Impact of court fee rise will leave door wide open for bad tenants
Planned changes to court fees will take effect from 22nd April 2014, where fees for possession claims will see an increase of 60%.
An application for possession currently costs £175 and when these changes come into force this will increase to £280.
The possession claim online (PCOL) service, which currently has a discounted fee of £100, will rise by 150% to £250; making the discount for using the online system far less appealing to landlords. Although the fee for the warrant of possession, when a bailiff is required, (which currently costs £110) will stay the same.
The Government have stated :
“The benefits brought by a simplified approach with a fee which reflects the average cost of issuing such proceedings justifies the change.”
Landlord Referencing Services affiliate eviction specialists Landlord Action had this to say:
“The rises are ludicrous and will have a huge impact on those landlords and letting agents that find themselves in the unfortunate position of having to start eviction proceedings. Landlords who are seeking possession of their property are usually already in financial difficulty due to rent arrears or damage to their property, so increasing the cost of fighting this battle, and by such a significant jump, seems wholly unfair.
As a company that has fought for the rights of landlords from the start, we have always endeavored to ensure our services are priced fairly and competitively. Whilst we will try to swallow some of these increases, at such a great hike, we will inevitably have to pass some of this on to our landlords and agents. It is actions such as these which discourage new landlords from entering the market, which is concerning at a time where there is a desperate shortage of rental stock.”
Inevitably this will make it significantly more expensive for a landlord to obtain a CCJ against future bad tenants, as well as enforcement costs increasing too. This will mean that even less landlords will bother taking tenants to court, leaving the door wide open for bad tenants and leaving landlords even more vulnerable to taking on serial debtors, as their debt will not have been registered.
There is also the worry that this could spark a stampede of possession cases in the next 2 weeks from landlords trying to beat the rises.
Therefore LandlordReferencing.co.uk cannot stress enough the importance of Lifestyle Referencing your future tenants – as the best way to avoid taking a bad tenant on is to not take them on in the first place.
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