Renters' Rights Bill (Seventh sitting)

Debate between Jerome Mayhew and Matthew Pennycook

Committee stage
Tuesday 5th November 2024 Public Bill Committees

[Jerome Mayhew (Broadland and Fakenham) (Con)]

I apologise for being rather slow on the uptake, but may I take the Minister back to clause 124, “Duties where occupiers are on residential premises entered without warrant”? Subsection (1) states:

“If an officer of a local housing authority enters premises under section 123(1) and finds one or more occupiers on the premises”—

in other words, if there are people there—

“the officer must produce evidence of the officer’s identity and special authorisation to that occupier or (if there is more than one) to at least one of them.”

That is very sensible—it means that the person must demonstrate who they are to the people in the premises—but subsection (2) states:

“An officer need not comply with subsection (1) if it is not reasonably practicable to do so.”

If we have already identified that an officer is entering premises that are occupied, what are the circumstances in which it would not be reasonably practicable for him to identify himself?

[Matthew Pennycook]

That is a very reasonable question. If the hon. Member will allow me, I will come back to him via written correspondence. In drafting the clause— I am raking my memory for our discussions about it—we thought that there would be certain circumstances in which the reasonability test might not need to be met. Some of the clauses have been developed following exchanges with local authorities. I will come back to the hon. Member on the specific point about whether we have met the test for it being necessary to include the subsection in the Bill.

[Jerome Mayhew]

The difficulty is that the Minister is asking us to support the wording of the Bill now, not subsequently to a letter being received. It is hard to support a clause that suggests on the face of it that an officer could come in and decide that it is not reasonably practicable to show their authority to somebody who is in occupation of their own residence. This is not an office building; it is where people live. I invite the Minister, who has his officials with him, to provide a more substantive answer in his next comments, because it is difficult for someone like me to support the clause as drafted.

[Matthew Pennycook]

I will happily try to do so: I will take away the point and try to get the hon. Member some reassurance in short order. I reassure him that we have drafted the clauses carefully, following extensive dialogue with local authorities and local authority stakeholders. We do not take the power lightly. If I understand him correctly, he is putting to me the reasonable point that such a power would never be necessary. If, in the course of our ongoing exchanges, I can give him an example in which it might be necessary, perhaps he will be reassured.

Question put and agreed to.

Clause 111 accordingly ordered to stand part of the Bill.

Clauses 112 to 133 ordered to stand part of the Bill.

Clause 134

Interpretation

Question proposed, That the clause stand part of the Bill.

Renters' Rights Bill (Fifth sitting)

Debate between Jerome Mayhew and Matthew Pennycook

Committee stage
Thursday 31st October 2024 Public Bill Committees

[Jerome Mayhew (Broadland and Fakenham) (Con)]

The Minister identified other legislation that already make discrimination illegal, and went on to make the point that proving discrimination is very difficult, so my question is twofold. First, if we have already outlawed that kind of behaviour, why do we need further legislation to do exactly the same thing? Secondly, if we do require further legislation, how is the evidential burden going to be passed more easily under this clause than has been the experience under previous provisions?

[Matthew Pennycook]

I thank the hon. Gentleman for his two reasonable questions; I will come on to answer them both in my remarks. If he feels that I have not sufficiently explained the matter, I am more than happy to give way to him again, but I will address both those points. The first I have already touched on: despite it almost certainly being unlawful under the Equality Act, discriminatory conduct of the kind that we are trying to bear down on happens fairly routinely, so it is evident to the Government that the existing legislation does not allow us to bear down on the problem effectively in practice. We think the Bill’s provisions will allow us to do so. I will pick up the hon. Gentleman’s point about the evidential burden and how local authorities make that judgment in due course.

In contrast to the approach on which I challenged the then Minister in the previous Parliament, the advantage of the approach taken in the Bill is that, first, responsibility for enforcement lies with local authorities and not tenants, and secondly, breaches can be addressed relatively easily, in the English context, via a civil offence with a lower burden of proof than a criminal one.

Clauses 32 and 33 directly and expressly prohibit discriminatory bans and restrictions on the letting of private rented sector properties on the basis that children would live with or visit a person at the property, or to persons in receipt of benefits. They also prohibit any conduct that might otherwise effectively constitute such bans or restrictions. In other words, the provisions are intended to deal with both direct and more subtle forms of discrimination. It is important to note that landlords and agents will continue to have the final say on who they let their property to, and they will be able to continue to carry out referencing checks to make sure that tenancies are sustainable for both parties.

It is also the case, as clause 40 makes clear, that nothing in this chapter will prevent landlords from making a final decision based on an objective and fair assessment of whether the prospective tenant can afford the rent, nor will it force landlords into entering into unsustainable tenancies. The majority of landlords—those who already act fairly and conscientiously and treat applicants equally, assessing their suitability on a case-by-case basis—have absolutely nothing to fear as a result of the introduction of the new rental discrimination framework.

