Baroness Williams of Trafford
Main Page: Baroness Williams of Trafford (Conservative - Life peer)Housing and Planning Bill
Baroness Williams of Trafford Excerpts
Lord Beecham (Lab)
My Lords, I understand why the noble Lord, Lord Greaves, would not wish to be considered to be a member of the “Liberal Demotic Party” but we have more important things to discuss in the 14 groups that are before us. I trust that the noble Baroness will deal with the matter briefly, and then we can get into the substance of the Bill.
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, before I begin, I will correct a comment I made at Second Reading. At col. 1266 in Hansard I attributed a comment to my noble friend Lord Young of Cookham but he did not make that comment. Obviously, I cannot correct it in Hansard because I said it, so I use this opportunity to correct the attribution.
I will deal with the amendment briefly. When I saw the word “specified”, I thought of “specified housing” as opposed to a person. The public understand the concept of a rogue landlord, just as they would understand the concept of a rogue trader. BBC 1 in the morning is full of stories of rogues of various descriptions, so it is understood in the public mind. However, just to be clear, the majority of landlords and letting agents provide a good service, and we should commend them for doing that. This part of the Bill, which is widely supported, is about tackling the small minority of rogues who deliberately flout the rules. We should call them out for what they are, as they are rogues. It is important that we send a clear message through the Bill that such practices will not go unchecked. I therefore ask the noble Lord to withdraw the amendment.
Lord Northbourne (CB)
My Lords, I speak as a humble landlord. How will I know whether I am a rogue?
Baroness Williams of Trafford
The noble Lord will know very well if he is a rogue landlord, because I will now read out the definition. It is a landlord or property agent who knowingly flouts the law by renting out unsafe and substandard accommodation. To be on the database, they will have to be convicted of certain serious offences—and, for that, they may come before your Lordships’ House.
Lord Greaves
My Lords, that is not the correct definition, with respect to the Minister, unless being banned by a First-tier Tribunal is a conviction. Perhaps it is—it is certainly a status—but it is clear that people banned by the First-tier Tribunal will be on the banned list. One assumes that they are therefore rogue landlords under the definition in the Bill, so they would not have to be convicted in a higher court of law. Yes, the Minister is nodding her head.
I will be brief. I am no friend of bad landlords—far from it. In the part of Colne that I represent, parts of those streets have been wrecked by bad landlords, and I agree that it is a clear phrase in the public mind. However, we are not talking about the public mind but about phrases that will have to be interpreted at some stage by the courts of the country. We are talking about words written into the law of the land. The use of such colloquial expressions, which are perfectly okay on breakfast-time television as the people who are denounced there deserve everything they get, will get us into trouble if we put them into the law.
If the Government are really determined to put this rather unusual and extraordinary expression into the law of the land, it ought to appear in the list of definitions at the end of Part 2 so that we have a clear definition of it, because when the Minister was asked just now she did not quite give an accurate one. At the very least, I ask that it appears in the list of definitions because words mean what they say. This is not Humpty-Dumpty land. Words actually have a meaning and, when it comes to the law, words have more of a meaning than they do in chat in the pub or on breakfast-time television. Having said that, I beg leave to withdraw the amendment
Lord Campbell-Savours
My Lords, I want to intervene briefly again, because this raises an issue of principle which came up during our consideration of tax credits. If you read the report of the Joint Committee on Conventions—the Cunningham report—you will find, under one of the sections, the conditions in which the House feels it is entitled to vote on fatal amendments. I am increasingly of the view, as I think are a number of other Members on this side of the House, that the Government are now abusing legislation by introducing skeleton Bills and bringing in, on the back of them, statutory instruments which they feel the House cannot consider in detail because we cannot amend them. This is a classic case of where, had the House had been given more information in the Bill, we would at least have had the opportunity to debate the detail, within the circumscribed area referred to by the noble Lord, Lord Deben, that would allow for flexibility. We could have considered in some detail what the crimes—if I might use that word, although it is a very broad one—might be.
I feel very strongly about fatal amendments. When it came to the consideration of tax credits, I was one of the very few Labour Peers who refused to vote, on the basis that I did regard what we were doing as fatal. That is how strongly I felt. However, increasingly in conversations with others, they will point to these recommendations on skeleton Bills and the use of SIs. One is being driven into a position whereby one has to vote on fatals—something which I never wanted to do when I was brought to this House some 15 years ago. As the Bill progresses, the noble Baroness should have it in mind that we need more detail, particularly in areas where Members might feel they wish to amend primary legislation.
Baroness Williams of Trafford
Amendments C1 and 8ZA relate to the same issue, so I shall address them together. Amendment C1 would remove Clause 13(3) from the Bill and replace it with a provision listing the offences that constitute banning order offences, namely,
“unlawful eviction of a tenant; or … failure to comply with an improvement notice in relation to property conditions”,
and would require that regulations to amend the list be subject to affirmative resolutions.
Amendment 8ZA would amend Clause 22, and would require financial penalty guidance to be laid in draft before Parliament, and not brought into force without an affirmative procedure resolution of each House.
We propose to define banning order offences in secondary legislation, as this will give us the flexibility to amend the list of banning order offences in the light of experience, as my noble friend Lord Deben said. As he has also requested in terms of certainty, we are sympathetic to that and we will consider it further.
Clause 13(4) explains what matters may be taken into consideration when setting out in regulations what are banning order offences. Banning order offences are likely to include a serious offence, where an offender has been convicted in the Crown Court of an offence involving fraud, drugs, sexual assault or violence that is committed in, or in relation to, a property that is owned or managed by the offender, or which involves, or was perpetrated against, persons occupying such a property. A banning order offence also includes any serious offence involving violence against the tenant by the landlord or property agent, and serious breaches of housing legislation.
