Tenant Fees Bill (Second sitting)

Debate between Sarah Jones and Maria Caulfield

Committee Debate: 2nd sitting: House of Commons
Thursday 7th June 2018 Public Bill Committees

[Sarah Jones]

Q For my final question I just want to change the subject. We will look today at the deposit element of this proposed legislation. There has been quite a debate on what level of deposit is fair, in terms of what people can afford and what is fair for the landlord to be able to hold. Do you have any views on what that level should be, whether it should be three, four, five or six weeks’ rent, or something else?

Alex McKeown: I certainly think the maximum should be six weeks, which it is at the moment. That has been the norm within the industry. I know that Citizens Advice—the CAB—and others that have given evidence want it brought down to at least five weeks. I understand some of their arguments for that, but to be honest with you, that has not been my main focus.

Councillor Blackburn: I do not have a view.

[Maria Caulfield (Lewes) (Con)]

Q I want to touch on the point you made about the requirement in the Bill of proof to a criminal standard and how difficult that will be. Do you have any suggestions for how the Bill could be formed to allow enforcement to happen relatively easily and effectively?

Alex McKeown: I think it needs to be more similar to the redress scheme for letting agents and property managers in the Consumer Rights Act, because that is a fairly simple process. You get the evidence, you issue the notice of intent, they make representations, you then issue a final notice and it goes to the tribunal. That process has worked very well. We obviously get some random judgments coming out of the tribunals, but that is a better way of doing it.

The only issue we have found is that you will get a large fine against a company—such as the £30,000 fine—and they will then fold their company and phoenix. That is where we may need to look at holding the directors themselves liable. That will assist trading standards in getting the money back.

Tenant Fees Bill (First sitting)

Debate between Sarah Jones and Maria Caulfield

Committee Debate: 1st sitting: House of Commons
Tuesday 5th June 2018 Public Bill Committees

[Maria Caulfield]

Q So is there a need to have default fees within this Bill?

Richard Lambert: I think there is.

David Smith: Landlords are always entitled to recover their costs from a tenant’s breach of contract. A default fee is actually where the parties pre-agree what the level of that fee should be, creating a degree of certainty between them so that tenants are going to know that they will have to pay this amount and this amount only, whatever the actual cost of, say, a locksmith. There is a benefit to having a fixed tariff of fees for particular contractual breaches. It is a commonly used mechanism across a wide range of contracts.

[Sarah Jones (Croydon Central) (Lab)]

Q May I just ask for information? Obviously we accept that the majority of landlords are good landlords and do the right thing. You talk about exploitation, variation and some egregious levels of charging, and some exploitation of people. Would you describe what evidence there is as to the numbers of good agents versus bad agents, and good landlords versus bad landlords? We talk about the bogus ones who are charging people but is there evidence of the number, or of where they tend to be? Do they tend to be the bigger ones or smaller ones? Are they in cities or in rural areas? What do we know?

Richard Lambert: It is almost impossible to identify that. Those kinds of landlords and agents do not self-identify, by definition. Somebody once said to me, “The worst tenants tend to gravitate towards the worst landlords.” Often, those kinds of landlords will be housing people with chaotic and vulnerable lives who find it difficult to go anywhere else, or people who may be on the verges of criminality. Quite often, you find that the actual accommodation provision is a sideline of a wider organised criminal activity, and it is a part of something that will involve people trafficking, prostitution, drugs, money laundering and so on. The letting of the property is simply a factor: they need somewhere to house the people.

David Smith: The only way to clarify that would be to look at the number of landlords prosecuted as a percentage of the overall number of landlords. However, the problem with that as a measure is that enforcement is so poor.