Report (1st Day) (Continued)
Clause 13: “Banning order” and “banning order offence”
14: Clause 13, page 9, line 15, leave out “companies” and insert “bodies corporate”
My Lords, the measures in this part of the Bill and Part 5 mark the Government’s commitment to tackle rogue landlords and agents as well as poor practice and standards in the private rented sector.
The amendments in this group respond to issues raised in Committee when we debated Part 2 of the Bill. They clarify issues that were of concern to your Lordships. Later this evening I will be moving further government amendments to address electrical safety in the private rented sector, which has also been of concern to your Lordships, as the House debates property standards in the sector.
Although he is not in his place, I thank the noble Lord, Lord Campbell-Savours, for raising in Committee issues around companies being subject to banning orders. To clarify matters, Amendments 14 and 16 to 19 replace the word “company” with “body corporate”, which has a wider meaning and includes bodies that are incorporated legal entities, such as an association, non-government organisation or corporation—but also includes a company.
The amendments ensure consistency in the terminology used in this part of the Bill and that any incorporated body, not just a company, which commits a banning order offence can be subject to a banning order. Now that he has returned to his place, I will repeat my thanks to the noble Lord, Lord Campbell-Savours, for raising the issue that the amendments are trying to address.
Amendment 31 to Clause 54, which is concerned with definitions in Part 2 of the Bill, explains that a body corporate includes a company or other body incorporated outside England and Wales. This clarifies that the banning order provisions extend to companies and other bodies registered abroad. During Committee we had a useful debate about the nature of banning order offences and the degree to which such offences should be subject to parliamentary scrutiny. As was explained, we have not included the specific offences on the face of the Bill because we want the flexibility to add further, or remove existing, offences as the new law beds in, and beyond, to ensure that the offences are relevant and up to date.
However, Clause 13(4) explains what matters may be taken into consideration when setting out in regulations what are banning order offences. The banning order offences will all be existing offences which already have serious consequences for those convicted, such as those involving fraud or violence as well as offences under the Housing Act 2004. We will consult on the proposed offences to be included in the regulations. We have noted the concerns of the DPRRC and the strong feelings expressed by Members of this House about the need for parliamentary scrutiny of those offences. While we do not think that it is appropriate to include such offences on the face of the Bill, for the reasons I have just explained, we see force in the argument that before the offences become law they should be laid and debated in both Houses of Parliament. Amendment 133, therefore, provides that regulations under Clause 13(3) describing banning order offences will be subject to the affirmative procedure.
The Committee also debated the standard of proof that should apply where a local housing authority imposed a financial penalty for the breach of a banning order or for certain offences under the Housing Act 2004, as an alternative to initiating a criminal prosecution for those offences. The noble Lord, Lord Beecham, was concerned that it was unclear whether the authority could apply the civil standard and, therefore, effectively act as prosecutor, judge and jury in its own case. I can confirm that the local housing authority will need to apply the criminal standard of proof.
Amendment 20 makes the standard of proof to be applied absolutely clear on the face of the Bill. A local housing authority which intends to impose a financial penalty must serve a notice of intent setting out both the reason for imposing the penalty and the amount. The reason must reflect that the local housing authority is satisfied beyond reasonable doubt that the offence complained of has been committed. The department will issue guidance to local housing authorities on financial penalties, including the circumstances in which a local authority should consider imposing such a penalty.
Amendment 21 clarifies how the First-tier Tribunal will deal with an appeal against the imposition of a financial penalty, in relation to both penalties imposed for a breach of a banning order and those imposed for offences under the Housing Act 2004. On appeal, the tribunal must consider the local housing authority’s financial penalty decision afresh and in reaching its own decision may take account of matters which the local authority was not aware of when it made its decision. The tribunal, therefore, does not review the authority’s decision and decide whether it is reasonable but must instead re-determine the case itself, applying the criminal standard of proof on the facts known to it.
Amendment 29 is concerned with appeals under Part 2 of the Bill from the First-tier Tribunal. Essentially the new clause provides that an appeal to the Upper Tribunal cannot be made unless permission is granted by either the First-tier Tribunal or the Upper Tribunal, but any such appeal is not limited to a point of law only. This mirrors the situation in other housing legislation involving appeals to the Upper Tribunal, such as the Housing Act 2004 and the Mobile Homes Act 1983. I beg to move.
My Lords, my Amendment 15 has been popped into the middle of all these government amendments, so now is the moment when technically I must speak to it. It has been tabled in the same way as it was before: simply to ask the House to comment on how well it now thinks our regulations are beginning to show through in the form of amendments to this Bill. We have been very dissatisfied that the regulations have not been published and believe that much has to be put on the face of the Bill that could otherwise have been covered in regulations. I do not need to go into further detail as I spoke to this in Committee.
My Lords, as this is the first time I have spoken during today’s Report stage consideration of the Housing and Planning Bill, I refer noble Lords to my declaration of interests and declare that I am an elected councillor in the London Borough of Lewisham.
Perhaps I may also thank Members from all sides of the House for their kind remarks after I was taken ill as we entered the last day of Committee before Easter. I received emails, notes and cards, and noble Lords were very generous in their remarks about me and in wishing me a speedy recovery. I am also very grateful to my noble friend Lord Beecham and all other noble Lords from the Labour Benches who, at short notice—or no notice at all—came forward to assist the Front Bench efforts. I am truly grateful to everyone.
The Government will have seen that we have divided the House a number of times already this evening, and I think it is inevitable that we will continue to divide the House today and on future days on Report as we proceed with our consideration of the Bill. It is not just that we object to or do not like parts of this Bill; it is the wholly inadequate and poor way the Bill has been brought forward with ill-thought-out, half-baked proposals, inadequate preparation and a general disregard for Parliament, local authorities, charities, campaigners, tenants and anyone else affected by these proposals. The noble Baroness, Lady Williams of Trafford, has done her very best in the circumstances, and we are very grateful to her and her colleagues for that. I thought it important to put that on the record again.
Amendments 14, 16, 17, 18, and 19 replace the word “companies” first, and subsequently “company”, with the words “bodies corporate” in the first instance and “body corporate” subsequently, so as to include bodies incorporated outside England and Wales. This widens the scope of the banning order, which is to be welcomed, and is in response to points made by my noble friend Lord Campbell-Savours in Committee, as the noble Baroness, Lady Evans of Bowes Park, mentioned in her remarks.
Amendment 20 raises the standard of proof to the criminal standard and we welcome that proposal. If someone is to be subject to a penalty, then being satisfied to the higher standard of proof seems sensible to me, and this amendment makes that crystal clear for everyone.
Amendment 21 will add a new sub-paragraph into paragraph 10 of Schedule 1, again clarifying that, under the appeals procedure, the appeal can have regard to matters that the local authority was unaware of. Amendment 29 provides for an appeal from the First-tier Tribunal to the Upper Tribunal, other than on a point of law. My noble friend Lord Beecham made that point in this regard in Committee, and, as the noble Baroness, Lady Williams, advised us all in her letter of 6 April, these matters were also raised by the First-tier Tribunal and we support them.
Amendment 15 in the name of the noble Baroness, Lady Gardner of Parkes, is one with a lot of appeal to us. It would stop the regulations coming into force until at least one year after the publication of the draft regulations to be made under the subsection. It would certainly leave us with a proper time for reflection. That can only be a good thing when we look at the Bill and consider how the Government have acted in their general handling of it so far. If the noble Baroness wishes to test the opinion of the House, I can assure her of the support of these Benches.
I thank my noble friend Lady Gardner for Amendment 15, and the noble Lord for his comments. As I explained in my opening remarks, we have considered the issues raised in Committee and by the DPRRC concerning banning order offences. This is why we are moving an amendment that regulations prescribing banning order offences will now be subject to the affirmative procedure and therefore cannot be brought into law until both Houses of Parliament have debated them. In effect, this would mean that Clause 13 could not become operational until after your Lordships had approved the regulations. As we also said in Committee, we will consult on the proposed banning order offences before the regulations are laid in Parliament.
I hope that, with these assurances, my noble friend will not press her amendment and I commend the government amendments in this group.
Amendment 14 agreed.
15: Clause 13, page 9, line 25, at end insert—
“( ) This section shall not come into force until at least one year after the publication of a draft of regulations to be made under subsection (3).”