[Jerome Mayhew]

The Minister made reference to the burden of proof under the clause being the civil burden, and compared that to the Equality Act. I just had a quick look at that Act—I stand to be corrected because it was a very brief look—and the burden under that Act appears to be a civil burden and also one where the maxim res ipsa loquitur can be applied. If that is the case, what is the difference between the burden of proof in this clause and that of the Equality Act?

--- Later in debate ---

[Matthew Pennycook]

I appreciate and understand that point, and the shadow Minister is right to say that we need to bring the requisite level of clarity in this area. He has asked a series of questions in Committee on insurance products more generally and I will attempt to give him a more comprehensive answer in writing so that we can draw a line under some of his concerns.

The shadow Minister asked specifically about no recourse to public funds and care leavers, which again is a specific subset of issues that he is right to raise. I will come back to him on those as well.

On civil penalties and whether they can be proved, we have taken a different approach in the Bill from Scotland and Wales where the situation is different. While they seek to enforce discriminatory provisions through a criminal offence, we have deliberately taken the civil route because of the lower burden of proof required for local authorities, and the ease with which they will therefore be able to take enforcement action against cases of discrimination where they have sufficient evidence.

[Jerome Mayhew]

rose—

[Matthew Pennycook]

If I have answered the shadow Minister’s point, the hon. Gentleman can come in.

[Jerome Mayhew]

The Minister will be aware that, although there is a civil burden of proof under English and Welsh law, the level to which the courts hold that burden of proof varies substantially, depending on the nature of the tariff or the consequence of that finding. Given that councillors will be seeking to impose what looks quite like a criminal fine under clause 39—a fine of many thousands of pounds—is it the Minister’s understanding that, although the burden of proof required is civil, it will be a high hurdle when applied by the courts?

[Matthew Pennycook]

I do not think I would make that particular point. To expand further, we have taken this particular approach because we think there is a benefit provided by the burden of proof that local authorities are required to meet. It is also the case that making breaches of rental discrimination provisions a single civil matter in England is in line with our wider discrimination legislation, in the way that it is not in Scotland and Wales—we will come on to discuss those points.

It is worth noting that, where there is evidence, local authorities can take enforcement action against either the landlord or the letting agent, or indeed both, if the letting agent has been party to the breach, and they can face multiple fines. They are civil fines at the £7,000 level rather than the criminal fines found elsewhere in the Bill, which have a much higher threshold of £40,000. I hope that answers the point made by the hon. Member for Broadland and Fakenham. Again, if he writes to me, I am happy to give him a more detailed answer.

I hope that I have reassured the shadow Minister as to why we have taken this approach and that we have considered its impact on different cohorts. It is important that the power provided for in clause 38 is there. We will take it forward only very specifically, as I have said, after consultation and through the affirmative procedure, but we want to have it so that the system can to adapt to any new instances of discrimination that arise. To go back to the point that my hon. Friend the Member for Doncaster Central has put to me fairly frequently, if sufficient evidence is brought to us that shows that certain cohorts, be it care leavers or anyone else, are facing the type of discrimination we want to bear down on through the Bill, we can more easily add them and cover them with that power.

Renters' Rights Bill (Fourth sitting)

Debate between Jerome Mayhew and Matthew Pennycook

Committee stage
Tuesday 29th October 2024 Public Bill Committees

[David Simmonds]

My hon. Friend raises an extremely good point. As he outlined, this is very much about perverse incentives. We do not want to create a situation in the market where it is always in the interests of the tenant to push this to the tribunal. We need to make sure that that point is effectively addressed, and the amendments seek to do that.

[Matthew Pennycook]

Clause 8 amends section 14 of the Housing Act 1988, and the amended sections set out the circumstances in which a tenant can submit an application to the tribunal to challenge the rent amount either in the first six months of a tenancy or following a section 13 rent increase notice. Amendments 50 to 53 seek to alter the process for challenging initial rents and rent increases at the tribunal.

I must stress that, in the first instance, under this new system, the Government strongly encourage landlords and tenants to communicate early about what adjustments to rent are sustainable for both parties. Where an agreement cannot be reached, the Government are clear that tenants should submit an application to the tribunal only where they believe that a rent increase is above market rates. Such rises may represent an attempt by the landlord to exploit a tenant who simply wishes to remain in their home, or they may be an underhanded attempt to remove a tenant without pursuing the very clear possession grounds laid out in schedule 1. That is why we think clause 8 is so important.

[Jerome Mayhew]

I understand that the Government’s intention is that tenants should not go to the tribunal unless they are clear that the asked-for rent is too high, but what prevents them from gaming the system, as we discussed?

