Renters’ Rights Bill

Baroness Thornhill Excerpts

Tuesday 6th May 2025 Lords Chamber

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Taylor of Stevenage) (Lab)]

My Lords, I will start with government Amendments 136, 138 and 139. These amendments make provision for the requirement to provide a written statement of terms for tenancies that become assured after they have begun. A tenancy may become assured during its lifetime for a range of reasons; for example, because it becomes the tenant’s principal home, or rent becomes payable on the property.

Where this happens, landlords should be able to comply with the requirement to provide a written statement of terms. These amendments will therefore require landlords to provide a written statement of terms within 28 days of the tenancy becoming assured. Without this, landlords would be left in limbo, unable to comply with the duties in new Section 16D of the Housing Act 1988 to provide a written statement of terms at the outset of a tenancy, leaving them liable to penalties. It would also leave a tenant without the written statement of terms, a key benefit of the new system, despite their tenancy having become assured. I beg to move.

[Baroness Thornhill (LD)]

In view of the time that we have lost—and I must say publicly that I regret the pressure that we are putting ourselves under—I will just say that it is essential that written statements are mandated to help people resolve conflicts and provide evidence if disputes go to court. What these must contain, which is the essence of Amendment 140 from the noble Baroness, Lady Scott, is clearly important and needs to be widely known.

There is quite a lot in the Bill that we feel needs to be widely known, and we have all had concerns about the level of knowledge. All I will say, with my tongue in my cheek for things down the road, is that that is all the more reason to regulate those who act for landlords—such as letting agents—to make sure that they act professionally and inform their tenants correctly.

[Baroness Scott of Bybrook (Con)]

My Lords, Clause 14 aims to strengthen the transparency of rental agreements by requiring landlords to provide written terms at the outset of a tenancy. This is a welcome step towards ensuring that tenants are fully informed about their rights and obligations, and that landlords are held to account for the terms they offer.

Amendment 140, in my name, recognises that legislation alone is not enough. We must ensure that tenants, landlords and, indeed, any third-party contractors involved are informed and empowered. By requiring the Secretary of State to issue clear, accessible guidance, we help to make these rights and duties real and usable in practice. Without such guidance, even the most well-intentioned legislation risks becoming an abstract concept rather than a meaningful tool for change. This is why it is crucial that the Government take proactive steps to ensure that everyone involved in the rental process understands their roles and their responsibilities.

Amendments 136, 138 and 139, tabled by the Minister, seek to refine the process through which written statements of terms are provided. The intention, as I understand it, is to ensure that landlords are held to account for providing these terms in a timely manner, which is certainly a step in the right direction. However, we must be careful to consider whether the amendments fully take into account the diverse needs and circumstances of both tenants and landlords.

The Government have a clear opportunity here to provide a system that is not only fair and transparent but also practical and achievable for all those involved. We must ensure that these provisions do not overburden landlords with an administration task but, at the same time, protect the rights of tenants by providing them with the necessary information to make informed decisions about their tenancies. While the intention is to create more transparency, it is equally important, we feel, that we do not add unnecessary complexity or red tape that could inadvertently discourage smaller landlords or make the rental process more cumbersome.

In light of these considerations, I would like to ask the Minister one or two questions. First, is the Minister confident that the 28-day requirement for landlords to provide written statements will not lead to confusion or delays? This timeline, while designed to allow time for landlords to issue the statements, may in practice create gaps in communication, potentially leaving tenants in a state of uncertainty about their rights and obligations. How do the Government intend to mitigate these potential delays?

Furthermore, how do the Government plan to ensure that smaller landlords, who may not have the dedicated administration teams, will be able to comply with these provisions without facing excessive burdens? Small landlords, who often play a crucial role in our rental market, could face challenges in keeping up with increased administration requirements without support or resources. We must be mindful not inadvertently to create barriers that make it harder for these landlords to continue offering tenancies.

In conclusion, while we acknowledge the Government’s intention to improve transparency in tenancy agreements and better protect tenants, we must consider the real-world impact of these changes. We must ensure that reforms are workable for both tenants and landlords, without increasing the complexities of the rental process or creating unnecessary barriers to housing. The amendments, while positive in some respects, do not fully address the practical challenges landlords and tenants face. Is the Minister confident that these provisions will not place undue burdens on landlords, especially those at the smaller end of the market, and that they will effectively protect tenants’ rights without creating new avenues for confusion and non-compliance? The legislation must strike a balance that promotes fairness and transparency while also being workable for all parties involved.

