(8 years, 11 months ago)
Public Bill CommitteesI thank the Minister for his response. When people are handling money that does not belong to them, it is important that it is ring-fenced and safeguarded. For example, solicitors have to keep a completely separate client account, which is audited, because it is not their money. That principle is important with letting agents as well. Nevertheless, I hear what the Minister says and look forward to what may happen in 2016. With that, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 36
Restriction on permitted changes of use
Where the Secretary of State has exercised or exercises his powers conferred by sections 59, 60, 61, 74 or 333(7) of the Town and Country Planning 1990 Act to make an Order in respect of change of use from office buildings (currently Class B1(a) of the Schedule to the Town and Country Planning (Use Classes) Order 1987 (as amended)) to use as dwelling-houses, the Order shall have no effect in respect of any building situated within Greater London as provided in the London Government Act 1963.”—(Mr Gareth Thomas.)
This new clause would exclude from the permitted changes of use provided in a Permitted Development Order made, or to be made, by the Secretary of State changes of use from offices to housing in London. Such changes would require planning permission from the local authority.
Brought up, and read the First time.
I beg to move, That the clause be read a Second time.
The new clause would require proposals to change offices in London into homes to go through a planning application process. Greater London has been particularly badly affected by the introduction of permitted development rights for those wanting to convert office accommodation into residential dwellings without seeking planning permission. There is a significant difference between office and residential values, which, combined with the high demand for housing and the scarcity of land, has created big incentives for landlords to convert, without planning permission, viable and occupied offices into homes. London Councils estimates that between May 2013 and April this year, at least 100,000 square feet of office floor space was lost. It argues that one consequence of that had been to drive up office rents in some parts of London, increasing costs for businesses; hon. Members know about all the implications of that.
London Councils has expressed concerns about the impact of the provisions on affordable housing in such developments. Because developers do not have to go through section 106 agreements when offices are converted into flats, there is no requirement to provide any affordable housing. London Councils estimates that some 16,000 new dwellings have avoided the full planning process and, as a result, many affordable homes that could have been built, had a planning application been required, have not been built. The LGA and London Councils have argued for change, and they support the intent of the new clause.
(8 years, 12 months ago)
Public Bill CommitteesFurther to that point of order, Sir Alan. To be helpful to the Committee, I suggest that the hon. Member for Harrow West looks at the National Housing Federation website, where the deal is published in full.
Clause 48, as amended, ordered to stand part of the Bill.
Clause 49
Recovering abandoned premises
I beg to move amendment 110, in clause 49, page 22, line 10, at end insert—
“(e) the local housing authority responds to a request by the landlord confirming that they suspect the property to be abandoned.”
This amendment would require the local housing authority to confirm that they also suspect that the property is abandoned before a landlord can recover the abandoned premises.
Part 3 of the Bill makes provision for private landlords to recover abandoned premises. We appreciate the need for some landlords to recover abandoned premises, but the proposed measures give landlords dangerous powers to evict tenants with speed and ease.
Tenancies are formal legal agreements and the Bill will give landlords the power to repossess homes from tenants without going through a court process. The turnover period for recovering abandoned premises is too short and the Bill does not provide safeguards for genuine cases of someone legitimately being away from the property, such as for a long holiday, a stay in hospital or a short period of working away.
The proposed measures will lead to further pressure on our already stretched social housing and local authority housing departments as evicted tenants turn to their local authorities after eviction. At the moment there is a timetable and a process for a local authority to help people avoid homelessness by trying to get them into another property, but the process in the Bill is too speedy and people will literally be turning up at the housing department having just been given a second letter.
As drafted, the measures go against the spirit of the Bill that we debated in our scrutiny on Tuesday, namely to crack down on rogue and criminal landlords with banning orders, the database and the fines and to drive up standards throughout the private rented sector. Instead, as they stand, the provisions create a way for some landlords to evict without recourse to the courts and with ease and speed.
Part 3 gives the impression of being put together at the last minute, without thought for the impact on existing legislation. In fact, the impact assessment, on page 43, indicates that the Government are unsure about how big the problem being dealt with even is, so we are concerned about the inclusion of the measure in the Bill. We are not alone in expressing concern.
