Renters (Reform) Bill (Fifth sitting)

Lloyd Russell-Moyle Excerpts

Committee stage
Tuesday 21st November 2023 Public Bill Committees

[Matthew Pennycook]

Well, that just makes my point that the sector should have been overhauled a long time ago. The fact that it has changed beyond recognition over recent decades and now houses not just the young and the mobile, but many older people and families with children, for whom having greater security and certainty is essential to a flourishing life, renders urgent the need to transform how it is regulated and to level decisively the playing field between landlords and tenants.

This Bill is a good starting point to that end. We are glad that after a very long wait, it is finally progressing. However, we are determined to see it strengthened in a number of areas so that it truly delivers for tenants. In this Committee and the remaining stages, we will seek to work constructively with the Government to see this legislation enacted, but we also expect Ministers to give serious and thoughtful consideration to the arguments we intend to make about how its defects and deficiencies might be addressed.

Part 1 of the Bill seeks to amend the assured tenancy regime introduced by the Housing Act 1988. In the nearly 35 years since that Act came into force in January 1989, with some limited exceptions, all new private sector tenancies in England and Wales have been either assured or assured shorthold tenancies, with the latter becoming the default PRS tenancy following the implementation of the Housing Act 1996. As the Committee will know, assured tenancies can be either periodic or fixed, but the vast majority of ASTs are fixed.

Clause 1 will insert a new section 4A before section 5 of the 1988 Act, thereby providing, as the Minister made clear, that all future assured tenancies will be periodic and open-ended, and that they can no longer have fixed terms. That change will empower tenants by giving them more flexibility to end tenancies where and when they want or need to, including when landlords are not meeting their responsibilities and obligations or in instances in which the property that they have moved into is not as advertised. We support it.

We take no issue with Government new clause 2. Although we are not convinced that it is strictly necessary, given how the Apportionment Act 1870 applies to rent paid in advance, we believe that it is a worthwhile amendment none the less, to the extent that it makes express provision for that.

We believe that Government new clause 6 is a necessary change to how council tax works, given that the Bill abolishes fixed-term tenancies. However, in the sense that its effect will be to render a tenancy that

“is or was previously an assured tenancy within the meaning of the Housing Act 1988”

a “material interest” for the purposes of this Bill, we would be grateful if the Minister provided some clarification. Could he tell us the effect of the proposed change in circumstances in which a tenant used to have an assured tenancy but, after this part of the Bill comes into force, now does not because of circumstances that are out of their control? Let us say, to take an extreme example, that a tenant died prior to the end of their assured tenancy, and the relevant provisions came into force. Would their estate be forced to pay the council tax liability as a consequence of the new clause?

We understand the Government’s intention with regard to the new clause, which is to manage the transition between the two tenancy regimes when it comes to council tax. However, we are a little concerned that, as drafted, the new clause may be unnecessarily broad and may create some problematic outcomes. The explanatory statement accompanying the new clause suggests that it may have another purpose altogether—namely, to make people liable if they leave a tenancy without giving notice—but that raises the obvious question of how the Valuation Office Agency and the relevant local authority are meant to know that, and how the local authority might ever hope to find the tenant who is liable. Could the Minister tell us whether the Government have discussed the matter at all with either the Valuation Office Agency or the Local Government Association?

Lastly in connection with this new clause, is there not a risk that unscrupulous landlords may game this provision by claiming that there is still a tenant in situ who should settle the council tax liability, rather than the landlord doing so? Our concern is that the provision could be abused along those lines and that local authority revenue would suffer as a result. I would appreciate some reassurance and clarification on those points in the Minister’s response.

With or without the incorporation of Government new clause 2 and new clause 6—after clause 6 and before clause 20 respectively—huge uncertainty now surrounds the implementation of clause 1, and the rest of chapter 1 of part 1, as a result of the Government’s recent decision to tie implementation of the new system directly to court improvements. Whatever the motivation behind that—renters will no doubt have reached their own conclusions—the decision has significant implications for when clause 1 and the other clauses in this chapter become operational. We need answers today, so that those whose lives stand to be affected are clear as to what they are.

Clause 67, “Commencement and application”, gives the Secretary of State the power by regulations to appoint a day when chapter 1 of part 1, including clause 1, comes into force. In other words, the Bill has always given Ministers discretion as to precisely when the new system becomes operational—a matter that we will debate more extensively in a future sitting when we come to clause 67 itself and our amendment 169 to it.

The Government were previously clear that there would be a two-stage transition to the new tenancy system, with precise starting dates for new and existing tenancies to be determined by the Secretary of State, and that a package of wide-ranging court reforms was to accompany the legislation, but at no point prior to the response issued on 20 October this year to the Select Committee on Levelling Up, Housing and Communities did the Government indicate that the new system’s implementation was directly dependent on such reforms. As things stand, because of the Government’s last-minute change of approach, not only do tenants have no idea when the new tenancy system will come into force, but they do not even know what constitutes the requisite progress in respect of court reform that Ministers now deem is necessary before it does.

