Tenant Eviction by Solicitors – Costs

How much of your costs can you expect to recover when your tenant eviction claim is successful?

Firstly, legal fees are not generally recoverable unless there is a tenant eviction solicitor on the court record. Certain disbursements however may be recoverable even in the absence of an eviction solicitor, for example, the court’s issue fees or reasonable travel expenses.

The court has a wide discretion in tenant eviction matters as to the method it will use to decide who pays what to whom for costs. Costs orders in tenant eviciction claims can be either fixed costs, assessed costs or contractual costs.

Fixed costs are laid down in the Civil Procedure Rules. The Civil Procedure Rules provide for fixed costs in relation to claims to evict tenants, at paragraph 45.1(2). The rules indicate, among other things, that fixed costs are for totally uncontested claims.

In reality, fixed costs are the default position for the majority of district judges hearing claims to evict tenants; even where there is a strong argument that a different basis of calculation is appropriate. It can be difficult to persuade some judges to deviate from simple fixed costs no matter how your tenant eviction claim unfolded and how vigorously it was defended.

The rates for standard tenant eviction claims amount to £69.50 to issue the claim and, generally, £57.25 when judgment is entered. In addition, the court’s issue fee of £280 (soon to be £350) and reasonable expenses should also be recoverable.

No one suggests that these costs are intended to accurately reflect the actual costs of bringing a possession claim to evict a tenant. Initially taking a landlord’s instructions regarding a problem tenant and advising how best to evict the tenant can knock a big hole in an hour. Remember that there are a number of different types of tenant eviction notice, three types of tenant eviction proceedings, and two types tenant eviction enforcement. Further, we seldom see a tenant eviction matter that does not have an additional problem or two. Common examples of additional problems, are a lack of a written tenancy agreement, tenancy deposit problems, disrepair issues, questions about who is the appropriate person to bring the claim, the list is endless.

Having established all the facts, provided appropriate advice regarding the issues and charted a course through the tenant eviction options, it is then necessary to serve the appropriate notices, draft the claim in the best way to suit the tenant eviction circumstances, file the eviction claim, deal with any defence and or evidence, and attend the hearing. Just attending the hearing, including travel and hanging around at court (there is a lot of hanging around at court) will likely take the best part of half a day. This is true of all courts, be they in London, Cardiff, Manchester, Newport, Sheffield or Swansea.  Fixed costs are nowhere near the true cost of tenant eviction proceedings.

The fixed rates have not been altered for many years, (court fees will, when the new increases come into effect, have increased by more than 350% (yes, more than 350%) since fixed costs were last reviewed for tenant eviction cases.

Fixed costs in tenant eviction claims are a mere token contribution and many might see them as a further insult to the landlord who has already lost a great deal of money because his tenant is stealing the housing benefit and / or trashing the property. The landlord has then been forced to further lose many hundreds or even thousands of pounds just waiting for the system creak to it’s leisurely conclusion. It commonly takes five or six weeks (sometimes more) for a tenant eviction claim to come before a judge. Currently, the courts in London seem generally to be the slowest for tenant eviction claims, but no courts are particularly speedy.  Eviction notices of up to three months will have gone before the eviction claim was even issued in the court and even then, the court will usually give the tenant at least two weeks (sometimes more) to vacate the property. Further, if the tenant simply ignores the order, it will take another few weeks to actually get possession with the help of the bailiffs who will actually evict the tenants.

For all these reasons, it is important to try and get a more just and realistic order for costs in tenant eviction matters where appropriate.

If you are not acting through a solicitor (non-solicitor “eviction specialists” don’t count) or you are attempting the d.i.y. route, you are not going to be entitled to costs at all, save for the court issue fee and reasonable expenses such as travel to court.

If your tenancy agreement is silent about costs and no defence was filed, the fixed costs are the appropriate order and the landlord is lumbered with them.

In any other circumstances, it will be appropriate to seek a different costs order in your tenant eviction matter.

Assessed cost would be appropriate where for example, a defence has been filed but the claim has succeeded. A court should undertake a summary (rough and ready) account of the work done, the conduct of the parties and any other factors relevant and make an order settling the liability and amount of costs.