We are planning to publish the secondary regulations in draft and will consult on these in the autumn before they are laid before the House. These will all be existing offences that already have serious consequences for those who are convicted. We are introducing civil penalties as an alternative to prosecution, and these will be available for certain serious breaches of housing legislation. The guidance for local authorities will be procedural and will provide advice on when it may be appropriate to issue a civil penalty rather than prosecute, together with advice on what might be the appropriate level of penalties.
The noble Lord, Lord Beecham, asked about the right of appeal for civil penalties. The landlord will have a right to appeal against a civil penalty to a First-tier Tribunal and can either cancel or decrease the penalty. Several noble Lords have brought up the DPRRC and its recommendations on the delegated powers in the Bill, including those highlighted in these amendments. I can confirm to noble Lords that we will consider the committee’s recommendations and respond in Committee if possible, but certainly before Report. I hope that, with those comments, the noble Lord will feel content to withdraw the amendment.
Lord Shipley (LD)
Before the Minister sits down, can I confirm my understanding of what she has said about secondary legislation? There was a request earlier that a draft of the secondary legislation should be made available to this House before Report. Yet I understood the Minister to say that there would be a draft of the secondary legislation in the autumn, which is clearly not before the Report stage. This is an extremely important matter, so can the Minister confirm exactly what the Government plan to do?
Baroness Williams of Trafford
I thank the noble Lord for seeking that clarification. I said that we were planning to publish the regulations and consult on them in the autumn. If I can get any detail on them before then, I shall do so.
Lord Beecham
My Lords, I am grateful for the Minister’s reply so far as it goes but there remain significant problems, particularly the contrast between a local authority being able effectively to impose a penalty of up to £30,000 for breach of a banning order on the basis of the balance of probabilities as opposed to a criminal prosecution, where of course the case would have to be proved beyond reasonable doubt. I am not at all sympathetic to rogue landlords, however they are described, but it is a curious position to have two processes, one of which requires a higher standard of proof than the other. That cannot really be satisfactory. In some respects, it may well be better to bring such a person to the courts on a criminal charge rather than the local authority taking action and securing financial compensation, yet that is a choice that will be left to the local authority. I am normally very much in favour of local authority discretion, but in this area we have to be careful not to infringe the responsibility of the judicial system. I invite the Minister to undertake at least to consider this aspect as well as those that she has already agreed to take back.
Baroness Williams of Trafford
I am happy to consider it, but the guidance for the local authorities will make it clear in what circumstances it would be appropriate to use a civil penalty rather than to prosecute. If it would be helpful, though, I will set out more detail around the two routes available.
Lord Beecham
That would be extremely helpful, but it would be particularly important to be clear what standard of proof is required under the procedures involved. Would it be the same standard of proof or a different one? I am not asking the Minister to answer that at the moment, but I would hope for an assurance that that would be dealt with in the information that she has kindly offered to supply. I assume that her nod was a nod of consent. I beg leave to withdraw the amendment.
Lord Foster of Bath
My Lords, I repeat my congratulations to the noble Baroness on being the first in your Lordships’ House to lay an amendment on this very important issue. I echo all the words of my noble friend Lord Shipley, although he left one issue rather hanging in the air: the current state of play with the drafting not only of regulations in respect of Clause 13, which we are discussing, but of all others. Perhaps in her reply the Minister will be kind enough to inform the House what her understanding is of the state of play with the drafting of legislation which affects the Bill.
Baroness Williams of Trafford
My Lords, I understand loud and clear the premise of the amendment of my noble friend Lady Gardner of Parkes, which proposes that the scheme for making the banning orders would not come into force until a year after the draft regulations setting out the nature and characteristics of banning order offences have been published. I understand the point about the laying of regulations and responding fully to the comments of the DPRR committee, which noble Lords have made loud and clear. However, I make it clear that people who have been convicted of offences that are in the nature of a banning order offence before the legislation comes into force cannot be subject to banning orders. That is quite important in the context of the discussion we are having. The legislation will therefore not apply retrospectively.
As I have said before, we have not included the specific offences in the Bill because we want the flexibility to add further. However, I can confirm that we will consult fully with interested partners on the matters that will constitute banning order offences before the regulations are laid in this House. I have set out the timetable for the consultation and for responding to the DPRRC. I hope to do that during Committee stage, but in any event we will definitely do it by Report.
I cannot remember which noble Lord—it may have been the noble Lord, Lord Foster—asked if we could have sight of what regulations there might be, when we might expect them and why we might not have them in a timely manner. I am more than keen to get what information I can to noble Lords to prevent some of the obvious concern that arises out of the Bill coming forward time and again, which it will—I cannot blame the House for doing that. The noble Lord, Lord Kerslake, is not in his place, but I point out that we are attempting to do that as fully as we can throughout the course of the Bill.
I hope that reassures my noble friend and other noble Lords that we do not intend to implement the banning order provisions in the Bill without fully considering the views of the interested parties on the nature and characteristics of such offences. We began that process last summer when we published our discussion paper on tackling rogue landlords, which noble Lords may or may not have seen, and we will develop them in further detail through further consultation later in the year. I therefore ask my noble friend to withdraw her amendment.
Baroness Gardner of Parkes
My Lords, I thank all those who have contributed very helpfully to the amendment and debated it. When the Minister says that she is more than keen to do things and make progress, I believe that. However, I feel there is a lack of willingness in the department. I do not say that just because she now happens to be the Minister. I had dealings with the Minister before her and with various Ministers before that. In all housing issues, I have found that there has been a reluctance to see any proper reform or progress. That is a great pity. We should probably have had a consolidation Act of all the property laws that have been passed. I have been involved in them myself since the early 1980s. All noble Lords know my registered interest, so I do not need to repeat it. Each time we pass another Act everyone working anywhere in the property world has to keep referring back to the previous Act and the Acts before that. I am told that consolidation Bills are not brought forward now because, in the past, the Law Commission used to finance them and bring them to Parliament. It will no longer do so unless Parliament agrees to finance the work that it does. This also needs a little bit of thought.
