Housing and Planning Bill (Eighth sitting)

Marcus Jones Excerpts

Thursday 26th November 2015 Public Bill Committees

[Helen Hayes (Dulwich and West Norwood) (Lab)]

I wish to speak about the concerns that Shelter and Crisis have expressed that the abandonment clauses are a disproportionate response to a problem that does not exist to any great extent. Of all the private sector tenancies in the country, it is estimated that 0.04% are affected by abandonment. I am therefore not convinced that the proposals in the Bill are necessary.

I want to say a little about the means that already exists for landlords to reclaim their property legitimately in cases where tenants are in breach of their tenancy, namely the section 21 process. My caseload is full of cases of tenants who have experienced unscrupulous evictions under the section 21 process, and I bear witness to the distress, anxiety and, ultimately, homelessness that is caused by its unscrupulous use. There are very many examples in my constituency and I would be happy to share some with the Minister in some detail, because the problems are real and prevalent.

Landlords complain that the section 21 process is cumbersome and causes delay. In my experience, such delay happens for two reasons. The first is that landlords often do not administer the process properly and are therefore defeated in the courts on technical grounds—that happens very frequently. The second is that there are great inefficiencies in the court system, so there are often long waits to get a date for a court hearing.

Those problems will not be made better by the current Government proposals to close many of our courts, including Lambeth county court, which serves many of my constituents and is the busiest housing court in the country. Its proposed closure will not help the landlords who are seeking legitimately to claim their property through the section 21 process, nor will it help give tenants the opportunity to receive just and fair treatment through that process. If the section 21 process is properly administered, and has a proper reason behind it—including, for example, abandonment—it should be relatively streamlined. It is subject to a court process, which gives tenants every recourse to justice. It is right and proper that they have that.

I support the amendment proposed by my hon. Friend the Member for Erith and Thamesmead. Requiring councils to support the view that a property has in fact been abandoned is important for three reasons, two of which relate to the relationship between local authorities and residents in their areas. First, local authorities administer housing benefit claims and are therefore in a good position to say whether a non-payment event, for example, is due to a claim that has not yet been processed—we know that the average processing time for a housing benefit claim is 22 days, and for universal credit it will be even longer, at up to six weeks.

Secondly, councils are often aware of the vulnerability of residents in their area. They interact with residents through social services, so will know whether, as in the examples highlighted by my hon. Friend the Member for Harrow West, someone is in the early stages of Alzheimer’s or has recently been in prison. There will be social services involvement with those families, so local authorities will know about any vulnerability and will be well placed to advise on whether it is a reason for apparent abandonment.

The third reason why local authority validation is important is simply that local authorities are a third party. In my short time as a Member of the House, I have dealt with many cases that concern complex interactions between tenants and landlords, particularly small-scale landlords, where often the relationships are complex and there are complicated behaviour issues on both sides. Having a third party that is independent of both landlord and tenant and can take an independent view on whether a property has been genuinely abandoned is a really important check and balance.

I do not believe that that would be a cumbersome addition to the process. I support the view of Shelter and Crisis that the abandonment proposals in the Bill are not necessary, because they are a disproportionate response to a very small problem for which effective processes are already in place. However, if the Government will not concede that point, local authority validation as a minimum requirement is vital.

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

It is a pleasure to serve under your chairmanship once again, Sir Alan. We have had a full debate with a number of points raised by hon. Members on both sides. I will do my best to respond to as many of them as I can.

The amendment would require a landlord to obtain confirmation from the relevant local housing authority that a property had been abandoned before they could serve a notice on the tenant to bring an assured shorthold tenancy to an end and repossess the property. We have introduced a procedure for dealing with abandoned premises that will allow a landlord to recover a property that has been abandoned without the need to obtain a court order. We have introduced safeguards to ensure that a landlord can use the process only in circumstances in which a tenant has genuinely abandoned the property.

[Mr Thomas]

Will the Minister give way?

