Housing and Planning Bill (Ninth sitting)

Marcus Jones Excerpts

Thursday 26th November 2015 Public Bill Committees

[Teresa Pearce (Erith and Thamesmead) (Lab)]

I beg to move amendment 107, in clause 51, page 22, leave out lines 34 to 37.

This amendment removes subsections 4 and 5 of Clause 51 from the Bill which would remove the ability for a landlord to deliver the first of the two letters needed to evict a tenant suspected of abandoning the property before they have missed rent.

The purpose of the amendment is to get some clarification from the Government. I realise that they have their own amendment to improve this part of the Bill slightly, but we have moved our amendment because the Bill states:

“The first warning notice may be given even if the unpaid rent condition is not yet met”,

which appears to be against the spirit of what the Minister was saying this morning.

If a warning notice may be given without the unpaid rent condition being met, a warning notice could be given when the tenant has done nothing wrong. We were a little confused about that and would welcome clarification and some reassurance about why the provision is in the Bill and what it is intended to do. As we said earlier, we are talking about only a few tenancies a year, but the measure seems to be outside the scope of what the Minister said earlier.

Will the Minister tell us something else? In discussion of earlier amendments, the Minister did not answer the question of what pressure or lobbying had happened. Why is the provision in the Bill? The problem is a small one, for a small number of people, so although I understand everything that has been said about the problems for landlords, I wondered whether there was another reason for the measure.

For example, in my area we have two local courts, both under severe pressure. One is very inefficient and people find it difficult to get their cases through the court, so I wondered whether the provision was in the Bill because of a problem with the court, or for another reason. The Minister did not really mention that earlier, so may we have some clarity on what subsection (4) is meant to do and why it is there?

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Marcus Jones)]

I hear what the hon. Lady says and her intentions are important, but I reassure her and the Committee that the amendment is unnecessary, because the case is already covered by the Bill as drafted.

The clauses are carefully drafted, but no doubt seem complex. The second warning notice cannot be served unless there is unpaid rent of at least eight consecutive weeks. Given that the second warning notice must be given at least two weeks and no more than four weeks after the first warning notice, in practice the first warning notice cannot be served unless there is unpaid rent of at least four consecutive weeks.

The hon. Lady is looking at me in a rather perplexed fashion, but I understand what she is saying and, if she reads my comments and compares them carefully with the two subsections that she is looking to the Committee to remove from the Bill, I am sure she will realise that no consequence of our measure will diminish the position of a tenant. As I have explained, we are keen to strengthen rather than diminish the position of tenants in the Bill.

The hon. Lady mentioned her two courts in connection with the reason for the provisions. The reason why we are introducing the provisions is to bring forward at the earliest practicable opportunity, in a way that protects tenants, a means to bring properties that have been abandoned back into use so that people may be housed in them. That is the purpose of the chapter. There is no ulterior motive to reduce the number of times that people go to court. I hope she accepts my explanation in the spirit in which it is intended and withdraws the amendment.

[Teresa Pearce]

I thank the Minister for his explanation. Without meaning to give offence, I will probably have to read back what he said to convince myself. It seems confusing that a warning notice may be given without the unpaid rent condition being met, but the Minister says that that would not happen. It is, however, complex and I am pleased about the third notice, which is an improvement. In that spirit, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendments made: 120, in clause 51, page 22, line 39, at end insert—

‘( ) The third warning notice must be given before the period of 5 days ending with the date specified in the warning notices under subsection (2)(b).’

See Member’s explanatory statement for amendment 118.

Amendment 121, in clause 51, page 22, line 39, at end insert—

‘( ) The Secretary of State may make regulations setting out the form that the third warning notice must take.’—(Mr Marcus Jones.)

See Member’s explanatory statement for amendment 118.

Clause 51, as amended, ordered to stand part of the Bill.

Clause 52

Reinstatement

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

[Mr Jones]

Sir Alan, given that we have debated the subject in general earlier, will it be acceptable—

[Mr Thomas]

I thought I knew the direction of the Minister’s remarks, so rather than necessarily having to make a formal speech in a clause stand part debate, I thought I might simply intervene to ask a question and, I hope, not have to press matters further.

Subsection (2)—and, indeed, subsection (1)—states that the tenant must have “a good reason” to press for reinstatement. I wonder whether the Minister might set out on the record what those good reasons are. I say that in the spirit of him wanting to help tenants, as the clause implies, who have unfairly or wrongly had their tenancy terminated under section 49, and I ask in a context in which occasionally, debates when legislation is being introduced can be used to provide guidance to the courts about what the purpose in the Government and Parliament’s mind was behind particular clauses.

Simply, will the Minister set out in more detail than perhaps he was initially intending what constitute, in his mind, the good reasons that might see a tenant wanting to go to a county court to get a reinstatement order, and indeed, being successful?

