Baroness Evans of Bowes Park
Main Page: Baroness Evans of Bowes Park (Conservative - Life peer)Housing and Planning Bill
Baroness Evans of Bowes Park Excerpts
Baroness Evans of Bowes Park (Con)
I thank all noble Lords for their amendments and contributions to the debate. As the noble Baroness said, the provisions are hugely important to a small number of landlords whose properties are abandoned by tenants who have stopped paying rent. We estimate that 1,750 properties in the private rented sector are abandoned a year at a cost of about £5 million to recover them. The Government want to ensure that the proper processes are in place before an abandoned property can be recovered.
Amendment 34 would require local authorities to certify for landlords in their area when a property has been abandoned. We are not convinced, and would echo the words of my noble friend Lord True, that local authorities, which may not have the resources, are necessarily in a better position to pass judgment on the matter. Such a requirement may also cause delays and hinder hard-working landlords and families from renting out empty accommodation. Amendments 35 and 36 would ensure that the minimum warning period before a landlord can recover an abandoned property was 12 weeks, and that a second warning notice was served at least four weeks and no more than eight weeks after service of the first.
I reassure noble Lords that this is absolutely not about opening a back door to landlords. It is about putting in place a procedure for dealing with abandoned properties that would allow a reputable landlord to recover a property that has been abandoned without the need to obtain a court order. The process includes a number of safeguards to ensure that a landlord can use it only where a tenant has genuinely abandoned a property. As my noble friend Lady Williams said, this is not about rent arrears.
Lord Campbell-Savours
Who will check that the landlord is not acting like a rogue and that the property is actually abandoned?
Baroness Evans of Bowes Park
I will go through the process, which contains checks and balances which will ensure that a tenant has genuinely abandoned the property.
The landlord can recover a property only where warning notices have been served on the tenant, with a copy of the first and second warning notice sent care of any guarantor. The first warning notice could not in practice be served unless there were at least four consecutive weeks’ rent unpaid. The second warning notice can be served only when at least eight consecutive weeks’ rent is unpaid. It must be given at least two weeks and no more than four weeks after the first warning notice. Each warning notice must state that the landlord believes the premises to have been abandoned, that the tenant or named occupier must respond in writing—which could be by email—before a specified date, which must be at least eight weeks after the first warning notice is given, if the premises have not been abandoned, and that the landlord proposes to bring the tenancy to an end if neither the tenant nor a named occupier responds in writing before that date.
Following service of the second warning notice, where the tenant has failed to respond, the landlord must then put a third and final notice on the door of the property at least five days before the end of the warning period. That notice must state that unless the tenant or the named occupier responds in writing within five days—as I said, that could include email—the landlord will bring the tenancy to an end and repossess the property. The Secretary of State will prescribe the content of the final warning notice. This requirement was added in Committee in the other place to add a further safeguard to the process. Finally, if a tenancy has been brought to an end using the abandonment procedure, where a tenant had a good reason for failing to respond to the warning notices, they may apply to the county court for an order reinstating the tenancy.
I hope from this explanation that it is clear that landlords will continue to have to go through a lengthy and detailed process before they can regard a property as being abandoned. In addition to a requirement that at least eight consecutive weeks’ rent remains unpaid, they must serve a series of warning notices on a tenant and, when applicable, any other named occupiers. We believe that it would be an unnecessary burden on local authorities to impose an additional requirement that a local housing authority must also confirm that a property has in its view been abandoned. It may be difficult to determine whether this is the case or not, and requiring it to do so could place it in a difficult position. It would also be likely to introduce further substantial delay into the process of recovering an abandoned property, depriving the landlord of income and a family of the chance to occupy a property sitting empty.
