Teresa Pearce
Main Page: Teresa Pearce (Labour - Erith and Thamesmead)Housing and Planning Bill (Seventh sitting)
Teresa Pearce Excerpts
Mr Jones
Clause 12 summarises the provisions in part 2 of the Bill. It explains that this part is about tackling rogue landlords and letting agents. The Government value the private rented sector. As I have said, it is an important part of our housing market, housing 4.4 million households in England. We want to support good landlords who provide decent, well maintained homes for people, and avoid unnecessary further regulation on them. Most private landlords provide a decent service to their tenants, but we know that there are a small number of landlords and letting agents who do not manage their lettings or properties properly, sometimes exploiting their tenants—and the public purse, through housing benefit—by renting out substandard, overcrowded and dangerous accommodation.
These landlords and letting agents often do not respond to legitimate complaints made by tenants. These are the rogues that this part applies to. We want to ensure that such rogues can be placed on a national database, so that local housing authorities in whose area they operate can identify them and their behaviours and standards can be properly monitored. We also want to ensure that the worst rogue offenders can be removed from the rental market altogether, through banning orders. Rogues who let out unsafe or unhealthy properties or engage in illegal practices such as violent entry, harassment or unlawful eviction of tenants will no longer be able to financially benefit from such activities. Part 2 extends the rent repayment order regime so that, in appropriate cases, tenants—and former tenants—can reclaim rent, and local authorities can reclaim housing benefit payments, from landlords who have engaged in those types of unacceptable activities.
The majority, good landlords, will not be affected by this part. However, they will benefit from it, since standards and compliance with the law across the sector will be set on a level playing field and good landlords who work hard for their tenants and comply with the law will cease to face unfair competition from the rogue landlords, who ignore the law and their obligations.
Teresa Pearce (Erith and Thamesmead) (Lab)
We welcome this initiative on rogue landlords. I would like to ask the Minister a question. The impact assessment talks a lot about the very small number of rogue landlords. Although they are in the minority, do we have any information about how big that small number may be? It is easy to send out surveys to landlords and get them to send them back, but it is the good landlords who complete those surveys, and the rogue or criminal landlords do not engage at all. Further, given that the private rented sector is increasing, especially in cities, do we have any information about whether the increasing amount of private rented accommodation is increasing the number of rogue landlords? As the sector increases, does it get better, or do we have no evidence on that?
Mr Jones
I thank the hon. Lady for her questions. First, she mentions the number of rogue landlords and the impact assessment. We have looked at that very carefully and consider that about 10,500 rogue landlords may be operating. This Government is firmly on the side of good landlords and tenants and we want to drive those rogue landlords out of the system. That is what the proposed clauses in this part do.
On banning orders, which I shall come to in clause 13, we expect that about 600 will be applied for to the tribunal as a result of the measures that this Bill brings.
Question put and agreed to.
Clause 12, as amended, accordingly ordered to stand part of the Bill.
Clause 13
“Banning order” and “banning order offence”
Question proposed, That clause 13 stand part of the Bill.
Mr Jones
The hon. Gentleman must understand that this Government have done an awful lot to pass power into the hands of the individual, but ultimately, in this case, there is an issue of public law protection and of ensuring that rogue landlords are held to account. We feel that the best body to do so is the local authority, which will be able to take on rogue landlords to the benefit of the tenants wronged as a result.
Amendment 6 agreed to.
Amendments made: 7, in clause 14, page 9, line 13, after “order” insert “under subsection (1)”
This amendment removes the need for a notice of intended proceedings in cases where a local housing authority is obliged to apply for a banning order because of amendment 6. It would not make sense to invite a person to make representations in a case where the authority is obliged to make an application.
8, in clause 14, page 9, line 16, after “why,” insert—
“( ) stating the length of each proposed ban,”—(Mr. Marcus Jones.)
This amendment requires the length of each proposed ban to be stated in the notice of intended proceedings that a local housing authority has to give a person before applying for a banning order.
Teresa Pearce
I beg to move amendment 104, in clause 14, page 9, line 20, at end insert
“and must make all reasonable effort to consult with any affected tenant of the person the authority is intending to proceed against.”
This amendment would require local housing authorities to consult directly with any tenants of a landlord or a letting agent when making a banning order.
We want local housing authorities to make reasonable efforts to consult tenants directly, because we understand that there may be times when for some reason they cannot contact affected tenants. We are largely supportive of the measures to tackle rogue landlords in order to ensure safety and security for tenants in the sector and to penalise criminal landlords. In its written evidence, the charity Crisis said of banning orders:
“We believe that these could help drive up standards and protect vulnerable tenants.”
For banning orders to work, they must penalise and target the criminal landlords, who bring down the name of the private rented sector and the reputation of all landlords. The Residential Landlords Association said in its written evidence that
“landlords who wilfully breach their legal obligations should face the consequences.”
We must not lose sight of the reasons for applying a banning order—to protect existing and prospective tenants from the criminality of rogue landlords. Some tenants may have been on the receiving end of the original offence and will have plenty of information on someone’s fitness to remain a landlord. Some tenants will bring the local housing authority’s attention to a landlord and will have input through their representations. Tenants should have a voice. Without one, they are just bystanders to the process. As the proposals stand, local authorities do not have to seek the views of tenants.
Mr Stewart Jackson (Peterborough) (Con)
What estimate has the hon. Lady made of the indicative costs of the proposal? As she knows, when local authorities proceed properly with selective licensing consultations under the Housing Act 2004, the cost can be prohibitive. In areas such as mine, which has a lot of people who do not speak English as their first language and a lot of transitory people domiciled in the private sector—[Interruption.] Will the hon. Member for Harrow West let me finish? In that situation, the costs were quite substantial. Has the hon. Lady given that some thought?