Something else that needs thought is the First-tier Tribunal. I opposed the removal of the leasehold valuation tribunal which could have dealt with the same sort of issue at a much lower cost. It is now extremely expensive. It used to be only £500. No matter what your case, more than £500 could not be awarded against you for most leasehold offences. Now, to bring your case at all, it is a minimum of £500 to walk in the door. It has changed into a much heavier legal procedure which I do not think works so well for simple cases. It has always been there and acknowledged to be necessary for the more important or serious cases. Certainly rogue landlords will come into that category. I did not speak earlier but, of course, the word “rogue” means something different to me as an Australian.
To return to the original point, I respect what the Minister has said. I hope she can persuade her department to bring these matters forward. I thank all those noble Lords who have participated and I beg leave to withdraw the amendment.
Lord Kennedy of Southwark (Lab)
My Lords, at the start of the first day of Committee, and my first contribution at that stage, I should have declared that I am an elected councillor of the London Borough of Lewisham.
I join other noble Lords in concern about the lack of regulations available for noble Lords to see. Why does the Minister think that it is acceptable to bring forward a Bill in such a sorry state? Does she accept that it is wholly inadequate to suggest that the Government will consult fully and lay regulations months after the Bill has become law?
On Second Reading, and subsequently, I and other noble Lords from these Benches have welcomed the banning order proposals in the Bill. They will provide, we hope, an effective additional tool for local housing authorities to use against rogue landlords and persons engaging in letting agency or property management work who think that they can rip off tenants and treat them badly with impunity. With an ever-increasing number of people forced into the private rented sector, it is important that there are proper safeguards. Peter Rachman became synonymous with the rogue landlords of the 1960s. We want to ensure that we do not have any modern-day Rachmans, or, if we do, that they are dealt with effectively.
I also see the proposals in this part of the Bill as a first step to dealing with the issues in the private rented sector that make life difficult for tenants living at the poorer end of the market. The ward that I represent on Lewisham Council is typical of those that the Bill is aimed at: we have very little local authority housing other than a successful housing co-op, and until recently an overwhelming number of people there were owner-occupiers. However, there has been an explosion in the private rented sector in the last 10 years, for a variety of reasons. Most landlords are very good, with anything from one to a few properties. They often get into the market as a landlord because they have fallen into negative equity, have looked to move on but have been unable to cover their capital outlay. Many of those coming to my surgeries are now private sector tenants, invariably young people, both singles and couples, who cannot get any social housing because they are not in a priority group, cannot go on the housing list, cannot afford to buy and are left to seek refuge in the private rented sector.
When I was a member of Southwark Council in the 1980s, we had properties deemed hard to let—that nobody wanted to live in—and the council was able to let those to single people and couples who would not otherwise qualify for social housing. That category no longer exists. The amendment proposed by the noble Baroness, Lady Grender, in this group, has identified what is a significant omission from the Bill. The amendment has the full support of noble Lords on these Benches. After we have taken action against the rogue landlords, what happens to their tenants? These will be the very people who have suffered at the hands of the rogue landlord in the first place. It is right that the amendment should be in the Bill and not left to regulations, advice notes or any other procedure that does not involve it being clear in the Bill itself. If the noble Baroness, Lady Williams of Trafford, does not accept the amendments today, I hope that she will at least reflect on this proposal and meet with colleagues from your Lordships’ House to discuss this matter before we get to Report.
We also support Amendment 7, in the names of the noble Baroness, Lady Bakewell of Hardington Mandeville, and the noble Lord, Lord Palmer of Childs Hill. Following an enforcement action resulting in a financial penalty, it must be right that the money should be retained by the local authority and not be lost to the Consolidated Fund or some other place where money from these penalties goes and never returns.
The remaining amendments in this group are government amendments. Amendments 3 and 8 appear to correct drafting errors and make matters clearer. Amendment 4, to which my noble friend Lord Campbell-Savours referred, seeks to deal with the situation where a person convicted of an offence continues with the breach after conviction. I have an issue with this amendment. Does it go far enough when dealing with people who, at this stage, have no respect for the law, or where the tenants are again in a difficult situation? We may need to look at that further.
My noble friend Lord Beecham will ask more questions of the Minister when she moves her amendments. At that point, we may need to look at the issue further and bring an amendment back on Report.
Baroness Williams of Trafford
My Lords, I shall answer the noble Lord, Lord Kennedy, first because I ran out of time in a debate the other day and I could not answer him fully. He will get first place on the housing list today.
The noble Lord referred to the regulations which other noble Lords have mentioned at length. I can only reiterate my desire to bring forward as much information as I can. In any event, as I outlined in relation to the previous amendment, none of the orders could be implemented until the regulations were in force. So the orders would not be retrospective; they would only be made after the regulations had gone through. However, I take his point and I will do my best to bring forward as much information as possible.
The noble Lord made a point about social housing being so much harder to obtain than previously for people who would seem to be on modest incomes. That is behind the Government’s priority of building homes for all types of tenure in this Parliament, but focusing particularly on the younger generation that he talks about who are increasingly left out of the housing market. He also asked whether I would meet with him and colleagues before Report and I will be happy to do so.
