Renters’ Rights Bill [HL]

Lord Palmer of Childs Hill Excerpts

Friday 10th June 2016 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, I thank my noble friend Lady Grender for producing this Bill and allowing us to have this debate, which furthers all the things that we dealt with during the passage of the Housing and Planning Bill. I support the Bill and draw attention to my interests in the parliamentary register.

I would like to link this Bill to our debates and decisions during our recent consideration of the Housing and Planning Bill. One of the successes of that Bill was the decision to include a power to require property agents to join client money protection schemes. I remind noble Lords that a manuscript amendment was agreed with Ministers to require a property agent to be a member of such a scheme, thus protecting tenants and landlords from an agent not keeping safe the rent paid or the repairs money received and held by the agent. It was an enabling amendment, so it said:

“The Secretary of State may by regulations require”.

As I said during the debate on that amendment, I would have preferred “must” rather than “may”. However, I am confident that we will get there, subject to the successful conclusion of the review to be conducted by the noble Baroness, Lady Hayter, who has not been able to be present today, myself and others. Similarly, my noble friend Lord Tope put forward an enabling amendment on electrical safety checks containing the word “may” rather than “must”.

With the Bill before us today, we try to tackle further the rights of renters. How can there be any doubt that anyone seeking a tenancy should have access to a database of rogue landlords? If necessary, it could be a database where one enters the name of the landlord or agent and there is a response as to whether the person or company is on the “Danger: beware” list. Why should that be made secret and not be available to tenants? Of course, as another noble friend pointed out at Second Reading of the housing Bill, we have to clarify the definition of “rogue”, which could mean many things.

I turn to the part of the Bill concerning letting fees for tenants. As my noble friend Lady Grender said, often tenants are not affluent but it is hoped that they can meet the monthly rent. They may also have to put up a deposit, which should now be covered by ombudsman schemes. They may be required to put up rent in advance, which is what we seek to protect, as detailed in the Housing and Planning Act. However, the question that this Bill raises is whether the often impecunious prospective tenant should also be asked to pay up front—I shall list them again, although the noble Baroness, Lady Gardner, set them out clearly—a registration fee, an administration fee, an inventory fee, a reference check fee, a tenancy renewal fee and a so-called exit fee. Why should these fees be paid by the tenant and not the landlord, or—this was not mentioned by the noble Baroness, Lady Gardner—be subsumed into the fees or commission received by the letting agent?

At the moment, the consumer law position on fees is that they should be transparent, fair and not excessive and that they must be proportional to the work undertaken. I think it is fair to say that a letting agent will take a commission from a landlord, so why are these additional fees necessary? Why should a tenant pay a fee to register, or pay an admin fee to the agent, who in reality acts for the landlord? There is an argument for a fee being charged for an inventory check—I have some sympathy with the comments that have just been made—which would then contractually give the tenant ownership of the inventory list. If it is done for the tenant rather than just for the landlord, there is therefore a contractual arrangement. Perhaps that could be explored further in Committee. A modest reference check fee could also be appropriate, but who should pay this—the landlord or the prospective tenant? Fees have been banned in Scotland. Shelter says that there is no evidence that this has increased rents, although it has to be said that the suggestion worries some in the industry in England.

I return to the subject of electrical safety, which I mentioned in my opening remarks. On 3 June, my honourable friend Tom Brake in the other place asked the Secretary of State for Communities and Local Government,

“when he plans to bring forward regulations on the testing of electrical installations in rental properties”.

Yesterday we on these Benches gave the Minister notice of the following question, and when he sums up we would like to hear what progress has been made. Electrical Safety First received a letter from the noble Baroness, Lady Williams, explaining the Government’s amendment just after the Bill received Royal Assent. That encouraged the organisation to continue correspondence with the DCLG at an official level. Since then, however, it has had no response to its queries on the state of play concerning the regulations or to its offer to help draft them. It is asking two things: first, when the work on the regulations will start—a reasonable request—and, secondly, what the Government now think about mandatory checks, given the “may” not “must” issue, to which I have already referred.

Electrical Safety First has decided to push ahead with drafting its own regulations on this and will present them to DCLG. The Scottish model for this has been law since December of last year and this matter should not just be put—if noble Lords will excuse the expression—on the back burner.

I trust that the Minister will agree that no one, regardless of age, income or where they live, should be put at risk of electrical faults in their home. There is also concern that amendments made during the passage of the Housing and Planning Bill to include electrical safety checks are to be introduced through regulations. Will any regulations that are brought forward make electrical safety checks mandatory every five years or thereabouts? Very often a tenant believes that because checks are mandatory for gas, electrical checks are also mandatory, but they are not.

My noble friend quite rightly ended, according to the protocols of this House, with the words “I beg to move”. When considering the Bill, noble Lords need to know that renters more often “beg to stay”—they cannot afford to move. I support the Bill.