The key point here is that you will need to refer the judge to the appropriate passage in the Civil Procedure Rules paragraph 45(1) 2 to support your submission that fixed costs are not appropriate in a defended tenant eviction claim. The landlord should also have prepared (the landlord’s solicitor will do this) a schedule of costs. The difficulty will be that many district judges default to fixed costs no matter what the circumstances. They have an over busy eviction list and are concerned to not get behind. The judge is likely to be extremely reluctant to spend time dealing with costs.

Nevertheless, the application for assessed costs should be pressed. The landlord has waited a very long time and paid an exorbitant fee to the court for his or her five minutes in front of the judge. The landlord should not be made to suffer more injustice by being deprived of their rightful costs because the court hasn’t got time to deal with them.

Whilst it is accepted that the court has discretion it is suggested that there should be a reason to exercise that discretion in such a way as to deprive a landlord of their appropriate costs. If on the other hand, the court derogates from the landlord’s entitlement for reason, for example, poor behaviour in the conduct of the claim that would be a different matter. The decision may still be challenged depending on the circumstances, however, the decision to revert to fixed costs (or lesser or no costs at all) is on a sound footing.

Contractual costs are payable when the tenancy agreement says that the landlord is entitled to his costs of enforcing breaches of the agreement.

If the tenancy agreement makes no reference to eviction costs, then fixed costs would normally be the default costs position in an undefended claim.

The court has a discretion regarding the allocation and amount of costs.

All simple enough at first glance, however, on slightly closer scrutiny, like anything connected with evicting tenants, it can be a lot more difficult than it looks. Consequently, this note will look at a situation where the landlord succeeds in a straightforward standard possession claim. The key point here is that your solicitor will need to refer the judge to the appropriate passage in the Civil Procedure Rules paragraph 45(1) 2 to support your submission that fixed costs are not appropriate in the circumstances.

Where the contract provides for the tenant to pay the landlords legal costs, it is submitted that costs that are reasonably incurred and reasonable in amount should be ordered in favour of the successful landlord.

The Civil Procedure Rules 48.3 and PD 48 s. 50 confirm the position in Gomba Holdings (UK) Ltd v Minories Finance Ltd (No 2) [1993] CH 171 that where the tenant eviction costs are payable by contract they are presumed to be reasonable. Church Commissioners for England v Ibrahim [1997] 1 EGLER 13 confirms that this approach to costs applies to landlord and tenant possession claims.

Occasionally, tenant’s representatives will raise a defence to the effect that contractual costs are a breach of the Unfair Terms in Consumer Contracts Regulations 1999.  This is wrong.  Not only is there ample authority for the position that contractual costs are perfectly reasonable in themselves, (see the previous paragraph) but the Office of Fair Trading has published specific guidance on unfair terms and conditions in tenancy agreements in Sept 2005  (Now Published by the Competition and Markets Authority).

The guidance as far as is relevant to this particular issue is as follows:

Paragraph 3.47 objects to legal costs on an “indemnity basis,” because of the potential to claim “unreasonable legal costs” However, it is suggested that this position misunderstands the principle of indemnity costs as a court is not obliged to order any costs that are unreasonable or exceed what has actually been expended.   There is no objection in the guidance to claiming costs on a contractual basis if entitled to do so by the tenancy agreement as long as those costs are reasonable.   The guidance makes clear that the objection is to Landlords claiming more than it has actually cost them.  In other words, if the costs are reasonably incurred, reasonable in amount and reflect the genuine cost to the landlord, there is no objection.

Paragraph 3.5 of the guidance states that “Landlords are entitled to recover the reasonable costs they incur in obtaining outstanding rent or other amounts due to them, but should not impose arbitrary charges….”

Paragraph 3.55 indicates that costs shouldn’t be regardless of outcome.   Paragraph 3.55 of the guidance is controversial in that contractual costs would not be payable in any event (win or lose) if the guidance were followed.  This differs from the position in mortgage arrears cases, and the authority in Church Commissioners for England v Ibrahim [1997] is clear that mortgage arrears and landlord and tenant arrears cases are to be treated in the same way as far as contractual costs are concerned. However, it would seem open to argument that if the claim was lost, the costs might be unreasonable anyway.