It is already effectively the case that in the Bill the minimum period before a landlord can recover an abandoned property would be 12 weeks, as I have outlined. The clauses are carefully drafted but complex and, subject to Royal Assent, the department will issue guidance to landlords to help them to understand the new process. Amendments 35 and 36 would also replace the current provision in Clause 57, which specifies that a second warning notice must be served at least two weeks and no more than four weeks after service of the first warning notice. We have sought to strike the right balance between ensuring that tenants are given adequate notice, that the landlord believes that the property may have been abandoned, and to respond if they have not, in fact, abandoned the property, while also ensuring that landlords do not have to wait an unreasonable amount of time before being able to recover the property. Requiring that the second warning notice is served at least four weeks and no more than eight weeks after service of the first warning notice would add further delay and deprive the landlord of an income and another family of the chance to occupy the property when it is sitting empty.
Lord McKenzie of Luton (Lab)
This is my first foray into this Bill, and I draw attention to my interests in the register. Clause 57(6) says:
“The first warning notice may be given even if the unpaid rent condition is not yet met”.
On what basis can the landlord assume that the unpaid rent condition is eventually going to be met?
Baroness Evans of Bowes Park
The first warning notice would not in practice be able to be served unless four consecutive weeks’ rent is unpaid, and the second warning notice may be served only when at least eight consecutive weeks is unpaid. So there are specific timescales for which there is unpaid rent. I am not sure whether that fully answers the question; if it does not, perhaps I can come back to noble Lords.
Lord McKenzie of Luton
I would be grateful if the Minister could do so because, on the face of it, the provision seems odd. The unpaid rent condition has to be met for the abandonment provisions to proceed. Obviously, the concern is that warning notices may come thick and fast without the chance of the tenant to have due consideration. The basis on which that first warning notice can be given if the unpaid rent condition is not met is somewhat bemusing. Could the Minister, if she cannot say more today, write to us on that?
Baroness Evans of Bowes Park
Yes, I am happy to clarify. I have talked about a lot of notices and warnings; perhaps it would be better to put it in writing so that it is clear.
Baroness Hollis of Heigham
Under the provisions for universal credit—it is something that I regret very much, although it is a structure that I very much support—you are not allowed as a social landlord to start alternative payment arrangements in which there is direct payment to the landlord until there is at least six weeks’ non-payment of rent. It looks to me as though a private landlord can start possession behaviour faster than a social landlord can seek direct payment of rent to the landlord.
Lord Kennedy of Southwark
The Minister explained the process for getting possession of a property believed to have been abandoned but she did not mention vulnerable tenants. Will there be any special provision for vulnerable people? I am worried that those people will not be opening their mail or looking at their emails or engaging in things and all of a sudden they will find themselves on the street.
Baroness Evans of Bowes Park
I set out the overall process but of course we will have to be mindful of people being able to access it. That is why we have put so many checks within the process to ensure that there is an opportunity for the tenant or someone else named as an occupier to respond. The final thing will be a public notice on the property to say what the situation is. We believe that this process as a whole will ensure that tenants are not disadvantaged and, of course, vulnerable tenants are on our mind.
Lord Kennedy of Southwark
The Minister also said that when the tenant of the property believed to have been abandoned has been evicted, they can go to the county court. Will legal aid be available for the county court action?
Baroness Evans of Bowes Park
I will have to get back to the noble Lord. I am afraid I do not have that information.
Lord Kennedy of Southwark
That would be very helpful. In this short debate we have highlighted a few issues with this section of the Bill so can I suggest that it might be welcome if a few noble Lords got together with the Minister to discuss some of them? There are issues which are not clear and could cause problems. The last thing we want is to get something on the statute book that causes everybody confusion.
Lord McKenzie of Luton
I have one further question. If the rent condition is initially not met but then there is a payment which starts the process again, where does that leave the warning notices that have been issued? Will they remain in place for a possible second bout of the application of these provisions?
Baroness Evans of Bowes Park
I am happy to agree to meet with noble Lords interested in this area so perhaps they could list all their questions and we will try to respond to them when we meet in due course.