Shelter and Crisis, two of the leading charities in the sector, released special briefings on those clauses in part 3, strongly opposing them and recommending that they be removed from the Bill completely. They were particularly concerned that vulnerable tenants could be unintentionally evicted, that tenants will be unable to challenge eviction effectively and that there is insufficient evidence that abandonment is a real problem. They also said that there is existing legal provision to deal with genuine cases of abandonment. In addition, they believe that by undermining the role of the courts in the eviction process, the changes will put more tenants at risk of homelessness.
Many representations made to the Committee in written and oral evidence noted concern about the proposals. In written evidence, Crisis highlighted:
“The Bill creates a new ‘fast-track’ eviction process for landlords to reclaim possession of a property which”
they believe
“has been abandoned”,
and that:
“There is no robust evidence to suggest that abandonment is significant or widespread”.
Crisis cited the Bill and the Government’s own impact assessment, which I just mentioned, in which landlords’ associations representing approximately 1.4 million landlords estimated that only 1% of calls to their helplines relate to abandonment. From that figure, the Government have extrapolated that only 1,750 tenancies are abandoned every year, which amounts to 0.04% of private rented households.
The Housing Law Practitioners Association also expressed concern in its written evidence, saying that the HLPA was unaware of any evidential basis suggesting the need for such a power and did not understand what was thought to be defective in existing law. Looking more closely at the legislation, the HLPA noted that the trigger rent arrears are plainly modelled on those in schedule 2 of the Housing Act 1988. If rent arrears are not paid, the landlord is already entitled to a mandatory possession order on ground 8 of the Act.
If the landlord already has a right to mandatory possession, why does he need a right to bypass the court? I would be interested to hear why the Minister believes that the clause is necessary, because it puzzles me. The HLPA also raised concerns about the reinstatement provisions, noting that if the landlord re-lets the property after recovering possession using the abandoned property route and the original tenants seek reinstatement, the court is very likely to refuse them, given that reinstatement would take effect as a concurrent tenancy but would not entitle the original tenant to resume occupation.
In addition to the written evidence, I remember clearly questioning Campbell Robb, chief executive of Shelter, in the evidence sessions. I remind the Committee of that discussion. To quote the transcript, Mr Robb mentioned
“potentially some unintended consequences of bringing”
these measures
“forward and of the lack of court oversight or local authority oversight in making sure that the proposals achieve what is wished but that they do not give a licence to some landlords to use them in a way that we would not support. I just want to put that on record.”
Mr Robb also went on to highlight the danger that,
“without that due process, certain types of landlords may use this to create evictions”
and agreed that it might
“put additional pressure on local authority housing departments by people appearing evicted without due process”.––[Official Report, Housing and Planning Public Bill Committee, 10 November 2015; c. 59, Q153-156.]
Although many have concerns about the proposals as they stand, others note that they are unnecessary. Crisis and Shelter reminded the Bill Committee in their briefing and in written evidence that there is already legal provision for cases of abandonment, in the form of the legal rule on implied surrender.
I wonder whether my hon. Friend thinks that an elderly person living alone, perhaps with early-onset Alzheimer’s, might be a suitable example for highlighting the concerns about the clause. Such a person, whose Alzheimer’s might not have been noticed, might inadvertently not pay their rent. An unscrupulous landlord would be able to exploit that fact to put that vulnerable person at risk, unless the local housing authority were aware of the situation and able to intervene to prevent the landlord from using an eviction process.
I thank my hon. Friend for that intervention. That is exactly the sort of situation that I could envisage arising. We heard on Tuesday that there are 10,500 rogue landlords who are known about; I know that there are a fair number in my constituency. I hear many cases in which the landlord, rather than resort to the court, has intimidated tenants into moving out of a premises voluntarily. When the tenants go to the housing department, the housing department says, “You’ve made yourself voluntarily homeless, so we don’t have a duty to house you.” There are landlords like that out there; we know that from the discussions that we had on Tuesday.
It is from that sort of person that we seek to protect tenants. We believe that people who do not want to go to the cost and the bother of going to court will use this route, so it needs to be tightened up.
