How to deal with Disrepair Counterclaim
Landlords seeking a possession order, through the court, under section 8 notice may face a counterclaim for disrepair known as Housing Disrepair Claims.
If a tenant does file a counterclaim for disrepair, this can be a problem for a landlord. It is likely; that a possession claim will not be dealt with until the counterclaim is determined.
Legally aided tenants could result in a miserable situation for a landlord.
Legal fees for a tenant are paid by legal aid. A landlord has to pay their own legal fees.
The typical cost of dealing with a disrepair counterclaim can be between £5,000 and £13,000. These are just the landlord’s costs. Should a landlord fail to defend a tenant’s claim, a landlord may have to pay the defendant’s legal fees too.
If a landlord manages to defend the disrepair counterclaim, a landlord is still unlikely to;
(1) Recover the rent arrears (if landlords claim, under s8, is for rent arrears)
(2) Recover legal fees paid by the landlord.
Why disrepair claims can be a nightmare for landlords, read on…
When dealing with a counterclaim or a stand-alone disrepair claim, a landlord should consider using part 36 to offer. Do this as soon as possible. Serving a part 36 offer is not necessarily accepting there is disrepair,s. Drafting a part 36 offer properly is essential. The following text is typically used in disrepair cases:
The claimant does not accept all of Defendant’s counterclaims; however, to save time & cost offers to settle the entire counterclaim by:-
- The claimant pays £xxx compensation towards the settlement of the entire counterclaim. Settlement monies £xxxx to be taken from the current rent arrears of £1,855 as at 16/12/20xx. 3. The defendants to discontinue there counterclaim. 4. Defendant gives up vacant possession of the let property on or before 28th of January 202x. 6. No order for costs for either side saves for the defendant’s costs to be assessed for legal aid purposes.”
The above is, for example, for purposes only.
Now at this stage, some may be taking a deep breath. Do not worry too much. In many cases, compensation is being offered to be deducted from the rent arrears a tenant owes.
If some repairs alleged by the tenant are due, you should ensure these repairs are done in a reasonable time.
If possession proceedings have not been issued and a tenant has issued a claim for disrepair, the tenant is required to issue a Pre-Action Protocol before they issue possession proceedings.
A pre-action protocol is also known as a Letter Of Claim.
The tenant should only issue a claim if the landlord has failed to deal with the disrepair as set out in the pre-action protocol.
Some pre-action protocols may also contain an element of Personal injury. If you have the legal cover, you should consider informing your insurer at the earliest convenience because you are required to respond in a reasonable period.
Housing disrepair claims are a complex process, even with an element of a personal injury claim.
Part 36 may avoid a landlord having to more on legal costs
Part 36 offer is a potent tool and can force the tenant to settle the disrepair counterclaim/claim. Part 36 may avoid the landlord having to spend further legal costs, which, as stated above, are unlikely to recover from a tenant.
Judges understand that a landlord is unlikely to recover their legal fees or any rent arrears claimed; hence for this reason, “Part 36 offer” is an excellent option.
Also, another good reason why a landlord should consider using part 36 is; that the tenant may face serious consequences such as a financial penalty from the time the part 36 offer is triggered.
Part 36 offer is usually triggered 21 days after a tenant’s solicitor receives a valid part 36 offer.
Under part 36, if the offer made by a landlord is not accepted by a tenant, the matter goes to trial. A tenant may face serious financial consequences if the Judge awards less than what was on offer.
Its vital to fire off the part 36 offer as soon as practical in the proceedings.
Usually, in a disrepair claim, the Judge will give direction’s how to deal with the application.
The directions given by the Judge at the 1st court hearing are likely to be something like; –
- To instruct a joint expert.
- Tenant solicitors propose one joint surveyor (or three surveyors) with a CV and costs for the claimant (you) to agree on using one surveyor out of the surveyor(s) proposed.
- Parties agree on joint instructions.
- Disclosure by list
- Simultaneous exchange of witness statement
- Case management hearing
- If no further directions, the matter set for trial
A lawyer representing a landlord must have an excellent understanding/experience in dealing with disrepair counterclaims.
Nearly all Shelter solicitors are learned in housing law
A lawyer with good experience in dealing with disrepair claims will know that the fight does not start on the day of the trial. When directions are given, that is when the fight starts. At this stage, it is imperative to seek sensible, advantageous, or fair directions. Many tenants are represented by Duty solicitors, usually from Shelter. Nearly all Shelter solicitors are learned in housing law. If a landlord lawyer is not familiar with housing law, then there is a chance the lawyer will have a rude awakening!
If any disrepair claim is dealt with properly from day one, it should never go to trial.
It is essential to seek directions for the “joint instructions” to the “joint surveyor” that are limited to the alleged disrepair.
Unfair directions are something a landlord’s lawyer needs to argue against to defend a claim. Seek specific directions to inspect the property for the disrepair s aired in court by a tenant.
A landlord cannot, in most cases, be held responsible for disrepair where a tenant has not reported them.
Some tenants will allege disrepair when they are fully aware that;
(1) they never previously informed the landlord of the disrepair.
(2) claim non-existing disrepair or cause damage and claim it as disrepair.
In rare cases, some tenants may be economical with the truth and wrongly claim disrepair for the following reasons;
- The council has informed a tenant they are unlikely to house them because of proceedings against them under section 8 for rent arrears or other breaches. There is legislation that prevents tenants seeking council help for housing who are intentionally homeless due to rent arrears or other breaches. The council may have no legal obligation to house a tenant due to being evicted under section 8 for violations.
- Tenant is advised by a lawyer if they have disrepair, they can defend the landlord’s claim for possession and, as such, will not have to pay the rent arrears claimed.
Part 36 offer is a pretty powerful tool
Note that a tenant’s solicitors will be claiming their legal fees from legal aid; hence, they have no incentive to drop the counterclaim unless they must. A part 36 offer is a powerful tool to remove the tenant’s solicitor’s temptation.
Each case is different; however, to draft a part 36 offer, a landlord should seek expert advice and needs to ensure their lawyers are experienced in disrepair claims and are aware of the different factors that should be considered.
How to avoid a Disrepair Claim?
Good management of your property is essential, and you should ensure:
1. Carryout regular Inspections
2. Attend all major Repairs in a reasonable period of time
3. Make sure you do not your property in poor housing conditions
4. Make sure there are no safety risks from any appliances or things like a staircase, stair bannister
5. Your tenancy agreement has a mode of reporting any disrepairs that a tenant is required to follow.
Can a tenant Withhold Rent Due To Disrepair?
A tenant is not permitted to withhold rent due to any allegations of disrepair or poor condition of any item. You should ensure your tenancy has clauses that state the tenant is not to withhold any rent for any reason or set off rent against any repairs.
All landlords should attend to repairs, especially regarding water supply and electricity, including all hazards which affect the health & safety of the tenant.
The British Landlords Association is a national landlords association for residential & commercial landlords. Join us today; membership for the year is only £69.95
Source; British Landlords Association
Author: Mr Sajjad Ahmad
Date: 4th of August 2022
For expert advice on eviction, contact Landlord Advice UK.
This article provides a guide. Any information should be used for research purposes and not as the basis for legal action. The British Landlords Association is not herein providing legal advice. This page content does not constitute a client-solicitor relationship.