A legal expert for ARLA Propertymark is recommending that letting agents consider serving a second Section 8 notice if a tenant's rental arrears exceed six months.
This is the advice even if the original Section 8 has yet to come into force. ARLA says this is because of a crucial change at the six months of arrears mark, when the notice period for tenants drops from six months to just four weeks.
Robert Bolwell - senior partner at Dutton Gregory which manages the ARLA Propertymark Legal Helpline - told a webinar run by PropTech firm Goodlord: “One of the tantalising questions now is, what do I do if I have rent arrears of five months? Do I serve a notice now for six months’ expiration date or do I wait until I go over the six month mark? At six months, the rules say your Section 8 notice period (on ground eight) can actually be four weeks.”
Bolwell, who is head of the firm’s landlord and tenant department, added: “We’re looking at situations now where the clients have served a six-month notice initially, when the rent arrears are quite small, but when we get to that six months [of arrears] mark, we might be serving another notice because...of the shorter period [of four weeks notice]. The general rule is, it’s never wrong to serve additional notices.”
He told agents who tuned into the webinar that those tenants with rent arrears of three or four months could be served notice, with landlords then “keeping an eye on those rent arrears and, if things are getting worse, when you hit that six month mark, serve another one for four weeks. Because that might enable you to start proceedings more quickly than waiting for your first notice to expire.”
In terms of the court backlog, Bolwell said that “the indicators suggest that you will save time if you can go down the accelerated route than if you go down the normal route.”
He said that this action could save landlords “weeks, maybe even months” in being granted a possession order.
Bolwell noted that, in addition to the estimated backlog of 65,000 cases, an additional review process, combined with the requirement to social distance in the courts themselves, means that it will take longer than usual for cases to be heard.
Usually, courts could hear up to 10 cases an hour, said Bolwell, but now it could be as little as three.
This additional review process is the judges assessment of the “reactivation notice”, which needs to be included with claims filed on or after 3 August 2020.
The “reactivation notice”, says Dolwell, comprises an Covid-19 impact statement and up to two-years of rent payment history “even if it is an accelerated claim and you are not claiming for rent arrears”.
The legal expert also noted that the government has changed the forms for Section 21 and Section 8 notices and advised letting agents and landlords to ensure they were using the most recent forms, which can be downloaded from the government website - “They look very similar to pre-Covid except that there are different expiry periods for different grounds, and it sets these out."