Housing and Planning Bill (Eighth sitting)
(8 years, 5 months ago)
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The Committee divided: - Ayes: 7 / Noes: 11 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 11 - Question accordingly negatived.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
On a point of order, Sir Alan. If everything remains equal, as I understand it, we will reach clauses 56 to 61—chapter 1 of part 4—on Tuesday morning. The chapter relates to the implementation of the voluntary right-to-buy deal. I spoke to the House of Commons Library yesterday lunchtime to find out whether any more information on the pace of negotiations between the Government and the National Housing Federation on the detail of the deal had been forthcoming. At that point the Library staff were not aware of any. I understand, however, through a tweet from the Minister and from some information that the Chancellor of the Exchequer made available in his statement yesterday, that five housing associations are proceeding with the deal. Have you, Sir Alan, been made aware of whether any more information will be forthcoming to the Committee on the detail of the right-to-buy deal, to put us in a better position to scrutinise it and the part 4 clauses that relate to it on Tuesday morning?
The Chair
That is not a route for the Chair to follow. It is a matter not for me, but for the normal channels and the Chairman of Ways and Means. However, you have listed the question in Hansard and I will take it on myself to make inquiries along those lines. I will advise you at a later date. Is that okay?
The Minister for Housing and Planning (Brandon Lewis)
Further to that point of order, Sir Alan. To be helpful to the Committee, I suggest that the hon. Member for Harrow West looks at the National Housing Federation website, where the deal is published in full.
Clause 48, as amended, ordered to stand part of the Bill.
Clause 49
Recovering abandoned premises
Teresa Pearce (Erith and Thamesmead) (Lab)
I beg to move amendment 110, in clause 49, page 22, line 10, at end insert—
“(e) the local housing authority responds to a request by the landlord confirming that they suspect the property to be abandoned.”
This amendment would require the local housing authority to confirm that they also suspect that the property is abandoned before a landlord can recover the abandoned premises.
Part 3 of the Bill makes provision for private landlords to recover abandoned premises. We appreciate the need for some landlords to recover abandoned premises, but the proposed measures give landlords dangerous powers to evict tenants with speed and ease.
Tenancies are formal legal agreements and the Bill will give landlords the power to repossess homes from tenants without going through a court process. The turnover period for recovering abandoned premises is too short and the Bill does not provide safeguards for genuine cases of someone legitimately being away from the property, such as for a long holiday, a stay in hospital or a short period of working away.
The proposed measures will lead to further pressure on our already stretched social housing and local authority housing departments as evicted tenants turn to their local authorities after eviction. At the moment there is a timetable and a process for a local authority to help people avoid homelessness by trying to get them into another property, but the process in the Bill is too speedy and people will literally be turning up at the housing department having just been given a second letter.
As drafted, the measures go against the spirit of the Bill that we debated in our scrutiny on Tuesday, namely to crack down on rogue and criminal landlords with banning orders, the database and the fines and to drive up standards throughout the private rented sector. Instead, as they stand, the provisions create a way for some landlords to evict without recourse to the courts and with ease and speed.
Part 3 gives the impression of being put together at the last minute, without thought for the impact on existing legislation. In fact, the impact assessment, on page 43, indicates that the Government are unsure about how big the problem being dealt with even is, so we are concerned about the inclusion of the measure in the Bill. We are not alone in expressing concern.
Shelter and Crisis, two of the leading charities in the sector, released special briefings on those clauses in part 3, strongly opposing them and recommending that they be removed from the Bill completely. They were particularly concerned that vulnerable tenants could be unintentionally evicted, that tenants will be unable to challenge eviction effectively and that there is insufficient evidence that abandonment is a real problem. They also said that there is existing legal provision to deal with genuine cases of abandonment. In addition, they believe that by undermining the role of the courts in the eviction process, the changes will put more tenants at risk of homelessness.
Many representations made to the Committee in written and oral evidence noted concern about the proposals. In written evidence, Crisis highlighted:
“The Bill creates a new ‘fast-track’ eviction process for landlords to reclaim possession of a property which”
they believe
“has been abandoned”,
and that:
“There is no robust evidence to suggest that abandonment is significant or widespread”.
Crisis cited the Bill and the Government’s own impact assessment, which I just mentioned, in which landlords’ associations representing approximately 1.4 million landlords estimated that only 1% of calls to their helplines relate to abandonment. From that figure, the Government have extrapolated that only 1,750 tenancies are abandoned every year, which amounts to 0.04% of private rented households.
The Housing Law Practitioners Association also expressed concern in its written evidence, saying that the HLPA was unaware of any evidential basis suggesting the need for such a power and did not understand what was thought to be defective in existing law. Looking more closely at the legislation, the HLPA noted that the trigger rent arrears are plainly modelled on those in schedule 2 of the Housing Act 1988. If rent arrears are not paid, the landlord is already entitled to a mandatory possession order on ground 8 of the Act.
If the landlord already has a right to mandatory possession, why does he need a right to bypass the court? I would be interested to hear why the Minister believes that the clause is necessary, because it puzzles me. The HLPA also raised concerns about the reinstatement provisions, noting that if the landlord re-lets the property after recovering possession using the abandoned property route and the original tenants seek reinstatement, the court is very likely to refuse them, given that reinstatement would take effect as a concurrent tenancy but would not entitle the original tenant to resume occupation.
In addition to the written evidence, I remember clearly questioning Campbell Robb, chief executive of Shelter, in the evidence sessions. I remind the Committee of that discussion. To quote the transcript, Mr Robb mentioned
“potentially some unintended consequences of bringing”
these measures
“forward and of the lack of court oversight or local authority oversight in making sure that the proposals achieve what is wished but that they do not give a licence to some landlords to use them in a way that we would not support. I just want to put that on record.”
Mr Robb also went on to highlight the danger that,
“without that due process, certain types of landlords may use this to create evictions”
and agreed that it might
“put additional pressure on local authority housing departments by people appearing evicted without due process”.––[Official Report, Housing and Planning Public Bill Committee, 10 November 2015; c. 59, Q153-156.]
Although many have concerns about the proposals as they stand, others note that they are unnecessary. Crisis and Shelter reminded the Bill Committee in their briefing and in written evidence that there is already legal provision for cases of abandonment, in the form of the legal rule on implied surrender.
Mr Thomas
I wonder whether my hon. Friend thinks that an elderly person living alone, perhaps with early-onset Alzheimer’s, might be a suitable example for highlighting the concerns about the clause. Such a person, whose Alzheimer’s might not have been noticed, might inadvertently not pay their rent. An unscrupulous landlord would be able to exploit that fact to put that vulnerable person at risk, unless the local housing authority were aware of the situation and able to intervene to prevent the landlord from using an eviction process.
Teresa Pearce
I thank my hon. Friend for that intervention. That is exactly the sort of situation that I could envisage arising. We heard on Tuesday that there are 10,500 rogue landlords who are known about; I know that there are a fair number in my constituency. I hear many cases in which the landlord, rather than resort to the court, has intimidated tenants into moving out of a premises voluntarily. When the tenants go to the housing department, the housing department says, “You’ve made yourself voluntarily homeless, so we don’t have a duty to house you.” There are landlords like that out there; we know that from the discussions that we had on Tuesday.
It is from that sort of person that we seek to protect tenants. We believe that people who do not want to go to the cost and the bother of going to court will use this route, so it needs to be tightened up.
In its briefing, Crisis says that implied surrender
“is where a tenant behaves in a way that would make a landlord believe they wanted to end a tenancy such as emptying the property of all of its possessions or handing back the keys.”
Crucially, there has to be evidence of actual abandonment—evidence that the tenant has gone for good. That can be evidence from neighbours or visual evidence that all possessions have been cleared. The landlord can accept that and then legally change the locks without any court proceedings being required.
Crisis notes that, in addition to the legal rule of implied surrender, the landlord can, outside the fixed term of the tenancy, use a section 21 notice to give a tenant two months’ notice of eviction, under which they do not have to prove that the tenant is at fault. A common complaint about the section 21 route is that the court process can be slow, but if the tenant has genuinely abandoned the property, this route should be straightforward. For example, there will be no need for the landlord to go to court to seek a possession notice, because the tenant will no longer be in the property. There is no evidence to suggest that existing legal provision is ineffective in genuine cases of abandonment.
Mr Thomas
I wonder whether I can raise another example with my hon. Friend. If someone living on their own has a heart attack and is taken at a moment’s notice to hospital, they may have to spend quite a time there recovering. As a result, they may not pay their rent for a couple of months. If it is not obvious that they are still living at the premises, they may fall victim to a rogue landlord or, indeed, to any landlord who is concerned about the arrears and who is not aware that the person has been hospitalised. Is that not a further reason for the Minister to take the amendment seriously?
Teresa Pearce
I thank my hon. Friend for that intervention. That is exactly the type of scenario we are talking about. I do not think that reputable landlords will use the provisions to get rid of tenants they do not want or to reclaim their property, but, as we know from our discussions on Tuesday, there are landlords out there who do not act in their tenants’ best interests.
I hope the Minister will be able to comment on the rationale for these measures. As I mentioned, there are no real data to hand, and the impact assessment judges the number of households affected to be extremely small.
The measures give landlords dangerous powers to evict tenants with speed and ease. It is a puzzle why the clause is in the Bill, given that there is already a legal route for landlords to go down. That is why we have tabled amendment 110, among others, which would require the local housing authority, as an extra layer of protection, to confirm that it also suspects the property has been abandoned, before the landlord can recover it.
It is clear that we do not have a cohesive set of measures to adequately prove abandonment. One flaw is that they are open to abuse or error. Landlords could use them as they stand to evict tenants, just by writing them a couple of letters. They could also use the measures to evict someone as an act of revenge.
Kevin Hollinrake (Thirsk and Malton) (Con)
First, I would like to draw the Committee’s attention to the Register of Members’ Financial Interests. I have some knowledge and experience of these matters. Are there not two sides to this coin? Are we not trying to be fair to the tenant and the landlord? A lot of very welcome measures in the Bill do tighten up on rogue landlords, but we also need to be fair to landlords. We are talking here about situations where tenants are at least eight weeks in arrears. Are these not just fair measures to allow a landlord to get a decent return on his investments?
Teresa Pearce
I thank the hon. Gentleman for his intervention. I know he has a lot of experience in this area. The charities that came forward were very upset about this proposal and wanted it removed altogether. However, we are trying to find out why it is thought to be necessary, given that there are already legal avenues that landlords can go down, and we have proposed ways to make it work better. Under the amendment, if a landlord suspects that a property has been abandoned, the local housing authority would have to agree. That is just an extra layer of protection. Given the small number of abandonments, that would not be an extra burden on local authorities; it is just a little safety net. As we all know, there are landlords out there—they are in the minority—who do not act in a proper way and who could abuse this measure. That is why we want the clause to be a little tighter.
Mr Thomas
I am grateful to the hon. Member for Thirsk and Malton for intervening, because he prompts me to remind the Committee of my entry on the Register of Members’ Financial Interests.
I put to my hon. Friend another example of someone who might be vulnerable if this provision were introduced without the additional protections she suggests. Let us suppose that someone is rightly sent to prison and has to spend a few months there, in which time they do not pay their rent and—perhaps for understandable reasons —do not make their landlord aware of where they are residing for that short period. Is there not a danger that, without additional protections, a landlord might simply go ahead and seek to evict that person, making it even more difficult for them to be rehabilitated after their spell in prison?
Teresa Pearce
There are many scenarios in which that could happen. As I have stated, I believe the majority of landlords are good and proper citizens who would not do that, but we know there is a core of rogue landlords. The Minister’s figure of 10,500 such landlords is, I think, an underestimation, because those are the ones we know about; there are plenty who we do not know about, but who we hear about it in our caseloads and surgeries. That is the reason we tabled the amendment—to try to ensure this proposal has a few safeguards. Landlords could use this measure to kick out a legitimate tenant who was away on business, in hospital or even in jail, as my hon. Friend suggested. Will the Minister outline what would happen in those situations?
What safeguards are in place for tenants if their landlord says a letter has been delivered? Will the letters have to be signed for, with recorded delivery? Many properties in my constituency have communal letterboxes, and people often do not get mail directed at them. A number of properties have external letterboxes, and it is not unusual for people to go along and steal post from those. How will the tenant be protected if the landlord says a letter has been delivered? Will it have to be signed for? What happens if a landlord says he sent a letter but the tenant never received it, or the tenant goes away for a couple of weeks and the landlord evicts them while they are away?
All the legislation requires is for the landlord to say a property is abandoned, rather than for it to actually be abandoned. It is clear that the proposals could be open to abuse. That is why we propose adding an extra layer to them through our amendment. The local housing authority would need to confirm that it also suspects a property is abandoned, which would ensure a landlord is unable to just say it is abandoned. Adding the voice of a local, respected body to the process would ensure the measures are not open to abuse.
Mr Thomas
Does my hon. Friend agree that many landlords would appreciate that additional requirement and the ability to check with a respected local body that has expertise in housing matters whether a property has been abandoned? I think most landlords would be horrified if they inadvertently evicted someone who was in hospital, having a short spell in prison or away caring for an elderly relative. Surely another argument for supporting the amendment is that it would help landlords to avoid inadvertently doing the wrong thing.
