In Part 1 of this topic, we looked at the “accelerated procedure” for possession claims, used where a landlord seeks only a possession order from the Court but not a money judgment for rent arrears.
In this “Part 2” post, we will consider how a landlord goes about issuing a possession claim based on a s.21 Notice and at the same time seeks a money judgment for rent arrears.
The most important thing to bear in mind is that such a claim must be distinguished from a claim based on rent arrears.
As most landlords know, a claim based on rent arrears is started by service of a Notice under s.8 of the Housing Act 1988 using the “rent grounds” for possession, i.e., grounds 8, 10 and 11 of schedule 2 to the Housing Act 1988. It is the essence of such a claim that the landlord is claiming possession of the property because the tenant has not paid the rent under the terms of the tenancy agreement. The landlord therefore has to prove that the rent arrears are owed in order to obtain an order for possession.
In contrast, using a s.21 Notice as a basis for possession and at the same time seeking a money judgment for rent arrears does not require the landlord to prove that the rent arrears are owed in order to obtain a possession order. Rather, the landlord is saying to the Court:
“I am entitled to a possession order using the s.21 procedure in order to restore my property to me. This is because Parliament has deliberately passed legislation comprising the s.21 procedure that makes this course open to me and I have complied with all the rules of that procedure. However, although I am not relying on rent arrears in order to obtain my possession order, the tenant is in breach of the terms of the contract of the tenancy agreement by failing to pay the rent and I want the Court to make a money judgment in my favour for that unpaid rent”.
Including a claim for rent in a s.21 claim for possession allows a landlord to obtain a money judgment for unpaid rent without having to issue a separate claim for breach of contract in the County Court. If a landlord used the accelerated procedure to obtain possession, he/she would have to issue a separate claim for breach of contract if he wished to get a money judgment for that rent. So, what about the procedure?
Instead of using a N5B Claim form, a landlord is required to use forms N5 and N119, which are available on the Court Service website:
The N5 Form is straightforward and the box on page 2 “other” should be ticked with the “ground” for possession being described as “s.21 Housing Act 1988”. The Form N119 can also be completed relatively easily and the basis for the contractual claim for unpaid rent can be described or “pleaded” at paragraph 15. The Claim should be supported by a witness statement, which should address all of the questions that appear on the N5B Form including in relation to the pre-requisites for service of a s.21 Notice. All the documents required to be attached to the N5B Form should instead be attached or “exhibited” to the witness statement.
Three copies of the Claim and witness statement should be sent to Court together with payment of the Court fee of £355.00.
The Court will issue the claim and send a copy to the tenant. Disregarding any temporary legislative changes due to Covid-19, there will ordinarily be at least 28 days between issue of the Claim and the date that the Court sets down for a hearing.
The tenant has 14 days after receipt of the Claim to file a defence. If a tenant fails to do so he may take part in the hearing but his failure to put in a defence can be taken into account when the Court decides what order to make about costs. Unlike an ordinary money claim, a landlord cannot get a judgment for the rent arrears merely because no defence is filed within the 14 days period.
At the hearing, if no defence has been filed, the Court should first deal with the possession order. If the landlord has complied with all the relevant requirements that he would have to fulfil for a claim using a Form N5B, the Court should make a possession order in 14 days, i.e., a possession order that can be enforced by a warrant after 14 days have elapsed since the making of the order. The Court can extend that period up to a maximum of 42 days if the tenant can show “exceptional hardship”. The hardship has to be “exceptional” and therefore must go beyond the hardship that inevitably results from being evicted.
Next, the Court must consider the Claim for a money judgment. The Court will consider the evidence of rent arrears in the witness statement and might put the landlord on oath to confirm his evidence. If the Court is satisfied as to the evidence about the rent arrears and no defence has been put forward, it will make a money judgment, usually also payable in 14 days. The Court will ordinarily only make an order for “fixed costs”, which is a specific amount set out in the Court Rules.
Sometimes a defence or defence and counterclaim will be made by the tenant. Defences in relation to the possession order are limited to the same defences that might be raised to a claim using the Form N5B.
However, it is possible for the tenant to raise different defences in relation to the money claim, including a challenge to the landlord’s evidence that rent or a part of it is owed and/or a counterclaim, commonly one of disrepair.
It is very important to note that defences challenging the fact that arrears are owed and/or counterclaims for disrepair can only operate as defences/counterclaims to the claim for unpaid rent. They cannot operate as defences to the Claim for a possession order. Where such defences/counterclaims are made, assuming the pre-requisites for a possession order under s.21 are met, the Court should make a possession order in the usual way and “hive-off” the money claim/defence/counterclaim to be dealt with separately. The Court should not delay possession because of the defence/counterclaim. This is because, as above, the claim for possession is not based on rent arrears. Rather, the landlord has a right to possession based on service and expiry of the s.21 notice but is making an additional, separate claim for unpaid rent.
This procedure is not usually worth adopting if the landlord is aware that the tenant has no means to pay the money judgment as it may serve merely to delay possession and add the costs of a hearing. However, if, for example, a tenant has means but has deliberately stopped paying rent because a s.21 notice has been served, the process can be more economical than issuing a separate claim for unpaid rent. That said, caution should be taken to ensure that there is no valid disrepair counterclaim as in that event, giving the opportunity to the tenant to put forward a counterclaim might lead to lengthy and costly litigation in which the landlord’s costs may be irrecoverable.