[Mr Jones]

I will make some more progress first. The landlord can recover a property only when warning notices have been served on the tenant. The first warning notice would not in practice be able to be served unless at least four consecutive weeks’ rent is unpaid. The second warning notice may be served only when at least eight consecutive weeks’ rent is unpaid. That second warning notice must be given at least two weeks, and no more than four weeks, after the first warning notice. Each warning notice must state that the landlord believes that the premises have been abandoned and that the tenant or named occupier must respond in writing before a specified date, which must be at least eight weeks after the first warning notice is given, if the premises have not been abandoned.

The landlord proposes to bring the tenancy to an end if either the tenant or a named occupier responds in writing before that date. Finally, if the tenancy has been brought to an end using the abandonment procedure, where a tenant has a good reason for failing to respond to the warning notices they may be able to apply to the county court for an order reinstating the tenancy.

It is clear that landlords must go through a lengthy and detailed process before they can regard a property as being abandoned. In addition to the requirement that at least eight consecutive weeks’ rent remains unpaid, they must also serve a series of warning notices on that tenant and, where applicable, any other named occupiers.

[Mr Thomas]

Will the Minister give way now?

[Mr Jones]

I will in a moment. It would be disproportionate and an unnecessary extra burden on local authorities to impose the additional requirement that a local housing authority must also confirm that a property has, in their view, been abandoned. It may also be difficult for a local authority to determine whether a property has in fact been abandoned. To require them to do so could put them in an extremely difficult position.

[Mr Thomas]

Will the Minister set out a little more on the general rationale for the provisions? What evidence is there that abandonment is such a huge problem that all those provisions are needed? I do not think we heard any evidence that suggests a problem on the scale merited by the effort gone to by Ministers and civil servants with the clauses.

[Mr Jones]

I thank the hon. Gentleman for his question. As Labour Front Benchers have set out, there are 1,750 such cases a year and we need put that in context. He and Labour Members want protection for vulnerable people. I agree with that and I will go into more detail on how we will protect them, but there is also a significant number of vulnerable people who need to be housed. When there are abandoned premises that landlords cannot let, that reduces the stock of accommodation available to get those vulnerable people into settled accommodation.

[Mr Thomas]

I do not disagree with that proposition, but there are already legal provisions that deal with rent arrears and abandonment. What is the evidence that they are not working and that a slew of additional powers is needed?

[Mr Jones]

That brings me nicely to the points that were made about the section 21 notice, which landlords can use to retake possession of a property. It is important to point out that to recover possession under section 21, the landlord would need to obtain a possession order from the court, as has been pointed out, which would obviously involve additional time and the additional cost of going to court.

We need to bear it in mind that the Bill is about bringing forward proportionate measures to protect tenants. The golden thread running through all the measures on the private rented sector is that we are trying to improve the tenant’s lot and tenant protection. At the same time, however, there is a balance between tenant protection and the needs of the landlord—the person who invests in property to house people. The hon. Gentleman and the Labour party need to consider that the measures are a proportionate way to redress that balance, particularly where tenants are clearly not paying their rent and not living at the property.

[Peter Dowd]

I completely accept the spirit in which the Minister suggested that the burden on local authorities will be too great for them to become involved, but does he not agree that it would be even greater if the person was evicted? It is a case of a stitch in time saves nine in relation to the proposal.

[Mr Jones]

What the hon. Gentleman and several other Labour Members do not consider is that the measure is designed for a situation in which a property has been abandoned. It has not been put forward to allow landlords to try to fast-track the eviction of tenants who are living in a property or tenants who are paying their rent. It is important for the Committee to remember that.

Let me make another point about the section 21 process. To go back to my point about freeing up property that has been abandoned so that people can be housed, the section 21 process involves the landlord giving the tenant two months’ notice. After that, however, the landlord would need to go to court to obtain a possession order. On average, that process takes four months, which seems an excessive amount of time to get a property that has clearly been abandoned back into use.

[Teresa Pearce]

The Minister mentioned that the clause would mean that landlords did not have to obtain a possession order. However, under the Protection from Eviction Act 1977, a possession order is needed to recover possession. Will the clauses override that legislation?