Teresa Pearce
I completely agree. The amendment would also give a heads-up to the local housing authority that there is the possibility of an eviction, enabling the authority to help that tenant into new premises and prevent them from ending up homeless.
It is estimated that these abandonments would arise on only 1,750 occasions a year, and with only 400 local authorities in the country, the amendment would be unlikely to place too much of a burden on them. It is clear that the clause needs amending if it is to work, to not be open to abuse and to be used appropriately on the rare occasions when a landlord is required to recover abandoned premises. The amendment would require the local housing authority to confirm, as an extra layer, that it also suspects that the property is abandoned before a landlord can recover the abandoned premises.
Grahame M. Morris (Easington) (Lab)
I support the arguments made by my hon. Friend the Member for Erith and Thamesmead. My preference and that of the Labour party would be that the Government remove the clause. There seems to be little in the way of evidence that additional regulations are required for landlords to recover abandoned properties. Quite often, the Minister’s response to an amendment tabled by the Opposition is that it would create an additional level of bureaucracy that is unnecessary. I suspect that that is precisely what is happening now.
The Minister might correct me, but the Government’s impact assessment suggests that only 1,750 tenancies are abandoned each year—it has been an issue for me with some of the former colliery properties. That is a fraction of a percentage of the total of private renting households. As my hon. Friend has indicated, there are well-established legal mechanisms by which landlords can recover properties that are genuinely abandoned through implied surrender, whereby a tenant has removed all their possessions or, indeed, handed back the keys.
I respectfully point out that Crisis noted in its evidence that when a tenant is outside of their fixed term, a landlord only has to provide two months’ notice to take possession, and that, in cases where there is genuine abandonment, no court possession notice would be required as the tenant would already have left the property. I fear that the fast-track eviction process would leave those in receipt of housing benefit particularly vulnerable.
My hon. Friend the Member for Harrow West has given some examples of circumstances in which people could reasonably be adversely affected. With benefit delays and average waiting times of 22 days to process new claims, leaving tenants are at risk of falling foul of the definition of an abandoned property when, in fact, the delay may be an administrative one.
We also have issues with the universal credit system leaving tenants vulnerable to rent arrears—some have to wait at least six weeks until they receive their first payment. My contention is that the steps that we dealt with on Tuesday to tackle rogue landlords, including the maintained database, are commendable measures to address the worst practices of the private rented sector. However, to seek to exclude the courts and maintain a fair process for evictions, may leave vulnerable tenants at the mercy of unscrupulous landlords, with little or nothing in the way of redress.
Although I would prefer the Government to remove the clause, the amendment provides a vital safeguard and an extra layer of protection for vulnerable constituents. There is not sufficient evidence to suggest that we require additional regulations. Although I have raised concerns relating to vulnerable constituents, there is a level of scepticism about how useful the proposals would be for landlords. I note the comments of the hon. Member for Thirsk and Malton in that regard.
The question is, who will the proposals benefit? The Guild of Residential Landlords, which gave evidence to the Committee, noted that the new proposals would take
“almost as long as a section 8 notice would take to obtain a court order. At least with a court order, there is no risk of the tenant applying for reinstatement”.
The existing arrangements may well afford more protection to landlords. The question of the benefits of the proposals for the tenant or the landlord needs a little further reflection.
Mr Thomas
I am concerned that if the clause is agreed to and our amendment is not, we may inadvertently place an additional burden on the taxpayer when people who still need accommodation are evicted, and that the cost of homelessness might rise. New universal credit claimants will be particularly vulnerable to accruing rent arrears, as it is likely to be six weeks before their first payment. If there is a delay in the post, that could easily rise to eight weeks, which falls within the scope of an eviction under the abandonment provisions.
Grahame M. Morris
Again, my hon. Friend makes a sensible point, and I hope the Minister will reflect on it. It reinforces my point that the new mechanism does not provide substantial benefits to either party—the tenant or the landlord—and does not improve on the existing arrangements. If the Government insist on pressing ahead with the clause, there is a danger that it could be used by rogue landlords to threaten and intimidate vulnerable tenants, such as those that my hon. Friend the Member for Erith and Thamesmead referred to and those in ill health, who my hon. Friend the Member for Harrow West referred to. At the very least, the Government should offer the additional safeguards that are proposed in our amendment.
Peter Dowd (Bootle) (Lab)
It is a pleasure to serve under your chairmanship, Sir Alan. The hon. Member for Thirsk and Malton made a perfectly reasonable point about getting back a tenancy, but at the end of the day he is a perfectly reasonable person. The amendment is not about dealing with perfectly reasonable people; it is partly about dealing with rogue landlords. We welcome the proposals on rogue landlords that the Government and the Minister put into the Bill, but it is a shame that they are counterbalanced by the rogue landlords’ ability to use the clause to kick people out of their own homes. Those people will not be able to resort to legal process, which is a fundamental capacity in this country.
Kevin Hollinrake
Does the hon. Gentleman concede that, as well as rogue landlords, there are also tenants who do not pay their rent? That is what the clause is trying to resolve.
Peter Dowd
Again, that is a perfectly reasonable point, but, as my hon. Friend the Member for Erith and Thamesmead said, perfectly reasonable landlords, or rogue landlords, for that matter, can already use legal measures—section 21 evictions, for example, take about three months. These proposals will take eight to 10 weeks, anyway. The difference between eight to 10 weeks and the three months it takes to go through a section 21 eviction is fairly minimal. People in that situation already have that capacity and the protection of the law. There is potentially going to be a post hoc recourse to law. How many of us would like to be in the position whereby if someone does something to us or takes something off us, we have to go to court to get it back? Who would want to go through that process and face those challenges?
Given the retrenchment in the legal aid budget, people will not have access to the courts. The Government have not taken action about that. I am not going to comment on legal aid—that is for another debate—but we are where we are. We should be trying to protect tenants through due process in the way that we protect everybody else. In fact, the fundamental responsibility of this place is to protect people’s rights in law. We want to protect the rights of tenants in law that already exists. Let us not introduce some cack-handed method that allows landlords to throw people out of their homes.
Mr Thomas
I am grateful for the opportunity to speak in this debate, Sir Alan. I hope the hon. Member for Thirsk and Malton is tempted to catch your eye to say a little more in this debate. He makes a broadly reasonable point in saying that there needs to be a balance in law between the rights of the tenant and the rights of the landlord. However, I struggle to understand why he thinks there is not a sufficient balance in law at the moment. As my hon. Friend the Member for Bootle alluded to, there are already legal provisions to deal with tenants who get into substantial rent arrears and for cases of abandonment, and there is the legal rule of implied surrender. It is difficult, reflecting on the evidence sittings and all the submissions to the Bill Committee, to see what evidence there is to justify all the additional powers for landlords, which, as many hon. Members have suggested, could cause problems for vulnerable citizens.
I accept that the Government have gone some way to address those concerns with amendments 116 to 126. Nevertheless, I share the concern of my hon. Friends the Members for Erith and Thamesmead, for Easington and for Bootle that those amendments do not go quite far enough to deal with concerns about vulnerability.
A case in my constituency involved a woman who was a teaching assistant. She got into rent arrears because of problems with housing benefit and, worried about her housing situation, she chose, wrongly, not to answer her mail. As a result, her problems got worse. She was intimidated by the financial position that she was in. I worry that the provisions could make it easier to evict a person in that case than to help her sort out her finances.
Peter Dowd
The Minister proposes to amend clause 51 so that a third notice must be given. Does my hon. Friend agree that a third notice is fine, but that it would take the process virtually to the three-month period that would make it possible to get a section 21 eviction? Effectively, it would take the same time, but without recourse to law. That seems a bit inappropriate.
Mr Thomas
My hon. Friend makes a good point. If the hon. Member for Thirsk and Malton will forgive me, that is another reason why it would be good to hear his experience about why the additional provisions, albeit with the Government amendments, are necessary. We will no doubt hear from the Minister in due course.
Part of my concern is that tenants evicted under the new provisions will struggle to challenge their evictions. I asked on Tuesday about legal aid for someone wanting to make sure a rent repayment order would be available, and the Minister was going to reflect on that. Will he also reflect on whether legal aid will be available to a tenant who wants to challenge an eviction under the new provisions?
I am concerned that the clauses and Government amendments could lead to further illegal evictions, and part of the reason for that is that there are very few successful prosecutions at the moment for unlawful eviction by landlords. In 2011 there were only 13. The brutal truth is that illegal evictions are rarely investigated, and few landlords are prosecuted.
There are a number of reasons for that. There have been substantial cuts to many of the tenancy relations teams in housing associations, which have traditionally carried out that function—if, indeed, they still exist. Police forces often think that illegal eviction is a civil matter, so it is quite rare that they investigate. For someone who has been evicted illegally and is now homeless, finding accommodation is a much more urgent priority than launching a prosecution.
My hon. Friend the Member for Erith and Thamesmead is right to ask for an additional check and balance before a landlord can take action under the provisions. The opportunity to go and ask a local housing authority whether it shares the view that a property has been abandoned is a check strongly worthy of consideration.
Mr Richard Bacon (South Norfolk) (Con)
The hon. Gentleman made an interesting point that police forces often think that an illegal eviction is a civil matter. If such an eviction is actually a criminal matter subject to prosecution, does he agree that it ought to be relatively simple for the Government to make it clear to police forces that it is a criminal matter and should be dealt with as part of their responsibilities to protect the public from crime?
Mr Thomas
I am tempted to think that it ought to be relatively simple for Ministers to write to police forces urging them to check things carefully. If the Minister were to agree to that, I would certainly welcome it. I encourage the hon. Member for South Norfolk to consider the whole piece and all the reasons why it is unlikely that landlords who pursue unlawful evictions will be taken to task. The police issue is one thing, but I alluded to a series of other issues that prompt concern about the Bill’s clauses, albeit there are potential amendments from the Minister.
Peter Dowd
Does my hon. Friend agree that we are in the territory of a person possibly being declared de facto homeless vicariously through three letters coming through their door? The person could in effect become homeless not because they want to or have caused it, but because someone has sent three letters. They would then face the challenge of finding alternative accommodation.
Mr Thomas
My hon. Friend makes a good point, and it will be useful to hear from the Minister on that.
Returning to a point I made in an intervention, the vast majority of landlords are not large buy-to-let companies. They are often individuals or families with just one or two properties who want to do the right thing by their tenants. The opportunity to talk to a body before taking a view that abandonment has happened gives them an additional safeguard and provides an additional opportunity for them to satisfy themselves that they are not making somebody homeless inadvertently. The amendment is pro-good-landlord just as much as it is anti-rogue-landlord, as my hon. Friend suggested.
I am sorry that the hon. Member for Peterborough is not in his place, because he very much—
Mr Thomas
I apologise to the hon. Gentleman. It is good to have him here. Indeed, he has arrived in time to allow me to draw his attention once again to the examples of rogue landlords that I mentioned on Tuesday. Mr Antoniades, Mr Ippolito, Stanley John Rodgers, Zuo Jun He, Andrew Panayi, Katia Goremsandu, and Ishak Hussein have all been convicted of appalling behaviour. One suspects that they are looking at the abandonment provisions in the Bill—the Minister has proposed amendments—and thinking that they are a further weapon in their armoury, if they need it, when behaving badly towards tenants for not doing exactly what they want in the time that they want them to do it.
I urge the Minister to understand the spirit with which my hon. Friend the Member for Erith and Thamesmead tabled the amendment, which is pro-good-landlord and anti-rogue-landlord and will strengthen the Bill. I hope the Minister embraces it.
Helen Hayes (Dulwich and West Norwood) (Lab)
I wish to speak about the concerns that Shelter and Crisis have expressed that the abandonment clauses are a disproportionate response to a problem that does not exist to any great extent. Of all the private sector tenancies in the country, it is estimated that 0.04% are affected by abandonment. I am therefore not convinced that the proposals in the Bill are necessary.
I want to say a little about the means that already exists for landlords to reclaim their property legitimately in cases where tenants are in breach of their tenancy, namely the section 21 process. My caseload is full of cases of tenants who have experienced unscrupulous evictions under the section 21 process, and I bear witness to the distress, anxiety and, ultimately, homelessness that is caused by its unscrupulous use. There are very many examples in my constituency and I would be happy to share some with the Minister in some detail, because the problems are real and prevalent.
Landlords complain that the section 21 process is cumbersome and causes delay. In my experience, such delay happens for two reasons. The first is that landlords often do not administer the process properly and are therefore defeated in the courts on technical grounds—that happens very frequently. The second is that there are great inefficiencies in the court system, so there are often long waits to get a date for a court hearing.
Those problems will not be made better by the current Government proposals to close many of our courts, including Lambeth county court, which serves many of my constituents and is the busiest housing court in the country. Its proposed closure will not help the landlords who are seeking legitimately to claim their property through the section 21 process, nor will it help give tenants the opportunity to receive just and fair treatment through that process. If the section 21 process is properly administered, and has a proper reason behind it—including, for example, abandonment—it should be relatively streamlined. It is subject to a court process, which gives tenants every recourse to justice. It is right and proper that they have that.
