Tenant Fees Bill

Lord Beecham Excerpts

2nd reading (Hansard): House of Lords
Wednesday 10th October 2018 Lords Chamber

[Lord Beecham (Lab)]

My Lords, I refer to my interests in the register as a vice-president of the Local Government Association and a Newcastle City councillor. The ward I represent has a number of private rented properties, many of which were former council houses that were sold under the right to buy and now have people living in them paying considerably higher rents than would have been the case had they remained council properties.

However, this is a well-intentioned Bill that received broad support in the Commons and has been generally welcomed in this Second Reading debate. I was particularly interested in the contribution of the noble Baroness, Lady Jenkin. It was extremely informative and I have no doubt that she will talk to her ministerial colleague and friend. I hope that the Government will listen and see whether the points she made can be incorporated in the Bill as we proceed.

There are, in any event, a number of issues that need to be addressed or clarified, some of which, in addition to the noble Baroness’s point, have been identified today. One critical matter is funding, mentioned just now by the noble Lord, Lord Shipley. The Government’s commitment to provide £500,000 in the first year of the new regime to support enforcement activities is, of course, welcome, but the assumption that this will be sufficient to meet all of the costs of the new regime and that it will ultimately be self-financing is somewhat dubious. The responsibility now being imposed on local authorities is within the new burdens doctrine, under which the Government should meet the cost of responsibilities imposed on councils. Therefore, will the Government guarantee to meet the difference between the cost incurred and any sums recovered from landlords or agents?

The Bill bars additional charges to tenants except if they fall within a range of matters, including, for example, a variation of the terms of the tenancy or its renewal, many of which might be very simply achieved. It is unclear what the effect of that would be. Should there not be guidance about the size of such levies in those circumstances? Will the Government review the charging system after a time to ensure that the charges are reasonable? It is welcome that financial penalties might be imposed on landlords or managing agents for certain activities, but why should the failure to return a deposit, for example, not be treated as a criminal matter? The money will, effectively, have been stolen.

There are a number of questions about other provisions in the Bill. It lists a number of payments to landlords that are permitted. They include, oddly, payments to a local authority via the landlord of council tax. Could the Minister explain the rationale for this and for the inclusion of an alternative provision under which the landlord or agent could require the tenant to pay the council tax to the authority? Is it not the tenant’s obligation to pay the council tax anyway? There is also a provision that tenants could be required by the landlord or agent to pay for gas, electricity, fuel or water. Would this not be the normal position in any event, although I can understand that there might be difficulty for multiple occupants of a property? Could the Minister explain whether this provision will therefore apply to all tenancies, or is it designed for the situation where more than one tenancy is involved in a particular building? The same question arises relating to the landlord’s or agent’s requirement of a tenant to pay the BBC television licence or for telephones and the internet.

Paragraph 3 of Schedule 2 requires the holding deposit to be refunded if the parties do not enter into the tenancy agreements,

“for reasons, broadly, under the landlord or agent’s control”.

Will the Minister say how “broadly” is to be defined? Paragraph 7 of that schedule touches on the sensitive area of immigration, stipulating that the landlord or agent does not have to refund a holding deposit if a tenant does not have the right to rent property under the Immigration Act, provided that they, the landlord, were unaware of the problem. Given the appalling record of the Home Office in Windrush and other cases, is there not a real risk of injustice in that provision?

Clause 15 allows tenants to apply to the First-tier Tribunal for compensation from the landlord or agent if they have been required to make an improper payment or have been unable to recover a holding deposit that has been unlawfully withheld, but will legal advice and, if a hearing is required, legal aid be available for a tenant of limited means? Or is the provision in Clause 16 that provides that, “An enforcement authority may”—I emphasise “may”—help a tenant, a substitute for legal advice and/or aid? What criteria would be adopted to assist that enforcement authority in a decision as to whether or not to offer such advice and support?

The Bill places significant duties, under Clause 21, on what might be thought to be a somewhat curious choice of organisation, namely local weights and measures authorities, to enforce client money protection schemes. This vests the function in county councils and two-tier areas, in contrast to the unitary areas, where the local authority already has a significant role in housing. What steps do the Government propose to take to ensure the necessary liaison between the different county and district councils? What steps are planned to equip the officers at county and unitary council levels with the necessary skills—or indeed those district councils, as opposed to unitary councils, which may choose to exercise the role?

Clause 22 deals with the lead enforcement authority. Oddly, that title is defined as either,

“the Secretary of State, or … a person whom the Secretary of State has arranged”,

which is a curious word,

“to be the lead enforcement authority”.

In the latter case, what will be the criteria for an appointee and how will he or she be selected? Will local government have a role in the appointment process? The clause goes on to list a number of things that the Secretary of State may arrange or regulate, though in the latter case the type of secondary legislation is not identified. I assume it will not be in the affirmative mode, but in any event can the Minister say when these are likely to emerge, and whether the Local Government Association will be fully consulted, alongside other relevant bodies representing tenants, landlords and agents?

Clause 23 sets out the duties of the lead enforcement authority. Will the officeholder be required to consult with local authorities about the exercise of his or her duties? Will there be an annual report of the work undertaken and contemplated? In particular, will the duty of the officeholder,

“to keep under review and … advise the Secretary of State about … social and commercial developments in England and elsewhere”—

as the Bill says, somewhat curiously—relating to tenancies, agency work and related activities extend to include local government?

Clause 24 sets out in detail the way the lead enforcement authority is to work, and the relationship between the authority and the relevant local authorities. The key subsections (3), (4) and (5) require the enforcement authority to notify the relevant action it proposes to take. It is not clear whether “the relevant authority” to which notification should be given is the relevant housing authority or, in a two-tier area, the county council which provides the local weights and measures service. Should the housing authority, or the district council in two-tier areas, not at least be notified of the position? After all, they have the ultimate housing responsibilities.

The Local Government Association is concerned about the impact of the provision in Clause 3 that proscribes the payment to a landlord in order to secure a tenancy. This is absolutely legitimate in relation to ordinary lettings, but it has a potentially serious impact on the practice of some councils, as we heard from the noble Lord, Lord Shipley, to make incentive payments to secure the rehousing of homeless people. Councils have a duty, as housing authorities, to help the homeless to be housed, and the recent Homelessness Reduction Act and the homelessness code of guidance in February allow councils to provide support to applicants, financial or otherwise, to access private rented accommodation. The noble Lord identified that point and I hope the Minister can provide some satisfaction. The code explicitly refers to making small grants to property owners to facilitate housing these vulnerable people. I hope the Government will accept this and ensure that the Bill recognises this growing need.

Finally, I raise again the urgent need to facilitate selective licensing as a means of ensuring decent standards of housing and good housing management. There are too many people living in poorly managed properties, often in appalling conditions. This not only affects the residents of those properties but has a damaging effect on those who live either as owner-occupiers or tenants of well-maintained rented homes. I speak with experience of precisely that situation, which exists in the ward I represent and in some other wards in Newcastle. We have some selective licensing schemes but it is a very difficult and prolonged process to ensure that one can be given. The Government have undertaken a review of the issue and I invite the Minister to indicate when this will be concluded and whether, if action is recommended, the Government will look to implement it.

I join most of the noble Lords who have spoken in welcoming the Bill. Certainly, on these Benches we will seek to work with colleagues across the House to look at possible improvements and ensure that the Bill emerges fit for purpose, as undoubtedly the Government would wish.