[Mr Jones]

That is a very good point, and I will cover it in a moment when I come to the 1977 Act, which is very pertinent to a number of the questions Opposition Members have raised.

First, however, I want to cover some of the other questions that have been raised. There was a question about warning notices. If a notice is not served on a tenant in person, it must be left at or sent to the premises and to every other address the landlord has for that tenant. In addition, it must be sent to any email address the landlord has for the tenant. If the tenant did not receive the letters, a claim could be brought for unlawful eviction, and the landlord would need to prove that the letters had been properly delivered. We will come on later to Government amendments that will further strengthen the process.

--- Later in debate ---

[Grahame M. Morris]

I am grateful to the Minister for answering the questions raised, but will he reflect on this? It is perfectly possible for a landlord to assume a property has been abandoned, but it may well be that the tenant is in ill health and not in a position to answer the door. I am not convinced the protections are sufficient to address that specific issue.

[Mr Jones]

It is clear that a landlord who knows the abandonment procedure will know they are going beyond the letter and spirit of the provisions if they do what the hon. Gentleman suggests. As we have identified, there is legislation in place, in particular the 1977 Act, which protects people in that sense.

As for the suggestion that the implied surrender process means that abandonment provisions are not required, there is an existing common-law route of implied surrender, but it can be used only where a landlord is clear that the tenant has definitely left the property—for example, when they have removed all their possessions and returned the keys to the property. Our abandonment procedure will help landlords where a tenant suddenly disappears and stops paying rent by providing a process for landlords to confirm whether the property has actually been abandoned.

That brings me to the Protection from Eviction Act 1977. Any landlord who abuses the process we are introducing by not giving proper warning and repossessing the property when they know that it has not been abandoned will be liable to prosecution under the 1977 Act. Again, the prosecuting authority will usually be the local housing authority, and the tenant can apply to the county court for damages.

[Mr Thomas]

I am grateful for what the Minister is saying. Will he clarify—if not now, then later in proceedings, or perhaps by letter—whether the tenant in that situation would be able to claim legal aid?

[Mr Jones]

The hon. Gentleman should recognise that action under the 1977 Act would be a criminal process, and would generally be driven by the local authority with responsibility for enforcing that legislation because it would be in a stronger position to do that than a potentially vulnerable tenant who had just been evicted illegally. The second route for the tenant, on the basis of the contract between the tenant and the landlord, would be a civil legal matter. To my knowledge, under both the current legal aid system and that operated by the previous Government, there was no provision for people to receive legal aid support for such civil matters. I hope that answers the hon. Gentleman’s question sufficiently.

[Teresa Pearce]

As a general point, when someone enters into a tenancy, that is a legal document that is binding on both sides. Is the Minister not at all concerned that these provisions will do away with having an independent legal mind looking at whether the contract has been broken? Is he concerned that a landlord will be able to decide whether a premises has been abandoned without someone independent looking at whether the underlying contract between the two parties still exists? I am not a lawyer, by the way.

[Mr Jones]

I agree with the hon. Lady that we should not get drawn into discussing that type of scenario. A tenant who has not paid their rent would, by implication, have already broken the terms of the tenancy, so the matter would not be as cut and dried as she suggests. Nevertheless, I appreciate her concern for tenants, which is why we have ensured that the abandonment provisions include measures that will create a significant process that any landlord who wants to recover their property under abandonment will have to follow properly. If they do not follow that process, there will be significant routes to rectify the position.

Later on, I am likely to make further comments demonstrating how, following the Bill’s publication, we are strengthening the tenant’s position further, but at this point, in the spirit of the comments I have made and the questions I have answered, I hope that the hon. Lady will withdraw the amendment.

[Teresa Pearce]

I thank the Minister for some of the reassurances he has given, but I still believe that having the local authority look at a claim of abandonment would be a good safety net in many ways. First, it would alert the local authority early on to the fact that someone was about to be evicted. Secondly, it would deter rogue landlords from using this route. Thirdly, it would mean that local authorities could get a better idea of what their private rented sector was like and whether there were not only rogue landlords but rogue tenants. It is important for local authorities to know that, so I will be pushing the amendment to a vote.