I support the amendment proposed by my hon. Friend the Member for Erith and Thamesmead. Requiring councils to support the view that a property has in fact been abandoned is important for three reasons, two of which relate to the relationship between local authorities and residents in their areas. First, local authorities administer housing benefit claims and are therefore in a good position to say whether a non-payment event, for example, is due to a claim that has not yet been processed—we know that the average processing time for a housing benefit claim is 22 days, and for universal credit it will be even longer, at up to six weeks.
Secondly, councils are often aware of the vulnerability of residents in their area. They interact with residents through social services, so will know whether, as in the examples highlighted by my hon. Friend the Member for Harrow West, someone is in the early stages of Alzheimer’s or has recently been in prison. There will be social services involvement with those families, so local authorities will know about any vulnerability and will be well placed to advise on whether it is a reason for apparent abandonment.
The third reason why local authority validation is important is simply that local authorities are a third party. In my short time as a Member of the House, I have dealt with many cases that concern complex interactions between tenants and landlords, particularly small-scale landlords, where often the relationships are complex and there are complicated behaviour issues on both sides. Having a third party that is independent of both landlord and tenant and can take an independent view on whether a property has been genuinely abandoned is a really important check and balance.
I do not believe that that would be a cumbersome addition to the process. I support the view of Shelter and Crisis that the abandonment proposals in the Bill are not necessary, because they are a disproportionate response to a very small problem for which effective processes are already in place. However, if the Government will not concede that point, local authority validation as a minimum requirement is vital.
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
It is a pleasure to serve under your chairmanship once again, Sir Alan. We have had a full debate with a number of points raised by hon. Members on both sides. I will do my best to respond to as many of them as I can.
The amendment would require a landlord to obtain confirmation from the relevant local housing authority that a property had been abandoned before they could serve a notice on the tenant to bring an assured shorthold tenancy to an end and repossess the property. We have introduced a procedure for dealing with abandoned premises that will allow a landlord to recover a property that has been abandoned without the need to obtain a court order. We have introduced safeguards to ensure that a landlord can use the process only in circumstances in which a tenant has genuinely abandoned the property.
Mr Jones
I will make some more progress first. The landlord can recover a property only when warning notices have been served on the tenant. The first warning notice would not in practice be able to be served unless at least four consecutive weeks’ rent is unpaid. The second warning notice may be served only when at least eight consecutive weeks’ rent is unpaid. That second warning notice must be given at least two weeks, and no more than four weeks, after the first warning notice. Each warning notice must state that the landlord believes that the premises have been abandoned and that the tenant or named occupier must respond in writing before a specified date, which must be at least eight weeks after the first warning notice is given, if the premises have not been abandoned.
The landlord proposes to bring the tenancy to an end if either the tenant or a named occupier responds in writing before that date. Finally, if the tenancy has been brought to an end using the abandonment procedure, where a tenant has a good reason for failing to respond to the warning notices they may be able to apply to the county court for an order reinstating the tenancy.
It is clear that landlords must go through a lengthy and detailed process before they can regard a property as being abandoned. In addition to the requirement that at least eight consecutive weeks’ rent remains unpaid, they must also serve a series of warning notices on that tenant and, where applicable, any other named occupiers.
Mr Jones
I will in a moment. It would be disproportionate and an unnecessary extra burden on local authorities to impose the additional requirement that a local housing authority must also confirm that a property has, in their view, been abandoned. It may also be difficult for a local authority to determine whether a property has in fact been abandoned. To require them to do so could put them in an extremely difficult position.
Mr Thomas
Will the Minister set out a little more on the general rationale for the provisions? What evidence is there that abandonment is such a huge problem that all those provisions are needed? I do not think we heard any evidence that suggests a problem on the scale merited by the effort gone to by Ministers and civil servants with the clauses.
Mr Jones
I thank the hon. Gentleman for his question. As Labour Front Benchers have set out, there are 1,750 such cases a year and we need put that in context. He and Labour Members want protection for vulnerable people. I agree with that and I will go into more detail on how we will protect them, but there is also a significant number of vulnerable people who need to be housed. When there are abandoned premises that landlords cannot let, that reduces the stock of accommodation available to get those vulnerable people into settled accommodation.
Mr Jones
That brings me nicely to the points that were made about the section 21 notice, which landlords can use to retake possession of a property. It is important to point out that to recover possession under section 21, the landlord would need to obtain a possession order from the court, as has been pointed out, which would obviously involve additional time and the additional cost of going to court.
We need to bear it in mind that the Bill is about bringing forward proportionate measures to protect tenants. The golden thread running through all the measures on the private rented sector is that we are trying to improve the tenant’s lot and tenant protection. At the same time, however, there is a balance between tenant protection and the needs of the landlord—the person who invests in property to house people. The hon. Gentleman and the Labour party need to consider that the measures are a proportionate way to redress that balance, particularly where tenants are clearly not paying their rent and not living at the property.
Peter Dowd
I completely accept the spirit in which the Minister suggested that the burden on local authorities will be too great for them to become involved, but does he not agree that it would be even greater if the person was evicted? It is a case of a stitch in time saves nine in relation to the proposal.
Mr Jones
What the hon. Gentleman and several other Labour Members do not consider is that the measure is designed for a situation in which a property has been abandoned. It has not been put forward to allow landlords to try to fast-track the eviction of tenants who are living in a property or tenants who are paying their rent. It is important for the Committee to remember that.
Let me make another point about the section 21 process. To go back to my point about freeing up property that has been abandoned so that people can be housed, the section 21 process involves the landlord giving the tenant two months’ notice. After that, however, the landlord would need to go to court to obtain a possession order. On average, that process takes four months, which seems an excessive amount of time to get a property that has clearly been abandoned back into use.
Teresa Pearce
The Minister mentioned that the clause would mean that landlords did not have to obtain a possession order. However, under the Protection from Eviction Act 1977, a possession order is needed to recover possession. Will the clauses override that legislation?
Mr Jones
That is a very good point, and I will cover it in a moment when I come to the 1977 Act, which is very pertinent to a number of the questions Opposition Members have raised.
First, however, I want to cover some of the other questions that have been raised. There was a question about warning notices. If a notice is not served on a tenant in person, it must be left at or sent to the premises and to every other address the landlord has for that tenant. In addition, it must be sent to any email address the landlord has for the tenant. If the tenant did not receive the letters, a claim could be brought for unlawful eviction, and the landlord would need to prove that the letters had been properly delivered. We will come on later to Government amendments that will further strengthen the process.
Grahame M. Morris
I am grateful to the Minister for answering the questions raised, but will he reflect on this? It is perfectly possible for a landlord to assume a property has been abandoned, but it may well be that the tenant is in ill health and not in a position to answer the door. I am not convinced the protections are sufficient to address that specific issue.
Mr Jones
It is clear that a landlord who knows the abandonment procedure will know they are going beyond the letter and spirit of the provisions if they do what the hon. Gentleman suggests. As we have identified, there is legislation in place, in particular the 1977 Act, which protects people in that sense.
As for the suggestion that the implied surrender process means that abandonment provisions are not required, there is an existing common-law route of implied surrender, but it can be used only where a landlord is clear that the tenant has definitely left the property—for example, when they have removed all their possessions and returned the keys to the property. Our abandonment procedure will help landlords where a tenant suddenly disappears and stops paying rent by providing a process for landlords to confirm whether the property has actually been abandoned.
That brings me to the Protection from Eviction Act 1977. Any landlord who abuses the process we are introducing by not giving proper warning and repossessing the property when they know that it has not been abandoned will be liable to prosecution under the 1977 Act. Again, the prosecuting authority will usually be the local housing authority, and the tenant can apply to the county court for damages.
Mr Jones
The hon. Gentleman should recognise that action under the 1977 Act would be a criminal process, and would generally be driven by the local authority with responsibility for enforcing that legislation because it would be in a stronger position to do that than a potentially vulnerable tenant who had just been evicted illegally. The second route for the tenant, on the basis of the contract between the tenant and the landlord, would be a civil legal matter. To my knowledge, under both the current legal aid system and that operated by the previous Government, there was no provision for people to receive legal aid support for such civil matters. I hope that answers the hon. Gentleman’s question sufficiently.
Teresa Pearce
As a general point, when someone enters into a tenancy, that is a legal document that is binding on both sides. Is the Minister not at all concerned that these provisions will do away with having an independent legal mind looking at whether the contract has been broken? Is he concerned that a landlord will be able to decide whether a premises has been abandoned without someone independent looking at whether the underlying contract between the two parties still exists? I am not a lawyer, by the way.
Mr Jones
I agree with the hon. Lady that we should not get drawn into discussing that type of scenario. A tenant who has not paid their rent would, by implication, have already broken the terms of the tenancy, so the matter would not be as cut and dried as she suggests. Nevertheless, I appreciate her concern for tenants, which is why we have ensured that the abandonment provisions include measures that will create a significant process that any landlord who wants to recover their property under abandonment will have to follow properly. If they do not follow that process, there will be significant routes to rectify the position.
Later on, I am likely to make further comments demonstrating how, following the Bill’s publication, we are strengthening the tenant’s position further, but at this point, in the spirit of the comments I have made and the questions I have answered, I hope that the hon. Lady will withdraw the amendment.
Teresa Pearce
I thank the Minister for some of the reassurances he has given, but I still believe that having the local authority look at a claim of abandonment would be a good safety net in many ways. First, it would alert the local authority early on to the fact that someone was about to be evicted. Secondly, it would deter rogue landlords from using this route. Thirdly, it would mean that local authorities could get a better idea of what their private rented sector was like and whether there were not only rogue landlords but rogue tenants. It is important for local authorities to know that, so I will be pushing the amendment to a vote.
Question put, That the amendment be made.
The Chair
I agree: it was a full and frank debate.
Question put and agreed to.
Clause 49 accordingly ordered to stand part of the Bill.
Clause 50
The unpaid rent condition
Mr Jones
I beg to move amendment 116, in clause 50, page 22, line 20, at end insert—
‘( ) If the unpaid rent condition has been met and a new payment of rent is made before the notice under section 49 is given, the unpaid rent condition ceases to be met (irrespective of the period to which the new payment of rent relates).’
This amendment ensures that a landlord cannot rely on old arrears of rent to recover premises if the tenant has since made a payment of rent.
Mr Jones
Clause 50 concerns the rent arrears that must have accrued before a landlord may serve a notice ending a tenancy under clause 49. The general rule is that at least eight weeks, or two months, of rent must be unpaid. That is known as the unpaid rent condition.
Amendments 116 and 117, which are in the name of my hon. Friend the Housing and Planning Minister, provide additional safeguards for tenants and landlords with regard to the unpaid rent condition. Amendment 116 will ensure that only if arrears continue to accrue after the landlord serves the first warning notice under clause 51 may the landlord terminate the tenancy under clause 49. This means that if the tenant makes a payment during the warning period, even in respect of historic arrears, the unpaid rent condition would not be met and the tenancy cannot be ended.
Amendment 117 provides that the unpaid rent condition can be met only if the unpaid rent is rent that was lawfully due. The amendment will ensure that a landlord cannot rely on arrears of rent where the rent is not treated as payable because the landlord has failed to comply with certain obligations.
Amendment 116 agreed to.
Amendment made: 117, in clause 50, page 22, line 20, at end insert—
‘( ) In this section “rent” means rent lawfully due from the tenant.’—(Mr Marcus Jones.)
This is intended to exclude cases where, for example, rent has become due under the terms of a lease but it is unrecoverable because legislation provides that until certain requirements are met it is not to be treated as lawfully due.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Jones
The unpaid rent condition will be met if at the time the landlord ends a tenancy under the provisions in clause 49 the rent is in arrears by at least eight consecutive weeks if the rent is paid weekly or fortnightly, or by at least two consecutive months if the rent is payable monthly. Those are the most common rental periods in assured shorthold tenancies. However, if the rent is payable quarterly, at least one quarter’s rent must be in arrears by more than three months, while if the rent is payable yearly, at least three months’ rent must be in arrears by more than three months.
Mr Jones
I beg to move amendment 118, in clause 51, page 22, line 23, leave out
“the tenant and any named occupier two”
and insert “three”
This amendment requires a third warning notice to be given before a landlord can bring a tenancy to an end under clause 49. The third notice must be fixed to the premises (see amendment 119) and must be given towards the end of the warning period (see amendment 120). Amendment 121 gives power to specify the form of the third notice. Amendments 122, 123, 124 and 125 are consequential.
Mr Jones
Clause 51 concerns the warning notices that must be given to the tenant and any named occupiers before a tenancy can be terminated under clause 49. Amendment 118 introduces a requirement for a third warning notice to be given before a tenancy can be ended. Amendment 119 provides that the third notice must be fixed to a conspicuous part of the property, such as the front door. Amendment 120 requires the notice to be given at least five days before the end of the warning period, after which the landlord can terminate the tenancy under clause 49. Amendment 121 provides that the Secretary of State may, by regulations, specify the contents of the third warning notice. That will ensure the tenant knows what they must do next if the tenancy has not been abandoned. Amendments 122 to 125 are consequential to the introduction of the third notice requirement.
