18 December 2018

Estates Gazette publishes PLA view on proposed court to deal solely with housing disputes

Property Litigation Association 

Estates Gazette

15 December 2018

Housing Court on the horizon

The government is consulting on the possibility of establishing a new court to deal solely with housing disputes. Emily Wood gives the Property Litigation Association’s view.

In 2017, Sajid Javid, then secretary of state for housing, communities and local government, raised the possibility of establishing a specialist Housing Court to sit alongside the current structure of courts and tribunals.

The proposed Court would hear all cases involving housing issues. As lawyers become more specialist, there is undoubtedly both pressure and an expectation for greater specialisation in any decision-making forum. If those deciding a case know their subject, justice should be both speedier and less costly. Moreover, the more expert the decision-maker, the greater the chance that the decision will be right. The rationale is to address concerns about the processes and procedures of the current system, improve efficiency, reduce delay and improve the service for landlords and tenants, in both the private and social sectors.

With the above in mind, the Housing Court Project Board commissioned a study to gain a better understanding of experiences and outcomes of housing cases. On the back of that, the Ministry of Housing, Communities & Local Government (MHCLG) last month published a call for evidence. This closes on 22 January 2019. The Property Litigation Association (PLA) will be responding to the consultation on behalf of its 1,300 members comprising solicitors from throughout England and Wales (and elsewhere in the UK) specialising in all aspects of property litigation.

The current regime

Most claims relating to housing issues such as possession and disrepair are heard in the County Court, with a modest number started in the High Court and Magistrates Court. The First-tier Tribunal (Property Chamber) (the FTT) deals with a limited number of specialist disputes such as houses in multiple occupation (HMOs) and council enforcement notices. There are even cases which need hearings in both the County Court and the FTT – for example, in the case of possession for service charge arrears, for which a pilot project is currently under way for simultaneous determination by one single judge for both jurisdictions.

A vast and varied number of claims are pursued each year. For example, there were 114,000 section 8 possession claims issued in the County Court between July 2017 and June 2018, together with 30,000 accelerated possession claims. This contrasts with 9,000 in the Residential Property Tribunal and 500 in the Upper Tribunal.

County courts do not often offer a quick and efficient means of redress. In terms of possession claims, the time it takes for a landlord to retake possession has been increasing. The average time taken to progress from claim to possession by County Court bailiff for all tenure types was 19.1 weeks between July and September 2018 (seven weeks to get the possession order).

For the same period, accelerated cases on average took 16.7 weeks, private landlord cases took 16.1 weeks and social landlord cases took 28.3 weeks. And, of course, this is usually on top of a protracted period of forbearance, instalment plans, reduced rent agreements, notice periods, letters before action and other correspondence with the tenant, trying to sort out the problem before the issue of proceedings.

The accelerated possession route does work relatively well and swiftly, at least to the possession order stage, but it offers no redress to landlords for the often underlying reason for wanting possession (rent arrears, damage or antisocial behaviour). But even in uncontested cases (where perhaps a tenant needs a possession in order to be offered local authority housing), landlords are on average still waiting seven weeks for a possession order.

Undoubtedly, the greatest delay and lack of communication from the court is at the enforcement stage. Waiting times for bailiffs are also increasing. This can mean that any successful stay application for enforcement of the possession order (which are common particularly in the social rented sector) can lead to many more months of delay.

There is, of course, a whole raft of non-possession claims that take far longer than possession claims – often lawyers are advising clients that it could take 9-12 months before the matter will be resolved through the courts. These timescales are no different to most claims through the County Court and to some extent are dictated by the standard stages of disclosure, exchange of evidence and so on.

In contrast, the perception of the FTT (Property Chamber) and Upper Tribunal (Lands Chamber) is that they offer a quicker, more efficient, more communicative process with good case management procedures. Named case managers, well-manned telephones, and efficient e-mail communication all add to this. Front-loading of evidence and expert panels also reduce timescales. Much of this is down to their processes and approach, although the fact that the tribunals are not substantially overburdened, in contrast to the County Court, is unquestionably a factor.

Undoubtedly, a well-resourced specialist Housing Court – in terms of finance, staffing and expertise – has to be a good thing. Not only will it provide a better forum for resolving specialist housing disputes, but it will help unclog the County Court from the huge number of such, typically administration-heavy, cases it currently manages. This will improve the experience for commercial landlords and occupiers by, for example, aiding the more efficient handling of business lease renewals.

Added to this, if it can embrace technology – digitising all claims and providing instant access updates – then that will likely speed up all manner of housing claims and improve perception for both landlords and tenants. However, this must go hand in hand with a serious shake-up of enforcement in possession cases, whether expanding the remit of enforcement officers outside the High Court, or (dramatically!) increasing the number of bailiffs.

Housing in the spotlight

The focus on the protection of housing is not surprising – the private rented sector is vital to the UK economy and is expanding. Alongside this, the social rented sector still provides nearly 4m people with a home. However, as landlords face more hurdles when taking action against defaulting tenants or otherwise securing possession of their properties, they in turn need the ability to seek speedy redress for breaches with limited barriers. In our members’ experience, the landlords’ ideal is to retain their tenants long-term unless there is a good reason not to. This is mirrored in the results of MHCLG’s research investigation – retaining tenants for longer periods reduces costs and hassle and is mutually beneficial.

This is all part of a larger programme aimed at reform in housing and leasehold property law. Active and forthcoming consultations that the PLA is considering include proposed changes to enfranchisement, the right to manage and commonhold tenure; proposals for widening the FTT’s jurisdiction; overcoming barriers to longer tenancies; and reducing ground rents and banning the grant of leases of houses.

There has also been legislation in this area. The Deregulation Act 2015 protects tenants against retaliatory eviction where they have raised a legitimate complaint about the condition of their home, and requires landlords to provide certain tenants with information about their rights and responsibilities, preventing them serving a section 21 notice unless they have complied. More recently, the Housing and Planning Act 2016 introduced powers for local authorities to tackle “rogue landlords” and improve substandard properties within their area. The Tenant Fees Bill will limit the level of fees that landlords and letting agents can charge their tenants and licensees.

With Brexit dominating almost everything else, it seems clear that housing and leasehold property is one of the few areas of law reform to capture government’s attention.

Emily Wood is a partner at DMH Stallard and member of the Property Litigation Association’s law reform committee