Teresa Pearce
I have given thought to that, which is why I talked about “reasonable effort”. The original amendment said that the local authority “must” consult. It now asks for a “reasonable effort”, which is open to interpretation. Of course, there are costs in doing things properly, but we are trying to rid the private rented sector of rogue landlords who commit criminal offences by keeping people in properties that are unfit and unsafe. There is a cost, but the cost of not doing something could be far higher for the local authority.
Are banning orders only a way to punish criminal landlords or are they a way to improve standards in the sector by working with landlords and tenants to drive out rogue landlords? It will be fundamental to the success of banning orders for tenants to be brought in on the process. Not all tenants will want to play a part in the process and that is fine. The aim behind the amendment is for local housing authorities to consult affected tenants, ensuring they have the opportunity to have their say. If tenants have been subject to wrongdoing by a landlord, they will be able to provide further and wider evidence to the local housing authority. The landlord may have been prosecuted for one offence but could have demonstrated a consistent disregard for the tenant’s security and safety. That could be factored in by the local housing authority in the first-tier tribunal. It works both ways. The local housing authority and the first-tier tribunal could factor in positive experiences from tenants, although I suspect that those cases will be few and far between. In all cases, it will allow for the local housing authority and the first-tier tribunal to build up a more coherent case for or against a banning order.
I hope the Minister looks favourably on the suggestion because it would make this section of the Bill work better. For those reasons, we are moving that the clause be amended to include a requirement for the local housing authority to consult directly with any tenants of the rogue landlord or letting agent against whom it is hoping to make a banning order.
Mr Thomas
I rise to support the amendment and to add one or two brief thoughts. What would my hon. Friend, who spoke to the amendment in a very consensual style, think about a local authority that has not rushed into taking action against landlords because, for ideological reasons, it does not think it should or because the burden of other legislation in this time of significant cutbacks is too much for it to prioritise taking action against rogue landlords? The amendment would create that additional bit of pressure to ensure that local housing authorities always think of the need to consult tenants on an annual basis about whether rogue landlords are in action and whether the authority should act on that.
Let us take South Norfolk Council as an example. Presumably whenever the hon. Member for South Norfolk sees housing authority staff, he sits down and talks with them at some length about self-build and custom house building. Presumably, given his importance and the esteem in which he is held, it requires a considerable effort by those staff to deal with his inquiries. What my hon. Friend’s amendment will do is gently rebalance perhaps the enthusiasm within South Norfolk housing authority to focus on the needs of tenants, as well as dealing with his concerns. As I alluded to, there might be an authority—a Bexley or Bromley, perhaps, in London—that is so pro-landlord that it cannot envisage rogue landlords operating in its space.
Given that the Minister is determined—it seems to me, at least—to adopt the nanny state approach and not allow tenants themselves to go to the first-tier tribunal, my hon. Friend’s amendment would at least force local authorities to consider whether there is a need to take action. In that sense, it would be a useful annual prod to get local authorities to do a bit more in this area.
Teresa Pearce
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Jones
Clause 14 explains that before a local housing authority applies to the first-tier tribunal for a banning order, it must give the person against whom it proposes to make the application a notice of intended proceedings. That notice must explain that the authority proposes to make the application and why. It must invite the person to make representations about the proposal and not less than 28 days must be given for doing so. The authority must consider any representations received in deciding whether to proceed with the application. The authority cannot make the application until the notice period has expired and it has considered the representations it has received, if any.
Subsection (5) places a time limit on making an application by providing that the notice of intended proceedings cannot be given any later than six months after the person’s conviction for the banning order offence to which the notice relates.
Question put and agreed to.
Clause 14, as amended, accordingly ordered to stand part of the Bill.
Clause 15
Making a banning order
Amendments made: 9, in clause 15, page 9, line 29, leave out “letting” and insert “property”
See Member’s explanatory statement for amendment 2.
Amendment 10, in clause 15, page 9, line 30, at end insert “(but see subsection (2A))”
See Member’s explanatory statement for amendment 11.
Amendment 11, in clause 15, page 9, line 32, at end insert—
‘(2A) Where an application is made under section 14(1A) against an officer of a body corporate, the First-tier Tribunal may make a banning order against the officer even if the condition in subsection (1)(b) is not met.”
This ensures that where a body corporate commits a banning order offence and an officer commits the same offence, an order can be made against the officer even though he or she was not a residential landlord etc at the time the offence was committed (i.e. because it was the company that was the landlord etc). The amendment is related to amendment 6.
Amendment 12, in clause 15, page 9, line 39, leave out “letting” and insert “property”—(Mr Marcus Jones.)
See Member’s explanatory statement for amendment 2.
Question proposed, That the clause, as amended, stand part of the Bill.
Mr Jones
Again, I hear what the hon. Gentleman says. He is bringing me back to the point that we discussed earlier when I set out quite clearly why the Government think that local authorities are the best placed to deal with this issue.
In London there may be numerous issues across different boroughs. We have a situation where those local authorities will be able to access the database of rogue landlords and therefore be able to get the information that goes across borough. It is incumbent on those local authorities not just to work in the best interests of people renting in the private sector in their borough, but to work with adjoining boroughs and pick up on the issues that also affect tenants in the borough in question, because landlords do not just operate on administrative boundaries; they operate on a wider basis. While I hear what the hon. Gentleman says, I think that the Bill is in a good place in this regard.
Question put and agreed to.
Clause 15, as amended, accordingly ordered to stand part of the Bill.
