RENT BILL

HL Deb 24 June 1974 vol 352 cc1235-91

8.0 p.m.

Committee stage resumed.

Clause 3 [Recovery of possession of holiday accommodation let on out-of-season tenancies]:

On Question, Whether Clause 3 shall stand part of the Bill?

LORD HYLTON

It seems to me that the whole course of the debate on the various Amendments has drawn attention to the need for a measure of flexibility in the security of tenure for furnished tenants, as opposed to complete and rigid security of tenure right across the board. A number of different special cases have been quoted and argued from both sides of the House. I should like to ask the Government to look carefully at this question of excluding from security of tenure leases for a certain known period defined in advance. This may be the key to giving just that little flexibility which is needed. I find myself in a stronger position in suggesting this because in previous housing debates, I have tried to argue for security of tenure for furnished tenants who are families, or who are old people, and for those living in the existing housing stress areas. If those tenants can be included in the general provisions of the Bill, and something could be done to exclude the fixed-period tenancies, then I think we can cover both the special cases which have been raised, and give a little less rigidity and more flexibility throughout the whole of the furnished sector.

LORD SHEPHERD

In response to what the noble Lord, Lord Hylton, has said, certainly I would wish to see in this sphere, as in most legislation, the highest degree of flexibility, because one knows that when legislating, one creates anomalies on one side of the line or the other. I will say to the noble Lord that I have approached this Committee stage and the Bill with no firmly set view. I will read again with great care all that has been said on the previous clauses to the Bill, and if there are improvements, particularly in the area of flexibility, then I will see what can be done. Within the very nature of the beast itself, to a certain extent rent legislation needs to be specific, and where there has been flexibility in the past this has been left to the courts. I will look at what the noble Lord has said. I have much sympathy with what he has in mind, and will undertake, with my advisers, to look at the whole nature of our debate on the previous clauses and see whether there are changes which are possible.

Clause 3 agreed to.

Clause 4 agreed to.

LORD SHEPHERD

I think my noble friend and the noble Lord, Lord Annan, spoke to Amendment No. 10 on a previous occasion. In view of the fact that they are not present at the moment and in the light of what they said earlier, I do not think it will be their intention to move Amendment No. 10.

Clause 5 [Furnished lettings: increase in rateable value limits]:

BARONESS YOUNG moved Amendment No. 10A:

Page 5, line 19, leave out ("£1,500") and insert ("£750").

The noble Baroness said: On behalf of the noble Lord, Lord Bethell, I beg to move Amendment No. 10A. The noble Lord has already spoken to this point on a previous discussion on whether Clause 2 should stand part. By this Amendment, the noble Lord is concerned to exclude from the provisions of the Bill certain very highly-rated flats, particularly used by people in the Diplomatic Service who are in London for a very short time, or by certain businessmen who come to London for business reasons and require somewhere to live. Both groups of people by definition are here for temporary periods of time.

The noble Lord, Lord Bethell, is anxious that so far as the members of the Diplomatic Service are concerned, it should be possible for the flats that they occupy to become vacant when their terms of duty is over. It would be helpful if the noble Lord, Lord Shepherd, could clarify for the Record the position of these people, and also the position of business people who occupy these expensive flats, again for short periods of time, while they are working in this country. Apart from the benefit that may accrue to the economy generally, I am advised that these people bring into this country enormous amounts of foreign currency. Therefore, they can be said to be making a direct contribution to our balance of payments.

However, I think the principal argument is that both groups of people are in effect here for short periods of time. These people require somewhere to live and not to be subject to security of tenure, because they often would be able to find somewhere else to live if they had to. In this case the expensive furnished flats are really suitable only for these people doing this kind of work. I beg to move.

LORD SHEPHERD

I listened to the noble Lord, Lord Bethell, with great interest when he spoke earlier and sought to reply to him. It seems to me that there is only one area of difficulty, that relating to those individuals who may be occupying premises in their own name, but are clearly doing so on behalf of a Government or a company. I was not able to help the noble Lord on that matter.

With regard to the rateable value, it is fair to point out that the 1965 Act established the same rateable value limits of £400 inside and £200 outside Greater London for both Part I—protected—and Part VI tenancies. Section 89 of the Housing Finance Act of 1972, which I think the noble Baroness, Lady Young, will remember, provided that these limits should be increased, following the 1973 rating revaluation, by Order. However, this provision was repealed as regards protected tenancies by the Counter-Inflation Act of 1973, which raised the limits applicable to those tenancies on and after April 1, 1973, to £1,500 inside and £750 outside Greater London, while those applicable to Part VI lettings on and after that date were raised by Order under the Housing Finance Act to £1,000 inside and £500 outside the Greater London area.

This clause restores the previous parity by raising the limits applicable to Part VI lettings. I can say to the noble Baroness that I think it would be wrong to make any exception or alteration to this since the amounts now specified in the Bill take into account the inflationary consequences of the last few years. I do not think it would be right to make a special exception merely to be able to provide some arrangement for a very small number of people. Since the noble Lord, Lord Bethell is not in his place. perhaps he may care to look later at what I have said and decide whether he should pursue it on another occasion.

BARONESS YOUNG

I should like to thank the noble Lord. Lord Shepherd. As he suggests, we will study what he has said and consider whether to put down an Amendment again. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

Clause 6 [Furnished lettings: amendments relating to control and registration of rents]:

8.10 p.m.

On question, Whether Clause 6 shall stand part of the Bill?

BARONESS YOUNG

I should like to ask a question on Clause 6(3)(2A) with regard to rates. I wonder whether the noble Lord, Lord Shepherd, could clarify the position. I shall quite understand if he is not able to do so this evening, and if he would write to me I should be perfectly satisfied. I want to make sure what is the position with regard to the fixing of a fair rent in the case where the landlord pays the rates on a flat. In that case he will presumably be responsible for the rates. But what happens in the case where the rent includes the rates on the flat? Are these automatically added on top of the fair rent, or is some special calculation made?

LORD SHEPHERD

I understand that subsection (3) requires in the register of rents the inclusion of a reference to the fact that where the rates are borne by the landlord or the superior landlord, this is to be noted but it is not to affect the amount of the rent to be registered. I wonder whether those brief words extracted from my brief give the noble Baroness the information she requires? If there is anything further she would like to know, naturally I shall be happy to correspond with her.

BARONESS YOUNG

I will read what the noble Lord has said. This is rather a complicated matter, where rates are included in the rent. I think it is necessary to have clarification. I will study what the noble Lord has said and, if necessary, we can confer again.

Clause 6 agreed to.

Clause 7 agreed to.

LORD GIFFORD moved Amendment No. 11:

After Clause 7 insert the following new clause:

Fixed term tenancies.

". Any tenancy of a dwelling-house for a term certain which does not exceed 2 years shall not come to an end merely by effluxion of time, but unless and until determined by lawful notice to quit or by surrender or by forfeiture shall continue as a tenancy by holding over; and any provision in any contract shall be of no effect in so far as it purports to exclude the operation of the foregoing provision."

The noble Lord said: This Amendment concerns short fixed term tenancies, and before turning to the terms of the Amendment itself may I draw the attention of the Committee to the provisions about short term fixed tenancies as they are now set out in the Bill. To do that one has to look at Schedule 2 to the Bill and the proposed new Section 5A, which contains the resident landlord exemption. One should say at once that as far as non-resident landlords are concerned it will not matter whether a fixed term or a periodic term is granted, the full Rent Act security will apply; but so far as resident landlords are concerned, it will be open to the landlord to make with his tenant an agreement for a term not exceeding two years.

The question then arises: what happens when that period, let us say six months, expires? The landlord cannot grant a second fixed term of six months, or any period, and indeed rightly so, because then he would fall foul of section 5A(2) which lays down that the resident landlord exemption only applies to periodic tenancies and to fixed term tenancies which are the first fixed term tenancies granted by that be he would want to make a further agreement with his tenant, to grant him a periodic tenancy to succeed the original first six months. If he does that, however, he will fall foul of subsection (3) of the new section 5A because subsection (3)(a) states that the section—that is to say the resident landlord exemption— does not apply to a tenancy which is granted to a person if immediately before it was granted he was the lessee of any premises under a contract to which part VI of this Act applies;"— that is to say, a resident landlord contract—and (b) the premises comprised in the tenancy are either the same or include part of the premises included in the other contract.

As I understand this subsection, what it means is this: that when the first fixed term has come to an end the landlord is on the horns of a dilemma. He must either bring proceedings to evict the tenant or, if he allows the tenant to stay, he will find himself saddled with a fully protected tenancy. I am talking, of course, about resident landlords. Under the Bill as at present drafted there is no way whereby the landlord who initially grants a fixed term tenancy can convert that into a periodic tenancy without it being protected, because of the peculiar provisions of subsections (2) and (3). I want very much to know, first of all, whether that view that I take of the Act is right, and, secondly, if there are proposals to word it differently so as to bring into effect what I understand to be the Government's intention, that a resident landlord can escape from the rent tribunal if he grants an initial fixed term but thereafter he should be able to grant a periodic tenancy which would then be subject to the rent tribunal provisions.

Having tried to explain the present provisions regarding fixed terms, which I suggest are something of an absurdity in the way they are drafted, may I now come back to the Amendment I propose, which is also not a very easy Amendment to understand at first reading. There is a peculiar difference so far as fixed term tenancies are concerned between English law and Scots law. Under the law in Scotland, a fixed term tenancy does not automatically come to an end when the period expires, but on the part of the landlord who wants to bring it to an end there has to be a notice to quit. Since there has to be a notice to quit, the tenant then has a right to refer that notice to quit to the rent tribunal, and he is, therefore, entitled to the protection which the rent tribunal affords. That is not the case in England. In England, a landlord can grant a six-month tenancy and once the period expires the tenancy comes to an end. That means there is no need for a notice to quit, and thus there is no possibility of the rent tribunal having jurisdiction. Those who have been familiar with the ways of landlords in London know that at present the easiest way of avoiding even the rent tribunal security is for the landlord to grant successive fixed term tenancies. I am glad to know that under the Bill he is not going to be able to do this.