Lord Beecham
I declare two interests: one is my local government interest which is in the register. In that context I want to reflect briefly on the burdens that might be imposed on local authorities in terms of enforcement and point out that there is such a thing as the new burdens doctrine. Admittedly it is more honoured in the breach than in the observance by the present Administration—the noble Lord, Lord True, is nodding his wry agreement with that—but technically speaking, if a new burden is imposed and incurs costs then the Government are expected to meet that cost. We are presumably not talking about large sums of money nationally in any event, as I assume that there will not be a huge number of cases, unless the Bill incentivises such procedures.
I also declare a family interest inasmuch as my daughter practises at the Bar, particularly in the field of housing law, both as counsel and as a part-time deputy district judge. My impression is that legal aid would not be available. At the moment it is confined to cases of eviction. I assume that this case would not fall within the definition of eviction. It is effectively the tenant failing to respond to the procedure that is set out here. If I am wrong about that and if legal aid is applicable, it would be as well to have that on the record. If it is not, then I hope that the Minister will not only reply to that effect but consider very carefully and quickly whether legal aid should be extended to cases of this sort, particularly because, as my noble friend has indicated, there may well be vulnerable people who will need help in presenting any kind of case for resuming possession of a property which appeared to be abandoned.
Baroness Evans of Bowes Park
I believe that the noble Lord is correct about legal aid, but I hope he will permit me to go back and confirm that. In response to the question on what happens when some payment of rent is made, the process starts from scratch and all notices will need to be resent. But as I said, I am very happy to meet noble Lords to discuss some of the detail further.
Lord Campbell-Savours
Before we finish on this amendment, does the Minister understand that very often we are talking about very vulnerable people who simply will not understand this process? We can almost foresee the circumstances in which this is going to go wrong. I wonder whether the Minister will go away and consider the position and how this will affect the vulnerable. It is a very important issue.
Lord McKenzie of Luton
My Lords, I agree with those who say that these provisions should be recast. I want to pick up on the third warning needing to be,
“given by fixing it to some conspicuous part of the premises to which the tenancy relates”.
Conspicuous to whom? Is it the tenant, the whole world, the community that passes by the front door? It seems to me that giving notice to somebody by nailing something to their front door is almost medieval. You can imagine that somebody will put the notice up, the mobile phone will come out and a photograph will be taken but half an hour later it could be ripped off and be nowhere in view—certainly nowhere in view of the tenant. It seems an incredibly archaic approach. I think the whole thing should be recast but that particular provision jars immensely.
Baroness Evans of Bowes Park
My Lords, I thank all noble Lords who have contributed to this debate on Part 3 of the Bill. The noble Lord, Lord Kerslake, said that numbers may be small, but these provisions are nevertheless important to good and reputable landlords whose properties are abandoned by tenants who have stopped paying rent. As we have tried to make clear, we want to find a balance between protecting good landlords and good tenants. Presently, when abandonment happens a landlord can go in and change the locks. However, that involves taking a huge risk, since if the tenant has not abandoned the property the landlord could be liable to prosecution for unlawful eviction and be subject to claims for damages in the civil courts. As a result, many landlords do not take the risk and instead take possession proceedings in the county court.
However, before they are able to commence court action they must bring the tenancy to an end by serving a Section 21 notice giving the tenant two months’ notice, and when they have made the application it can be two or three further months before they get a court order enabling them to repossess the property. In the mean time they receive no rental income for a property which is standing empty, and often will still need to meet their mortgage payments. The landlord will also incur costs in taking court proceedings. As I have said, abandonment may not be a widespread problem but it is estimated that it costs landlords around £5 million a year in legal fees, missed rent and time.
When a person surrenders a property they contact their landlord and hand in their keys, but in this instance we are talking about when a person abandons a property and disappears and stops paying rent. It is a different situation. That is why we think the provisions in Part 3 provide for a simpler and cheaper method for recovering property where the former tenant has permanently left owing arrears of rent that have continued to accrue since the first warning notice was given.