The contract should be reasonably clear and understandable.

So, if there is a provision for contractual costs in the agreement, the landlord is successful in his or her eviction claim, and the court has a schedule of costs, then it is submitted that the costs of the eviction should be awarded on the contractual basis as long as those costs are not unreasonably incurred or unreasonable in amount.  The argument that a contractual costs term in the agreement automatically breaches the Unfair Terms in Consumer Contracts Regulations 1999 is without basis and contrary to all authority including the Office of Fair Trading’s own guidance.  It is for the tenant to show that the particular term is unfair for a particular reason.

The court ought therefore to grant contractual costs to the successful landlord who has the benefit of a contractual costs in the tenancy agreement.

Tenant Eviction in Wales

Tenant Eviction in Wales

Housing (Wales) Act 2014

You might think that evicting a tenant who is causing you problems should be fairly straightforward. And some would say that it is. Much is made of the three step procedure that is: serving an eviction notice; issuing proceedings for eviction and obtaining an eviction order; and if necessary, instructing bailiffs to execute the warrant or writ of eviction.

You can even buy d.i.y. kits on the internet where a firm sells you the eviction forms, (which can be downloaded for free anyway), and possibly some tenant eviction instructions. The quality of these d.i.y. kits can be a bit hit and miss. Nevertheless, it appears cheaper so why don’t more people do it themselves?

Well, firstly, because tenant eviction is not as simple as it looks. There are several different kinds of eviction notice, three different types of eviction proceedings, and two different types of eviction enforcement.

Secondly, you are attempting to deprive a tenant of their home; judges can be exceptionally pernickety about minor details (no matter how much the tenant deserves to be evicted). It is easy to get your tenant eviction case adjourned or even thrown out.

Thirdly, we rarely see a tenant eviction case that doesn’t have an interesting twist of one sort or another. For example, there is a tenancy deposit issue or there is no written agreement or a potential counter claim, or the current tenant is not the one named on the tenancy agreement or one of countless other complications.

Fourthly, the cost of getting tenant eviction wrong can be significant. Not only might you have wasted all your fees and time, you may have to start again with notice and that could lose another three or four months rent if the tenant isn’t paying rent.

Given the size of the issue fee charged by the court for possession claims, recently increased for £100 to £280 almost unbelievably (and we understand that a further increase to £355 is on the way), what you pay to a solicitor to evict a tenant for you is not all that much. Given that many firms, this one included, will evict your tenant in return for a fixed fee, there is a strong argument in favour of saving yourself the risk and hassle when it comes to removing a problem tenant.

Incidentally, do use a proper tenant eviction solicitor, rather than a non solicitor “eviction specialist.” It’s not so much that solicitors are properly qualified (though they are of course) as that they are highly and independently regulated. There is an ombudsman scheme and solicitors have to have very extensive (and hugely expensive) insurance against things going wrong. There is always redress when something goes wrong, if it’s appropriate.

Landlord’s lives were recently made more complicated by the tenancy deposits debacle. For years, many landlords have had to pay substantial penalties to tenants (who hadn’t suffered any loss whatsoever) for infractions of the tenancy deposit requirements even though nobody (including the lawyers and the courts) understood the rules.

Well, here comes another brand new layer of perplexing complexity for those who want to evict tenants in Wales; courtesy of the Welsh Assembly. Until now, evicting a tenant in London, or Manchester, or Liverpool has been no different to a tenant eviction in Cardiff, Swansea or Newport.

Recently, a special Welsh s. 8 eviction notice was introduced, it is virtually identical and to exactly the same effect as the English s. 8 eviction notice. An apparently pointless complexity!

And now, letting a property in Wales is going to be hugely more complicated than doing so in England. There is a layer of additional cost, and all manner of new ways in which landlords can be penalised and generally bossed about. And of course, a whole new layer of bureaucracy and bureaucrats.

Don’t rely on what follows, it is just some points that stood out to us on first reading of the act. There are still things we don’t quite understand. However, just to give you feel for the new Welsh legislation, hang on to your hat and read on.