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[Baroness Thornhill (LD)]

My Lords, I have spent some time looking at this and I have listened very carefully to the amendments in this clause from the noble Baroness, Lady Scott, and the noble Lord, Lord Jamieson, as well as listening to the words of the noble Lord, Lord Hunt, and the noble Earl, Lord Kinnoull.

I am neither a lawyer nor a solicitor, but we are troubled by Amendment 144 in particular, as it would in effect delete all of the new Section 16I of the Housing Act 1988, inserted by Clause 18. In doing so, it would remove the ability of local housing authorities to issue civil penalties for a range of offences, pushing them into the courts. Having listened to the noble Lord, Lord Hunt, and the noble Earl, Lord Kinnoull, I think that there probably is a debate about what should be pushed back to the courts, but in general I see a legitimate role for local authorities to issue penalty notices. I also feel that in much of the Bill we have talked about the courts’ capacity to deal with things, so I would be a little reluctant to increase the burden on the courts, which we are already arguing are stretched.

I would also be interested in hearing from the noble Baroness, Lady Scott, why Clause 15 of the previous Government’s Renters (Reform) Bill gave similar powers to the local housing authorities as in Clause 17 of this Bill, albeit with a much lower maximum fine. To us, the proposal undermines the regime in the Bill that empowers local housing authorities to issue civil penalty notices. It is part of the tools in the box to give local authorities more powers to enforce across the many and various sections of the Bill. If the one objective of the Bill is to raise standards and root out rogue landlords, the Bill is right to give greater powers to local authorities to do so and raise the level of fines that can be imposed to be an effective deterrent.

At this point, when the noble Lord, Lord Jamieson, very nicely pointed out the one person who has inherited and the this and the that—I do not think that those landlords need to be worried at all about this measure, as they are not the people whom the Bill is aimed at. In fact, there is a tiny degree of scaremongering in this. As I understand the aim, and I am sure that the Minister will correct me if I am wrong, we are looking at the bottom end of the market. The answer to the landlords mentioned in the list cited by the noble Lord, Lord Jamieson, is, “If it is so ruinous to you, don’t do it—don’t do the thing that will result in that fine being imposed”. I am absolutely certain that the majority of good landlords would go nowhere near it—but actually, as the noble Earl said, some of our worst landlords do terrible things. It is very often a shock to talk to the people who deal with bailiffs, evictions and all that, to actually see the conditions that some landlords will subject human beings to. But it is a legitimate argument to talk about what should go to the courts or not as a result of what we have been talking about.

Amendments in this group seeking to reduce the amount that a local authority can charge in civil penalties will be generally resisted by ourselves, precisely because this Bill enables these fines to be used as revenue to provide resources for a strong and effective enforcement service. The capacity and capability of local authorities to carry out positive enforcement is a serious matter—and, of course, we will cover that in the next group. Councils keep the fines that they impose, whereas fines from the courts go to the Treasury, although it must be said that the LGA is still concerned that there will be a funding gap, the amount of which is going to be fairly speculative at this stage, which makes the reasons for wide-ranging reviews, which we will discuss in later groups, to be imperative. Perhaps the Minister could give us some reassurances on funding.

Amendment 144 removes the power of local housing authorities to enforce several provisions in the Bill that we strongly agree with, such as purporting to end a tenancy by serving a notice to quit orally or serving a purported notice of possession—in other words, not using the Section 8 process. In other words, it is conning a tenant that they have to leave. Councils must have the right to enforce this, as it goes to the heart of the Bill.

Amendment 144 therefore reduces the powers of local housing authorities to enforce, and Amendments 146 and 154 go on to reduce the penalties that can be imposed, which we opposed. Amendments 147 and 155, as well as all the amendments from the noble and learned Lords, Lord Etherton and Lord Keen, and the noble Earl, Lord Kinnoull, are an interesting variation on that theme, using rental payment as a measure of the penalty. I can see some logic in that, given that rents vary enormously depending on the property. But two months’ rent in a small house in Lancashire might well be several hundred pounds, whereas a similar property in Hertfordshire might be several thousand. There is a fairness of argument there, which is probably why there is a range of fines the authority can use, and I am sure the noble Baroness will enlighten us.

