Landlords face higher court costs

Landlords face higher court costsAs a landlord, there may be times when you have to seek possession of your property – either because of damages or because your tenants are in arrears. The costs of this legal procedure look likely to rise for a second time since April 2014, so it’s important to be aware of this and take it into account when writing your tenancy agreements.

Possession fees went up from £170 to £280 in April 2014 and now there are plans in the pipeline to up the cost by an extra £75. There were also fee increases last year on applications for possessions and the fees for using the possession claim online service following a landlord Section 8 notice on rent arrears grounds also soared – by a whopping 150%. The only cost that remained unchanged was the warrant of possession (when the bailiffs are instructed) which stayed at £110.

The government said last year that landlords could apply for an order against the tenant if necessary to recover costs, although this is likely to be a problem in most cases as if there are rent arrears, it could be tough for a landlord to recover monies owed.

As well as this, senior judges have also told the government that these changes could lead to tenants getting the upper hand, as there’s an increase in the number of landlords starting court action and representing themselves and not appointing proper legal representatives.

How can landlords prepare

If you want a tenant to leave a residential property there are strict procedures that must be adhered to. First of all, you must serve notice and then you have to go to court to get a possession order. Next, you may need to instruct a bailiff or High Court Enforcement Officer. If you don’t get the process right, you may be charged with illegal eviction, which carries severe financial penalties and even a custodial sentence.

One thing you could do would be to include a clause in the contract making it clear that tenants will be liable for legal costs as a result of any breach of their tenancy agreement.

However, none of the above would be necessary if you were to hire a management agency or sign up to a guaranteed rent scheme. The risks associated with illegal eviction, missed rent payments and possible damage to your property if tenant eviction is badly handled, are significantly reduced by paying for professional advice or services. These help landlords and investors to avoid worst case scenarios, by managing the daily tasks, maintenance and legal aspects.

The government has launched a consultation on this issue, which ends on 27 February. If you’d like to have your say, have a look here.