I did not declare my interest earlier because I had declared it the first time I spoke to the Bill, but as this is the first time I have spoken on Report, I should have declared it again. I would also like to say that I think we are making progress. The two votes earlier have done something significant in putting different items in the Bill. For that reason, I do not propose to press the amendment.
Amendment 15 withdrawn.
Clause 17: Content of banning order: company involvement
Amendments 16 to 19
16: Clause 17, page 10, line 38, leave out “company” and insert “body corporate”
17: Clause 17, page 11, line 1, leave out “company” and insert “body corporate”
18: Clause 17, page 11, line 2, leave out “company” and insert “body corporate”
19: Clause 17, page 11, line 3, leave out “company” and insert “body corporate”
Amendments 16 to 19 agreed.
Clause 22: Financial penalty for breach of banning order
20: Clause 22, page 12, line 28, after “satisfied” insert “, beyond reasonable doubt,”
Amendment 20 agreed.
Schedule 1: Financial penalty for breach of banning order
21: Schedule 1, page 103, line 26, at end insert—
“( ) An appeal under this paragraph—(a) is to be a re-hearing of the local housing authority’s decision, but(b) may be determined having regard to matters of which the authority was unaware.”
Amendment 21 agreed.
Clause 37: Access to database
22: Clause 37, page 18, line 31, at end insert—
“( ) A local housing authority is required to give access to the database to a tenant or a person seeking a tenancy.”
My Lords, this group of amendments is about giving tenants and those seeking tenancies access to the rogue landlord database. I will speak to Amendments 22 to 25. I also support Amendment 26.
I fully support the Government’s intention to require local housing authorities to compile a register of rogue landlords. However, there seems little point in the Secretary of State imposing this requirement on local housing authorities if the very people affected by the treatment meted out by such landlords have no idea that their landlord is on the list, or that their potential landlord should be avoided if at all possible.
Tenants of rogue landlords are extremely vulnerable to poor and inadequate housing and have little protection in securing their tenancy or improving the quality of their accommodation. However, the simple measure of giving them access to the register would transform their ability to have some sense of control over their accommodation. They would be able to see just who is on the register and thus avoid repeatedly ending up at the mercy of poor landlords.
We heard detailed description in Committee of the plight of some of the tenants of landlords who are extremely likely to end up being added to the register of rogue landlords. I am afraid that I cannot understand the logic which says that the register, once produced, would be anonymised so that tenants would, presumably, know only the number of rogue landlords but not who they were or the properties that they owned. Ensuring that all accommodation is fit for human habitation, watertight, capable of being heated in winter and safe are basic rights for all tenants. Unless the register is open for tenants to check that their landlord is indeed looking after their best interests in return for the rent that they pay, there seems little point in compiling the register in the first place.
I trust that the Minister will be able to respond positively to this group of amendments and I beg to move.
My Lords, Clause 37 will require the Secretary of State to give every local authority in England access to information in the database of rogue landlords, which is fine as far as it goes. Amendment 22 in my name and those of the noble Baroness, Lady Bakewell of Hardington Mandeville, and the noble Lord, Lord Shipley, would put a requirement on every local authority for a tenant to also have access to that list. This is a sensible provision as these prospective tenants are the people who need to be aware who the rogue landlords are so that they can make an informed choice when seeking rented accommodation. The noble Baroness made that point in her contribution.
Of course, we are talking about only England in this clause, but there is nothing to stop rogue landlords operating elsewhere in the United Kingdom. Perhaps when the noble Baroness, Lady Evans of Bowes Park, responds she can tell us, notwithstanding the amendment, how the information will be disseminated beyond England and how it will be handled by the devolved institutions, because you will not be a rogue landlord in England and a model landlord in Scotland, Wales and Northern Ireland at the same time if you have properties there.
Amendments 23 and 24 would remove the requirement for anonymity when the information is used for research purposes. This is important as it can help to identify trends and patterns that may need to be addressed by the Government. The anonymity afforded here risks something being missed. Amendment 25 to the same clause would make it clear that the information can be used for the protection of tenants. If that is not the purpose of this whole part of the Bill, then what is its purpose?
The final amendment in this group, in my name and that of my noble friend Lord Beecham, would enable a housing authority not to grant a house in multiple occupation licence to someone on the database of rogue landlords. As we are all aware, occupants of HMO properties are often the most vulnerable of tenants. This seeks to afford some protection where the property is of sufficient size and number of people to require an HMO licence. I hope that the Government Front Bench can see the intent behind these amendments—to protect tenants—and will give the House a positive response.
My Lords, during the passage of the Bill we have debated extensively the question of who shall have access to the database, in which form and for what purposes. The noble Baroness, Lady Bakewell, and the noble Lords, Lord Shipley and Lord Kennedy, have sought, through Amendments 22 to 25, to require that tenants or potential tenants should have access to the database, that the Secretary of State should be able to disclose information held in non-anonymised form, and that local authorities may use the information held on the database for the protection of tenants.
Giving tenants, or potential tenants, access to the database would be fine if its purpose was to blacklist landlords and to drive them out of business, but that is not its purpose. The proposed database is primarily for the purpose of ensuring that those landlords and property agents who have committed banning order offences, or who have received two or more civil penalties as an alternative to prosecution for such offences, can be monitored by local authorities to ensure future compliance with the law, and, where necessary, those authorities can target enforcement against them. The database will help local authorities drive up standards in their areas and ensure that those landlords entered on to it raise their game so that their properties are safe and well managed for the benefit of tenants.
As with penalty points on a driving licence, a person will remain on the database for a specified period—a minimum of two years. Also as with someone who has incurred penalty points, continuing to breach the law may result in a ban. While it is important, as I said, that people who commit banning order offences should be liable to be monitored through their entry on to the database, this does not mean that the public at large should have a right to know about those offences if they are not so serious as to warrant the local authority immediately obtaining a banning order. Again, there is an analogy with driving offences because there is no right for the public at large to know whether a person has received penalty points on their licence. Indeed, allowing such access to the database would arguably breach the landlord’s human rights by making sensitive personal information about their convictions publicly available and effectively banning them from operating without an independent tribunal determining whether they should be banned.
Amendment 26 in the names of the noble Lords, Lord Kennedy and Lord Beecham, is unnecessary. Under existing provisions for HMOs, which we are proposing to strengthen through Part 5 of the Bill, a local authority can grant a licence only if it is satisfied that the proposed licence holder is a fit and proper person. In doing so, it must have regard to, among other matters, whether the applicant has contravened housing law or been convicted of certain criminal offences such as those relating to violence, drugs or fraud. These offences that the authority must have regard to will likely be banning order offences for which a person can be entered on the database. It follows that a person who has been entered on to the database could be refused an HMO licence.
I should make it clear that just because a landlord has a conviction or received financial penalties under the new regime that will not automatically mean that they are an unfit person and not able to hold an HMO licence. It would, of course, depend on the nature of the offence, the circumstances surrounding it and whether the landlord was a prolific offender. Indeed, if the conviction or financial penalty was in respect of a minor infringement which had subsequently been put right, it would be disproportionate to refuse that person an HMO licence.
There is no blanket rule excluding persons who have criminal convictions or received financial penalties from holding HMO licences. It will depend on the individual circumstances of the case. However, this amendment would introduce such a blanket rule, even though such a person could continue to operate other types of private rented properties as the database is not a register of banned persons. Provisions are made in the Bill already to deal with HMOs operated by people subject to banning orders, namely that neither they nor any agent may hold such a licence. That is of course right because such a person has been banned from operating as a residential landlord.
As I have said, local authorities will be able to use the information on the database for the protection of tenants by using it to assist with exercising their functions under the Housing Act 2004 and to investigate contraventions of housing law and promote compliance with such law. In particular, authorities can use the information held to decide whether to apply for a banning order against a person entered on the database, whether or not he or she holds an HMO licence. It will then be for local authorities to decide whether to publicise information on those subject to banning orders in their local area, considering whether such publication can be justified as the most proportionate means of ensuring that banning orders are successfully enforced and that tenants in the area are properly protected.
These amendments would effectively result in many cases of landlords being put out of business, or at least suffering harmful reputations that would make trading more difficult, without any case being made out by the local authority to an independent tribunal to stop them trading through the banning order procedure. I hope that, with that explanation, noble Lords will not press their amendments.