There are three distinct questions to which the Government have so far failed to provide adequate answers. First, is the county court system for resolving most disputes between landlords and tenants performing so badly that reform is a necessary precondition of bringing this clause and others in this chapter into force?

[Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)]

We heard from many representations on the county court part of the process that the county court system was performing adequately. Does that not make one suspicious that there are other motivations for kicking this into the long grass?

[Matthew Pennycook]

I will come on to our view of precisely how the county court system is operating, but I think it would be fair to say that we do not necessarily buy the Government’s argument that it is performing so badly that we need to tie implementation of this clause and others in this chapter to it. It could certainly do with improvement, but if it needs improvement, we need to know what that improvement is. That is an argument that I will come on to make in due course.

The second of my three questions to the Government relates to the point that my hon. Friend has just raised: if the court system requires improvement to ensure that landlords can quickly regain possession of their property if a tenant refuses to move out, what is the precise nature of the improvements that are required? Thirdly, how can we measure progress on delivering those improvements so that tenants have certainty about when the new system might come into force?

I will start with my first question. With apologies, Mr Gray, I intend to spend some considerable time on this point, because it is central to when the clause and the rest of the chapter come into force.

If one examines the evidence, it is clear that the possession claims system is one of the faster and better-administered parts of the civil justice system. As housing expert Giles Peaker put it when giving evidence to the Committee on Thursday, it is “well honed”. As Simon Mullings, co-chair of the Housing Law Practitioners Association, stated in the same session:

“What we have at the moment is an extremely good network of county courts, with a very evolved set of civil procedure rules that deal with possession claims very well.” ––[Official Report, Renters (Reform) Public Bill Committee, 16 November 2023; c. 111, Q141.]

The data seems to bear that out. It makes it clear that the various stages of possession and litigation are back to where they were pre-pandemic, and that non-accelerated possessions are not taking significantly longer than the relevant guidelines stipulate. As Giles Peaker argued,

“the current time from issue to a possession order under the accelerated possession proceedings—an ‘on the papers’ process, without a hearing—is roughly the same as under the section 8 process with an initial hearing. There is no great time lag for the section 8 process as opposed to accelerated possession proceedings.”––[Official Report, Renters (Reform) Public Bill Committee, 16 November 2023; c. 111, Q141.]

One of the more robust defences of the adequacies of the present system that I have heard came from the sixth of the seven housing and planning Ministers that I have shadowed in my two years in this role. On Second Reading, the hon. Member for Redditch (Rachel Maclean) argued:

“It is important to note at this point that the vast majority of possession claims do not end up in the courts—only something like 1% of claims go through the courts... The courts have already made huge improvements. It is worth saying that over 95% of hearings are listed within four to eight weeks of receipt, and of course the ombudsman will encourage the early dispute resolution process, taking a lot of claims out of the courts and freeing up court time for more complex processes.”—[Official Report, 23 October 2023; Vol. 738, c. 695.]

We also heard expert testimony last week that called into question the suggested impact of the Bill on the courts. For example, it was disputed whether the reforms in the Bill would increase the number of contested cases. Giles Peaker persuasively argued that there was likely to be an increase in the number of initial hearings, but that we are unlikely to see an increase in the number of contested hearings.

To the extent that concern was raised about capacity within the system, several witnesses argued that it still did not justify postponing the enactment of chapter 1 of part 1. Indeed, the head of justice at the Law Society, Richard Miller, argued in relation to plans for digitisation that it would be sensible to see the new tenancy system put in place first so that we can properly understand what a new digital system needs to achieve in respect of the Bill.

Every part of the civil justice system would benefit from improvement, but we would argue that, to date, the Government have failed to demonstrate that the county court system for resolving landlord and tenant disputes is failing to the degree that it is imperative to further delay the long-overdue reforms to tenancies in the Bill. I would be grateful if the Minister set out very clearly why the Government believe the possession of claims system is so woefully inadequate that the enactment of clause 1 and the other clauses in chapter 1 must be postponed.

I turn to the second of my questions. If we accept that the county court system as it relates to housing cases could be improved—probably no one here would dispute that, even if we might debate the extent of the improvement required—how are the Government defining improvement? To put it another way, what is the precise nature of the improvements that Ministers believe are required before we finally abolish section 21 of the 1988 Act and reform the tenancy system, as clause 1 and other clauses in chapter 1 will do?

Let us examine and interrogate what the Government have said about this. Their 20 October response to the Select Committee stated:

“We will align the abolition of section 21 and new possession grounds with court improvements, including end-to-end digitisation of the process.”

