Rental properties - taking possession

With the rental market still putting in a strong performance, a worrying new trend is emerging that is leaving landlords and letting agents across the county out of pocket. With tenants becoming increasingly savvy when it comes to the law on rented property, cases of professional non-payers are on the rise.

Here, Michael Whitaker, recoveries manager at Nottingham law firm Rothera Dowson, answers your questions, showing the best way for local landlords and letting agents to deal with the issue.

I’m having problems with a tenant in one of my properties. A friend suggested using a Section 21 Notice to gain possession. If I do this, can I also gain back the rent arrears at the same time?

There are two kinds of Notice that can be used to regain possession, being Section 21 and Section 8. In my experience possession is usually sought because of arrears in rent, so this is actually a very common problem.

Put simply, Section 21 allows you to bring an assured shorthold tenancy to an end without having to give a reason, as long as the relevant notice period is given. The problem here is that the notice period can’t expire until the end of the fixed term tenancy and this process can’t be used to claim rent arrears at the same time. You do have the option to use Section 21 and to also issue separate debt proceedings in the County Court, but often I find that landlords want to wrap everything up in one action.

A Section 8 Notice differs from a Section 21 as it can be used to gain possession before the fixed term of tenancy has finished. Also, the arrears of rent can be claimed at the same time, dealing with both possession of the property and a claim for the unpaid rent at once.

This may seem like a more attractive option, however be aware that to successfully use Section 8, the landlord must have sufficient grounds to do so and strict criteria must be proven, as listed as part of Section 8. The most common ground is that there are at least two months rent outstanding and this is one of the “mandatory” grounds for possession. There are other “discretionary” grounds, however if you don’t have strong evidence to support your claim then a possession order is unlikely to be granted.

What is the fastest way to gain possession?

This very much depends on your situation. In some circumstances Section 8, if undefended, can be the quickest option. However, you need to be confident in your evidence and that there are no grounds for a tenant to Counterclaim against you, as I’ve seen cases that are defended run on for months and, in extreme instances, years.

A correctly drafted and served Section 21 Notice is the easier and safest option as there can be no defence, but I would certainly suggest seeking appropriate legal advice on your individual situation.

In certain circumstances we would also suggest serving both Notices if you’re undecided about which route to follow.

It’s also worth considering serving a Section 21 Notice on day one of the tenancy to expire at the end of the fixed period. More and more people are taking this route as it means that there’s no need to serve a new Notice if problems occur towards the end. If you’re happy with your tenant you can simply enter a new contract securing them for a further six months.

How much will gaining possession cost me?

This is often what puts many people off seeking advice as the costs are sometimes more than can actually be recovered and I’ve seen cases of people trying to go it alone without any knowledge of the correct procedure.

Section 8 requires strong evidence and carries a lot of pitfalls. Even Section 21, although the more straightforward of the two, can easily confuse, particularly in relation to the date for possession to be specified in the Notice.

Both present the potential to make simple mistakes and this means that another Notice has to be issued, resulting in at least another two months of no rental income. I’ve seen instances of both landlords and letting agents getting it wrong and what set out to be an attempt to reduce costs, has resulted in a more expensive exercise in the long run. The simply advice is to always seek professional legal support if you’re not familiar with the procedure.

Before the tenancy started, I forgot to register the deposit. Can I still gain possession?

Not registering the deposit with a Deposit Protection Scheme can be quite a serious matter. You potentially risk being sued by the tenant for three times the amount of the original deposit. It also raises other problems when it comes to gaining possession as it means that Section 21 cannot be used.

The law says that the deposit must be registered as soon as it’s received. On a strict reading of the law this can’t be rectified later. However, not being able to register the deposit later would mean you could never use Section 21, so the Courts have said that provided the deposit is registered before the Notice is served, Section 21 can still be used.

However, I always advise that procedures are followed properly and that the deposit is registered immediately to avoid future problems. Although this situation still occurs, it’s happening less frequently as the need to register a deposit has been well publicised.

For further details visit Rothera Dowson’s website rotheradowson.co.uk.