Amendment 126 introduces a requirement in clause 53 that the landlord must serve the first and second warning notices on the tenant, care of any person who has agreed with the landlord to guarantee the performance of the tenancy. As that person is likely to be close to the tenant and have a direct interest in ensuring that the tenancy is maintained and the rent payments kept up to date, they ought to be able to contact and encourage the tenant to respond to the warning notice if the tenancy has not been abandoned.
These important amendments ensure, together with other requirements in clause 51, that the tenant is given the greatest possible opportunity to respond to the landlord to confirm that the property has not been abandoned before the landlord is able to bring the tenancy to an end.
Amendment 118 agreed to.
Amendment made: 119, in clause 51, page 22, line 24, at end insert—
“( ) The first two warning notices must be given to the tenant and any named occupier using one of the methods in section 53(1) or (2).
( ) The third warning notice must be given by fixing it to some conspicuous part of the premises to which the tenancy relates.”—(Mr Marcus Jones.)
See Member’s explanatory statement for amendment 118.
Teresa Pearce
I beg to move amendment 108, in clause 51, page 22, line 32, leave out “8” and insert “12”
This amendment would extend the minimum amount of time needed to pass from 8 to 12 weeks before a landlord is able to recover an abandoned premises.
The Chair
With this it will be convenient to discuss amendment 109, in clause 51, page 22, line 38, leave out
“two weeks, and no more than 4 weeks”
and insert
“4 weeks, and no more than 8 weeks”
This amendment would extend the time periods of and between the two letters needed to evict a tenant suspected of abandoning the premises.
Teresa Pearce
These are probing amendments. Let me put it on record that I think the amendments we just agreed are actually quite good. [Hon. Members: “Hear, hear.”] I still believe, however, that this whole part of the Bill is open to abuse. I hope that it will be reviewed at some point and that if such abuse occurs, regulations will be brought in. Clearly, I am not as optimistic as the Minister about the behaviour of some landlords, particularly the ones in my constituency who I have seen threaten and abuse tenants, and access properties at any time of the day or night. That sort of person will not look at the safeguards in this part of the Bill, but will see it as an opportunity to act in an even more irresponsible way than they already do.
Amendment 108 would extend the minimum period that would need to pass before a landlord is able to recover abandoned premises. Amendment 109 would extend the time period between the two letters—I believe it may now be three—that are needed to evict a tenant suspected of abandoning a premises. I am truly concerned about abuse of the provisions in this part of the Bill. Landlords could use the proposals to evict tenants simply by writing them letters. They could also use the measures to evict someone as an act of revenge. If a tenant moves into a property that is not fit to live in and asks for repairs, the landlord might think, “This tenant isn’t going to be easy, so I’ll use this process to try to get rid of them.”
We appreciate the need for landlords to be able to recover truly abandoned premises and the fact that tenancy agreements are a two-way street. I appreciate the Minister’s argument that if someone does not pay their rent, they have clearly already broken their tenancy agreement. I have seen instances of that: for example, someone in my area who had a property of her own got married and moved in with her husband. Rather than sell her property, she decided to let it out. For an entire year, the tenant paid no rent at all, but she still had to pay the mortgage on that property. I therefore completely understand that there are situations of that sort that need addressing. The measures in the Bill may make the situation easier for landlords in that sort of position, but my fear is they may also make it easier for rogue landlords.
I am pleased that the Minister has added a provision to the Bill that requires a third wave of letters for the process, but it is still important to safeguard against abuse. Extending the minimum amount of time that has to pass before a landlord is able to recover an abandoned premises will mean that those with legitimate reasons for absence will be able to respond. That will help to safeguard against potential abuse.
One concern about the proposals that has been raised with me is the possible pressure they will put on local housing authorities, which may have a duty to house tenants following eviction, even if only in emergency accommodation. Under the current system, when faced with someone who is about to be evicted, those local housing authorities have time to plan their resources, so that they know that if a resident is going to be evicted they will be able to house them adequately in emergency housing. Under the proposals in the Bill, residents could be evicted with haste, putting further pressure on already pressed local housing authorities. The amendments would insert a bit more time into the process for recovering abandoned premises, which would, I hope, ease the pressure on local housing authorities.
Amendment 109 would extend the time period between the letters. Currently it is two weeks and no more than four weeks; we propose extending it to four weeks and no more than eight. That would be advantageous for a number of reasons. It would safeguard against error. A landlord could use the measures to kick out a legitimate tenant who is away on business, in hospital or on holiday; extending the time period between the letters would mean that there was less chance of that happening. It would also safeguard against abuse. It would allow tenants more time to lodge a query with the landlord or seek housing advice. As there is no court involvement in the process, it would give the tenant more time to assess their options.
It is clear that the proposals in the Bill will have the power to affect all tenants in the private rental sector. All landlords will have these powers, open to abuse as they are, even though abandonment accounts for an estimated 1,750 occasions of tenancies ending a year. We hope that the rules will be got right, so that there are safeguards against abuse, and so that we allow landlords to recover abandoned premises where they need to, but do not allow them to evict tenants at their ease. That is the reason behind these probing amendments. I hope that the Minister will be able to give me some reassurance that those who could be abused will be protected by the law.
Mr Jones
The amendments seek to ensure that the minimum warning period before a landlord can recover an abandoned property would be 12 weeks and that a second warning notice would be served at least four weeks and no more than eight weeks after the service of the first.
I am happy to be able to reassure the hon. Lady and other members of the Committee that amendment 108 is unnecessary. It is already effectively the case under the Bill that the minimum period before a landlord can recover an abandoned property would be 12 weeks. The clauses are carefully drafted, but are complex, and, subject to Royal Assent, my Department will issue guidance for landlords to help them to understand the new process. It will therefore probably be helpful if I explain a little more to the Committee in that regard.
The process to recover an abandoned property takes at least 12 weeks because the second warning notice may be served only when at least eight weeks’ consecutive rent is unpaid. This second warning notice must be served at least two weeks and no more than four weeks after the first warning notice. This means that in practice the first warning notice could not be served unless at least four weeks’ rent was unpaid.
The first warning notice must specify the date of recovery of the property, which is at least eight weeks after the date when that notice is given. Given that the tenant will already have been at least four weeks in arrears, that provides a total period of at least 12 weeks from when the rent was last paid to the tenancy being brought to an end.
Amendment 109 would make changes to clause 51(6), which states:
“The second warning notice must be given at least two weeks, and no more than 4 weeks, after the first warning notice.”
The abandonment procedure that the Bill is introducing is intended to allow a landlord to recover a property that has been abandoned without the need to obtain a court order. As I have explained, we have introduced a number of safeguards to ensure that a landlord could use the process only if a tenant had genuinely abandoned the property.
A landlord will be able to recover a property only when warning notices have been served on the tenant, and a copy of the first, second and third warning notices have been sent, care of any guarantor. It will not be possible in practice for the first warning notice to be served unless at least four consecutive weeks’ rent is unpaid; the second warning notice may be served only when at least eight weeks’ consecutive rent is unpaid. The second warning notice will have to be given at least two weeks and no more than four weeks after the first warning notice.
It is clear that landlords will have to go through a lengthy and detailed process before they can regard a property as being abandoned. In addition to the requirement for at least eight consecutive weeks’ rent to remain unpaid, they will also have to serve a series of notices on the tenant and, where applicable, any other named occupiers.
We have also sought to strike the right balance between ensuring that tenants are given adequate notice that the landlord believes the property may have been abandoned, with an opportunity to respond if they have not abandoned it, and ensuring that landlords do not have to wait an unreasonable time before being able to recover the property.
The requirement for a second warning notice to be served at least four weeks and no more than eight weeks after service of the first would introduce further delays into the process of recovering an abandoned property, depriving the landlord of an income and a family of the chance to occupy a property that would, by definition under the provisions in question, be empty. I hope that that explanation will help hon. Members and that the hon. Member for Erith and Thamesmead will agree to withdraw her amendment.
Teresa Pearce
I thank the Minister for the explanation. As I mentioned, this was a probing amendment. Therefore, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Ordered, That further consideration be now adjourned. —(Julian Smith.)
Housing and Planning Bill (Ninth sitting)
(8 years, 5 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text
The Chair
I have reflected on Mr Thomas’s earlier point of order about information and its availability and, after liaising with the Department, I have been informed that the matter is one not for the Chair, but for the Government. I take note that the Minister drew attention to some information, but perhaps in the next couple of days he will reflect on what information is required and write to the members of the Committee. That would be helpful, Minister.
The Minister for Housing and Planning (Brandon Lewis)
Sir Alan, I will happily let the hon. Member for Harrow West have the website address of the National Housing Federation, where the information can be found.
Mr Gareth Thomas (Harrow West) (Lab/Co-op)
I am very grateful to the Minister for the spirit of his response to my point of order this morning. I have been on the website and I can see information about the offer that was made to the Government in October, but no additional information appears to be there about the detail of further discussions or, specifically, of the arrangements with the five housing associations that are proceeding with the pilot. If the Minister were able to give us further information ahead of Tuesday’s sittings, that would be extremely helpful.
Brandon Lewis
Obviously we are now somewhat outside the scope of the Bill, but I am sure that there will be information over the next few months as we answer questions and make Government statements about what we are doing. The National Housing Federation and the housing associations themselves will also be publishing such information. I am pleased that, as of last night, the five pilots are in place and people may go and register for the right to buy their own home.
Teresa Pearce (Erith and Thamesmead) (Lab)
I beg to move amendment 107, in clause 51, page 22, leave out lines 34 to 37.
This amendment removes subsections 4 and 5 of Clause 51 from the Bill which would remove the ability for a landlord to deliver the first of the two letters needed to evict a tenant suspected of abandoning the property before they have missed rent.
The purpose of the amendment is to get some clarification from the Government. I realise that they have their own amendment to improve this part of the Bill slightly, but we have moved our amendment because the Bill states:
“The first warning notice may be given even if the unpaid rent condition is not yet met”,
which appears to be against the spirit of what the Minister was saying this morning.
If a warning notice may be given without the unpaid rent condition being met, a warning notice could be given when the tenant has done nothing wrong. We were a little confused about that and would welcome clarification and some reassurance about why the provision is in the Bill and what it is intended to do. As we said earlier, we are talking about only a few tenancies a year, but the measure seems to be outside the scope of what the Minister said earlier.
Will the Minister tell us something else? In discussion of earlier amendments, the Minister did not answer the question of what pressure or lobbying had happened. Why is the provision in the Bill? The problem is a small one, for a small number of people, so although I understand everything that has been said about the problems for landlords, I wondered whether there was another reason for the measure.
For example, in my area we have two local courts, both under severe pressure. One is very inefficient and people find it difficult to get their cases through the court, so I wondered whether the provision was in the Bill because of a problem with the court, or for another reason. The Minister did not really mention that earlier, so may we have some clarity on what subsection (4) is meant to do and why it is there?
The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)
I hear what the hon. Lady says and her intentions are important, but I reassure her and the Committee that the amendment is unnecessary, because the case is already covered by the Bill as drafted.
The clauses are carefully drafted, but no doubt seem complex. The second warning notice cannot be served unless there is unpaid rent of at least eight consecutive weeks. Given that the second warning notice must be given at least two weeks and no more than four weeks after the first warning notice, in practice the first warning notice cannot be served unless there is unpaid rent of at least four consecutive weeks.
The hon. Lady is looking at me in a rather perplexed fashion, but I understand what she is saying and, if she reads my comments and compares them carefully with the two subsections that she is looking to the Committee to remove from the Bill, I am sure she will realise that no consequence of our measure will diminish the position of a tenant. As I have explained, we are keen to strengthen rather than diminish the position of tenants in the Bill.
The hon. Lady mentioned her two courts in connection with the reason for the provisions. The reason why we are introducing the provisions is to bring forward at the earliest practicable opportunity, in a way that protects tenants, a means to bring properties that have been abandoned back into use so that people may be housed in them. That is the purpose of the chapter. There is no ulterior motive to reduce the number of times that people go to court. I hope she accepts my explanation in the spirit in which it is intended and withdraws the amendment.
Teresa Pearce
I thank the Minister for his explanation. Without meaning to give offence, I will probably have to read back what he said to convince myself. It seems confusing that a warning notice may be given without the unpaid rent condition being met, but the Minister says that that would not happen. It is, however, complex and I am pleased about the third notice, which is an improvement. In that spirit, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 120, in clause 51, page 22, line 39, at end insert—
‘( ) The third warning notice must be given before the period of 5 days ending with the date specified in the warning notices under subsection (2)(b).’
See Member’s explanatory statement for amendment 118.
Amendment 121, in clause 51, page 22, line 39, at end insert—
‘( ) The Secretary of State may make regulations setting out the form that the third warning notice must take.’—(Mr Marcus Jones.)
See Member’s explanatory statement for amendment 118.
Clause 51, as amended, ordered to stand part of the Bill.
Clause 52
Reinstatement
Question proposed, That the clause stand part of the Bill.
Mr Thomas
I thought I knew the direction of the Minister’s remarks, so rather than necessarily having to make a formal speech in a clause stand part debate, I thought I might simply intervene to ask a question and, I hope, not have to press matters further.
