Renters (Reform) Bill (Second sitting)

Ben Spencer Excerpts

Committee stage
Tuesday 14th November 2023 Public Bill Committees

[Lloyd Russell-Moyle]

Q So the property portal should be accessible for you to see that detail of it—potentially in public generally, or for the potential tenant?

Fiona Rutherford: Importantly for the tenant. It is there that transparency matters the most. I think that there are possibly bigger issues with making it fully public.

Professor Hodges: One of the points about the portal is that it is a very effective self-regulatory—or indeed managerial—system, because it says, “Have you got an insurance certificate? Have you got a fire certificate? Well, upload it.” It is done, and then you get a reminder saying, “You’ve got to do the next one.” Everyone should be able to see that. There is nothing secret about that information, but it delivers a baseline of regulatory compliance—“Are you compliant with the decent homes standard? Where’s your certificate?” or whatever. It is self-policing, and provides a very simple mechanism for doing that.

Just to give one dramatic example of sanctions, the Civil Aviation Authority never fines airlines in relation to safety issues—although it fines them now and again. It has an incredibly good culture among all the players—air traffic control, the airlines, engineers, and so on—and has constructed that deliberately, and it is the only reason why planes stay in the sky and we have confidence in them. It never fines anyone, but it uses the ultimate sanction—rarely—that I was talking about of saying, “I’m going to stop you operating your aircraft or your airport.” That concentrates the mind and gets the result of them saying, “Okay, we’ve fixed it,” very quickly.

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

Q Elaborating on that point, would you do that based on a landlord or based on the property itself? Would there not be a danger of evasion through the property group being put in someone else’s name, or using a different landlord, to escape that enforcement?

Professor Hodges: Personally, I am in favour of the broadest possible enforcement powers, but not necessarily their regular use. Therefore, whoever is involved in management and responsibility should be within scope of the discussion, and then of the potential response or intervention.

[Dr Spencer]

Q I am just thinking that in terms of the aviation sector, which you gave the example of, it is very difficult to evade that—but I wonder whether in practice, with what you are describing, that would be easy to get around.

Professor Hodges: Well, whoever owns, or shadow-owns, a building, if you stop people letting the building, that will have an effect on anyone, will it not?

[Dr Spencer]

Q Then you have a different problem: if you sanction by property, the property essentially gets blacklisted. How do you switch that if it genuinely does change ownership?

Professor Hodges: You would have other powers against beneficial owners by saying, “You’ve done this several times; you’re out,” or, “Do it right otherwise you’re out.” That is a regulatory power.

[Dr Spencer]

Q Then you would need a separate database of people who are registered landlords.

Professor Hodges: Not necessarily. I think one database is enough, frankly. You should be able to capture all the data about, “Who owns this?” We have been talking about foreign-owned companies and things in other contexts, and there are techniques for identifying them.

Fiona Rutherford: I am going to make a point in relation to enforcement that I referenced earlier. Local authorities have been brought into this as we are talking about the widest panoply of options that might be available. I am going back to the penalties that I referenced earlier, so forgive me—I am moving out of the ombudsman perspective and the regulatory questions—but this is possibly related to enforcement. While there is a plan with the penalties as and when section 21 can be moved forward, and while the local authorities get a benefit from those penalties, a rate of £5,000 probably does not go far enough to act as any kind of incentive, in so far as you want enforcement to work in that way. Of course, there are other examples: £30,000 is the maximum financial penalty for a breach of the Leasehold Reform (Ground Rent) Act 2022.

The other thing to say about local authorities is that while they benefit from the financial gain of any fixed penalties as a result of section 21 breaches, there is a real problem with local authorities’ resourcing. I am probably not saying anything that is particularly new to the Committee, but we are asking local authorities to do something more: it is not only enforcing section 21, but the other obligations to investigate antisocial behaviour appropriately. I again reference a report on behavioural control orders that we have looked into and the poor quality of data and understanding around antisocial behaviour. This means that the resources required are quite simply not going to be delivered through the proposed fixed penalties. We very much urge serious consideration around proper resourcing in a wider sense, but specifically in relation to antisocial behaviour and the section 21 enforcement regime.

[Matthew Pennycook]

Q Briefly on the breaches and penalties, how extensively do you think rent repayment orders should run through the Bill as a back-up? I am talking about the clause 9 and 10 breaches and the ombudsman portal registration breaches. Do you think we should have a much wider inclusion of rent repayment orders—probably as a final resort; we do not want to throw all the onus on tenants—as another deterrent?

Professor Hodges: Following the principle that the pathway and the process should be as simple as possible, we should not have a system in which people have to go to different institutions—a judge, an ombudsman, a regulator or a local authority—to get everything fixed if that can be done in one place at one time. The logic of that takes you towards giving power to the ombudsman, the judge and the regulator to issue rent orders at the end of a case. Why should anyone have to start again and go somewhere else to get that result? They should say, “Okay, on the proposition, the landlord was wrong—badly wrong, probably—in this particular circumstance. Fix it and we will come and make sure you’ve done all this stuff. The right result is to repay the rent.” Give them the power to do that and to be holistic.