HC Deb 30 July 1974 vol 878 cc648-55

"After subsection (2) in section 73 of the Rent Act 1968 (powers of rent tribunals on reference of Part VI contracts) there shall be inserted the following subsection— (2A) Where on reference of a Part VI contract under which the rent includes payments for rates then—

  1. (i) the Rent Tribunal shall determine what part of the rent is payable exclusive of rates and what amount of rates it is just and equitable that the tenant shall pay for the rating year then current;
  2. (ii) for the purpose of this subsection the Rent Tribunal shall have the powers of a Court or Judge to apportion the rateable value of the building of which the dwelling house forms part; and
  3. (iii) the amount so determined as payable by the tenant in respect of rates may be increased or decreased as though the letting was one to which Section 23 of the Rent Act applies".'—[Mr. Rossi.]

Brought up, and read the First time.

Mr. Rossi

I beg to move, That the clause be read a Second time.

Mr. Speaker

With new Clause 15 we are to discuss Amendment No. 12, in page 6, line 11, at end insert: '(3) In section 73 of that Act there shall be inserted the following subsection: (7)(i) a person intending to let on a furnished tenancy a dwelling house which is not for the time being subject to such a tenancy may apply to the Rent Tribunal or Rent Officer as the case may be for a Certificate to be known as a certificate of approved rent; (ii) a certificate of approved rent shall specify the rent which in the opinion of the Rent Tribunal or the Rent Officer would be a reasonable rent for the dwelling house taking into account the accommodation offered, the services provided, the sharing of facilities, and the quantity, quality and condition of the furniture and cost of its replacement; (iii) a certificate of approved rent shall also contain full particulars of the accommodation to which it relates, the services to be provided, the sharing of facilities, and a schedule of the furniture to be supplied and its condition; (iv) a copy of the certificate of approved rent shall be handed to any intended tenant by the landlord and shall form the basis of the letting between them; (v) a copy of the certificate of approved rent shall also be registered in the register kept under section 74 below; and (vi) save as provided by subsection (5) above no variation shall be made by the landlord in the rent payable under the certificate of approved rent except in accordance with such indexation as the Secretary of State shall prescribe at yearly intervals by statutory instrument"'.

Mr. Rossi

Two separate principles are involved. The clause deals with the situation in which there is a rent quoted inclusive of rates. That is normally the situation with a furnished letting. However, it is often necessary that that part of the rent which is attributable to rates should be identified, particularly when the rates increase and it is necessary for the landlord to pass on the increase to the tenant, as that is not a profit to the landlord. It is an outgoing that he has to pay to the local authority, and he is entitled to pass on the increase to his tenant.

Problems often arise because, with furnished lettings in particular, where the accommodation is in the landlord's own home, the let premises have rarely been separately assessed for rating purposes. The Rent Acts provide a machinery whereby the tenant and the landlord can together agree the apportionment of the rateable value of the whole of the house and arrive at an agreement on what part of the total rateable value is attributable to the part of the premises which are the subject matter of the furnished letting. Where there is no agreement, the matter has to be referred to a county court and the county court judge has power to apportion.

In Committee the view was expressed that it seemed singularly unfortunate that there were three separate administrations having to deal with the relationship of landlord and tenant. If questions of harassment or missing rent books arise, the parties go off to a magistrate to deal with them under the criminal code. If it is a question of arriving at the rent, they go to a rent tribunal. But if they have problems as to possession or the terms of the tenancy they go to the county court. Three separate sets of proceedings can apply out of virtually the same set of circumstances.

Mr. Speaker

Order. I think that that is not a proper posture that the hon. Member for Burton (Mr. Lawrence) is adopting.

Mr. Rossi

What we are seeking in this instance, where no great harm or difficulty can arise, is to have the rent tribunal deal with a relatively simple issue, so that when the parties go before a rent tribunal to consider questions of rent, at one and the same time the rent tribunal can deal with any questions as to apportionment of rateable value that might arise. The same hearing can deal with all questions related to the rent, rates and the apportionment of the rateable value.