Subsection (2)—and, indeed, subsection (1)—states that the tenant must have “a good reason” to press for reinstatement. I wonder whether the Minister might set out on the record what those good reasons are. I say that in the spirit of him wanting to help tenants, as the clause implies, who have unfairly or wrongly had their tenancy terminated under section 49, and I ask in a context in which occasionally, debates when legislation is being introduced can be used to provide guidance to the courts about what the purpose in the Government and Parliament’s mind was behind particular clauses.
Simply, will the Minister set out in more detail than perhaps he was initially intending what constitute, in his mind, the good reasons that might see a tenant wanting to go to a county court to get a reinstatement order, and indeed, being successful?
Mr Jones
I thank the hon. Gentleman for that question. As he rightly points out, that would be a matter for the court, but to reassure him about the spirit in which the clause on reinstatement is intended, let me give him an example. A tenant may go away on holiday for a short period, during which they have a serious accident that possibly hospitalises or incapacitates them for some time. It may well be that that renders any contract with the landlord impossible for them to fulfil, and therefore, the courts may decide, on the basis of those extenuating circumstances that the tenant could not do anything about, that it would be right and proper to reinstate the tenancy. I hope that reassures the hon. Gentleman about the thinking behind the clause.
Mr Thomas
I apologise for detaining the Committee on this clause, which is helpful, as was the Minister’s example. He will be aware from our discussions this morning that a series of other examples were discussed, such as short prison sentences, someone being taken ill with a mental health condition, or someone perhaps with the early onset of an incurable condition such as Alzheimer’s. Does the Minister see those examples, similarly, as a good reason for the county court to reinstate the tenancy?
Mr Jones
Although I understand where the hon. Gentleman is coming from, as I said—I have already given a reasonable example of where we are coming from in proposing the clause—it would be for the court to decide on the particular circumstances at a particular time and on whether they deem those circumstances as such that the tenancy should be reinstated.
Peter Dowd (Bootle) (Lab)
May I push the Minister on that and seek a bit more clarity? Take, for example, a person going into hospital on a section 2, which means detention for up to 28 days, and then that is transferred or transformed to a section 3, which means a much longer period of time. Ought we not to be making it clear that, in situations in which somebody is detained under the Mental Health Act 1983 and through due process, there should be an exemption specifically for the purposes of the clause?
Mr Jones
Again, it is for the court to decide in those circumstances and in any other circumstances whether or not a tenant should have their lease reinstated. I hear what the hon. Gentleman has said, but I do not, in our deliberations, see an amendment that he has tabled to make the case for what he is saying. In the spirit of the clause, it is for the court to decide, and I am sure that, in the majority of cases, the court will make the right decision for the tenant involved.
Question put and agreed to.
Clause 52 accordingly ordered to stand part of the Bill.
Clause 53
Methods for giving notices under sections 49 and 51
Amendments made: 122, in clause 53, page 23, line 11, at end insert—
“( ) This section sets out the methods for giving—
(a) a notice under section 49;
(b) the first or second warning notices under section 51.”
See Member’s explanatory statement for amendment 118.
Amendment 123, in clause 53, page 23, line 12, leave out—
“A notice under section 49 or 51”
and insert “The notice”.
See Member’s explanatory statement for amendment 118.
Amendment 124, in clause 53, page 23, line 14, leave out—
“A notice under section 49 or 51 that”
and insert “If the notice”.
See Member’s explanatory statement for amendment 118.
Amendment 125, in clause 53, page 23, line 15, after “person” insert “it”
See Member’s explanatory statement for amendment 118.
Amendment 126, in clause 53, page 23, line 21, at end insert—
“, and
( ) in the case of a tenant, leaving it at or sending it to every postal address in the United Kingdom of every guarantor, marked for the attention of the tenant.
‘( ) In subsection (2) “guarantor”, in relation to a tenant, means a person who has agreed with the landlord to guarantee the performance by the tenant of any of the tenant’s obligations under the tenancy.”—(Mr Marcus Jones.)
This amendment requires certain notices to be sent to a tenant’s guarantors, marked for the attention of the tenant. This requirement applies unless the tenant has been given the notice in person.
Mr Jones
As I have mentioned throughout our debate on the abandonment provisions, it is important that the landlord demonstrates he has given the tenant and any named occupier every opportunity to respond to warning notices. It is also important to try to ensure that the notice under clause 49 ending the tenancy is brought to the attention of the tenant so that they are notified of the fact, and so that the former tenant can take appropriate action—for example, reclaiming anything the landlord has stored or, where appropriate, notifying the council. The landlord must serve three written warning notices before he can end the tenancy under clause 49. The third notice must be affixed to a conspicuous part of the premises and be in a form prescribed by the Secretary of State, as I have explained.
Clause 53 provides that the first two warning notices and the notice ending the tenancy can be delivered to the tenant or named occupier in person. In practice, that is unlikely to happen, given that they are likely to have disappeared on abandoning the property. Alternatively, the notices must be delivered to the tenant and any named occupier by leaving it at or sending it to the premises to which the tenancy relates, or by leaving it at or sending it to any other postal address in the UK that the tenant or occupier has given the landlord. They must also be served on the tenant care of any person who has agreed with the landlord to guarantee the tenant’s performance under the tenancy. Finally, the landlord must serve those notices by sending them to every email address the tenant or occupier has given the landlord.
Question put and agreed to.
Clause 53, as amended, accordingly ordered to stand part of the Bill.
Clauses 54 and 55 ordered to stand part of the Bill.
Clause 84
Assessment of accommodation needs
The Chair
Exceptionally, this hollow starred amendment, together with other hollowed starred amendments in the name of Teresa Pearce, has been selected.
Teresa Pearce
I beg to move amendment 136, in clause 84, page 34, leave out lines 19 and 20.
This amendment would retain sections 225 and 226 of the Housing Act 2004 regarding accommodation needs of gypsies and travellers.
I thank you, Sir Alan, and the Committee for allowing this hollow starred amendment to be considered. Before I start, I would like to express my personal interest in this subject. Thamesmead was built on the marshlands on the south of the Thames, where many marsh Gypsies and Travellers have historically lived, so we have a large Traveller community in my constituency of Erith and Thamesmead, and this is therefore something I feel quite strongly about.
Amendment 136 would lead to the retention of sections 225 and 226 of the Housing Act 2004. Section 225 requires every local authority, when carrying out a review of local housing needs under section 8 of the Housing Act 1985, to carry out an assessment of the accommodation needs of Gypsies and Travellers who reside in the area. Section 226 provides for the Secretary of State to issue guidance on how local housing authorities can meet those needs. Clause 84 will remove the requirement for local authorities to make an assessment of the accommodation needs of Gypsies and Travellers when considering local housing need.
There has clearly been, and continues to be, a need to recognise the differing housing needs of Gypsies and Travellers. Anyone with a basic understanding of Gypsies and Travellers would appreciate that they have different housing needs. The impact assessment states that the aim of the policy is to
“ensure that all members of the community are treated equally”;
but we can treat people equally only if we fully assess their needs. People should be treated equally, but without a needs assessment, I do not think that can happen. The assessment also states:
“The Government recognises a perception of differential treatment in favour of Gypsies and Travellers.”
There may be such a perception, but surely we should legislate on the basis not of perceptions but of facts.
The Committee has seen a wealth of evidence about how devastating the impact on Gypsy and Traveller communities could be. The Joseph Rowntree Foundation noted:
“The former Commission for Racial Equality concluded in 2006 that Gypsies and Irish Travellers are the most excluded groups in Britain today”.
Provision for the accommodation needs of Gypsies and Travellers continues to be lacking, and the foundation commented:
“The Equality and Humans Rights Commission, in reviewing activity since the 2004 Act, concluded that the overall rate of progress was slow, but that there were a number of positive aspects emerging, in terms of the types of sites being developed, and their permanence.”
The foundation went on to call for
“a continued focussed assessment of this community’s particular needs”
and for the requirement to assess Gypsy and Traveller needs to be retained.
The national charity Friends, Families and Travellers submitted evidence to the Committee. It is concerned that the provisions that are in place weaken the understanding of the specific accommodation needs of Gypsies and Travellers. The 2007 Department for Communities and Local Government guidance on Gypsy and Traveller accommodation needs assessments—that is a long title—states:
“In the past, the accommodation needs of Gypsies and Travellers…have not routinely formed part of the process by which local authorities assess people’s housing needs. The consequences of this have been that the current and projected accommodation needs of Gypsies and Travellers have often not been well understood.”
Friends, Families and Travellers is concerned that removing the requirement specifically to assess the accommodation need of Gypsies and Travellers will result in an even higher rate of homelessness in the communities as even fewer sites to meet their assessed need will be delivered, and even less land will be allocated in local plans. It highlights the concern that, as a result of the shortage of authorised sites, Gypsies and Travellers will have no alternative but to camp in an unauthorised manner, which has an impact not only on their community but on surrounding settled communities. Without authorised sites, they will have difficulty in getting access to running water, toilets, refuse collections, schools and employment opportunities. Local authorities already spend millions of pounds each year on unauthorised encampments, in legal costs, evictions, blocking off land from encampment and clear-up costs. Friends, Families and Travellers highlights a lose-lose situation, where Gypsies’ and Travellers’ needs are not assessed or met, and local communities are affected as a consequence.
The Community Law Partnership also expressed concern about the impact of the clause. It is concerned that Gypsy and Traveller accommodation needs will be
“buried within general housing need.”
It highlighted the fact that Gypsies and Travellers
“are traditionally hard to reach groups, and as such require focused guidance for local authorities to assess their needs.”
It is also concerned that there has not been consultation on the proposals, and questions the recent consultation on planning and Travellers.
Mr Stewart Jackson (Peterborough) (Con)
Does the hon. Lady agree that good local authorities that plan ahead put arrangements in place, by way of emergency stopping places, which allow, in extremis, a number of Gypsies and Travellers to reside there temporarily? Although it takes time and is subject to consultation, which can be very fraught, that is the case with many authorities.
Teresa Pearce
That is the case with good local authorities but, as we all know from experience, some local authorities are better than others. We want people to be treated equally, no matter which local authority they fall within.
The London Gypsy and Traveller Unit is also concerned at the intention to,
“incorporate the needs of Gypsies and Travellers within the general housing needs assessments.”
It even produced three short films to raise awareness of the proposed changes within the Gypsy and Traveller community. It believes that,
“general housing needs studies such as Strategic Housing Market Assessments are unable to pick up the needs of marginalised, hard to reach communities such as Gypsies and Travellers.”
It adds that,
“these studies are based on demographic projections which are not disaggregated by ethnicity”
and often on limited direct surveys, which are likely to miss off the entire Gypsy and Traveller population. The unit believes that as
“Gypsy and Traveller site provision is generally faced with enormous opposition, it is crucial to have in place positive policies that recognise the full extent of need, as well as site allocations which enable the delivery of Gypsy and Traveller accommodation in suitable locations.”
The National Federation of Gypsy Liaison Groups—the umbrella group for liaison groups across the UK —submitted written evidence questioning the proposal’s compatibility with the Human Rights Act and the Equality Act 2010. Heine Planning Consultancy submitted written evidence supporting the retention of a duty to consider Traveller housing need and expressing further concerns at the impact of removing that requirement.
Michael Hargreaves, of Michael Hargreaves Planning, raised concern about the implications of deleting sections 225 and 226. He raised concern about the confusion and uncertainty for local authorities and about the impact on Gypsies and Travellers, and he believes the change will lead to anger and frustration in that community. He supports widening, not narrowing, the support to meet Travellers’ and Gypsies’ housing need.
The Derbyshire Gypsy Liaison Group believes that it is important that we have a mechanism to assist Gypsy and Traveller families with their accommodation needs, and that the proposals will worsen the housing situation for those communities.
The Traveller Movement, a leading national charity working in partnership with the community, highlights a number of concerns. All available data show that Gypsies and Travellers do not receive favourable treatment in the planning system. The Traveller Movement highlights a chronic shortage of Traveller sites and says that that shortage will grow in the future. It notes:
“Gypsies and Travellers already experience some of the poorest social outcomes of any group in our society and accommodation is a key determinant of these wider inequalities.”
It questions the legal implications of the proposals, which I will come to in a moment, and it does not support the removal of sections 225 and 226.
We also saw submissions from Ruston Planning Ltd, Hereford Travellers Support and the all-party group on Gypsies, Travellers and Roma, which raised further concerns about the proposals. In addition, we saw a written submission from the Showmen’s Guild of Great Britain, the main representative body for travelling showpeople, which shared its extreme concern about these proposals and their impact on its members’ work. I would be grateful if the Minister could outline the impact on travelling showpeople. I would also be grateful for any reassurances he can give the guild and showpeople that the provisions will not impact them.
Policy on this issue is different across the nations. The Welsh Government are taking a different approach, introducing a statutory duty on local authorities to facilitate site provision for Gypsies and Travellers.
The amendment is necessary to continue support for Traveller and Gypsy communities, which are some of the most excluded groups in Britain. There are also legality issues, which I hope the Minister will be able to respond to.