[Mr Jones]

I thank the hon. Gentleman for that question. As he rightly points out, that would be a matter for the court, but to reassure him about the spirit in which the clause on reinstatement is intended, let me give him an example. A tenant may go away on holiday for a short period, during which they have a serious accident that possibly hospitalises or incapacitates them for some time. It may well be that that renders any contract with the landlord impossible for them to fulfil, and therefore, the courts may decide, on the basis of those extenuating circumstances that the tenant could not do anything about, that it would be right and proper to reinstate the tenancy. I hope that reassures the hon. Gentleman about the thinking behind the clause.

[Mr Thomas]

rose—

[Mr Thomas]

I apologise for detaining the Committee on this clause, which is helpful, as was the Minister’s example. He will be aware from our discussions this morning that a series of other examples were discussed, such as short prison sentences, someone being taken ill with a mental health condition, or someone perhaps with the early onset of an incurable condition such as Alzheimer’s. Does the Minister see those examples, similarly, as a good reason for the county court to reinstate the tenancy?

[Mr Jones]

Although I understand where the hon. Gentleman is coming from, as I said—I have already given a reasonable example of where we are coming from in proposing the clause—it would be for the court to decide on the particular circumstances at a particular time and on whether they deem those circumstances as such that the tenancy should be reinstated.

[Peter Dowd (Bootle) (Lab)]

May I push the Minister on that and seek a bit more clarity? Take, for example, a person going into hospital on a section 2, which means detention for up to 28 days, and then that is transferred or transformed to a section 3, which means a much longer period of time. Ought we not to be making it clear that, in situations in which somebody is detained under the Mental Health Act 1983 and through due process, there should be an exemption specifically for the purposes of the clause?

[Mr Jones]

Again, it is for the court to decide in those circumstances and in any other circumstances whether or not a tenant should have their lease reinstated. I hear what the hon. Gentleman has said, but I do not, in our deliberations, see an amendment that he has tabled to make the case for what he is saying. In the spirit of the clause, it is for the court to decide, and I am sure that, in the majority of cases, the court will make the right decision for the tenant involved.

Question put and agreed to.

Clause 52 accordingly ordered to stand part of the Bill.

Clause 53

Methods for giving notices under sections 49 and 51

Amendments made: 122, in clause 53, page 23, line 11, at end insert—

“( ) This section sets out the methods for giving—

(a) a notice under section 49;

(b) the first or second warning notices under section 51.”

See Member’s explanatory statement for amendment 118.

Amendment 123, in clause 53, page 23, line 12, leave out—

“A notice under section 49 or 51”

and insert “The notice”.

See Member’s explanatory statement for amendment 118.

Amendment 124, in clause 53, page 23, line 14, leave out—

“A notice under section 49 or 51 that”

and insert “If the notice”.

See Member’s explanatory statement for amendment 118.

Amendment 125, in clause 53, page 23, line 15, after “person” insert “it”

See Member’s explanatory statement for amendment 118.

Amendment 126, in clause 53, page 23, line 21, at end insert—

“, and

( ) in the case of a tenant, leaving it at or sending it to every postal address in the United Kingdom of every guarantor, marked for the attention of the tenant.

‘( ) In subsection (2) “guarantor”, in relation to a tenant, means a person who has agreed with the landlord to guarantee the performance by the tenant of any of the tenant’s obligations under the tenancy.”—(Mr Marcus Jones.)

This amendment requires certain notices to be sent to a tenant’s guarantors, marked for the attention of the tenant. This requirement applies unless the tenant has been given the notice in person.

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

[Mr Jones]

As I have mentioned throughout our debate on the abandonment provisions, it is important that the landlord demonstrates he has given the tenant and any named occupier every opportunity to respond to warning notices. It is also important to try to ensure that the notice under clause 49 ending the tenancy is brought to the attention of the tenant so that they are notified of the fact, and so that the former tenant can take appropriate action—for example, reclaiming anything the landlord has stored or, where appropriate, notifying the council. The landlord must serve three written warning notices before he can end the tenancy under clause 49. The third notice must be affixed to a conspicuous part of the premises and be in a form prescribed by the Secretary of State, as I have explained.

Clause 53 provides that the first two warning notices and the notice ending the tenancy can be delivered to the tenant or named occupier in person. In practice, that is unlikely to happen, given that they are likely to have disappeared on abandoning the property. Alternatively, the notices must be delivered to the tenant and any named occupier by leaving it at or sending it to the premises to which the tenancy relates, or by leaving it at or sending it to any other postal address in the UK that the tenant or occupier has given the landlord. They must also be served on the tenant care of any person who has agreed with the landlord to guarantee the tenant’s performance under the tenancy. Finally, the landlord must serve those notices by sending them to every email address the tenant or occupier has given the landlord.