However, there seems to be a good deal of virtue in the Scottish provision. It was a virtue that was recognised by the Francis Committee, who said at page 161 of their Report, having explained the difference: We think that English law might with advantage be brought into line with Scots law in this respect, and we recommend that a Part VI fixed term tenancy should require a month's notice in writing to terminate it, such notice to expire at the end of the fixed term or at any time thereafter. If that were implemented then all tenants of resident landlords, whether they were periodic or fixed term, would then have the right to go to the rent tribunal; they could then look at all the circumstances, and decide whether or not it was right to give security.

Quite apart from criticising the erroneous way in which I believe the Bill to be drafted at present, I still wish to maintain this Amendment, which states that in order to bring English law into line with Scottish law, a fixed term tenancy of under two years shall not come to an end merely by effluxion of time, but shall continue unless it is determined by notice to quit or by surrender or forfeiture. I would urge the Government to consider whether it is not right that the Scottish provision, as the Francis Committee indicated, is not a better way of bringing within the rent tribunal ambit these short, fixed-term lettings.

8.22 p.m.

LORD SHEPHERD

My noble friend referred to the horns of a dilemma for the landlord, and seeks to allow him to let on periodic tenancies to the same tenant after one fixed-term contract. The Government recognise that subsection (3) of new Section 5A should be subject to Amendment to relate it to a protected or statutory tenancy and not to a Part VI contract. I would hope that we shall be able to introduce this Amendment at the next stage of the Bill.

In regard to fixed-term tenancies, the Government do not believe that they should necessarily be capable of extension in the manner proposed. There are circumstances in which they are clearly suited to the interests of the tenant as well as the landlord. This may well be so in the case of the resident landlord who knows that he has spare accommodation in his home for a limited period—until perhaps a child grows up and needs extra space, or until a relative comes to live with a landlord. Such accommodation may well suit a tenant who has only temporary need for a home. These are cases where there is a genuine use for a fixed-term contract, and it would clearly be unreasonable to expect a landlord to let in such circumstances if he could not be sure of getting possession in time to fulfil his obligations. In my view, it would also be unreasonable to deny the resident landlord the right to let fixed term once to a tenant with whom he will be sharing the building in which he lives.

This is a very difficult area. That is my initial response to what my noble friend has said. I shall look carefully at what he has said when I see Hansard. I hope, on those conditions, and in view of the fact that I recognise the point about the horns of the dilemma for a landlord, and of our willingness to meet it by Amendment, that he will feel that we have gone some way to meet him on this Amendment he is proposing.

LORD GIFFORD

There are two points I would make. I am sorry that we do not have an Amendment before us. Obviously, I should like to look at a subsequent Amendment to see how it would affect the Bill as it stands, and how it would perhaps reduce the need for the Amendment I am proposing. I think that it will substantially reduce the need, since it will not raise this difficult position which would otherwise have arisen, on which it would have been quite impossible to advise either landlords or tenants.

I would ask my noble friend, even so, to see whether the Scottish provision might not be usefully applied here. If, in the cases that he mentions, a landlord quite plainly needs the premises to do repairs, or to house a neighbour, and if particularly he has made that very plain to the tenant at the beginning of the tenancy, then that is clearly a case where the rent tribunal would not be disposed to grant a very substantial amount of security, and I recognise the fairness of the situation. It seems that if they have got by in Scotland with a situation where all fixed-term tenancies are subject to rent tribunal review, then it can avoid injustice in England to bring about the same result.

The injustice I am seeking to overcome is that where there is a fixed-term letting which the rent tribunal cannot touch, it puts the tenant into the landlord's power, at any rate for that initial period of the first letting. In other words, if he complains about the rent, or the state of repair, he is likely not to get his fixed term converted, as it would be if my noble friend's Amendment comes through, into a periodic tenancy. That, in the initial period of a letting, puts the tenants into a difficult position. It seems that the rent tribunal can deal with the other points which might militate against this Amendment being accepted. Having said that, I am sure that my noble friend will review my Amendment in the light of his, and I beg leave to withdraw the Amendment.

LORD SHEPHERD

I undertake to look at the Scottish legislation to see whether, as in the past, it would be helpful in England.

BARONESS YOUNG

Is the noble Lord, Lord Gifford, suggesting a new clause in substitution for subsection (3) of Case 5A of Schedule 2, so that you would have another Amendment to take that out? Am I right in thinking that the noble Lord, Lord Shepherd, wishes to meet the point of this case, and will be bringing forward a Government Amendment to amend Case 5A(3)?

LORD SHEPHERD

I am not sure whether it will be a new subsection. I have in mind an Amendment to the subsection. I would certainly say to both the noble Lord, Lord Gifford, and the noble Baroness, that I shall see whether I can get advance copies of our proposed Amendment so that we could perhaps consult before it is placed on the Marshalled List.

BARONESS ELLIOT OF HARWOOD

May I say one word about this before the noble Lord withdraws his Amendment, because I have been listening to this discussion with interest. I do not know about the English law, but I know about the Scottish law. Although it has advantages it also has disadvantages. When the noble Lord looks at it, I hope that he will realise there are some severe disadvantages. For instance, if the landlord has a really genuine reason for wanting to get back some of his property because there is a son growing up, or he wants to house his daughter, it is exceedingly difficult to get the tenant out unless the tenant has gone there on the understanding that at some point or other he will probably have to move. If he cuts up rough and is disagreeable, then it is extremely hard to do anything.

I quite understand the views of the noble Lord, Lord Gifford, and that people do not want landlords to be able to turn anybody out at a moment's notice, which would be equally wrong, but there is a case for realising that it also has great disadvantages if it is too rigid. Although some of the rent tribunals are very good, some of them are not so good—you never quite know. I hope that the noble Lord, Lord Shepherd—I am sure he will, because he knows Scotland very well—will realise that they do not always have the right thing, although it may be better than in England.

LORD SHEPHERD

Again I shall say that I will read carefully what the noble Baroness has said. I now understand why my noble friend Lord Gifford drew upon Scottish legislation in support of his Amendment. Quite clearly, the landlords in Scotland are not very keen about the existing legislation. I will look at what the noble Baroness has said and I will not even mind consulting her.

LORD GIFFORD

In answer to the noble Baroness, Lady Young, one of the intentions of my Amendment was to resolve what seemed to me the absolutely insoluable problem presented by the Bill; that is to say, that at the end of a fixed term tenancy the landlord is saddled either with the necessity to evict the tenant or with the burden of a fully protected tenant on his hands. My Amendment would solve that problem by allowing the fixed term tenancy to continue ad infinitum until a notice to quit was served. If, as he has indicated he will, my noble friend brings in an Amendment to solve that problem in a different way, there are still substantial virtues in my Amendment even if the Bill is changed. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 8 agreed to.

Clauses 9 and 10 agreed to.

.32 p.m.

LORD MELCHETT moved Amendment No. 12:

After Clause 10 insert the following new clause—

Provisions as to notices to quit.

".—(1) Without prejudice to the provisions of section 16 of the Rent Act 1957, no notice given by a landlord to quit any pre mises let as a dwelling-house shall be valid unless—

1. (a) it is given in writing; and
2. (b) it contains upon its face in letters no smaller than the text of the notice to quit the words set out in Schedule (Words to be contained in notices to quit referred to in section (Provisions as to notices to quit)) to this Act.

(2) Any tenant who is induced by a failure to comply with subsection (1) above to surrender a tenancy of a dwelling-house shall be entitled to recover damages from any persons by whom or on whose behalf the notice to quit is given as if in an action for wrongful eviction."

The noble Lord said: I should like to speak to this Amendment on behalf of myself and my noble friend Lord Gifford. The proposed new clause is of not quite the same type as the other Amendments in my name and that of my noble friend Lord Gifford. We feel that it would help to bring the provisions of the Bill, which we welcome, to the attention of all the people it seeks to protect. The provision lays down that the Government should make regulations to say what form a notice to quit should take and what information it should contain on the face of it. I shall not go into this point in very great detail, partly because I spoke about it at some length on Second Reading, and partly because I hope the Government will have some good news for us regarding the Amendment. I hope that noble Lords will not think I am brief because we have a poor case: we have a particularly strong case on this Amendment.

We were asked on Second Reading by the noble Lord, Lord Garnsworthy, to provide evidence that when tenants were issued with notices to quit they either misunderstood the form of words contained in them or were ignorant of some of the rights which they have under the existing rent legislation. I think we can safely say that we have managed to provide the Government with a great deal of support for the Amendment from people involved, particularly in housing stress areas. Clearly, statistical evidence is very difficult to come by, because people who are unaware of their rights and who receive a notice to quit are, by definition, unlikely to go to a lawyer or a housing aid group and ask what their rights are. They are ignorant and, given a notice which says that they have to quit and deliver up possession of the premises, they do just that. There is a widespread feeling among people who work in this area that this is a major problem, and that very large numbers of tenants get notice to quit and just go, whether or not they have rights and whether they are furnished or unfurnished tenants.

The Amendment seeks to lay down a prescribed form to which notices to quit would have to conform, and which would inform tenants of their rights. I cannot see how anybody can have any objection to this. After all, if Parliament passes legislation to give protection to people and to give them rights, nobody can really take exception if people are informed about those rights. The present Bill and the Rent Acts have specifically given people rights when they receive a notice to quit from a landlord, and it seems that the most sensible time to tell people of their rights is when they receive the notice to quit, which is why we suggest that the notice to quit should inform people of their rights on the face of it.

Noble Lords may be aware that the present notice to quit comes with a very archaic form of words on the face of it, and that it tells tenants to quit and deliver up possession. There is no requirement to tell the tenant that he has the right to security, nor to tell him that he can go to the rent tribunal, nor to tell him that receiving a notice to quit does not mean hat he has to leave there and then. I hope that the Government will feel disposed to accept the Amendment. In all future cases where people are given notice to quit. we should at least have a guarantee that if they can read what is written on the notice they will know what their rights are.

LORD AVEBURY

I cannot refrain from intervening for one moment to say that in the Standing Committee on the Rent Act 1965, I moved an Amendment providing for statutory notices to quit. I have drawn the attention of the noble Lord, Lord Garnsworthy, to the debate on that occasion, in response to his request for evidence that a provision of this kind is necessary. Although, as the noble Lord, Lord Melchett, has said, it is very difficult to find evidence of invalid notices to quit being issued and of tenants being pressured into giving up their homes by the use of such invalid notices, the practice has been going on for a very long time. I think that the Department of the Environment, if it had wanted to, could have made inquiries before the Bill was brought before the House. It was in a much better position to obtain information than any noble Lord, however well-informed on the subject he might be.