The Community Law Partnership highlights the public sector equality duty. Romany Gypsies and Irish Travellers are recognised as ethnic minorities, and the Government acknowledge that there is a shortage of suitable sites for them, so will the Minister comment on the potential under-provision of suitable sites, given that the needs of these groups will not be properly assessed?
The European Court of Human Rights has held that the UK has an obligation to facilitate the traditional way of life of Gypsies and Travellers. I shall be grateful if the Minister can confirm whether the removal of sections 225 and 226 would go against that.
Our amendment would ensure the retention of sections 225 and 226. That would ensure that Gypsies’ and Travellers’ housing needs continue to be assessed by local authorities. That would make sure that safe sites can continue to be identified for Gypsies and Travellers, avoiding the lose-lose situation in the Bill, where an under-represented group faces the prospect of its housing need being swallowed up by general housing need.
As it stands, the clause would lead to many unintended consequences: a shortage of authorised sites for Gypsies and Travellers; a rise in unauthorised sites; less safety for Gypsies and Travellers; and greater pressures on local authorities and local communities. I therefore hope the Committee will consider the amendment.
Mr Jackson
I rise to oppose the hon. Lady’s position and to support the Government. The Government’s position is quite courageous, because this is obviously an incendiary issue, not least at local level. We in the east of England have been bedevilled over the years by unauthorised and illegal encampments. Indeed, I have had some choice words with my own local superintendent, who has failed to properly use his powers under the relevant legislation, even when emergency stopping places have been provided for Traveller families. The position in the north of Cambridgeshire is not quite as bad as it has been in the south, around Cambridge, but it has nevertheless been very difficult.
Grahame M. Morris (Easington) (Lab)
I fully accept that this is a controversial measure, not least for the settled community—as much in Easington as in Peterborough, I am sure. Does the hon. Gentleman accept that—perhaps by accident—the Government might be making things worse, if the outcome is that fewer temporary or permanent sites are allocated by local authorities?
Mr Jackson
I am just developing my comments, and I will not detain the Committee too long. But let us establish something right from the outset. The general housing needs of the population, which will reflect the social, economic and demographic profile of a particular district, borough, city, unitary or county council, are reflected in the housing plan and the decisions taken by an authority based on the evidence available from professional officers. That evidence is given to elected members so they can bring forward the county structure plan, which is now the regional spatial strategy—the local district plan. That will take into account the preponderance in favour of local authorities having to house Gypsy and Traveller families.
Were the legislation to be changed along the lines set out by the hon. Member for Erith and Thamesmead, it would single out a particular group, and circumscribe the autonomy of the local housing authority and its authority to make reasonable changes and accommodations for particular individuals. That would exacerbate the resentment—and sometimes anger—among the settled community, who would feel that their housing needs were being disregarded in favour of a special group. Whether we agree with that or not, that is the perception there would no doubt be.
I say to the hon. Lady that I agree that the Government would be wise to look at the issue of accommodation for Gypsies and Travellers, but let us see whether we can nuance the existing legislation, which, as I have mentioned, gives rise to the provision of emergency stopping places. If there is a proper consultation, then let us all be honest: in the London Borough of Greenwich, in Northumberland and in Durham, there will be brownfield sites, which are not in commercial or industrial use and may be near an urban centre, that could be used as emergency stopping places.
I am not convinced that local authorities have been sufficiently robust in investigating those options. Perhaps the Department for Communities and Local Government has more to do to encourage them to consult and to look at best practice. It has been a tortuous process for my city council, not least because many of the councillors in the nice leafy villages to the west of Peterborough did not want them there; they wanted them in the east of Peterborough, which I represent. I lost out and three of our emergency stopping places are now in the east of Peterborough. We have borne that burden for the good of the community, and more local authorities can learn from their neighbours in that respect.
Teresa Pearce
I am listening carefully to the hon. Gentleman. He seems to be saying that local authorities should be pressed to do more, but surely they would be so pressed by getting them to assess housing needs. That is not contradictory.
Mr Jackson
That is if one assumes that local authorities are not already discharging their proper statutory functions in providing appropriate housing, where they can, with registered providers to everyone who needs it in their local community. My difficulty with the hon. Lady’s amendment is that it singles out a particular group and would exacerbate community tension. I am not convinced that in practical, pragmatic terms it would deliver more housing for that group. I agree that more work needs to be done, but we need a less prescriptive, less heavy-handed approach. For that reason, I will resist the amendment.
Grahame M. Morris
I do not intend to detain the Committee for too long, but I want to make a couple of brief points and put a number of questions to the Minister. I am not completely at odds with the hon. Member for Peterborough, and I recognise the potential for discord and disruption among the settled community, to which I am no stranger in Easington.
I should also declare an interest in that I am an honorary member of the Showmen’s Guild. The Travellers group that we are referring to is not homogeneous, and the Showmen’s Guild, which is familiar to many of us and travels around the country establishing fairs and particular events at particular times, tends to cause many fewer problems. In fact, there are virtually no problems and it is an asset in many respects. The amendment moved by my hon. Friend the Member for Erith and Thamesmead is reasonable and sensible, because the deletion of sections 225 and 226 of the Housing Act 2004, regarding the accommodation needs of Gypsies and Travellers, may create more problems through the law of unintended consequences than the Committee or the Government intend.
Mr Jackson
I have to say that I had not imagined that the hon. Gentleman had run away from the circus to join the Whips Office. Does he agree that the description is a catch-all because there is an entirely different cultural predisposition in terms of housing need between, say, Czech or Slovak Roma and Irish showpeople? They cannot really be lumped together, which is why they need to be considered as disparate groups on a local basis.
Grahame M. Morris
I do accept that it is a disparate group, but even though it is a relatively small group compared with the settled community, I have had experience of disruption and antisocial behaviour in my constituency arising from a lack of temporary Traveller sites, and I think it is beholden on the local authority to make provision. That might not be a popular view, but it is part of the solution in the long run.
I recognise the hon. Gentleman’s description of spending many hours with the police and the local authority in trying to ameliorate the impact of temporary horse fairs and so on that attract a large influx of Travellers from across the country. The problem, however, arises from a failure to provide permanent or, indeed, temporary sites, which is particularly acute during the summer months. Is the Minister concerned that the change proposed to the assessment of Gypsies’ needs will reduce the number of sites and lead to a shortage of accommodation for the Traveller community if they are assessed only as part of general housing need and not with their specific needs in mind?
Without wishing to detain the Committee further, I would appreciate it if the Minister outlined precisely what he seeks to achieve by removing the requirement for local authorities to adequately address the travelling community’s needs. Do we not risk worsening the problem of unauthorised encampments?
Dr Roberta Blackman-Woods (City of Durham) (Lab)
My hon. Friend is raising the extremely important issue, which we both felt in our constituencies over the summer, of problems with illegal encampments for travelling people, who fall into various categories, because of a lack of either temporary or permanent sites. It is important to ensure proper assessment of all communities’ needs and proper planning so that there are enough sites and we do not end up with illegal encampments, which can be unpleasant for everyone.
Grahame M. Morris
I agree. That was the point I was trying to make, albeit in a rather laboured and long-winded fashion. Let me conclude by reminding the Committee that Catriona Riddell, the strategic planning convenor for the Planning Officers Society, said that there is real concern about councils misinterpreting the new rules. She said that the change is
“almost like handing local authorities, which are reluctant to plan for travellers, an excuse not to do it.”
That warning should ring in our ears before we delete the provision in the Housing Act 2004.
Brandon Lewis
Before I touch on the amendments directly, may I say that I appreciate the opening remarks made by the hon. Member for Erith and Thamesmead? I was happy to accept the idea of debating the amendment today and, as I said to the hon. Member for City of Durham, I am happy to flex the agenda next week to suit their request for debates and time to be spent on certain parts of the Bill. I am particularly pleased that we are considering the amendment, because it has opened my mind to the whole new world of the talents of the hon. Member for Easington. My mind boggles at what those talents might be—[Interruption.] We are getting a short demonstration now—I look forward to popping into the Labour Whips Christmas party to see him in action.
On a more serious note, I support the intention of the hon. Member for Erith and Thamesmead in the amendment to retain a duty on local authorities to assess the accommodation needs of Gypsies and Travellers, so I want to be clear: the clause does not remove that duty. As hon. Members have said—and, in particular, in the light of the closing remarks of the hon. Member for Easington—it is right that planning authorities understand that the clause does not remove that duty. Rather, we seek to remove any possible perception that because Gypsies and Travellers have specific mentions in legislation, they somehow receive more favourable treatment.
Planning law and planning should treat everyone equally and fairly. The clause makes it clear that the needs of those persons who reside in or resort to the area with respect to the provision of caravan sites or moorings for houseboats are considered as part of the review of housing needs. That would include all those who are assessed at present and potentially those who simply choose to live in a caravan, irrespective of their cultural traditions or whether they have ever had a nomadic way of life.
We want local authorities to assess the needs of everyone in their communities. Our clause emphasises that Gypsies and Travellers are not separate members of our communities, and it takes on board the points made by my hon. Friend the Member for Peterborough and the hon. Member for Easington: that local authorities must properly assess the needs of all in their community, with reference to their community. Local housing authorities will be able to consider how best to assess that need, whether as a whole or to provide individual assessments for specific groups of people. I hope that that deals with the point that was made. However, we do wish to assist local authorities in meeting their duties and will therefore be happy to consider incorporating any necessary elements of the current “Gypsy and Traveller Accommodation Needs Assessments Guidance” in wider planning guidance, to which local authorities must have regard.
Teresa Pearce
I thank the Minister for his reassurances. I am still concerned about there not being a provision in the legislation to make local authorities do something. Not all local authorities act in the same way, but I am minded to accept the reassurances given. I look forward to seeing further evidence as we go forward, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 84 ordered to stand part of the Bill.
Clause 85
Licences for HMO and other rented accommodation: additional tests
Brandon Lewis
I beg to move amendment 127, in clause 85, page 34, line 26, leave out subsection (3) and insert—
“(3) In section 66 (tests for fitness and satisfactory management arrangements: houses in multiple occupation)—
(a) after subsection (1) insert—
‘(1A) A local housing authority in England must also have regard to any evidence within subsection (3A) or (3B).’;
(b) in subsection (2), in paragraph (c), after ‘tenant law’ insert ‘(including Part 3 of the Immigration Act 2014)’;
(c) after subsection (3) insert—
‘(3A) Evidence is within this subsection if it shows that P—
(a) requires leave to enter or remain in the United Kingdom but does not have it; or
(b) is insolvent or an undischarged bankrupt.
(3B) Evidence is within this subsection if—
(a) it shows that any person associated or formerly associated with P (whether on a personal, work or other basis) is a person to whom subsection (3A)(a) or (b) applies; and
(b) it appears to the authority that the evidence is relevant to the question whether P is a fit and proper person to be the licence holder or (as the case may be) the manager of the house.’
(4) In section 70 (revocation of licences), in subsection (2), in the words after paragraph (c)—
(a) for ‘Section 66(1) applies’ substitute ‘Section 66(1) and (1A) apply’;
(b) for ‘it applies’ substitute ‘they apply’.”
This amendment, together with amendment 128, ensures that amendments made by clause 85 apply only to England.
Brandon Lewis
Clause 85 amends the fitness test applied to persons who apply for licences to let a house in multiple occupation or subject to selective licensing. It adds criteria to those that local housing authorities must currently take into account under sections 66 and 89 of the Housing Act 2004. Amendments 127 and 128 are minor and technical amendments to ensure that the additional criteria apply only to England.
Amendment 127 agreed to.
Teresa Pearce
I beg to move amendment 137, in clause 85, page 34, line 37, at end insert—
“(g) has a current entry on the Database of Rogue Landlords and Letting Agents as set out in Part 2 of the Housing and Planning Act 2015.”
This amendment would deny those with an entry on the Database of Rogue Landlords and Letting Agents from being granted a licence for a HMO.
This amendment would ensure that those with an entry on the database of rogue landlords and letting agents are not granted a licence for a house in multiple occupation. Anybody subject to a banning order would not be allowed to be granted a licence for an HMO, but we would like that to apply also to those with an entry on the database of rogue landlords and letting agents. As we discussed at length on Tuesday, it is important that we crack down on rogue landlords, who drive down the whole private rented sector. We support measures to tackle those people, both to ensure the security and safety of tenants and to penalise criminal landlords. One way in which that could be furthered is by amending clause 85 to include those with an entry on the database of rogue landlords and letting agents, so that they would be denied a licence for an HMO.
Clause 85 currently amends previous legislation to include further measures in the fitness test for a landlord to be granted an HMO licence. We would like this further measure to be added to ensure that rogue landlords could not be granted HMO licences. I was encouraged to see the consultation document that the Government put out earlier this month on HMOs. No doubt I will respond to that in due course, but this amendment would assist in ensuring that those licensed to run an HMO were fit to do so.
As the Committee will be aware, a local housing authority may include other persons on the rogue landlords database, rather than applying for a banning order, in a case where a person’s offences are slightly less serious and the local authority considers monitoring of that person to be more appropriate than seeking a banning order. With this amendment, we seek an assurance that those people would not be considered for an HMO licence. It would have the added bonus of ensuring that the local housing authority checked with the rogue landlords and letting agents database to ensure that the applicant was allowed, which would ensure that nobody subject to a banning order slipped through.