Amendments 3 and 4 amend Clause 20 so that a person who has been convicted of breaching a banning order and continues to breach the order after that conviction shall commit a further offence and be liable to a fine not exceeding one-tenth of level 2 on the standard scales for each day or part of a day on which the breach occurs. This would equate to up to £50 a day until the breach ceases The amendment also introduces a defence of reasonable excuse in relation to the further offence which will capture any cases where a person was genuinely not able to cease breaching a banning order following conviction because, for example, they were in hospital and therefore unable to manage their affairs to bring tenancies to an end. Rogues who continue to let out their properties despite being convicted for that offence will therefore not only incur punishment for the initial breach of the order but will continue to be punished for each additional day that they remain in breach of the order. This sends out a strong message that a breach of banning order will not be tolerated.
Amendments 5, 6 and 8 amend Clause 22 so that a person who has had a civil penalty imposed upon them for breaching a banning order as an alternative to prosecution, and continues to breach the order despite the first civil penalty, can have an additional civil penalty of up to £30,000 imposed for each period of six months or part of a six-month period in which the breach of the banning order continues. Rogues who continue to let out their properties despite having incurred a civil penalty for the breach will, therefore, be subject to additional civil penalties for continuation of the breach. This sends out the strong message that a breach of a banning order will not be tolerated and will ensure that the business model of rogue landlords is disrupted.
Lord Greaves
I have an amendment later on that refers to empty dwelling management orders, which do not work very well at the moment. If a local authority is managing a property because the owner of that property has a banning order, is it assumed that the only money the local authority can spend on the property, which may be severely substandard—that may be why the banning order is there, or may be related to it—is the money taken in rents, even if it is not sufficient to bring it up to standard? If so, do we accept that a local authority is managing a substandard property for a period of time and if not, where will the local authority get the money to put into that property?
Baroness Williams of Trafford
I think that comes back to the point made by the noble Lord, Lord Campbell-Savours, about charges on properties. The local authority cannot in any circumstances of managing that property be out of pocket, but nor would the tenants be expected to live in substandard conditions. Therefore, any money that needed to be spent on the property could be recouped by a charge on the property. I think that answers the questions of both the noble Lords, Lord Campbell-Savours and Lord Greaves.
Lord Beecham
A further question has just occurred to me. We are assuming that we are talking only about a landlord and a tenant but of course, there may well be a mortgagee. What happens in the event that the council takes over the property? Is the council then responsible for paying the mortgage payments out of the money it receives and, if not, is the tenant not at risk of the mortgagee obtaining possession of the property?
Baroness Williams of Trafford
My Lords, as far as I know, the mortgagee is responsible for paying the mortgage. If the rents do not cover the costs of any works that need to be done on the house, again, it comes back to the charge on the property in order to keep those tenants in the property for the agreed period of the tenancy. That is the way I think it would work, but I will confirm that in writing because I do not want to mislead noble Lords.
Lord Campbell-Savours
The issue there would be whether the council had a first or second charge.
Lord Foster of Bath
I wonder if the Minister can help me because I am now slightly confused. If the local authority is expected to use funds upfront to make repairs and bring a property up to suitable standards, and the only way it can recoup them is through a charge—whether a first or a second charge—is it not the case that that money can be realised to the council only when the property is sold, which may be a considerable time after the local authority has incurred the costs?
Baroness Williams of Trafford
That might be the case. The point is that the local authority could recoup the costs. I think the premise of all the questions is the local authority not being out of pocket because of its obligations to the tenants. The noble Lord, Lord Greaves, is shaking his head so I will let him intervene.
Lord Greaves
I am grateful to the Minister for giving way when I was not asking her to. This is a new convention which perhaps we should adopt. I think the point that my noble friend Lord Foster of Bath was making is that it might be a very long time before the property is sold by the owner. It could be 50 years, by which time who knows whether local authorities will still exist? There appears to be no means by which the local authority is guaranteed to get its money back within the period of the banning order.
Baroness Williams of Trafford
My Lords, I hope I made the point clearly that ultimately, the local authority will get its money back. That might mean that at the end of a tenancy the local authority could force the sale of a property in order to get its money back, but the point is that the local authority can get its money back. I guess if it incurred any interest charges over the period, it can claim those back as well. But such is the level of the civil penalty that local authorities should be in a fairly good position, using penalties and other things to service any housing costs they might have and to not be left out of pocket.
Lord Greaves
My Lords, I am trying to be helpful to the Minister. It would be extremely helpful if she could write to us all with some examples and figures showing how this might work in practice, both in terms of the procedure and some numbers, so that we can understand it—which we are not going to this afternoon, clearly.
Baroness Williams of Trafford
My Lords, I think I understood what I was saying, but I am sorry if noble Lords did not. I shall be very happy to write and explain. I always use the example of a house that costs £100, so it will probably be something around that.
Lord Kennedy of Southwark
While all this is going on, I am conscious that there is one very vulnerable tenant and one rogue landlord, who is getting angrier. What protection is there for the poor tenant left there while all this is going on? The landlord is not getting his rent or having his mortgage paid and the council is in there taking things over. I am wondering about the human issue.
Baroness Williams of Trafford
My Lords, I do not have any particular concerns about the rogue landlord; I am concerned about the vulnerable tenant. That is why the local authority, or the managing agent of the local authority, is the protection for the tenant who, if they have been subject to the practice of a rogue landlord, might find it a light relief not to be treated in such a contemptuous way.
Lord Kennedy of Southwark
That is absolutely right. I have no worries for the rogue landlord but the noble Lord, Lord Deben, spoke earlier about these characters and some of their despicable practices. I am worried about how they treat their tenants.