The only doubt I might have about the Amendment is whether it is sensible to put the words in the Schedule to the Bill. if one wished to alter it afterwards. amending legislation would be needed. What I suggest if, as the noble Lord, Lord Melchett, appears to think, the Minister will give a favourable response on this, and as he will not accept the wording which is down on the Marshalled List—Ministers never do—this should be drafted so as to allow the Secretary of State by Order to specify what should be contained in the notice to quit. That means that, if any further devices come to light which were not anticipated at the time when your Lordships or another place were considering the Bill, it can very easily be put right afterwards. Subject to that minor criticism, I am very much behind the noble Lords and their Amendment.

LORD HYLTON

In support of this Amendment, I should like to say that over the years I have advised a good many tenants about their rights after receiving a notice to quit. They could go either to the county court in cases of unfurnished tenancies, or to the rent tribunal in the case of furnished tenancies. But very few knew this, and I think the records of housing aid centres will show that substantial numbers of tenants just went away after receiving a notice to quit and without any further process of law. I am sorry that I have not brought evidence on that point with me, but I am sure that it is obtainable.

LORD SHEPHERD

I have read with very great interest what my noble friends Lord Melchett and Lord Gifford said on Second Reading, and I have listened with great care to what my noble friend has said in introducing the Amendment and to all those who have supported him. I have a good deal of sympathy for the Amendment, as I should have if I am to be logical and consistent, for I persuaded your Lordships' House to pass the Consumer Credit Bill in rapid time, and it was recognised that the basis of that Bill was the right to know. But there is a difference between providing legislation for, on the one hand, consumer credit and, on the other, dealing with rent and the question of the relationship between landlord and tenant, for, in many cases, one is dealing not with companies nor with any organised body that has the machinery for dealing with a more formalised approach when one is dealing with maybe small landlords and small tenants.

Nevertheless I can say that the Government, despite the difficulties, think it is worth studying the idea that a notice to quit a dwelling let on a protected tenancy or Part 6 contract must, in order to be valid, be in writing, with the possibility of using it as a source of information or advice to the tenant. I can therefore give the noble Lords an assurance that if they are willing to withdraw the Amendment the Government will examine the possibilities in the hope of working out some proposal which would give tenants further protection in this way without serious damage to the principle that legal procedures should not create for private people traps avoidable only at heavy cost in professional advice. The aim would be to introduce such a measure, if a workable proposal can be evolved, either in the Bill at a later stage or it may be perhaps more convenient and suitable for inclusion in the Housing Bill which we shall be receiving in two or three weeks' time.

I have expressed the Government's good intentions in this matter. If it is feasible to find a solution that will meet, what I am sure, are the wishes of the Committee, we shall do so, and I shall be happy to consult with the noble Lords. Lord Melchett and Lord Gifford, and any other noble Lords who have spoken, to see whether we can find a formula that meets the hopes and the wishes of those who have spoken.

LORD MELCHETT

I am grateful to my noble friend for that reply. I have a couple of points to make on what he said. First, providing this information of notice to quit will help landlords as well as tenants. One of the cases which we supplied to him was of a landlord who clearly did not understand what on earth they were meant to be doing, because even after receiving legal advice on no less than two occasions, it took them a further attempt to get a valid notice to quit. Obviously the need for information on both sides is great. The other point concerning the mention of consumer credit is that here we are trying to give advice to small landlords and individuals. That is why we were urging that it should go on the notice to quit, because that is something inevitably that both parties, or both individuals, are bound to see. However, I am grateful to my noble friend for his assurance to accept something along these lines if at all possible.

LORD GIFFORD

Before my noble friend withdraws the Amendment the question of evidence was raised on Second Reading and was referred to by the noble Lord, Lord Hylton. It is worth putting on Record that following the Second Reading I canvassed the views of a number of law centres, housing aid centres and other organisations. The response was quite remarkable. Within a few days I received letters from four law centres, four housing aid centres, the Citizen's Rights Office, a long letter from the National Association of Citizens Advice Bureaux and a powerful letter from Professor John Greve, all responding immediately and positively to the suggestion of such an Amendment as this. Many of them telephoned me with cases they had come across which made it clear how valuable this Amendment would be. My noble friend has the material which they provided. I wish to add only that I would certainly accept the suggestion that the matter should be dealt with by way of Orders and Regulations rather than by specific words in the Bill. We have indicated the kind of information which we feel ought to be included.

LORD MELCHETT

I would add to that impressive list, Shelter, who wrote to me, the Child Poverty Action Group and at least one other housing aids centre, again, all in favour of this Amendment. As the Government will bear that in mind I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

8.51 p.m.

LORD GIFFORD moved Amendment No. 12A.

After Clause 10 insert the following new clause:

Provisions regarding the occupation of a dwelling-house by two or more persons.

".—(1) Where two or more persons together enjoy exclusive occupation of a dwelling-house under two or more contracts, those contracts shall be deemed to constitute a contract to which the relevant part of the Rent Act shall apply.

(2) Where under a contract to which the relevant part of the Rent Act applies, including a contract deemed to be such by virtue of the preceding subsection, two or more persons are entitled to occupy a dwelling-house, any one or more of them may refer the entire contract to the Rent Tribunal under the provisions of the relevant part of the Rent Act."

The noble Lord said: This Amendment appears on an extra sheet which was circulated at the beginning of the afternoon. It deals with a small but quite important potential loophole which was noticed by the Francis Committee where a number of usually young people are sharing a flat or a house. It has come to light —it was noticed by the Francis Committee—that in a number of cases where three or four people were sharing a flat the landlord, instead of granting a tenancy to them all jointly, would make separate agreements whereby each of them had the right to live in the flat but none of them had exclusive occupation. The effect of this is that the contract is neither a letting under the Rent Act, nor does it confer exclusive occupation which is needed to bring it into Part 6 of the Rent Act and, therefore, the jurisdiction of the rent tribunal. This was a dodge which the Francis Committee recommended ought to be changed, and I should add it would be covered by subsection (1) of the proposed new clause. Subsection (2) deals with a slightly different point: namely, that where a number of people share a flat which is subject to the rent tribunal jurisdiction, if one of them wanted to refer the matter to the rent tribunal, either to reduce rent or security of tenure, he must obtain the concurrence of the others. For instance, if three people occupy a flat and a notice to quit is given, and one is content to move out and does so, one of the other two has no right to go to the rent tribunal because the reference must be made by both. That is another small point which I have sought to cover by the second part of the proposed new clause. I should be grateful to know what view the Govern- ment take on each of these small separate points about sharing accommodation. I beg to move.

LORD SHEPHERD

As my noble friend said the Francis Committee on Rent Acts observed that this appeared to be a loophole permitting evasion of Part 6 and recommended that where two or more people together enjoyed exclusive occupation of the same accommodation under two or more contracts that those contracts shall be deemed to constitute a contract to which Part 6 applies! The Government agree with the desirability of bringing leases of dwellings occupied in common within the jurisdiction of the rent tribunals. What is doubtful, however, is the wisdom of achieving this by providing that separate contracts under which lessees occupy should be deemed to be one contract. Whatever effect this would have on the rights and obligations of the lessees or between themselves and between them and the lessor, the drawback to this approach emerges clearly from subsection (2), to which my noble friend referred. Subsection (2) will entitle any one of the occupiers in common to refer to the rent tribunal the deemed single contract which subsection (1) would create out of the separate contracts each co-occupier had with their lessee, thus enabling him to effect to refer a co-occupier's contract to a tribunal. whether the co-occupier wished it or not or indeed knew of the reference. It would not be acceptable for a private person to be enabled in any circumstances to interfere in such a way in a contract to which he is not a party. The Government propose that they should look into the possibility of amending Part VI in such a way as to enable tribunals to entertain references of contracts under which the lessee is entitled to occupy residential accommodation in common with others, without the subsequent decision affecting the contracts of the co-occupiers, who would of course, if a satisfactory provision could be evolved, be equally entitled to refer their own contracts to the tribunal. If a suitable measure can be worked out in time, an Amendment to introduce it will be proposed at a later stage of this Bill. This is a very complicated area, and if we are not able to do it in your Lordships' House we shall certainly undertake to sec that it is done in the other place. I hope that, with that assurance, my noble friends will feel that I have sought to meet their case, and will withdraw their Amendment.

LORD GIFFORD

I am certainly impressed by that assurance, which seems to me to underline the value of having raised some of these matters at this stage, because it may well be that it will take a week or two (by which time the Bill will be in the Commons) in order to work out the right approach. As I understand it, what my noble friend is saying is that he likes in principle the first part of my Amendment, although he is not very happy about the second part. I am certainly sufficiently pleased by his favourable acceptance of the first part in principle to have hopes for the future, and I beg leave to withdraw the Amendment at this stage.

Amendment, by leave, withdrawn.

Clauses 11 and 12 agreed to.

Clause 13 [Short title, citation, application, commencement and extent]:

8.52 p.m.

LORD GIFFORD moved Amendment No. 13: Page 10, line 16, leave out from ("operation") to ("the") in line 17 and insert (" on the day after").

The noble Lord said: During the debate today we have spoken of the need to get this Bill into law quickly and because of that which is obviously right, I was a little concerned to see that the Bill is not going to come into operation until one month after it is passed. While I know that there are regulations to be promulgated, it seems to me that at least some of the provisions ought to come into force immediately. What will happen over the next two months is this. During the month of July a number of possession orders are going to be made in the county courts against tenants who would be entitled to protection under this Bill if it were then law. Those possession orders are going to fall to be executed during the month of August, since the normal delay period is 28 days. During the month of August the courts are on vacation, and I think it will be impossible to suspend the operation of any warrant during the one-month interval after Parliament has clearly stated its intention that the Bill should be law but before it actually comes into effect.

