Draft Housing and Planning Act 2016 (Banning Order Offences) Regulations 2017

Jake Berry Excerpts

Tuesday 9th January 2018 General Committees

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

I beg to move,

That the Committee has considered the draft Housing and Planning Act 2016 (Banning Order Offences) Regulations 2017.

It is a pleasure to serve under your chairmanship, Mr Robertson, for what I believe is the first time. I draw the Committee’s attention to my entry in the Register of Members’ Financial Interests. The draft regulations were laid before the House on Wednesday 29 November 2017.

The Government value the private rented sector, an important part of our housing market that houses some 4.5 million households in England. We want to support good landlords who provide decent, well maintained homes; we also want to avoid unnecessary further regulation. Most private landlords provide a decent service to their tenants, respecting their rights and complying with the obligations and legal requirements imposed on them. However, we know that a small number of landlords and property agents do not meet their legal obligations and sometimes exploit their tenants by renting out substandard, overcrowded and often dangerous accommodation. Those landlords and property agents often do not respond to legitimate complaints made by their tenants; some would even prefer to be prosecuted rather than to maintain their properties to a decent standard. Such practices, which damage the reputation of the sector and of the vast majority of good landlords, frankly have no place whatever in Britain’s housing market.

The Government have implemented tough measures to enable local authorities to target rogue landlords under the Housing and Planning Act 2016. In April 2017, we introduced civil penalties of up to £30,000 as an alternative to prosecution. We also extended rent repayment orders to cover a wide range of housing offences, including illegal eviction and failure to comply with statutory notices. Banning orders, the subject of the draft regulations, are an important part of this wider package and will enable local authorities to take effective enforcement measures against rogue landlords.

It may help if I briefly outline the purpose of banning orders. A banning order is defined in section 14 of the 2016 Act as

“an order…banning a person from—

(a) letting housing in England,

(b) engaging in English letting agency work,

(c) engaging in English property management work, or

(d) doing two or more of those things.”

Section 15 enables a local housing authority to apply to the first-tier tribunal

“for a banning order against a person who has been convicted of a banning order offence.”

A banning order must last for a minimum of 12 months, but there is no upper limit. A landlord who breaches a banning order may face further enforcement action, including an unlimited fine and up to six months in prison.

Hon. Members will be aware of the Government’s intention to introduce a database of rogue landlords and rogue property agents. Any landlord or property agent subject to a banning order will be entered on the database, which can then be used by local housing authorities throughout England to co-ordinate their enforcement activity against rogue landlords.

We will also ensure that tenants who live in property rented out by landlords subject to a banning order retain adequate protection. A banning order will not invalidate any tenancy agreement held by the tenant in the property, regardless of whether it was issued before or after the banning order was made. That will ensure that the tenant does not lose their rights under the terms and conditions of their existing tenancy agreement. The 2016 Act therefore provides that, in certain circumstances, the management of a property can be taken on by the local housing authority following the making of a banning order.

Banning orders target the most prolific offenders who have been convicted of serious housing, immigration or other criminal offences connected to their role as a landlord. They will prevent rogue landlords and property agents from earning income from renting out properties or engaging in letting agency or other property management work, forcing them either to raise the standard of the service that they provide or to leave the sector entirely.

Hon. Members will be aware that we did not include specific banning order offences in the 2016 Act. During the passage of the Bill, concerns were raised about the nature and scope of banning order offences. In response, we held a public consultation on which existing criminal offences should be regarded as banning order offences. We also amended the Bill to ensure that the regulation-making powers were subject to the affirmative procedure, to allow full scrutiny by Parliament of the proposed offences. The regulations before the Committee specify which offences will constitute banning order offences under section 14 of the Act, but I shall summarise the offences, which are set out in the schedule to the regulations.

All the offences listed in the regulations are existing criminal offences. By making them banning order offences, we are not introducing any new offences, but simply introducing a new and draconian sanction for pre-existing criminal offences. Broadly speaking, the regulations cover three types of offences. The first type is housing offences relating to a breach of existing requirements under the Housing Act 2004 and other housing-related legislation, provided that the person convicted of the offence has not received an absolute or conditional discharge for the offence. That condition is in place to ensure that banning orders remain a proportionate sanction.

We want to target only the worst offenders who have been convicted of serious housing offences. Those offences include failure to comply with an improvement or overcrowding notice, failure to comply with houses in multiple occupation licensing and selective licensing of other privately rented properties, and offences relating to fire and gas safety. They also include unlawful eviction of tenants or violence or harassment towards them by the landlord or letting agency. Such offences are serious and directly impact the health and safety of the tenants of a property. The offences are directly related to the offender’s role as a landlord, and in our view it is right that they are included as banning order offences.