Lord Palmer of Childs Hill
In terms of the charges on the property, I seek some clarification. We are told that the local authority may have taken over management of the property and be taking a charge on it, and will be able to underwrite its costs in one way or another, which seems very sensible. The problem is if there is an existing charge on the property because the owner has a mortgage on it. To seek recompense and take action, the local authority will have to take cognisance of the fact that there is already a charge on that property. A local authority may be very reluctant to incur the cost when it knows it is in a queue and may get nothing whatever at the end of the line.
Baroness Williams of Trafford
My Lords, I would assume that in those circumstances the local authority would take a second charge out on the house. That is the assumption I would make in such circumstances.
Under subsection (7) the Secretary of State may make regulations specifying how financial penalties recovered under this clause are to be dealt with. Broadly speaking, we envisage that such sums could be used in connection with the authority’s private sector housing functions, but we will discuss the details of how the income is to be applied with relevant parties before making the regulations. We will consult on guidance, setting out the appropriate penalties to levy, and take into account a wide range of circumstances. Such guidance will also cover landlords’ right to appeal. Furthermore, we will issue local authorities with guidance on the utilisation of any money they receive through financial penalties.
I do not know whether I answered the noble Baroness, Lady Bakewell, and the noble Lord, Lord Greaves, about the new burdens. I have probably made my point, but any policy that could result in a local authority incurring costs is subject to a new burdens assessment. We have considered this test when developing this policy. It is not a burden as it is not a requirement to place someone under a banning order.
In answer to the noble Lord, Lord Palmer, on how local authorities will implement this policy, local authorities have warmly welcomed it because it will help them to crack down on the rogues and retain the income from civil penalties and rent repayment orders. It is important that noble Lords are satisfied that local authorities are very happy with this.
The noble Lord, Lord Campbell-Savours, mentioned the transfer of interest to a prohibited person when that interest is an overseas interest. It does not matter whether it is an overseas interest or whether it is in this country, the policy still applies, as I understand it.
The noble Lord, Lord Greaves, asked how local authorities would make their decision and how many cases we would have a year. Local authorities are likely to seek banning orders where the offence is particularly serious or where they have a repeat offender. We estimate that there will be about 600 banning orders per year. I hope my comments have reassured noble Lords, but I see that the noble Lord, Lord Beecham, is about to stand up.
Lord Beecham
I am sorry to add to the noble Baroness’s problems. However, I am slightly puzzled by the relationship between government Amendments 3 and 4, which apply to Clause 20, and government Amendments 5 and 6, which apply to Clause 22. Government Amendment 4 to Clause 20 specifies:
“Where a person is convicted … of breaching a banning order and the breach continues after conviction, the person commits a further offence and is liable … to a fine not exceeding one-tenth of level 2 on the standard scale for each day or part of a day”.
However, government Amendment 6 to Clause 22 states that,
“subsection (3A) allows another penalty to be imposed … If a breach continues for more than 6 months, a financial penalty may be imposed for each additional 6 month period for the whole or part of which the breach continues”.
Is that on the same basis or a different basis? I apprehend that the Minister may not be able to give me an answer off the cuff, but will she have a look at that—or get somebody to have a look at it—to see whether there is a relationship between those two positions, or whether they deal with different issues? At the moment, I am confused—which is not unusual. It may be perfectly simple but it does not look terribly simple from these two amendments.
Baroness Williams of Trafford
My Lords, as I understand it, the second penalty is an enhancement of the first, so they are related. However, I think the first is a lesser penalty because it involves a first breach and the second is greater because it perpetuates the breach.
Lord Beecham
With respect, that does not tell us or the offender the basis on which the second penalty would be calculated.
Baroness Williams of Trafford
My Lords, Clause 20 concerns a criminal offence whereas Clause 22 concerns a civil penalty, which is an alternative, if that makes any sense.
Lord Beecham
I am sorry to persist but that does not tell us the basis on which the relevant penalty would be calculated. It is clear as regards the criminal offence, if that is the distinction, but it is not clear whether the same way of calculating the penalty is used. I do not expect the noble Baroness to answer that today but if she could answer it in writing subsequently, that would be fine.
Baroness Williams of Trafford
I thank the noble Lord, not for letting me off the hook but for deferring the hook. I will write to him about that. I request that the noble Baroness withdraws the amendment at this stage.
Baroness Grender
I thank all noble Lords for their contributions to this discussion and the noble Earl, Lord Lytton, for his support for continuing to examine this area. I also thank the noble Lord, Lord Palmer of Childs Hill, who raised property transfer and the noble Lords, Lord Campbell-Savours and Lord Greaves, for commenting on where the resource goes, about which we have already had much discussion. The Minister said that we would find some answers and reassurance for tenants in Schedule 3. We will continue to scrutinise this issue to make sure that there is absolutely no threat of a tenant being made homeless as a result of the activities of a dreadful rogue landlord. That is the main aim of this amendment and we will continue to review that as the Bill progresses. However, at this point, I beg leave to withdraw the amendment.
Lord Campbell-Savours
My Lords, I firmly support Amendment 9, moved by the noble Baroness, Lady Bakewell of Hardington Mandeville. It is a very sound amendment.
Clause 29 refers to a power to include a person convicted—that is, convicted in a court of law—of a banning order offence. Then it says in a subsection:
“A local housing authority in England may make an entry in the database in respect of a person who has, at least twice”—
not once, twice—
“within a period of 12 months, received a financial penalty in respect of a banning order offence committed at a time when the person was a residential landlord”.
We are talking here about a habitual offender. In Clause 32 the Government set out what can be on the database. Let us go through the list, because that list should be available to the general public for the reasons set out by the noble Baroness, Lady Bakewell, when she referred to freedom of information. First, there is the period for which the entry is to be maintained: why should that not be available to the tenant or tenants? Details of properties owned, let or managed by the person: why should they not be in the public domain when the matter has been dealt with in the courts? Details of a banning order offence of which the person has been convicted in a court of law: why should that information not be made available to the tenant? Details of any banning orders made against the person, whether or not still in force: why should tenants not know the background of their prospective landlords? Also on the list are “details of financial penalties” received by the person.