Rent tribunals are composed of a triumvirate, consisting normally of a lawyer, a professional valuer and a layman. One would have thought that a rent tribunal experienced in dealing with valuations as to rent would be equally competent to do the arithmetic necessary in splitting up the rateable value of a building as between the component parts. Therefore, we suggest it as a matter of great convenience to landlords and tenants, and particularly to rent tribunals, which would welcome having to do it instead of having to send parties elsewhere for determination.

In Amendment No. 12 we are seeking to introduce a new machinery very similar to that which exists in respect of rent officers. A rent officer can in certain circumstances certify what is the fair rent of the accommodation before a letting actually takes place.

The amendment proposes to give a similar jurisdiction for furnished accommodation, because the certificate of fair rent up to now has only applied to unfurnished accommodation. We say that where a person intends to let a furnished tenancy … not for the time being subject to such a tenancy. … he may apply to the rent tribunal or the rent officer. We need to say that now because the jurisdictions are split, depending upon whether the landlord lives in the house.

Even though it is furnished accommodation, if the landlord lives in the house the rent tribunal is the correct forum; if he does not live in the house the parties have to go to the rent officer to determine any rental question under the Bill. Therefore, the amendments speaks of both the rent tribunal and the rent officer dealing with the question of furnished lettings where a landlord wants to know before he lets what should be the correct rent to charge. He makes his application and the rent tribunal or rent officer can specify the rent that is considered to be a reasonable rent for the dwelling, taking into account the accommodation offered, the services provided, whether any facilities are proposed to be shared between the tenant and anyone else living in the house, the quantity, quality and condition of the furniture and the cost of its replacement.

It is also suggested in the amendment that the certificate of approved rent shall contain the particulars I have just mentioned, and also a schedule or list of the furniture to be supplied and its condition. The need for that lies in the fact that if a certificate of approved rent is given by the rent tribunal or rent officer on the basis of what the tribunal or rent officer says, it would be most undesirable if questions arose at a later date of the landlord's removing or changing the furniture that had led to a particular rent being certified as reasonable.

Therefore, to avoid that situation arising, it would be necessary, for the certificate to contain a list of the furniture and an indication of the condition. Then the certificate of approved rent issued by the rent tribunal or the rent officer would be handed to the intended landlords with a copy of the certificate signed by the rent officer or someone on behalf of the rent tribunal and that would form the basis of the letting between the parties. It would stipulate the rent payable and certified as reasonable. It would also certify the accommodation and give details of it and of the services and state whether there was any sharing of facilities, and it would list the furniture. For a double security—a double lock, as it were, on the situation—a copy of the certificate of approved rent would be kept in a register.

11.30 p.m.

Finally, the new clause states that no variation could be made by the landlord in the rent payable under the certificate of approved rent except in accordance with such indexation as the Secretary of State prescribed by statutory instrument at yearly intrvals. The extent to which he authorised a percentage increase in rents in any given year to take care of the cost of repairs and maintenance and the cost of furniture would be entirely a matter for the Secretary of State, having regard generally to the cost of living within reasonable limits and ensuring fairness between the parties in view of the ordinary contingencies of life.

The protection of the tenant would be the certificate issued in advance by the rent tribunal or the rent officer, and the protection of the landlord would be that, having gone through this procedure and found what was a reasonable and fair rent—the term that one uses does not matter—having found the rent stipulated by an independent body, the landlord would know that the tenant, entering that bargain with his eyes open, would not later be able to cause difficulties about the certified quantum of rent.

The objective of the new clause is to remove much of the difficulty that can arise between landlord and tenant when the tenant feels that he is being overcharged and that the landlord is being too greedy. If the rent can be certified in advance in this way, the tenant will rest assured from the outset that he is paying a fair and appropriate rent for his furnished accommodation.

Mr. R. J. Maxwell-Hyslop (Tiverton)

Will my hon. Friend say whether what he is recommending would be national legislation or local byelaws? Has he in mind the cost of this pretty expensive apparatus? Should that cost be borne on national taxation or by local ratepayers?