I would therefore wish the matter to be looked at to see whether at least the key passages giving protection, and the passages enabling the courts to suspend the execution of possession orders if they would not have been made had the Bill been law, could not be brought into operation immediately after Parliament has passed the Act. If that is not done, I would wish to know what steps can be taken, for instance by way of directives to rent tribunals and, if such can be given, to the officers of county courts and bailiffs, to try to delay the eviction of tenants who would, by the end of August, if that is the likely timetable, be entitled not to be evicted. It disturbs me that in the case of a Bill which is treated, and rightly treated, as a matter of urgency there is this month's delay built in. I beg to move.

LORD SHEPHERD

The effect of this Amendment would be to bring the Bill into operation the day after Royal Assent. A delay of one month between Royal Assent and the coming into force of a new Act is in fact a common occurrence. It is desirable to allow a reasonable time for the provisions as finally enacted to become generally known, and for prints of the Bill to become available to the public. As we have heard, the Amendment is prompted by the fear that the Bill will come into effect too late to protect those tenants whose landlords served notice to quit as soon as the Government announced their intention to give them security or tenure. The tenants in this position, however, should be safe from eviction provided they have used the means already available to them to delay the effects of a notice to quit.

If they had applied to a rent tribunal when they received a notice to quit, its operation would have been suspended for up to six months; and even if the rent tribunal had not been willing to repeat a period of suspension that had already been granted and had recently run out, the tenant can remain until an order for possession is made against him in the courts. Assuming a speedy passage through both Houses — and I am sure this will be the wish of this House and of another place — the Bill should be laid well before these temporary safeguards are exhausted. Further, the transitional provisions of paragraph 2 of Schedule 3 serve to protect the tenant where his tenancy comes to an end before the commencement date.

Perhaps I may say to my noble friend that I carefully examined whether it would be possible to bring this Bill into effect as suggested in the Amendment. Although it would have given some protection to some people who may not be quite included in what I have said, on balance, taking the need to have regard to an important function of the landlord and the wish not to put a landlord into a position of breaking the law quite unknowingly (but that, as the noble Lord, Lord Gifford, will know, is no defence), we have come to the conclusion that the decision is right that there should be this one month lapse between Royal Assent and the actual enactment of the Bill.

BARONESS YOUNG

I thank the noble Lord, Lord Shepherd, for that assurance. Quite apart from this important point that the landlord could unknowingly be breaking the law, the noble Lord, Lord Shepherd, undertook to look at this question of producing some kind of document which would explain this Bill to a number of people. I really think that if it became law immediately after Royal Assent an enormous number of people could find themselves affected by it without really understanding what was happening to them, and this really would be very unfair to those people. I think it is very important that justice should be seen to be done to everybody in these cases, and I would have thought that, with the assurance that the noble Lord, Lord Shepherd, has given about those who might be evicted, the Bill ought to be left as it is drafted.

LORD GIFFORD

I should like to say that I certainly agree with the noble Baroness in her suggestion that what the Bill does should be made known in a simple and easy to read leaflet, and I would hope that that is going to be done. I should certainly like to study the answer which my noble friend has given about the delay period, and both here and, it may be, in another place the reasons that he has given can be examined. I certainly remember — and I am quite sure that the noble Lord, Lord Avebury, remembers — that certain Acts (one thinks of the Immigration Act 1968) were brought into operation almost on the hour they passed, let alone there being a delay of a month. Certainly there is precedent for bringing an Act into operation on the day after the day on which it is passed; but I do not wish to press the matter, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 13 agreed to.

Schedule 1 [Consequential amendments of Rent Act]:

LORD MELCHETT moved Amendment No. 14: Page 11, line 11, after ("court,") insert "substantially").

The noble Lord said: I should like to speak, if I may, to Amendments Nos. 14 and 15 together. These two Amendments are to the new Case, Case 3A, which is set out in Schedule 1, Part 1, of the Bill. This case gives grounds for landlords who are providing furniture for their tenants to go to the courts to ask for a tenant to be evicted if that tenant has ill-treated the furniture.

This case parallels the existing Case 3 in the Schedules to the consolidated Rent Acts which give the landlord power to take the tenant to court when the tenant has damaged the fabric of the building. It seems to me that that Case has been transferred straight over so that exactly the same provisions apply to furniture now as have applied to the fabric of the building in the past. Our Amendments to this Case seek to do one thing; that is, to make some distinction between damage to the fabric of the property — which I think all noble Lords will agree is a fairly serious thing for the landlord and a fairly substantial thing for the tenant to undertake — and damage to furniture which can be of an extremely minor nature. The noble Lord, Lord Avebury, gave us an instance on Second Reading of, I think it was, putting a glass down on a table, which led to his expulsion from some premises.

Damage to furniture is a much more difficult area, I think noble Lords will agree, than damage to property. Furniture can be put into a property in a very dilapidated condition and since the passing of the 1965 Act a large number of premises have been furnished in order to avoid the provisions of that Act, and it is the common experience of all people working in the housing field that a large number of landlords have put in very dilapidated furniture indeed. They have shoved in anything they couldget their hands on in order to get their premises outside the control of the previous Rent Act. There are already, therefore, a large number of furnished premises with poor to miserable furniture in them. Very rarely, if ever, is there — certainly in the cheaper rented accommodation — a schedule or list of furniture that was put in or what condition it was in when supplied by the landlord. Because furnished tenants have not been given security in the past, no furnished tenant has ever dreamt of taking his landlord to court to complain about the condition of the furniture. That is the quickest way known to anyone of getting oneself evicted from a property.

Furniture is not the same as the fabric of the property, and this Amendment seeks to distinguish between them and to make sure that the courts can evict people only if they have done two things: first, that the damage to the furniture was substantial (and the court would be under an obligation to see from the evidence that the substantial deterioration of the furniture had been caused by the tenant); secondly, and probably more important, the court — and this is Amendment No. 15 — will have to be of the opinion that such deterioration cannot in all the circumstances be compensated for by an award of damages. It is true to say that the court can at the present time award damages to the landlord rather than to evict the tenant. All that this Amendment seeks to do is to place the court under a statutory obligation to examine the possibility of awarding damages; in other words that it will not be possible for a court to say on hearing a case, "This is so bad, we will evict the tenant without more ado." They will have at least to consider in all the circumstances whether an award of damages will not be sufficient.

Given the distinction which I believe should be drawn between damage to the fabric of the property and damage to furniture and all the difficulties that can arise, and undoubtedly do arise over the sort of furniture which is provided, the condition it is in, whether or not the landlord has maintained it properly and who exactly is to blame for any deterioration anyhow, it is important to make sure that the court is under an absolute obligation to see whether it is possible to compensate for any damage in cash rather than by evicting the tenant from his home. I beg to move.

BARONESS YOUNG

Before the noble Lord, Lord Shepherd, replies to these two Amendments, I wonder whether he could help me over this Schedule. I think I understand the reason why Case 3A has been added to Schedule 3 to the Rent Act. It is of course to make a comparable new case to the case for damage to the external fabric of an unfurnished tenancy. I wonder whether he would perhaps, in answering the two Amendments of the noble Lord, Lord Melchett, be able to indicate to us how he sees this Case working? My information is that already the courts find it very difficult to determine cases brought under Case 3 of Schedule 3 and in this new Case 3A would find it almost impossible. There would be required, before there was any letting, a complete inventory of what the house or flat contained, probably backed up with photographs so that everybody knew exactly what the condition of the property, the furniture and the fittings were when it was let if the landlord was going to bring a successful case under this new Case 3A. Because the fact would be that the landlord might say, "Well. the tenant has damaged the table" and the tenant would argue, "No, the table was damaged when I moved in". It will be impossible for a court to determine who is right in this respect.

The only people I can see who will benefit from Case 3A will be the valuers and, as one of them said to me, "It is good business for us because we shall be called in on every case." But I find it very difficult to believe that that was the intention of the Government when they included it. I hope they will explain how they would recommend someone to go about establishing the kind of necessary evidence that will be called for in Case 3A and perhaps they will explain whether they expect every landlord to undertake a complete inventory with photographs of the property, in order that everybody, landlord and tenant alike. can know exactly what they are getting.

LORD AVEBURY

I just want to remark that in the case of the expensive lettings we were talking about earlier, where the noble Baroness was saying that she agreed with her noble friend that the oil companies and foreign embassies who took properties, where the furniture might be worth thousands of pounds, in the name of one of their employees and certain difficulties would have arisen, at least in those instances, I think the noble Baroness would agree with me, it is customary for the landlord to have a complete inventory taken for the purposes of insurance and also for the purposes of recovering any damages which are normally provided for in the tenancy agreement. At least in those instances there would not be any difficulty in the courts ascertaining whether a piece of furniture had been wilfully damaged by the tenants, or the silver had been "knocked off", or whatever. But where you come down to the more normal type of furnished tenancy where the equipment is probably not worth very much anyway, I think it will be a matter of common sense for the courts to see whether the furniture originally provided had been damaged or whether it was likely to have been damaged, according to the condition at the time. If the furniture was originally in rather a poor condition and that was not specified in any schedule attached to the tenancy agreement, then it could be simply a matter of argument between the landlord and the tenant; and, based on the unsupported word of either of them, the courts would have difficulty in determining what damage had been done and how much. But in those cases presumably the furniture would be of so little value in the first place that the granting of possession under Case 3A would he unlikely to happen. It is only where the furniture is of some considerable value in relation to the amount of rent paid under the tenancy that it becomes of importance.

9.10 p.m.

LORD SHEPHERD

In reply to the noble Baroness, I would say that my only experience of living in furnished premises was when I used to come home from Singapore on my six months' leave and would take rented accommodation in Edinburgh. Whether or not it was because they were Scots I do not know, but we always had a good inventory and — as the noble Lord, Lord Avebury, has said — a good description of what was in the house, and if one disagreed with what the landlord had in mind then one drew his attention to it and reached an agreement. However, I accept that in some cases there may be a problem for those landlords who, as the noble Lord, Lord Avebury, said, are not exactly in the area which the noble Lord, Lord Bethell, had in mind. At this stage I should not like to say specifically, as the noble Baroness asked me to do, how that part of the Bill will be administered; but in practice this is something that has been going on for many years. I will look into this to see whether I can say something in a more formal sense on Third Reading, because clearly this is a matter of interest.

