Housing and Planning Bill

Teresa Pearce Excerpts

Tuesday 5th January 2016 Commons Chamber

[Mr Jones]

I thank my hon. Friend for his comments. He is absolutely right. It is important that we raise the level of civil penalty to £30,000, because a smaller fine may not be significant enough for landlords who own numerous properties and who flout the law to think seriously about their behaviour and provide good quality, private sector rented accommodation for their tenants.

Amendments 17 and 18 provide that a person who has had two or more relevant civil penalties imposed on them in the previous 12 months may be entered on the database of rogue landlords and property agents. Amendment 26 would amend clause 53, consequential to Government amendment 17. As the Bill is drafted, it is possible for a person to be entered on the database only if they have been convicted of a banning order offence. Consequently, any person who has had a number of civil penalties imposed on them as an alternative to prosecution in relation to such offences may not be entered on the database. We seek to remove that anomaly with these amendments. We recognise that a civil penalty is likely to be imposed rather than a prosecution in a court for less serious offences. That is why two or more civil penalties have to be imposed, as opposed to a single criminal conviction.

Amendment 19 provides that regulations made about information to be included on the database may include the details of the civil penalties a person has incurred. Amendment 20 makes provision for an entry on the database to be removed or reduced by the local housing authority when the entry was made because the person had incurred civil penalties. That mirrors the existing provisions that deal with the removal or variation of database entries for people who have been convicted of criminal offences. Amendment 21 provides that the duration of an entry on the database may be reduced to less than two years by the local housing authority in certain circumstances.

Amendment 22 provides that the Secretary of State may provide information held on the database in an anonymised form to any person with an interest in private sector housing for statistical and research purposes.

In Committee, the Bill was amended to make it a criminal offence to breach a banning order imposed under chapter 2 of part 2. Changes were also made to ensure that chapter 4 applies to the offence of breach of a banning order in the same way as it applies to other offences. Amendments 23, 24 and 25 are minor and consequential on the introduction of the banning order offence.

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

I will speak to new clauses 55 and 56 and amendments 49, 47 and 48.

New clause 55 would require local authorities to put in place a scheme to license and provide for the accreditation of private sector landlords in their area. Private rented housing is an important part of the housing sector. Nine million people rent privately and the sector is growing. In the past, the private rented sector was often a place for young people to find short-term solutions to their housing needs, perhaps while studying or establishing their careers. Now, almost half of those who rent are over 35 and they need security and stability. Many people are stuck in the private sector, unable to secure any of the declining amount of affordable social housing or to save for a deposit to buy their own home owing to the ever-rising rents.

Most landlords are effective and efficient in letting their property. They provide good properties and support their tenants. Many landlords are already accredited through independent or local authority schemes and some are licensed as they provide houses in multiple occupation. However, there are a few rogue landlords, as we call them, who bring down the name of the private rented sector and the reputation of all landlords. Such rogue landlords often provide substandard accommodation at extortionate prices, sometimes intimidate tenants and often cannot be reached until the rent is due.

The accreditation of landlords has been a feature of the private rented sector for more than 15 years. A local authority-led accreditation and licensing scheme would allow all private landlords to meet set standards. As it would be administered locally, it would give councils the power to establish the scheme that best suited their local housing need. Some local authorities might have particular difficulties with private landlords in respect of housing standards and want to address those through the scheme. Others might have no real problem, but might want to better understand the housing need in the local area and to monitor standards. An accreditation and licensing scheme would also support other measures in the Bill, such as the database of rogue landlords and banning orders. A local authority-led accreditation and licensing scheme would undoubtedly drive up standards across the private rented sector—something we all want—and bring the select few rogue landlords up to the standards of the many good landlords across the country.

[Ms Buck]

Does my hon. Friend share my concern that although it is estimated that 700,000 properties in the private rented sector have a category 1 hazard under the housing health and safety rating system, just 2,000 landlords have been prosecuted in the past eight years? In addition to the measures she is supporting, does she agree that we should make it possible for tenants to take action when their properties are not fit for human habitation, and update the legislation, as she sought to do in Committee and I did in my private Member’s Bill?

[Teresa Pearce]

I could not agree more with my hon. Friend. The rogue landlord proposals in the Bill and the banning orders are responses after the fact. We want to improve standards so that people do not end up needing banning orders, and do not have to go through the trauma of living in substandard accommodation. Such accommodation often makes people unwell and unfit to work; it lowers their productivity and hampers their children’s education.

[Catherine West]

Does my hon. Friend accept that it is also terrible when housing benefit is paid on such properties so that in some cases it is almost state-sponsored squalor?

[Teresa Pearce]

I could not agree more. In Committee we tabled an amendment that asked local authorities to report quarterly to Her Majesty’s Revenue and Customs on all housing benefit paid, so that some of the landlords who are literally putting money in their back pocket and not providing a decent service could be caught. Unfortunately, that amendment was not accepted.