Finally, I return to the first item in the list: the person’s address or other contact details. One would have thought that a tenant should at least have the right to know who their prospective landlord is, where they live, and their contact details. I put it to the Minister that the Government are a little oversensitive about this. They should reconsider this area and think about what is in the public interest. Who is going to lose as a result of this? The local authority does not lose; the tenant does not lose; only the landlord who has been convicted of a criminal offence loses. I ask the Minister to reconsider the position.
Baroness Williams of Trafford
My Lords, I shall speak to Amendment 16 in my name in relation to Clause 38. Amendment 16 would mean that for the purposes of paragraph 17 of Schedule 23 to the Finance Act 2011, the database will be treated as being maintained by the Secretary of State, although Clause 27 sets out that local authorities have responsibility for maintaining its content. This will ensure that HMRC is able to access the database, using its powers under the Finance Act 2011, so that it can use the data in discharge of its tax functions when dealing with rogue landlords and property agents.
I thank the noble Baroness, Lady Bakewell of Hardington Mandeville, for speaking to Amendment 9. While appeals, and not just appeals about entries on the database, should be dealt with without undue delay, it is not appropriate to set out in primary legislation strict time limits for doing so, because it may not be practical or reasonable to do so. The tribunal has a wide range of powers to ensure that cases are dealt with fairly and justly. It can award costs against vexatious litigants whose only purpose in appealing is, for example, to delay their entry on the database or to cause further expense to the local housing authority. It can also prioritise cases that it considers urgent and refuse adjournments when there is no good reason for the request. In general, however, when the appeal is not vexatious in nature, how quickly it can be disposed of will ultimately depend on its complexity and other factors, such as the representations that the parties intend to make. Indeed, other factors can lead to delay, such as the illness of a party or a representative. It would be manifestly unfair if representations could not be accepted outside 28 days when there is genuine and good reason for doing so because the law has said that the appeal must be heard within that timeframe, regardless of circumstances.
I turn to Amendment 10. Landlords and property agents included on the database will have either been convicted of a banning order offence or received two or more civil penalties, as an alternative to prosecution, for serious breaches of housing legislation. I appreciate the feelings of noble Lords on this issue. It is not intended that all those included on the database should be banned from operating their business, but banning orders would be sought for the very worst or repeat offenders. Banning order offences will be defined in secondary legislation but are likely to include a serious offence. This is where an offender has been convicted in the Crown Court of an offence involving fraud, drugs, sexual assault or violence that is committed in, or in relation to, a property that is owned or managed by the offender or which involves, or was perpetrated against, persons occupying such a property. It would also include any serious offence involving violence against the tenant by the landlord or property agent, and serious breaches of housing legislation.
Amendment 11 would allow tenants and prospective tenants to petition their local housing authority to gain access to the database of rogue landlords and property agents. Doing so would effectively blacklist those landlords and agents on the database and put them out of business. This is not the intention of our legislation. The database aims to enable local authorities to keep track of rogue landlords and agents and target their enforcement action more effectively. Where a local authority believes a landlord or agent should be prevented from renting out or managing property, it should seek a banning order.
Noble Lords, and particularly the noble Baroness, Lady Bakewell, asked whether the public or tenants will have access to the database. The database will hold details of landlords and property agents who have been convicted of certain offences. Just because a landlord or property agent is on a database does not mean that they are banned from letting out a property—that would require a banning order. Making the database publicly available could raise data protection issues. However, the Secretary of State can give information held on the database in an anonymised form for research, statistical or monitoring purposes. The noble Lord, Lord Beecham, asked about tenants’ details. These will never be disclosed. The noble Baroness, Lady Bakewell, also asked about the effect of putting a landlord or property agent on the database. A database will enable a local authority to keep track of the landlords or property agents who have been convicted of a relevant offence and who may seek to move to a new area to avoid detection and attract new tenants. It will also enable them to obtain details about other rental properties owned by the landlord. In some cases, a local authority may decide to monitor a landlord or property agent on the database before deciding whether to apply for a banning order.
Information on the database will be made more widely available in an anonymised form. In addition, where tenants raise concerns about their landlords failing to take action over property conditions, local authorities can carry out an inspection, using the housing health and safety rating system introduced in the Housing Act 2004, and take appropriate enforcement action.
Where a local authority believes that a landlord or property agent should be banned from being involved in renting out or managing property, it should apply to the First-tier Tribunal for a banning order. Banning orders are intended to be used for those landlords and property agents who are particularly serious or prolific offenders, and who represent a real risk to the health and safety of prospective tenants. Local authorities have been provided with strong enforcement tools to ensure that, once a banning order has been made, it is not breached by the offender.
Amendments 12, 13 and 14 would require the Secretary of State to make information on the database of rogue landlords and property agents accessible to everyone and provide that the purposes to which the data may be put include the protection of tenants. As I have said, making the database publicly accessible would effectively drive anyone on the list out of business—which is not the purpose of the database.
Finally, Amendment 15 would require local authorities to automatically bar landlords on the database of rogue landlords from holding an HMO licence. As I have said previously, the purpose of the database is not to ban landlords and property agents from operating. The idea is to enable local authorities to monitor rogue landlord activity and effectively target enforcement action. The noble Lord, Lord Beecham, mentioned retaliatory eviction. We legislated through the Deregulation Act 2015 to stop the practice of retaliatory eviction, a move that has been much welcomed by Shelter.
