HC Deb 21 March 1973 vol 853 cc601-10

Special rent limit for existing tenancies brought within the Rent Act

1.—(1) This paragraph applies to a regulated tenancy—

  1. (a) which was granted before 8th March 1973, and
  2. (b) which would not have been a regulated tenancy but for the provisions of subsection (1) of the principal section.

(2) Subject to the provisions of this Schedule, the recoverable rent for any contractual period of a tenancy to which this paragraph applies shall not exceed the limit specified in paragraph 2 below, and the amount of any excess shall, notwithstanding anything in any agreement, be irrecoverable from the tenant.

(3) Where a rent for the dwelling-house is registered under Part IV of the Rent Act 1968 which is less than the limit specified in paragraph 2 below, neither section 20(2) (registered rent as limit for contractural periods) nor section 22(2) (corresponding provision for statutory periods) of that Act shall apply to a tenancy to which this paragraph applies.

(4) Sub-paragraphs (2) and (3) above shall cease to apply if the landlord and the tenant so provide by an agreement conforming with the requirements of section 43(3) of the Housing Finance Act 1972 (agreement to explain the nature of the tenant's security of tenure).

(5) sub-paragraph (2) above shall not apply where a rent for the dwelling-house is registered under Part IV of the Rent Act 1968 which is not less than the limit specified in paragraph 2 below.

(6) Section 33 of the Rent Act 1968 (enforcement provisions) shall apply as if any amount made irrecoverable by this paragraph were irrecoverable by virtue of Part III of that Act, and section 36 of that Act (adjustment for differences in lengths of rental periods) shall apply for the purposes of this paragraph.

2.—(1) Where at the date of the passing of this Act Article 10 of the Counter-Inflation (Rents) (England and Wales) Order 1972 applied to the rent under the tenancy (to which paragraph 1 applies), the said limit is the rent payable under the tenancy as limited by the said Article 10 immediately before that date.

(2) In any other case the said limit is the rent payable under the terms of the tenancy (to which paragraph 1 applies), at the passing of this Act.

Adjustment for repairs, services or rates

3.—(1) This paragraph applies to a contractual period the rent for which is subject to paragraph 1(2) of this Schedule.

(2) In this paragraph "the previous terms" means the terms of the tenancy (to which paragraph 1 applies) as at the passing of this Act.

(3) Where under the terms of the tenancy there is with respect to—

  1. (a)the responsibility for any repairs, or
  2. (b) the provision of services by the landlord or any superior landlord, or
  3. (c) the use of furniture by the tenant,
any difference compared with the previous terms, such as to affect the amount of the rent which it is reasonable to charge, the limit in paragraph 2 above shall be increased or decreased by an appropriate amount.

(4) Where for the contractual period there is a difference between the amount (if any) of the rates borne by the landlord or a superior landlord in respect of the dwelling-house and the amount (if any) so borne during the first rental period for which the previous terms were agreed, the limit in paragraph 2 above shall be increased or decreased by the difference.

(5) Where for the contractual period there is an increase in the cost of the provision of the services (if any) provided for the tenant by the landlord or a superior landlord compared with that cost at the time when the previous terms were agreed, such as to affect the amount of the rent which it is reasonable to charge, the limit in paragraph 2 above shall be increased by an appropriate amount.

(6) Where the previous terms provide for a variation of the rent in any of the circumstances mentioned in this paragraph, the limit shall not be further varied under this paragraph by reason of the same circumstances.

(7) Any question whether, or by what amount, the limit is increased or decreased by sub-paragraph (3) or sub-paragraph (5) of this paragraph shall be determined by the county court, and any such determination—

  1. (a) may be made so as to relate to past rental periods, and
  2. (b) shall have effect with respect to rental periods subsequent to the periods to which it relates until revoked or varied by a subsequent determination..

4. Section 25 of the Rent Act 1968 (increase for improvements) shall not apply to a tenancy to which paragraph 1 of this Schedule applies.

Premiums

5.—(1) This paragraph has effect where a premium was lawfully required and paid on the grant of a tenancy to which paragraph 1 of this Schedule applies.

(2) Nothing in section 86 of the Rent Act 1968 (prohibition of premiums on assignment of protected tenancies) shall prevent any person from requiring or receiving, on an assignment of the tenancy, the fraction of the premium specified below (without prejudice, however, to his requiring or receiving a greater sum in a case where he may lawfully do so under Schedule 11 to the Rent Act 1968).

