What usually happens at the end of tenancies?

Forget scaremongers. The overwhelming majority of tenancies wind themselves up without any legal issues whatsoever. Let property is temporary housing for tenants. Most landlords are letting out property over many years that far outlast a tenant’s wish to stay.

Nevertheless, let’s be realistic. If novice landlords worry about leases, they positively fret about how they’ll shut down an unsatisfactory tenancy. They needn’t. So long as landlords stay inside the safe confines of an assured shorthold lease, they’ve genuinely nothing to fear about ending troublesome tenancies. And, if that wasn’t peace of mind enough, the whole basis in law of an assured shorthold is that landlords have a legal right to close down any tenancy they choose, for no reason whatsoever, once that initial fixed term has expired – in other words, if you’ve followed my earlier advice, after six short months.

Notice only grounds for possession under Section 21

This is the pearl in the proverbial shorthold oyster. Section 21 of the Housing Act 1988 gives landlords with assured shorthold leases absolute freedom to choose whether or not to continue any tenancy once its initial fixed term expires. Which is why landlords should insist on testing out new tenants with a six month start, throughout which you’re entitled to your rent – at the end of which you can end the tenancy relatively easily, using the courts of course. Read on.

Once the landlord receives a notice letter from their
tenant

The overwhelming majority of tenancies don’t end with courts. Tenancies usually conclude when the tenant wants to move. What will usually happen is that your tenant will notify you that they plan to leave the property on a certain date (request verbal notice in writing to cover your back). Tenancies are formal and always need paperwork, which must be stored.

This written notice will usually trigger a few matters.

• 1.Initially, landlords should contact outgoing tenants and ask if they still have their copy of the inventory, schedules, etc to help them return the property as found. If not, pop photocopies in the post to tenants to avoid amnesia.
• 2.It should also trigger a letter of confirmation from the landlord, along with a written explanation that you intend to exercise your right to show prospective tenants the property during the last 28 days and some tentative suggestions on timing.
• 3.Don’t overpower your existing tenant – remember that they are still paying rent and it’s terribly invasive having strangers walk round your bedroom at the best of times, so be considerate.

If your tenant wants to move out before their initial
fixed term expires

Sometimes, a tenant wants or needs to move before their initial fixed term has expired. This will necessitate landlords having a far firmer dialogue. Tenants have rights – they also have responsibilities – one of them is that they remain liable for the rent for the entire fixed term. Of course, this isn’t open to abuse. When tenants find themselves moving for reasons beyond their control (eg a hurried job deployment) landlords should explain to the tenants their responsibilities, then try to find an amicable settlement. And though the law in this respect is equitable between landlord and tenant, landlords who rest on their laurels entirely – hoping to bill a long gone tenant for three or four months without lifting a finger to re-let – might find themselves challenged in court. Landlords are expected to make reasonable attempts to find a suitable replacement and will need proof of advertising and viewings. Waiting it out in the luxurious position of having all the benefits (rent) and none of the liabilities (a tenant) will not be deemed fair by a court.

Finding a new tenant

The businesslike thing to do here is to begin re-advertising to find a new tenant. Once you have found a suitable alternative, the liabilities of the first tenant are obviously discharged. You’ll find that tenants who are forced to move on quickly and with all the rental liabilities that incurs, are the most helpful you’ll ever encounter in terms of tidying up before viewings.

If you can’t genuinely find a replacement (though heaven only knows why if you found one before), then you’ll need to bill your tenant for rent unpaid throughout the contract. Don’t hold your breath waiting for the cheques. Tenants can be veritable will-o’-the-wisps once they’ve moved.