I hope I have explained enough to enable the noble Baroness to withdraw her amendment—
Lord Campbell-Savours
On government Amendment 16, I do not quite understand why HMRC would want to gather these data. Perhaps the Minister could explain.
Baroness Williams of Trafford
My Lords, it is for tax purposes—to enable the rogue landlords to fulfil their tax obligations.
Lord Campbell-Savours
I am not opposed to that but are we saying that persons who are subject to the legislation in terms of banning orders come under a separate reporting arrangement to the Revenue as against the generality of landlords?
Baroness Williams of Trafford
I am sorry, could the noble Lord please repeat what he just said?
Lord Campbell-Savours
Are we saying that there is a separate category for those landlords who would fall under the legislation in terms of banning orders as against the generality of landlords, who, as the noble Earl, Lord Lytton, said, are pretty good people?
Baroness Williams of Trafford
My Lords, it is the rogue landlords who are on the database. HMRC will have access to that database.
Lord Beecham
Does it not already have access to the Land Registry and can therefore find out more quickly and more cheaply who the owner of a property is?
Baroness Williams of Trafford
My Lords, anyone can have access to the Land Registry but not everyone can have access to the database of rogue landlords.
Lord Beecham
May I revert to my Amendment 15 about the HMO licence? I do not understand the logic of the Minister’s position. If a landlord is described as a rogue landlord and is on the database accordingly, why should that not operate as a bar to obtaining a licence for a house of multiple occupation?
Lord Beecham
Amendment 15 would prevent a landlord on the database of rogue landlords obtaining an HMO licence, which seems perfectly logical. The Minister appeared to reject the idea; I cannot think why. If she cannot for the moment remember why she did, perhaps she could communicate her thoughts later.
Baroness Williams of Trafford
I rejected the amendment because the purpose of the database is not to ban landlords and property agents from operating but to enable local authorities to monitor rogue landlord activity. It is crucial to give local authorities the freedom to make judgments regarding the licensing in their area, just as they do in other forms of licensing, so it does not necessarily follow that a rogue landlord should be banned from holding an HMO licence. Although a local authority may make the judgment that they should be banned from having such a licence because of their activity, it does not necessarily follow.
Lord Campbell-Savours
My Lords, on that matter, I had almost forgotten what I was going to ask, but it was this: if we can ban a doctor or a dentist for bad practice, why can we not ban a landlord?
Baroness Williams of Trafford
The landlord who is on a database of rogue landlords has not necessarily been banned but may have had a civil penalty. So it is up to the local authority, when coming to a judgment about an HMO licence and in the light of the information that it has, whether that landlord will be banned from holding one. It may decide on balance that he or she will be, because they are such a rogue, or they may have had one civil penalty and it might therefore grant him or her a licence.
“(5) For the purposes of paragraph 17 of Schedule 23 to the Finance Act 2011 (which relates to HMRC data-gathering powers), the database is to be treated as being maintained by the Secretary of State.”
Baroness Williams of Trafford
My Lords, if I may, I will take note of what my noble friend Lord Flight has said and deal with it in the relevant group so that I have both heard him and responded at the relevant time and we do not move amendments out of kilter.
Amendments 18 and 33A are very similar, so I will address them together. These amendments would involve local authorities operating an accreditation and licensing scheme for private sector landlords in their area. The current licensing arrangements were introduced to give local authorities the ability to deal with problems that might arise in connection with rented property and provide for three types of licensing: mandatory licensing of larger houses in multiple occupation; additional licensing of smaller houses in multiple occupation; and selective licensing of all types of private rented housing, should the local authority see fit to do that.
A major drawback of licensing is that it impacts on all landlords and it places additional burdens on reputable landlords who are already fully compliant with their obligations. As my noble friend Lord O’Shaughnessy says, this creates unnecessary costs for reputable landlords which tend to be passed on to tenants. The majority of landlords—the non-rogue landlords, to quote my noble friend—provide a good service and the Government do not want to impose unnecessary additional costs on them or on tenants who may see their rents rise as landlord costs rise.
Accreditation is of interest only to good landlords who rent out decent accommodation, so it does not help to identify and tackle criminal landlords nor lead to improvements in the sector. Local authorities are in the best position to decide whether or not there is a need for an accreditation system in their area. Indeed, voluntary accreditation systems have been introduced by many local authorities and are also promoted by the main landlord associations. The noble Lord, Lord Beecham, asked whether these could be extended if they were successful. They most definitely could, but it would be a local decision-making process. I hope, with that explanation, the noble Lord will agree to withdraw the amendment.
I would like to thank my noble friend Lord Flight for tabling Amendment 21. I see that my noble friend Lord Cathcart is in his place; he has spoken to this. The amendment would require local authorities to request tenure information from residents, owners and managing agents whenever the local authority requests council tax information. As my noble friend Lord Cathcart and I have already discussed, it happens in some councils, as noble Lords have pointed out, particularly in London. It is already being practised by some councils, but not all. I am very supportive of ensuring that local authorities have the tools necessary to tackle rogue landlords in the private rented sector in their areas. Parts 2 and 3 of this Bill demonstrate our commitment to this.
Local authorities already have powers in existing legislation to request tenure information on council tax forms—as I have said, some do—through the Local Government Finance Act 1992 and the Housing Act 2004. They can also access the tenancy deposit protection schemes. I am very sympathetic to the purpose of this amendment but, before jumping head first into legislation to require it, which could potentially increase financial burdens, the Housing Minister and I intend to investigate the matter further and have taken steps to establish a working group to explore this important issue. It will be chaired by none other than Dame Angela Watkinson herself. The working group will assess the extent to which local authorities are currently using their existing powers, examine how they could currently use this information to tackle rogue landlords and, crucially, consider how and whether requiring the collection of tenure data will assist in tackling rogue landlords. It is due to meet in March and will report back to Ministers within three to six months.
