If an extension is made to the ban on evictions, as called for by the Labour Party, this could lead to financial ruin for landlords with existing possession cases for rent arrears, says Landlord Action.
Some landlords with pre Covid-19 possession cases will find themselves trying to cover more than a year’s worth of rent if the courts are unable to resume existing cases from 25th June. Paul Shamplina, Founder of Landlord Action, says these cases must be prioritised.
According to Landlord Action, following the government’s ban on evictions in March, there is an estimated 25,000 cases stuck in the legal system, of which 10,000 are from private landlords.
With over 500 live possession claims with the courts, Shamplina says he is being contacted daily by landlords who launched eviction proceedings against tenants for non-payment of rent before the ban and are now facing financial collapse.
One landlord, David Walters, has a tenant who owes him £12,000 and her refusal to leave or pay means he cannot return to his home in the UK.
Contacting Landlord Action for advice, David said: “I live abroad and rented my one-bedroom flat in London via an agency 2.5 years ago. My tenant was good for the first year, so we renewed her tenancy for another year (this was the beginning of 2019).
“She then started paying her rent later and later, so I gave her notice to vacate last June (there was a two-month notice period in the tenancy agreement).
“She refused to move out saying she couldn’t find anywhere to live. I took court action which was raised at the beginning of October 2019 with Landlord Action. Still she did not move out. So, we then sought an order for a bailiff. This should have happened this April, but the lockdown meant no further action could be taken for 90 days, as you know.
“I’m in a desperate situation as I have no home to return to in the UK. A tenant who is refusing to move out who owes over £12,000 in unpaid rent and no idea when this situation can be resolved. Even when the central London court reopens there will be a huge backlog of cases.”
Landlord Action says that landlords like David are now stuck with tenants who have often not paid rent for months and who are now living rent-free in their properties until early September and probably beyond.
Commenting on Labour’s five-point plan which includes calls for an extension to the temporary ban on evictions from three months to six months, Paul Shamplina, founder of Landlord Action, says: “We understand and agree that it will take many months for people to recover from this crisis and adequate support to prevent homelessness is absolutely essential.
“However, I do believe that existing possession claims should be treated separately to any tenancy issues that arise as a result of Covid-19. Cases where rent arrears had already built up for months and landlords had sought action prior to the pandemic should be prioritised as these landlords will be taking the biggest financial hit.
“If the ban on evictions is extended for existing cases as well, there will be thousands of landlords who, by the time they are finally able to gain possession of their properties, will have up to years’ worth of rent arrears, maybe more. I dread to think how the court systems will cope towards the end of the year.”