Will the Minister tell us precisely what is meant by end-to-end digitisation of the process? Precisely what process did that statement refer to? Was it a reference to just the court possession action process, or to civil and family court and tribunal processes more generally? Further detail was seemingly provided in the briefing notes that accompanied the King’s Speech on 7 November:

“We will align the abolition of section 21 with reform of the courts. We are starting work on this now, with an initial commitment of £1.2 million to begin designing a new digital system for possessions. As work progresses, we will engage landlords and tenants to ensure the new system supports an efficient and straightforward possession system for all parties.”

[Lloyd Russell-Moyle]

Did we not hear in evidence that the key for this to work was the property portal? Delaying the implementation of these measures until after court reform would therefore seem to be the wrong way around. Surely the property portal and ombudsman need to be up and running, and then we can see what pressure is on the courts, and we can also integrate the property portal into the digitalisation of the process.

[Matthew Pennycook]

I thank my hon. Friend for that intervention. It is a point well made, and I think the same point was made by Richard Miller of the Law Society. If this Bill works as intended, there are a number of provisions in it that should relieve the burden on the courts. We all want to see that happen. However, to the extent that the courts do need to act in possession cases, we need to know precisely what the Government mean by the “improvements” that they have been referring to over recent months.

That King’s Speech briefing note would suggest that the required improvements relate only to the court possession action process. However, it is not clear whether the proposed new digital system for possessions is the only improvement that Ministers believe needs to be delivered before the new tenancy system can be introduced, and if so—this is crucial—by what date that new system will be operational.

Can the Minister tell us more about the new digital system for possessions that the King’s Speech briefing note referred to? Specifically, can he tell us whether its introduction is the sole determinant of when the new tenancy system can come into force? Can he also outline when the Government expect work on that new digital system to be completed by the Government and rolled out for use by landlords, given that it appears—on the basis of the King’s Speech briefing note—to have only just commenced?

The White Paper “A fairer private rented sector”, which the Government published in June 2022, set out the Government’s intention, working in partnership with the Ministry of Justice and HM Courts and Tribunals Service, to

“introduce a package of wide-ranging court reforms”.

Those went beyond purely the court possession action process that I have just been speaking to. It was suggested in the White Paper that the package would include steps to address county court bailiff capacity, a lack of adequate advice about court and tribunal processes, a lack of prioritisation of cases and the strengthening and embedding of mediation services for landlords and renters—issues that many of our witnesses in last week’s evidence sessions referred to.

Many of those issues were also identified in the Government’s response to the Select Committee as “target areas for improvement”. What is not clear is whether the implementation of the new tenancy system, and this clause, is dependent on Ministers judging that sufficient progress has been made in relation to each of those target areas for improvement, or whether it is dependent, as I have suggested, solely on improvements in the court possession process.

Can the Minister tell us clearly which one it is? Will the new tenancy system be introduced only when improvements have been made in all the target areas specified, or is the implementation date linked solely to improvements in the court possession process? If it is the former, what are the criteria by which the Government will determine when sufficient improvements have been made in each of the listed target areas for improvement? Those of us on the Opposition side of the Committee, and many of the millions of tenants following our proceedings, need answers to those questions. As we debate the Bill today, we do not know precisely what reform of the courts is required for the new tenancy system to be enacted.

I turn to my third question. Because we have no real sense of precisely what the Government mean by court improvements, and therefore no metrics by which they might be measured, we have no idea whether and when they might be achieved. The concern in that regard should be obvious. Having been assured repeatedly by Ministers that the passage of this Bill will see a new tenancy system introduced and the threat of section 21 evictions finally removed, tenants have no assurances, let alone a guarantee, that the Government have not, in effect, given themselves the means to defer—perhaps indefinitely—the implementation of these long-promised changes.

As I referenced in my response to my hon. Friend the Member for Brighton, Kemptown, we accept that the court system needs to be improved so that, when landlords or tenants escalate a dispute, they can have confidence that it will be determined in an efficient and timely manner. However, since they committed themselves to abolishing section 21 evictions, the Government have had more than four and a half years to make significant improvements to the system to support tenants and good-faith landlords, and they have not succeeded in doing so.

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[Matthew Pennycook]

I thank my hon. Friend for that well-made point. A related and incredibly important issue is the supply of genuinely affordable housing, and the Government have failed woefully to build enough social rented homes in this country to meet housing need. She is absolutely right that local authorities are picking up the burden for this failure and the failure in the courts. My local authority—like hers, I am sure—is now sending people in need of temporary accommodation as far as Dartford or north Kent, and even further in some cases. Those people are struggling to retain a foothold in the community they live in and value, and in the schools that their children go to. Frankly, that is unacceptable. We need an end to section 21 as soon as possible.