Clause 16
Duration and effect of banning order
Teresa Pearce
I beg to move amendment 112, in clause 16, page 10, line 3, leave out “6” and insert “12”
This amendment would ensure that a banning order lasts at least 12 months.
The Chair
With this it will be convenient to discuss amendment 105, in clause 16, page 10, line 3, at end insert—
“(2A) A landlord or letting agent subject to a banning order must undertake accredited training, as approved by the local housing authority, before they are able to let a property again.”
This amendment would equip banned landlords and letting agents with the knowledge and skill to properly manage a property.
Teresa Pearce
We want to amend clause 16 in two ways. First, we want to ensure that a banning order lasts at least 12 months rather than six. Secondly, the amendment seeks to equip banned landlords with the knowledge and skill to go back into the property market once the banning order has expired.
A similar vein runs through both amendments. They are both intended to strengthen banning orders, which is a measure that we support. In their written and oral evidence, many organisations, such as the Residential Landlords Association and Crisis, discussed the need to strengthen banning orders and provide further consequences for landlords who wilfully breach their legal obligations. That is why, with amendment 112, we are seeking to amend clause 16 to ensure that a banning order lasts at least 12 months, rather than six.
Mr Jones
Amendment 105 would require landlords and letting agents who are subject to a banning order to undertake local authority-approved training before a ban is lifted. This morning, Labour Members talked at length about clauses in the Bill placing new burdens on local authorities, but we will put aside the logistical issues for the moment.
The amendment focuses on the training of landlords and property agents. I am sure that the hon. Member for Erith and Thamesmead knows that a banning order is a serious step. A local authority will not seek a banning order, and the tribunal certainly will not grant one, if the landlord or property agent was simply ill-informed about their responsibilities. An order will be granted only after considering, as set out in clause 15(3),
“the seriousness of the offence of which the person has been convicted”
and any previous convictions for a banning order offence. The problem is not that the landlord is not aware of their responsibilities, but that they have already failed to meet them. I do not believe that accredited training will help with that.
The hon. Lady asked about training. A number of organisations, including the National Landlords Association and the Association of Residential Letting Agents, provide significant training for their members. I looked on the Association of Residential Letting Agents’ website earlier and it had clear advice and guidance on how to be a good and responsible landlord.
On amendment 112, clause 16 sets out a minimum term of six months for a banning order. Banning someone from acting as a landlord or property agent is a serious step. It is right that the tribunal have considerable discretion when making a banning order including over the length of the order, so as to take into account all of the relevant circumstances. The amendment would extend that minimum period to 12 months, removing the discretion of the tribunal to make a banning order for a shorter period. This chapter on banning orders seeks to impose stronger penalties on the worst offenders. I have heard the hon. Lady’s strength of feeling and I think that is shared by many members of the Committee.
Teresa Pearce
The legislation states a minimum of six months. Is a maximum period envisaged? Would the Minister consider that in certain circumstances it would be right for the court to give a much longer banning period than six months?
Mr Jones
I hear what the hon. Lady says and I hope that she takes my comments on the minimum period in the spirit of consensus intended. I reassure her that we will look at this very carefully on Report. On her point about the maximum time for the banning order, there is no maximum; actually, the ban could be for life. I hope that reassures the hon. Lady and that she is reassured about the minimum period of a banning order. On that basis and in the spirit of the good-natured debate we have had, I hope she will consider withdrawing the amendment.
Teresa Pearce
I am pleased to hear that the banning order is a minimum period and that it could be for life. We will have to examine it as it progresses to the courts to see how effective this is. Clearly we all want the same thing, which is to improve standards and rid the sector of the people who are exploiting tenants and often exploiting housing benefit as well.
To return to amendment 105 about accredited training, the Residential Landlords Association offers accredited training to its members, but the people we are considering here would not be part of that training. They would not be interested in that training; they are just interested in taking the money. So I understand what the Minister says but we are looking at clause 16, about duration and effect of banning order—what we want for the effect of banning order is not just to take people out of the sector for a while but for them to be changed characters if they are to come back. Some training or proof that they have improved their standards would be beneficial. However, given the reassurances from the Minister, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Teresa Pearce
I beg to move amendment 103, in clause 16, page 10, line 9, at end insert—
“(5) The court may issue a rent repayment order as provided in Chapter 4 of this Part during prosecution of a landlord or letting agent for a banning order offence.
(6) The court may issue a rent repayment order as provided in Chapter 4 once prosecution of a landlord or letting agent for a housing related offence has commenced and before proceedings have concluded.”
This amendment would allow the court to issue a rent repayment order whilst prosecution for a banning order or housing related offence is underway.
The amendment would allow the court to issue a rent repayment order at the same time as prosecuting for a banning order or housing related offence. We are no doubt all aware of the pressures on court services in this country and the pressures on time and resource. Accessing court services costs money whether you are a tenant or a local housing authority and court fees and legal representation can be an unnecessary burden.
I hope the Minister will be able to outline what conversations he has had with the Secretary of State for Justice about the further pressures that will be placed on court services. Most banning orders will follow a criminal conviction, and this will provide a perfect opportunity to kill two birds with one stone. During the court procedure it could be appropriate for the court to make a decision on a rent repayment order. The current alternative, as proposed in the Bill, will be for one court case for a criminal conviction and then for the local housing authority to—[Interruption.]
The Chair
Order. Mr Thomas, it is a discourtesy to be speaking. Will you calm down? You move amendments, you speak to the debate, you raise questions and you debate a number of issues. Please calm down. I call Teresa Pearce.