I also make clear that any landlord who abuses this process by not giving tenants proper warning and takes repossession of the property knowing that it has not been abandoned will be liable to be prosecuted for unlawful eviction under the Protection from Eviction Act 1977. As we have also tried to make clear, this is not intended as a route to remove a tenant in arrears. This is about abandoned properties. A tenant will also be able to bring a claim for damages through the civil courts where the landlord has not followed the procedure as set out in legislation. The provisions are not a charter for landlords—
Baroness Grender
Have the Government made an estimate of the cost to a tenant? Since there is a cost of £5 million to the landlords—which is the Government’s estimate—what is the cost to tenants for pursuing this through the courts?
Baroness Evans of Bowes Park
As I have said, we have heard the strength of feeling in the House on this issue and have agreed that we will meet and have a further opportunity to discuss issues. I will attempt also to ensure we have information on hand in that meeting. I reaffirm that these provisions are not a charter for landlords to carry out a do-it-yourself eviction. That is and will remain unlawful. On the basis of the strength of feeling in the House, we welcome the opportunity to discuss further details with noble Lords. On that basis, I ask that these clauses stand part of the Bill.
Lord Kennedy of Southwark
Can the Minister tell us a little about where the pressure for these changes is coming from? We hear that there is not a big issue and not a problem here. The Government are going to meet us and seem quite determined about this. What is behind all this? Where has it all come from?
Baroness Evans of Bowes Park
As I have explained, the rationale behind this is to attempt to provide balance and fairness for both tenants and landlords.
Lord McKenzie of Luton
Will the Minister help me on one other point, please? On the reference to rent not being paid, or rent being unpaid, what happens if a tenant, in struggling to pay the rent, pays an amount on account? Does that count as the rent being unpaid for a week, or a month? How is that dealt with? The Minister has used the expression that someone has effectively given up on paying the rent. There could be many instances where people are struggling to pay the rent, doing the best that they can, and making partial payments. If that is what they do, would that preclude the operation of these provisions?
Baroness Evans of Bowes Park
Obviously, there will be a dialogue between tenant and landlord, and arrangements between the two may be made. As I said earlier, if some payment of rent is made and if a process had been started, it would have to start again from scratch.
Lord McKenzie of Luton
I understand that if the rent is paid in full you go back to square 1. But if the rent is only partly paid, what is the position? Our concern here, as many people have said, is about unscrupulous landlords who will use these provisions for a perverse effect. If somebody has only part-paid the rent that would give them the opportunity of doing so.
Baroness Evans of Bowes Park
In terms of part-payment of rent, if any rent is being paid, the process would be ended. It is about abandoning a property—no rent being paid. It is not about part-payment.
Baroness Evans of Bowes Park
There would be a balanced view on this. As I have tried to set out, where payment is being made, that is not abandonment of a property. As I have said to noble Lords, we are happy to discuss this in further detail to, I hope, allay concerns.
Lord Campbell-Savours
Does this not all point to the need to have someone to check? That might well be a local authority.
Baroness Evans of Bowes Park
As I have said, we believe there is a process that has a number of important elements to it. However, we have heard the strength of feeling in the House and look forward to discussing this in due course.
Baroness Evans of Bowes Park
My Lords, this amendment would insert a new clause into the Bill requiring a review of the effectiveness of empty dwelling management orders and other provisions for bringing into use domestic properties left empty by their owners. We welcome noble Lords’ interest in seeing properties being brought back into use to increase the housing supply, which is certainly an aim that the Government share, but we do not believe that this amendment is necessary because the range of measures we already have in place to tackle the issue of empty homes is working.
The Government have achieved a year-on-year reduction in long-term empty homes, with the number of homes that stand empty for more than six months now at the lowest level since records began. In London, as highlighted by the noble Lord, Lord Campbell-Savours, empty homes are at an all-time low of 2%.
Lord Campbell-Savours
When the Minister talks about empty homes, does she mean homes on which no council tax is being paid? If council tax is being paid on an empty home, is it defined within those statistics?