On the question from the noble Lord, Lord Kennedy, about how information on the database will be disseminated to devolved Administrations, we will consider taking powers to facilitate this and will explore that further with the devolved Administrations.
I thank the Minister. I had only just thought of that. Clearly, where somebody can operate across other parts of the United Kingdom, if they will be a rogue in England they will be a rogue elsewhere. It is an issue that needs to be looked at.
I thank the Minister for her response and the noble Lord, Lord Kennedy, for his contribution on HMO licences. I remain unconvinced by the Government’s response. While the Government may feel that it would be unfortunate if banned rogue landlords went out of business, I am sure that tenants would not feel that way. If you are the tenant of a rogue landlord, or live in an HMO run by somebody on the rogue landlord register, I think you should be entitled to know that. If, as a result of that, some landlords went out of business, only very poor landlords would suffer that fate. Yet if good landlords are judged in the same way as bad landlords—apart from being on the rogue landlords register, which nobody will know about except the local authority—that seems a bit of a nonsense, and a disincentive to those landlords who are extremely diligent and vigilant about looking after their tenants. However, I accept that, at this late stage, I will probably not get the Government to change their mind. I beg leave to withdraw my amendment.
Amendment 22 withdrawn.
Clause 38: Use of information in database
Amendments 23 to 26 not moved.
27: After Clause 38, insert the following new Clause—
“CHAPTER 3APRIVATE RENTED SECTORPrivate rented sector: code of practice
(1) The Secretary of State shall issue a code of practice for the letting and management of private rented sector housing in England.(2) A code of practice under subsection (1) shall contain provision designed to ensure—(a) the provision of homes for rent which are of a good quality;(b) consistent and high standards of management; and(c) choice for the consumer.(3) Before issuing a code of practice under this section, the Secretary of State shall consult—(a) the Royal Institute of Chartered Surveyors;(b) the Association of Residential Letting Agents;(c) the British Property Federation;(d) the National Landlords Association;(e) the Property Redress Scheme; (f) the Residential Landlords Association;(g) the Deposit Protection Service;(h) the Property Ombudsman;(i) the UK Association of Letting Agents; and(j) any other persons or organisations as the Secretary of State considers appropriate.”
My Lords, I will also speak to Amendment 28. We heard from the Minister in Committee that the Government’s aim is to move tenants out of local authority housing and housing association accommodation and into the private rented sector. It follows that the private rented sector must be fit for purpose so that tenants are not disadvantaged by being moved from public sector housing into the private market.
The Secretary of State has an obligation to ensure that private landlords step up to the mark and provide accommodation that tenants would wish to move into. A code of practice for letting and management of the private rented sector is now essential to provide protection for tenants, some of whom will be vulnerable. Homes must be of good quality, have consistent management and provide choice for the consumer. It would not be unreasonable for the Secretary of State to consult with a number of professional bodies in drawing up the code of practice to ensure it is fit for purpose. The list in the amendment, from proposed new paragraphs 3(a) to 3(j), would ensure that all necessary views are obtained and have input into the code. This should help guarantee that tenants, as well as landlords, are protected.
Amendment 28 is consequential on Amendment 27. As we all know, both landlords and tenants make use of letting agents. These are an essential part of renting in the private sector. Letting agents bring the two sides of the equation together, helping landlords to find suitable tenants and tenants to find suitable homes and accommodation. However, regulation is also needed for this sector to provide security for both the landlord and the tenant. A nationally held register of letting agents, available for all interested bodies to view, should be an essential element of the Government’s policy in moving tenants into the private sector. The register in the form of a database should be clear, have all relevant information required as listed in the amendment and be easy to access and use by both landlords and tenants.
Many of us will have seen the story of the housing association in Walthamstow that sold off whole streets of its properties to an investor but did not inform its tenants of the change of ownership and hence the change of their landlord. The housing association had employed a company to do all routine repairs and maintenance. It was only when tenants rang up this company to report faults that they discovered they were no longer covered by the contract as their landlord had changed. It later transpired that the new landlord was likely to give all tenants notice to quit as they wished to sell the properties on the open market.
If the Government wish tenants to seek accommodation in the private sector, they must assist in ensuring that correct and relevant information is available to aid tenants in their choice of move. Moving home is one of the most stressful events in any person’s life, and to be moving often and unnecessarily is unlikely to ensure that tenants maintain their employment and their children have access to a continued education. Both a code of practice for the private rented sector and a register of letting agents readily accessible by tenants are essential to achieving the Government’s aim. I look forward to a positive response from the Minister. I beg to move.
My Lords, I have mixed views on this because I recall the great victory of the noble Baroness, Lady Hayter, which ensured that all residential letting agents were obliged to be registered. I think that measure, which has been in force for a few years, is working very well. It seems to me that this is far too belt and braces and that the proposed measure would be so onerous and costly that it would end up costing tenants who want to rent these properties extra money. Is the noble Baroness aware of the Association of Residential Letting Agents and the registrations that are now applicable? I well remember the noble Baroness, Lady Hayter, arguing at the time that there was no way of getting the bad agents to register. However, when the relevant amendment was passed and they had to be members of the relevant body, the situation changed.
I am slightly puzzled when I see glossy magazine advertisements letting properties which give the name of the agent and add in brackets “Fees apply”. I am not sure whether that means an extra fee is being levied on people when it should not be. It might be worth investigating that. However, I believe that tenants are good judges of whether a property looks reasonable and the cost suits their needs. We should be more concerned about the cases featured in newspapers in the last couple of weeks in which people are paying £70 a night to sleep in three-tier beds and all the rubbish in the world ends up outside because there are no proper toilet facilities. That is a different field which requires very careful consideration and attention. However, the everyday letting process used by ordinary tenants and agents seems to work reasonably well.
My Lords, we are supportive of both Amendments 27 and 28 in the name of the noble Baroness, Lady Bakewell of Hardington Mandeville. Amendment 27 would require the Secretary of State to issue a code of practice for the letting and management of private rented sector housing in England. As often with legislation, you are legislating to deal with the end of the market that wants to cut a few corners. The fact of the matter is that the overwhelming majority of private sector landlords do a very good job and provide tenants with a better choice, better management standards and better homes than the code would allow for. However, the proposed code would afford an additional layer of protection and help to lift up those landlords who are not always the best in the business and raise standards generally. The list of organisations is comprehensive in nature and would allow the Secretary of State the flexibility though proposed new paragraph 3(j) to consult “other persons or organisations” as he considers appropriate, which is sensible as organisations come and go, and needs and requirements change.
Amendment 28 would require the Secretary of State to keep and publish a register of letting agents. This, again, is a very welcome move and would bring a sensible and proportionate measure to this part of the housing market by requiring a register to be maintained. These agents facilitate agreements between landlords and tenants. There is a proper role for local authorities in maintaining the register as they will be aware who is operating in their area. The amendment prescribes what information is to be held on the register. Proposed new subsection (8) of the amendment would allow the Secretary of State to,
“make further provision about the register”.
It is a sensible move to take this power. I hope that the noble Baroness, Lady Evans of Bowes Park, will accept the amendment. However, if she will not, I hope that she will explain carefully to the House why that is the case.
I thank the noble Baroness, Lady Bakewell, and other noble Lords who have contributed to this short debate. If enacted, Amendment 27 would require the Secretary of State to issue a code of practice for the letting and management of private rented sector housing in England. A code to promote best practice in the letting and management of private rented sector housing in England already exists. A cross-sector code for the letting and management of private rented sector housing in England was originally published in September 2014. A wide range of industry members was involved, including all the stakeholders referenced in the noble Baroness’s amendment. The department also contributed to the wider stakeholder consultation and Brandon Lewis, Minister of State for Housing and Planning, provided the foreword. Although the code does not currently have statutory force, which would mean that a court or tribunal would have to take it into account when determining relevant cases, in practice, a court or tribunal would already be likely to take the contents of the code into account, where relevant. The code has been in operation for a year and a half, and was last updated in July 2015. The Government are continuing to work with industry to monitor the effectiveness of the code and organise any necessary revisions to ensure that it is relevant and remains up to date. In addition, since October 2014, all letting and property management agents have been required to join a redress scheme, offering a clear route for consumers to pursue complaints. This, in conjunction with the code, protects the consumer and supports good agents.