Teresa Pearce
Thank you, Sir Alan. The current alternative, as proposed in the Bill, will be for one court case for the criminal conviction and then for the local housing authority to apply for a rent repayment order, requiring a whole new court case. That would lead to greater pressure not only on court time but on the time of local authorities that would have to complete the processes necessary to bring it to court. The court could have the power to provide for a rent repayment order when prosecuting a landlord or letting agent for a banning order offence and a housing-related offence.
In addition, that alternative would put further pressure on tenants, many of whom would be unable to seek redress for a rent repayment order through the financial hurdles they need to cross. In written evidence Crisis and the Housing Law Practitioners Association showed support for amendments that would give judges the power to issue a rent repayment order. Crisis noted the lack of claims made for rent repayment orders elsewhere in the sector and noted:
“Currently very few claims are made for RROs, largely because prosecutions are very low and tenants find it difficult to apply to the First Tier Tribunal to do so. Crisis would be supportive of amendments that would give judges the power to issue a RRO when they prosecute a landlord. This would help reduce costs/burdens to local authorities and tenants, who would have to make a claim to the First Tier Tribunal for a RRO following a successful prosecution.”
The Housing Law Practitioners Association suggested in written evidence that, in addition, courts
“should be given power to make a ‘banning order on conviction’. Civil restrictions flowing from criminal convictions are now a very common aspect of our law…It would provide a quick and simple route for those ‘clear’ cases where it is obvious that the landlord/agent should be banned, e.g. a conviction for unlawful eviction, violence against a tenant, fraud against the housing benefit authorities…It will also help to ensure that the residents of any local authority which is reluctant to exercise the new powers (perhaps because of budgetary constraints) receive some protection against rogue landlords”.
It is clear to Opposition Members that it would be beneficial for an amendment to allow courts to provide a rent repayment order when prosecuting for a banning order or housing-related offence. For those reasons, we would like the Minister to consider allowing courts to issue a rent repayment order at the same time as they are prosecuting.
Mr Jones
The amendment would insert a subsection that would enable the courts to make a rent repayment order against a landlord or property agent while a prosecution for a banning order offence is under way but prior to conviction.
Giving courts those powers presupposes guilt and undermines the presumption of innocence required for a fair trial. The amendment’s proposals also pose logistical challenges, in particular in the involvement of two distinct sentencing bodies. Rent repayment orders are civil sanctions issued by the first-tier tribunal and are issued on application by a local authority or the tenant. Magistrates courts deal with housing offences that are criminal. Since the magistrates courts do not deal with civil sanctions against rogue landlords and property agents, the amendment would burden them with a new and unnecessary responsibility. If the magistrates court did not convict, the court would also have wasted its time.
Mr Jones
I hear what the hon. Gentleman says. In that regard, as he knows, the magistrates court can hear the case. If the court decides that the person who has breached the banning order is guilty, it can impose a criminal sanction against the individual or individuals involved through a fine or, as I mentioned earlier in my comments, a prison sentence. We must draw a distinction between that and a civil penalty that can be applied for in the county court. At that point, as he knows, local authorities can bring the civil action to trial and obtain a rent repayment order.
The hon. Gentleman’s point is interesting and requires further consideration. I am thinking through the matter on my feet, but it requires more careful consideration, and I am certainly willing to listen to his comments and take them away from the Committee.
Teresa Pearce
This is more of a probing amendment, so I am happy to withdraw it, but I ask the Minister to keep a close eye on the issue. We do not want the fact that some people find it difficult to access the courts to mean that they do not get the justice that they deserve. For instance, a couple of my local courts are overcrowded with cases at the moment, and people are having to wait a very long time for an inefficient service. I would not want that to get in the way of what we are trying to achieve in the Bill. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider Government new clause 2—Revocation or variation of banning orders.
Mr Jones
I beg to move amendment 14, in clause 17, page 10, line 15, leave out
“that applied for the banning order”
and insert
“for the area in which the housing to which the conduct relates is situated”
This amendment changes which local housing authority may impose a financial penalty where a person breaches a banning order. At the moment the authority that originally applied for the banning order is responsible for imposing a penalty; the amendment will make the authority where the breach occurs responsible.
Amendment 14 allows a local housing authority in whose area a person is acting in breach of a banning order to apply for a civil financial penalty against the person. New clause 3 makes the breach of a banning order a criminal offence, so the imposition of a financial penalty is an alternative to prosecution, but the local authority cannot impose a civil penalty unless it is satisfied that the offence is being or has been committed.
A local housing authority cannot impose a civil penalty when the person has been convicted in court of a breach of a banning order or where a prosecution has begun in relation to the same conduct; and the prosecution may not be brought against the person who has had a civil penalty imposed against them in respect of the same conduct. Subject to a right of appeal, the financial penalty that can be imposed for a breach is at the discretion of the local housing authority subject to a maximum of £5,000.
Local housing authorities will be able to retain fines they receive as income. Under subsection (7), the Secretary of State may make regulations specifying how financial penalties recovered under the clause are to be dealt with. Broadly speaking, we envisage that such sums should be used in connection with the authority’s private sector housing functions, but we will discuss the details of how the income is to be applied with key interested bodies before making those regulations.
Schedule 1 sets out the procedures for imposing a financial penalty. The authority must serve a notice of intent on the person whom it intends to charge the penalty to. That notice must be served within six months of the authority having sufficient evidence of the breach, or, in the case of an ongoing breach, within the period of six months from when the breach last occurs.
The notice must specify the amount of penalty the authority proposes to charge, the reason for imposing the penalty, and that there is a right to make representations within 28 days. After the period for making representations has expired, the local housing authority must decide whether to impose the financial penalty and, if so, the amount. If it decides to impose a penalty, the authority must serve a final notice specifying the amount of penalty, the reason for imposing it, how it is to be paid, and by when. The final notice must also provide information about the right to appeal and the consequences of failing to pay. Payment must be made within 28 days of the service of the final notice unless there is an appeal against it.