[Mr Prisk]

All Members of the House want to ensure that we crack down on rogue landlords, and that is why many measures in this Bill are good. My problem with the new clause is that it seems to replicate the failed experiment in Scotland, where a register has been on the books for more than five years, yet fewer than half of 1% of those landlords have been removed or had their licence revoked. The ombudsman scheme, together with measures in the Bill, is more effective. How would the hon. Lady’s scheme differ from the one in Scotland?

[Teresa Pearce]

I am aware of the Scottish scheme, but this measure applies to England and it is perfectly possible that we could do it better. We will discuss our amendment on the ombudsman later, so I hope the hon. Gentleman will bear with me.

[Mark Pawsey (Rugby) (Con)]

We all accept that substandard rental accommodation should not be offered to tenants. Does the hon. Lady agree that local authorities currently have plenty of powers to deal with substandard accommodation, but the problem is that often they do not exercise them? Should we be putting pressure on local authorities to make use of powers they already have?

[Teresa Pearce]

Local authorities have the powers but they do not have the resources. Many local authorities have very few officers who are able to police the system, but resourcing that is an argument for a different day. We discussed in Committee whether the fines that were brought in should be ring-fenced for that purpose, but that measure was not accepted.

[Mr Marcus Jones]

Does the hon. Lady accept that the civil penalties that local authorities can impose on rogue landlords will be received by the local authority that takes action against the landlord? Does she also accept that things such as housing benefit payments can be reclaimed by local authorities where rogue landlords have not fulfilled their duties under the new rent repayment order regime in the Bill?

[Teresa Pearce]

I do accept those facts, and in Committee there was much in this section of the Bill that we agreed on. Amendments were tabled that the Minister took away and has now agreed to, which I welcome. New clause 55 is just to ask whether accreditation and licensing by local authorities would create a more professional private rented sector.

New clause 56 would give the Secretary of State the power to introduce a pilot scheme that would see the housing ombudsman extend its cover in London to the private sector. It would require a report from the Secretary of State following the pilot scheme and give the Secretary of State the power to extend the powers of the housing ombudsman to the private sector nationwide after that pilot.

--- Later in debate ---

[Teresa Pearce]

I agree that that is a possibility, which is why we are proposing that new clause 56 would see the extension of the housing ombudsman scheme, at first through a pilot scheme in London and then potentially across the country. I believe this would help many tenants in resolving disputes.

On amendment 49, part 3 of the Bill makes provision for private landlords to recover abandoned premises from tenants without going to court. We appreciate the need for landlords to recover abandoned premises, but the measures give landlords dangerous powers to evict tenants with speed and ease. We believe the Bill does not provide safeguards for genuine cases where somebody could be away from the property legitimately, such as a stay in hospital or somebody working away from home. We believe the measures will lead to further pressure on our already stretched local authorities. As the measures stand, we believe they go against the spirit of other parts of the Bill where we have looked to crack down on rogue and criminal landlords through banning orders and a database, and to drive up standards. Instead, as they stand, the measures give the very same landlords a way to evict without recourse to the courts, and with speed and ease.

Many organisations contacted us to raise concerns about the proposed legislation. I raised their concerns in Committee, but it is worth raising them again. Crisis and Shelter have both spoken out against these clauses and recommended that they be removed from the Bill. They were particularly concerned that vulnerable tenants could be unintentionally evicted; tenants will be unable to challenge their eviction effectively; and that there is insufficient evidence that abandonment is a widespread problem and that there is existing legal provision to deal with genuine cases of abandonment. In addition, they believe that by undermining the role of courts in the eviction process, the changes will put more tenants at risk of homelessness. Further representations were made in written and oral evidence to the Committee noting concern with the proposals. Crisis highlighted that the

“Bill creates a new ‘fast track’ eviction process for landlords to reclaim possession of a property which has been abandoned”

and that there was no

“robust evidence to suggest that abandonment is a significant or widespread problem.”

Citing the Bill and the Government’s impact assessment, it also stated:

“Landlord associations have estimated that 1% of calls made to their helplines relate to abandonment. There are approximately 1.4 million landlords. From this figure the government has extrapolated that there are only 1,750 tenancies abandoned every year, which amounts to only 0.04% of private renting households.”

We heard concern from legal organisations, such as the Housing Law Practitioners Association, which was unaware of any evidential basis suggesting the need for such a power as that in part 3 of the Bill and did not understand what was thought to be defective in the existing law. It also noted that the “trigger” rent arrears in clause 50 were plainly modelled on those in ground 8 in schedule 2 to the Housing Act 1988. If those arrears are made out, the landlord is already entitled to a mandatory possession order under ground 8. If a landlord has a mandatory right to possession already, why does he need a right to bypass the courts?

The association was also uneasy about the re-instatement provisions and had many concerns about the proposals. Others noted that they did not think the proposals were necessary at all. In fact, there is already legal provision for cases of abandonment in the form of the legal rule of implied surrender, which is where a tenant behaves in such a way that would make a landlord believe they wanted to end a tenancy, such as emptying the property of all its possessions or handing back the keys. Crucially, there has to be evidence of actual abandonment—evidence that the tenant has gone for good—and this could be evidence from neighbours or visual evidence, such as possessions being cleared. The landlord can accept this and then legally change the locks without any court proceedings being required. The question has been raised with us why the measures are being introduced, given the existing provisions protecting landlords in such circumstances.