Turning to the Amendments of my noble friend Lord Melchett (Nos. 14 and 15), one should really stress that what we have in the Bill here is only an additional ground on which the court may make an order. It must be appreciated that the new Case does not provide that the court must — and I stress the word "must" — make an order for possession in the event of there having been any ill-treatment of the landlord's furniture. Under Section 10 of the Rent Act 1968, a court (that is a county court) is not to make an order for possession of a dwelling-house let on a protected tenancy or subject to a statutory tenancy, unless the court is first of all satisfied that it is reasonable to make an Order; and, secondly, that the court is satisfied (apart from the question of alternative accommodation for the tenant) that the circumstances are as specified in any of the Cases in Part I of Schedule 3 to the Rent Act. It is not sufficient for the landlord to show that one of the Cases referred to above applies: he must also satisfy the court that it is reasonable to make the Order. Therefore, if some damage has occurred, shall we say to a particular table, that does not provide grounds.

The court would take a view as to how the tenant has occupied the tenancy and used the furniture and, as most courts do, it would take a broad view as to how the tenant has behaved. I should have thought that where a tenant has created damage, but not wilfully or extensively, there is no risk that the court would require him to leave. I would agree that preference should be given by the court to the payment of damages, as opposed to the removal of the person from the home, If the court were of the opinion in any case that damages would be a sufficient remedy for the landlord, it would hardly be satisfied that it was reasonable to make an order for possession. Under Section 10 of the Rent Act 1968 the court has the discretion. In my view it would be undesirable to attempt to fetter or interfere with that discretion in any particular case. I have looked at this matter and from all the evidence one sees regarding the attitude of the courts, this is a matter one could safely leave with the Administration of Justice Act.

LORD MELCHETT

I thank my noble friend for that reply. The noble Baroness, Lady Young, said that this Amendment would lead to a lot of work for people in making up inventories. That would be a good thing on the whole. As the noble Lord, Lord Avebury, said, it is common practice in any expensive letting, where there is a substantial amount of money involved in the furniture, for inventories to be made. Landlords have never complained about having to do it; they always insisted on doing it. Often landlords have not made inventories for cheap furnished lettings because if they did they would expose the fact that the furniture was not sufficient to make a furnished letting at all. They have got away with it because nobody knew what the furniture was like. That is one of the reasons why inventories have been avoided in at least one class of furnished letting. If this Amendment has the effect of making inventories much more important for everybody, it is a very good thing indeed.

The noble Baroness, Lady Young, also made the point that this is a very difficult area. I entirely agree; and it makes it all the more important, because the evidence is difficult and because there will often be conflict between landlord and tenant that the court should be obliged to look at the question of giving damages before considering evicting the tenant. The award of damages and losing one's home are two different things. It is important that the court should be obliged to look at damages first. This is a point that I would urge on my noble friend Lord Shepherd. I know that the courts already have the power to award damages and decide what is reasonable. As a non-lawyer, I have less confidence than some other noble Lords about how difficult it is to interpret "reasonable" in different situations. It is possible for some courts to decide that if a tenant damages furniture that is unreasonable and is sufficient grounds for eviction. Some other courts may decide that if a tenant damages furniture seriously or wilfully that is sufficiently unreasonable for them to be evicted. Other courts may take the view that if a tenant damages furniture twice, or several times, and refuses to pay damages, that is sufficient grounds for eviction.

My Amendment does not seek to fetter the courts; it could not have that effect. It seeks to make sure that the court must look at damages before considering eviction. I urge my noble friend to look at this again and take advice. This Amendment merely places the court under a minor obligation to consider damages before eviction. There has been no real objection raised to doing that, and maybe my noble friend could consider including this in a later stage of the Bill.

LORD SHEPHERD

I will certainly respond to my noble friend, particularly the part in which he suggests that there should be an obligation on the court to consider whether payment of damages should be ordered before giving an order for eviction. It may be difficult to draft that Amendment because at the end of the day one needs to be fair to the landlord. Some tenants are not all that they should be. There needs to be a limit to the number of times a landlord needs to go to the court in order to get damages paid regarding furniture that a tenant has misused on a number of occasions. But it would be wrong for me not to undertake to look at what the noble Lord has said. I will look most carefully and communicate with him.

LORD MELCHETT

I am grateful for that assurance, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.20 p.m.

BARONESS YOUNG moved Amendment No. 16: Page 12, line 42, after ("dwellinghouse") insert (", any services which are provided by the landlord under the terms of the tenancy,").

The noble Baroness said: I am moving Amendment No. 16 for clarification. On an earlier Amendment, I raised the question of the determination of a fair rent for furnished accommodation. This is something which will prove to be much more complicated than the determination of a fair rent for unfurnished accommodation, in the field of which there is now a great deal of experience. One of the matters which must be taken into account, besides the age, character, locality and state of repair of the dwelling house, are the services that are provided in furnished accommodation. They vary enormously, and I accept there are a great many furnished flats and houses where no services at all are provided. But, on the other hand, there arc some good blocks of flats which may provide a porter and all kinds of fittings and extras that go with the flat; services of central heating, lighting; possibly laundry services, and the cleaning of flats. All these will vary with the circumstances of the tenancy. Clearly, the cost of providing these services is the kind of factor which can escalate rapidly — for example, the cost of central heating when oil prices rise. This is something of which everybody who has any kind of oil-fired central heating is only too well aware: and no doubt next winter we shall discover by how much the cost of other forms of central heating will rise.

The point of raising this question is that if these services are included in the furnished accommodation, I believe their cost ought to be reflected in the calculation of the fair rent because in these circumstances the calculation is very different from that of a furnished flat with which go none of these services. The calculation of the fair rent in that case must include whatever figure was allowed when the accommodation was unfurnished plus something for the furniture, and that is all that ought to be allowed in that particular circumstance. I hope, therefore, that the noble Lord, Lord Shepherd, will be able to explain how this calculation will be made, so again to reassure those who want to let what is, after all, the better type of furnished accommodation, that they can expect a fair rent for their property. I beg to move.

9.22 p.m.

LORD AVEBURY

Obviously the factors which the noble Baroness has men- tioned must be taken into account to determine what the fair rent should be, either of a furnished or of an unfurnished property, because it does not necessarily follow that facilities of the kind she described are limited to furnished tenancies. For example, one can think of porterage, the lighting of common areas and the cleaning of common areas. Laundry might well be provided by the landlord even in the case of an unfurnished property. In the past we have always been told that the provision of such additional services, or indeed other circumstances that could not properly be described as "services", are covered by the phrase, "all the circumstances".

During the proceedings on the 1965 Rent Bill, I moved an Amendment in the other place which would have required rent officers to take into account the rateable value of the dwelling. I was not seeking to impose any arithmetical formula such as obtained in the case of old control, where the rent was some multiple of the rateable value, because that would have been far too rigid. Also, of course the rateable values in different parts of the country had got out of line with each other, and so that course would not have been appropriate. I simply wished to insert rateable value as one of the factors which should be taken into account in assessment of the fair rent. What I was told by the then Minister, Mr. Dick Crossman, was that obviously the rateable value of a property was included in the phrase, "all the circumstances".

Therefore, I think that if the noble Baroness seeks to put in a phrase of the kind she is proposing dealing with one aspect of the rent officer's examination in arriving at what should be a fair rent, it will be found difficult to know where to draw the line. One can go on including rateable value, and so on, until the phrasing becomes very cumbersome. Indeed, by putting in these additional phrases one can mislead the rent officers, and the rent assessment committees, because they do not know what importance Parliament attached to each one of the factors. So probably it is best if we keep the phrase or formula as simple as possible, and do not try to add in many of the factors which rent officers and rent assessment committees will already take into account automatically.

LORD HYLTON

I hope that the Amendment moved by my noble friend Lady Young will prove to be unnecessary. I always understood that where you have a fair rented dwelling you have a separate service charge to cover many of the items the noble Baroness mentioned — indeed, in addition, such things as the cost of common gardens. I hope that we do not have to agree with this Amendment.

LORD SHEPHERD

I am grateful for the intervention of the two noble Lords because they have saved me from making one of my lengthy speeches. The fact is that the Amendment is unnecessary because under Section 46(1) of the Rent Act 1968 on determining a fair rent the rent officer or rent assessment committee are to have regard, among other matters mentioned, to all the circumstances, and the words clearly include any services provided by the landlord. The matter is put beyond doubt by Section 47(1) of the Rent Act which relates to The amount to be registered as the rent… This section expressly provides that the amount so registered, shall include any sums payable by the tenant to the landlord for the use of furniture or for services…". Indeed, a number of appeals to the High Court from rent assessment committees have related to the amount allowed in respect of services, and the fact that services provided by the landlord for the tenant is one of the matters to which regard must be had has never been questioned.

I hope that the noble Baroness will take not only my advice, but that also of the two noble Lords who now sit on her side of the Committee, although the noble Lord, Lord Avebury, is of another Party, that her Amendment is unnecessary. I hope that she will feel now that she can withdraw the Amendment.

BARONESS YOUNG

I realise that 1 am clearly at a disadvantage at this Committee proceedings, not having taken part in the Committee proceedings on the 1965 Rent Act, but I am grateful for the remarks of the noble Lord, Lord Avebury, and the noble Lord, Lord Hylton. I put this down as a probing Amendment so that we could have on the Record the position for tenants of furnished accommodation where services are included, and I am glad to have it. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule 1 agreed to.

Schedule 2 [Tenancies granted by resident landlords]:

9.28 p.m.

LORD AVEBURY moved Amendment No. 17: Page 15, line 25 at beginning insert ("Subject to subsection (1A) below").

The noble Lord said: Would it be for the convenience of the Committee if we took with this Amendment Amendment No. 22 to which Amendment No. 17 is a paving Amendment, and also Amendments Nos. 26 and 31 which deal with the same point in relation to Scotland, and perhaps also, with the permission of the noble Lord, Lord Gifford, his Amendment No. 20 which deals with substantially the same point?