Paragraph 10 of schedule 1 deals with appeals against a final notice. An appeal is to the first-tier tribunal and can be made against a decision to impose the penalty or against the amount and must be made within 28 days of the service of the final notice. If an appeal is made, the final notice is suspended until the tribunal makes a decision or the appeal is withdrawn. The tribunal may confirm, vary or cancel the final notice. Paragraph 11 provides that if a person fails to pay the penalty, the local authority can recover it through proceedings in the county court.
Finally, clause 17(9) enables the Secretary of State to issue guidance that local housing authorities must have regard to when imposing financial penalties for breaching banning orders.
Amendment 14 agreed to.
Amendments made: 15, in clause 17, page 10, line 17, leave out from “same” to end of line 20 and insert “conduct”
This amendment is consequential on NC3.
Teresa Pearce
I beg to move amendment 101, in clause 17, page 10, line 22, leave out
“, but must not be more than £5,000.”
This amendment would allow for an unlimited financial penalty for a breach of a banning order.
The Chair
With this it will be convenient to discuss amendment 102, in clause 17, page 10, line 22, leave out “£5,000” and insert “£20,000”
This amendment would increase the financial penalty imposed for breach of a banning order from a maximum of £5,000 to a maximum of £20,000.
Teresa Pearce
Amendments 101 and 102 go together. Clause 17 sets out the financial penalty for breach of a banning order and we are seeking, first, to remove the limit for the breach of a banning order, and, secondly, to change the maximum fine from £5,000 to £20,000. As was said earlier, we support the measures to tackle rogue landlords, to ensure security and safety for tenants and to penalise criminal landlords. We believe that banning orders should help drive up standards and protect tenants, but for banning orders to work they must penalise and target the few criminal landlords who bring down the name of the private rented sector. Those who breach a banning order deserve to be penalised appropriately.
For a criminal landlord, who may have committed a crime such as violently securing entry or harassing their occupiers, to be given a banning order and to breach it and only to face a fine of £5,000 is wrong. It is not in keeping with the spirit of this part of the Bill to tackle such rogue landlords. If a landlord has committed such an offence and gets caught letting a property in breach of that banning order, he will be fined less than he would if he got caught speeding on his way home. If a rogue landlord owns multiple properties, particularly in London, where market rates are obviously much higher, he could raise the funds to pay that fine in just a few weeks, so I believe there is no deterrent. Why was £5,000 thought to be an appropriate maximum financial penalty? By removing the upper limit, the Bill would provide a greater deterrent to those considering breaching banning orders. It would penalise further and recover extra moneys from criminal landlords, which would help drive up standards by ensuring that criminal landlords do not return to the sector.
Secondly, we are proposing to change the maximum to £20,000 from £5,000. That will create a further deterrent to criminal landlords considering breaching a banning order and will penalise those who do. As I said, if a rogue landlord owns multiple properties, particularly in London, where the market rates are high, it would not take very long at all for them to raise the money to pay £5,000. We believe that £20,000 is much more of a deterrent. The figure of £20,000 was drawn from the financial penalty for letting a licensed house in multiple occupation to more than the maximum number permitted. Therefore, we believe that there is a precedent for that level of fine. I would like to hear from the Minister why £5,000 was considered to be appropriate and what his view would be on a higher figure.
Mr Thomas
I support my hon. Friend’s amendment and I shall quote a number of examples which have received coverage. They are examples of rogue landlords and how they have been dealt with by the courts.
I draw attention to an article in the Conservative party’s newspaper of choice, The Guardian. According to that article, figures released last summer through a freedom of information case against the Ministry of Justice reveal that there were just over 2,000 convictions of rogue landlords between 2006 and 2014—that is, nicely, the last four years of a great Government and the first four years of a dismal Government for us to look at. The resulting fines in those 2,000 cases were just £3 million—less than £1,500 per conviction. One of those convicted was a man called Andreas Stavrou Antoniades, a landlord who converted a north London terrace into nine flats. He was given the maximum fine at the time, some £20,000—the equivalent of little more than two month’s rent from one property. The article goes on to say that the campaign group Generation Rent has suggested that criminal landlords rake in some £5 billion in rent a year.
The Minister has said that there are, in his estimate, some 10,500 rogue landlords. Clearly, if there is consensus on the Committee that we want action against those rogue landlords, we need housing authorities to move quickly. If they are going to take action quickly against rogue landlords, inevitably there will be a desire within housing authorities to know that the sanctions imposed on those landlords have real and significant teeth that will be a real deterrent to the often very rich individuals who benefit from very poor behaviour, and get them to change their behaviour.
At the moment, particularly in London, where rents are so expensive, we run the risk of fines just being written off as a business expense. I encourage the Minister to look with favour on my hon. Friend’s amendment, to send a much stronger and stiffer signal to stop criminal and other bad behaviour.
Mr Jones
I hear what the hon. Member for Erith and Thamesmead has said. In the spirit of co-operation, as was the case earlier, I also hear what the hon. Member for Harrow West has said, albeit he said it in a fashion that was not as subtle and conciliatory as that of the hon. Member for Erith and Thamesmead, who is on the Opposition Front Bench.
These amendments would increase the financial penalty for a breach of a banning order, either by making it unlimited or by raising the upper limit to £20,000. It is right that the breach of a banning order carries a strong penalty. This Committee has already considered Government amendments to make the breach of a banning order a criminal offence and, as we discussed earlier, a banning order—if taken to its ultimate conclusion—can end in a ban for life against a rogue landlord. However, these amendments would mean that a breach of a banning order could still result in a civil penalty as an alternative alongside the option of the criminal prosecution, which I mentioned earlier and which we discussed at greater length earlier.