[Lloyd Russell-Moyle]

My hon. Friend talked about the insecurity for tenants if the measure is not implemented in time, but does he also think that if it is not clear when it will be implemented, there could be adverse effects on the wider rented sector market? We know that people game the system; if it is not clear when the measure will be implemented, the danger is that people can run rings around both tenants and the public sector.

[Matthew Pennycook]

My hon. Friend is right: a protracted delay in implementing this clause and the others in chapter 1 could lead landlords to look at how they can best abuse the system before the new one is introduced. Equally importantly, it could provide a real problem for good-faith landlords who are trying to do the right thing. If a landlord who is affected by high interest rates and section 24 tax changes is wondering whether they can stay in the market and continue to provide private lets, how does it help to have hanging over their head an undetermined date, based on an unspecified set of metrics, for when a new system will come into force?

As I was saying, the Government have had more than four and a half years to improve the court system. They have not succeeded. If they had, then, as the former Housing Minister—the hon. Member for Redditch—claimed, they would have had no justification for delaying the enactment of this clause and the others on the grounds that the system is failing to such an extent that landlords have no confidence in it. The truth is that the Government’s record on court reforms is as woeful as their record on social rented housing. In a damning report published this summer, the Public Accounts Committee made it clear that, seven years into the courts and tribunals reform programme, HMCTS

“is once again behind on delivering critical reforms to its services. Overall, despite an increase in budget, the programme is set to deliver less than originally planned, at a time when the reforms are even more vital to help reduce extensive court backlogs.”

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[Lloyd Russell-Moyle]

I rise to support clause 1, while raising concerns similar to those expressed by my good colleagues about the delay to its implementation. I will first explain why it is important that we abolish fixed-term tenancies and do not provide loopholes whereby such tenancies can be brought back in, despite the well-meaning efforts of colleagues on this Committee.

When the original Act that introduced assured tenancies and assured shorthold tenancies was being discussed, assured tenancies were initially expected to be the dominant form of tenancy. Members can see from the debate at the time that assured shorthold tenancies were meant to be there because some tenants might want the security of a specified period. What happened over the slightly less than 10 years until the 1996 Act was that they dominated and took over the market as the only recourse for people. The reality is that tenants do not have a choice: they must choose what is available—what the landlord offers. If there is an option for any form of fixed period, the landlord might well offer it for that property. That then limits the tenants who can apply for that property to people who are willing to have fixed-term periods only, and eventually those are the only tenancies offered in the market. Effectively, we get to the same situation that we have at the moment.

I applaud the Government for not relenting and giving into having fixed-term periods, even for longer periods. Although the argument might sound appealing, it is a slippery slope. It is also true that none of our future conditions can be predicted. I might sign a tenancy and the landlord’s situation or mine might change; the inability to get out of that situation, or the requirement to go to the courts to get out of it, would bung up the courts and slow the process down. It is, then, the right call to make.

I worry that the link relates to the courts. I heard that the problem was getting bailiffs in at the final stage of the final part for, let us be clear, a very small number. Most people leave when a section 21 notice is issued—in cases under the Bill, that will be when the new grounds are issued—and they leave quickly. They often leave before their time limit is up, because they have found a place, or when it is up. The very few who do not leave and are required to go to court will usually leave as soon as the court has given notice. There is of course a tiny minority who need to be dealt with efficiently—they need forceful eviction via bailiffs and are required to leave.

I think we all agree that reform of the bailiff system needs to happen. It needs to happen on many fronts to make sure that it is sensitive, targets the right people and is efficient for all sides. That does not seem the same as needing to wait for the advanced digitisation of the court system. We all agree that the court system needs digitisation, but they are two different things. The digitising of the bailiff system does not seem to be the problem we have heard about bailiffs: the problem we have heard about bailiffs is the supply chain. It is about the pay and conditions of bailiffs, the equipment they need and procuring the right number of bailiffs in certain areas, with London being particularly problematic. If the Minister is talking about bailiff reform in respect of the delay, it would be useful if he could be clear about what exactly the Government will do to increase the number of bailiffs in the sector. If this is not about bailiff reform, the Minister needs to give clear indicators of what the court reform he talks about actually is.

We heard in evidence that while we can always have improvements in the courts, we must not do it the wrong way around. We need a property portal through which eviction notices can be served to free up some of the court processes. We need an ombudsperson who can help to resolve disputes before they get to the courts, so that we can get to a situation in which things do not lead to eviction because the issue has already been resolved. We also need clearer competencies for councils to be able to fulfil their homelessness duty—there are amendments on that later in the Bill. That is what will free up the courts, so the full implementation of the Bill, not delays to sections of it, is needed to allow the courts to function more effectively.

The danger of delaying the implementation of clauses 1 and 3—on periodic tenancies and section 21—is that there will be a rush for evictions in that period or, as we have heard from Opposition Members, that landlords will be unsure about their situation, the market will slow down and people will withdraw to see what happens. I would like the private rented sector to be smaller overall in the long term, but I do not think anyone thinks that, before we get Britain building again, withdrawing or slowing down the letting market would do anyone any favours.