In its briefing, Crisis says that implied surrender
“is where a tenant behaves in a way that would make a landlord believe they wanted to end a tenancy such as emptying the property of all of its possessions or handing back the keys.”
Crucially, there has to be evidence of actual abandonment—evidence that the tenant has gone for good. That can be evidence from neighbours or visual evidence that all possessions have been cleared. The landlord can accept that and then legally change the locks without any court proceedings being required.
Crisis notes that, in addition to the legal rule of implied surrender, the landlord can, outside the fixed term of the tenancy, use a section 21 notice to give a tenant two months’ notice of eviction, under which they do not have to prove that the tenant is at fault. A common complaint about the section 21 route is that the court process can be slow, but if the tenant has genuinely abandoned the property, this route should be straightforward. For example, there will be no need for the landlord to go to court to seek a possession notice, because the tenant will no longer be in the property. There is no evidence to suggest that existing legal provision is ineffective in genuine cases of abandonment.
I wonder whether I can raise another example with my hon. Friend. If someone living on their own has a heart attack and is taken at a moment’s notice to hospital, they may have to spend quite a time there recovering. As a result, they may not pay their rent for a couple of months. If it is not obvious that they are still living at the premises, they may fall victim to a rogue landlord or, indeed, to any landlord who is concerned about the arrears and who is not aware that the person has been hospitalised. Is that not a further reason for the Minister to take the amendment seriously?
I thank my hon. Friend for that intervention. That is exactly the type of scenario we are talking about. I do not think that reputable landlords will use the provisions to get rid of tenants they do not want or to reclaim their property, but, as we know from our discussions on Tuesday, there are landlords out there who do not act in their tenants’ best interests.
I hope the Minister will be able to comment on the rationale for these measures. As I mentioned, there are no real data to hand, and the impact assessment judges the number of households affected to be extremely small.
The measures give landlords dangerous powers to evict tenants with speed and ease. It is a puzzle why the clause is in the Bill, given that there is already a legal route for landlords to go down. That is why we have tabled amendment 110, among others, which would require the local housing authority, as an extra layer of protection, to confirm that it also suspects the property has been abandoned, before the landlord can recover it.
It is clear that we do not have a cohesive set of measures to adequately prove abandonment. One flaw is that they are open to abuse or error. Landlords could use them as they stand to evict tenants, just by writing them a couple of letters. They could also use the measures to evict someone as an act of revenge.
I am grateful to the hon. Member for Thirsk and Malton for intervening, because he prompts me to remind the Committee of my entry on the Register of Members’ Financial Interests.
I put to my hon. Friend another example of someone who might be vulnerable if this provision were introduced without the additional protections she suggests. Let us suppose that someone is rightly sent to prison and has to spend a few months there, in which time they do not pay their rent and—perhaps for understandable reasons —do not make their landlord aware of where they are residing for that short period. Is there not a danger that, without additional protections, a landlord might simply go ahead and seek to evict that person, making it even more difficult for them to be rehabilitated after their spell in prison?
There are many scenarios in which that could happen. As I have stated, I believe the majority of landlords are good and proper citizens who would not do that, but we know there is a core of rogue landlords. The Minister’s figure of 10,500 such landlords is, I think, an underestimation, because those are the ones we know about; there are plenty who we do not know about, but who we hear about it in our caseloads and surgeries. That is the reason we tabled the amendment—to try to ensure this proposal has a few safeguards. Landlords could use this measure to kick out a legitimate tenant who was away on business, in hospital or even in jail, as my hon. Friend suggested. Will the Minister outline what would happen in those situations?
What safeguards are in place for tenants if their landlord says a letter has been delivered? Will the letters have to be signed for, with recorded delivery? Many properties in my constituency have communal letterboxes, and people often do not get mail directed at them. A number of properties have external letterboxes, and it is not unusual for people to go along and steal post from those. How will the tenant be protected if the landlord says a letter has been delivered? Will it have to be signed for? What happens if a landlord says he sent a letter but the tenant never received it, or the tenant goes away for a couple of weeks and the landlord evicts them while they are away?
All the legislation requires is for the landlord to say a property is abandoned, rather than for it to actually be abandoned. It is clear that the proposals could be open to abuse. That is why we propose adding an extra layer to them through our amendment. The local housing authority would need to confirm that it also suspects a property is abandoned, which would ensure a landlord is unable to just say it is abandoned. Adding the voice of a local, respected body to the process would ensure the measures are not open to abuse.