Part 1 Regulation of Private Rented Housing

The act has nine parts, dealing with Homelessness, Gypsies & Travellers, Standards in Social Housing, Housing Finance, and other related matters. This note is concerned with part 1 – Regulation of Private Rented Housing.

The new act received royal assent on 17.09.14. The Private Rented Housing provisions are expected to be brought into force over 2015 / 2016. Requirements for landlords and agents to register and be licensed are expected to be in force in the autumn of 2015.

The key points are:

  1. All landlords and their properties must be registered.  Landlords will have to pay a fee for registration and must renew every 5 years. Landlords will be obliged to keep the registration up to date with information including the identity of the landlord and identity of the licensed person appointed to manage the property;
  2. All agents and any landlords who want to manage their property must be licenced to do so.  Licensing will include training, checks on suitability (including the suitability of anyone a landlord is or has been associated with).  Licenses may be granted with conditions.  Landlords and agents will have to pay for their licences.
  3. As a condition of your licence, you agree to obey whatever codes of practice the Welsh ministers may or may not issue in the future.
  4. The fit and proper test for licensing, will ask if the landlord or anyone associated with landlord, or formerly associated with the landlord, has been convicted of offences including fraud or dishonesty, violence, firearms, drugs, sexual offences.  Further, the test will ask about issues of discrimination, harassment, or contravention of any law relating to housing in the applicant’s background.
  5. If the landlord or agent isn’t licenced, they will be unable to carry out what the act refers to as “certain kinds of lettings activities” which include arranging or conducting viewings; referencing or interviewing prospective tenants; preparing or arranging the preparation of the tenancy agreement; preparing or arranging the preparation of an inventory or schedule of condition.  Presumably, an unlicensed landlord will be unable to serve an eviction notice, or issue proceedings for tenant eviction.
  6. A landlord or agent may not even check his or her property after a tenancy has ended unless she or he is licensed.  The only step an unlicensed landlord may take is to instruct a licenced agent to inspect the property, save that it seems an unlicensed landlord may be able to publish an advert for a tenant as long as they don’t do anything else.
  7. It is an offence for a landlord to appoint or continue to instruct an unlicensed agent.
  8. There are two kinds of licence, one for landlords and one for “persons acting on behalf of landlords.”
  9. Contravention of the licencing requirements is a criminal offence.
  10. The Welsh Assembly have also created a number of enforcement powers; i.e. criminal sanctions, fixed penalty notices; rent stopping orders, rent re-payment orders, as well as borrowing from the tenancy deposit rules, the sanction of invalidating s. 21 notices during noncompliance.  The licencing authority is also empowered to demand information from landlords and agents, and of course, to revoke their licences.
  11. Local Authorities will have new enforcement powers and be able to issue fixed penalty notices for certain offences alleged to have been committed by the landlord, currently the fines are £150 or £250 depending on the offence.  The licencing authority keeps it’s fixed penalty receipts.
  12. The licensing authority has a new method of penalising a landlords, in that it may make an application to a residential property tribunal for a rent stopping order.  This means that for a specific period, no rent is payable for the property.  Any rent paid during this time must be re-paid to the tenant and is a debt recoverable through the court.
  13. The licensing authority, a housing authority and even the tenant will have another new method of penalising landlords. They may also apply for a rent repayment order. A residential property tribunal may order the return of rent for a period during which certain offences are committed.
  14. The landlord may be further penalised for non-compliance as no s. 21 notice may be given if a landlord is not registered, licenced or has appointed a licensed agent.  This doesn’t apply if the notice is served within 28 days of the landlord acquiring the property.
  15. A person authorised by the licencing authority may demand documents or other information from landlords or agents.  Not to provide the documents demanded or to destroy them is a criminal offence.
  16. It is a defence to a registration offence to have a reasonable excuse for not being registered.
  17. Exceptions to registration and licencing requirements are: that there is an a pending application;  it is within 28 days of the landlord owning the property; as long as possession proceedings are continuing if the landlord commenced proceedings within 28 days of acquiring the property; registered social landlords; mutual housing associations are exempt.
  18. The act invents some new terms.  For example “Domestic tenancies” which includes assured and assured shorthold tenancies; “Lettings Work,” which includes interviewing and referencing potential tenants; “Property Management Work,” which might be collecting rent, being a point of contact, making arrangements for repairs or maintenance, checking the condition of the property or make arrangements for the condition to be checked; or serving any notice to terminate the tenancy.