Amendment 28 seeks to introduce a mandatory national register for all letting agents in England that would be maintained and operated by the relevant local authority. As the noble Lord said, the vast majority of letting agents provide a good service to tenants and landlords and the Government do not believe that a mandatory register is the answer to tackle a minority of irresponsible agents. As my noble friend Lady Gardner said, the Government believe that this could add excessive red tape to the sector which would push up the cost of rents and reduce choice. The Government believe that providing routes for redress and ensuring full transparency is the best approach by giving consumers the information they want and supporting good letting agents. As I mentioned, that is why we recently required all agents to join a redress scheme and prominently display a breakdown of their fees and statements about redress and client money protection. This allows landlords and tenants to vote with their feet when looking to let or rent a property. Each redress scheme also displays a list of members, fully accessible to the public, on its website. What is also important is to help local authorities focus their enforcement action on the rogue agents who knowingly flout their responsibilities and leave the majority of good agents to get on with running their business. As we have just discussed, that is why we plan to introduce a database of rogue property agents and landlords.
In addition, we are also including provisions to allow local authorities to issue civil penalty notices of up to £30,000 as an alternative to prosecution for certain housing offences, which will support their capability to enforce action on rogue agents.
In response to the question from my noble friend Lady Gardner about letting agency fees, from May 2015 letting agents have been required to publish a full tariff of their fees on their websites and in their offices. Anyone who does not comply will face a fine of up to £5,000. Given the commitments I have mentioned and the action that we have already taken that I have outlined, I hope that these amendments will not be pressed.
I thank the noble Baroness for her remarks. I am pleased to hear that there is a register and a code of practice, but I am somewhat mystified about why there is no statutory enforcement. There are, therefore, loopholes through which tenants will fall. A large number of tenants will now be looking for accommodation in the private sector, having had their tenancies in the public sector ended under the removal of lifetime tenancies. There will be vulnerable people who have not been used to renting in the private sector who are being displaced, perhaps because their rents have been increased or their tenancies not renewed by housing associations or local authorities. They will be looking for accommodation in the private sector and need protection.
The noble Baroness spoke about transparency—that letting agencies have to say which redress scheme they belong to and publish that in their windows. So there is transparency for letting agencies, but there is none for rogue landlords. There seems to be a discrepancy here between the Government’s aims and the requirements they are making for the various people operating in this sector. I am not convinced, I am afraid. This is a really important issue. If it were not for the fact that the Government are trying to move large numbers of communities out of the public rented sector and into the private one, I would probably let this go. However, as this is the case, the code of conduct should be a statutory requirement. I would therefore like to test the opinion of the House.
Amendment 28 not moved.
29: After Clause 51, insert the following new Clause—
“Appeals from the first-tier tribunal
(1) A person aggrieved by a decision of the First-tier Tribunal made under this Part may appeal to the Upper Tribunal.(2) An appeal may not be brought under subsection (1) in relation to a decision on a point of law (as to which see instead section 11 of the Tribunals, Courts and Enforcement Act 2007 (right of appeal to Upper Tribunal)).(3) An appeal may not be brought under subsection (1) if the decision is set aside under section 9 of the Tribunals, Courts and Enforcement Act 2007 (review of decision of First-tier Tribunal).(4) An appeal may be brought under subsection (1) only if, on an application made by the person concerned, the First-tier Tribunal or Upper Tribunal has given its permission for the appeal to be brought.(5) In any case where the Upper Tribunal is determining an appeal under subsection (1), section 12(2) to (4) of the Tribunals, Courts and Enforcement Act 2007 (proceedings on appeal to the Upper Tribunal) apply.”
Amendment 29 agreed.
Amendment 30 not moved.
Clause 54: General interpretation of Part
31: Clause 54, page 25, line 16, at end insert—
““body corporate” includes a body incorporated outside England and Wales;”
Amendment 31 agreed.
32: After Clause 54, insert the following new Clause—
“Implied term of fitness for human habitation in residential lettings
(1) Section 8 of the Landlord and Tenant Act 1985 (implied terms as to fitness for human habitation) is amended as follows.(2) For subsection (3) substitute—“(3) Subject to subsection (7), this section applies to any tenancy or licence under which a dwelling house is let wholly or mainly for human habitation.”(3) After subsection (3) insert—“(3ZA) Subsection (1) does not apply where the condition of the dwelling-house or common parts is due to—(a) a breach by the tenant of the duty to use the dwelling-house in a tenant-like manner, or other express term of the tenancy to the same effect; or(b) damage by fire, flood, tempest or other natural cause or inevitable accident.(3ZB) Subsection (1) shall not require the landlord or licensor of the dwelling house to carry out works— (a) which would contravene any statutory obligation or restriction; or(b) which require the consent of a superior landlord, provided that such consent has been refused and the landlord or licensor has no right of action on the basis that such refusal of consent is unreasonable.(3ZC) Any provision of or relating to a tenancy or licence is void insofar as it purports—(a) to exclude or limit the obligations of the landlord or licensor under this section; or(b) to permit any forfeiture or impose on the tenant or licensee any penalty or disadvantage in the event of his seeking to enforce the obligation under subsection (1).(3ZD) Regulations may make provision for the exclusion of certain classes of letting from subsection (1).(3ZE) In this section “house” has the same meaning as “dwelling house” and includes—(a) a part of a house, and(b) any yard, garden, outhouses and appurtenances belonging to the house or usually enjoyed with it.”(4) Omit subsections (4) to (6).(5) In section 10 of the Landlord and Tenant Act 1985 (fitness for human habitation), after “waste water” insert “any other matter or thing that may amount, singly or cumulatively, to a Category 1 hazard within the meaning of section 2 of the Housing Act 2004”.(6) Regulations may make provision for guidance as to the operation of the matters set out in section 10 of the Landlord and Tenant Act 1985 which are relevant to the assessment of fitness for human habitation.(7) This section shall come into force—(a) in England at the end of the period of three months from the date on which this Act is passed and shall apply to all tenancies licences and agreements for letting made on or after that date; and(b) in Wales on a date to be appointed by the Welsh Ministers.”
My Lords, Amendment 32 is in my name, with the support of my noble friend Lord Beecham and the noble Baroness, Lady Grender. It puts a duty on landlords to ensure that the properties they let are fit for human habitation and remain so during the course of the tenancy. It gives the tenant power to take action: to go to court, to get an injunction and to get an order requiring the landlord to make good the repair and carry out necessary works.
If the Government do not accept this amendment, as I suspect they will not, they need to tell us why it is not needed and why they believe that tenants have adequate protections already. They will have to do better than Mr Marcus Jones, the Minister in the other place, who said that he believed that homes should be fit for human habitation but did not want to pass a law that specifically requires that. What complete and utter nonsense. That is not good enough, and we are seeking to put in the Bill a proposal to update the law and improve tenants’ ability to take action against their landlord where necessary to bring their home up to a state that is fit for human habitation.
It strikes me as odd that the Government are not embracing this amendment wholeheartedly. The private rented sector is growing. People need to be able to live in properties that are safe, warm and dry. The updating of the law will, in the end, be used only against those landlords who do not play fair and who have been compelled to carry out repairs to their properties. We are all aware of the health problems associated with living in a property that is damp, has condensation, suffers from poor ventilation and has mould or other problems. This is a sensible and much-needed device to give tenants the power to ensure that the property they rent is properly maintained and fit for human habitation. I very much hope the House will support it. I beg to move.
My Lords, we support this amendment. I remain at a loss as to why the Government do not support this simple measure, for the following three reasons. First, this is not new legislation; it is updating older legislation, so there is no additional bureaucracy. Secondly, it reduces reliance on local government and puts the power into the hands of the consumer—the tenant. Thirdly, it will not cost a good landlord anything; it will give them cover. It will add costs only for bad landlords.
I am delighted that we had a much more detailed debate in Committee here than in the other place. However, the Government were reluctant to give tenants legal rights to take action through the courts. My question is: why? In Committee, it was clear that the Government believe that local authorities should be responsible for human habitation. Of course, it is only right that the council is there to step in where needed to take action and drive up conditions. But we should empower renters who can to challenge their landlords through civil means, so they do not have to rely on the state unnecessarily. Currently, in most cases of poor conditions, the tenant’s only practical remedy is through environmental health departments at their local council. A complaint to the council will trigger a health and safety inspection, which can then lead to the council requiring the landlord to make improvements under the Housing Act 2004.
