How to evict a problem tenant – Section 21 How to evict a problem tenant – Section 21

How to evict a problem tenant

Ever wondered how to evict a problem tenant? Landlord Action founder Paul Shamplina provides this guide to eviction for landlords. Find out what you need to know, covering such topics as writing an eviction letter and serving a section 21 notice.

This video breaks down what landlords need to know about the eviction process, or click here to read about it.

 

What should I do about rent arrears?

First and foremost, when a tenant has fallen behind with their rent, Landlord Action always advises landlords to try and make contact with the renter. Talking to them can help uncover the reason quickly. You can then decide whether to come to some agreement to help the tenant through their difficulties, or start eviction proceedings.

Sometimes tenants default through no fault of their own and communication can help to solve the problem before it’s taken any further. It could be something as simple as the tenant forgot to transfer the money or is experiencing temporary cash flow problems.

Obviously it’s important to establish whether this is a one off or because the tenant is poor at managing their finances. It could also be due to something more serious, such as a job loss, illness or a relationship split.

Some landlords start considering eviction proceedings as soon as a tenant falls even a day behind on their rent, while others leave it too long. Many of us experience financial problems at some point. If it’s a short term issue and the landlord can afford a little patience, then helping a tenant through a tough time could result in them being a loyal tenant for many years to come.

Sometimes, tenants withhold rent because they feel the landlord isn’t maintaining the property properly when repairs have been requested. Here, communication is key and landlords should be fulfilling their obligations as a landlord also.

Sadly, there are occasions when tenants think they can simply live rent free at the expense of their landlord. Landlords who suspect a ‘professional bad tenant’ should seek help straight away.

Here are the five key steps when a tenant stops paying rent.

  1. Contact them straight away – a polite phone call to enquire if there is a problem followed by an email as proof of communication is the first step
  2. Check with the bank – if the tenant claims payment has been sent, double-check with the bank or ask the tenant for proof. Give them a few days grace to rectify the situation
  3. Agree a payment plan – if the tenant hasn’t paid for whatever reason, agree how much and by when the payment will be made
  4. Put it in writing – write to the tenant confirming the payment plan you have agreed and what the next step will be if they fail to pay a second time
  5. Seek legal advice – if the tenant still doesn’t pay their rent, send a final letter stating that if payment isn’t made within seven days, eviction proceedings will commence with a Section 8 notice. Landlords should speak to a legal specialist to work out the best course of action from here

Unsure of what to do next? Companies like my own Landlord Action can help.

What is a lease termination agreement? 

In the vast majority of cases, the contract between a landlord and tenant takes the form of a tenancy agreement. The most common tenancy agreements are for Assured Shorthold Tenancies (AST). This is where:

  • the tenant pays rent to a private landlord
  • the landlord and tenant live in different properties
  • the tenant has control of the property meaning the landlord (or any others) can’t enter as they please.

Having a written tenancy agreement in place ensures all rights and responsibilities are clearly agreed beyond those prescribed by law. It also means any disputes can be resolved more easily. Without a written agreement the landlord will not have recourse to the benefit of an accelerated property repossession, if it’s required.

An AST can be:

  • fixed term – the agreement lasts for a fixed length of time (weeks, months or years)
  • periodic – the agreement rolls on indefinitely with rent paid at fixed intervals throughout.

If a fixed term AST is coming to an end and the landlord wishes to end the tenancy, they need to bear the below in mind.

  • A landlord cannot just let the tenancy 'run out'. If he or she does nothing, the tenant is legally allowed to stay on under a statutory periodic tenancy
  • The landlord can end the tenancy by providing 2 months' written notice. This is the Section 21 notice
  • If the landlord has complied with these rules and the tenant refuses to leave, the landlord may start the process of eviction. A court order is required to forcibly remove a tenant

How do you end a tenancy agreement?

If the landlord wishes to end a periodic AST, they need to factor in these points.

  • If it’s a contractual periodic AST, follow the stipulations which should be laid out in the contract. If in any doubt, take legal advice before proceeding
  • If it’s a statutory periodic AST, the landlord must give at least 2 months written notice which expires on the last day of a rental payment period. For example, if a rent period runs from the 2nd of August to the 1st of September, the end of tenancy date stated in the notice must be the 1st of September

If a landlord wishes to end a fixed term AST before the end of the term, they need to consider the below.