Does my hon. Friend agree that many landlords would appreciate that additional requirement and the ability to check with a respected local body that has expertise in housing matters whether a property has been abandoned? I think most landlords would be horrified if they inadvertently evicted someone who was in hospital, having a short spell in prison or away caring for an elderly relative. Surely another argument for supporting the amendment is that it would help landlords to avoid inadvertently doing the wrong thing.
I completely agree. The amendment would also give a heads-up to the local housing authority that there is the possibility of an eviction, enabling the authority to help that tenant into new premises and prevent them from ending up homeless.
It is estimated that these abandonments would arise on only 1,750 occasions a year, and with only 400 local authorities in the country, the amendment would be unlikely to place too much of a burden on them. It is clear that the clause needs amending if it is to work, to not be open to abuse and to be used appropriately on the rare occasions when a landlord is required to recover abandoned premises. The amendment would require the local housing authority to confirm, as an extra layer, that it also suspects that the property is abandoned before a landlord can recover the abandoned premises.
(8 years, 12 months ago)
Public Bill CommitteesVery briefly, I want to press the point about the jurisdiction of the database. It clearly relates to England, but rogue landlords operating in the Gloucester area or on the borders of Wales might have properties in Wales. It might be similar with the border areas close to Scotland. It would be useful, as part of the Minister’s helpful commitment to look at how the database might be made even more robust, to think about co-operation with Welsh, Scottish and even Northern Irish housing authorities.
I am reassured by the Minister’s comments. We all agree that we want to drive those sorts of people out of business, because of the suffering of their tenants and the impact on the communities in which they live—on schools and on the NHS. Slum landlords overcrowding properties is a problem in all constituencies, particularly in London. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 128, in clause 85, page 35, line 5, leave out subsection (5) and insert—
“(5) In section 89 (tests for fitness and satisfactory management arrangements: certain other houses)—
(a) after subsection (1) insert—
‘(1A) A local housing authority in England must also have regard to any evidence within subsection (3A) or (3B).’;
(b) in subsection (2), in paragraph (c), after ‘tenant law’ insert
‘(including Part 3 of the Immigration Act 2014)’;
(c) after subsection (3) insert—
‘(3A) Evidence is within this subsection if it shows that P—
(a) requires leave to enter or remain in the United Kingdom but does not have it; or
(b) is insolvent or an undischarged bankrupt.
(3B) Evidence is within this subsection if—
(a) it shows that any person associated or formerly associated with P (whether on a personal, work or other basis) is a person to whom subsection (3A)(a) or (b) applies; and
(b) it appears to the authority that the evidence is relevant to the question whether P is a fit and proper person to be the licence holder or (as the case may be) the manager of the house.’
(6) In section 93, in subsection (2), in the words after paragraph (c)—
(a) for ‘Section 89(1) applies’ substitute ‘Section 89(1) and (1A) apply’;
(b) for ‘it applies’ substitute ‘they apply’.”—(Brandon Lewis.)
See Member’s explanatory statement for amendment number 127.
Clause 85, as amended, ordered to stand part of the Bill.
Clause 86
Financial penalty as alternative to prosecution under Housing Act 2004
I have given thought to that, which is why I talked about “reasonable effort”. The original amendment said that the local authority “must” consult. It now asks for a “reasonable effort”, which is open to interpretation. Of course, there are costs in doing things properly, but we are trying to rid the private rented sector of rogue landlords who commit criminal offences by keeping people in properties that are unfit and unsafe. There is a cost, but the cost of not doing something could be far higher for the local authority.
Are banning orders only a way to punish criminal landlords or are they a way to improve standards in the sector by working with landlords and tenants to drive out rogue landlords? It will be fundamental to the success of banning orders for tenants to be brought in on the process. Not all tenants will want to play a part in the process and that is fine. The aim behind the amendment is for local housing authorities to consult affected tenants, ensuring they have the opportunity to have their say. If tenants have been subject to wrongdoing by a landlord, they will be able to provide further and wider evidence to the local housing authority. The landlord may have been prosecuted for one offence but could have demonstrated a consistent disregard for the tenant’s security and safety. That could be factored in by the local housing authority in the first-tier tribunal. It works both ways. The local housing authority and the first-tier tribunal could factor in positive experiences from tenants, although I suspect that those cases will be few and far between. In all cases, it will allow for the local housing authority and the first-tier tribunal to build up a more coherent case for or against a banning order.