Of course, the government safety net should be there. Much of the Bill is very welcome in strengthening the incentive for councils to operate that safety net. However, this is an opportunity for renters to feel more able to raise the alarm in the first place. We know from Shelter’s survey that more than 10% of renters feel either that their issue is not serious enough to take to the council, or that nothing will change as a result. Bringing back to life this legislation as a means of civil redress for private renters, as this amendment would, would free up local authorities to focus on those who really need help.
This is important because local authorities, as we all know, are struggling to manage the demands on their environmental health officer teams as the private rented sector balloons. We argued this in Committee and to back this up, data indicate that only a fraction of complaints result in investigations. There were 51,916 complaints about housing conditions to the responding councils in 2013-14, but only 14,043 inspections of private rented properties, so the rate is very low. The follow-up is about one prosecution per council per year at the moment.
In Committee, the Government argued that tenants have all they need in the publication of the How to Rent guide, which is on their website, so I looked it up. The Government’s guide provides a general overview of what to expect as a renter—that you should expect your landlord to provide a gas safety certificate, for example. But it is not a detailed consumer guide to renting and for the most part it advises renters to seek help via their local authority rather than empowering them to take action for themselves, which is what this amendment is all about. Of course, those who critically need help should be signposted to a local authority.
Finally, in Committee the Government argued that this would cost landlords more money. For the vast majority of landlords who are compliant with the law and keep their property in good condition, nothing would change once this law was introduced. What it would do is to underpin the right of the tenant as a consumer. The fitness for human habitation reform can easily be linked to the existing health and safety requirements. This is not about creating new burdens for landlords, so my central question remains: why are a Conservative Government not leaping at the opportunity to give greater power to the customer—the tenant? This is that opportunity.
My Lords, everybody is of course entitled to live in a decent and well-maintained home that is safe and free from harm. Where someone rents a home from a private landlord and it does not meet the standards, and if complaints to their landlord are not dealt with, as I understand it, tenants can report this to their local authority, which can indeed take action. It is important that tenants raise such problems with their local authority, otherwise it will not know.
What I found interesting in doing the research is that the party opposite seemed to have most of this covered in the Housing Act 2004. If a property is dangerous or in a state of disrepair, a local authority can enter and inspect the home or premises and demand that the hazard is removed—and in some cases, ban the property from being used until it is fixed—under the 2004 Act. If rooms are too small, a local authority can enter and inspect the property and assess whether their size is suitable; again, that is in the Housing Act 2004. If a property is overcrowded, a local authority can enter and inspect the property and decide the number of persons allowed to live there. I could go on. In other words, the Housing Act 2004 seems to cover most of this and I do not understand why this amendment will help in any shape or form.
My Lords, the answer to the noble Lord’s point is quite simple. Local authorities are not carrying out their statutory responsibilities and there are people all over this country living in squalor because the authorities simply do not have the resource to follow up their responsibilities and deal with that squalor.
I find the point just made by the noble Lord interesting. He is quite right that there are people living in squalor but, unfortunately, we have also taken away the right of regulation. Local authorities can no longer check now to see who is living in a property, how long they have been there and whether they are just flying in and out. The local authorities were willing to agree to 24-hour licences, so that people coming in for quick holiday use could be accommodated because that is modern travel: people want to do something in 24 hours. But when I spoke on this issue they made it clear to me that, unless you know how many people are living there and for how long, there is no way to have it within the limited amount of time in the year. You cannot even have any idea what that limited amount of time would be. That is one of the problems.
We have seen articles in the press recently saying, “Watch out for all those piles of rubbish outside some property—it shows that it is occupied by many more people than there is the actual facility for. If you see triple-decker beds going in, they are let out at £70 a night to people”. All that definitely has to be caught up with but I find some of the other points in this amendment very strange. I do not think that they are all appropriate. If we interfere too much in the private letting sector—oh! Exactly which amendment are we speaking to now? Is it Amendment 32?
My Lords, Amendment 32 aims to raise property standards for tenants: an aim that this Government support. The amendment will do two things. First, I am afraid I disagree with the noble Baroness, Lady Grender, as we believe that it will create new hoops for good landlords to jump through as they seek to prove their property meets the standards, creating unnecessary red tape and expensive bureaucracy, the cost of which will be passed on to tenants through higher rents. Secondly, it risks letting rogue landlords off the hook by expecting tenants—sometimes very vulnerable tenants—to accurately inspect the condition of their property and go to the expense and stress of taking their landlord to court where there are failings. This will not tackle rogue landlords and will not help vulnerable tenants who do not have the knowledge or resources, as to get really bad landlords banned you need a successful prosecution first.
This is not an argument about whether homes should be fit for human habitation, despite how the amendment is titled. It is one about how standards in the private rented sector should be enforced. The Government believe that there is strong enforcement by local authorities and that it is a role that they, on the whole, have fulfilled well to date. Their actions can lead to criminal prosecution, unlimited fines, rent repayment orders and even banning orders. This amendment suggests it should be just a civil matter—a breach of contract to be dealt with by a civil court, where the tenant is asked to prove the case against their landlord. We cannot support this.
As my noble friend Lord Polak outlined, local authorities already make good use of the existing framework that provides them with strong powers to require landlords to make necessary improvements to a property. The housing health and safety rating system assesses the health and safety risk in all residential properties and, under the Housing Act 2004, following a HHSRS inspection, local authorities can issue the landlord with an improvement notice or a hazard awareness notice. Where local authorities find a serious breach—a category 1—they are under a duty and must take action.
I do not think I have the statistics the noble Lord has asked for, but we have seen a significant reduction in the number of non-decent homes since we came into government in 2010—it is down by 64%. However, on the particular question, I do not have the figures to hand, so I may have to write to him following this debate.
We are strengthening the powers that I outlined previously by taking forward proposals through the Bill to enable local authorities to take further enforcement against rogue landlords, including through the database, banning orders, civil penalty notices and rent repayment orders. Noble Lords have argued that local authorities have limited resources to carry out inspections and take forward prosecutions but, through the new civil penalty measures outlined in the Bill, they would be able to retain those penalties, of up to £30,000, to use for housing-related activities.
The real problem is that tenants are often not aware of their rights when renting a home. To counter this, last year we published a short guide, Renting a Safe Home, which aims to help tenants recognise potentially harmful hazards in the home, such as damp, mould and excess cold, and to signpost them on what to do if something goes wrong. However, we understand the strength of feeling in the House on this and therefore commit to working with stakeholders to revisit this publication—to make it more user-friendly and to promote it further—to ensure that tenants are aware of their rights.
We believe that this proposed new clause would result in additional costs to landlords, which would deter further investment and push up rents for tenants. Of course we believe that all homes should be of a decent standard, and that all tenants should have a safe place in which to live regardless of tenure, but local authorities—
The Minister refers to this pushing up the costs and landlords passing those costs on to tenants. Is this the answer we are going to get when we consider the amendments dealing with electrical arrangements, which include the word “may”? In other words, when the Government say they “may” create electrical standards, do they have in mind the costs that they believe landlords are going to pass on to tenants? If that is the case, the legislation is going nowhere and we are not going to get it. We will not even get a statutory instrument.
I will obviously respond to the electrical safety issue in due course. We have put down amendments, and I hope I will be able to address those in a few minutes.
As I have said, we are strengthening the measures already in place by taking forward further measures in the Bill that will protect tenants and ensure that landlords provide good-quality, safe accommodation. I hope in the light of these comments that the noble Lord will withdraw his amendment.
My Lords, I thank the noble Baroness for her response, although I feel that it is woefully inadequate. I do not see why the Government are resisting the amendment. It is just not good enough to say that tenants in those circumstances should be able to rely on their local authority. Local authorities are struggling to meet their statutory responsibilities in this respect, and we should protect tenants from rogues who abuse them by not providing a home fit for human habitation. The noble Lord, Lord Polak, completely missed the point. I do not know whether he has ever been elected to a local authority; I am happy to welcome him to Lewisham to look at what we do there and see the difficulties that we confront every day in dealing with these issues. In the circumstances, it is right that we test the opinion of the House tonight.