Question put, That the amendment be made.

--- Later in debate ---

[Mr Jones]

On the basis that I would just be rehearsing the arguments that I put forward in the debate on the previous amendment, may I suggest, Sir Alan, that we proceed to put the Question that clause 49 stand part?

[The Chair]

I agree: it was a full and frank debate.

Question put and agreed to.

Clause 49 accordingly ordered to stand part of the Bill.

Clause 50

The unpaid rent condition

[Mr Jones]

I beg to move amendment 116, in clause 50, page 22, line 20, at end insert—

‘( ) If the unpaid rent condition has been met and a new payment of rent is made before the notice under section 49 is given, the unpaid rent condition ceases to be met (irrespective of the period to which the new payment of rent relates).’

This amendment ensures that a landlord cannot rely on old arrears of rent to recover premises if the tenant has since made a payment of rent.

[The Chair]

With this it will be convenient to discuss Government amendment 117.

[Mr Jones]

Clause 50 concerns the rent arrears that must have accrued before a landlord may serve a notice ending a tenancy under clause 49. The general rule is that at least eight weeks, or two months, of rent must be unpaid. That is known as the unpaid rent condition.

Amendments 116 and 117, which are in the name of my hon. Friend the Housing and Planning Minister, provide additional safeguards for tenants and landlords with regard to the unpaid rent condition. Amendment 116 will ensure that only if arrears continue to accrue after the landlord serves the first warning notice under clause 51 may the landlord terminate the tenancy under clause 49. This means that if the tenant makes a payment during the warning period, even in respect of historic arrears, the unpaid rent condition would not be met and the tenancy cannot be ended.

Amendment 117 provides that the unpaid rent condition can be met only if the unpaid rent is rent that was lawfully due. The amendment will ensure that a landlord cannot rely on arrears of rent where the rent is not treated as payable because the landlord has failed to comply with certain obligations.

Amendment 116 agreed to.

Amendment made: 117, in clause 50, page 22, line 20, at end insert—

‘( ) In this section “rent” means rent lawfully due from the tenant.’—(Mr Marcus Jones.)

This is intended to exclude cases where, for example, rent has become due under the terms of a lease but it is unrecoverable because legislation provides that until certain requirements are met it is not to be treated as lawfully due.

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

[Mr Jones]

The unpaid rent condition will be met if at the time the landlord ends a tenancy under the provisions in clause 49 the rent is in arrears by at least eight consecutive weeks if the rent is paid weekly or fortnightly, or by at least two consecutive months if the rent is payable monthly. Those are the most common rental periods in assured shorthold tenancies. However, if the rent is payable quarterly, at least one quarter’s rent must be in arrears by more than three months, while if the rent is payable yearly, at least three months’ rent must be in arrears by more than three months.

--- Later in debate ---

Warning notices

[Mr Jones]

I beg to move amendment 118, in clause 51, page 22, line 23, leave out

“the tenant and any named occupier two”

and insert “three”

This amendment requires a third warning notice to be given before a landlord can bring a tenancy to an end under clause 49. The third notice must be fixed to the premises (see amendment 119) and must be given towards the end of the warning period (see amendment 120). Amendment 121 gives power to specify the form of the third notice. Amendments 122, 123, 124 and 125 are consequential.

[The Chair]

With this it will be convenient to discuss Government amendments 119 to 126.

[Mr Jones]

Clause 51 concerns the warning notices that must be given to the tenant and any named occupiers before a tenancy can be terminated under clause 49. Amendment 118 introduces a requirement for a third warning notice to be given before a tenancy can be ended. Amendment 119 provides that the third notice must be fixed to a conspicuous part of the property, such as the front door. Amendment 120 requires the notice to be given at least five days before the end of the warning period, after which the landlord can terminate the tenancy under clause 49. Amendment 121 provides that the Secretary of State may, by regulations, specify the contents of the third warning notice. That will ensure the tenant knows what they must do next if the tenancy has not been abandoned. Amendments 122 to 125 are consequential to the introduction of the third notice requirement.