Landlords letting out their own home on a short-term
basis

Up and down the country, there are potential landlords who, usually for work-related reasons, decide that letting out their own home is a better option than selling up. These landlords still need to stay within the comfortable breadth of the assured shorthold protocol. In other words, don’t try letting for periods of less than six months, because that fixed term offers you the maximum benefits. However, life has a nasty habit of not always conforming to our plans. Anyone who wants to let out their own home on a reasonably temporary basis might feel happier to serve what’s known as a ‘prior notice’ ground on their tenant (a simple letter explaining that the property is your main home, let out temporarily and quoting the appropriate ground in full – read on) before exchanging leases. This establishes a mandatory ground for possession – or in plain language – it establishes an additional (indisputable) legal reason for the courts to grant you possession. Keep the initial fixed term to six months. Beyond that, any landlord can apply to the courts for possession for no reason whatsoever.

Landlords with mortgages

Landlords who have borrowings against the property they intend to let out (especially Buy to Let landlords) will probably be advised by their lender that a different ‘prior notice’ ground must be served. This applies to anyone with a mortgage and landlords would be breaching their covenant with their lender if they omitted to notify their tenants, in writing, that the property is subject to a mortgage, which was granted before the tenancy. Should the lender want (or need) to sell the property (usually to cover mortgage arrears), this ground allows possession at any time through the courts. This particular ‘ground for possession’ is one of the few that can be initiated before the fixed term has expired.

When tenancies start to go wrong, what should I do?

Hold your breath and count to ten before doing a thing. Starting legal processes against your tenants is the final nail in the relationship coffin. Avoid court as anything but the last resort. Misunderstandings, over-bearing landlords and late payers are two a penny. What this industry is often a bit short of is common sense – and landlords can be as deaf as any tenants.

Managing well minimises problems. Make your tenants aware of their responsibilities and try to work things out long before things get to court. Agents can afford court delays – you can’t.

Finding solutions is usually better than using courts

The route to solutions is, more often than not, a negotiation. Independents enjoy a level of flexibility that an agent can only dream about. You can make choices for yourself, ease pressure points, look for lateral solutions that an agent wouldn’t dare suggest to an angry landlord. Tenants can get in a terrible jam sometimes. Often they’ve been silly. Sometimes, circumstances have genuinely left them in a dilemma. Talk to them. If rent is the problem, try any solution to limp things along until the end of your fixed term. Offering a fall-back position (agreeing to let tenants pay a bit more each week to get their rent back in line for example) is often much cheaper in the medium term than going to court ever is. For tenants whose initial fixed term has expired, initiate possession proceedings by all means, but try limping things along with reasonable dialogue or risk losing all future payments – the giving of formal notice followed by court process (including bailiffs) usually takes three to four months. That’s a big hole in your annual accounts that might be avoidable if you can bite your tongue.

If you’ve no alternative but to use the courts

Once legal proceedings are initiated, all hope of discussion and compromise flies out of the window. Goodwill evaporates. Rent stops right there and then – I can almost guarantee it. Getting possession takes time – and it must be done legally at every stage. This is a hands-off process for landlords. It’s a form-filling, fee-paying, loss-making, frustrating waiting game. Even once you have a possession order you can’t act if the tenant fails to leave on the date the court sets for them to go. You must fill out another form, write another cheque and arrange for court-appointed bailiffs to evict. Doing anything else is the route to massive fines for illegal eviction. UK law is very clear. Courts and their officers evict tenants. Anyone else doing so is committing a major criminal offence.

Something you probably don’t know

Tenants in a jam (say those who lose their job) are in a Catch 22 position when courts set a date for them to leave (a possession order in favour of the landlord). Believe it or not, leaving voluntarily on that date – without being actually evicted by bailiffs – is regarded by most local housing departments as making yourself deliberately homeless. Therefore, all tenants in this position are advised by the Citizens Advice Bureau to stay put until the bailiffs arrive. Sometimes what can look like bloody mindedness is simply a tenant doing the best they can to avoid sleeping on the streets.

Making the best of a bad tenancy by using notice only
grounds

The rule of thumb is that, wherever possible, ride out the initial fixed term. Doing so enables you to use your notice only grounds (Section 21 of the Housing Act 1988). In other words, the tenancy is up and you want your property back. This is a fail-safe mechanism, guaranteed to obtain possession from any court as it isn’t optional.