33: After Clause 54, insert the following new Clause—
“Requirement to carry out electrical safety checks
(1) The landlord of a rental property shall ensure that the following are maintained in a safe condition so as to prevent the risk of injury to any person in lawful occupation of relevant premises—(a) any electrical installations; and(b) any electrical appliances supplied by the landlord.(2) Without prejudice to the generality of subsection (1), a landlord shall—(a) ensure that the electrical installation and any electrical appliances supplied by the landlord are checked for safety within 12 months of initial leasing and thereafter at intervals of not more than five years since they were last checked for safety, regardless of whether the check was made pursuant to this Act;(b) in the case of a lease which commences after the coming into force of this Act, ensure that the electrical installation and each electrical appliance to which the duty extends is checked for safety either within a period of 12 months before the lease commences or within 12 months of any electrical installation or electrical appliances being installed; and(c) ensure that a record of any check for safety in respect of an electrical installation or electrical appliance is made and retained for a period of six years from the date of that check, which record shall include—(i) the date on which the electrical installation or electrical appliance was checked;(ii) the address of the premises at which the electrical installation or electrical appliance is installed;(iii) the name and address of the landlord of the premises at which the electrical installation or electrical appliance is installed (or, where appropriate, the landlord’s agent);(iv) a description of, and the location of, the electrical installation or electrical appliance that was checked;(v) any defect identified;(vi) any remedial action taken;(vii) the name and signature of the individual carrying out the check; and(viii) the registration number with which that individual’s firm is registered with a Part P competent persons scheme approved by the Department for Communities and Local Government and certified as being competent in periodic inspection and testing.(3) The landlord shall ensure that any work in relation to a relevant electrical installation or electrical appliance carried out pursuant to subsection (1) or (2) is carried out by a firm registered with a Part P competent persons scheme approved for the time being by the Department for Communities and Local Government.(4) The record referred to in subsection (2)(c), or a copy thereof, shall be made available upon request and upon reasonable notice for the inspection of any person in lawful occupation of relevant premises who may be affected by the use or operation of any electrical installation or electrical appliance to which the record relates.(5) Notwithstanding subsection (4), the landlord shall ensure that—(a) a copy of the record made pursuant to the requirements of subsection (2)(c) is given to each existing tenant of premises to which the record relates within 28 days of the date of the check; and(b) a copy of the last record made in respect of each electrical installation or electrical appliance is given to any new tenant of a premises to which the record relates before that tenant occupies the premises save that, in respect of a tenant whose right to occupy those premises is for a period not exceeding 28 days, a copy of the record may instead be prominently displayed within those premises.(6) A landlord who fails to comply with this section commits an offence and is liable on summary conviction to a fine not exceeding level 4 on the standard scale.”
My Lords, Amendment 33 is tabled in my name and that of the noble Lord, Lord Tope. It would introduce mandatory five-yearly electricity safety checks in private rented accommodation. Noble Lords may be surprised that, unlike those for gas, such checks are not already mandatory, given the danger of electrocution and of fires caused by faulty electrical installations. Indeed, according to Electrical Safety First, a charity that works to prevent electrical accidents, there are about 70 deaths a year involving electricity compared with 18 from gas. We can all work out that that is more than one a week. Tragically, one such death was that of the daughter of the noble Baroness, Lady Tonge, who is not in her place, but whose calls for greater electricity safety we should heed.
We are delighted that, following the debate on this amendment in Committee, the Government have recognised the need for intervention and have tabled their own amendment, Amendment 82, which allows for regulation to require safety checks. However, that power is only permissive, not mandatory. Hence Amendments 83, 85, 87 and 89, to Amendment 82, make the very smallest of changes—a mere “may” becoming a “must”. As a result, the Government would have to bring forward regulations, for which the amendment makes provision, rather than leaving it to chance as to whether Amendment 82 was acted upon. Alternatively, as my noble friend Lord Campbell-Savours already warned us earlier today, we might find that the Government suddenly use the excuse of it costing landlords too much to bring in this permissive regulation. The cost is £2.50 a month—a five-yearly electricity check costs about £150, which comes to £2.50 a month—so we hope the Government are not going to use that excuse for not making this regulation mandatory.
We are happy to accept that the Government are nearly there, and we welcome the beginning of that movement. They have moved from their earlier response that there is an existing legal duty on landlords to keep tenants’ electrical installations safe. That of course allowed electrics in rented properties to go unchecked for many a year, and it guaranteed the prosecution of the landlord only after the event, rather than preventing electrocution or fires in the first place.
So while we welcome the Government’s Amendment 82, it fails to meet the calls for mandatory five-yearly checks. Those calls come from the Local Government Association, Electrical Safety First, the Chief Fire Officers Association, Shelter, Crisis, the London fire brigades, British Gas and, perhaps most importantly, tenants. We hope the Minister will accept our Amendments 83, 85, 87 and 89 to her Amendment 82. That would put a bit of backbone and urgency into the permissive regulations.
The other amendments to the Government’s Amendment 82 deal with the requirement, advised by experts, to ensure that the checks are by a skilled person competent in such work. Being qualified means nothing if it does not specify what this covers. Our Amendments 86 and 88 would effectively tie the test into the CLG’s existing Competent Person Schemes, which ensure high guaranteed standards for this important work of checking for safety. The other amendments, though important, are drafting amendments that I assume the Government would accept. I beg to move.
My Lords, I do not intend to detain the House for very long on this subject, which I dealt with at length in Committee. The Minister’s response on the previous amendment will send a shiver down the spine of many organisations outside this House which are relying on the Government to come forward with something more substantial than an amendment that includes the word “may”. In the context of the last debate, “may” suggests to us that nothing meaningful is going to happen. I hope the Minister will give us a full explanation of why the Government felt it necessary to include the word “may” as opposed to “shall”, “must” or whatever. We need that explanation, because I am sure that those outside who are lobbying on this issue will pore over her words with great care to try to establish what the Government’s intention actually is.
My noble friend referred to NICEIC and NAPIT, the two organisations that currently have an installer registration scheme in place. If, in the end, the Government concede and go down this route, it is important that those organisations’ schemes are the ones on which the new safety check arrangements are built, because the infrastructure they already have in place is perfectly adequate to deal with the substance of the amendment my noble friends are promoting today.
My Lords, my name is added to these amendments. I am very grateful to the noble Baroness, Lady Hayter, for her tribute to my noble friend Lady Tonge, who first introduced me to this subject and then told me that she was handing it over to me. I am not sure that she has completed the process, but that is what happened. This is the third Bill that I have attempted to amend in this way. The previous two were under the coalition Government, so I am very pleased that we are now making some progress.
I welcome the movement from the Government and their Amendment 82, but I echo all the points that have been made by the previous two speakers—particularly the noble Baroness, Lady Hayter, who introduced our amendments very well. It is good to see at least a positive step and a willingness to consider the issue, but I simply do not understand why the Government’s amendment uses the word “may” and not “must”—why the provisions are not mandatory, as they should be.
Electrical safety has been left behind. Quite rightly, we have had regulations relating to gas and carbon monoxide; why not for electrical safety? I hope that the Minister will be able to indicate that the caution in the amendment does not reflect the Government’s position and that they do intend to regulate on this issue and are not merely proposing a gentle amendment which they hope will buy us off at this stage.
I shall not repeat all the things that the noble Baroness, Lady Hayter, said but I want to add one that I do not think has been mentioned tonight. There are any number of examples of why electrical safety is important and of the dangers when proper checks are not made. Perhaps it is my age but I was shocked to read that nearly two-thirds of properties occupied by couples over the age of 60 do not meet electrical safety standards. From that it follows that in 2013-14 half the fatalities from electrical fires were of people aged over 65. Those statistics alone ought to be shocking enough to indicate that it is time for the Government to make this check mandatory.
We have dealt with the question of costs. According to Electrical Safety First, the five-yearly check being called for will cost in the region of £150. I accept the arithmetic of the noble Baroness, Lady Hayter, that £150 every five years works out at £2.50 a month. That is no argument at all against having the check, even if the cost were considerably greater.
Similarly, we feel that the term “qualified” in this context means nothing at all. Electrical Safety First certainly feels that, and in fact it says that it is meaningless. The person carrying out the check needs to be property-competent. Again, we would welcome reassurance from the Minister that the Government will take that on board when they draft the regulations, if indeed today they can give us a firm commitment not that they “may” produce regulations but that they “will” produce regulations.
