I’m not going to go into detail on Gateway Holdings (NWB) Ltd v McKenzie & Anor (LANDLORD AND TENANT – SERVICE CHARGES) [2018] UKUT 371 (LC) but it does set out a point of principle. Ms McKenzie, the current leaseholder, sought to challenge service charges which had been demanded from (and paid by) her late father, the previous leaseholder.

The Upper Tribunal, via Oakfern Properties v Ruddy [2006] EWCA Civ 1389, found that she could. Section 27A Landlord and Tenant Act 1985 did not restrict the class of people who could bring a challenge to the tenant at the time of the demand.

However, in this case

the outcome of the FTT’s determination in relation to the years before she acquired her father’s lease can be of no practical benefit to Mrs McKenzie.  The service charges she has challenged were paid by her father, and neither she nor her father’s estate have any continuing liability concerning them.  The lease in this case provides for half yearly payments on account with a balancing charge or credit if the sum paid during the year exceeds the service charge finally shown to be due (see paragraph 4.5, of the Sixth Schedule to the lease).  The lease requires that “the landlord shall give credit for such overpayment” which presumably means the sum overpaid must be credited to the account of the tenant who paid it.  In respect of the sum found by the FTT to have been overpaid, that tenant was not Mrs McKenzie and I do not see how she could now claim to be entitled to receive the overpayment.  Her father’s executors may have a claim to recover it, but Mrs McKenzie herself is not an executor and she would have to await the recovery and distribution of the funds by them. 

So, Ms McKenzie’s argument that any surplus from those years should have gone to the sinking fund and be set against the major works charge that she faced in 2016 did not succeed.

Alongside the Housing Court ‘call for evidence’, MHLCG also published the snappily titled:

A qualitative research investigation of the factors influencing the progress, timescales and outcomes of housing cases in county courts

This was the ‘pre consultation consultation’ on issues with housing matters in the courts. (Full disclosure, I was one of the interviewees, not by invitation of MHCLG). 

It is a genuinely interesting document, addressing perceptions of the court process (particularly on possession claims) and what might be factors leading to perceived delays.

The key delay on possession claims – and something I think I’ve mentioned before – is the period after the possession order. For example, an accelerated procedure possession claim takes, on average 5.3 weeks from issue to order. However, it then takes a further 10 weeks (and 6.8 weeks after issue of a warrant of possession) to eviction.

A number of causes are suggested for this:

The reasons for these delays include some non-professional landlords being slow to understand that they need to apply for a warrant, and a lack of court resources, specifically a lack of bailiffs to handle the workload. It also appears that some Local Authorities (LAs) have been advising tenants to stay in the property until the bailiffs arrive. This encourages tenants to ignore the proceedings and forces landlords to take enforcement action.

Well yes, although it appears that the authors haven’t quite grasped why local authorities (and indeed in consequence, tenant advisors) tell tenants to stay put, which is a whole other kettle of fish. And permit me a dark laugh on the report’s conclusions on the Homelessness Reduction Act

However, the Homelessness Reduction Act, which came into force in April 2018, will to some extent address this issue: Local Authorities should be able to intervene earlier to support tenants threatened with homelessness. This should mean that, in future, Local Authorities will no longer advise tenants to stay as long as possible

Oh they will, they will. And it was MHCLG who changed the draft Homelessness Reduction Bill as was to ensure that a tenant with a s.21 notice would only be treated as ‘threatened with homelessness’ up until the point of a possession order having been made.

Still, landlords’ perception was that even accelerated claims take too long to get to possession order:

Nevertheless, some landlords perceive it to take too long to get to possession order stage because even if landlords use a S.21 notice, there is often an underlying reason for wanting possession (such as rent arrears, damage, or anti- social behaviour (ASB)). Landlords may have taken legal action only after a period of trying to sort the problem out informally.

Ah yes, the old days of ‘instant justice’…

However, the paper goes on to find a number of reasons for such delays

landlords also make errors in the application, leading to cases being delayed. Mistakes have become more common because of the need to demonstrate compliance with tenant protection regulations (e.g. regarding deposit protection and gas safety).

“The main reason for bouncing Section 21 applications is that they are not signed by a solicitor or landlord” (Legal professional stakeholder).

(That is, the landlord hasn’t got it right reasons)

Another perceived ‘delay’ factor was the advice and involvement of tenant support services. Most claims proceed without a response from tenants. However, if tenants receive advice at an early enough stage, the complexity of the application gives more scope for tenants and advisors to challenge the facts of a claim. If issues are raised regarding the application, this prompts judges to list cases for a hearing rather than making decisions based on the paperwork.

(That is, the tenant has a prospective defence because the landlord hasn’t got it right reasons), and

Finally, our research found some backlogs and bottlenecks in court administrative procedures. Some stakeholders believed that the pressure on court resources caused by lack of staff, closure of courts, a high workload and outdated IT led to delays in processing paperwork.

Well yes, yes indeed.

On cases brought by tenants:

There are considerable barriers to tenants taking legal action against landlords. These include lack of knowledge and understanding about the legal options available, fear of having to attend court, limited access to legal advice and support, fears of the costs of taking legal action, the limited availability of Legal Aid or pro bono providers, and the reluctance of Legal Aid firms to take on cases if they are not confident of recovering costs. Tenants can also be inhibited by fears of the landlord’s reaction, especially if they want to continue living in the property. There was some evidence of retaliatory eviction in the sample for this study. Current protection against retaliatory eviction does not seem to be effective because it relies on action by the Local Authority.

This all rings true.

The whole thing is worth reading. It highlights a lack of knowledge of both landlords and tenants on legal requirements and legal process, and this is increasingly important as more and more tenants, and indeed landlords are or will be in person in proceedings. 

It also highlights a gap between the perceptions (and understandings) of legal professionals and landlords (in particular) on timescales for proceedings, which I sort of knew already, but are set out starkly here. While lawyers (and judges) think that, say, 5 weeks from issue to a possession order (including as it does time for service, and a fortnight for any defence) is pretty damn quick, landlords thought things would be even quicker

“We thought it would take about a month to get him out because he paid the rent on a monthly basis” (Landlord, North West).

“I’m not satisfied with a 4 to 5 week wait for a hearing because most tenants don’t turn up” (Landlord, South).

And then there is a general landlord objection to tenants raising a defence, let alone with representation.

“Their (the legal advice organisation’s) job is to prevent possessions” (Landlord representative stakeholder).

“They bring in obstacles. If they had their way, landlords couldn’t get possession” (Landlord, South).

“Advice Centres run anything. They should differentiate genuine cases” (Landlord, South).

(People don’t ‘run anything’, it has to have reasonable prospects. It might not be successful in the end, but that is a different matter. It is, of course, not for an opposing party to decide what is ‘genuine’,)

What the whole research report means for a ‘housing court’ is unclear. Most (though not all) of the landlords’ issues are to do with legal requirements for a possession claim, not the actual procedure – which is merely the implementation of those requirements. There are some practical suggestions (online applications or better ones, sorting out enforcement), and an acknowledgment of the general perception of the impact of funding cuts, under resourcing and over burdened courts on the administration of proceedings. But these are not ‘specialist court’ specific.

But as a snapshot of approaches, perceptions and concerns with the court process, it is fascinating and illuminating.