Here is a question to the blog clinic Fast Track from Jane (not her real name) who is the mother of a tenant.
In January 2019, I made a Rent Repayment Order (RRO) application on behalf of a group of 5 tenants (I am the mother of one of them) for a Rent Repayment Order on their behalf.
On 27th January 2020, after lots of twists and turns (failed appeals etc), theFirst Tier Tribunal (FTT) made a rent repayment order value £32K (there were aggravating factors) giving the landlord 28 days to make payment. The Landlord now has 28 days to seek leave to appeal from the FTT or appeal to the Upper Chamber.
There was a hearing in March 2019 re who was the landlord with the FTT deciding that the Owner was the landlord not the Letting Agent. The Landlord appealed their decision but they found against him and he didn’t appeal to the Upper Chamber. The Council have also fined both the landlord and the letting agent for breaches in respect of lack of the HMO.
The tenants want to proceed with enforcement if the landlord doesn’t pay voluntarily. The landlord has one rental property and his home property.
I have done searches of the register and there are mortgages on both properties and the equity in the rental property will be sufficient to meet the claim.
Now that we have the Order – I am confused by the information I can find on the net regarding enforcement.
1. Do I have to send a letter before action to the Landlord and is there a precedent I can follow – how do I obtain it?
2. Once I have done that, do I have to register the Order/Debt with the County Court and which form do I use. The N1 doesn’t seem quite right as it appears to indicate that the Defendant can dispute the claim, and I’m not clear why this would be the case if there has already been a hearing and a judgement made. Is there a different form?
3. Can you help with signposting of the most cost-effective/pragmatic way of obtaining payment of the order?
4. I have some legal knowledge but pretty out of date and this was definitely not my area – I used to practice as a family lawyer.
Help please and thank you.
Well done on getting the Rent Repayment Order! I just hope that enforcing it will not be too much of a nightmare for you.
Let’s take a look at your questions. If anyone with more experience with me in this work has any suggestions by the way, please leave a comment.
1 Should you send a letter before action?
You can do but it is not necessary. After all, presumably, your award sets out the details of the sum he has to pay and the date he has to pay by. He can’t claim to be unaware of what he should do.
There is no harm I suppose in sending a 7-day letter along the lines that if he fails to pay by the date in the order, you will be registering the award for enforcement with the County Court and then proceeding to enforce the award without further reference to him.
However, don’t let this delay the start of enforcement.
2. Registering the Order with the County Court
There is a useful explanatory form EX328 which you will find here.
You will need to file a form at the court – this can be any County Court hearing centre but the paperwork will be transferred to the enforcement agent based at the nearest hearing centre to the Landlord’s address.
The form that you use is Form N322B which you will find here. This is assuming that the decision is one which does not need the permission of the Tribunal before enforcement. I don’t know whether this will be the case with your order – but if you read the order it should tell you.
There will be a fee to pay which will be set out here. It looks as if it will be £44.
Good news is that the judgement will be automatically registered at the Register of Judgements which your landlord may not want as it will affect his credit rating. Unless he is already there I suppose …
3. Thoughts on enforcement procedures
I have to say that in my opinion, the court enforcement procedures in this country are appalling. They are expensive, bureaucratic and if you were trying to design a system from scratch to be as difficult as possible you could not do better than the system we have!
I took a look at the enforcement procedures (from the point of landlords pursuing rent arrears) in this post from 2014 and I don’t think that they have changed a lot since then.
You will find a guidance page on the government site here which has links to the forms.
Assuming the landlord does not have a job, probably your best options are:
- Getting a charging order
- Using the sheriffs, or maybe
- A third party payment order
Even if the landlord does have a job, monthly payments under attachment of earnings orders are generally very low and it would take decades to pay an award of £32K. The other procedures (if they work) are more likely to result in quicker payment.
It’s possible that just registering the award may be enough if he is concerned about his credit rating.
Incidentally, if the tenants are still living at the property they can also ‘enforce’ the award by not paying rent.
I did quite a few of these at one stage (although it is a long time ago) when I did debt collecting work. You will need your Land Registry entries to prove ownership and then you apply to the court.
Don’t forget to register the order, once obtained, at the Land Registry (you can also register the initial interim order). This is important as it will protect your position. The final order should also be served on everyone who has a prior charge or mortgage – just so they know that they must pay you before any proceeds of sale are paid to the judgement debtor.
A charging order is essentially just securing the debt – you do not get paid now. However, once you have it, there is another procedure you can then follow called an order for sale.
I would suggest however that if you do this you should use solicitors (I would normally advise using solicitors for getting the charging order too, but as you are familiar with legal work you should be OK).
Using High Court Enforcement Officers (HCEO’s)- formerly known as the Sheriffs
You could also use the County Court bailiffs, who are cheaper, but they have a poor reputation. The HCEO’s get paid by results so they have more incentive to do a good job.
The essence of their job is to seize goods and sell them at auction. However, often goods at these auctions sell at very low prices so you may recover considerably less than you would expect. Also, the fees can be very high and will include storage of goods before any auction takes place.
Needless to say, the fees get taken out of any proceeds of sale first before you get anything.
If you decide to follow this route you need to check out the fees very carefully before agreeing to anything. Ideally, you will want the judgement debtor to pay up to prevent their possessions being removed in the first place. Which better off judgement debtors will often do. But the whole process is a bit chancy.
Third-party debt orders – formerly known as ‘garnishee orders’
You will need to know the landlord’s bank account details for this as the order is made in respect of a specific account.
The important thing to remember here is that a third party payment order will only serve to attach money in the judgement debtors bank account at the time of service of the order. So if £10,000 is paid in the day after – it’s too late.
When third party payment orders work they are brilliant and will seriously upset your judgement debtor – particularly if they are in business as their bank will not be pleased.
It’s best to use them only if you know for sure that your judgement debtors bank account will be in funds on a particular day – and ask the court to let you serve the initial order yourself so you are not at the mercy of the postal system.
Although third-party debt orders are normally used against banks, they can actually be used to order anyone who owes money to the Judgement debtor to pay it to you instead.
NB There is a useful information page, from the point of view of the defendant, on the CAB website here.
I hope the above will be of some help to you. Let us know how you get on!