What do I have to do to give a Section 21 notice?

Simply write to your tenant giving them a minimum of two months’ notice before the end of their fixed term (or at any time after this has expired) and confirm that you’ll want your property back by the end of the fixed term date on the lease (or alternate later date). Beyond the initial fixed term you’re still required to give two months’ written notice. Wherever possible, don’t antagonise tenants, this is a delicate process. Angry tenants tend not to behave well. Make sure you send this letter well in advance – and a follow-up reminder is a good idea – all to arrive more than two months before their fixed term expires. Always use recorded delivery and keep copies of correspondence and receipts to show date of posting.

Follow the simple rules

• 1.There’s no special form for this. All you’re legally required to do is to write to your tenants (keep a copy and make sure that you can prove receipt by the tenant by recording the delivery or by hand delivering the letter with a witness).
• 2.You must give at least two months’ written notice that you require possession.
• 3.You must ask them to leave on a date after the fixed term ends.
• 4.If your tenancy has run on beyond that initial fixed term and become a statutory periodic, the date for leaving must be the last day of a tenancy period (the last day before a rent payment is due).
• 5.The letter must state that you require possession under Section 21 of the Housing Act 1988.
• 6.Add your name and address, the address of the property concerned, the date their tenancy began and the date that the initial fixed term expires(ed).
• 7.It’s a good idea to send a photocopy of the original lease (but hold on to the original – you may need to provide this to the court).

Note: for tenancies that started before 28 February 1997 special rules may apply here and you need to take specialist advice on the best way to obtain possession.

When things go wrong at an early stage

Of course, tenancies don’t always go well. Sometimes landlords and/or tenants allow the relationship to deteriorate. At other times, even the most responsible landlord can find themselves housing a tenant who will not pay rent – or will pay very erratically. Tenants might be bothering the neighbours, or damaging your property. They could even be dealing drugs or running a car workshop in the yard. They may have moved in friends against your clear instructions and the lease. In these circumstances, you clearly can’t limp a tenancy along. You will then have to act – using the courts at a much earlier date.

How difficult is it to get a possession order during the initial
fixed term?

It’s certainly not easy. Tenants only enjoy security of tenure for such a short time (during these first fixed terms) that courts take closing one down very seriously. In these circumstances, you’ve no alternative but to use one or more of the 17 grounds for possession that the Housing Act 1988 provides for this purpose.

The Housing Act 1988 provides 17 legitimate legal reasons for a court to grant possession to a landlord – a few even during the fixed term. There are two types of grounds – mandatory and discretionary.

During the initial fixed term, landlords have to prove to a court that problems do genuinely exist. This is a treacherous area for landlords, who need to be able to substantiate and prove their case in court. To do this, they have to decide which legal reason(s) they will be seeking to prove.

During the fixed term you can only seek possession if one of the grounds 2, 8, 10, 14, 15 or 17 apply, the terms of the tenancy make provision for it to be ended on any of these grounds and you can prove your case in court.

At the end of the fixed term, you can seek possession on any of these grounds that apply. And, when tenants become problematic, it may be better to use one of the faster to obtain grounds than using the Section 21 route, which requires two months’ written notice, where some of these additional legal grounds require a much shorter period of notice. However, anything other than a Section 21 requires special forms to be used (available from Oyez and other suppliers).

These special forms are called ‘Notice seeking possession of property let on an assured tenancy or an assured agricultural tenancy’. These must be completed by the landlord/agent and delivered to the tenant. Always take a photocopy. Make sure that you can prove your tenant received this notice by delivering by hand with a witness or sending the document by recorded delivery.

When filling in these forms, it’s important to write out the legal ground(s) that you are using exactly as it appears in the legislation (as below or in your handy landlord booklet from the Department of Communities and Local Government).

