understand that the world of landlords is sinking in delay and dare we say it …. Despair. But take heart – we want you to know this simple truth ….
THERE ARE NO BACKLOGS IN HIGH COURT ENFORCEMENT – THERE ARE ENFORCEMENT AGENTS (AKA BAILIFFS) WAITING TO ENFORCE YOUR POSSESSION ORDER TODAY!
In fact, it has been puzzling to us why the County Court system has such an enormous backlog when it comes to the enforcement process and we think we have found the answer in a Daily Telegraph article published in February of this year which confirms our worst fears for our landlord community. There is in short, a “huge shortage” of county court bailiffs.
According to Ministry of Justice civil justice statistics, of the 14,433 possession claims that were issued in courts from October to December in 2021, just 17 led to bailiff evictions in the same quarter, according to government data. This was a rate of 0.1pc – the lowest on record, and 155 times slower than at the end of 2019.
Between October and December 2021, the average time between a landlord repossession claim and an eviction was 68 weeks. This was a record high, excluding the pandemic period, when the wait time was further extended by the eviction ban. It was also 56pc higher than at the end of 2019.
The long waits after going through the legal system are due to a shortage of bailiffs. One landlord in north-east London, who had a rogue tenant with arrears of £18,375 in June 2021, was granted an eviction order and applied for a bailiff last July. After a wait of seven months, they have only just been given a bailiff eviction date for the beginning of March 2022.
We hear more and more anecdotal evident of landlords who suffer from the breakdown in the county court system. A landlord reported in the same Daily Telegraph article suffered from a rogue tenant who just stopped paying rent (we believe there are hundreds if not thousands of landlords in this situation).
Going back to November 2021 that led to arrears of rent of £16,000 being accumulated. It then took that landlord a WHOLE YEAR to get a court hearing. In desperation, he offered to pay his tenants £4,000 to leave his property. Once he got an eviction notice in April 2021, he then had a nine-week wait for a bailiff. Over this period alone, he lost a further £1,900 in rental income.
Does that sound like justice to you? That landlord now plans to sell up and exit the sector altogether. Five of his 16 properties are already under offer. He was quoted as saying to the Daily Telegraph ….
“My horrendous experience of trying to do evictions is a huge contributing factor,” he said.
So, What Does It Cost to Use Shergroup Enforcement as Opposed to County Court Bailiffs
Our fixed fee is £799 plus VAT if you have permission to transfer to the High Court – which will save you weeks in unpaid rent.
If you don’t have permission to transfer then we will charge additional fees to get you in a position to enforce,
Ideally, we want you to come to us at the service of Notice stage and put your Notice and Claim together in a package which means you spend the least possible amount to get back possession of your property.
Is All This Fair on Landlords?
We say ABSOLUTELY NOT! Our CEO, Claire Sandbrook, says all this delay is a “national disgrace” and she is not one for mincing her words.
In theory, a landlord should be able to get a bailiff 14 days after they receive a possession order. In reality, before the pandemic the wait time was four to six weeks. Now, this wait period has doubled. We hear county court bailiff managers offering eviction dates of up to 6 months!!
There are around 350 bailiffs across the country. Even before the pandemic, the Ministry of Justice acknowledged that there was a shortfall. But we want to emphasize this shortfall is only in the County Courts!
The pace of processing evictions in the courts is glacially slow, despite the fact that the number of claims was still 43pc down compared with the end of 2019. But the scale of the problem is increasing very quickly, as the backlog created during the pandemic starts hitting the courts fast.
According to the Daily Telegraph report which sparked us to blog about this intolerable situation for landlords, a Ministry of Justice spokesperson said: “We are reducing backlogs with new measures such as allowing some defendants to pay bailiffs online, so they can reduce doorstep visits to focus on possession orders.”
Really? Is that the solution from the MoJ? Frankly we find this pathetic. Instead, surely the answer lies in allowing possession orders to be transferred to the High Court and to stop District Judges passing secret messages on their internal network boycotting the granting of permission (just to say we have been told that such a letter exists but surprise surprise no one wants to share it with us!!!!!).
This is where we have come to in England and Wales today. Landlords have been encouraged to invest in private rental property to support the lack of housing and now aren’t allowed to manage their assets efficiently.
Now more than ever, when they need access to justice they are being shafted by the very system that should see them receive fair play!
Have you been shafted by the justice system – send us a message and tell us how and let’s see if we can improve your position. Tell us about delays in your enforcement, and what were you told by the county court staff, or by a judge about your eviction situation. And on a more positive note did you receive an efficient service from the Courts, and which judges in which Courts granted permission? We are building a tracker which we intend to publish to show what is happening from the Orders for Possession we receive so help us build up the data!
If this is something that has affected you and you want help then get in touch with us through shergroup.com and let’s see what’s possible. On our website, you will find all the ways to connect us with – and a phone call or chat message is a good way to start a conversation.