Tenants defending a Section 8 eviction with a counterclaim. Chance of success?

half100

Morning all

Let me preface this by saying I have done a lot of things wrong in managing these tenants, and I accept that. However, I would still want to try and make the Section 8 work if it is possible and I am open to any advice/suggestions you can offer me.

I rented out my house in 2019 to a family of three for £800pm. No issues at all, some minor repairs regarding heating and leaking radiators were reported in 2020 and 2021, those were fixed by me prompty. In 2022 I wanted to renew the tenancy again for £1000, but tenants have asked for some further repairs due to boiler losing pressure often and not heating up the radiators as good before. They said they will renew a tenancy once the heating issues were fixed.

I was not in position to do the repairs at the time, and I agreed to just renew on £800 again due to their inconvenience and stated I will sort out the heating issues as soon as I can. This is where I have gone wrong as I still didn't fix the heating issue and tenants have only raised it once more, then never again. Foolishly, I let it go, assuming it's no longer an issue.

In 2023 their son has moved out and I just wanted the property back either to sell it or try and refurbish and rent again for more rent. I paid an eviction specialist to start S21 proceedings, hoping the two adults will now be motivated to look for a smaller property elsewhere. These proceedings have ultimately failed as I did not protect the deposit. I fully accept the blame here and at this point the tenants were made aware by the court that their initial £800 deposit was never protected.

My eviction specialist then suggested to just increase the rent to the point where they will be motivated to leave. New payable rent via S13 notice was £1200, but was reduced to £1100 by the rent tribunal. Tenants have claimed heating and boiler issues in the property do not warrant the increase to such a level, but the rent tribunal has not taken that into account and has stated the market value for my house is £1200 and reduced the rent payable to £1100 on account of wear and tear as nothing was replaced in the property since 2019.

I had hoped this will be the end of this, but tenants have just continued paying £800 instead of £1100. By April 2024 they have accrued £2400 in arrears, which was more than two months worth of rent. I served a S8 notice through the eviction specialists, tenants did not move out and in August I have applied for possession with the help of the eviction specialists. By this point the arrears were £3000. S8 notice served on grounds 8, 10 and 11.

Tenants submitted their defence forms at the very last moment. They claim the following:

1.) S8 notice is not valid as the landlord still did not return the deposit back to the tenants. Due to this alleged rent arrears at the time of serving the notice are reduced by £800 owed by the landlord, and the S8 conditions are not met as alleged rent arrears fall below two months of rent. (It is true I did not return the deposit after they found out it was not protected, I wanted to have some money left in case of any damages by tenants or any rent being owed, so I did not return. I accept this mistake.)

2.) Tenants are counterclaiming for compensation regarding the unprotected deposit. (I have since received their letter before action, asking for the original £800 deposit back, in addition to £2400 compensation for the 2019 tenancy agreement and £2400 compensation for the 2022 tenancy agreement. I don't have this money available, but was hoping to maybe just offer to clear their rent arrears and call it even? Would this work?)

3.) Tenants are counterclaiming for compensation due to disrepair. The boiler and the heating system have suffered issues since 2019 and no repairs or maintenance has been completed since 2021. Due to this tenants have been forced to buy two oil heaters in 2022 and an additional oil heater in 2023 to maintain a suitable living environment and to protect the landlord's property from any mould and other related damage due to the property's heating system being unable to heat the property properly. In addition, tenants have suffered a financial loss due to relying on increased electricity costs during every winter in order to heat the property, as the gas heating was not capable of doing so. (I did not know they have bought oil heaters and I can't believe that they can claim for increased electricty costs due to gas heating not working properly, but I could be wrong? I have last inspected the property October 2022 and have not been in the property since and I cannot bear going back to it until the tenants leave)

4.) Tenants do not agree ground 10 conditions are met, as due to deposit and disrepair claims, it is the landlord who owes the tenants money, not the other way around (I don't know what to say about this one)

5.) Tenants do not agree ground 11 conditions are met as tenants are not paying rent late, they simply disagree the rent is appropriate due to the condition of the property. Tenants have always paid rent on time since May, 2019. (It is true that they never missed the rent date, but since October 2023 they have refused to pay the extra £300, so surely this is persistently paying rent late?)

