Localism Bill

Lord Palmer of Childs Hill Excerpts

Monday 5th September 2011 Lords Chamber

Moved by

[Lord Palmer of Childs Hill]

37: After Clause 153, insert the following new Clause—
“Orders for possession: cases in which Ground 8 is not available
(1) Section 7 (orders for possession) of the Housing Act 1988 is amended as follows.
(2) In subsection (3) for “subsections (5A) and (6)” substitute “subsections (5A), (6) and (6A)”.
(3) In subsection (4) for “subsections (5A) and (6)” substitute “subsections (5A), (6) and (6A)”.
(4) After subsection (6) insert—
“(6A) If the court is satisfied—(a) that Ground 8 in Part 1 of Schedule 2 to this Act is established; and either(b) that some rent is in arrears as a consequence of a delay or failure in the payment of relevant housing benefit, or(c) the landlord is a private registered provider of social housing,it shall not make an order for possession unless it considers it reasonable to do so.”(5) After subsection (7) insert—
“(8) In subsection (6A) above—(a) “relevant housing benefit” means—(i) any rent allowance or rent rebate to which the tenant was entitled in respect of the rent under the Housing Benefit Regulations 2006; or(ii) any payment on account of any such entitlement awarded under Regulation 93 of those Regulations;(b) references to delay or failure in the payment of relevant housing benefit do not include such delay or failure as is referable to any wilful act or omission of the tenant.””

[Lord Palmer of Childs Hill]

My Lords, the proposed new clause amends ground 8 of Schedule 2 to the Housing Act 1988. At present, private landlords and housing associations can use ground 8 to seek possession of accommodation let on an assured tenancy where a tenant has arrears equal to more than two months' rent. The important point is that, unlike other rent arrears grounds for possession, ground 8 is mandatory: only in this instance does the court have no discretion to decide whether it is reasonable to make an order for possession. The amendment to ground 8 is designed to give discretion to the courts in cases where housing benefit issues are outstanding. I am sure that many noble Lords have seen such examples. The court can decide to adjourn the case or suspend an order for possession. This will help to ensure that tenants are not evicted from their homes because of non-payment of, or delay in the payment of, housing benefit.

The amendment would also prevent housing associations and other private registered providers of social housing using ground 8. The reason for this reform is that it is not appropriate for social landlords to seek to deprive the court of its discretion by mandating that it must make an outright order for possession, whatever the circumstances of the case. The Minister will know that most housing associations choose not to use ground 8, but some do. Local authorities do not have a mandatory ground for possession based on rent arrears. There is no need or justification for a mandatory arrears ground where social tenancies are concerned.

--- Later in debate ---

[Baroness Hanham]

My Lords, I have all sorts of answers that were given in the letter, which I was absolutely satisfied covered everything that could possibly be raised. I am stuck on this position about the courts and will have to come back to noble Lords, because the response I have already given is that landlords must have the right to go for possession, particularly where there are rent arrears and particularly where those are long term. On the other hand, landlords are expected to use every possible means of supporting tenants to sustain their tenancies and to prevent unnecessary evictions. That should be a requirement on all social landlords within a revised tenancy standard. The expectation is that evictions should happen only as a very last resort.

There is a well established pre-action protocol on rent arrears and the data show a steady decline in evictions of housing association tenants in recent years. However, we believe that good practice in managing rent arrears should not exclude using mandatory grounds in limited circumstances—right at the end of the road when the landlord really had not been able to come to any satisfactory conclusion. Recent independent research suggests that mandatory grounds are used sparingly, in less than 5 per cent of total housing association evictions for rent arrears. That is not a very high percentage, and indicates that it is not being used as a blunt instrument and takes proper account of the particular circumstances of the case.

There are protocols and we expect landlords to abide by them. I do not think we want to remove the mandatory aspect of ground 8 from the legislation. Under the previous Government, a working group was convened to look at the issue in detail and it commissioned independent research through the Tenant Services Authority. However, there was absolutely no unanimity among external partners that abolishing ground 8 was necessary or desirable.

Having talked long enough, I have been able to get at least a partial reply to my ignorance about what happens in the courts. The grant of possession does not necessarily mean eviction. Landlords may need to apply to the court again for an eviction order and arrears could be resolved before that point, which should have been the situation in the case mentioned by the noble Lord, Lord Palmer. If it is an arrear, time should be given for housing benefit to come through to prevent that eviction.

I think I understood the noble Lord to say that the courts felt that they had no alternative but to grant possession and to ensure eviction. I may have misunderstood him but I hope I have not. If that is the situation, I simply say again that no action should necessarily need to be taken immediately as a result of that court decision, particularly if it relates to money and it is felt that eviction is likely to come about. I am bound to say that in that scenario I would expect the landlords to have got to that situation before they apply for eviction, but there may be reasons why they have not.

We would resist removing ground 8, which leaves room for negotiation and should not have the effect of ensuring that tenants are automatically evicted as part of the court decision. If I have misunderstood anything that the noble Lord, Lord Palmer, has said, he is bound to let me know when he replies to the amendment. If necessary I will look at that position again, but I hope I have picked up the main points of his concerns. I very much hope that he will feel able to withdraw his amendment.

[Lord Palmer of Childs Hill]

My Lords, I thank the Minister for her detailed reply both in writing and verbally. She has not misunderstood anything but she lives, as perhaps we all do, in this utopia where all landlords are good. I am afraid that in the world in which I live not all landlords are good, and I believe that there are a modest number who will use ground 8. I hope that only a modest number will do that, but there will be some who will. There should be nothing in legislation that removes the discretion of the court to do what is right. The matter of when the bailiffs move in was raised. Those who have had experience of the courts know that that is a varied situation because it often depends on whether the landlord has set the thing in motion to get early occupation of the property.

That is particularly important at this moment. The noble Lord, Lord McKenzie, talked about when benefits—universal benefits and the like—are paid. Those of us who have been local councillors—I have been a councillor for 25 years and still am—know that local authorities and social landlords use IT systems to deal with housing benefits. For years, my local authority used Pericles, which went dreadfully wrong. It is not an indictment of any landlord that they should use a system that goes wrong, because IT systems often do, but the fact is that, with the changeover to universal benefits, which has already been mentioned in this debate, there is a great probability that housing benefits arrears will be built up unintentionally because of a changeover in computer systems. In that case, there would be the danger of ground 8 evicting people without the courts having a chance even to postpone eviction. I would ask that my noble friend the Minister looks again at how many such cases there have been and whether there is a need to tweak this in the legislation.

[Lord McKenzie of Luton]

Does the noble Lord agree that the issue is compounded because there will be a split of housing support, which is going via the universal credit, and council tax benefit, which is staying with local authorities? The noble Lord from his experience would know that often those systems run together and are contracted out jointly, although I do not know whether in this particular instance that is the case. Therefore, having to unpick those two systems, as well as having to build the universal credit, adds a particular dimension to the issue that he has raised.

[Lord Palmer of Childs Hill]

I thank the noble Lord for emphasising that point. In my view, during this volatile period there is a great danger of more notional housing arrears arising that would pose the danger of eviction. Good landlords, as my noble friend the Minister said, will be able to deal with it, and that is why I concurred with what she said. But can any noble Lord doubt that there will be some bad landlords? Some bad landlords may seek to use ground 8 knowing that the courts have no power to protect the tenant. Perhaps between now and Third Reading the Minister could look at that. Having said that, at this stage, which is always a mixture of Committee and Report stage, I beg leave to withdraw the amendment.

Amendment 37 withdrawn.