Amendment 126 introduces a requirement in clause 53 that the landlord must serve the first and second warning notices on the tenant, care of any person who has agreed with the landlord to guarantee the performance of the tenancy. As that person is likely to be close to the tenant and have a direct interest in ensuring that the tenancy is maintained and the rent payments kept up to date, they ought to be able to contact and encourage the tenant to respond to the warning notice if the tenancy has not been abandoned.

These important amendments ensure, together with other requirements in clause 51, that the tenant is given the greatest possible opportunity to respond to the landlord to confirm that the property has not been abandoned before the landlord is able to bring the tenancy to an end.

Amendment 118 agreed to.

Amendment made: 119, in clause 51, page 22, line 24, at end insert—

“( ) The first two warning notices must be given to the tenant and any named occupier using one of the methods in section 53(1) or (2).

( ) The third warning notice must be given by fixing it to some conspicuous part of the premises to which the tenancy relates.”—(Mr Marcus Jones.)

See Member’s explanatory statement for amendment 118.

[Teresa Pearce]

I beg to move amendment 108, in clause 51, page 22, line 32, leave out “8” and insert “12”

This amendment would extend the minimum amount of time needed to pass from 8 to 12 weeks before a landlord is able to recover an abandoned premises.

[Teresa Pearce]

These are probing amendments. Let me put it on record that I think the amendments we just agreed are actually quite good. [Hon. Members: “Hear, hear.”] I still believe, however, that this whole part of the Bill is open to abuse. I hope that it will be reviewed at some point and that if such abuse occurs, regulations will be brought in. Clearly, I am not as optimistic as the Minister about the behaviour of some landlords, particularly the ones in my constituency who I have seen threaten and abuse tenants, and access properties at any time of the day or night. That sort of person will not look at the safeguards in this part of the Bill, but will see it as an opportunity to act in an even more irresponsible way than they already do.

Amendment 108 would extend the minimum period that would need to pass before a landlord is able to recover abandoned premises. Amendment 109 would extend the time period between the two letters—I believe it may now be three—that are needed to evict a tenant suspected of abandoning a premises. I am truly concerned about abuse of the provisions in this part of the Bill. Landlords could use the proposals to evict tenants simply by writing them letters. They could also use the measures to evict someone as an act of revenge. If a tenant moves into a property that is not fit to live in and asks for repairs, the landlord might think, “This tenant isn’t going to be easy, so I’ll use this process to try to get rid of them.”

We appreciate the need for landlords to be able to recover truly abandoned premises and the fact that tenancy agreements are a two-way street. I appreciate the Minister’s argument that if someone does not pay their rent, they have clearly already broken their tenancy agreement. I have seen instances of that: for example, someone in my area who had a property of her own got married and moved in with her husband. Rather than sell her property, she decided to let it out. For an entire year, the tenant paid no rent at all, but she still had to pay the mortgage on that property. I therefore completely understand that there are situations of that sort that need addressing. The measures in the Bill may make the situation easier for landlords in that sort of position, but my fear is they may also make it easier for rogue landlords.

I am pleased that the Minister has added a provision to the Bill that requires a third wave of letters for the process, but it is still important to safeguard against abuse. Extending the minimum amount of time that has to pass before a landlord is able to recover an abandoned premises will mean that those with legitimate reasons for absence will be able to respond. That will help to safeguard against potential abuse.

One concern about the proposals that has been raised with me is the possible pressure they will put on local housing authorities, which may have a duty to house tenants following eviction, even if only in emergency accommodation. Under the current system, when faced with someone who is about to be evicted, those local housing authorities have time to plan their resources, so that they know that if a resident is going to be evicted they will be able to house them adequately in emergency housing. Under the proposals in the Bill, residents could be evicted with haste, putting further pressure on already pressed local housing authorities. The amendments would insert a bit more time into the process for recovering abandoned premises, which would, I hope, ease the pressure on local housing authorities.