We come to that Part of the Bill which is concerned with the situation of residential landlords, and I am going to argue that their total exclusion from the provisions of the Bill is a defect and would deprive substantial numbers of tenants of the protection which is given to others. This point was raised en passant on Second Reading by the noble Lord, Lord Melchett, when he spoke of the possibility that a property company might nominate somebody to move into a building, thereby becoming a residential landlord, and take the property companies' tenancies out of the ambit of the Bill. But the property companies form only a small fraction of the possible total of residential landlords with whom we are concerned. Most of them would not be able to take advantage of the procedure which the noble Lord outlined on that occasion. We arc concerned, therefore, purely with existing residential landlords and people who might become individual residential landlords between now and the time this Bill becomes law.

If one looks at the figures, one sees that the proportion of tenants who live in the same building as their landlords is twice as high in the furnished sector as in the unfurnished sector. The figure which I have been given is 27 per cent. in Greater London as a whole, and according to the Francis Report it is as high as 39 per cent. in the stress areas. If one looks purely at cases that come before the rent tribunal, and taking the sample of early 1969 examined by the Francis Committee, the figure rises to nearly 50 per cent. So we are not talking about a minor aspect of the Bill in discussing the position of the residential landlord.

The Government say, rightly, that they do not want to discourage the owner-occupier from letting off part of his home when he is in a position to do so, and the noble Lord, Lord Garnsworthy, gave an example during the Second Reading debate of the owner-occupier whose family have grown up and left the home to set up on their own, and where the mother and father therefore have accommodation which is surplus to their own needs. In those cases, which I agree ought to be taken out of the restrictions imposed by this Bill, the accommodation released by the children is unlikely to be suitable for more than one other household.

The point of the Amendment to which this is a paving Amendment is that if there is only one other unit of accommodation in the house, then the landlord ought to be exempt from the protection which is given to tenants otherwise under the Bill.

The noble Lord, Lord Garnsworthy, went on to say that the distinction between protected and unprotected tenants, based on whether the landlord and the tenant live under the same roof, had the advantage of being readily understood by both. But equally this Amendment could be understood very easily. If there is more than one tenant in a building, then all the tenants will have the protection conferred by the Bill, as I am suggesting, hut if there is only one tenant sharing the house with the landlord. and if he has been the only tenant since the beginning of his tenancy, then he will have no protection. It is not only easy to make a statutory restriction. It is also simple to argue that this is a logical distinction. The person who becomes a landlord of furnished premises because the house has become too large for his own needs, is in a very different position from the person who acquires a property as an investment with two or more existing tenants, and is there only secondarily because there happens to be one flat in the building with vacant possession that he can himself occupy.

What would be the effect of the formula that I am suggesting? The Child Poverty Action Group has given us information about 23 cases where tenants were under notice to quit from a resident landlord, and in only 4 of those cases were the tenants the only household in the building apart from the landlord. In the Pimlico Neighbourhood Aid Centre, there were 2 tenants out of 22 who were the only ones in the building and a sample of the Deptford Housing Aid Centre gave 1 out of 22. I am not suggesting that these figures, based on a very small sample, represent Greater London as a whole, let alone England and Wales, but they give some indication of the number involved.

One also has to consider the sort of reasons that were given by the landlords in arguing the case for security of tenure, and the extent to which friction between tenants and landlords, which has been given as the main argument for excluding resident landlords from the provisions of the Bill, is of importance, particularly if one agrees with the Minority Report of the Francis Committee that living in your own house with another family can produce tensions and personal conflicts, and that a quick, informal and cheap remedy is needed in those cases. In fact, when one examines the reasons for landlords seeking reductions on security of tenure, in the applications that I have mentioned as ones that were dealt with by the three bodies I have mentioned — the Pimlico Neighbourhood Aid Centre, the Deptford Housing Aid Centre and the C.P.A.G.—friction between tenants and landlords appears to be quite a minor proportion of the total number of cases: of the C.P.A.G., it was 4 cases out of 23; in the Pimlico cases, 3 cases out of 22 and. I think, a similar figure in the case of Deptford.

I hope I am not going on too long. but I should like to give one or two examples of the kind of friction used by landlords in the case of the C.P.A.G.. 23 instances. In case No. 1 the landlord made unsubstantiated allegations of a moral nature against a tenant who was a deserted wife with three children. In case No. 2 relations were described as strained, but there were no specific allegations. In Case No. 4 the landlord alleged that the tenant slammed doors. The tribunal chairman later remarked that the landlord had previously applied for possession against another tenant for slamming doors. Case No. 6, the landlord complained that the tenant had allowed his wife's mother to stay without his consent. If one looks at these instances one might agree that they were rather trivial, the kind of things that might arise between neighbours, but which would give one no power over the neighbours if they were not tenants. The kind of behaviour which is alleged is either of a trivial character or in other cases does not seem to have been well substantiated before the tribunal. One finds that often the alleged friction is only used as an additional excuse where the real reason for the landlord wanting to get possession is that he wishes to sell for owner occupation or some other reason. It is possible to exaggerate the potential for friction between a landlord and tenant living in the same building, particularly where it is not of the kind I outlined first where the building has simply become too large for the landlord's own use and he has let off part of it. I am talking of cases where there are two or more other tenancies in the building, and I regret that we do tend to be misled by the sensational Press who love to blow up stories about landlords and tenants coming into dispute and the kind of behaviour which makes nice headlines, but which is by no means typical of the relations between landlord and tenant. One must not get the matter out of perspective. There are many thousands of landlords and tenants who live harmoniously in the same building where two or more tenancies are occupied and the landlord is also in the same building. It would be wrong for this House, or anybody else, to give the impression that landlords and tenants are in a perpetual state of warfare. Of course, one is not saying that any tenant should have absolute security and protection. Where the main reason is that the landlord has acquired a building for the purposes of investment and it is only secondly his own dwelling, as is evidenced by the fact that there are two or more dwellings let to tenants in the building with the landlord occupying only one third or less, there are strong arguments for saying that those tenants are entitled to the same protection as is given to every other furnished tenant in the country and we should confine the exclusion to the single tenant, who is the only other household in the building. If the Government are not prepared to go along with that, I accept, as a second best, the Amendment which is down in the names of the noble Lords, Lord Melchett and Lord Gifford. I think it is quite wrong for us to exclude the residential landlords entirely when I have illustrated to your Lordships what a substantial proportion of the total furnished accommodation they represent, particularly in the stress areas. I beg to move.

9.40 p.m.

LORD MELCHETT

I should like to support the noble Lord, Lord Avebury, in his Amendment. It covers similar ground to that in my own name and of my noble friend Lord Gifford. Frankly, I think the Amendment of the noble Lord, Lord Avebury, is a better one than ours; it is tighter and simpler, and would certainly be my first choice if the Government felt disposed (and I should be surprised if they did) to accept one or other of the Amendments.

I think the noble Lord touched on the most important point in looking at resident landlords. It should be possible to distinguish between those who buy a property as an investment and who let a substantial part of the property, if not to make money, at least to cover their costs. The Child Poverty Action Group and others, in surveys of rented accommodation where there is a resident landlord, have found many resident landlords allowing two or more households to live in their own house. In such cases, the landlords are covering the cost of rates, rent and other fixed outgoings of that sort, their mortgage repayments and so on. Many of these resident landlords are at least covering those costs, if not making a profit, and are living rent-free at the expense of their tenants. I am not objecting to that, but I think that if landlords are prepared to make money out of this sort of housing market, they should also be prepared to accept the responsibilities which go with this type of business.

We are not dealing here with people who are providing some ethereal thing, or something which people can do without one day and get the next day, or buy one week if they have enough money. Fundamental in people's lives is the place where they live, and the provision of housing for them. It is vital that people should, wherever possible, feel secure in where they live. The landlords anyway, resident or not, have many grounds for getting rid of tenants who are unco-operative, fail to pay the rent, or cause a nuisance. There arc already many grounds to enable landlords to get rid of bad tenants. We are trying to stop landlords moving people out because, for example, they apply for a reduction in the rent, if they are being overcharged, if they try to make the landlord look after the premises as he has a statutory obligation to do. It is important to try to get as many tenants as possible under the Control of Rent Act. This kind of Amendment will go a long way to doing that. This is a very important and very large sector, as the noble Lord. Lord Avebury, said.

It may be that up to 30 per cent. of tenants will be excluded if all resident landlords are excluded from the provisions of the Bill. I agree with the noble Lord that the instance I gave on Second Reading of property companies utilising a loophope like this is a minor point. If is very unlikely that they would do such a thing. There are difficulties that they will come across if they try it on. On the other hand, I have received at least one letter since the Second Reading debate from tenants in a building where the landlord is in the process of moving in at this moment; in other words, he is anticipating the effects of this Bill. This is a house with three tenants, and the landlord is in the process of moving in so that he can get the tenants out when the property market goes up, because he is planning to sell the house for conversion to luxury flats. So although property companies may or may not take advantage of this, some landlords, not all, undoubtedly will, and it is an extremely important area.

LORD SHEPHERD

I am sure my noble friend Lord Melchett and the noble Lord. Lord Avebury, will appreciate that my initial reaction is to resist all the Amendments that have been moved, and to do so on the basis that we do not wish to see too great a constraint being placed in a sphere which is important in the provision of accommodation. I see not only difficulties in principle in accepting the Amendment, but many practical difficulties in meeting the cases to which the noble Lord, Lord Avebury, has referred specifically. My noble friend Lord Melchett referred to them also. If these noble Lords will agree, I should like to read and study carefully what has been said tonight, not in any way indicating that I can move at all on the general principle, but to see whether there is any particular area where we could perhaps overcome some of the fears and expressions of dismay that we have heard this evening. I could not give any undertaking, but I should not like to say "No" to this series of Amendments, particularly in view of the persuasive way in which they have been moved. I should like to read and study what has been said and communicate with the noble Lords.

BARONESS YOUNG

If the noble Lord is going to write to the noble Lord, Lord Avebury, and the noble Lord, Lord Melchett, I wonder whether he would let me know what he has in mind. It seems to me that these Amendments are striking very much against what I always understood in this Bill to be the change in policy from drawing a distinction between "furnished" and "unfurnished" to drawing a distinction between tenancies where the landlord is resident and those where he is not, and it is the latter which will become subject to full security of tenure.