[Matthew Pennycook]

What I would say to the hon. Gentleman—I will expand upon my argument in due course—is that I think he underestimates how difficult it is to take a case to the tribunal. That is why we are seeing such low numbers of tenants going to the tribunal. It is an onerous process; we need to provide support and guidance about how to do it. I do not take his point that we will see a flood of tenants taking rent increase cases to tribunal.

To be very clear—I have said this on previous occasions—the Government want more tenants to take their cases to tribunal. We think the tribunal has an important role to play in setting the effective market rate for any given area, so we want to see a proportionate number of cases go through it—we obviously do not want to see it overwhelmed. However, I think the hon. Gentleman underestimates the onerous nature of taking a case to tribunal. It will not be as simple as the tenant deciding on a whim one day that they can do that, and that it is a no-lose situation, but I recognise the incentives at play on both sides. I will expand upon what I mean and why we have come to this decision in relation to this particular clause.

The shadow Minister proposes in his amendments that rent increases, where they are challenged at the tribunal, should be backdated to the date the landlord first proposed. That would mean tenants possibly facing significant arrears immediately after the tribunal hearing. That is an incentive in the other direction, which we fear would, if introduced, see no tenants taking their case to tribunal. We have just had an extensive discussion about the need to address the affordability pressures to ensure that landlords are not exploiting the system with large, completely unreasonable within-tenancy increases. We have to take that into account as well.

Tenants should not be thrust into debt simply for enforcing their rights. As such, the Bill proposes that rent increases should apply only at the beginning of the next period after the tribunal determination, or up to two months later, in limited cases of undue hardship.

[Jerome Mayhew]

Will the Minister give way?

[Matthew Pennycook]

If the hon. Gentleman would allow me to develop my argument after his intervention, I am sure I will get to his points.

[Jerome Mayhew]

I am grateful—I am not intervening for the sake of it; there is an important point here. The Minister says that it would be unfair on the tenant to have a significant increase in rent and a backlog after the determination of the tribunal, but that is rent that ought properly to have belonged to the landlord and has been unjustifiably denied them for the period of the process. Why is it fair for the landlord to be denied a just rent as a result of the delay in the process, yet it is for some reason not fair for the tenant?

--- Later in debate ---

[Matthew Pennycook]

Many of the 11 million people living in the private rented sector would love to own a pet but have difficulty finding a property that allows them to do so. We want tenants in the private rented sector to enjoy the joys of pet ownership, just as homeowners do. We know the benefits of pet ownership for mental and physical wellbeing. I declare an interest: I have a dog named Clem, who I referenced in the debate on the previous Government’s Bill, and he is, as I know to be the case for many pets across the country, a valued member of the family.

We have heard the calls from animal groups for more protection for pets living in rented homes. In its written evidence to the Committee, the Royal Society for the Prevention of Cruelty to Animals highlighted the plight of renters forced to give up their pets because they cannot find a home that will allow pets. I am delighted that the RSPCA, as well as the Dogs Trust, Battersea, and Cats Protection, support the action the Bill takes in this area.

On how we support pet ownership in the private rented sector, clause 10 introduces a new implied term that allows tenants to make a request to keep a pet, which landlords cannot unreasonably refuse. That stops landlords utilising a blanket “no pets” approach and ensures that each request is considered on its merits. We understand that not all properties or situations will be appropriate for pets. Landlords will not have to accept their tenant’s request where it is unreasonable, such as where housemates have allergies and might be detrimentally affected by pet ownership.

The clause makes it clear that landlords will always be justified in refusing a request if their own superior tenancy agreement prohibits pets. That will ensure that the law is consistent and that landlords will not be put in a position where they are forced to breach the terms of their own superior lease. However, to ensure that the provisions have teeth, tenants will have the right to challenge refusals they think are unreasonable via the new private rented sector landlord ombudsman or in court. The ombudsman or court will be able to take an unbiased view on whether the landlord has reasonably refused a request.

Clause 10 also gives landlords an ample 28 days to respond to requests, with an additional seven-day window if the landlord requests more information from the tenant within the initial 28-day timeframe. I make that point because the previous Government’s Renters (Reform) Bill proposed a 42-day response window. The animal welfare charities I mentioned were concerned about that duration, especially as it would mean tenants finding it hard to adopt a pet or the charities needing to keep animals for a long time while landlords made a decision. I share those concerns and I am pleased to say that we have made an improvement by bringing down the timeframe in this Bill.

Finally, clause 10 provides reassurance to landlords by allowing them to require pet damage insurance, either by charging the tenant for it or by asking the tenant to take out an appropriate insurance policy. These measures encourage responsible pet ownership in the private rented sector while providing landlords with assurance.