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[Helen Morgan]

The hon. Gentleman is making an excellent point about short fixed terms, and I absolutely agree with him. To be clear, my proposal was for a long fixed term of at least three years.

[Lloyd Russell-Moyle]

I totally take that point. I am talking specifically about the short-term problem.

On the all-party parliamentary group for renters and rental reform, we heard from Gemma Marshall, who every year has to look for a new house and has had to change her children’s school three times. She lives not in London, which is even worse, but in north Devon. This problem affects all parts of our country. We also heard from Amy Donovan, who does live in London, and equally has had to move numerous times, which has meant that she cannot commute to her job effectively and has had to move job.

This issue causes problems for the very foundations of society. On the Opposition Benches—and, I genuinely believe, on both sides of the House—we believe that strong societies are built with strong, stable families and communities from the ground up. To some extent, communities are built with bricks and mortar—with people being safe and secure where they are. That is why the clause is so important, but also why it is so important that it is implemented right now, because any delay will mean more mould on the walls for the Amys of the world and more new schools for the Gemmas and their children. Whether the wait is a year, two years or whenever the Minister has the whim to act—he has not laid out the conditions in which he will enact the clause—it is not acceptable for anyone.

[Shaun Bailey (West Bromwich West) (Con)]

I do not intend to detain the Committee for long. I congratulate the hon. Member for Brighton, Kemptown on his powerful contribution to the debate, which has inspired me to make a contribution.

I want to pick up on a point that the hon. Member made about the aims of the clause and the flexibility for tenants to leave their tenancies when they need to. That is welcome, and I welcome the clause. I also welcome what my hon. Friend the Minister is doing and congratulate him, because I have not yet had a chance to do so officially, on his elevation to his position and the work that he has done so far in this space. However, the aims of the clause need to go alongside a regulatory foundation. The Bill rightly builds that flexibility.

This has been an interesting debate; it has almost had two sides. The hon. Member for Brighton, Kemptown spoke about the need for security, and not uprooting families from their community. I agree with that, and I think we all share the aim of building sustainable communities that enable people to put down roots. They need a home with security of tenure, but equally, a regulatory framework is needed if we are to meet the aim of enabling tenants to escape tenancies that are not working because, say, there is mould, or uninhabitable conditions.

I think quite often of the additional licensing schemes that were available to councils, particularly for houses in multiple occupation. The fights that I have had with my local authority to implement those schemes have driven me to the point of madness at times. Authorities—particularly mine, in Sandwell—have the expertise, in many ways. My authority has admitted to me that it could do that. We need a localised, driven regulatory system.

I think we would all agree that landlords are, broadly, good actors. They want to offer decent, habitable homes, and to have people in them for the long term. That benefits the landlord, because they then get emotional and moral investment in the property, and from a long-term, sustainability perspective it of course makes sense to have that. We do not want to broadbrush the sector in general. However, clearly there are bad actors. We all know about them from our postbags; I certainly see them in the area that I represent. We need a framework that deals with the issues. My hon. Friend the Minister and I have had many positive discussions on this subject, and I know that he is committed to it. The framework should be locally driven, in many respects—I know his commitment to localism—and should enable us to catch these people and drive down the problem.

I fully support what clause 1 does. When a tenant needs to get out because the tenancy is frankly not working and puts them in a dangerous situation, getting out is absolutely the right thing to do.

[Lloyd Russell-Moyle]

The hon. Member mentions selective licensing, which is important. Do we need to review the way that authorities apply for selective licensing? Should there be an assumption that they should have selective licensing for all properties, rather than their having to provide evidence for a license? Many shy away from doing that.

[Shaun Bailey]

To be honest, I probably want a comprehensive selective system. There are already structures and expertise that would enable us to have that. The hon. Gentleman and I have probably had similar experiences with constituency casework. Something like that could be preventive. I am not saying that the issues we have talked about would not still present themselves—let us face it: they probably always will—but if we can mitigate them, that is what we need to do.

I welcome the clause for a variety of reasons that Members from across the Committee have touched on. It is welcome that it enables tenants to leave more expeditiously, but I say to my hon. Friend the Minister that we need to continue the conversation. The Bill is part of a broader conversation about how we ensure that we do not even get to the point at which the measures are needed, because we have habitable homes, people have somewhere to live safely, and they do not have to fall back on the provisions all the time just to keep themselves safe. The clause is absolutely the right way forward. My hon. Friend the Minister can see that there is support for it from across the Committee. I thank him for hearing me out.

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[Jacob Young]

Ultimately, we want to bring in these measures as quickly as we can. The system will be in place soon. What I will do to give the hon. Gentleman the assurances he desires is to write to him further. We can agree on that principle and if changes are needed to the Bill, I am happy to consider them.