Mr. Rossi

As far as I am aware, rent tribunals are not paid by local authorities. I am not sure about rent officers. They are appointed by town clerks, but I am not sure whether the local authorities pay their salaries. Even if they do, I am not sure whether they are not 100 per cent. reimbursed by the State. In any case, the apparatus already exists. The rent officers are to be supplemented by an increased staff to cope with the work that the Bill will give them. I do not think that this proposal would mean a great deal of additional work. In the long term it will reduce work, because if rents are certified in advance, fewer disputes will come before officers, with all the acrimony that such disputes entail.

Mr. Kaufman

I can lift the burden fo apprehension from the hon. Member for Tiverton (Mr. Maxwell-Hyslop) as I fear that I cannot be forthcoming to his hon. Friend the Member for Hornsey (Mr. Rossi) about the two proposals that he has put forward. There is already provision in Section 6 of the 1968 Act for the court to determine the apportionment of rateable value. Even after listening to the hon. Member for Hornsey I am still not clear why the clause should give this power to the rent tribunal, apart from the intention of saving a separate application to the court for a determination.

I had occasion to tell the hon. Gentleman in Standing Committee that the fixing of the proportion of rates payable by the tenant is no part of the rent tribunal's functions and is specifically excluded by the provisions of Clause 6. If a dwelling is not a separate rateable hereditament and there is disagreement between landlord and tenant as to the proportion of rates payable, the only proper recourse is to the court. To give the rent tribunal equivalent powers would, in our view, not produce a sensible solution.

With regard to Amendment No. 12, I shall not trouble the House with arguments, which I could advance, about the principle of a certification procedure. This is controversial. One could cite the Holy Writ, or at any rate the Apocrypha of Francis. There is no need for me to do so, however, since the procedure set out in the amendment is unacceptable to the Government. It provides that the landlord may increae the rent in accordance with an index annually prescribed by my right hon. Friend the Secretary of State without any requirement for a reference to the rent tribunal for registration of a rent increased in this manner.

One can only presume that the indexation procedure would allow a landlord, even if it was not specifically so intended, to recover a higher rent each year to take account of the effects of inflation. This, I must tell the hon. Gentleman—although I am sure he knows it—is directly contrary to the principle of rent fixing that the rent fixed relates primarily to the accommodation provided. I must also tell the hon. Gentleman that it conflicts violently with the Government's fight to hold down prices to combat inflation. I cannot, therefore, recommend the House to accept the hon. Gentleman's new clause or his amendment.

Mr. Graham Page

I am astonished at the Under-Secretary. Sometimes it is a virtue to go on playing a straight bat and be obstructive to every sort of reform procedure put forward by this side of the House. New Clause 15 represents a simple little change to reduce the procedure and to make it easy for the parties to get a decision; instead of going to the court, instead of getting one decision and taking that to the rent tribunal and having a further decision, to go to one body, the rent tribunal, and get it all decided there.

The parties have to go to the rent tribunal to decide between them what the rent may be. It is perfectly simple to have the rates apportioned there and have the matter decided. It is a burden on the county court to have to decide this as a separate issue. It is a burden on the parties to go there.

I should have thought that the hon. Gentleman could have accepted such a simple little reform of this nature. I have no doubt that at the top of his brief is written "Reject".

Mr. Kaufman

"Resist".

Mr. Page

It is sometimes "Resist" sometimes "Reject". I am delighted that it is only "Resist" because "Reject" is much firmer. I wish that the hon. Gentleman would simply cross out "Resist"" and substitute "Consider". I thought I saw a sort of smile on his face at one time and that he would allow this proposal to go through. It is such a simple little reform but it would bring great benefit to the parties and to the court or tribunal and yet it is rejected, and not even on the basis of drafting. Even if my hon. Friend the Member for Hornsey (Mr. Rossi) had not drafted it quite right, however, it would not matter if it went into the Bill now because we must have a Bill of Corrigendum next Session to correct all the mess that has been made to legislation during the past few days.

I am told that there are at least six clauses in the Housing Bill which are complete "ga-ga" and are not even intelligent grammar, let alone intelligent law. We will have to have a Bill of Corrigendum. I urge the Minister to let my hon. Friend have his amendment and if there is any drafting to be put right let it be done later.

Question put and negatived.

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