I hope the Minister looks favourably on the suggestion because it would make this section of the Bill work better. For those reasons, we are moving that the clause be amended to include a requirement for the local housing authority to consult directly with any tenants of the rogue landlord or letting agent against whom it is hoping to make a banning order.
I rise to support the amendment and to add one or two brief thoughts. What would my hon. Friend, who spoke to the amendment in a very consensual style, think about a local authority that has not rushed into taking action against landlords because, for ideological reasons, it does not think it should or because the burden of other legislation in this time of significant cutbacks is too much for it to prioritise taking action against rogue landlords? The amendment would create that additional bit of pressure to ensure that local housing authorities always think of the need to consult tenants on an annual basis about whether rogue landlords are in action and whether the authority should act on that.
Let us take South Norfolk Council as an example. Presumably whenever the hon. Member for South Norfolk sees housing authority staff, he sits down and talks with them at some length about self-build and custom house building. Presumably, given his importance and the esteem in which he is held, it requires a considerable effort by those staff to deal with his inquiries. What my hon. Friend’s amendment will do is gently rebalance perhaps the enthusiasm within South Norfolk housing authority to focus on the needs of tenants, as well as dealing with his concerns. As I alluded to, there might be an authority—a Bexley or Bromley, perhaps, in London—that is so pro-landlord that it cannot envisage rogue landlords operating in its space.
Given that the Minister is determined—it seems to me, at least—to adopt the nanny state approach and not allow tenants themselves to go to the first-tier tribunal, my hon. Friend’s amendment would at least force local authorities to consider whether there is a need to take action. In that sense, it would be a useful annual prod to get local authorities to do a bit more in this area.
Amendments 101 and 102 go together. Clause 17 sets out the financial penalty for breach of a banning order and we are seeking, first, to remove the limit for the breach of a banning order, and, secondly, to change the maximum fine from £5,000 to £20,000. As was said earlier, we support the measures to tackle rogue landlords, to ensure security and safety for tenants and to penalise criminal landlords. We believe that banning orders should help drive up standards and protect tenants, but for banning orders to work they must penalise and target the few criminal landlords who bring down the name of the private rented sector. Those who breach a banning order deserve to be penalised appropriately.
For a criminal landlord, who may have committed a crime such as violently securing entry or harassing their occupiers, to be given a banning order and to breach it and only to face a fine of £5,000 is wrong. It is not in keeping with the spirit of this part of the Bill to tackle such rogue landlords. If a landlord has committed such an offence and gets caught letting a property in breach of that banning order, he will be fined less than he would if he got caught speeding on his way home. If a rogue landlord owns multiple properties, particularly in London, where market rates are obviously much higher, he could raise the funds to pay that fine in just a few weeks, so I believe there is no deterrent. Why was £5,000 thought to be an appropriate maximum financial penalty? By removing the upper limit, the Bill would provide a greater deterrent to those considering breaching banning orders. It would penalise further and recover extra moneys from criminal landlords, which would help drive up standards by ensuring that criminal landlords do not return to the sector.
Secondly, we are proposing to change the maximum to £20,000 from £5,000. That will create a further deterrent to criminal landlords considering breaching a banning order and will penalise those who do. As I said, if a rogue landlord owns multiple properties, particularly in London, where the market rates are high, it would not take very long at all for them to raise the money to pay £5,000. We believe that £20,000 is much more of a deterrent. The figure of £20,000 was drawn from the financial penalty for letting a licensed house in multiple occupation to more than the maximum number permitted. Therefore, we believe that there is a precedent for that level of fine. I would like to hear from the Minister why £5,000 was considered to be appropriate and what his view would be on a higher figure.
I support my hon. Friend’s amendment and I shall quote a number of examples which have received coverage. They are examples of rogue landlords and how they have been dealt with by the courts.