The second type of offence is immigration offences under part 3 of the Immigration Act 2014. For a banning order to be made against a landlord, that landlord would need to be convicted of offences including letting a property to an illegal immigrant. Where the original immigration offence is prosecuted, that would generally be a serious offence that would probably be associated with wider exploitation of migrants, so it is appropriate that offenders should be banned.

The third type is serious criminal offences with a connection to the landlord or tenant. A banning order may be sought where a person has been convicted in the Crown court of a serious criminal offence including fraud, misuse of drugs or sexual offences. The Government consider it appropriate to include those serious criminal offences as banning order offences where there is a clear link between the offence and the offender’s role as a landlord. It is for that reason that the offence is linked to property being rented out and/or the tenant living at the property.

The banning order offences regulations were the subject of a consultation held over the eight weeks between 13 December 2016 and 10 February 2017. We received responses from local housing authorities, landlords’ organisations, tenants’ groups, housing charities and representatives of letting agents. We published our response to the consultation on 28 December 2017. In total, there were 223 responses, with a high level of support for our proposals. Overall, 84% of the respondents agreed that the proposed banning order offences were the right ones. In addition, we have included in the regulations a range of further offences that were suggested by respondents during the consultation, because we consider them to be offences that are most commonly committed by rogue landlords against their tenants. The additional offences, listed as items 10 to 14 of the schedule, include offences relating to the Proceeds of Crime Act 2002, harassment, antisocial behaviour, criminal damage and theft.

The vast majority of landlords and agents who comply with their responsibility will not be affected or have to worry about the regulations. Indeed, the Government believe that they will benefit from them, since standards and compliance with the law across the sector will be set as a level playing field. Good landlords, who work hard for their tenants, provide a decent place to live and comply with the law, will no longer have to face unfair competition from the rogues, who ignore the law and flout their obligations.

Ultimately, it will be for local housing authorities to determine whether to apply for a banning order in any given circumstance. My Department will produce comprehensive guidance for local authorities in England on how they may use the new powers. I therefore—

[Clive Efford (Eltham) (Lab)]

Before the Minister sits down, I want to clarify a matter. In my constituency, I have a number of homes in multiple occupation that are a source of antisocial problems, drugs and violence and are poorly managed. Many of them are owned by one company. If a banning order were applied to a company that owned properties, would it apply to all its properties or just to the individual property?

[Jake Berry]

If the hon. Gentleman does not mind, I will deal with his question in my concluding remarks, when we have had the benefit of colleagues’ views in that area. Therefore, before anyone else intervenes, I recommend the draft regulations to the Committee.

--- Later in debate ---

[Clive Efford]

I wish you, Mr Robertson, everyone on the Committee and all the officials here a happy new year. I will not keep the Committee long, and I will put my questions at the start to give people a fair chance of finding answers.

My first question is something that I mentioned earlier. In my constituency, a single company owns several properties. If it is found to have committed a criminal offence relating to one of those properties, and if the local authority then sorts a banning order, will that banning order to the company therefore mean that all its properties have to be taken over by a local housing authority or will the order apply to just that one property? If we are talking about an organisation—a company that is a fit and proper person, which is what we are seeking to achieve—surely if it is found to be criminally negligent or to have mismanaged its property, it follows that it should not be running other properties either. I seek clarification around that.

[Jake Berry]

Will the hon. Gentleman give way?

[Clive Efford]

I will, if I can just get my questions out to give people in the room the chance to hand the Minister a note if necessary. I am trying to be fair to him. I know the situation and I am genuinely after the answers, rather than trying to trip him up.

On the resourcing of tribunals, are we expecting a glut of these applications? My hon. Friend the Member for Great Grimsby raised the issue of tenants’ rights during this period; they do need to be protected. We do not want a flurry of evictions coming about as a result of this measure, as has been pointed out by the hon. Member for The Cotswolds. People might decide that they want to sell the property, or even attempt to evict the tenants under the guise of wanting to sell the property, and therefore seek possession. What about damage that arises during the period in which a housing authority is in charge of the property? Who is liable? Does the landlord have any say over who manages that property during a banning order period, or is that to be determined by the tribunal and the local housing authority? I would like some clarification on those points.

--- Later in debate ---

[Jake Berry]

It is one of the unusual benefits of an ongoing Government reshuffle that this is the first of four debates that I will have the opportunity to respond to today, which would otherwise have been dealt with by colleagues from other areas of the Department.