Mandatory grounds

Mandatory grounds – ones that if proven the court must grant possession to the landlord. If proved, courts will grant an absolute possession order to the landlord.

Discretionary grounds

Grounds where the court may, or may not, agree to give a possession order.

These are more numerous, but even if you prove your case, the court may decide NOT to grant full possession (which is why so many of us limp things along until we are certain that we have section 21 rights). They may grant a suspended possession order – in other words, give your tenant a last chance.

It remains, during that fixed term, a costly game of chance – a frustrating and pricey business for landlords chasing erratic rent, whose tenant suddenly stumps up a couple of weeks rent on the court steps – promptly burying your ground.

List of all grounds available to landlords

Mandatory grounds

(Note: prior notice grounds mentioned below are ones that must be incorporated into the contract that the tenant signs – either written into a gap provided on an off-the-peg lease, or incorporated into a tailor-made one.)

• Ground 1 prior notice ground
  You used to live in the property as your only or main home. Or, so long as you or someone before you did not buy the property after the tenancy started, you or your spouse require it to live in as your main home.
• Ground 2 prior notice ground
  The property is subject to a mortgage which was granted before the tenancy started and the lender, usually a bank or building society, wants to sell it, normally to pay off mortgage arrears.
• Ground 3 prior notice ground
  The tenancy is for a fixed term of not more than eight months and at some time during the 12 months before the tenancy started, the property was let for a holiday.
• Ground 4 prior notice ground
  The tenancy is for a fixed term of not more than 12 months and at some time during the 12 months before the tenancy started, the property was let to students by an educational establishment such as a university or college.
• Ground 5 prior notice ground
  The property is held for use for a minister of religion and is now needed for that purpose.
• Ground 6
  You intend to substantially redevelop the property and cannot do so with the tenant there. This ground cannot be used where you, or someone before you, bought the property with an existing tenant, or where work could be carried out without the tenant having to move. The tenant’s removal expenses will have to be paid.
• Ground 7
  The former tenant, who must have had a contractual periodic tenancy or statutory periodic tenancy, has died in the 12 months before possession proceedings started and there is no one living there who has a right to succeed to the tenancy.
• Ground 8
  The tenant owed at least two months’ rent if the tenancy is on a monthly basis or eight weeks’ rent if it is on a weekly basis, both when you gave notice seeking possession and at the date of the court hearing.

Discretionary grounds

(Where the court may or may not decide to grant possession to the landlord.)

• Ground 9
  Suitable alternative accommodation is available for the tenant, or will be when the court order takes effect. The tenant’s removal expenses will have to be paid.
• Ground 10
  The tenant was behind with his or her rent when you served notice seeking possession and when you began court proceedings.
• Ground 11
  Even if the tenant was not behind with his or her rent when you started proceedings, he or she has been persistently late in paying rent.
• Ground 12
  The tenant has broken one or more of the terms of the tenancy agreement, except the obligation to pay rent.
• Ground 13
  The condition of the property has got worse because of the behaviour of the tenant or any other person living there.
• Ground 14
  The tenant, or someone living or visiting the property has caused or is likely to cause a nuisance or annoyance to someone living in the locality; or has been convicted of using the property; or allowing it to be used for immoral or illegal purposes; or an arrestable offence committed in the property or the locality.
• Ground 15
  The condition of the furniture in the property has got worse because it has been ill-treated by the tenant or any other person living there.
• Ground 16
  The tenancy was granted because the tenant was employed by you, or a former landlord, but he or she is no longer employed by you.
• Ground 17
  You were persuaded to grant the tenancy on the basis of a false statement knowingly or recklessly made by the tenant, or a person acting at the tenant’s instigation. (Remember your handy signed tenancy application procedure.)

Notice you must give the tenant before using grounds for
possession

Each of these grounds has a particular notice period, which must expire before the landlord can apply to the court.

For grounds 3, 4, 8, 10, 11, 12, 13, 15 or 17 – at least two weeks’ written notice must be given.