Finally, we can agree on Amendment 157. The burden on local authorities cannot be understated, and therefore it should be contingent on the Government to specifically look at this aspect and not just rely on the LGA and others to point it out. We are not convinced that it needs to be in the Bill, but it should be a genuine commitment.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I thank the noble Baroness, Lady Scott, and the noble Lord, Lord Jamieson, for moving those amendments. I send my get-well wishes to the noble and learned Lord, Lord Etherton, as well, and thank the noble Lord, Lord Hunt of Wirral, for moving the noble and learned Lord’s amendments. I thank the noble Earl, Lord Kinnoull, and the noble Baroness, Lady Thornhill, for taking part in the debate.

It might help if I start with a brief bit of context. We are taking a clear escalatory approach to civil penalties here. Across the Bill, less serious, one-off breaches will be subject only to the maximum penalty of £7,000. Only if landlords persist in not signing up to the database or the ombudsman will they become liable for a civil penalty of up to £40,000—and that is the maximum. Where landlords continue to fail to remedy unacceptable conditions in a property, they may be faced with a civil penalty of up to £40,000 or indeed criminal prosecution. Where there is evidence that landlords and letting agents continue to discriminate in the letting process, they can face multiple fines. But as the noble Baroness, Lady Thornhill, said, good landlords—there are many of them—will not be subject to any of these fines because they do not commit the offences that would lead to those fines. The answer is to follow the outlines in the Bill and then there will not be any need for landlords to be fined.

Amendment 144 would remove the ability of local authorities to impose financial penalties for non-compliance with the tenancy requirements where this is not a criminal offence. Effective enforcement against landlords who flout the rules is a key part of ensuring that our reforms deliver their full benefits. Across the provisions in the Bill, as I said, we have taken a consistent, proportionate and escalating approach to penalties. The civil penalties of up to £7,000 for less serious or first-time non-compliance is an important part of that approach. Removing the ability of local authorities to impose civil penalties for non-criminal breaches of the tenancy requirement would create a gap. How would landlords who, for example, failed to issue tenants with a written tenancy agreement or ended a tenancy illegally be held to account? Transferring responsibility for determining fines for these breaches to the courts would be a poor alternative and, as mentioned by the noble Baroness, Lady Thornhill, it would unnecessarily increase pressures on the courts. We have had many debates about that in this House in response to other areas in the Bill. In response to the question from the noble Lord, Lord Jamieson, about the capacity of local authorities to deal with this, local authorities have significant experience of imposing civil penalties. I do not see a good reason for excluding breaches of the tenancy requirements from this well-established practice.

Amendments 137, 141, 149 to 151, 156, 158 to 164, 293 and 294 are consequential on Amendment 144 and remove references to new Section 16I of the Housing Act 1988, which Amendment 144 would delete. Amendment 146 would reduce the maximum penalty for a breach of the tenancy requirements from £7,000 to £5,000. Amendment 147 would, in the alternative, set the maximum penalty for a breach of the tenancy requirements at two months’ rent. Amendment 154 would reduce the maximum financial penalty for tenancy offences from £40,000 to £30,000. Amendment 155 would set the maximum penalty for tenancy offences at 12 months’ rent. Amendments 153, 201, 217 and 241 would reduce the maximum civil penalties for offences in relation to tenancy reform, illegal eviction, the database and the ombudsman from £40,000 to £7,000.

Civil penalties need to be set at a level that provides an appropriate punishment and acts as an effective deterrent to future non-compliance. To respond to the question from the noble Lord, Lord Jamieson, about the level of the fines, we have set the maximum civil penalty for offences across the Bill at £40,000. This mirrors existing maximum civil penalties for offences under the Housing Act 2004, which are currently £30,000, but this takes account of inflation since those came into force. We intend also to increase the Housing Act 2004 maximum penalties to £40,000, via regulations, to reflect those changes in the value of money. The £7,000 maximum penalty for breaches represents a similar percentage uprating to reflect inflation, compared with a maximum fine level of £5,000 for less serious non-compliance in other housing legislation; for example, the Tenant Fees Act 2019.