My court hearing is in two weeks. How can I fight this, or can I get possession through either of those grounds, whether 8, 10 or 11? I no longer have faith in the advice provided by my eviction specialist and am asking for help and advice here instead. My solicitor did ask for "any counterclaim to be dealt with as a separate claim" in my original application, will this be honoured?

I accept that this is largely due to my errors and mismanagement and will accept if you tell me I'm going to lose this (I am expecting it to be honest). But if there is any way to fight this, I would appreciate it, as my stress levels are going through the roof.

Thank you all in advance.

_Penny_Dreadful

half100 said:

Morning all

Let me preface this by saying I have done a lot of things wrong in managing these tenants, and I accept that. However, I would still want to try and make the Section 8 work if it is possible and I am open to any advice/suggestions you can offer me.

I rented out my house in 2019 to a family of three for £800pm. No issues at all, some minor repairs regarding heating and leaking radiators were reported in 2020 and 2021, those were fixed by me prompty. In 2022 I wanted to renew the tenancy again for £1000, but tenants have asked for some further repairs due to boiler losing pressure often and not heating up the radiators as good before. They said they will renew a tenancy once the heating issues were fixed.

I was not in position to do the repairs at the time, and I agreed to just renew on £800 again due to their inconvenience and stated I will sort out the heating issues as soon as I can. This is where I have gone wrong as I still didn't fix the heating issue and tenants have only raised it once more, then never again. Foolishly, I let it go, assuming it's no longer an issue.

In 2023 their son has moved out and I just wanted the property back either to sell it or try and refurbish and rent again for more rent. I paid an eviction specialist to start S21 proceedings, hoping the two adults will now be motivated to look for a smaller property elsewhere. These proceedings have ultimately failed as I did not protect the deposit. I fully accept the blame here and at this point the tenants were made aware by the court that their initial £800 deposit was never protected.

My eviction specialist then suggested to just increase the rent to the point where they will be motivated to leave. New payable rent via S13 notice was £1200, but was reduced to £1100 by the rent tribunal. Tenants have claimed heating and boiler issues in the property do not warrant the increase to such a level, but the rent tribunal has not taken that into account and has stated the market value for my house is £1200 and reduced the rent payable to £1100 on account of wear and tear as nothing was replaced in the property since 2019.

I had hoped this will be the end of this, but tenants have just continued paying £800 instead of £1100. By April 2024 they have accrued £2400 in arrears, which was more than two months worth of rent. I served a S8 notice through the eviction specialists, tenants did not move out and in August I have applied for possession with the help of the eviction specialists. By this point the arrears were £3000. S8 notice served on grounds 8, 10 and 11.

Tenants submitted their defence forms at the very last moment. They claim the following:

1.) S8 notice is not valid as the landlord still did not return the deposit back to the tenants. Due to this alleged rent arrears at the time of serving the notice are reduced by £800 owed by the landlord, and the S8 conditions are not met as alleged rent arrears fall below two months of rent. (It is true I did not return the deposit after they found out it was not protected, I wanted to have some money left in case of any damages by tenants or any rent being owed, so I did not return. I accept this mistake.)

2.) Tenants are counterclaiming for compensation regarding the unprotected deposit. (I have since received their letter before action, asking for the original £800 deposit back, in addition to £2400 compensation for the 2019 tenancy agreement and £2400 compensation for the 2022 tenancy agreement. I don't have this money available, but was hoping to maybe just offer to clear their rent arrears and call it even? Would this work?)