Question put and agreed to.

Clause 53, as amended, accordingly ordered to stand part of the Bill.

Clauses 54 and 55 ordered to stand part of the Bill.

Clause 84

Assessment of accommodation needs

[The Chair]

Exceptionally, this hollow starred amendment, together with other hollowed starred amendments in the name of Teresa Pearce, has been selected.

--- Later in debate ---

[Mr Jones]

The clause inserts into the Housing Act 2004 proposed new section 212A, which will require tenancy deposit protection schemes to provide, when requested, tenancy deposit information to local housing authorities and other relevant bodies in England. Local housing authorities tell us that they have a limited picture of the size and scale of the private rented sector in their area.

My hon. Friend the Member for Wimbledon, who is on the Committee, and my hon. Friend the Member for Hornchurch and Upminster, who is not, have shown an interest in ensuring that local authorities have the information that they need to crack down on rogue landlords. I assure my hon. Friends—my hon. Friend who is not on the Committee will, I am sure, be paying close attention to our proceedings—that I completely agree with the aim they set out and it is exactly what the clause intends.

The three tenancy deposit schemes in England hold information on nearly 3 million tenancy deposits. That information will help local housing authorities in England to identify privately rented housing and enable them to target the small minority of rogue landlords who knowingly rent out unsafe and substandard accommodation, often to vulnerable tenants. The information to be shared will relate to the tenancies of properties in the local housing authority’s area. The type of information to be shared and the mechanism for sharing will be specified in contractual arrangements between the Department and the tenancy deposit protection schemes. Local housing authorities tell us that the information of most use is the property address of the rented property, the address of those managing the property and the number of tenancy deposits registered at the property address. Such data are the types intended to be shared.

Proposed new section 212A(3) allows tenancy deposit schemes to charge local housing authorities the costs associated with making the information available. Proposed new subsection (5) restricts the ways in which the information may be used by a local housing authority. The information may be used only to carry out an authority’s statutory functions under parts 1 to 4 of the Housing Act 2004 and for investigating whether any offence has been committed under those parts of the Act. The purposes may be amended by secondary legislation subject to the affirmative procedure. Parts 1 to 4 of the Housing Act relate to improving housing conditions, licensing of HMOs and selected licensing of other accommodation. The Government consider that by restricting the use of data to those purposes, the proposal satisfies data protection principles and provides adequate protection for the rights of data subjects. In addition, arrangements between the Department and the tenancy deposit schemes will require that data subjects are notified that their information will be used for such purposes.

Proposed new section 212A(6) allows a housing authority to share the information with bodies providing services to it in the discharge of the functions under parts 1 to 4 of the Housing Act and investigating whether any offence has been committed under those parts. The clause is enabling and local housing authorities will not be required to access the data. It will be up to individual authorities to decide whether to access and use the data.

Clause 88 amends section 237 of the Housing Act to allow the Secretary of State to make regulations subject to the affirmative procedure to change the list of purposes for which a local authority may use the data that is obtained in relation to housing benefit or council tax. That is required to ensure that data obtained under proposed new section 212A and section 237 may still be matched with one another, should changes be made to section 212A(5).

Clauses 87 and 88 will help authorities to identify privately rented housing and to crack down on rogue landlords in their areas. That will help to improve conditions in rented properties, benefiting tenants as a result. It will cut the costs of enforcement and reduce the need to operate borough-wide licensing schemes that impact on good landlords.

Question put and agreed to.

Clause 87 accordingly ordered to stand part of the Bill.

Clause 88 ordered to stand part of the Bill.

Clauses 89 to 90 ordered to stand part of the Bill.

Schedule 5

Enfranchisement and extension of long leaseholds: calculations

[Mr Jones]

I beg to move amendment 129, in schedule 5, page 83, line 21, leave out “Secretary of State” and insert “appropriate national authority”.

Amendments 129, 130, 131, 132, 133, 134 and 135 ensure that a regulation-making power may be exercised by the Welsh Ministers in relation to land in Wales as well as by the Secretary of State in relation to land in England.

[The Chair]

With this it will be convenient to discuss Government amendments 130 to 135.

[Mr Jones]

Amendments 129 to 135 to schedule 5 will ensure that new regulation-making powers can be exercised in respect of residential leasehold land by Welsh Ministers in relation to Wales, as well as by the Secretary of State in relation to England.

Clause 90 and schedule 5 amend the Leasehold Reform Act 1967 and the Leasehold Reform, Housing and Urban Development Act 1993 to allow a formula used in those Acts to be updated by regulations. The formula is used to calculate the value of minor superior leasehold interests and minor intermediate leasehold interests for the purposes of lease renewals and enfranchisement. The formula references a Government gilt—2.5% consolidated stock undated—that was redeemed by the Government in July 2015. It is, therefore, no longer listed and no longer available.