Increasing maximum fine levels to reflect inflation ensures that the deterrent effect of the penalties is maintained. However, I emphasise that these are maximum levels: they will not be the normal penalty level. Local authorities will need to look at the particular circumstances of each instance of non-compliance. They will need to take account of aggravating or mitigating factors and arrive at the final penalty in line with their policy. When considering whether to issue a civil penalty, local authorities are required to issue a notice of intent, allowing time for landlords to make representations. The local authority will need to be satisfied beyond reasonable doubt that the landlord has committed an offence. If the landlord disagrees with the imposition or amount of the penalty, they will of course be able to appeal to the First-tier Tribunal.

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[Lord Jamieson (Con)]

I thank noble Lords for their contributions to this group. I owe a particular debt of gratitude to the noble and learned Lord, Lord Etherton, for bringing amendments to this House. I also wish him all the best for his recovery. These amendments, while similar in spirit to ours, would go even further in addressing the limits placed on local housing authorities. The noble and learned Lord is right to highlight both the challenges faced by local authorities and the significant scale of the proposed fines.

As there appeared to be a little bit of confusion, let us be absolutely clear: we need powers to hold to account rogue landlords who deliberately and maliciously break the rules to the detriment of tenants. That is something we can all agree on. However, we need a system that is fair and proportionate and does not ensnare essentially innocent landlords who inadvertently —or not maliciously—fall foul of the rules. They need to be encouraged to stay in the rental game.

As my noble friend Lord Hunt said, we need more rental homes, we need people to stay in the rental market and we need more people to come into it. We need to be very wary of coming up with systems where they fear very significant fines that they may perceive as arbitrary. Hence, I was very keen to get clear guidance from the Minister about how these fines would be placed and at what levels. I look forward to hearing further from her on this. I also appreciated what the noble Earl, Lord Kinnoull, said around the 2016 Act and the importance of guidance on that.

I thank the Minister for her reply and the commitment to share some reasoning for the figures that the Government have arrived at and some guidance— it appeared she would, anyway. Without insight into the rationale for the figures selected and the thresholds imposed, we are left to critique in the dark. For scrutiny to be effective and informed, the Government must provide not just partial explanations but a full and transparent account of how these conclusions were reached. Only then can Parliament properly fulfil its role in holding the Executive to account. I hope that the Minister will enable us to do this by sharing some of the Government’s reasoning and further guidance on how those fines will be brought forward.

Getting penalties right is not a technical detail; it is fundamental to the fairness and effectiveness of a system designed to remedy an offence. Significant fines and penalties for rogue landlords are appropriate and proportionate. However, as I said earlier, significant fines for someone who unintentionally falls foul of the law would be inappropriate. We need to be careful and calibrated to ensure that they deter offences but do not distort the functionality of the housing market. Although we want to address rogue landlords, we also want a thriving rental market and to avoid deterring good landlords who might perceive a significant risk of large, arbitrary fines.

I will finish with this message: a well-designed penalty framework should uphold the law, encourage compliance and support the functioning of housing authorities. The success of this legislation depends not just on good intentions but on practical deliverability, balanced implementation and trust from those who must operate within it.

[Baroness Thornhill (LD)]

Before the noble Lord sits down, can I just ask him: did he really feel, in his time as chair of the Local Government Association and leader of a reputable authority, that local authorities were dishing out fines willy-nilly or were disproportionate in their measures when they were considering things? I found the opposite—there were times when I wished we would be a bit tougher and stronger and go a bit further. I do not recognise this picture that the noble Lord is painting: that landlords might perceive that it is terrible and feel bad about it. I genuinely believe that most good landlords have nowt to fear—it is not those that the Bill is gunning for. We have a duty to convey that message and not to make good landlords feel threatened by the fact that there is an escalation in fees.

[Lord Jamieson (Con)]

I thank the noble Baroness very much. She is absolutely right: most councils in this country are very good and proportionate and do not levy fines—or whatever—willy-nilly. I absolutely agree with that. However, it is very much in the eye of the beholder, and we need to do everything we can to encourage a successful and thriving rental market with good landlords. Within that, one needs to think what that single-, two- or three-home landlord will look at. They will see the potential risk of £40,000, and it is perception. I absolutely concur that councils act appropriately in many instances, but if a landlord feels that there is a risk, and particularly when that risk can be two, three, or, in some cases in the north of England, four years’ rent, they may just say, “I do not want to take that risk, I will sell my property”. That is one less house for somebody to rent and one more person on a council’s housing waiting list.