(3) If there was more than one premium, sub-paragrah (2) above applies to the last of them.

(4) The said fraction isX/Ywhere—

  1. (a) X is the residue of the term of the tenancy at the date of the assignment, and
  2. (b) Y is the term for which the tenancy was granted.

(5) Sub-paragraph (1) of this paragraph shall apply where a tenancy has been assigned as it applies where a tenancy has been granted, and then Y in the said fraction shall be the residue, at the date of that assignment, of the term for which the tenancy was granted.

(6) In this and the next following paragraph "grant" includes continuance and renewal.

6.—(1) Where the tenancy to which paragraph 5(1) above applies was granted on the surrender of a previous tenancy and a premium has been lawfully required and paid on the grant, or an assignment, of the previous tenancy, the surrender value of the previous tenancy shall be treated, for the purposes of paragraph 5 above as a premium, or as the case may be as part of the premium, paid on the said grant of the tenancy..

(2) For the purposes of sub-paragraph (1) above the surrender value of the previous tenancy shall be taken to be the amount which—

  1. (a) if the previous tenancy had been assigned instead of being surrendered, and
  2. (b) if this paragraph had applied to it,

(3) In determining for the purposes of paragraph 5 above, or of this paragraph, the amount which may be or could have been required and received on the assignment of a tenancy terminable, before the end of the term for which it was granted, by a notice to the tenant, that term shall be taken to be a term expiring at the earliest date on which such a notice, given after the date of the assignment, would have been capable of taking effect.

Tenancies ending before passing of this Act

7.—(1) This paragraph applies where the tenancy of a dwelling-house has come to an end at a time before the passing of this Act, and the tenancy would have been a regulated tenancy if the principal section had been in force at that time.

(2) No order for possession of the dwelling-house shall be made which would not be made if the principal section had been in force at the said time.

(3) Where a court has made an order for possession of the dwelling-house before the passing of this Act, but the order has not been executed, the court, if of opinion that the order would not have been made if this Act had come into force before the tenancy came to an end may, on the application of the person against whom it was made, rescind or vary it in such manner as the court thinks fit for the purpose of giving effect to the principal section.

(4) If the tenant under the tenancy which has come to an end duly retains possession of the dwelling-house after the passing of this Act (without any order for possession having been made, or after the rescission of such an order) he shall be deemed to do so under a statutory tenancy arising on the termination of the tenancy which has come to an end, and, subject to sub-paragraph (7) below, the terms of that tenancy (including the rent) shall be deemed to have been the same as those of the tenancy which has come to an end.

(5) Where Article 10 of the Counter-Inflation (Rents) (England and Wales) Order 1972 applied to the rent under the tenancy, the rent under the tenancy imposed by sub-paragraph (4) above shall be the rent as limited by the said Article 10.

(6) Paragraphs 1 to 4 of this Schedule shall not apply to a statutory tenancy arising under sub-paragraph (4) above.

(7) The High Court or the county court may y order vary all or any of the terms of the tenancy imposed by sub-paragraph (4) above in any way appearing to the court to be just and equitable (and whether or not in a way authorised by the provisions of sections 23 and 24 of the Rent Act 1968).

(8) If at the passing of this Act the dwelling-house is occupied by a person who would, if the tenancy had been a regulated tenancy, have been the "first successor" within the meaning of paragraph 4 of Schedule 1 to the Rent Act 1968—

  1. (a) an application under sub-paragraph (3) above may be made by that person, and
  2. (b) sub-paragraphs (4), (5) and (6) above shall apply where that person retains possession as they apply where the tenant retains possession.

Mortgages

8. At the end of section 93 of the Rent Act 1968 (mortgages to which Part VIII of that Act applies) there shall be inserted the following subsection—

"(5) If at the date of the passing of the Counter-Inflation Act 1973 land consisting of or including a dwelling-house was subject to a tenancy which becomes a regulated tenancy by virtue of section B of that Act, then in relation to that dwelling-house (and any land including that dwelling-house)—

  1. (a) sections 94 and 95 below shall have effect as if for the reference in subsection (1)(a) above to 8th December 1965 there were substituted a reference to the date of the passing of the said Act;
  2. (b) subsection (2)(a) of the said section 94 shall have effect as if for the reference to the appropriate day there were substituted a reference to 7th March 1973, and
  3. (c) subsection (1)(b) of the said section 95 shall not apply."