[Lloyd Russell-Moyle]

I want us to give the Minister an opportunity to elaborate on court reform, because it is also relevant to this clause, in terms of when it will be implemented and the indicators as to when it will be implemented. Will he be able to write to us, or publish after the Bill receives Royal Assent, what those clear indicator thresholds are regarding when court reform will be completed, so that it will be clear for everyone? It does not need to be set out in the Bill, but a commitment that the Government will do that, so that everyone will know when that threshold has been met, would be useful.

[Jacob Young]

I appreciate the hon. Gentleman’s concern about this point. As I mentioned earlier, I think we will discuss this issue when we debate clause 67, so we can have that debate then.

Question put and agreed to.

Clause 2 accordingly ordered to stand part of the Bill.

Clause 3

Changes to grounds for possession

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The process behind these amendments is modelled on case 9 of the Rent Act 1977, but with a key difference. This is important: in that instance, the burden of proof was on the landlord to show that he or she would suffer greater hardship, and the default was against the possession order; in this instance, the burden of proof would be on the tenant, with a possession order being the default. We believe that these reasonable and proportionate amendments would enable mandatory grounds 1, 1A and 6A, about which we have particular concerns, to function as the Government intend, while providing tenants with a modicum of additional security in circumstances where their eviction on those grounds would cause genuine and real hardship. I hope the Minister will consider accepting our amendments, and look forward to his response.

[Lloyd Russell-Moyle]

I rise to support these three amendments. Amendment 150 is, of course, inextricably linked to amendment 149, which we will come on to shortly. I want to talk about the protections, particularly against ground 6A, which is a ground for possession to allow compliance with an enforcement action, fundamentally so that conditions for the tenants can be improved. Enforcement action is almost impossible unless tenants co-operate with it. There is a real danger that ground 6A will be used as a quasi-punishment for tenants who have co-operated—tenants who have said, “This house has a massive hole in the ceiling”—

[The Chair]

Order. I think the hon. Gentleman is speaking to the next group.

[Lloyd Russell-Moyle]

I am speaking to amendment 150, which relates to ground 6A, about greater hardship. The next group is about the court having mitigating measures other than eviction. They could have been clustered differently—

[The Chair]

Quite right. I apologise for interrupting the hon. Gentleman; he knows much more about it than I do.

[Lloyd Russell-Moyle]

Thank you, Mr Gray.

We have a problem here. It is important that the court is able to weigh up where the greater hardship is. Is it a greater hardship to evict a tenant who has complained to the council so that the property can be fixed? Or is the ground being used to get rid of a tenant who is constantly complaining about enforcement action? Without an element of discretion—other amendments would afford wider discretion—and without this particular measure on greater hardship, there is a danger that ground 6A could be misused. That is why it would be good to hear reassurance from the Minister, particularly on amendment 150, that advice and guidance will be provided to the courts to ensure that the ground is not manipulated or abused, and that the Government are considering other changes to prevent that.

[Jacob Young]

I thank hon. Members for their contributions. I thank the hon. Member for Greenwich and Woolwich for his amendments 145, 146 and 150. As has been discussed, the amendments look to make grounds 1, 1A and 6A discretionary.

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[Matthew Pennycook]

I beg to move amendment 149, in clause 3, page 2, line 32, at end insert—

“(aa) After subsection (5) insert—

‘(5ZA) The court shall not make an order for possession under Ground 6A if the court considers that it is not just and equitable to do so, having regard to alternative courses of action available to the landlord or the local housing authority, which may include—

(a) a management order under Part 4 of the Housing Act 2004;

(b) in relation to paragraphs (b) and (f) of Ground 6A, other measures which are more appropriate for reducing the extent of overcrowding or the number of households in the dwelling-house, as the case may be;

(c) in relation to paragraph (c) of Ground 6A, the provision of suitable alternative accommodation for the tenant, whether under section 39 of the Land Compensation Act 1973 or otherwise; and

(d) in relation to paragraphs (d) and (e), other means of enforcement available to the local housing authority in respect of the landlord’s default;

and having regard to all the circumstances, including whether the situation has occurred as a result of an act or default of the landlord.’”

This amendment would permit a court to refuse to make a possession order under Ground 6A where a more appropriate course of action exists.

One of the changes made to schedule 2 to the 1988 Act by the clause, as we briefly discussed, is the introduction of a new ground for possession to allow compliance with an enforcement action. The new mandatory ground 6A will require the court to award possession if a landlord seeking possession needs to end a tenancy because enforcement action has been taken against the landlord, and it would be unlawful for them to maintain the tenancy.

The relevant enforcement actions (a) to (f) are set out on page 73 of the Bill. They include situations where a landlord has been issued with

“a banning order under section 16 of the Housing and Planning Act 2016…an improvement notice under section 11 or 12 of the Housing Act 2004”

and

“a prohibition order under section 20 or 21 of the Housing Act 2004”.