I have certainly heard the strength of feeling from the Opposition Front Bench and from the hon. Member for Harrow West. We are considering this issue carefully. Obviously, we want penalties that are set high enough to ensure that they make a real difference and have the desired effect on rogue landlords. So, we hear the arguments that a limit of £5,000 may not be sufficient, and on the basis that we are willing to look at what the hon. Lady has put forward and consider it on Report, I hope Opposition Members will agree to withdraw the amendment and enable the Government to consider these points further, and the level of the penalty, before the Bill comes back on Report.
Teresa Pearce
Given what the Minister has said—I am taking him at his word—it seems that we may have some agreement here, and given that he seems to have intimated to the Committee that the Government will look at the level of the penalty and perhaps increase it, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 16, in clause 17, page 10, line 22, at end insert—
“( ) The responsible local housing authority may not impose a financial penalty in respect of any conduct amounting to an offence under section (Offence of breach of banning order) if—
(a) the person has been convicted of an offence under that section in respect of the conduct, or
(b) criminal proceedings for the offence have been instituted against the person in respect of the conduct and the proceedings have not been concluded.”
This amendment ensures that a person does not end up with a financial penalty as well as a conviction for the criminal offence created by NC3.—(Mr Marcus Jones.)
Mr Thomas
I beg to move amendment 94, in clause 17, page 10, line 27, leave out subsection (7).
This amendment would ensure local housing authorities would be able to retain any financial penalties recovered under Clause 17.
I hope that the Minister continues to feel in a sufficiently good mood to consider this amendment with enthusiasm. If he wanted to intervene on me very early on and say that it is indeed his intention that local housing authorities will be able to retain any financial penalties recovered under this clause, clearly I would not need to dwell any further on the case for the amendment. As he has stayed firmly in his seat, focusing on his notes, let me make the case a little further. Quite rightly, the Minister alluded to the fact that, as a result of this legislation, it would be incumbent on housing authorities to take action whenever they see a rogue landlord in action and can gather evidence of malpractice. I suggest to him and to the Committee that we have to live in the real world. In a case of declining budgets and cuts, local authorities on occasion have to make tough choices, and it may be that other parts of a housing authority’s responsibilities have to take precedent. Although some prosecutions may take place, there may be other prosecutions that might not go ahead, if additional resources are not available.
My amendment seeks to ensure that the resources that are recovered as a result of clause 17 go to the housing authority, so that they can be invested in action against rogue landlords, and so that there can be confidence that we will see progress in getting the Minister’s figure of 10,500 rogue landlords down to a better limit, more quickly. It cannot be that any of us would want to have such a large figure of rogue landlords operating, feeling that they can do so willy-nilly and that if they get taken to task by the courts, that will almost be by accident. I think the Minister said that he expected just 600 cases a year as a result of the new legislation. That suggests that it will take us a very long time before we can eliminate the full list of rogue landlords.
I give credit to the Government for wanting to bring forward legislation to deal with the issue, but I gently suggest that we need to make sure that those we are going to vest with legislative power to do more against rogue landlords have the resources available to them, so that they have the means to take action and use these powers. My humble amendment perhaps offers a small glint of light to hard-pressed housing authorities that there will be some additional resource that they might get as a result of their efforts to bring bad landlords to justice, which they can use to reinvest in taking further measures against other rogue landlords.
Mr Jones
The amendment, as drafted, would have the effect of removing the power to make regulations specifying how local authorities are to deal with fines received under this clause. I have looked at the clause put forward by the hon. Gentleman and I think there is a little confusion. He refers to “fines” within his clause, but I think he may mean civil penalties. That said, local housing authorities will be able to retain the penalties that they receive as income. Under subsection (7) the Secretary of State may make regulations specifying how financial penalties recovered under clause 17 are to be dealt with. Broadly speaking, we envisage that such sums should be used in connection with an authority’s private housing sector function, but we will discuss the details of how the income is to be applied with the key interested bodies before we make those regulations.
Teresa Pearce
Is the Minister saying that those penalties would be ring-fenced for the specific purpose of bringing the private rented sector up to a reasonable standard? Is that what he is intimating?
Mr Jones
We are saying that those penalties should go to the local authority. We want to consult with interested bodies, particularly the local authorities, in relation to how we make these regulations and how they work; whether we ring-fence or not and whether the money is put toward the private rented sector housing function of an authority or not.
As I have made clear, our intention is that the money that is recovered should be used. This is the basis on which we shall discuss this with interested parties: it should be used for the private rented sector housing function within the particular authority in question.
Stephen Hammond
I think the hon. Member for Harrow West and I must have heard a different answer from my hon. Friend the Minister. I heard him say that if I could work with his officials to ensure that access to the database would be on an anonymised basis, he would bring forward on Report broadly the amendments I am proposing, but with the caveat that he wants anonymisation of the database. That would fulfil the Mayor’s purpose, because the Mayor wants access to the data for statistical and research purposes.
I am pleased to hear that the Minister has accepted the concept of the amendments. I am sure that he and I will be able to work together to bring forward some wording on Report—I am afraid I heard a slightly different conversation from the hon. Member for Harrow West. On that basis, given the Minister’s warm welcome for the concept and his warm words of reassurance, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Teresa Pearce
I beg to move amendment 106, in clause 30, page 14, line 9, at end insert—
‘(2) Tenants and prospective tenants may establish whether an individual is listed on the database through their local housing authority.”