For grounds 1, 2, 5, 6, 7, 9 and 16 – at least two months’ written notice must be given.

For ground 14 – this is the only ground where possession may be sought immediately after notifying your tenant in writing on the special form mentioned earlier.

What are my realistic options?

Put simply, you’ve two broad alternatives if you want your property back.

• If things are not brilliant, but bearable (say the rent’s sometimes a bit slow or the place is beginning to look a bit care worn), the best advice is to try to stick out the tenancy for the first six months (that initial fixed term). Two months before the end of the fixed term, write to your tenant explaining that you’ll be exercising your rights under Section 21 of the Housing Act 1988 and that you’ll want the property back at the end of the fixed term. Waiting until the end of the fixed term makes sense wherever possible because, if they don’t move out by that date, you can then use the accelerated possession procedure for a speedy resolution through the courts, and usually without even attending (more details below).
• However, if your tenant is accruing significant arrears – or is obviously causing trouble or damage, you may need to act earlier to protect yourself. This requires a judgement by the courts gained only by evidence of significant breach of contract.

Do landlords need legal representation to end an assured
shorthold lease?

No. It’s simply not required under the 1988 Act. Nor do landlords have to work their way through the detailed ‘clause 8 sub-section, para. iv, etc’ that websites and glossy agent’s blurb so often use to undermine an independent’s confidence. It’s fluff, designed to convince you that repossession is too complicated to be carried out by anyone but them. Tosh! All you need to terminate even the most contentious assured shorthold tenancy is a bit of practical common sense – the right forms and a few fees for service.

If I don’t feel confident enough to go for possession myself,
what else can I do?

Nervousness and the steady stream of court fees can take their toll – especially now, when so many landlords are part-timers who don’t do this regularly. And even the most straightforward rules can seem complicated to those who don’t feel familiar enough with them.

Two options

Option 1

Many landlords (and, I’m assured, many agents too) use a specialist service for this. It can give peace of mind to someone happy enough to do everything else but evict. The usual cost is around £399 – so my advice is don’t pay over the odds for a straightforward service.

There are a few specialist services out there for those of you who want the confidence of a guarantee of possession for a set fee. See www.landlordaction.co.uk who do nothing but evict shorthold tenants for any number of reasons. They’ve carried out thousands over the last few years and their services are guaranteed to provide you with possession. Look online for other firms with proven track records.

Option 2

Alternatively, any high street solicitor will take a case through the courts and get you possession for a fee. It’s likely to cost more than the possession services but high street solicitors are all small businesses and are open to fee negotiation, so get yourself a fixed-fee deal.

In summary, repossession can be obtained by a simple court process carried out by:

• any independent landlord using simple forms available from legal stationers and courts and completed in triplicate then returned to the courts with the appropriate fee;
• services which specialise in possession for assured shorthold leases;
• any high street solicitor.

Accelerated possession procedure

Those of you applying for possession at the end of a fixed term can use a special process called accelerated possession. They are speedy and cheap(ish), a little over £130 at time of writing. One drawback is that you can’t charge your tenants any owed rent using this process – it’s for possession only. It can only be used where a written tenancy (lease) exists.

County courts will send you an Accelerated Possession Procedure Form N5B. Follow the (simple) instructions and fill in the three copies required. Return all three copies to the court with your fee. They do the rest and let you know how things are proceeding.

So long as you can provide evidence of a lease with an expired fixed term and copy letters giving two months’ notice, the court should expedite the possession very efficiently on your behalf (typically three to four weeks).

Although landlords can’t use accelerated possession to recoup lost rent, most are more troubled by obtaining possession by this stage.

Lost rent

Alternatively (I told you, this legislation was comprehensive), if you do want to make a claim for lost rent too, you’ll need to complete a different form from the county court. This process takes longer as evidence from both parties is needed. To make a comprehensive claim for possession plus lost income (and indeed damage) you’ll need a Form N5 from your county court (again three copies must be filled in and cheques provided, then the court will progress matters).

