By : Alastair Redpath-Stevens
In June 2005, the Civil Justice Council announced a consultation paper seeking comments on a proposal to introduce a pre-action protocol governing proceedings for possession of residential premises solely for rent arrears.
The Chairman of the Civil Justice Council said at the time that:
“This protocol aims to ensure that all the appropriate steps have been completed before a case comes to court. Too often people are arriving at court when a solution could be found at an early stage. I look forward … to introducing a better way to deal with this distressing area which causes difficulty to so many”.
Although originally envisaged that parts would apply to the private sector, the overall response to the consultation was a negative one and the final protocol applies only to social landlords, including local authorities, registered social landlords and housing action trusts.
In fact by the time the protocol came in to force on the 2nd of September 2006 the Department for Communities and Local Government had already published its Housing Guide (August 2006). This Guide was itself a supporting document to the summary and the Improving the Effectiveness of Rent Arrears Management: Good Practice Guidance published by what was then the ODPM in June 2005.
The guidance and the protocol (which itself highlights the increasing move towards alternative dispute resolution (ADR) rather than court proceedings, other than as a final resort) reflect the well-known Housing Corporation regulatory guidance contained in Regulatory Circular 07/04: Tenancy Management, Eligibility and Evictions which emphasizes that social landlords should seek to maintain and sustain tenancies, rather than terminate them and that eviction should be used as a last resort.
The requirement for early contact
The protocol requires early contact with tenants once arrears accrue to discuss possible causes and where appropriate involve debt advice agencies. Pre-action correspondence must be sent to all joint tenants under separate cover, and should set out clearly any time limits with which the tenant should comply.
The landlord will be required to establish the tenant’s financial circumstances, including any entitlement to benefits, and to assist with any claim for housing benefit. The landlord and tenant should also try to agree a clear and affordable repayment scheme based on the tenant’s known income and expenditure, with arrears being paid direct by the Department for Work and Pensions whenever appropriate.
Possession proceedings should not be started against any tenant who can demonstrate that: all the evidence needed to process the claim has been provided to the benefit authority; there is a reasonable expectation of entitlement to benefit; and, other sums not covered by housing benefit have been paid. The landlord should ensure effective ongoing liaison with the benefit authority, including – where the tenant consents – making direct contact before taking enforcement action. The tenant will be expected to co-operate in order to resolve any difficulties.
If it proves necessary to serve a NOSP then, before issuing proceedings, the landlord should again take reasonable steps to contact the tenant to discuss the arrears including their cause and repayment and the housing benefit position. Court proceedings should be postponed for so long as the tenant complies with an agreement to pay current rent and a reasonable amount from the arrears. In the event of a breach, a letter of intended proceedings should be sent but allowing a clear time limit in which to comply. The landlord may be required to demonstrate that consideration was given to ADR at this stage where a dispute has arisen and settlement is still actively being explored.
Tenants must be sent quarterly rent statements showing rent due and sums received for the past 13 weeks. In addition, landlords must be able to provide, on demand, copies of rent statements from the dates when arrears first accrued, showing all amounts of rent due and the dates and amounts of all payments made, whether from the tenant or through housing benefit, and a running total of the arrears. Rent statements must be “comprehensible”, and accordingly references to rent weeks rather than calendar dates may not be acceptable if not easily understood. Likewise, the requirement to show rent and housing benefit separately will mean that rent statements which show only nett rents will not comply.
Where any tenant is known to have difficulties reading or comprehending information, the landlord will be expected to demonstrate that he has taken reasonable steps to ensure that the information has been appropriately communicated and that the tenant understands that information. In the case of vulnerable tenants, including those under 18 the landlord should give early consideration to whether the tenant needs a litigation friend and whether any issues arise under the Disability Discrimination Act 1995.
In the event that proceedings are issued, then the landlord must: inform the tenant of the date and time of the hearing and the order sought; advise the tenant to attend as his home is at risk; and, keep a record of such advice. Not later than ten days before the hearing date the landlord should provide the tenant with up to date rent statements and disclose what he knows of the tenant’s housing benefit position.
If after issue the tenant complies with a repayment agreement, the proceedings should be adjourned on such payment and only restored following notification of a breach and expiry of a clear time limit within which to comply.
In conclusion, for many social landlords the protocol will simply require existing procedures to be amended to ensure compliance. A failure to follow the detailed requirements of the protocol may, however, result in adverse costs awards and claims brought on discretionary grounds being adjourned, struck out or dismissed – with all the attendant problems of expense and delay. Tenants who fail to co-operate may find this counts against them when it comes to the question of reasonableness.