The noble Lord, Lord Campbell-Savours, came back on the point about the ability of the Inland Revenue —or HMRC—to access rogue landlord data.
Baroness Williams of Trafford
Yes, it can access all data, but in particular it can access rogue landlord data. This is part of my point: there is evidence of some practices in London where rogue landlords are housing 20 or so tenants in two-bedroom properties. That evidence could be married up with the various agencies not only to find those rogue landlords but to fine them as well, and recover the tax that is due to HMRC. I thought that might be a useful circling up.
Lord Campbell-Savours
I am not referring to rogue landlords but to all landlords.
Baroness Williams of Trafford
Absolutely—I would just make the point about the rogue ones, but the noble Lord is absolutely right.
Amendment 27 would require all private landlords to sign up to a national register, which would be operated and maintained by a local authority. The information on the register could be used by local authorities to inform landlords about regulatory matters, of their duties under the Housing Act and the Immigration Act 2014, and other useful information. The Government do not support a national register, for reasons which some noble Lords have pointed out. In addition to the costly undertaking of supporting a national register—
Lord Campbell-Savours
I am sorry to press the Minister again, but has any estimate been made of what the cost would be? Can we have some idea, or is there just an assumption that it will be too costly?
Baroness Williams of Trafford
My Lords, I am not sure whether an assessment has been made, but while I do not know what the cost will be, there will be a cost. There will obviously be an obligation to provide a register, and therefore an associated resource and cost. I cannot say what the quantum of that cost would be at this point.
Baroness Hollis of Heigham
I wonder whether the Minister can also help me. She was helpfully describing a working party which is being set up and chaired by Dame Angela Watkinson, to report in three to six months’ time. Given the findings and recommendations with which it will no doubt come forward, can the Minister assure us that there are powers within this proposed legislation—the Act may have gone through by then—to implement them in a way which reflects the opinion of this House? Does she have those powers? How would she therefore progress any findings which might or might not follow the path of the noble Lord, Lord Flight, or the path of my noble friend Lord Beecham on this?
Baroness Williams of Trafford
It may be helpful if I tell the noble Baroness that what I discussed with my noble friend Lord Cathcart and the Housing Minister was that there are local authorities doing just this. I imagine that the working group will be exploring the art of the possible—to extend if it needed—and what the implications would be for local authorities, but some are already doing it under existing legislation. I do not think that the Bill per se would do it, but it is about how we would marry up existing legislation with what is already being done by local authorities.
Baroness Hollis of Heigham
But that would suggest that the chair of the working party and that party did not produce recommendations any different from those currently practised. That of course is not probable. If it is to be effective, one will need some powers in this legislation, by affirmative regulations or something, to come back to that should it be appropriate. I doubt that the Minister would want primary legislation for that, but if she does not have statutory instrument powers, she will not be able to do it.
Baroness Williams of Trafford
My Lords, the working group will meet in March and I would not want to pre-empt what it will come up with or recommend. I am saying that there is existing legislation to do what my noble friend Lord Flight suggests, but it is a question of local authorities’ willingness to take it up, which is varied. I cannot pre-empt what the working group will say.
My noble friend also made the point that only the good landlords will come forward, and I agree with that. I also agree that local authorities should focus their enforcement on the small number of rogues who knowingly flout their obligations, and that what is why we are establishing the database.
The noble Lord, Lord Greaves, asked how the council can crack down on a landlord if the tenant does not know them. The tenant can raise concerns with the council, which can use the powers in the Housing Act 2004 and seek action from the landlord or the property manager. The tenant may not know the landlord, but they should know the managing agent.
My noble friend Lord Flight asked how local authorities know where the rogue landlords are. Obviously the database will be built up, but authorities will be able to combine the tenancy deposit data with existing data sets, such as council tax and housing benefit data, to identify properties that are not on the tenancy deposit protection list and hence those potentially belonging to rogue landlords.
The noble Lord, Lord Foster, asked about immigration, particularly illegal immigration, and how those tenants would be identified. The Immigration Act 2014 introduces a requirement now to check the immigration status of the tenants. Where a landlord has concerns about a tenant’s immigration status, he should contact the Home Office. Local authorities can also raise any concerns regarding illegal immigrants with the Home Office.
With those points, I hope that the noble Lord will feel content to withdraw his amendment.
Lord Beecham
My Lords, I will not keep Members of your Lordships’ House from their dinner or from the dinner break business, whichever they prefer or are committed to.
I have a couple of very short points. The first is that the Minister did not quite reply to my noble friend Lady Hollis’s question, but perhaps she will send her a reminder. Alternatively, of course, the Minister could look at Hansard.
The noble Baroness, Lady Gardner, has raised Airbnb matters more than once in the House. If she looks down the list she will see that I have Amendment 32, which will touch on that matter, so, hopefully, we can revert to it.
Lastly, I shall say a brief word about Amendment 18. Part of the problem is that at the moment we have a selective licensing scheme that operates slowly, and there are hurdles to surmount before you can implement such a scheme. I mentioned the scheme that is now working in my own ward in Newcastle and which has received this additional funding—I repeat my gratitude in the hope that perhaps we will get some more—so it is not a straightforward matter to produce any form of licence scheme on a selective basis.
Having said that, I think it is clear that there is not much support for making this universal and comprehensive, but I invite the Minister to commit to looking at how the current scheme might be improved so that it could be speedier and done much more at the discretion of local authorities. At the moment you have to have a certain number and a certain percentage; it is full of hurdles that get in the way of dealing with what is quite an important problem for many people. I beg leave to withdraw the amendment.