Amendment 109 would extend the time period between the letters. Currently it is two weeks and no more than four weeks; we propose extending it to four weeks and no more than eight. That would be advantageous for a number of reasons. It would safeguard against error. A landlord could use the measures to kick out a legitimate tenant who is away on business, in hospital or on holiday; extending the time period between the letters would mean that there was less chance of that happening. It would also safeguard against abuse. It would allow tenants more time to lodge a query with the landlord or seek housing advice. As there is no court involvement in the process, it would give the tenant more time to assess their options.

It is clear that the proposals in the Bill will have the power to affect all tenants in the private rental sector. All landlords will have these powers, open to abuse as they are, even though abandonment accounts for an estimated 1,750 occasions of tenancies ending a year. We hope that the rules will be got right, so that there are safeguards against abuse, and so that we allow landlords to recover abandoned premises where they need to, but do not allow them to evict tenants at their ease. That is the reason behind these probing amendments. I hope that the Minister will be able to give me some reassurance that those who could be abused will be protected by the law.

[Mr Jones]

The amendments seek to ensure that the minimum warning period before a landlord can recover an abandoned property would be 12 weeks and that a second warning notice would be served at least four weeks and no more than eight weeks after the service of the first.

I am happy to be able to reassure the hon. Lady and other members of the Committee that amendment 108 is unnecessary. It is already effectively the case under the Bill that the minimum period before a landlord can recover an abandoned property would be 12 weeks. The clauses are carefully drafted, but are complex, and, subject to Royal Assent, my Department will issue guidance for landlords to help them to understand the new process. It will therefore probably be helpful if I explain a little more to the Committee in that regard.

The process to recover an abandoned property takes at least 12 weeks because the second warning notice may be served only when at least eight weeks’ consecutive rent is unpaid. This second warning notice must be served at least two weeks and no more than four weeks after the first warning notice. This means that in practice the first warning notice could not be served unless at least four weeks’ rent was unpaid.

The first warning notice must specify the date of recovery of the property, which is at least eight weeks after the date when that notice is given. Given that the tenant will already have been at least four weeks in arrears, that provides a total period of at least 12 weeks from when the rent was last paid to the tenancy being brought to an end.

Amendment 109 would make changes to clause 51(6), which states:

“The second warning notice must be given at least two weeks, and no more than 4 weeks, after the first warning notice.”

The abandonment procedure that the Bill is introducing is intended to allow a landlord to recover a property that has been abandoned without the need to obtain a court order. As I have explained, we have introduced a number of safeguards to ensure that a landlord could use the process only if a tenant had genuinely abandoned the property.

A landlord will be able to recover a property only when warning notices have been served on the tenant, and a copy of the first, second and third warning notices have been sent, care of any guarantor. It will not be possible in practice for the first warning notice to be served unless at least four consecutive weeks’ rent is unpaid; the second warning notice may be served only when at least eight weeks’ consecutive rent is unpaid. The second warning notice will have to be given at least two weeks and no more than four weeks after the first warning notice.

It is clear that landlords will have to go through a lengthy and detailed process before they can regard a property as being abandoned. In addition to the requirement for at least eight consecutive weeks’ rent to remain unpaid, they will also have to serve a series of notices on the tenant and, where applicable, any other named occupiers.

We have also sought to strike the right balance between ensuring that tenants are given adequate notice that the landlord believes the property may have been abandoned, with an opportunity to respond if they have not abandoned it, and ensuring that landlords do not have to wait an unreasonable time before being able to recover the property.

The requirement for a second warning notice to be served at least four weeks and no more than eight weeks after service of the first would introduce further delays into the process of recovering an abandoned property, depriving the landlord of an income and a family of the chance to occupy a property that would, by definition under the provisions in question, be empty. I hope that that explanation will help hon. Members and that the hon. Member for Erith and Thamesmead will agree to withdraw her amendment.