If in future the database of rogue landlords and letting agents were to be expanded, it would provide further protection for tenants against such people. As discussed before, we are supportive of measures to tackle rogue landlords, both to ensure the security of tenants and to penalise criminal landlords. I believe that the amendment would help to drive up standards across the sector by protecting tenants in HMOs from such people. I therefore hope that the Committee will consider the amendment.
Brandon Lewis
I appreciate that the amendment would require a local authority to have regard to the fact that a landlord had been included in the database of rogue landlords and letting agents when considering an application from that landlord for a licence to operate a house in multiple occupation or for selective licensing.
If the Committee will bear with me for a few moments, I want to go into a bit of detail to give the hon. Lady a full answer. A local authority is already required to have regard to a range of factors when deciding whether to grant a licence. Those include whether the applicant has committed any offence involving fraud or other dishonesty, violence or drugs, practised unlawful discrimination, or contravened any provision relating to housing or landlord and tenant law.
That last factor—contravention of housing or landlord and tenant law—would include all the offences leading to inclusion in the database. The database will be a key source of information for local authorities when taking decisions on whether to grant a licence. Those safeguards are very important, as it is clearly essential that a local authority can be confident that a licence is granted only to a landlord who can demonstrate that they are a fit and proper person to operate a house in multiple occupation, or a property subject to selective licensing, and will not pose a risk to the health and safety of their tenants, many of whom may be vulnerable.
Grahame M. Morris
That is a very interesting point. Is the Minister effectively advising us that he considers someone who is a rogue landlord not to be a fit and proper person to hold a licence for a house in multiple occupation?
Brandon Lewis
As I have outlined, we want to ensure that the licence is granted only to a landlord who can demonstrate that they are a fit and proper person to operate a house in multiple occupation. To build on a good point raised by the hon. Member for Harrow West the other day, there was an example in my constituency over the summer when somebody contravened the law. I would make the case that that person should never have been allowed again to be a landlord in the first place, people having lost their lives when that person was previously a landlord. We all want to ensure that we do everything we can to stamp out the chance of that kind of individual ever being a landlord again.
If the hon. Member for Easington will bear with me, I want to go a bit further. Clause 85 includes two further safeguards by providing that in future a local authority would also be required to have regard to whether the landlord has leave to remain in the UK or is an undischarged bankrupt or is insolvent. The aim of the amendment is to ensure that local authorities fully consider the past behaviour of landlords and agents who apply for a licence.
The Government and I are extremely sympathetic to that aim. To do that, local authorities need access to information about the previous activities of the landlord and will need to share that information across local authority boundaries. The database will be an important step forward in sharing information about convictions for housing-related offences.
Having heard the strength of feeling in the Committee both today and previously, particularly on Tuesday, I want to look further at whether local authorities have access to the right information, beyond convictions, to enable them to make the right judgments about who is a fit and proper person to hold a licence. I hope that, with that assurance, the hon. Member for Erith and Thamesmead will agree to withdraw the amendment.
Mr Jackson
I would like to add briefly to the important point the Minister has made. Members of the Committee might have heard “World at One” a few weeks ago when it focused on high levels of immigration in the Peterborough constituency. They followed around a housing enforcement officer of 20 years’ experience, who found, in a two-bedroom house, a family comprising a mother on her own and eight children. That is pertinent because it is important to make the point that is no good for individual local authorities to collect those data if they do not cross-reference them with other regulatory and statutory bodies.
It is appalling not only that that mother was living with eight children in a slum, and a greedy, rapacious landlord was skimming money off the state and plunging them into misery; frankly, that lady should not have been in the country because she is a Slovak national. She was not exercising her EU free movement directive rights because she was not employed, self-employed, looking for work or a student. She should not have been in the UK accessing UK benefits. Over and above the housing issue, we need a much tougher and more robust regulatory framework to share information with organisations such as Border Force. I hope that we are able to do that in some way because, frankly, we want to drive some landlords out of the market, but we also want to ensure that the right people are in the country accessing the scarce public resources.
Mr Thomas
Very briefly, I want to press the point about the jurisdiction of the database. It clearly relates to England, but rogue landlords operating in the Gloucester area or on the borders of Wales might have properties in Wales. It might be similar with the border areas close to Scotland. It would be useful, as part of the Minister’s helpful commitment to look at how the database might be made even more robust, to think about co-operation with Welsh, Scottish and even Northern Irish housing authorities.
Teresa Pearce
I am reassured by the Minister’s comments. We all agree that we want to drive those sorts of people out of business, because of the suffering of their tenants and the impact on the communities in which they live—on schools and on the NHS. Slum landlords overcrowding properties is a problem in all constituencies, particularly in London. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 128, in clause 85, page 35, line 5, leave out subsection (5) and insert—
“(5) In section 89 (tests for fitness and satisfactory management arrangements: certain other houses)—
(a) after subsection (1) insert—
‘(1A) A local housing authority in England must also have regard to any evidence within subsection (3A) or (3B).’;
(b) in subsection (2), in paragraph (c), after ‘tenant law’ insert
‘(including Part 3 of the Immigration Act 2014)’;
(c) after subsection (3) insert—
‘(3A) Evidence is within this subsection if it shows that P—
(a) requires leave to enter or remain in the United Kingdom but does not have it; or
(b) is insolvent or an undischarged bankrupt.
(3B) Evidence is within this subsection if—
(a) it shows that any person associated or formerly associated with P (whether on a personal, work or other basis) is a person to whom subsection (3A)(a) or (b) applies; and
(b) it appears to the authority that the evidence is relevant to the question whether P is a fit and proper person to be the licence holder or (as the case may be) the manager of the house.’
(6) In section 93, in subsection (2), in the words after paragraph (c)—
(a) for ‘Section 89(1) applies’ substitute ‘Section 89(1) and (1A) apply’;
(b) for ‘it applies’ substitute ‘they apply’.”—(Brandon Lewis.)
See Member’s explanatory statement for amendment number 127.
Clause 85, as amended, ordered to stand part of the Bill.
Clause 86
Financial penalty as alternative to prosecution under Housing Act 2004
Teresa Pearce
I beg to move amendment 138, in clause 86, page 35, line 24, leave out “as an alternative” and insert “in addition”
This amendment would allow for a financial penalty as an addition, rather than as an alternative, to prosecution.
The amendment is a probing one. I would like to query this with the Minister. The amendment would amend clause 86. The clause introduces schedule 4, which amends the Housing Act 2004 to allow financial penalties to be imposed as an alternative to prosecution in certain offences. The amendment would ensure that financial penalties could be sought in addition to prosecution, rather than as an alternative.
On Tuesday in Committee, there appeared to be a growing consensus that the Bill could go further to penalise criminal landlords to deter them from committing crimes and from returning to the sector, as well as providing an adequate punishment for the offence. I hope the amendment might meet with a similar consensus.
We support the measures to tackle rogue landlords and to penalise criminal landlords. By seeking further provisions to penalise criminal landlords, we would ensure that they do not get away with the offences they commit. At present, the Bill allows for a financial penalty to be sought instead of criminal prosecution in cases from failure to comply with improvement notices to letting an unlicensed HMO. Clearly, there will be cases where a financial penalty will be more appropriate, as well as ones where a court route will be more appropriate. However, there may well be other situations where both routes will be appropriate, and the amendment would allow both routes to be taken. That would also help in situations where the impact of the offence is unclear. A local authority may deem a financial penalty to be appropriate, but for repeat offenders, or if the impact of the original offence escalates, there may also be a wish to seek an additional prosecutorial route. Making provision for both routes will allow greater flexibility. Local authorities could choose to fine or they could choose to prosecute, but they could also choose to seek both measures.
I hope that the Minister will consider my amendment and explain to me why he believes that local authorities should be able to do one or the other, but not both. Is there something that forbids local authorities from placing large fines, or some other reason why they cannot do both? We want to deter people from committing the crimes we are talking about and from returning to the sector, so we want to provide adequate punishment. I look forward to hearing the Minister’s explanation of why the clause has been phrased as it has.
Mr Thomas
I rise to support my hon. Friend’s amendment and to push the Minister gently for clarity about why, as the Bill stands, someone who was subject to a banning order could not be subject to a financial penalty as well. Given the significant costs that any housing authority will incur in taking action against one or other of the 10,500 rogue landlords that the Minister estimates there to be, why should not a financial penalty be imposed to help to recover some of the costs of taking action against them?
The hon. Member for Peterborough was a particular fan of the examples of rogue landlords in a recent article in the Conservative party newspaper The Guardian. I cannot think of any reason why any of those individuals who has already been convicted of being a bad landlord and who may or may not be subject to a banning order under this legislation should not also face a financial penalty. I hope that the Minister might, on this occasion, welcome my hon. Friend’s amendment and accept it for inclusion in the Bill.
Brandon Lewis
I appreciate what the hon. Member for Erith and Thamesmead has said about the amendment being a probing one, and I hope that I can satisfy her queries. While we are still considering this part of the Bill, I want to pick up on the points made by the hon. Member for Harrow West a few moments ago about how the information is spread and the databases. I am committed to looking at what we can do about that. Obviously, we have devolution and some of those matters are devolved. An amendment would be required to the Bill, but the details could be set out in a memorandum of understanding. That is part of what we are looking at now. We all share the desire to make it as difficult as possible for anybody who is not a fit and proper person ever to be able to be in a similar position again.
Amendment 138 would make a change to clause 86 to allow a local housing authority to impose a civil penalty in addition to, rather than as an alternative to, prosecuting a landlord, as the hon. Member for Erith and Thamesmead has quite rightly outlined. My hon. Friend the Member for Peterborough talked in the last few minutes about rapacious landlords. I will take his “rapacious” and raise him this: I want to make sure that we drive out avaricious landlords, as much as rapacious ones, so that they cannot act in the market again.
We have to make sure that we get the balance right, however. The Bill provides local housing authorities with a choice about whether to go down the civil penalty route or the prosecution route, depending on the seriousness of the offence. That is a matter for them to review in the light of their local circumstances. I think it would be disproportionate to use both regimes in relation to the same conduct, especially when local authorities will also benefit from other measures in the Bill. As we have outlined over the last few days, we are keen to look at going further and making this even harder on people. For instance, local authorities can apply for a rent repayment order where rent has been paid from housing benefit or universal credit and where certain housing offences have been committed, as set out in part 2 of the Bill. That is in addition to the powers already available through the Housing Act 2004, under which magistrates can rightly impose unlimited fines for the most serious housing offences. I hope that, given that short explanation, hon. Members will agree to withdraw their amendment.
Mr Thomas
I hear the Minister’s point about the need for proportionality. It seems eminently sensible. For a first offence, one clearly would not want to impose both a financial penalty and some other form of penalty. However, for the very worst sorts of landlord, I do not see why one could not add the option of a financial penalty as well, as part of the armoury of tools available to a first-tier tribunal in dealing with a rogue landlord.
Brandon Lewis
Obviously, it depends on the seriousness of the offence. It is for local authorities to decide whether to go down the civil or criminal route. If they do the latter and use the Housing Act 2004, of course, magistrates have an unlimited ability to fine for that kind of offence. It is absolutely covered in that sense; they can impose unlimited fines. For the most serious housing offences, it is right that they should have that freedom and flexibility. I hope that hon. Members will agree to withdraw the amendment.
Teresa Pearce
As I outlined earlier when moving the amendment, it was a probing amendment, so we do not wish to proceed to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 86 ordered to stand part of the Bill.
Schedule 4
Financial penalty as alternative to prosecution under Housing Act 2004
Teresa Pearce
I beg to move amendment 139, in schedule 4, page 78, line 9, leave out “but must not be more than £5,000”.
This amendment would remove the limit for the amount of a financial penalty imposed by the local housing authority under the section.
The Chair
With this it will be convenient to discuss the following:
Amendment 140, in schedule 4, page 78, line 42, leave out “but must not be more than £5,000”.
This amendment would remove the limit for the amount of a financial penalty imposed by the local housing authority under the section.
Amendment 141, in schedule 4, page 79, line 32, leave out “but must not be more than £5,000”.
This amendment would remove the limit for the amount of a financial penalty imposed by the local housing authority under the section.
Amendment 142, in schedule 4, page 80, line 20, leave out “but must not be more than £2,000”.
This amendment would remove the limit for the amount of a financial penalty imposed by the local housing authority under the section.
Teresa Pearce
The amendments are grouped together and seek a similar aim. They are probing amendments, like the previous amendment. As discussed during debate on the previous amendment, amendments 139 to 142 relate to schedule 4, which allows for a financial penalty as an alternative to prosecution. Each amendment goes through schedule 4 to omit the upper limit on the financial penalty. What they seek is further scrutiny of the financial penalty of £5,000 or, in the case of an offence under section 139(7), £2,000.
On Tuesday, when we discussed part 2 of the Bill, a consensus appeared to be growing that the Bill could go further to penalise criminal landlords, and there appears to be a consensus in this room that that is what we all wish to do. Offences in schedule 4 are met with a similar fine and could be sought as an alternative to, rather than in addition to, prosecution. It is therefore appropriate to consider closely whether the amounts are suitable to the offence committed and do enough to deter rogue landlords from committing their crimes.