Although I quite accept (because I have seen the memorandum from the Child Poverty Action Group and the one from Shelter) that there are no doubt very bad cases where the landlord is resident—indeed there could well be some of the worst cases of all in those circumstances—there are, on the other hand, a great many people who may well buy a house and then, because it is very expensive—I am thinking again of a young married couple—decided to let part. They might, if it is a very large house decide to let off two bits of the house. This has been described as living at the expense of tenants. It may well be true that they cover quite a large part of their expenses by letting part of the property, but on the other hand they are providing accommodation for people and they are helping themselves in the process. The owner of the house will be incurring considerable expense, not only for the mortgage but for repairs and so on. I really cannot concede that this is in principle a bad thing to do. On the contrary, it seems to me a useful thing to do from everybody's point of view. So I think one wants to be careful, before committing oneself to amending this, that one is not once again harming a great number of people by doing so.

LORD SHEPHERD

I hope the noble Baroness has not read into words I have said a meaning that I had not intended. What I said was that I could not accept the Amendments; I did not necessarily accept the principle behind the Amendments and I certainly could not depart from the principle and intention in the legislation. What I was seeking to do was to respond to the various cases raised, to sec whether there was any area in which consideration could be given to dealing with the kind of problems that have been raised this evening. I suggest that that is part of Committee stage. I do not think any of my noble friends or the noble Lord, Lord Avebury, thought that I went any further than being willing to look at what has been said. But as I have said—and I am glad the noble Baroness has drawn attention to it—I am in no way departing from the intention within the Bill.

LORD HYLTON

I should like to ask the noble Lord, Lord Shepherd, whether he would, in thinking about this problem, try to disinguish between what one might call the professional landlord and the amateur landlord without worrying too much about who is living at the expense of whom. Furthermore, in particular would he consider whether Section 7 of the 1968 Race Relations Act provides a working model for an amending clause?

LORD SHEPHERD

I will undertake to look at what the noble Lord has said to see whether there is something to be taken from it.

LORD MELCHETT

May I comment on one thing that the noble Baroness said. I hope that no noble Lord will get the impression from anything that I have said, or the Amendments, that we are suggesting that letting part of one's house to somebody else to live in is in any way a bad thing. The implication behind the Amendments is that if you are letting part of your house, a large part for a fairly large sum of money to two or more households, then those households should have some protection. They should not be able to be evicted from a house at the whim of a landlord. That is a bad thing. Letting the premises to people is certainly not a bad thing.

LORD AVEBURY

I hope that the noble Baroness was not suggesting that this was the first Amendment, of quite a large number that we have been looking at this afternoon and this evening, that the Minister should not examine further. I think that the noble Lord has given that undertaking to everybody else who has spoken. One must take it as not having an enormous amount of value, if one is being perfectly frank with oneself, because one knows that the point is that the Government do not want a Report stage; they want to prevent us from putting any of these Amendments to a Division. Therefore, they try to be nice to anybody moving an Amendment without giving them any undertakings.

LORD SHEPHERD

If the noble Lord says that I have undertaken to look at Amendments for the purpose of avoiding Divisions, he is being less than fair to me and to my colleagues. If I felt that one had to fight to the last ditch on an Amendment I would, but this is a Committee stage, and if there are points put that are worthy of consideration, then what is the point of a Committee unless one is willing to listen to what has been said and examine it to see whether something can be done? If the noble Lord has been aware of what I have said, on every occasion where I have had a doubt as to whether I could do anything I have always drawn the Committee's attention to it.

On an Amendment moved by the noble Baroness, she had present, I will not say the entire Conservative Party of your Lordship's House, but a large part of it. She asked me whether I would consider the Amendment and I undertook to consider it, but I made it clear that the chances of my being able to do anything were extremely remote. I hope that on reflection the noble Lord will feel that he has in fact been less than fair.

LORD DAVIES OF LEEK

I have listened—

LORD AVEBURY

I shall not finish my speech now, because I will have to withdraw the Amendment at the end. I will listen to what the noble Lord has to say first.

LORD DAVIES OF LEEK

I have been listening, too. While we want protection for the tenant, I should like to re-emphasise a point made by the noble Baroness. Take the case of young, fully qualified students who have now got married and are trying to build up a home and take a job in London, such as teachers and young medical people, and they have a little house and they put somebody in it. I hope that we are not going to look on them as flinty-hearted landlords. I hope that sometimes they will be protected from the kind of people who might batten on them, and who are much more sophisticated than they are. I know that people who have had a pied à terre somewhere feel that they ought to put somebody in it. They do not want to make money out of it, but they want an understanding that the house is kept decent. They are doing a good turn for students and others, and there should be some kind of protection for them. I think that it is absolutely necessary to give to tenants a period during which they know they are safe. At the same time, some people should also have protection when they have rooms to let and they arc living in the house themselves, and with prices as they are today are looking on those people not to exploit them for money but to help to pay for the house.

LORD AVEBURY

The noble Lord is absolutely right. Nobody can disagree With him, and that is why, under my Amendment, I have said that we should not extend the full protection given under this Bill to other landlords where there is only one other tenancy in the building.

LORD DAVIES OF LEEK

I believe that my noble friend will look at it.

LORD AVEBURY

I was not quite happy with the Minister's statement that he could not accept the principle. If what he meant by that was that he disagrees with the Lindell Evans quote that I mentioned—that is to say, where you are living in your own house with another family, it can produce tensions and per sonal conflict, and a quick, informal remedy is needed in these cases—and that he was going to look at it with a view to making sure that in those cases, and in those cases only, there was a quick, simple and cheap remedy, but that he was not going to extend it to the whole population of resident landlords, the large majority of whom could not be said to face that situation, I understand. When there are several other tenancies in the same block, the landlord may not even see the tenants from one week to another and it is therefore impossible for the tensions and the personal conflicts to which Lindell Evans was referring to arise.

The Minister knows as well as I do that there are many large blocks with up to a dozen tenancies in them where the landlord occupies one flat and where there is no logical reason whatsoever why he should be granted the same kind of exemption as the single owner-occupier with one tenant. That is all that we are saying, and I hope that the noble Lord, in having agreed to examine the case, contrary to the wishes of the noble Baroness, Lady Young, apparently, will look at the memorandum which has been produced by the Child Poverty Action Group—and I will be glad to let him have my copy if he has not already got one himself—and at the evidence produced by Shelter, and will come to the conclusion quite logically, and not on the basis that there is some principle which has to be upheld or prevented from being upheld.

If he approaches this from first principles and asks who should have protection and to whom it is not fair to give protection, I think he will come down on the side of my Amendment, or, at the very least, on that of the Amendment proposed by the noble Lords opposite. ff he starts by saying that there is a question of principle involved and he cannot get over that hurdle, and looks at the case on its own merit, I shall be very disappointed. But I am sure that that was not really what the noble Lord had in mind, and in view of the assurance which has been given I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

9.58 p.m.

LORD GIFFORD moved Amendment No. 19: Page 15, line 34, after ("his") insert ("sole or principal").

The noble Lord said: This Amendment raises a slightly different point, as to whether the residence should be the sole or principal residence of the landlord. In a sense, this is taking up an exchange which I and my noble friend Lord Garnsworthy had on Second Reading on this matter. At column 256 of Hansard of June 10, my noble friend said that it would have to be taken up as the main residence of the person occupying the flat and that he might be called upon to prove this. I rejoined that I did not think that that was expressed in the Bill, and indeed it is not. I think that there is a danger that some landlords will keep a flat or a room open in a five-storey block and will go along there at weekends or to spend a night, keeping a residence open to collect the rents and to preserve their rights under the new Section 5A.

It seems to me that, if it is the intention, as the noble Lord, Lord Garnsworthy has said, to make it the main residence, the Bill should say so. It does not do so at the moment. This seems to me to be a logical and necessary Amendment in order to get round that kind of residence, which may be a genuine residence in the sense that the landlord has belongings there and lives there, but would certainly not be the main or principal residence.

LORD SHEPHERD

The effect of these Amendments would be to limit the proposed application of the new Section 5A on resident landlord exemption. These sections are intended to apply where the tenancy is of a part of a "building"—a term to be modified by a Government Amendment on Report, it is hoped—part of which the landlord occupies as his residence. The concept of occupation as a residence already has significance under the Rent Act. It is occupation as a residence that creates an entitlement to a statutory tenancy. Any question whether a person genuinely occupies a dwelling as his residence can be tested in the courts. Indeed, such issues often have to be tested and there is a considerable body of case law on the subject.

It is the Government's view that the rights of a resident landlord should be grounded on the fact of residence in the same way, and to the same degree, as the rights of tenants. This is why Section 5A is so worded. These Amendments would reduce his rights by limiting him to one residence, which is his sole or principal residence. It may be suggested that the exemption as it stands would allow landlords to hold or let parts of several properties excluding all tenants in them from protection for short periods of occupation. In the light of the extensive case law already mentioned, this is something which we can rely on the courts to prevent.

The requirement for occupation of a residence for the purpose of claiming a statutory tenancy is that there must be personal occupation as a home. I refer my noble friend to Lord Justice Clark-Hutchison in Menzies v. Mackie in 1938. Similarly, there is nothing in the Rent Restrictions Act to prevent a man from having more than one home. Here I refer my noble friend to Langford Property Company v. Trueman in 1949. Provided that there is evidence on which it can properly be said that the second one was the home and not merely a place used when convenient—and I refer to Setty v. Cohen in 1958—these are the principles which we can expect to be applied when the residence in question is that of the landlord. It can also be mentioned that the only known attempt of a three-home man to claim protection of the Acts did not succeed.

It may be suggested that the exemption as it stands will enable companies to put nominees into parts of properties in order to deny protection to tenants of other parts. This would seldom be feasible and would be unlikely. It would be feasible only when a company had a vacant or largely vacant property before sitting tenants already enjoyed protection and were unaffected by the intrusion of a resident landlord. Even then it would be inadvisable, from the company's point of view, because to enjoy the resident landlord's exemption the hypothetical nominee, besides having to be genuinely resident, would have to be endowed with the legal estate of the property sufficient to entitle him to grant sub-tenancies, with the consequence that the company would risk losing control of the property to its nominee.