My Lords, Amendments 82 and 92, if approved by the House, will provide an enabling power that will allow the Secretary of State to set requirements for electrical safety in private rented properties, and their enforcement, through secondary legislation. I am conscious that this is an issue that many noble Lords feel strongly about, as we have heard again today, and it raised considerable debate in Committee. Following the words of the noble Baroness, Lady Hayter, I, too, extend my sympathies to the noble Baroness, Lady Tonge.
The Government are taking a measured approach to this issue. Should Amendments 82 and 92 be approved by the House, we will continue our research and work with the sector to explore further the detailed options for regulation. This will allow any regulations to be introduced once the policy has been finalised, ensuring that they are beneficial and strike the right balance. The Government’s amendments have been welcomed by the sector, including Shelter, which said in its blog of 5 April:
“Put simply, they tabled a life-saving amendment”,
“a striking signal from the Government that they are serious about tackling rogue landlords and poor conditions”.
Amendment 33 would introduce requirements for landlords to organise regular electrical safety tests in their rental properties. As I have already stated, we have tabled an amendment to create an enabling power which would allow the Secretary of State to set requirements for electrical safety through secondary legislation at a later date. It will allow further research to be conducted and ensure that the requirements are balanced and beneficial to the sector as a whole. Should our amendment be approved, it will give us the time fully to understand all the potential impacts and assess all options.
Yes, that is the Government’s intention.
In addition, putting the regulatory provisions on the face of the Bill would prevent them being changed, should they be found not to work effectively in practice, and further primary legislation would then be required. The Government believe that regulations such as those proposed are better made by secondary legislation so that they can be amended more easily should that be necessary. It is important to ensure that any regulation of electrical safety can be kept up to date.
Amendment 84 would define electrical safety standards for the purposes of this legislation as standards regarding both the installations for the supply of electricity, and electrical fixtures, fittings or appliances provided by the landlord. Any requirements introduced for electrical safety standards in private sector properties will be based on the findings of our committed further research.
Amendments 86 and 88 would mean that any regulations would require someone who is “competent” to carry out any necessary checks or produce any required certification, instead of someone who is “qualified”. Electrical safety is a very technical and potentially dangerous area, so it is important that the person who conducts any checks or produces any documentation has the necessary skills and experience to do so. This will be defined through any regulations and we believe that the term “qualified” allows for this.
Amendments 90 and 91 would allow requirements to be set for landlords to produce a certificate or a condition report, or both, instead of just a certificate. The amendments are unnecessary. A certificate will be defined through any regulations and will ensure that any documents provided are sufficient to tell the tenants that the property is safe and meets the required standards.
Amendments 83, 85, 87 and 89 would require the Secretary of State to introduce regulations for electrical safety in the private rented sector regardless of any of our findings from further work and discussions with stakeholders. The noble Lord, Lord Campbell-Savours, and others have talked about the difference between “must” and “may”. “Must” precludes any discussion with stakeholders; “may” allows us to design the way forward as part of our research. It would not be appropriate to pre-empt the results of our planned further research. Any introductions must be balanced and will be determined following extensive investigations of the effects of such requirements and further engagement with the sector.
I hope that the steps I have set out show the importance of these amendments and the Government’s commitment to protecting tenants. As I have said, we intend to bring regulations forward. With these assurances in mind, I ask that the government amendments be approved and that noble Lords do not press their Amendments 33 and 83 to 91.
My Lords, I thank both my noble friend Lord Campbell-Savours and the noble Lord, Lord Tope, for their interventions. I shall repeat what the Minister said to make sure that I, Hansard and everyone else have it absolutely right. I think she said that the Government intend to bring forward regulations. I see nods on the Government Benches. I think she answered yes to the straight question—I do like straight answers to straight questions—about our change from “may” to “must”. I disagree that “must” precludes discussions with stakeholders; nevertheless, the assurance about intent and the word “yes” are great reassurances.
I am delighted that—if I have understood correctly—the use of the word “qualified” in the government amendment would in the regulations mean “competent” and reflect the existing skilled person’s competence in the particular task. That covers the issue we were worried about. Finally, the regulations would allow for a certificate to be produced.
The noble Lord, Lord Tope, is giving me the wink that we have got the assurances we were seeking. This is a collective these days, and we work in that way.
We look forward to hearing something about a date, which could be intimated either in writing or at Third Reading. We welcome the straight intention. With those assurances and our thanks to the Minister, I beg to withdraw the amendment.
Amendment 33 withdrawn.
Amendment 34 not moved.
35: After Clause 54, insert the following new Clause—
“Review of deposit protection
Upon the coming into force of this section, the Secretary of State must undertake a review of tenancy deposit schemes, as introduced under sections 212 to 215 of the Housing Act 2004 (tenancy deposit schemes), in order to ensure that tenants are treated fairly at the end of their tenancy.”
My Lords, Amendment 35 seeks to put in the Bill a requirement for the Secretary of State to undertake a review of tenancy deposit schemes. The purpose of the review is to ensure that tenants are treated fairly at the end of their tenancy.
The Housing Act 2004 required every landlord or letting agent who takes a deposit for an assured shorthold tenancy to join a tenancy deposit scheme. The scheme was subsequently amended by the Localism Act 2011. The tenant pays over a deposit, which is usually one month’s rent, when the tenancy agreement is signed, and within 30 days from receipt of the deposit the tenant has to be provided with the details of the scheme that is being used. If at the end of the tenancy there is no dispute, the deposit is returned; otherwise, the two parties can go into a dispute resolution process and are bound by the decision with no redress to the courts. Alternative processes can be taken through the courts but there is an underlying problem, in that the tenant is often at a disadvantage where they have paid a deposit and need to access that money to put down as a deposit on the next property they are seeking to rent.
This amendment would allow for a review to take place to see what can be done to level the playing field somewhat between landlords or letting agents and tenants. One of the things the review could look at is the viability of zero or no-deposit schemes run by insurance companies or some other mechanism. This is an area where tenants can be put at a disadvantage and it needs looking at. I beg to move.
My Lords, this is an important subject of which I have had direct personal experience. I have found that the tenancy deposit schemes are extremely thorough, rapid in dealing with matters, and fair—or perhaps even anti the landlord in my case. My situation involved a solicitor who sent in 17 pages of issues he had raised, although he had been there for five years. He was Australian and cantankerous. It was a bit of a trial of strength, but it did convince me that the present system is working very well indeed.
The other reason this issue is important is that some cunning tenants do not pay their last month’s rent. They pay all the rent until they get to the end of the tenancy and then do not make the final payment. Therefore, the deposit might be the only thing you have to pay that rent. I have often seen that happen, so the amendment really is not a good idea.
My Lords, if agreed, Amendment 35 would require a review of the tenancy deposit scheme under Sections 212 to 215 of the Housing Act 2004. The tenancy deposit schemes in England are currently protecting more than 3 million deposits on behalf of tenants, helping to raise standards in the private rented sector and ensuring that tenants are treated fairly at the end of the tenancy. Carrying out a review of the schemes would be a resource-intensive and costly exercise which would duplicate the department’s ongoing and regular governance role in monitoring and reviewing the schemes. This is not the most effective way to spend taxpayers’ money. We are satisfied that all three tenancy deposit protection schemes are providing high standards of service to tenants and landlords—and I appreciate hearing about the experience of my noble friend Lady Gardner in this respect.
Let me give some further detail. If tenants have complied with all their obligations, they will receive their deposit back within 10 days of the scheme administrator being notified of the end of the tenancy. If the landlord and tenant disagree on the amount to be returned, they can either use the alternative dispute resolution service offered by the schemes or go to court. Of the 11.5 million deposits which have been protected since the launch of the scheme, less than 2% have gone to adjudication. On average, 27% are awarded to tenants, 17% to landlords or agents—and, interestingly, 56% are split between the two sides.
Alternative dispute resolution cases are handled by independent, impartial and qualified adjudicators and decisions are made on the basis of the evidence provided by both parties. The tenancy deposit schemes are required to deal with disputed cases within 28 days and they have regularly met this performance target. I am also satisfied that the tenancy deposit protection schemes awarded contracts for new custodial schemes which commenced on 1 April have the necessary dispute resolution processes in place to ensure that tenants will continue to be treated fairly. This was a key evaluation criteria in our re-procurement exercise carried out last year.