It’s interesting that there is nothing whatsoever in the act to help landlords deal with tenants who are not paying rent and / or abusing the property. These situations are extremely expensive to landlords, and our crumbling “civil justice” system takes an inordinate amount of time to deliver a solution to the landlord, via proceedings for eviction, by which time the landlord’s loss has increased exponentially.

The cost of producing and implementing this legislation, and the cost of operating it are and will be huge. It is really not justified, when taken together with the significant interference with the landlord’s property rights, to impose this burden on all Welsh landlords in order to reign in a small number of rogue landlords. Local authorities have plenty of power to deal with rogue landlords, and it would be much more effective and equitable to increase those powers if necessary.

Given the shortage of housing to rent, especially at the lower end of the market, is it wise to impose significant additional overhead, bureaucracy, and compliance risk on Welsh landlords, the vast majority of whom are perfectly decent people? There is likely to be less property available in Wales due to letting being a less attractive proposition than it is in England. Shortage of supply and additional overhead seem likely to make affordable housing in Wales something of a rarity.

It is well known and accepted amongst housing lawyers that housing law is ridiculously and unnecessary complex. As long ago as 1999, Lord Woolf expressed his view in these terms.

“. . . procedural reform can have only a limited impact on [housing law] . . . reform of the substantive law on housing could do more than anything to reduce cost and delay . . .  the main source of difficulty is the complexity of the substantive law itself. . . . The Department of the Environment should look at this as a matter of urgency.  The Law Commission should be invited to carry out a review of housing law with a view to consolidating the various statutory and other provisions in a clear and straightforward form.” (Access to Justice, Final Report, pages 197-9)

Since then, housing law has become even more complicated, not less so. This new legislation from the Welsh Assembly dramatically accelerates the scattered and diverse sources of housing law and represents, in our view, a significant deterioration in the quality housing law in Wales.

And by the way, in Wales, another significant additional piece of legislation, currently known as the Renting Homes Bill, is on its way. This one insists on a written tenancy agreement, tells you what to put in it, and then makes evicting problem tenants more difficult.

Simon Vollans LL.M. (Bristol) Barrister and Practicing Solicitor – 22.07.15.

 

Areas Covered by our Tenant Eviction in Wales service include; South Wales, South West Wales, South East Wales, West Wales, East Wales, Mid Wales & North Wales.

Landlord and Tenant Evictions

Mortgage and Landlord and Tenant Evictions

When the Mortgagor or Tenant Pays the Mortgagee or Landlord all  the Arrears During the Eviction Process

 

When arrears are paid to the mortgagee or landlord by the mortgagor or tenant to avoid an eviction before a possession order is made but after proceedings are issued, the lender or landlord will commonly ask for the matter to be adjourned generally.  This means that should arrears accrue again, the landlord or lender can bring  the possession claim back to court without the expense involved in re-issuing the claim.  When a matter is adjourned generally it is common for the judge to order that if there is no further application the possession claim be struck out after a certain date.

The Problem for Lenders and Landlords

 

The strike out date is usually 12 months ahead but a shorter period is not unusual.  If arrears return and the lender or landlord seeks a borrower or tenant eviction and an order is sought after the strike out date, the lender or landlord has to start the claim from scratch.  This is a waste of resources.

Strike out dates are justified on the basis that adjourned claims clog up the court’s resources.

When seeking the eviction of a borrower or tenant it is preferable for lenders or landlords not to have strike out dates imposed for the reasons already given.  Submissions should therefore be made in an effort to avoid them.

Some Help for Lenders or Landlords Seeking the Eviction of Problem Borrowers and Tenants

 

Anecdotally, it appears that certain courts in the North of England have ceased to impose strike out dates as judges have found that the court files are kept whether there is a strike out date or not.  This means that there is nothing to be gained by using a strike out date and resources are wasted for no purpose when claims have to be issued anew.

It is suggested that the practice of the northern courts be brought to the attention of local judges and that advocates remind the court who ultimately pays for starting fresh claims.