Grounds for possession of dwelling-house

9. If at the date of the passing of this Act a dwelling-house was subject to a tenancy which becomes a regulated tenancy by virtue of the principal section, then, in relation to that tenancy—

  1. (a) Case 5, paragraph (b) of Case 10, and paragraph 2(a) of Part III, of Schedule 3 to the Rent Act 1968 shall have effect as if for the references in those provisions to 8th December 1965 there were substituted references to the date of the passing of this Act.
  2. (b) Case 8 of the said Schedule 3 shall have effect as if for the reference to 23rd March 1965 there were substituted a reference to 8th March 1973, and
  3. (c) the said paragraph 2(a) of Part III of Schedule 3 shall have effect as if for 7th June 1966 there were substituted a reference to the expiration of a period of six

Lords Amendment No. 19, in Schedule 5, page 32, line 18, at the beginning insert:

"14 & 15 Geo 6. c. 65. The Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951. In section 16(2)(a) the words "on the appropriate day"."

Lords Amendment No. 20, in page 32, line 25, at end insert:

'1967 c. 88. The Leasehold Reform Act 1967. Section 39(1)(b).
1968 c. 23 The Rent Act 1968. In Schedule 15, in the paragraph amending section 2 of the Landlord and Tenant Act 1954 the words (amending section 2(5)) from "and in" to the end of the paragraph."

and Lords Amendment No. 21, in page 32, line 28, at end insert:

'1972 c. 47. The Housing Finance Act 1972. In section 89, in subsection (1) the words " (6) and ", in subsection (2) the words " (6) and " and " 1 and ". and subsection (6).

Statutory Instrument
S.I. 1972/1851. The Counter-Inflation (Rents) (England and Wales) Order 1972. In article 9(5) the words from " and this paragraph " to the end of article 9(5).
Article 10, except as respects rent for a period before the passing of this Act "

months beginning with the passing of this Act.

Reserve and Auxiliary Forces {Protection of Civil Interests Act) 1951

10. In section 16(2)(a) of the Reserve and Auxiliary Forces (Protection of Civil Interests) Act 1951 (protection of premises by extension of the Rent Acts) the words "on the appropriate day" shall cease to have effect, and for the words "in subsection (1)(a) of section 1" there shall be substituted the words " in paragraphs (a), (aa) or (aaa) of subsection (1) of section 1 ".

Tenancies at a low rent

11.—(1) At the end of section 2(1) of the Rent Act 1968 there shall be inserted the following proviso:—

"Provided that paragraph (a) of this subsection shall apply in relation to a dwelling-house—

  1. (i) in relation to which the appropriate day fell before the passing of the Counter-Inflation Act 1973, and
  2. (ii) which had on the said appropriate day a rateable value exceeding, if it is in Greater London, £400 or, if it is elsewhere, £200,
as if for the reference in the said paragraph (a) to the appropriate day there were substituted a reference to the date of passing of the Counter-Inflation Act 1973.".

(2) In section 2(5) of the Landlord and Tenant Act 1954 (as originally enacted) for paragraphs (a) and (b) there shall be substituted the words "for the purposes of this subsection the rateable value of the property is that which would be taken as its rateable value for the purposes of section 2(l)(a) of the Rent Act 1968."

Construction

12. In this Schedule—

  1. (a)"rates" include water rates and charges,
  2. (b)other expressions shall be construed as in the Rent Act 1968."

Mr. Channon

I shall deal also with all the amendments selected.

These amendments deal with the points raised by some of my hon. Friends during the Report stage of the Bill, particularly the amendment moved by my hon. Friend the Member for Cities of London and Westminster (Mr. Tugendhat). My hon. Friend the Member for Kensington, South (Sir B. Rhys Williams) also took a leading part in the discussions. The amendments meet the point raised on that occasion. It would have the effect of raising the rateable value limit specified in Section 1 of the Rent Act 1968. The House will wish to pay tribute to my hon. Friends for the very tenacious way in which they pressed their argument. I apologise to the House for the length of the provisions. This is inevitable when one is dealing with Rent Act matters.

The effect of these amendments is that subsection (1) of the new clause sets out the amendments to Section 1 of the Rent Act 1968, which deal with the exceptions to those rents which are subject to rent regulation at present.

The point raised by my hon. Friends will be in effect to raise the rateable value limits in London from £400 to £600 and outside London from £200 to £300 for those dwellings falling into the rateable value limits which are subject to the protection of the Rent Acts. There are some smaller points, but I need not weary the House with those. I am, however, anxious to answer any questions put by hon. Members.