We take no issue with the fact that the Bill introduces the new mandatory power. Clearly there are circumstances in which landlords will require possession of a property in order to comply with enforcement action.

We wrestled with what should be the minimum notice period that applies to the new ground, given that it feels somewhat perverse to provide for a mechanism by which possession can be gained quickly when the reason for the possession being granted is that the landlord has fallen foul of an obligation under housing health and safety legislation, particularly if it resulted in a banning or prohibition order. As we will come to discuss, we ultimately determined to argue in amendment 136 for a four-month minimum notice period in relation to ground 6A, because in all the situations set out on page 73 of the Bill, the tenant will be evicted because of neglect or default on the part of the landlord. In other words, it is a de facto no-fault ground for eviction that will punish tenants and put them at risk of homelessness because of bad practice on the part of a landlord, particularly as there is no requirement for the landlord to provide suitable alternative accommodation.

Amendment 149 seeks to provide tenants with a measure of protection in such circumstances—this touches directly on the point the Minister made on the previous group of amendments—by giving the court the power to consider whether the relevant enforcement can be met by means other than the eviction of the sitting tenant or tenants, including through a management order under the Housing Act 2004 or the provision of alternative accommodation. If the court judges that the enforcement objectives can be met by other means, the amendment would give the court the power to refuse to make a possession order on the grounds that it is not just and equitable to do so in the circumstances, given that there are other means of ensuring that the enforcement action is complied with.

We believe that the amendment would provide tenants with stronger protection in circumstances where they are victims of poor practice on the part of a landlord. Importantly, it would also ensure that tenants have an incentive to seek enforcement action through their local authority if their home is in a very poor condition or is non-compliant with HMO licensing schemes. That would address the fact that, as things stand, the introduction of the new mandatory no-fault ground with only two months’ notice is likely to actively discourage tenants from doing so. I hope the Minister will give the amendment serious consideration.

[Lloyd Russell-Moyle]

Following on from the debate on the last group of amendments, I want to add my concern about ground 6A. Where there are issues with fire or flood, landlords are often expected to find alternative accommodation before a house is vacated, but there is no such provision when enforcement action has to be taken. There is a real worry that a landlord who has multiple properties that are perfectly fit for habitation might seek to punish tenants who have pushed for enforcement, rather than moving them into those properties. That seems wrong, so it is important to require the courts to go through a checklist of other options that the landlord has to consider before they get to ground 6A.

The amendment also provides a checklist for landlords. They can go down it and say, “Okay, I need to comply with enforcement action. Have I considered these things?” It also allows the local authority to consider other courses that they could pursue, such as management orders. We do not want tenants punished. Although revenge evictions are illegal, we know that they happen time and again, because there are loopholes in the law. Closing those loopholes is important, and a statement from the Minister on the matter might suffice.

[Jacob Young]

I thank hon. Members for their comments. Amendment 149 would require judges to consider whether there are suitable alternative courses of action available before granting possession under ground 6A, which permits a landlord to evict if evicting a tenant is the only way that they can comply with enforcement action taken by a local authority. That includes cases in which, disgracefully, a landlord has received a banning order, meaning they are unable to continue operating as a landlord. It also includes situations in which a prohibition order is incompatible with the tenant’s continuing to occupy the property. The ground is mandatory, so there is certainty that possession will be granted to the landlord and they can comply with enforcement action taken against them. That means that tenants will not be left living in unsafe situations and gives local authorities confidence that their enforcement action demands can be adhered to.

The amendment would add uncertainty into the system. If possession was not granted, the landlord would continue to be in breach of their obligations and could face fines and other penalties. Clearly, it is in the best interests of both landlords and local authorities to explore alternative actions in such cases, and we encourage them to do so, but it is also in everyone’s interests to ensure that rogue landlords leave the market, and the ground will help ensure that that happens when necessary.

[Lloyd Russell-Moyle]

Will the Minister clarify that when courts grant possession under ground 6A, they will have to take into consideration whether that is the only option, and whether other options might be on the table? Confirmation of that would help courts’ deliberations in future.

[Jacob Young]

I should be clear that the landlords who are subject to enforcement action are the rogues; they are the people we are trying to root out of the system through the Bill. They are unlikely to be able to provide the suitable alternative accommodation that the hon. Member mentioned. If things get to this stage, they are that bad. We therefore do not feel that we can accept amendment 149, and I hope that the hon. Member for Greenwich and Woolwich will withdraw it.

--- Later in debate ---

I urge the Minister to think very seriously about ensuring stronger safeguards. We already have some experience of this in the Scottish system to draw upon. My hon. Friend’s amendments will close those loopholes and help to ensure that the positive developments from abolishing no-fault eviction are not inadvertently undermined by the weak protections in these clauses.