Can the Minister outline why those particular financial penalties have been set, and why those amounts are deemed appropriate? We believe that, particularly if the fines are sought as an alternative to prosecution, they need to penalise adequately. Why then do offences under section 95 of the Housing Act 2004, which relates to controlling or managing a house that is required to be licensed but is not—a house in multiple occupation—receive a fine of up to £20,000, while this Bill says that a local authority can impose a fine of up to only £5,000? Surely if a financial penalty can be issued as an alternative to prosecution by the local authority, the Bill must provide for as tough a penalty as the original Act does when seeking a prosecution. I would be grateful if he responded with the rationale for the level of the fines.
Brandon Lewis
Amendments 139 to 142, as the hon. Lady has outlined, would remove the £5,000 limit for a civil penalty or, in the case of a contravention of an overcrowding notice, £2,000. Instead, they would allow the local housing authority to impose an unlimited fine where the landlord has: failed to comply with an improvement notice; not obtained a licence for a licensable HMO; failed to comply with licence conditions; not obtained a licence for a property subject to selective licensing; failed to comply with licence conditions; or contravened an overcrowding notice. To turn to our conversation a few moments ago, obviously, at a point where an offence is that serious, the local authority has the opportunity to take a view about which course of action to take. Under the Housing Act 2004, magistrates courts have the ability to bring forward unlimited fines. However, as we discussed on Tuesday, it is right that these breaches carry as strong a penalty as possible, so that they are strong enough as a deterrent that no one wants to breach them in the first place. That is the best way to drive out these disgraceful rogue landlords.
I heard the strength of feeling that the civil penalties set out in the Bill must be high enough to damage a rogue landlord’s business model and make it untenable, and that the current penalties may not be sufficient. If the Committee will bear with me, I would like to consider the points raised by the hon. Lady in more detail than I have had the opportunity to today. I will return to the topic on Report. With that in mind, I hope she will feel able to withdraw her amendment.
Teresa Pearce
I am pleased to hear what the Minister says, which is similar to what was stated on Tuesday when we talked about the level of fine. We do not want something that is revenue-raising; we want something that is truly a deterrent, and the Bill needs enough teeth to do that. I welcome his remarks, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 agreed to.
Clause 87
Tenancy deposit information
Question proposed, That the clause stand part of the Bill.
Stephen Hammond (Wimbledon) (Con)
I do not want to detain the Committee for long, but this may well be a pertinent time to raise the issue that my hon. Friend the Member for Hornchurch and Upminster (Dame Angela Watkinson) raised on Second Reading about information that can be collected at the same time that council tax information is collected. She made a powerful speech on the point. As the Minister knows, her contention is that whenever a billing authority requests council tax information from the resident, owner or managing agent of any dwelling, the authority should also request the provision by that person of tenure information in respect of the dwelling.
I would like to reiterate the points made by my hon. Friend on Second Reading and test the Minister’s appetite for bringing something forward on Report. Although the Minister will potentially respond by saying that some local authorities make such a request already, or that all local authorities recognise they have the power to do so, in reality, this is a very easy request for local authorities to make when asking for council tax information. Making tenure information available would provide some protection for tenants and would secure the reputation of landlords in general. It would provide a useful tool for local authorities when carrying out their housing functions, in terms of information about the various tenures available in their area, and making even more information available would be helpful.
I think we all want to see the information for rogue landlord databases widely spread. This would be a simple addition, so I am keen to hear whether the Minister is receptive either to bringing such a measure forward himself or to a Member tabling such a new clause or amendment on Report.
Teresa Pearce
I am pleased that the hon. Gentleman raises that point, because it is interesting. Would he be surprised to learn that I wrote a year ago to Lin Homer, the head of Her Majesty’s Revenue and Customs, to ask what she thought the tax gap was for rental income, and that she estimated it to be in the region of £500 million? Would what he suggests not be a way to have a full register of landlords who can then be reported to HMRC, to ensure they are filling in their tax returns properly?
Stephen Hammond
Having been on the Public Accounts Committee for six months at the end of the previous Parliament, nothing surprises me about the inefficiency of HMRC. It is a body that needs almost complete reform. I am not sure I will be tempted down the line that the hon. Lady suggests, however, because there would be an issue with what the database was then being used for, but she may wish to ask the Minister about that. I am keen on a simple question that could be added to inform local authorities, helping with what the Government are trying to get to in the thrust of their Bill. With those few remarks, I am raising the issue with the Minister.
Mr Jones
The clause inserts into the Housing Act 2004 proposed new section 212A, which will require tenancy deposit protection schemes to provide, when requested, tenancy deposit information to local housing authorities and other relevant bodies in England. Local housing authorities tell us that they have a limited picture of the size and scale of the private rented sector in their area.
My hon. Friend the Member for Wimbledon, who is on the Committee, and my hon. Friend the Member for Hornchurch and Upminster, who is not, have shown an interest in ensuring that local authorities have the information that they need to crack down on rogue landlords. I assure my hon. Friends—my hon. Friend who is not on the Committee will, I am sure, be paying close attention to our proceedings—that I completely agree with the aim they set out and it is exactly what the clause intends.
The three tenancy deposit schemes in England hold information on nearly 3 million tenancy deposits. That information will help local housing authorities in England to identify privately rented housing and enable them to target the small minority of rogue landlords who knowingly rent out unsafe and substandard accommodation, often to vulnerable tenants. The information to be shared will relate to the tenancies of properties in the local housing authority’s area. The type of information to be shared and the mechanism for sharing will be specified in contractual arrangements between the Department and the tenancy deposit protection schemes. Local housing authorities tell us that the information of most use is the property address of the rented property, the address of those managing the property and the number of tenancy deposits registered at the property address. Such data are the types intended to be shared.
Proposed new section 212A(3) allows tenancy deposit schemes to charge local housing authorities the costs associated with making the information available. Proposed new subsection (5) restricts the ways in which the information may be used by a local housing authority. The information may be used only to carry out an authority’s statutory functions under parts 1 to 4 of the Housing Act 2004 and for investigating whether any offence has been committed under those parts of the Act. The purposes may be amended by secondary legislation subject to the affirmative procedure. Parts 1 to 4 of the Housing Act relate to improving housing conditions, licensing of HMOs and selected licensing of other accommodation. The Government consider that by restricting the use of data to those purposes, the proposal satisfies data protection principles and provides adequate protection for the rights of data subjects. In addition, arrangements between the Department and the tenancy deposit schemes will require that data subjects are notified that their information will be used for such purposes.
Proposed new section 212A(6) allows a housing authority to share the information with bodies providing services to it in the discharge of the functions under parts 1 to 4 of the Housing Act and investigating whether any offence has been committed under those parts. The clause is enabling and local housing authorities will not be required to access the data. It will be up to individual authorities to decide whether to access and use the data.
Clause 88 amends section 237 of the Housing Act to allow the Secretary of State to make regulations subject to the affirmative procedure to change the list of purposes for which a local authority may use the data that is obtained in relation to housing benefit or council tax. That is required to ensure that data obtained under proposed new section 212A and section 237 may still be matched with one another, should changes be made to section 212A(5).
Clauses 87 and 88 will help authorities to identify privately rented housing and to crack down on rogue landlords in their areas. That will help to improve conditions in rented properties, benefiting tenants as a result. It will cut the costs of enforcement and reduce the need to operate borough-wide licensing schemes that impact on good landlords.
Question put and agreed to.
Clause 87 accordingly ordered to stand part of the Bill.
Clause 88 ordered to stand part of the Bill.
Clauses 89 to 90 ordered to stand part of the Bill.
Schedule 5
Enfranchisement and extension of long leaseholds: calculations
Mr Jones
I beg to move amendment 129, in schedule 5, page 83, line 21, leave out “Secretary of State” and insert “appropriate national authority”.
Amendments 129, 130, 131, 132, 133, 134 and 135 ensure that a regulation-making power may be exercised by the Welsh Ministers in relation to land in Wales as well as by the Secretary of State in relation to land in England.
Mr Jones
Amendments 129 to 135 to schedule 5 will ensure that new regulation-making powers can be exercised in respect of residential leasehold land by Welsh Ministers in relation to Wales, as well as by the Secretary of State in relation to England.
Clause 90 and schedule 5 amend the Leasehold Reform Act 1967 and the Leasehold Reform, Housing and Urban Development Act 1993 to allow a formula used in those Acts to be updated by regulations. The formula is used to calculate the value of minor superior leasehold interests and minor intermediate leasehold interests for the purposes of lease renewals and enfranchisement. The formula references a Government gilt—2.5% consolidated stock undated—that was redeemed by the Government in July 2015. It is, therefore, no longer listed and no longer available.
Residential leasehold is a devolved subject, so it seems only fair and just that Welsh Ministers are given the powers to make regulations for Wales, while the Secretary of State has the same powers for land in England.
Amendment 129 agreed to.
Amendments made: 130, in schedule 5, page 83, line 24, leave out sub-paragraph (4) and insert—
“(4) At the end insert—
(7) In sub-paragraph (1) “appropriate national authority” means—
(a) in relation to a tenancy of land in England, the Secretary of State;
(b) in relation to a tenancy of land in Wales, the Welsh Ministers.
(8) Regulations under sub-paragraph (1) may include transitional provision.
(9) Regulations under sub-paragraph (1) are to be made by statutory instrument.
(10) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment—
(a) in the case of an instrument made by the Secretary of State, in pursuance of a resolution of either House of Parliament;
(b) in the case of an instrument made by the Welsh Ministers, in pursuance of a resolution of the National Assembly for Wales.’”
See Member’s explanatory statement for amendment 129.
Amendment 131, in schedule 5, page 84, line 3, at end insert—
“3 (1) Section 100 (orders and regulations) is amended as follows.
(2) In subsection (1), after ‘Secretary of State’ insert ‘or the Welsh Ministers’.
(3) After subsection (2) insert—
(3) Any power of the Welsh Ministers to make regulations under this Part shall be exercisable by statutory instrument which (except in the case of regulations making only such provision as is mentioned in section 99(6)) shall be subject to annulment in pursuance of a resolution of the National Assembly for Wales.”
See Member’s explanatory statement for amendment 129.
Amendment 132, in schedule 5, page 84, line 9, leave out “Secretary of State” and insert “appropriate national authority”.
See Member’s explanatory statement for amendment 129.
Amendment 133, in schedule 5, page 84, line 16, at end insert—
“( ) After sub-paragraph (10) insert—
(11) In sub-paragraph (2) “appropriate national authority” means—
(a) in relation to a leasehold interest of land in England, the Secretary of State;
(b) in relation to a leasehold interest of land in Wales, the Welsh Ministers.”
See Member’s explanatory statement for amendment 129.
Amendment 134, in schedule 5, page 84, line 29, leave out “Secretary of State” and insert “appropriate national authority”.
See Member’s explanatory statement for amendment 129.
Amendment 135, in schedule 5, page 84, line 31, at end insert—
“( ) After sub-paragraph (9) insert—
(10) In sub-paragraph (2) “appropriate national authority” means—
(a) in relation to a leasehold interest of land in England, the Secretary of State;
(b) in relation to a leasehold interest of land in Wales, the Welsh Ministers.”—(Mr Marcus Jones.)
See Member’s explanatory statement for amendment 129.
Schedule 5, as amended, agreed to.
Clause 91
Redemption price for rentcharges
Question proposed, That the clause stand part of the Bill.
Mr Jones
The clause amends sections 9(4)(a), 10 and 12(2) of the Rentcharges Act 1977. It gives the Secretary of State regulation-making powers to provide a replacement financial instrument for the now redeemed 2.5% consolidated stock. That stock is referenced in the 1977 Act and is included in the formula used in the calculation of redemption of rentcharges under that Act.
Rentcharges are an annual sum paid by the owner of freehold land to another person who has no other legal interest in the land. They have existed since the 13th century, and have traditionally provided a continuing income for landowners who allowed their land to be used for development. Section 8 of the 1977 Act sets out procedures to enable the payers of rentcharges to apply to the Secretary of State for a redemption certificate, and it puts a duty on the Secretary of State to provide that service.
The algebraic formula applied by the Secretary of State to work out the redemption price uses the yield of the consolidated stock to calculate a lump sum that has the same value as the right to receive all the rentcharges over the remainder of the term. We believe that the possibility that the gilt would be redeemed was not envisaged at the time of the 1977 Act, which provides no means of replacing the gilt in the formula by the use of secondary legislation.
While the Secretary of State continues to have a duty to fulfil his statutory function with regard to redemption certificates, he is currently unable to calculate the redemption price following the redemption of the relevant gilt and so cannot fully discharge his duty. Until there is a replacement for the gilt in the formula used for the calculation, it is not possible for the Secretary of State to issue a redemption certificate and a rent payer’s property will therefore remain subject to a rentcharge. The aim is to replace the gilt so that it continues to provide a balanced and fair settlement figure for all parties, so that they can retain confidence in the process.
Question put and agreed to.
Clause 91 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Julian Smith.)