There is also a valuation point that where on 1st April 1973 a dwelling has a rateable value not exceeding £1,500 in Greater London and £750 elsewhere, a tenancy shall not be excluded from the protection of the Rent Act notwithstanding that it would have been excluded on the basis of its having a rateable value in excess of the limits which will obtain up to 31st March. That point was worrying my hon. Friend the Member for Kensington, South. So, for example, on enactment of the Bill, where two dwellings have rateable values of £610 in London and £310 outside London but on 1st April 1973, in consequence of rating revaluation, rateable values of £1,490 and £740 respectively, those tenancies would not be excluded from Rent Act protection. We have been able to provide that any tenancy which exists when the new valuation lists come into effect and has a rateable value in London, on the new limits, not exceeding £1,500 and outside London not exceeding £750 shall receive protection.

We have also provided that no tenant shall lose his protection as a result of consolidating on the new valuation limits. I have no need to explain that in great detail.

These measures will bring within the Rent Act about 80 per cent. of the 20,000 or so unprotected tenancies now existing, about half in Greater London and about half in the rest of the country, mainly along the South Coast. This is done mainly in the first clause which we are dealing with, in Lords Amendment No. 6. The rest of the new clause and the whole of the new schedule set out the consequential provisions which flow from a decision to raise the rateable value limits.

There is one point about the transitional position. In paragraphs 1 and 2 of the schedule we introduce the concept of a special rent limit for tenancies coming into rent regulation as a result of raising these limits. It is generally accepted that for existing tenancies paragraphs 1 and 2 provide that landlords may, where the contract allows, on enactment of these provisions, charge the tenant either the current rent, or the fair rent, whichever is the higher, for the duration of the contract. In other words, rents for these tenancies will mark time until such time as a fair rent overtakes the existing rent. In due course the current limit will disappear and the whole sector will become consolidated on the fair rent principle. This is an equitable way of dealing with these matters. The provisions will take effect immediately upon the Royal Assent. The transitional provisions are set out in the later amendments which are being discussed with the amendment which I am moving.

If hon. Members have questions I shall try to answer them but I have set out the basic points of the amendments which my hon. Friends have been so anxious to see made and which meet the very real social point they have been informing the House about for some time.

11.15 p.m.

Mr. Reg Prentice (East Ham, North)

I wish to make only a brief comment. In these discussions the Opposition will maintain the tradition of brevity which was followed by the Opposition Front Bench throughout all the stages of the Bill.

We think that the amendments do not do much to improve the Bill. It was a poor Bill before it went to the other place, and it is still a poor Bill.

We welcome the amendment, for what it is worth. At least it recognises the point which has been emphasised again and again from the Opposition, that rent is one of the most vital elements in the cost of living and the failure of the Government to recognise this point adequately will be one of the main reasons why their entire strategy is likely to collapse.

The amendment is worth while to those who will benefit from it, and I welcome it as far as it goes. But the vital concession we should like to see from the Government is the suspension of the rent increases which flow from the Housing Finance Act and the Housing Finance (Scotland) Act. I heard only a few days ago that a large number of Durham miners received in the post their strike ballot from the NUM and in the same post a notice of a rise in their rents of 75p a week as a direct result of the Act. I ask Conservative Members to reflect on what people in that position will think of the Government's counter-inflation policy and how they are likely to react in terms of their wage demands and the rest.

Therefore, this group of amendments represents to us a small degree of recognition of the vital importance of rent, but unless the Government take much more radical steps along the lines we have constantly advocated the whole of their strategy is likely to be unsuccessful.

Sir Brandon Rhys Williams (Kensington, South)

I take this opportunity of congratulating my hon. Friends and also my noble Friends in the other place on their labours in perfecting these highly technical clauses so quickly and bringing them before the House so soon. I shall not go over the reasons why it was felt to be urgently necessary to take this kind of action, but I am glad that it has received a welcome from the Opposition. The amendments will mean a great deal to many hard-pressed people in central London and other constituencies.

It is only proper that we should pay a tribute and express our appreciation for the prompt way in which this has been done. The parliamentary draftsmen deserve a special word of praise. I know a little about the complications because we almost allowed an anomaly to slip through, but they seem to have found a satisfactory way of dealing with it as a result of the representations that I and others made when we discovered that there might be a serious gap.

I should like to thank my hon. Friend the Minister on behalf of my constituents and those other hon. Members who have been particularly concerned over this issue.

Question put and agreed to.

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