3.) Tenants are counterclaiming for compensation due to disrepair. The boiler and the heating system have suffered issues since 2019 and no repairs or maintenance has been completed since 2021. Due to this tenants have been forced to buy two oil heaters in 2022 and an additional oil heater in 2023 to maintain a suitable living environment and to protect the landlord's property from any mould and other related damage due to the property's heating system being unable to heat the property properly. In addition, tenants have suffered a financial loss due to relying on increased electricity costs during every winter in order to heat the property, as the gas heating was not capable of doing so. (I did not know they have bought oil heaters and I can't believe that they can claim for increased electricty costs due to gas heating not working properly, but I could be wrong? I have last inspected the property October 2022 and have not been in the property since and I cannot bear going back to it until the tenants leave)

4.) Tenants do not agree ground 10 conditions are met, as due to deposit and disrepair claims, it is the landlord who owes the tenants money, not the other way around (I don't know what to say about this one)

5.) Tenants do not agree ground 11 conditions are met as tenants are not paying rent late, they simply disagree the rent is appropriate due to the condition of the property. Tenants have always paid rent on time since May, 2019. (It is true that they never missed the rent date, but since October 2023 they have refused to pay the extra £300, so surely this is persistently paying rent late?)

My court hearing is in two weeks. How can I fight this, or can I get possession through either of those grounds, whether 8, 10 or 11? I no longer have faith in the advice provided by my eviction specialist and am asking for help and advice here instead. My solicitor did ask for "any counterclaim to be dealt with as a separate claim" in my original application, will this be honoured?

I accept that this is largely due to my errors and mismanagement and will accept if you tell me I'm going to lose this (I am expecting it to be honest). But if there is any way to fight this, I would appreciate it, as my stress levels are going through the roof.

Thank you all in advance.

I think your Section 8 is going to fail in court.

You could offer the tenants £2,400 as full and final settlement for not protecting their deposit and say that this will be used to reduce the rent arrears as well as the £800 deposit.  However, this means the tenants would no longer be in arrears therefore ground 8, the mandatory ground for eviction, will no longer work in court. Grounds 10 and 11 are discretionary grounds for eviction and I would not walk into court with only discretionary grounds when the rental property is in a state of disrepair.

On 20th March 2019 the Homes (Fitness for Human Habitation) Act came into force.  This allows tenants in England to take their landlords to court if the landlord does not sort problems such as excess cold within a reasonable time frame.

IANAL so take my advice at your own risk. This is what I would do:

1. Get the heating and whatever else is wrong with the property fixed.  Perhaps arrange an inspection of the property to identify all the maintenance and repair issues covered by the Homes (Fitness for Human Habitation) Act and get them sorted asap. Beg, borrow or steal (okay perhaps don't steal) the money to carry out the repairs.
2. Put together a rent statement showing rent due versus rent owed so that you can demonstrate how much the tenants owe you.
3. Return the deposit to the tenants and make a full and final settlement offer for failure to protect the deposit.  This would prevent the tenants coming back for a second bite of the cherry further down the line.
4. Once you are certain that you are fulfilling all your legal obligations as a landlord then you can look at issuing another Section 21 or Section 8 using ground 8 if the tenants fall into arrears again.

If the above sounds like it will take too long or you don't have the stomach for it you could:

1. Offer cash for keys and essentially bribe the tenants to move out.
2. Stick the property as is, tenants and all, into an auction and hope that some Homes Under the Hammer type snaps it up.

theartfullodger

And some wonder why landlords get a bad name....

Excellent case study ... 

Grizebeck

I never understand why people ask how courts will decide
If I knew I would be buying lottery tickets
The counter claim will be heard at the same hearing unless the court runs out of time.

These eviction specialists really are not all that good.

elsien

Yes, I was wondering why the eviction specialists  starting point wasn’t “are you sure you’ve done XYZ” In terms of the mandatory landlord requirement. 

fatbelly

Their point 1 would seem fatal to a S8 claim

theartfullodger

Helpful guidance...
https://england.shelter.org.uk/professional_resources/legal/possession_and_eviction/possession_process_for_rented_property/tenant_defence_to_a_landlords_claim_for_possession

Grizebeck

Are they not representing you at the hearing 

Herzlos

I'd be tempted to just offer to sell it to the tenants for market value minus the compensation amount (£4800?) to absolve you of any more liability.

