Local Authorities and Rehousing Tenants

20th April 2021 Commercial Litigation

An interesting decision has emerged from the Local Government Ombudsman this week. It is a good clarification of what local authorities are actually obliged to do where a tenant is served notice by a landlord and approaches them saying that they will be homeless.

There is a lot of misunderstanding about this area by landlords as well. It is important for landlords to be aware that tenants are legally entitled to remain in a property up until a bailiff (or High Court Sheriff) turns up to evict them from it and there is absolutely nothing wrong in them doing so. So a local authority is perfectly entitled (and should) advise tenants of their right to remain in the property. Landlords often complain about this but have no right to do so.

However, a local authority is required to treat people who have been served with a notice as threatened with homelessness. They are then required to consider whether it is reasonable to require that person to remain in the property. They must consider the financial burden this will place on landlord and tenant in doing so, the cost to the courts of dealing with any possession claim that will follow, and the cost to the local authority. In practice, for most local authorities the balance usually weighs on telling the tenant to stay in place because they simply do not have the resources to re-accommodate them. However, some local authorities at this point close the books and simply fail to engage again until the tenant has had a possession order made and a bailiff’s appointment has been made. This is not permitted and the Ombudsman made this point very clear.

The reason for this is that there is a Code which local authorities must follow in relation to these situations. This requires local authorities to:

  1. prepare a housing plan with people threatened with homelessness;
  2. keep in touch with landlords and tenants during the eviction process;
  3. keep the housing plan under review; and
  4. especially importantly for landlords, keep under review whether the tenant should continue to remain in the property.

In addition, the Code states that it is unlikely to be reasonable to ask a tenant to remain in a property after a possession order has been made.

In this case that was not done. The local authority had told the tenant in a letter that they had a legal right to remain in the property until the bailiff appointment. The landlord complained about this but the Ombudsman did not uphold it as it was perfectly proper for the local authority to tell tenants about their rights. However, the Ombudsman criticised the local authority as they had not prepared a housing plan until well after the possession order had expired and the tenants had left and had failed to keep in touch with the landlord at all.

The key points to note here are that a local authority can tell tenants about their rights but that they must also keep in touch with a landlord throughout the eviction process. Landlords should respond if they are contacted and then maintain the contact by advising the local authority of each further stage in the process. As a part of this the landlord should make clear the financial cost on them in terms of arrears and legal costs they are incurring as this is supposed to be part of the consideration. Once a possession order is obtained landlords should press the local authority hard to re-accommodate as they are only allowed to leave tenants in place after that point in exceptional cases.

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David Smith is a Partner located in Londonin our Commercial Litigation department

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