[Lloyd Russell-Moyle]

I support amendments 138, 139, 143 and 144, which would require evidence to be given when using grounds 1 and 1A. While that is important, I again think—I always live in hope—that some clarity from the Minister about the courts being required to obtain at least the first part of that evidence could achieve this without that necessarily being written in the Bill. I believe that the second part would need some legislative clarity, which is why the amendment is useful.

However, let us be clear: it is a crime to knowingly make a false statement to the court. We need to make it clear to landlords that that crime will be followed up. It can only be followed up if we then determine that the property was not then taken into possession and that there was no malicious element to it—there can be other reasons, of course. Without that element of enforcement, and therefore knowing what has happened in a number of months’ time, that will never happen. This could quite easily be implemented through the property portal sending automatic messages to the court, which would not overburden our court process. I again ask for some clarity from the Minister that this is how the property portal and court reform is intended to work. That would probably alleviate some of these issues.

I have tabled a number of other amendments in this group, which I would also like to speak to. The first one would provide for the six-month protection to be renewed on the basis of rent renewals. At the moment, a lot of assured shorthold tenancies—not all of them, Mr Gray, I grant you, but probably the majority of them—have rent renewal clauses, such that that when the rent is increased, there is a new tenancy. The landlord will say, “I’m increasing your rent. Please sign the new tenancy for the year ahead.” Every year, the landlord says, “Well, you’re moving on to the periodic. I would quite like you to sign the new tenancy with the new rent.” That is what happens for most of my constituents who are in the most precarious part of the market, which we are trying to address. That gives them six months’ protection every year, on an ongoing basis, every time their rent is increased.

I know that the National Residential Landlords Association has described this idea as bonkers, but I think that is because it does not quite understand what I am trying to get at here, which is to retain what we already have currently. Although it seems that the Bill is increasing the protection of tenants—and the security of landlords, by knowing that the tenant will be there for a period—the danger is that it will reduce it because, de facto, most tenants currently have six months protection in every 12. The proposed change would provide six months’ protection over an indefinite period, which is clearly far less. Six divided by infinity is an impossible mathematical equation, but it is clearly less than six months divided by 12.

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

It is zero.

[Lloyd Russell-Moyle]

Quite right: zero protection—well, it is mathematically zero, but I think we all know that six months’ protection is a bit more than that—so there needs to be something.

When a landlord comes along on that annual date, the landlord might say, “I don’t want to make any changes. I don’t want to increase the rent.” Then, to some extent, the question is: why should any further protection be afforded? But if the landlord comes along and says, “I want to increase your rent,” and the tenant agrees that they are going to increase the rent—it does not go to a tribunal; it is all agreed—it seems quite reasonable to ensure protection on both sides, for example to provide for a new six-month protection period, just as happens at the moment.

That is why I have tabled these amendments, because I do not think it is in anyone’s interest for tenants suddenly to be leaving. Although the six-month protection does not prevent tenants from leaving, it does produce a mindset that the tenancy is now at least fixed for six months, based on what the landlord is offering and the higher amount that the tenant is now offering to pay. I do not think that is unreasonable, and I would love to see the Government accept the principle of it. If not—of course, I am not foolish, but there is always wishful thinking—it would be useful to hear an indication from the Government of which measures they think might be put in place to ensure that rolling protection.

The other amendment that I wish to speak to concerns the ability for a tenant to be offered the property before it is for sale. If it is a genuine sale, on the open market—the amendments would require a solicitor’s letter or an estate agent’s letter; I think that is reasonable and fair enough—no landlord would have any problem with making this offer for a short period. In my experience of selling houses, it takes more than four weeks between interest and getting it on the market anyway. I am talking about the landlord offering it to the tenant at the rate at which they are going to initially list it on the market. The landlord might reduce what it is on the market for later, because of market factors. I am not saying that that needs to be taken into account. All I am saying is that the initial listing should be offered to the tenant—a right of first refusal—in those four weeks. Again, I do not think this is unreasonable. Of course, in the majority of cases, the tenant will not be in a position to buy; but if, in a small number of cases, we can prevent turmoil and give the landlord a quick sale, it is in everyone’s interest to do so.

Again, I am not delusional and do not think that the Minister will accept this proposal, but I hope that the Minister might indicate how he will be encouraging, through court papers, potentially, and court reform, all those questions to be asked, just as we saw during covid, when court papers required the landlord to ask whether the tenant had been affected by covid. That was not a Bill change—a law change—but it was in the court papers. I am talking about how the question could be asked in court papers. There does not necessarily need to be a change in the discretionary grounds, but the very fact of asking the question could change the mindsets of landlords and, I think, is important.

Finally, under amendments 204 and 203, which I have also tabled, no rent would be required for two months—