How has it taken you so long to repair the boiler?

saajan_12

half100 said:

1.) S8 notice is not valid as the landlord still did not return the deposit back to the tenants. Due to this alleged rent arrears at the time of serving the notice are reduced by £800 owed by the landlord, and the S8 conditions are not met as alleged rent arrears fall below two months of rent. (It is true I did not return the deposit after they found out it was not protected, I wanted to have some money left in case of any damages by tenants or any rent being owed, so I did not return. I accept this mistake.)

2.) Tenants are counterclaiming for compensation regarding the unprotected deposit. (I have since received their letter before action, asking for the original £800 deposit back, in addition to £2400 compensation for the 2019 tenancy agreement and £2400 compensation for the 2022 tenancy agreement. I don't have this money available, but was hoping to maybe just offer to clear their rent arrears and call it even? Would this work?)

A section 8 notice is still valid without the deposit being protected, and while it would have been advisable, you don't HAVE to return the actual deposit before the tenancy ends, so (1) doesn't really make sense. However they can claim the 1-3x compensation anytime. IMO that's likely to be nearer the top end as you didn't protect at all (vs a paperwork mistake), though debatable on whether they get 2 lots of compensation due to the 2 tenancies or 1 lot as they only paid 1 deposit. Either way, if the judge decides on an amount first, then this likely does bring the overall rent owed to below 2 months worth, so a S8G8 would fail. 

half100 said:

3.) Tenants are counterclaiming for compensation due to disrepair. The boiler and the heating system have suffered issues since 2019 and no repairs or maintenance has been completed since 2021. Due to this tenants have been forced to buy two oil heaters in 2022 and an additional oil heater in 2023 to maintain a suitable living environment and to protect the landlord's property from any mould and other related damage due to the property's heating system being unable to heat the property properly. In addition, tenants have suffered a financial loss due to relying on increased electricity costs during every winter in order to heat the property, as the gas heating was not capable of doing so. (I did not know they have bought oil heaters and I can't believe that they can claim for increased electricty costs due to gas heating not working properly, but I could be wrong? I have last inspected the property October 2022 and have not been in the property since and I cannot bear going back to it until the tenants leave)

They couldn't have initially if you fixed it in a reasonable timeframe, then any incidental costs are theirs. However since you failed your responsibility to repair in a reasonable timeframe, then had INCREASED costs beyond just the natural wait for a fix. That they could claim from you.. the question is whether they can demonstrate it (doesn't have to be 100% water tight, and a reasonable calculation may or may not suffice. How much are they saying for this? 

half100 said:

4.) Tenants do not agree ground 10 conditions are met, as due to deposit and disrepair claims, it is the landlord who owes the tenants money, not the other way around (I don't know what to say about this one)

5.) Tenants do not agree ground 11 conditions are met as tenants are not paying rent late, they simply disagree the rent is appropriate due to the condition of the property. Tenants have always paid rent on time since May, 2019. (It is true that they never missed the rent date, but since October 2023 they have refused to pay the extra £300, so surely this is persistently paying rent late?)

These are discretionary grounds so regardless of whether you think the exact points are fulfilled, they intentionally allow the judge to consider the broader context.. if it was me judging (its not) and it was just the deposit protection compensation against rent arrears then I may not be so sympathetic but with the added context of the long standing repair issues, I might not grant an eviction there. 

-----
SO WHAT TO DO NOW

1. Get the repairs done, now. This is the biggest breach of your responsibilities will continue to be an issue even if you do evict these tenants and find someone new. 
2. Return the deposit, if nothing else it might push the penalty to be lowered as you're not trying to run off into the night with it. 
3. If you've already paid for the court fees then go ahead with the hearing, as there is a chance that they don't file the deposit protection compensation properly or the judge doesn't award it fully, meaning your eviction might still be granted.  
4. If it fails then just wait.. either the net arrears - compensation will continue to increase above 2 months rent and you'll be able to evict via S8 G8 OR they'll pay down the rent so that the net stays below the 2 months, and hence you start getting more money.