Tenant Fees Bill

Baroness Laing of Elderslie Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Wednesday 5th September 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I beg to move amendment 5, page 2, line 17, after “(c),” insert—

“() requires the person to do any of those things—

(i) as a result of an act or default of the person relating to such a tenancy or housing let under it, and

(ii) otherwise than pursuant to, or for the breach of, a provision of a tenancy agreement,”

This amendment means that Clause 1 prohibits a landlord from requiring a tenant or other relevant person to make a prohibited payment or take other action within the clause in the event of an act or default of the tenant where the requirement is imposed otherwise than by the tenancy agreement.

[Madam Deputy Speaker (Dame Eleanor Laing)]

With this it will be convenient to discuss the following:

Government amendments 6 and 7.

Amendment 1, in clause 8, page 5, line 13 leave out “£5,000” and insert “£30,000”.

Amendment 2,  page 5, line 16, leave out from “exceed” to end of line 17 and insert “£30,000”.

Government amendments 8 to 23.

Amendment 4, in schedule 1, page 23, line 29, at end insert—

“Letting agent charges

3A (1) A payment to a letting agent or third party for the establishment or renewal of a tenancy is a permitted payment.

(2) In this section, a payment for the establishment or renewal of a tenancy may include, but is not limited to, fees for—

(a) administrative costs,

(b) credit checks,

(c) tenancy renewal fees, and

(d) inventory charges.

(3) The total payment under this section must not exceed £300.”

This amendment would allow letting agents to charge fees for various services connected with the establishment or renewal of a tenancy but would cap such fees at £300.

Amendment 3, page 23, line 30, leave out paragraph 4 and insert—

“Payment of Landlord or Agent expenses

4 (1) A payment that a tenant is required to make to cover a landlord’s or agent’s reasonable loss arising from a breach of a fair condition of the tenancy agreement by the tenant is a permitted payment.

(2) In this paragraph a “fair condition” is one that relates to—

(a) the replacement cost of a lost key or security device, or

(b) payment of the amount of late rent payments and interest relating to those payments

arising under or in connection with the tenancy.

(3) Paragraph 4(2)(a) does not apply if the payment required—

(a) pertains to rent that was paid within 14 days of the date due under the tenancy agreement, or

(b) exceeds the interest at Bank of England base rate on the rent from the day the rent was due to the day it was paid.

(4) Paragraph 4(2)(b) does not apply if the condition in the tenancy agreement prescribes a fixed fee to be paid for each breach of this term.”

This amendment would remove default fees as a permitted payment and permit the payment of landlord and agent expenses where there is a clear cost due to a tenant fault.

Government amendments 24 to 48.

[Rishi Sunak]

I will speak to all the Government amendments but, for ease, I will take them in a slightly different order from the one in which they have been set out.

I welcome the Under-Secretary of State for Housing, Communities and Local Government, my hon. Friend the Member for South Derbyshire (Mrs Wheeler), back to her place on the Front Bench. Everything we are discussing today is built on the foundations of her incredible diligence in preparing the Bill for us to consider in Committee, where I enjoyed constructive discussions with my opposite number, the hon. Member for Great Grimsby (Melanie Onn). I am delighted that my hon. Friend is back with us to help us to move the Bill through its final stages.

Amendments 5 and 6 will ensure that landlords and agents cannot charge any fees to tenants in the event of default, except under those circumstances set out in paragraph 4 of schedule 1. That now specifically includes prohibiting default fees that may have been set out in a separate agreement between the agent and the tenant, rather than in the tenancy agreement.

More generally, our provision on default fees in paragraph 4 of schedule 1 has been the source of much discussion and debate. Indeed, the hon. Member for Great Grimsby has tabled an amendment to the provision. Members from across the House, the Housing, Communities and Local Government Committee, and those who provided evidence to the Bill Committee have agreed with the principle that it is not fair for landlords to pay fees that arise due to the fault of the tenant. However, we have listened to concerns expressed by Members on Second Reading and in Committee, including the hon. Members for Great Grimsby and for Dulwich and West Norwood (Helen Hayes), and by tenant groups and the Chartered Trading Standards Institute that the default fees provisions as currently constructed may be open to abuse.

--- Later in debate ---

[Several hon. Members rose—]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. It will be obvious to the House that there is one hour and one minute left to debate this part of the proceedings and that a great many people wish to speak. I quite understand why those on the Front Benches had a lot to say and took a lot of interventions; this is a very large group of amendments. I appeal to hon. Members that if anybody speaks for much more than five minutes, they will be preventing many of their colleagues from speaking at all. It is not up to me to regulate that; it is up to the honour of each Member of the House to limit their remarks, not necessarily in scope but in time, because brevity is the soul of wit.

[Mr Goodwill]

I was very pleased to serve on the Bill Committee and to hear the very good reasons why the Bill came forward. I am pleased that the Minister has responded to some of the points made in Committee with the Government amendments, which I am very pleased to support.

The picture painted by colleagues from the south of England, particularly from London, does not represent the position in places such as Scarborough in the north of England, where there is a very vibrant rented sector, with adequate supply and demand and where the sort of fees that some have been talking about are not extracted from tenants. However, it is obvious from what we have heard that the current system is not working to protect tenants. Ninety-three per cent. of local authorities have failed to impose a penalty, and with many letting agents not publicising their fees it is difficult for prospective tenants to know what they would actually have to pay and almost impossible to make comparisons. I have also spoken to local estate agents, who have told me about some of the charges they have to take on board. A credit check, for example, can cost as little as £15, but a rogue agent could be charging as much as £625, which is taking advantage.