If you want to claim possession and other costs you need to tick the ‘forfeiture of the lease’ box on the form and, if unpaid rent is also an issue, you’ll tick the rent arrears box too (or whatever else is appropriate).

You’ll need to write out the precise legal wording of the grounds that you are relying on in the appropriate box. Check the list I gave earlier and choose the most appropriate grounds. Again, follow the instructions, attach leases, written notices and any other supporting documentation.

On balance, if a large amount of rent is outstanding or considerable damage needs to be claimed for, landlords may be prepared to wait the extra few weeks (with extra rent loss).

When things go horribly wrong

However, there will be rare circumstances when issues are too problematic to wait around for fixed terms to expire. We’re entering ‘tenant from hell’ territory – ugly – if fairly rare.

I’m acutely conscious that saying how rare such instances are doesn’t console the landlord in the midst of such a tenancy. And tenants from hell do exist and many are seasoned practitioners of abuse. However tight our procedures, some lousy tenants can and do slip through all our nets.

Protected by that initial six months’ security of tenure, some resolutely bad tenants can run up alarming debts and problems. Frustrating. Absolutely infuriating. And a nightmare to any landlord who has embarked on a letting without sufficient back-up funds to tide them over a very lean patch, which can sometimes drag on for months.

After the court has awarded you possession

Things are almost, but not quite, at an end. English courts don’t evict people on the spot. Usually tenants will be given a date sometime soon by which they must have vacated the premises.

So, even with an absolute possession order, there will still be a small time-lag. After this date, if the tenant still hasn’t moved on, you’ll need to contact the court again. Fill out the form requesting the court bailiff to enforce the possession order, pay another fee and wait for a few more days. The bailiff will notify both you and your tenants of his/her impending arrival. It is the job of the court bailiff service not the landlord – to evict tenants.

Under English law, illegally evicting a tenant remains a very serious offence, and incurs hefty fines.

Whys and wherefores

Excellent information is available on possession matters at www.communities.gov.uk in the online section for private landlords. The website www.rics.co.uk has a very handy section, as does www.rla.org.uk, which also has a handy Q&A section. The site www.landlordaction.co.uk has a dedicated telephone helpline to advise landlords who’ve run into problems. Alternatively, landlords can carry out all legal processes online at www.courtservice.gov.uk.

Beyond that, as usual, the practicalities of how to turn round the problem tenancies don’t seem to be anywhere but here. However, any landlord who is running up against problems would do well to consider contacting their Citizens Advice Bureau – landlords are citizens too. Or, if you’re really unsure about whether or not you have reasonable grounds to apply for possession within the fixed term – a half-hour consultation with a local solicitor may help to clarify things.

CHECKLIST/SUMMARY

• Most tenancies end naturally – using the law is rare in well managed units.
• If your tenant gives one month’s written notice of their intention to leave, use that time wisely to get hold of your next tenant.
• When tenants try to leave before their initial fixed term has expired, discuss the implications with them. If they still need to move, try to get another tenant in place to release them from their contractual liabilities – or risk having to explain why you didn’t.
• Bite your tongue before threatening tenants with possession. Court is the worst option for landlords – a last, not a first resort.
• Limp deteriorating tenancies along wherever possible to the end of fixed terms.
• Any landlord can – after the fixed term has expired – obtain possession using the Section 21 route – which is guaranteed.
• Using accelerated possession after the fixed term has ended is a quicker route to possession, but doesn’t allow a landlord to recoup lost rent.
• Usual court processes take a bit longer – but do allow landlords to claim unpaid rent.
• Landlords with very bad tenants mustn’t be afraid of trying for possession on good, provable grounds, during the fixed term.
• If you go down this route, you will need evidence that satisfies the judge before he will grant you a possession order. Keep rent records. Get photographs of damage. If the police have been involved, get something in writing from them. Do whatever you can to make sure the court can see that this is not a frivolous application.