  • If the tenancy agreement has a provision for this, landlords should be able to seek possession
  • Alternatively, they could activate the break clause in the agreement, provided there is one, and then use a Section 21 notice. Otherwise landlords cannot use the Section 21 notice if trying to end a tenancy during a fixed term
  • If a landlord can show they have grounds for possession (such as rent arrears), they can seek possession using a Section 8 notice.

What is the eviction process?

There are three steps to evicting a tenant.

1. Serving notice - Section 8 proceedings

A Section 8 notice is a notice seeking possession, which is served on the tenant when they have breached one or more clauses within the tenancy agreement. A section 8 notice is commonly used when the tenant is in arrears of rent.

The first step to evicting a tenant who is not paying their rent is to issue them with a ‘Section 8’ notice. If they owe more than 8 weeks’ or 2 months’ rent then, provided there are no exceptional circumstances, the court will probably award a possession order in the landlord’s favour. A possession order can be issued at any time during the tenancy

If the tenant fails to clear the arrears and/or vacate the property when the section 8 notice expires, then court proceedings are required. The tenant will need to owe at least two months’ rent on the day of the court hearing in order for a landlord to rely on these grounds for possession.

2. Court hearing and what it means

Where a claim is for possession and rent arrears (Section 8), there will be a court hearing before a judge. The landlord will be required to attend the hearing, or appoint an agent to attend on their behalf.

The landlord or agent must be fully conversant with the tenancy and have all relevant paperwork readily available, such as the tenancy agreement and an up to date schedule of arrears. If the tenant clears the arrears prior to the hearing date, then it is unlikely a landlord will get a possession order.

If the claim is successful, the judge usually grants a 14 day possession order. This means the tenant has 14 days from the date of the hearing to vacate. If the tenant doesn’t leave, the landlord will need to appoint a bailiff for the eviction. Also, a judgment for the arrears of rent may also be granted, then a landlord may also make a claim for interest and costs.

3. Eviction - county court bailiff

If a tenant fails to vacate on or before the expiry of the Possession Order (which is usually 2-6 weeks), a County Court bailiff must be appointed to carry out the final stage, eviction. Applying for a warrant for eviction can mean the process takes a further 6 weeks. The eviction can only be carried out by a County Court bailiff.

It can take a long time to regain possession of a property through the courts, often 4 to 6 months. Plus, sometimes difficult tenants can delay matters even further which is why we at Landlord Action always encourage landlords to do everything they can to establish contact and resolve issues, where possible, before taking this route.

But this is not always possible and it can be a very frustrating and worrying time for landlords, particularly if they rely on the rent to pay a mortgage. If this is the case, a landlord need to act quickly in order to minimise losses as much as possible.

However, landlords must never be tempted to harass the tenant in an attempt to resolve the matter. The penalties for harassment are severe and can result in heavy fines. Always seek professional advice and stick to the correct procedures.

What is a Section 21 eviction notice?

Sometimes, a landlord may wish to seek possession of their property for personal reasons, such as the landlord would like to sell the property, move back into it, or simply have a vacant period to carry out necessary maintenance work.

For this, a landlord may wish to serve a Section 21 notice to legally terminate an Assured Shorthold Tenancy (AST). However, Section 21 can only be given to tenants on agreements with a fixed term (six or 12 months) that has expired.

Section 21 gives a landlord an automatic right of possession without having to give any grounds (reason) for eviction, once the fixed term has expired. There doesn’t have to be a breach of the tenancy agreement.

Section 21 of the Housing Act 1988 is divided into subsections with different procedures to be followed depending on whether the notice is served before the fixed term has ended or after (at which point the tenancy becomes a periodic tenancy).

Where a landlord’s claim is for possession only (Section 21) and he/she uses the courts’ accelerated procedure, the tenant will have 14 days to file a defence. If no defence is filed, a landlord can apply to the court for an Order for Possession. It can take approximately 8 weeks to receive the Order for Possession.

It’s worth noting that claims under accelerated Section 21 don’t enable a landlord to claim for arrears of rent.

What is the section 21 4a notice?

There are currently three types of Section 21 notices.

Section 21(4)(a)
This is for giving notice during a periodic tenancy in England or Wales. If the tenancy is in England, this notice should only be served if the fixed start date of the tenancy started before October 2015.

Section 21(1)b
This is for giving notice during the fixed term of a tenancy in England or Wales. If the tenancy is in England, this notice should only be served if the fixed start date of the tenancy started before October 2015, otherwise use the S21 FORM 6A.

NEW Section 21 Form 6A
The new section 21 notice combines the two previous section 21 notices into a single use notice for both fixed-term and periodic tenancies. It’s for use with new tenancies starting after 1st of October 2015 and all tenancies (regardless of when they started) from 1st October 2018.
As of 1st October 2018 the new section 21 form will apply to all ASTs in existence at that time.