This amendment gives tenants and prospective tenants the ability to check with their local housing authority whether their current or prospective landlord or letting agent is listed.
We seek to amend clause 30 to give tenants and prospective tenants the ability to check with the local housing authority whether their current or prospective landlord or letting agent is listed on the database of rogue landlords or letting agents. We believe this simple amendment will fundamentally strengthen the measures in the Bill to tackle rogue landlords and will help to safeguard tenants from criminal landlords.
The amendment would allow tenants and prospective tenants to protect themselves from the select few landlords who breach their obligations towards tenants. At present, there is no scope in the proposals for tenants or prospective tenants to establish whether their landlord is on the database. There is no protection for tenants and no way for them to identify whether the landlord is subject to a banning order or not. The amendment seeks to enable tenants and prospective tenants to make an inquiry with their local housing authority, which could be answered with a simple no. If it were established that the landlord was indeed on the database, the local authority would be aware that a criminal landlord was operating in breach of their banning order.
Grahame M. Morris
That is a very important principle. Is there not an inconsistency in the Government’s approach? For example, they publish lists of employers who pay below the minimum wage—naming and shaming them— and Ofsted reports on school performance. That information is available. Is not the problem of rogue landlords in many ways a more serious matter and should the information not be more widely available?
Teresa Pearce
I agree that the more open and transparent the database is, the better it can ensure that standards are upheld. However, I have been contacted by a number of people who wish to see the database placed online, where it can be accessible to the public. Although I understand that and support their motives, a fully open database could lead to confusion. There could be landlords with similar names, they could be wrongly targeted or avoided by tenants, and any landlords who wish to reform following a conviction may be unable to find business. We are asking not for a fully open database, but tenants should be able to approach the local authority and ask whether someone they are about to rent a property from is on that database. The answer could be a no or a yes, in which case the local authority would know that that person was breaching their banning order.
A measure such as this has been met with support in the written evidence. Crisis noted its support for amendments that would allow local authorities to “share information”, which it believed would strengthen enforcement work. It noted the difficulty in targeting rogue landlords who move their business from one area to another. By allowing for a check, the database would become a greater deterrent. What deterrent is there for rogue landlords to be listed on a hidden database? They could take advantage of tenants, who would have no idea whether they had previously been convicted of a housing offence and no way of checking. With such checks, the database will provide for greater punishment of rogue landlords who engage in criminal activity, as they will know that that will be recorded and potentially made available to the public. At present, only local housing authorities can make those checks.
With such a check, standards will increase, as rogue and criminal landlords, following conviction of a housing offence, will be less likely to return to the sector and, even if they do, they will be found out faster. Tenants will therefore have greater power against rogue landlords and, with the local housing authority, will be able to root out the worst offenders. The database will also be of greater use to local housing authorities in enforcement work.
Grahame M. Morris
It is a pleasure to serve under your chairmanship, Sir Alan. I rise in support of my hon. Friend. We welcome the creation of a database of rogue landlords that will allow local authorities to share information, but will the Minister clarify why it will not be more broadly accessible? As my hon. Friend said, the Opposition do not believe that the database should be freely available, but a prospective tenant should be able to check whether their potential landlord is a rogue landlord with criminal convictions.
There are precedents and consistency issues to consider. We are used to seeing Ofsted reports, and while concerns were raised about whether they added value, it is now generally accepted that they are a valuable tool for parents and society more broadly. The Care Quality Commission’s reports about care homes and GP services are shared not just with their commissioners. Indeed, these days even hygiene ratings in takeaways and restaurants are available for the public’s inspection. All that is available to help the public to make informed choices and question the quality of the services they receive. Therefore, there is certainly merit in allowing prospective tenants to check whether a prospective landlord or letting agent is or has been on the register, because that would help them to make an informed choice and secure decent housing. I hope the Minister will consider that.
My hon. Friend the Member for Harrow West referred to Shelter’s report, “Safe and Decent Homes”, and that organisation gave evidence to the Committee. This is a huge problem. The hon. Member for Peterborough said that only a relatively small number of landlords are rogue and criminal in their conduct.
Teresa Pearce
Thank you, Sir Alan. The Minister misunderstands what the amendment is meant to do. We are trying to establish a way for tenants and prospective tenants—someone who is about to enter into a legal lease—to check with the local authority whether the person offering the lease is a fit and proper person. Someone could call up their local housing authority and say, “This person has offered me a lease. Are they fit and proper, or are they a banned landlord?” If the answer is no, and the landlord is not on the list, the person could proceed, or remain silent if the landlord is on the list. The only other way of giving individual tenants such protection would be to give some sort of kitemark to all landlords except those who are not fit and proper, which would be onerous.
The amendment is quite simple, but I thought long and hard before tabling it. Many people contacted me to say they wanted a public database, which I think would be a step too far, because there could be misunderstandings if there are people with similar names. That would not be right.
Matthew Pennycook
I appreciate that the Minister did not want to take an intervention, but it is important the Committee gets some clarity on this. What is different in data protection terms about the rogue employers that are named, shamed and listed by the Government? Why can the deviation or derogation from the Data Protection Act in that respect not apply in this respect, to empower tenants?
Teresa Pearce
I completely agree. We should be protecting people from engaging in a legal lease with someone who the local authority knows should not be offering that because they have been banned. We would therefore like to press the amendment to a vote.
Question put, That the amendment be made.
Brandon Lewis
The clause specifies that the amount to be repaid to a tenant or local housing authority is to be the maximum that the first-tier tribunal has power to order in certain circumstances. Those circumstances are, first, that the order is made against a landlord who has been convicted by a court of an offence to which the chapter applies, or who has received a civil penalty in respect of the offence, and that the period of appeal against the penalty has expired or any appeal has been finally determined or withdrawn.
