The UK housing market is complicated and ever-changing. For landlords, understanding the implications of the various acts is essential to ensure they remain compliant and protect their rights. One such act that landlords and tenants must be aware of is Section 21 of the Housing Act 1988.
Section 21 of the Housing Act 1988 UK
Section 21 of the Housing Act 1988 is the legal process that landlords and their agents must go through when they want to regain possession of the property they let out. This process requires that landlords serve a Notice of Possession on the tenant, giving them at least two months' notice to vacate the property. It's important for landlords to be aware that Section 21 does not require any fault or tenancy breach on the tenant's part.
Once the Notice of Possession is served, the tenant has two options. They can either leave the property before the expiry date of the Notice or stay on the property until the expiry date. This leaves the question: should a tenant stay after being served a Section 21?
Should a tenant stay after being served
In short No, it might seem appealing to stay in the property for longer but consider the real costs and risks to your credit. When considering whether to stay after a Section 21 has been served, there are many factors to consider. For starters, the tenant should make sure they understand their rights and responsibilities as a tenant in the UK. They should also be aware of the risks associated with staying in the property beyond the expiry date of the Notice.
If a tenant decides to stay, they should be aware that the landlord can apply for a Possession Order from the court. This will give the landlord the legal right to evict the tenant from the property. The tenant will likely be ordered to pay the landlord's legal costs which can be upwards of £1500.
Of course, staying on past the expiry date of the Section 21 also has implications for the tenant's credit rating. If the landlord is successful in obtaining a Possession Order, the tenant may be issued with a County Court Judgement (CCJ). This will remain on the tenant's credit file for six years and could make it more difficult to get credit in the future.
What are the risks of staying after the Section 21 expiry
If a tenant decides to stay on in their property beyond the expiry date of the Section 21, they should be aware of the risks they may face. The landlord may send a bailiff (or an authorised agent) to the property to take possession of it. In the case of a High Court Bailiff can also take goods that belong to the tenant in order to cover any unpaid rent or other costs and also apply to garnish your wages.
The tenant should also be aware that the landlord may refer the debt to a debt collection agency or take further legal action, this collection can also now take place around the world so moving countries is not necessarily an escape.
What are the implications of getting a Court Order against you
If the landlord is successful in obtaining a Court Order, the tenant is legally bound to leave the property. If the tenant refuses to leave, the landlord can apply for a Bailiff to enforce an eviction order. This order will be legally enforced by the court and a bailiff will be sent to the property to carry out the eviction.
The tenant should also be aware that the court is likely to award costs to the landlord in addition to the rent that is owed. This could include the landlord's legal costs, court costs and any other costs associated with the eviction process. This quickly adds up to well over £3000 these days.
Another route which is often quicker for the landlord is to apply for a Money Claim against the tenant and ask for it to be escalated to the High Court For Enforcement. Whilst this is cheaper to the landlord the tenant will still end up with their credit file affected for the following 6 years.
What is the bailiff process
If the tenant fails to leave the property by the specified date, the bailiff can forcibly remove them from the property. This could involve changing the locks or removing their belongings from the property.
Once a court order has been granted, the landlord can apply to the court for a warrant of possession. The notice will tell the tenant how long they have to leave the property (usually 14 days). This will authorise a bailiff to evict the tenant from the property on or soon after the 14th day.
The bailiff will then attend the property and serve a notice of eviction taking back the property. If you’ve watched the programs on TV you will see that this is a stressful and embarrassing time for the tenant. Let alone the additional costs they will be charged and forced to pay back.
External Debt Collection Agency will chase up the debt
At any stage there is a debt owed, the landlord may refer the debt to an external debt collection agency. The agency will then start to chase up the outstanding debt and may take legal action against the tenant to recover the money. These days Debt Collection is organised and will chase you wherever you are.
The debt collection agency may also take steps to recover the debt from the tenant's wages or bank account. This could involve getting an attachment of earnings order from the court, which will allow the agency to take money directly from the tenant's salary.
What is the effect on your credit rating of a County Court judgement
If a tenant fails to vacate the property before the eviction date, the landlord may take out a County Court Judgement (CCJ) against them. This will remain on their credit file for six years and will have a significant impact on the tenant's credit rating.
A CCJ will make it much harder for the tenant to get credit in the future and could even prevent them from getting a mortgage or other loan.
Referral to the High Court to take goods you own
If the tenant fails to pay the outstanding debt, the landlord may refer the case to the High Court. The High Court can then issue a writ of control, which will allow bailiffs to seize any goods that the tenant owns in order to recover the money. This could include taking goods from the tenant's home or from other properties they own.
Is it really worth the added costs and risks to your credit rating?
If you're a tenant and you're considering staying beyond the expiry date of the Section 21 then expect the costs and implications to increase quickly.
Better to work with your Agent and arrange a move out date sooner than later. Use this early move out date as a negotiation tool to get out of the property, in most cases landlords just want the property back safely, ensure you leave it in a good state so there isn’t additional issues with damage. This will help you avoid any potential legal costs and the risk of a CCJ or other adverse credit rating.
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