Residential leasehold is a devolved subject, so it seems only fair and just that Welsh Ministers are given the powers to make regulations for Wales, while the Secretary of State has the same powers for land in England.

Amendment 129 agreed to.

Amendments made: 130, in schedule 5, page 83, line 24, leave out sub-paragraph (4) and insert—

“(4) At the end insert—

(7) In sub-paragraph (1) “appropriate national authority” means—

(a) in relation to a tenancy of land in England, the Secretary of State;

(b) in relation to a tenancy of land in Wales, the Welsh Ministers.

(8) Regulations under sub-paragraph (1) may include transitional provision.

(9) Regulations under sub-paragraph (1) are to be made by statutory instrument.

(10) A statutory instrument containing regulations under sub-paragraph (1) is subject to annulment—

(a) in the case of an instrument made by the Secretary of State, in pursuance of a resolution of either House of Parliament;

(b) in the case of an instrument made by the Welsh Ministers, in pursuance of a resolution of the National Assembly for Wales.’”

See Member’s explanatory statement for amendment 129.

Amendment 131, in schedule 5, page 84, line 3, at end insert—

“3 (1) Section 100 (orders and regulations) is amended as follows.

(2) In subsection (1), after ‘Secretary of State’ insert ‘or the Welsh Ministers’.

(3) After subsection (2) insert—

(3) Any power of the Welsh Ministers to make regulations under this Part shall be exercisable by statutory instrument which (except in the case of regulations making only such provision as is mentioned in section 99(6)) shall be subject to annulment in pursuance of a resolution of the National Assembly for Wales.”

See Member’s explanatory statement for amendment 129.

Amendment 132, in schedule 5, page 84, line 9, leave out “Secretary of State” and insert “appropriate national authority”.

See Member’s explanatory statement for amendment 129.

Amendment 133, in schedule 5, page 84, line 16, at end insert—

“( ) After sub-paragraph (10) insert—

(11) In sub-paragraph (2) “appropriate national authority” means—

(a) in relation to a leasehold interest of land in England, the Secretary of State;

(b) in relation to a leasehold interest of land in Wales, the Welsh Ministers.”

See Member’s explanatory statement for amendment 129.

Amendment 134, in schedule 5, page 84, line 29, leave out “Secretary of State” and insert “appropriate national authority”.

See Member’s explanatory statement for amendment 129.

Amendment 135, in schedule 5, page 84, line 31, at end insert—

“( ) After sub-paragraph (9) insert—

(10) In sub-paragraph (2) “appropriate national authority” means—

(a) in relation to a leasehold interest of land in England, the Secretary of State;

(b) in relation to a leasehold interest of land in Wales, the Welsh Ministers.”—(Mr Marcus Jones.)

See Member’s explanatory statement for amendment 129.

Schedule 5, as amended, agreed to.

Clause 91

Redemption price for rentcharges

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

[Mr Jones]

The clause amends sections 9(4)(a), 10 and 12(2) of the Rentcharges Act 1977. It gives the Secretary of State regulation-making powers to provide a replacement financial instrument for the now redeemed 2.5% consolidated stock. That stock is referenced in the 1977 Act and is included in the formula used in the calculation of redemption of rentcharges under that Act.

Rentcharges are an annual sum paid by the owner of freehold land to another person who has no other legal interest in the land. They have existed since the 13th century, and have traditionally provided a continuing income for landowners who allowed their land to be used for development. Section 8 of the 1977 Act sets out procedures to enable the payers of rentcharges to apply to the Secretary of State for a redemption certificate, and it puts a duty on the Secretary of State to provide that service.

The algebraic formula applied by the Secretary of State to work out the redemption price uses the yield of the consolidated stock to calculate a lump sum that has the same value as the right to receive all the rentcharges over the remainder of the term. We believe that the possibility that the gilt would be redeemed was not envisaged at the time of the 1977 Act, which provides no means of replacing the gilt in the formula by the use of secondary legislation.

While the Secretary of State continues to have a duty to fulfil his statutory function with regard to redemption certificates, he is currently unable to calculate the redemption price following the redemption of the relevant gilt and so cannot fully discharge his duty. Until there is a replacement for the gilt in the formula used for the calculation, it is not possible for the Secretary of State to issue a redemption certificate and a rent payer’s property will therefore remain subject to a rentcharge. The aim is to replace the gilt so that it continues to provide a balanced and fair settlement figure for all parties, so that they can retain confidence in the process.

Question put and agreed to.

Clause 91 accordingly ordered to stand part of the Bill.

Ordered, That further consideration be now adjourned. —(Julian Smith.)