PIMS Members wins legal battle - Mistake on Section 21 can be expensive
A Landlords nightmare - legal aid appeals - could have cost more than £50,000
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Historic judgement upheld over Section 21 dated incorrectly, Taylor vs Spencer
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PIMS steps in to fund the upholding of the legal precedent
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Tenant's legal team launched appeal after appeal even when they had lost the right appeal !
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Right to appeal overruled tenant's solicitors even tried to stop the bailiff's warrant of possession
Roger Spencer, a PIM's member, won his day in court and created legal history that benefits all landlords and wants to share his tale as a warning to others.
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"I never thought that I would end up having to face the probability of going to Supreme Court and not only being taken on by solicitors, that were only interested in racking up fees, but also by Shelter who supported their case."
The Spencer vs Taylor case was finally concluded in July (2014) when the Supreme Court rejected Taylor's (the ex-tenant) legal team's request to appeal the Court of Appeal's previous ruling that the tenant had to leave.
Spencer's nightmare first started in September 2011 when after numerous complaints from neighbours, they finally decided to issue a Section 21 notice to their tenant, a month later in October.
The tenant's solicitors had been told in Nov 2013 at the Court of Appeal, that the tenant had to leave the house because although the Issue date of the Section 21 was incorrect nevertheless, by law, it was upheld as it had been issued to expire no less than two months later.
In January 2014 Taylor's solicitors appealed against the ruling that they could not appeal to the Supreme Court by submitting a 14 page document covering 39 different points. They engaged Ian Colville, a renowned barrister who specialises in Housing Issues and homeless clients on legal aid.
- The Section 21 contained a "catch all" savings clause and the tenant's solicitor's had even cited this as one of their 39 points that was being appealed.
Roger joined PIMS and spoke to the Member's Help Line which is open seven days a week.
- Upon hearing of his plight, PIMS requested the case notes for the team to examine thoroughly. After reviewing the information PIMS felt that Spencer's solicitors had failed to advise their client correctly.
Spencer's solicitors were responsible for issuing the Section 21 notice which they had dated incorrectly.
When the notice was challenged by the tenant's legal team they should have told Spencer that the most cost effective solution was to issue another notice correctly dated. This would have been the correct pre-emptive approach to avoid the possibility of any appeal...which unfortunately consequently occurred.
Richard Merrick said:" If they had issued another Section 21 notice that was correct, then that would have been that. The other problem was that the original fixed tenancy agreement was for a six month period where the rental payment had been specified as weekly and did not state which day of the week it should be paid on; this meant the section 21 notice would have been served on the basis a weekly periodic tenancy commenced the day after the 6 month fixed term had ended
- "We always advise any landlord never to 'mix and match' terms as it leaves you wide open to legal challenges. The PIMS Tenancy Agreement "wizard" prevents landlords from making these mistakes "
PIMS and Roger were concerned whether his existing solicitor had sufficient experience to counter the real danger, as if the appeal failed then Roger would have to face the Supreme Court and his costs could have spiralled. If he had lost Roger would have been liable for the tenant's legal costs.
The prudent approach was to make sure that Roger received the best advice from specialist solicitors and barristers with expertise in Supreme Court matters. PIMS felts that this case had such a significant benefit to all landlords that they funded the representation, to ensure success could be achieved. Roger changed his Legal representatives who would ONLY release documents to the new legal team after their account was paid in full.
" The reason PIMS wanted to fund Roger's case is because it was so important to uphold such a legal precedent which benefits all landlords."
- Spencer was awarded costs of £6,600 + vat from the case, with little chance of him even receiving a single penny from his ex-tenant, making the award virtually worthless except for the fact that Roger has nothing more to pay.
Roger Spencer says: " This situation has cost us more than £16,000 in legal bills and with loss of earnings and everything else, the full cost is approaching £25,000. What could have been worst is that if the case was lost then it may have ended up costing me more than £50,000."
PIMS always advises its members that if they need to involve solicitors, then always agree a fixed sum in advance that will not be over stepped:
Richard Merrick says: " Legal issues may at times be one of the highest costs that landlords will incur during their 'careers'. Always agree a sum before any work is undertaken as with solicitors time is money and everything is chargeable, no matter how minor.
"It's not just a case of 'nightmare' tenants that landlords have to deal with, it can also be having to deal with tenants' legal aid solicitors too.
"If Roger had joined PIMS earlier, a quick call to the helpline would have highlighted the discrepancies and pre-empted the situation of the spiralling costs.
We at PIMS [Property Information Made Simple" have created a series of automated online wizards whereby Section 8, Section 21 Notices and Tenancy Agreements are generate automatically and these would have prevented the mistake Roger encountered.
PIMS and Roger would like to give special thanks to David Smith of Anthony Gold Solicitors for his guidance in this extremely complex legal matter.
PIMS OVERVIEW - Section 21 Notices