Landlords seeking a possession order, through the court, under section 8 notice in some cases may face a counterclaim for disrepair.
If a tenant does file a counterclaim for disrepair, this can be a problem for a landlord. It is likely; 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 there own legal fees.
The typical cost of dealing with a disrepair counterclaim roughly can be between £5,000 to £13,000. These are just the landlord’s costs. Should a landlord fail to defend a tenants claim, a landlord may have to pay the defendants 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 the Defendant’s counterclaim however to save time & cost offers to settle the entire counterclaim by:-
- 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. The Defendant gives up vacant possession of the let property on or before 28th of January 202x. 6. No order for costs for either side save for the defendants costs to be assessed for legal aid purposes.”
The above is, for example, purposes only.
Now at this stage, some may be taking a deep breath. Do not worry too much. In many cases, what is being offered is compensation to be deducted from the rent arrears a tenant owes.
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; the tenant may face serious consequences as a financial penalty from the time the part 36 offer is triggered.
Part 36 offer is triggered usually 21 days after a tenant’s solicitors 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. If the Judge awards less than what was on offer, a tenant may face serious financial consequences.
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 surveyor.
- Tenants solicitors propose one joint surveyor (or three surveyors) with 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 who has 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 directions that are advantages or at least fair. 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 is going to 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 who is due to be 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 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, and a part 36 offer is a pretty 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.
Source; British Landlords Association
Author: Mr Sajjad Ahmad
Date: 12th of February 2020
For free advice you can join the British Landlords Association, membership is free.
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This article provides a guide. Any information should be used for research purposes and not as the base for taking legal action. The British Landlords Association is not herein, providing legal advice. This page content does not constitute a client-solicitor relationship.