Many of the organisations that approached us wanted the provisions to be withdrawn from the Bill altogether, but our amendment proposes an extra layer, requiring the local housing authority to confirm that it suspects that the property is abandoned before a landlord can recover the abandoned premises. Landlords could use the proposals in the Bill to secure eviction just by writing tenants a couple of letters, as an act of revenge or to kick out a legitimate tenant who is away on business or in hospital; and what would happen if a landlord says he has sent a letter but the tenant never receives it, after which the tenant goes away a couple of weeks later on holiday and the landlord evicts them while they are away?

The Bill requires the landlord only to say that the property is abandoned, rather than for it actually to be abandoned, and that could be open to abuse. That is why we would like to insert a reasonable extra layer in the proposals. Under the amendment, the local housing authority would need to confirm that it also suspects that the property is abandoned, ensuring that a landlord could not just say so. The amendment would add the voice of a local, respectable and accountable body, such as the council, to a landlord’s concerns and to the process and ensure that the measures are not open to abuse. Given that there are estimated to be only 1,750 occasions a year when such a situation would arise and that there are about 400 local authorities, it is unlikely to overburden local authorities. The clauses clearly need to be amended if they are to work, are not open to abuse and can be used appropriately on the rare occasions that a landlord requires a property back.

Amendments 47 and 48, also on abandoned premises, would extend the time period between the two letters needed to evict a tenant. Amendment 47 would specify that the date by which the tenant must reply must be after the 12-week period, while amendment 48 would provide longer between the first and second warnings. I spoke, on the previous amendment, about the flaws in the abandonment proposals and how they were open to abuse or error, meaning that landlords could use the proposals to evict tenants just by writing them a couple of letters.

I completely understand the situation a landlord is in when a tenant truly has abandoned a property. In Committee, I raised the need for local authorities to know not just who rogue landlords were but who rogue tenants were. Tenants also enter into a legal contract with a landlord when they take on a property, and they should not breach that agreement, just as landlords are not expected to breach their end of the agreement, yet these clauses give rogue landlords the ability to evict with speed and ease.

The Minister has already responded to the issues raised in Committee and added provision for a third wave of letters, for which I am grateful. It is still important, however, to safeguard these measures against abuse. We believe that by extending the minimum amount of time before a landlord is able to recover abandoned premises, those with legitimate reasons for absence from their property would be able to respond, which would help to safeguard against potential abuse.

One of the concerns raised about these proposals was the pressure on local housing authorities that might have a duty to rehouse tenants who have been evicted, even if just in emergency accommodation following the eviction. When faced with someone about to be evicted under section 21 notices, local housing authorities have the advantage of time in the current system to plan the resources; if they know that a resident is going to be evicted, they can try to do something about it before the date of eviction. Under the proposals in the Bill, however, residents could be evicted in haste, placing further pressure on local housing authorities.

The amendments would insert a little more time into the recovery of abandoned premises, which would ease the pressure on local housing authorities and help to avoid any abuse of the process. In addition, it would be advantageous to extend the time period between the first two letters needed to evict a tenant suspected of abandoning premises from four weeks to eight weeks, because that would safeguard against error and a landlord using the measure to kick out a legitimate tenant who is away on business, in hospital or even on holiday. By extending the time period between the letters, there is obviously less chance of that happening. That will safeguard against abuse and allow tenants more time to query the landlord or to seek housing advice. As there is no court involvement in this process, it gives the tenant more time to assess their options.

It is clear that the Bill’s proposals could affect all tenants in the private rented sector, and that all landlords will have the powers, even though they are open to abuse and abandonment accounts only for an estimated 1,750 occasions a year. Why not get this right so that it safeguards against abuse and does what it is supposed to do? That would allow landlords to recover abandoned premises and not allow rogue landlords to evict tenants with ease. Legislation on abandonment needs to be watertight, because although it affects only 0.04% of tenancies, it could be abused.

[Dame Angela Watkinson (Hornchurch and Upminster) (Con)]

I am pleased to have the opportunity to speak to new clause 5, which is complementary to clause 26—previously clause 22—of this excellent Bill and which relates to rogue landlords and letting agents. The new clause simply requires local authorities to add a question to their council tax registration forms seeking information about the tenure of a property. It would not only be administratively easy to implement, but the cost would be de minimis. The purpose of the new clause is to provide a database for all local authorities, identifying the owners of privately rented properties.

Currently, local authorities know who is paying council tax on a private property, but they have no way of knowing if it is owner-occupied or tenanted. Having easy access to such information would have numerous benefits for local planning authorities, environmental health departments, social services, tenants, HMRC and good landlords. The Residential Landlords Association fully supports this measure.