Baroness Evans of Bowes Park
That figure relates to unoccupied homes.
As the noble Lord, Lord Greaves, highlighted, local authorities have a range of powers to tackle empty homes. Through the new homes bonus they earn the same financial reward for bringing an empty home back into use as building a new one. As he also mentioned, councils may charge up to 150% council tax for homes left empty for over two years. They can CPO consistently neglected houses, as the noble Lord, Lord Beecham, highlighted, and there are also empty dwelling management orders, which can be used to regain possession of a long-term empty property, which has been empty for at least 2 years.
The Government want to strike a balance between respecting the liberties of responsible home owners and the need to tackle the harm caused to the local area when homes are left empty, as graphically outlined. The threat of issuing an empty dwelling management order is often enough to encourage an owner to bring a property back into use, so the number of orders issued is not necessarily a guide to how effective they are. Of course, local authorities have a range of powers at their disposal when seeking to tackle a property that has fallen into disrepair—for instance, through improvement notices under the Housing Act, or powers under the Building Act 1984 to deal with dangerous buildings. They can also tackle nuisances caused by properties using the Environmental Protection Act.
Our strong record on the economy has helped to create a buoyant housing market. Since 2009, over 880,000 new homes have been built in England and, in addition, owners are bringing more empty homes back into use without the need for government action. We believe that we have introduced a range of measures, which local authorities can use as they best see fit.
Lord Campbell-Savours
Sorry, I am not going to let this question go. Some unoccupied homes have council tax paid on them. There are quite a lot in London, where people who own expensive property leave it abandoned but continue to pay council tax. The question is whether they are included in the figures. I understand that this is a surprise question and I do not expect an immediate response, but I hope that we will be informed of that. If that is an issue—and there are a lot of these properties in London—then surely there should be some kind of report or review in the way that my noble friend and the noble Lord, Lord Greaves, have suggested. It would mean that there is an area of the market which we are not altogether aware of.
Baroness Evans of Bowes Park
The noble Lord makes a valid point. As he has kindly suggested, I will write to him with further details as I do not have the figures to hand. I hope that, in light of what I have said, the noble Lord will agree to withdraw the amendment.
Lord Greaves
My Lords, I am grateful to the Minister, half of whose speech was exactly the one I made in listing some of the powers that local authorities have in order to deal with empty homes and reduce their number. She is exactly right that some of those powers, such as levying council tax on empty homes, have contributed to a substantial reduction.
However, the Minister did not home in on my specific point about the relatively small number of properties which have effectively been abandoned and made derelict. They are the rotten teeth of the terraced streets, which cause immense problems. I am sure noble Lords can imagine the social problems that kids get in, or the effects of broken water pipes on neighbours. These problems are quite apart from the fact that people do not want to live on a street facing an empty property and therefore do not buy property on those streets, which reduces property values. This is a major problem in some parts of the country. The point I was trying to make—I thought I made it fairly well, but perhaps the Minister will read what I said and decide whether she agrees with me—is that the existing powers are no longer sufficient for allowing local authorities to deal with these problems.
The Minister mentioned improvement notices, which I deliberately did not include in order to keep my speech within 10 minutes. They are just the same. A council can make an improvement notice and if the owner does nothing do the work by default. It then has to put a charge on the property. Getting money back from people who have abandoned a property is not an easy thing to do and may well take many years, if it can be done at all. This is another example of a funding gap, where there is a cost to a local authority of using these powers in areas where the level of house prices and rents are low but the cost of the work is about the same as anywhere else in the country. In these areas, the cost of buying, doing work to and managing property is not matched by what the local authority can get in from selling, putting a charge on or renting the property. That is the difference. There is a gap and it is a serious problem, which applies to all of the different means that the Minister mentioned.
All I can ask is that the Minister and her colleagues look at this and write to me about how they think it may be solved. I beg leave to withdraw the amendment.