Turning to clause 11, although it is right that tenants can make the house they rent their home by having a pet, I understand that some landlords will be concerned by potential damage caused by pets to their property. The Committee has discussed the joys of pet ownership, but we all know that many pets can be active and at times destructive. That is one of the joys of pet ownership, but also one of the realities, particularly when it comes to some types of animals.

Clause 11 builds on changes made by clause 10 and amends the Tenant Fees Act 2019 to permit landlords to require tenants to take out an insurance policy to cover any potential damage caused by a pet or to charge the tenant the cost of such a policy. When granting consent, the landlord will be able to decide which insurance option best meets their needs. That underscores our commitment to ensuring that the private rented sector provides secure and stable housing. We recognise that pet ownership plays a crucial role in achieving that mission.

I thank the hon. Member for Ruislip, Northwood and Pinner for amendment 55, which seeks to ensure that suitable insurance products are available before landlords are allowed to mandate that their tenants purchase them to cover pet damage. We know that one of the reasons landlords are hesitant to take on tenants with pets is a fear that those pets could cause damage to their properties, which the tenants’ deposits might not be sufficient to cover.

I recognise that not a lot of insurance companies currently offer products designed to cover damage from pets. It is understandable that in the current climate, in which landlords have discretion over whether to accept or refuse pets, there is no demand for insurance and therefore the market is limited. We believe, however, that by creating an enabling environment for the industry, the Bill will cause the insurance market to adapt. I am sure that, as firm believers in the free market, the hon. Members for Ruislip, Northwood and Pinner and for Broadland and Fakenham share that view.

I hope the hon. Member for Ruislip, Northwood and Pinner will also be reassured that my Department has already had discussions with the insurance industry regarding such products. The discussions have been promising and I am aware that there are products in development to meet his concerns.

[Jerome Mayhew]

The Minister is quite right; I am a believer in the free market and I am sure the market will respond. Does he have an indication from his discussions with the insurance industry of the kind of price and the surcharge that will be required to fit the need?

[Matthew Pennycook]

We have not considered extensively the range of prices in the Department’s discussions, but I am sure the market will respond. I do not see any particular concern that companies will charge excessive rates for pet insurance, but that is something we will monitor as we bring the relevant parts of the Bill into force.

In the light of those points, I hope the shadow Minister will consider not pressing amendment 55 to a vote.

Renters' Rights Bill (First sitting)

Debate between Jerome Mayhew and Matthew Pennycook

Committee stage
Tuesday 22nd October 2024 Public Bill Committees

[Jerome Mayhew]

Thank you both very much.

[The Minister for Housing and Planning (Matthew Pennycook)]

Q I have three questions, starting with court improvements. There is a shared understanding between the sector and the Government that ensuring that the Courts and Tribunals Service is prepared for the implementation of the new tenancy regime is essential. You all know that we took issue with the previous Government’s legislation, which made the tenancy regime hostage to unspecified court reforms.

You mentioned investment, and I wanted to press you on precisely the type of improvements you want to see. You know that, together with colleagues in the Ministry of Justice, we are already taking forward improvements towards digitising the court possession process. What are the metrics you want to see in that process as improvements? On the understanding that —I think you will accept this—not every section 21 notice will read across to a section 8, so there will potentially be a bit of an increase, what do we need to see on the section 8 side and the tribunal side to ensure that the system is fit for purpose at the point that we switch it on?

Ben Beadle: I have a couple of things to say on this, Minister. I agree that court reform has been almost like the Colonel’s secret recipe—nobody quite knows what is in it or what it looks like. It is incumbent on us to define what “the courts are ready” means in practice. For us, there are two or three areas that could be improved. First, we are getting many reports of applications that are made to the court actually running out of time because they have not been processed in time. You have the admin part of the sausage factory at the beginning, because it is not so much about the number of judges. I sit as a magistrate and I often sit around waiting for cases to come to me and to be input into the new common platform. There are delays built into the administrative process that cause frustration.

The other issue we have seen is the wait for a bailiff. Once you have patiently waited for your court hearing date and you have possession, that will be what it will be, but waiting for a bailiff can take months in some areas. Sometimes there are really poor excuses—earlier this year, we saw the stab-proof vests not being available. If it is a high-risk area, you need somebody waiting out in the car and somebody on the door. London is predominantly a high-risk area, which is why we see such slow eviction timescales.

Personally, we want to prevent evictions. Landlords do not go around evicting tenants willy-nilly, but when they have a legitimate case, we do expect it to be dealt with expediently. To me, court reform looks like sifting the cases more appropriately and more speedily; digitising that process so you see the ping and the pong of the evidence going backwards and forwards; and, when you get possession, an automatic link to the bailiff, rather than having to reapply. Those are three tangible things. Ultimately, though, it is seven months at the moment, and it needs to be lower.