I draw attention to an article in the Conservative party’s newspaper of choice, The Guardian. According to that article, figures released last summer through a freedom of information case against the Ministry of Justice reveal that there were just over 2,000 convictions of rogue landlords between 2006 and 2014—that is, nicely, the last four years of a great Government and the first four years of a dismal Government for us to look at. The resulting fines in those 2,000 cases were just £3 million—less than £1,500 per conviction. One of those convicted was a man called Andreas Stavrou Antoniades, a landlord who converted a north London terrace into nine flats. He was given the maximum fine at the time, some £20,000—the equivalent of little more than two month’s rent from one property. The article goes on to say that the campaign group Generation Rent has suggested that criminal landlords rake in some £5 billion in rent a year.
The Minister has said that there are, in his estimate, some 10,500 rogue landlords. Clearly, if there is consensus on the Committee that we want action against those rogue landlords, we need housing authorities to move quickly. If they are going to take action quickly against rogue landlords, inevitably there will be a desire within housing authorities to know that the sanctions imposed on those landlords have real and significant teeth that will be a real deterrent to the often very rich individuals who benefit from very poor behaviour, and get them to change their behaviour.
At the moment, particularly in London, where rents are so expensive, we run the risk of fines just being written off as a business expense. I encourage the Minister to look with favour on my hon. Friend’s amendment, to send a much stronger and stiffer signal to stop criminal and other bad behaviour.
Given what the Minister has said—I am taking him at his word—it seems that we may have some agreement here, and given that he seems to have intimated to the Committee that the Government will look at the level of the penalty and perhaps increase it, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 16, in clause 17, page 10, line 22, at end insert—
“( ) The responsible local housing authority may not impose a financial penalty in respect of any conduct amounting to an offence under section (Offence of breach of banning order) if—
(a) the person has been convicted of an offence under that section in respect of the conduct, or
(b) criminal proceedings for the offence have been instituted against the person in respect of the conduct and the proceedings have not been concluded.”
This amendment ensures that a person does not end up with a financial penalty as well as a conviction for the criminal offence created by NC3.—(Mr Marcus Jones.)
I beg to move amendment 94, in clause 17, page 10, line 27, leave out subsection (7).
This amendment would ensure local housing authorities would be able to retain any financial penalties recovered under Clause 17.
I hope that the Minister continues to feel in a sufficiently good mood to consider this amendment with enthusiasm. If he wanted to intervene on me very early on and say that it is indeed his intention that local housing authorities will be able to retain any financial penalties recovered under this clause, clearly I would not need to dwell any further on the case for the amendment. As he has stayed firmly in his seat, focusing on his notes, let me make the case a little further. Quite rightly, the Minister alluded to the fact that, as a result of this legislation, it would be incumbent on housing authorities to take action whenever they see a rogue landlord in action and can gather evidence of malpractice. I suggest to him and to the Committee that we have to live in the real world. In a case of declining budgets and cuts, local authorities on occasion have to make tough choices, and it may be that other parts of a housing authority’s responsibilities have to take precedent. Although some prosecutions may take place, there may be other prosecutions that might not go ahead, if additional resources are not available.
My amendment seeks to ensure that the resources that are recovered as a result of clause 17 go to the housing authority, so that they can be invested in action against rogue landlords, and so that there can be confidence that we will see progress in getting the Minister’s figure of 10,500 rogue landlords down to a better limit, more quickly. It cannot be that any of us would want to have such a large figure of rogue landlords operating, feeling that they can do so willy-nilly and that if they get taken to task by the courts, that will almost be by accident. I think the Minister said that he expected just 600 cases a year as a result of the new legislation. That suggests that it will take us a very long time before we can eliminate the full list of rogue landlords.
I give credit to the Government for wanting to bring forward legislation to deal with the issue, but I gently suggest that we need to make sure that those we are going to vest with legislative power to do more against rogue landlords have the resources available to them, so that they have the means to take action and use these powers. My humble amendment perhaps offers a small glint of light to hard-pressed housing authorities that there will be some additional resource that they might get as a result of their efforts to bring bad landlords to justice, which they can use to reinvest in taking further measures against other rogue landlords.