Clampdown on Councils

Clampdown on Councils - New guidelines to protect the people

Recently, Eric Pickles set out new plans to tackle two ongoing issues that have arisen through the use of bailiffs by councils.

The new guidance has been introduced following the debate in the House of Commons by Lord Lucas - this was surrounding the issue of local authorities receiving kick-backs from bailiff companies as first highlighted in the 'Harrow Council and Newlyn Plc' case in summer 2011.

The new guidelines for councils set out;

• Councils should no longer be collecting ‘contractual kickbacks’ from bailiffs - there also needs to be more protection for the public against aggressive bailiffs, unreasonable charging orders and 'phantom visits'.
• Councils must be sympathetic to those in genuine hardship – they need to be proportionate in enforcement and not overuse bailiffs.
• Councils must take individual circumstances into account before proceeding with action against bill payers - there is even a suggestion that non-fee charging debt advisor's could be used to help develop their enforcement strategies.

Over the last five years, it was reported by the Citizens Advice that there had been a 38% increase in complaints about private bailiffs.

Citizens Advice Chief Executive Gillian Guy said; "A third of the bailiff problems we help with each year are for council tax debt. We see cases where bailiffs overstate their powers, act aggressively and bump up debts by levying excessive fees and charges.”  

“Local authorities must protect people from bailiffs who flout the law by helping people early on who are struggling to pay their council tax. We urge councils to sign up to our protocol for dealing with council tax debt."

The new guidance is crystal clear - stop the dodgy practices where town halls collect contractual kickbacks from bailiffs that will do almost anything to make money.

Once a payment becomes overdue, the council should send the bill payer at least three statutory communications before further action is taken, these are;

• Reminder for payment
• Court summons
• Notification that the liability order has been granted and unless the amount owing is paid, bailiffs are likely to follow

At each stage, full information must be provided by the local authority on what the bill payer can do to avoid this course of action and where they can go for help and advice.  They must be clear about the next steps. 

Charges for the court summons and for liability orders should be clear on all documentation with clear information on how they can be paid and how they will be collected if not. 

Local Authorities are reminded that they are only permitted to charge reasonable costs for the court summons and liability order. In the interests of transparency, Local Authorities should be able to provide a breakdown, on request, showing how these costs are calculated. 

A local Authority should take all reasonable steps to exhaust other options available to them prior to obtaining a liability order.

In the cases of ‘phantom visits’ and excessive fees for simply putting a letter through the door, these should be grounds for the termination of the contract and should be reported to the Police for fraudulent activity.

It is no longer appropriate for councils to receive a kick-back from the use of bailiffs and the charging of fees - contracts should not involve rewards or penalties which incentivise the use of bailiffs where it would not otherwise be justified.

There are other protections which have also been included;

• The bailiff must provide the debtor with a contact number should they wish to speak to the billing authority
• The local council remains responsible for the action of bailiffs they have engaged
• The standard scale of fees must be published on the council's website to allow public scrutiny and highlight unreasonable practices

These changes have been welcomed by civil liberties group Big Brother Watch.

Director Nick Pickles said: “It is clear that in the past there have been too many cases where bailiffs have been a law unto themselves, ­barging their way into people’s homes, intimidating ­vulnerable members of the public and imposing rip-off charges.

Personally, I think that it is about time that the councils took more responsibility for the Bailiffs they employ. There are many companies who operate a very professional and ethical business, yet still in today’s age most bailiffs are self-employed sub-contractors, so if they don’t get the fees then they don’t get paid, which is why some of overly aggressive.

Those interested in finding out more what Able Investigations and Enforcement can offer, can contact me, Steve Wood on 0800 6444 181 or e-mail; steve@ableinvestigations.com  alternatively visit - www.ableinvestigations.com

Quarter Day has Passed

With the recent passing of quarter day, any rent that wasn't paid on time would have fallen into arrears the following day - under Common Law, the landlord is entitled to take action by seizing goods to recover any rent arrears, however, some landlords will make an arrangement for the payment of the rent, thus allowing the tenant to remain in the premises and prevent the seizure of the assets.

Should the tenant then default on the agreed terms, the landlord is entitled to take enforcement to obtain payment, even sell the assets - this is called protective distraint.

Note – distraint for rent does not permit the enforcement officer to attend any other premises where goods belonging to the tenant may be found, the distraint only applies to the premises covered by the rent agreement.

All of this is done by instructing a Certificated Bailiff to collect the payment, or seize the goods on his behalf.

It is normally the case that when a Bailiff seizes the goods he does so under a walking possession order, allowing the tenant to continue to trade on the proviso that anything sold must be replaced, like for like, within twenty-four hours.  If the tenant falls to replace the items and fails to pay his outstanding rent, the landlord can demand two & half times the rent value from the tenant.

Another option would be to instigate a peaceful possession procedure; the landlord, agent or solicitor only need instruct a Certificated Bailiff to act on their behalf.  This is an effective method if the officer cannot levy distress due to them not being able to gain entry, there are insufficient goods to seize or all goods belong to third parties.

If you are ever stuck, need a little advice or simply need some clarity on any matter relating to rent recovery please do give us a call, we’d be happy to help where we can.