A lettings expert at PropTech firm Goodlord says he’s concerned at a growth of tenants with County Court Judgments as a result of the Renters Rights Bill.
The Bill is due to become law in the early autumn and will abolish Section 21 evictions. Instead, landlords who want to remove tenants will have to follow new processes that clearly highlight the reason behind the proposed eviction. This will often then require a court order to be granted.
Oil Sherlock, managing director of insurance at Goodlord, says that because S21 evictions will no longer be possible, he is worried that tenants will fall into a trap of thinking that they can get away with delaying or missing rental payments.
Similarly, if their landlord is pursuing their eviction through the courts, tenants might be tempted to pause their rental payments whilst the eviction process takes place.
Sherlock says this would one a huge mistake and comments: “If tenants allow themselves to fall into arrears with their landlord – it will catch up with them. Currently, when a Section 21 is used to evict a tenant, no further action is typically taken. However, the new rules means far more cases could end up in court.
“Should this happen and some rental payments have been missed or withheld, tenants might find that a “charge” has been made against their name in the form of a CCJ. If they don’t have the cash available to settle their debt quickly and in full, a CCJ could stay on their credit record for up to 6 years. This can be seriously damaging to credit scores – affecting their ability to secure everything from renting a new property, applying for a mortgage, or securing a mobile phone contract.
“The new rules mean tenants risk sleepwalking into CCJs that could follow them for years – even for relatively small debts. And, because tenancy notice periods will now be longer, the average amount owed in arrears could also spike – meaning tenants face higher debt burdens. More formal court action equals more judgments on record. It’s critical that tenants understand this risk now and engage early with landlords to avoid unnecessary escalation.”
This article is taken from Landlord Today