I will deal first with the questions asked by the hon. Member for Eltham. It is correct that if a company owns multiple properties it can receive a banning order against all those properties, but that is subject to a local authority applying for a banning order against any office of the company. If that company has been convicted of a banning order offence, it will be possible to get a banning order against all those properties.

In terms of tenants’ rights, which were raised by the hon. Member for Great Grimsby—my honourable friend outside this place—and the hon. Member for Eltham, local authorities have the power, through a management order, to take over the management of the property for the period of the banning order, thereby keeping the tenant in place and protecting them. The terms of that management order will ultimately be the local authority’s responsibility. It would be surprising if the local authority did not choose one of its preferred local housing providers to manage that property, if it did not do so itself.

We in the House would all acknowledge that public sector housing providers, local authorities and quasi-public sector providers such as registered social landlords are extremely good landlords. That is why so many people want to live in those properties.

In relation to the point made by the hon. Member for Eltham, the landlords, whether companies or individuals, who will be affected by the regulations are by definition the bad eggs. We have anticipated that and have put wide-ranging anti-avoidance measures in the regulations to ensure that things such as properties cannot be transferred to husbands, wives, associated companies or associated parties to try to ensure that people cannot avoid the regulations by nefarious means. We will keep that under review because rogue landlords—or crooks, as people may call them—are quite inventive.

My hon. Friend the Member for The Cotswolds, whom I congratulate on his recent knighthood—he has gone from a landlord to a landknight—set out several questions, which I am happy to write to him about. He also expressed concern that less serious offences may be caught by the regulations. The regulations are specifically drafted to cover the most serious offences and are not intended to catch the less serious. The vast majority of landlords, who make a living by letting out properties of a good standard and by providing a good service to their tenants, have nothing to fear from the regulations. We have designed the regulations to affect only the most serious offences. For many people, we are talking about the possibility of taking away their livelihood and their means of making a living for an extended period, so it is therefore appropriate that the offences are proportionate to that.

The hon. Member for Great Grimsby spoke about the Labour Government’s proposal to create a national register of all landlords. In a much more proportionate way, the regulations create a national register of all rogue landlords, which will be maintained by the Government and local authorities working together. It will enable them to target effectively those landlords who are not providing a good service. That is much more effective than a national register of all landlords and it will be a strong tool for local authorities that want to target rogues. The national database will be searchable by local authorities in England.

The hon. Lady also said that the regulations had been a long time coming. They were quite a long time in their design, because the Government were determined to get them right, and we are grateful for the helpful suggestions that came in during the consultation to ensure that they are right. We are talking about depriving people of their opportunity to make a living. Although that is absolutely right for rogue landlords—they should be deprived of that opportunity—for the vast majority of landlords who are going about their business legitimately, we want to ensure that they are not prevented from making a legitimate living. Again, that goes back to the comments made by my hon. Friend the Member for The Cotswolds.

We intend to keep the banning order offences under review. I heard what the hon. Member for Great Grimsby said about the response to the consultation, but, in fact, these offences will change over time and we intend to keep them under review to ensure that these banning orders remain up to date. We will listen to local authorities to ensure that they have the powers that they need to continue to provide decent service to tenants.

The hon. Lady also asked how many banning orders we expect. Our current estimate is that about 600 banning orders per year will be made, although we do not want to create a target for local authorities. Often, if they are told they are expected to do 10 each per year, they will do exactly 10 each. I hope local authorities fully embrace these new powers and simply get enough banning orders to deal with the rogue landlords in their area. There will be no guidance for the tribunal, but we will provide guidance for local authorities and ask the tribunal to have regard to the guidance.

On the last point made by the hon. Lady, we hope local authorities will have enough resources, because banning orders are additional sanctions for offences that local authorities already have a legal obligation to pursue. We have enabled them from April 2017 to keep the fines from civil offences of up to £30,000 and also enabled them to keep penalties relating to housing enforcement purposes.

The banning orders are a necessary tool to enable local authorities to combat rogue landlords who have committed serious offences relating to their role as landlord. Those rogues will continue to be prevented from operating for profit if they intend to keep providing poor-quality housing and continuing with bad management practices. Such practices, which we are discussing today as being subject to these banning orders, put health and safety and the welfare of tenants at risk. The Government and all in the House should be determined to crack down on that.

We want to compel rogue landlords either to improve the standard of housing they rent out and comply with their obligations or, if not, to leave the sector in its entirety and enable good landlords to enter and provide decent homes for people to live in. I therefore commend the regulations to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Housing and Planning Act 2016 (Banning Order Offences) Regulations 2017.