I hope that in setting out some detail, this explanation will assure the noble Lord, Lord Kennedy, and other noble Lords that tenants’ deposits are and will continue to be returned to them fairly and quickly at the end of the tenancy. However, I would be happy, along with my noble friend the Minister, to speak with noble Lords outside the Chamber about any specific issues they may have about the fairness of the scheme.
My Lords, I thank all noble Lords who have spoken in this debate. The noble Baroness, Lady Gardner of Parkes, made a very good point. If tenants are acting in that way, it should be looked at, as it is totally not something that we would support. We want both landlords and tenants to be treated fairly.
The point I was making was that some tenants are not treated very fairly. They often need the deposit to put down on their next property and are under considerable pressure because of a lack of resources. So I do think that a review is necessary and I wish to test the opinion of the House on this.
Amendments 36 and 37 not moved.
38: After Clause 54, insert the following new Clause—
“Standards for guardianship schemes
Terms as to fitness for human habitation and repairing obligations set out in sections 8 to 17 of the Landlord and Tenant Act 1985 for tenants of private landlords must also apply to guardianship scheme contracts.”
My Lords, this amendment deals with property guardianship schemes, a term with which I was entirely unfamiliar until I read about them in, appropriately enough, the Guardian last December. The situation originally arose when the owners of properties—often commercial properties—who were unable to sell or improve them for the time being wanted them protected. The owners allowed people to go in unlicensed to live there on moderate terms until such time as they could proceed with redevelopment, demolition or whatever.
As a concept it was workable and satisfactory to many people. But latterly it has changed. It has now become a commercial enterprise in which, I have to say, a number of ruthless owners are exploiting people who are not tenants—they have no rights; they are merely licensees—charging quite considerable sums of money for them to live in places that are, very often, unsatisfactory from the point of view of the conditions in which they have to live, with absolutely no security of tenure of any kind.
This prompted me to put down an amendment in Committee, where I quoted the experience of some people who had been through this system. One guardian described rooms that were “like chicken coops” in a place in Kennington offered by a guardian company—that is the euphemistic phrase—for £500 a month. It was a single space with rows of plyboard walls and no natural light or ventilation. In another place, carpets had been worn and stained by thousands of shoes that had crossed the floor of what was a council’s now defunct one-stop shop. Office furniture was piled high next to windows caked with soot, letting in the gloom from Commercial Road. The toilet light did not work. To wash, the guardian had to descend two flights of stairs to a dirty, windowless room, where the guardian company had installed a temporary shower. Other people in the property also used it. The Government should—this amendment seeks to compel them to—apply the same terms as to fitness for human habitation and repairing obligations that apply to proper tenancies under the Landlord and Tenant Act to these guardianship scheme contracts.
The Minister who is to reply to this debate is a different Minister from before. The buck has been passed and I sympathise with the Minister who is replying to this debate. The noble Baroness, Lady Williams, and I had an exchange of views—our usual civilised correspondence—in which she acknowledged that,
“property guardianship schemes have a range of drawbacks. The properties that are used are frequently derelict commercial or industrial buildings that were never intended to be used as accommodation and may be in an unsafe condition with inadequate physical security. Occupiers pay a fee to occupy part of the building, are responsible for securing it and preventing damage. However, they are not tenants and do not therefore have the right to exclusive possession of any part of the building. In addition, they can be required to leave at very short notice. The Government does not encourage such schemes but I do recognise that recent media reports suggest they are becoming more widespread. It is very important that anyone considering living in such a building clearly understands the limitations of these schemes and that they will have very limited rights. My department will therefore publish a short factsheet on its website which highlights the fact that the Government does not endorse these schemes, explains that buildings may frequently be unsuitable to be used as accommodation and that an occupier of such buildings has very limited rights”.
With all due respect to the Minister and perhaps those in the department who produced this response, it is very unsatisfactory given the kinds of conditions that I briefly described by quoting just a couple of examples.
That follows a rather difficult exchange with the noble Baroness, Lady Williams, in Committee where she made much the same points about being sympathetic and concerned. She said then:
“The Government do not support the schemes, as the guardians can be asked to live in conditions which do not meet the standards expected in residential properties”.
However, the reason given for not doing anything was that she did not believe—or, in all fairness, the Government did not believe—
“that it would be appropriate to require that Sections 8 to 17 of the Landlord and Tenant Act should apply to guardianship agreements”.
I found that entirely puzzling. If the Government are sympathetic to the plight of the people in these places, applying Sections 8 to 17 would not convert them to the status of tenants but would simply apply to those people conditions which apply to the tenants of residential properties. When I challenged her on this, the Minister said,
“if the noble Lord is talking about the property guardianship schemes, it is because they are arrangements between a building owner and one or more individuals, and the arrangement is temporary. They are not intended to provide stable alternative accommodation”.
However, that does not exempt the Government from protecting people in that position. I find it inexplicable that the Minister was falling back on her brief, which she is entitled to do, but that the brief in turn simply asserted that as there is no tenancy agreement, the Government did,
“not think that the Landlord and Tenant Act actually applies”.—[Official Report, 9/2/16; col. 2223.]
Well, it does not and would not without the Government legislating for that purpose. That is the point of the amendment. As the Government are so clearly aware of this growing problem—there are now reckoned to be more than 4,000 people living in these dreadful conditions—I cannot think why they cannot simply accept that these people should benefit from the limited but essential requirements of the relevant parts of the Landlord and Tenant Act which would be applied specifically by legislation for this purpose. I cannot think why the Government have so far declined to do that.
Unless there is an assurance from the Minister that she will take this issue back and return to it at Third Reading, I will seek to test the opinion of the House. I hope that we can make progress on this issue. It is not a party or divisive point. It is a simple enough matter which the Government should respond to more constructively and helpfully than they have done hitherto. I do not blame Ministers for that. I suspect that someone in the department has not grasped the reality of the situation. I beg to move.
This is an extremely worrying situation, as the noble Lord, Lord Beecham, explained it. I am not at all clear about the fact that this provision appears to apply the tenancy provisions that are applicable to all guardianship contracts. The noble Lord has already explained clearly that these are not all residential properties; some are commercial. I wonder whether the guardianship arrangements are suitable for people who live in the accommodation, which cannot be of a very high standard to come under the guardianship scheme. Therefore, I wonder whether it is possible to build something satisfactory on a foundation so unsatisfactory as a guardianship scheme for residential property.
My Lords, I reiterate the point made by my noble friend the Minister during our previous debates. We as a Government do not endorse these schemes and do not have any plans to introduce new regulation in this area as we believe that doing so could be regarded as tacitly endorsing the use of property guardianship schemes as a legitimate housing option. As the noble Lord said, while there has been some suggestion in the press that these schemes are becoming more widespread, we do not have any evidence that this is in fact a growing sector, nor has there been any pressure from campaign groups and others to take action in this area. People are free to make their own housing choices and the Government do not have any plans to stop the use of property guardianship schemes. Occupiers pay a fee to occupy part of a building and are responsible for securing it and preventing damage. However, they are not tenants and do not, therefore, have the right to exclusive possession of any part of the building. In addition, they can be required to leave at very short notice. However, it is very important that anyone considering living in such a building clearly understands the limitations of these schemes and that they will have very limited rights.
As the noble Lord said, my noble friend has proposed that the department will publish a factsheet on its website which highlights the fact that the Government do not endorse these schemes and draws attention to their clear drawbacks, including the fact that the buildings may frequently be unsuitable to be used as accommodation and that an occupier of such buildings has very limited rights. With that explanation, I ask the noble Lord to withdraw his amendment.
I am sorry to say that I find that a completely unsatisfactory answer. Once again, I do not blame the Minister. That is clearly the department’s line and it is utterly unacceptable. The noble and learned Lord says that all these arrangements should be barred, in effect. They were working reasonably well because there can be a fair degree of common interest when a responsible owner with a building on his or its hands treats people reasonably, on the understanding that it is short term, with no security of tenure, but there is at least a basic, decent standard of accommodation.
We now have people exploiting that situation partly on the basis, by the way, that the freeholders of the property no longer pay business rates because the property is not being used for business. That constitutes quite a significant financial loss to the local authority. That unfortunate consequence is a separate issue and one might not be too concerned about it.
We are left in the position that the Government are adamantly refusing to do anything other than warn people about the situation. That is, frankly, not good enough. I am sorry that the Government are taking that line. I wish to test the opinion of the House.
Consideration on Report adjourned.
House adjourned at 9.42 pm.