On 1 October 2015 further provisions in the Deregulation Act 2015 came into force requiring landlords to provide all new tenants with an EPC and a Gas Safety Certificate. Landlords also need to provide a copy of the Department for Communities and Local Government’s booklet entitled “How to rent: the checklist for renting in England”.

If at a later date the landlord wants to serve a section 21 notice on a tenant, they will need to prove the tenant has been provided with these documents. Any non-compliance with this requirement will render the section 21 notice ineffective.

Serving a section 21 notice

A section 21 notice is the most commonly used to start the eviction process for renters with an assured short hold tenancy contract.

Landlords must give tenants at least two months' notice but in order to be legal the Section 21 notice must:

  • be delivered in writing and give at least two months' notice
  • be on the new prescribed form if the tenant signed a contract or a renewal agreement on or after 1 October 2015.

Also, landlords cannot serve a Section 21 notice if they haven’t protected their tenant’s deposits in one of the government backed schemes. If they haven’t used the scheme the tenant could make a claim against the landlord.

From 1st October 2015, a landlord is no longer able to serve a section 21 notice within the first four months of the contractual term of the tenancy. This is to stop landlords and their agents serving notice at the commencement of a tenancy with a view to being able to terminate it at their convenience.

A Section 21 notice now also has a lifespan. Once a Section 21 notice has been given under a fixed term AST or a periodic AST, possession proceedings must be started within 6 months of the date the notice was given. Failure to do this will result in the possession notice becoming invalid and a new one being required.

Landlords should make sure they have evidence that the tenant has received the notice and on what day. It is advisable to use recorded delivery or have an eviction specialist serve the notice.

How to write an eviction letter

Evicting a tenant is an unfortunate part of being a landlord. Eviction is a time-consuming and occasionally costly process. To keep costs at a minimum, it’s best to begin eviction proceedings sooner rather than later.

The eviction letter (or letter before action) is the first step in the eviction process prior to serving a Section 8 notice. It’s paramount to keep copies of all correspondence as this will provide evidence to the judge at court if necessary.

Here is a template ‘letter before action’ landlords can use. Direct Line for Business customers with a landlord insurance policy bought or renewed before 1 February 2016 can use its Legal Documents service for a template, which once filled out can be submitted for solicitors to check.

An eviction notice template

Unless landlords know exactly what they're doing, they should avoid entering the eviction process itself without the advice of a legal professional. Landlord Action regularly takes on cases that have been thrown out of court because the original documents had errors or were filed incorrectly.

The goal of any landlord is to get their property back as quickly as possible so even the tiniest compliance mistake can be costly both in time and money.

The Direct Line for Business Legal Documents allows you to submit your filled out template to a solicitor to check that it will be compliant. 

Challenges to a section 21 notice

Here are the key challenges landlords face when serving a Section 21.

Tenant Deposit Protection
A landlord must protect a tenant’s deposit in one of the three government-back deposit protection schemes within 30 days and inform the tenant which scheme it has been protected in. Without doing so, a landlord cannot serve a Section 21 notice.

No Valid HMO Licence
HMO, or housing in multiple occupation is a property that’s shared by three or more people from more than one ‘household’ (eg a family). To operate legally, these establishments need special licences by the local county. Unless one is presented, the section 21 notice is invalid

Tenant Ignorance
Tenants often claim they didn’t receive the letter of notice. This is why it’s so important for landlords to keep copies and proof of postage for everything they send and even follow up with an email as evidence that every effort to contact the tenant was made.

Retaliatory Eviction
The Deregulation Act 2015 contains provisions suspending the operation of Section 21 in order to protect a tenant against retaliatory eviction. Landlords served with an improvement notice by a local council are prevented from issuing a Section 21 within six months of an enforcement notice being served.

Summary

In the last few years I have seen a huge increase in the number of self-managing landlords in the market place wanting to manage their properties themselves. This is usually fine, until something goes wrong, such as a tenant stops paying.

Experienced landlords may know what to do if a tenant stops paying, but often those with less experience don’t.

A buy-to-let property investment must be treated as a business. So you have to ask yourself how long you would allow someone to keep using your services without paying for them? Communicate and be flexible where you can, but never allow a situation to get so bad that it puts you in financial jeopardy.

Paul Shamplina Video Rental Road
Paul Shamplina

Paul Shamplina
Last Updated: 08 Jun 2016