Secondly, the maximum will be payable when the order is made in favour of a local housing authority in respect of any offences to which the chapter applies. Where the order is made in favour of a tenant, however, the maximum will be obligatory only in respect of the new grounds of commission of an offence of violent entry, or of unlawful eviction or harassment, failure to comply with an improvement notice or breach of a banning order, but not in respect of a licensing offence. When the first-tier tribunal considers repayment of the full amount unreasonable because of exceptional circumstances it might not be required.
Question put and agreed to.
Clause 40, as amended, accordingly ordered to stand part of the Bill.
Clause 41
Enforcement of rent repayment orders
Teresa Pearce
I beg to move amendment 111, in clause 41, page 19, line 10, at end insert—
“, and about what extra charges the local housing authority may levy to fund investigation, enforcement, and other matters related to the operation of rent repayment orders.”
This amendment would ensure that local housing authorities are able to levy a landlord who is ordered to pay a rent repayment order, in order to fund their related activities.
The amendment is probing, so we only want some clarity from the Minister. It would enable a levy by local housing authorities to fund investigation, enforcement and other matters relating to the operation of rent repayment orders. The Bill allows the orders to be covered by the local housing authority in cases of universal credit or housing benefit, or by tenants. We welcome the provision, which seeks to ensure that tenants are not at a loss financially after their landlord commits a housing offence or if they let from a landlord in breach of a banning order. Local housing authorities, however, might have no incentive to investigate allegations.
Clauses 42 and 43 mandate authorities to consider applying for a rent repayment order and to assist tenants in applying for one, but under clause 41 the powers rest with the Secretary of State to make provision by regulation for how local housing authorities are to deal with amounts recovered under rent repayment orders. We do not know what the secondary legislation will be, so the amendment would ensure that the local housing authorities are able to levy additional moneys from a landlord who is ordered to pay a rent repayment order to fund their investigations and enforcement actions.
If rent repayment orders are to be successful operationally, local authorities need to be able to fund their work. The amendment seeks to introduce a measure that would allow them to do so. Will the Minister outline his view of how local housing authorities should use the amounts recovered and whether they are to receive a proportion of receipts to compensate them for their investigatory work? Local authorities will be expected to do a great deal, whether assisting a tenant or acting on their own behalf. There will be pressures on council staff time and resources and, should the matter go to the first-tier tribunal, there will undoubtedly be more legal costs or costs for legal advice.
Grahame M. Morris
My hon. Friend is making an important point and I am interested to hear the Minister’s response. I am thinking, once again, about some of the acute problems we have in east Durham with absentee landlords. Many of them have bought up large blocks of properties and there is difficulty in identifying who actually owns them. Given the pressures that local authorities are under, it would be useful if they were in a position to recover some of the costs.
Teresa Pearce
That is what we are probing, and I hope to hear the Minister’s view on that. Without such compensation, local authorities could be unmotivated to act. When local government finance is squeezed, it is incredibly important for local authorities to be able to undertake fully any additional work that we expect of them. We must ensure that they may take on their responsibilities.
Helen Hayes (Dulwich and West Norwood) (Lab)
Does my hon. Friend agree that if the Government do not accept the amendment it will be yet another example of their determination to ensure that their regulatory framework for rogue landlords lacks teeth? We have just heard the Government refuse to allow tenants the opportunity to use the database of rogue landlords to inform their consumer choices about whether to rent a property. By refusing to allow local authorities the ability to levy charges to cover the additional burdens associated with rent repayment orders, this will inevitably hamper their ability to undertake effective investigation and enforcement. The Government are introducing regulations that will effectively have no teeth in practice.
Teresa Pearce
I completely agree. Some local authorities will be able to do this, but some local authorities simply will not be able to do it because they do not have the funds. We have moved this probing amendment to ask the Minister whether that has been considered and how the Government intend to make the measure work if a local authority does not have the resources to carry out the work set out in the Bill.
Brandon Lewis
I am slightly surprised by some of the comments made by the hon. Member for Dulwich and West Norwood. Bear in mind that, as I think those on both sides of the Committee have agreed—it has certainly been agreed outside—there will be a fairly stringent set of measures to do what we can to crack down on rogue landlords. The hon. Member for Harrow West mentioned a situation in my constituency that I think I mentioned on Second Reading, and those are exactly the sorts of landlords we need to drive out of the system. I absolutely support anything we can do to do that. It is disappointing that Labour did not do those things in 13 years and it has taken a full Conservative Government to get to grips with the issue.
The hon. Member for Dulwich and West Norwood might also want to look back at the comments made by the Under-Secretary of State on what we will consider in order to ensure that the list is properly used and well used, allowing for the Data Protection Act issues and the fact that sometimes these are organisations that have a legitimate right to run their business. Criminal prosecutions and banning orders are still part of the process; I think the hon. Lady has forgotten some of what was debated earlier.
In response to the hon. Member for Erith and Thamesmead, other measures proposed in the Bill will allow local authorities to retain civil penalties and to receive moneys from rent repayment orders where the rent has been paid from housing benefit or universal credit. Local authorities can also recover their costs from prosecutions; we have to get the balance right so that we do not make the system disproportionate by imposing a levy on top of those other financial penalties that can be levied and held by a local authority. With that explanation, and although I have great sympathy for her ethos, I hope she will be able to withdraw her amendment.
Teresa Pearce
My concern is that different local authorities operate in very different ways. Some are resourced and some are not, and I would not want tenants in one local authority not to have the same protection as tenants in another local authority, but I accept what the Minister says. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.