The effect of these Amendments would thus be to deny the occupier of two homes residential rights and rights as lessor in the second. Quite apart from the fact that it may be in the second home that he has spare accommodation and he could let, the principal home is not necessarily the one that matters most to a two-home person. The principal home may be leased and the second home owned, or when the principal home depends on a place of work the second one may be the one he intends to become his only home on retirement, or his wife may spend most of her time in the second home. No reason is seen why the person who genuinely occupies more than one dwelling as his residence should on that account be denied one of those rights deriving from the occupation, when they relate to his position as tenant, any more than he should be when they relate to his position as a landlord. As I said at the beginning of this statement, it is our intention to move an Amendment on this matter and here again I will see whether I can get an Amendment to the noble Lord before it is placed on the Marshalled List.

LORD MELCHETT

Before my noble friend finishes, may I ask him one question? While accepting what he says about three-home owners and the possibility of companies putting nominees into places, is it not true to say that the effect of what he has told us is that the Bill means that the Government are supporting the rights of two-home owners as against the rights of no home owners?

10.5 p.m.

LORD SHEPHERD

No. There will be two-home owners, I suppose. Some may have one as their principal home, in the sense that it is in the district where they work, and may then purchase another place in another part of the country in anticipation of retirement. I think it would be wrong, if such a person wished to let those premises to people in need, to take such steps as would prevent him making those premises available. But on the general principle of a second home, the noble Lord will know that in the last Budget certain of the facility for obtaining a second home was removed. At this stage we should not get on to the prin ciples and ethics of two-home ownership, but rather should look at the Bill as it is and at the facts that present themselves to us. I hope that in view of what I have said to my noble friend, particularly the fact that we intend to move an Amendment to the earlier part of this Schedule, he will be satisfied.

LORD GIFFORD

My noble friend has delivered himself of a formidable opinion and with a salvo of cases in it which I should certainly like to study further. What I have not quite understood, though, is his reference to a further Amendment, which if I understand him rightly is a different Amendment from that which was foreshadowed earlier in the debate this afternoon and which he said was to avoid the landlord's dilemma on a fixed-term tenancy. Is this a different Amendment and, if so, can we have some indication of what it is designed to do? Or is it a secret to be unlocked at a later stage?

LORD AVEBURY

When Ministers undertake to produce an Amendment at a later stage of the Bill, they give at least some vague idea of what is to be contained in it, whereas, as I understood the noble Lord, he simply announced it in vacuo and not in relation to what is covered by this Amendment. If it is only a question of the anticipation of retirement, I thought we dealt with that point some time earlier. The noble Lord said in response to another Amendment that where a person bought a second home, looking forward to his retirement in a couple of years' time, that was a matter which might be looked at and dealt with through an Amendment to an earlier clause in the Bill.

This really worried me, listening to the noble Lord's explanation, because I thought that the question of whether a person was occupying premises as a residence was determined by other legislation, apart from the Rent Acts. Surely there is the electoral registration provisions, which are of equal importance in this matter. The test is a very simple one. The noble Lord is probably aware that a lot of people register themselves in both homes and tend to vote in the one in which they think their vote is likely to be most effective. For example, if you have a Conservative who lives in South Kensington and who has a holiday home in Newquay, then he is most likely to exercise his vote in Newquay, in a vain attempt to defeat my honourable friend the Member for North Cornwall, in spite of the fact that he may occupy his Newquay home for only two weeks of the year. I am afraid the noble Lord may find that, in the case of many people who own two homes, one of them is not really a residence in the normal sense of the word. It may simply be a holiday home that he visits for two weeks in the year; and although one would not want to do anything to stop him letting part of that home for the rest of the year, I do not think that this is really a sufficient ground for saying that he should be totally exempted.

The noble Lord also seemed quite certain that, because of the cases applying to tenants, a person with three homes could not claim protection by successive occupation of each of them. If one was really certain of that it would be better than leaving the question in thin air, and if the noble Lord's Amendment was designed to prevent somebody from trotting round from South Kensington to Newquay and perhaps to Liverpool as well, it would be some improvement on the present drafting. But one would like to know what the noble Lord has in mind.

LORD SHEPHERD

I hope the Committee will understand the nature of taking Bills through your Lordships' House, and the legislation at the present time. This is a Bill which I have discussed with my advisers and in the light of my discussions the note I have is that they themselves advise me that it would be their desire to see an Amendment placed in response to the Amendment which has just been moved by my noble friends. I hope the noble Lord will understand what I am saying and not press me too far on this matter this evening.

Loan GIFFORD

In breathless anticipation I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

LORD GIFFORD moved Amendment No. 23: Page 16, line 9, leave out ("under a contract to which Part VI of this Act applies").

The noble Lord said: I think this is another area of the Bill which will be affected by the other Amendment which my noble friend Lord Shepherd has promised for the Report stage. May I set out what my Amendment is designed to deal with in the hope that his Amendment when it comes will deal with the same grievance. As the Bill now stands, the landlord of a building where there are protected unfurnished tenancies, can move into a vacant flat in the building. Although he is prevented by the nature of the Act from depriving the tenants of security by the act of moving in, he can, as the Bill now stands, induce them to sign a fresh agreement. That then becomes a new contract and then the new Section 5A will bite because Section 5A looks to the commencement of the tenancy to determine whether the resident landlord exemption applies. One knows that tenants, particularly because of their natural ignorance of the intricacies of this legislation, may well be induced to sign a fresh agreement which perhaps appears to give them better rights, but in reality gives them worse. They will then be deprived as unfurnished tenants of a complete protection which they have enjoyed hitherto. I hope that my noble friend's future Amendment will take account of that possibility. I beg to move.

LORD SHEPHERD

It is the intention to introduce shortly a Government Amendment to provide that resident landlord exemption shall not apply if immediately before the tenancy is granted the tenant had occupied the premises or part of the premises under a protected tenancy. This Amendment will have the effect of ensuring that a tenant who is protected either under the 1968 Rent Act or by virtue of Clause 1 of the Bill, cannot be deprived of his protection by any action of his landlord. Unless a provision to this effect is included in the Bill, it will be possible for a landlord to move into a building, to grant a resident tenant a new contractual tenancy perhaps on the expiration of a fixed-term contract, or by persuading the tenant to accept a change in the terms of the tenancy or an increase or decrease in the amount of accommodation provided, and thus to create a tenancy to which the resident landlord exemption applies. This loophole must clearly be closed, and an undertaking is given to introduce an Amendment to this effect as soon as possible.

LORD GIFFORD

I appear to have scored a hit on that one, and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

10.15 p.m.

LORD GIFFORD moved Amendment No. 24: Page 16, line 13, leave out ("comprised in the contract").

The noble Lord said: I do not know whether my run of luck is going to last, but Amendments 24 and 25 are designed to deal with a slightly different point but within the same area. Again, as drafted, this part of the Schedule prevents the resident landlord from getting round the policy of the Act by moving his tenant to slightly different premises but which include part of the same premises he occupied before. It seems to me that a much more likely means that may be devised to deprive tenants of security is not to move them to some differently constituted premises but to move them quite simply to another floor in the same building. If that is done, once again a new tenancy would come into being, and if it were the tenancy of a landlord who had just moved in and become a resident landlord, again the same thing would happen and the tenants who were previously protected would lose their protection.

I would ask that the new Amendment which is foreshadowed should also cover this point and that it should not only refer to premises which are in part the same as the previous premises but any new tenancy in the same building should also remain protected even though there is a landlord on the same premises. I beg to move.

LORD SHEPHERD

I believe this is a paving Amendment to Amendment No. 25. is it not?

LORD GIFFORD

That is so.

LORD SHEPHERD

It seems that this Amendment, if redrafted, may well represent an improvement to the Bill and tighten up the protection given to tenants. It requires a little more consideration to ensure that the proposal represents the best solution to the problem, after which a suitable Amendment could be introduced either here or in another place. With those words, I hope that the noble Lord will feel it right to withdraw his Amendment.

LORD HYLTON

May I ask the noble Lord, Lord Shepherd, to bear in mind the legitimate interests of housing associations, if he produces an Amendment following the ones proposed?

LORD SHEPHERD

I take note of what the noble Lord has said.

LORD GIFFORD

I am very grateful to my noble friend Lord Shepherd for what he has said, and 1 beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

LORD SHEPHERD moved Amendment No. 35: Page 17, line 7, after second C' words insert ("or by reason of those circum stances").

The noble Lord said: This Amendment is necessary to ensure that the provisions of Section 101 of the Rent Act 1968 are accurately adapted to suit the new legislation. It is further consequential on the introduction of the resident landlord concession. Section 101 of the Rent Act 1968 deals with a case where a tenant is precluded from protection, for example, because he shares essential living accommodation, such as a kitchen, with his landlord. The section gives the tenant the benefit of provisions of Part VI of the Act—that is the furnished code.

To preserve the effect of Section 101 in the light of the new Section 5A, no protected tenancy in certain cases where a landlord's interests belong to a resident landlord, it was necessary to add to Section 101 a reference to Section 5A: and this is done by paragraph 3 of Schedule 2 to the Bill. It has been found. however, that the Amendment made in paragraph 3 of Schedule 2 would have the effect of excluding from the benefit of Part VI the case (which would be uncommon) where the tenant shares, say, a kitchen with his landlord but the landlord does not occupy as his residence another dwelling-house in the building. An example would be a case where the landlord has a pied à terre in the building that he could not say was his residence. This Amendment shows that in such a case the tenant will have the benefit of Part VI, as he does at present. I commend to the Committee a close study of what I have just said to see whether they need further assistance on it, and I should be happy to respond.

On Question, Amendment agreed to.

LORD SHEPHERD: I beg to move Amendment No. 36.

Amendment moved— Page 17, line 43, at beginning insert ("or by reason of those circumstances").—(Lord Shepherd.)

On Question, Amendment agreed to.

Schedule 2, as amended, agreed to.

Schedule 3 [Transitional provisions]:

On Question, Whether Schedule 3 shall stand part of the Bill?

LORD AVEBURY

The point I wish to raise may have been covered by the mysterious Amendment which the noble Lord, Lord Shepherd, has promised us, but if we look at Schedule 3(1) we find that if a person is a furnished tenant before the Bill commences and, at the same time, the landlord is living in another dwelling which also forms part of the building, there is nothing in the Act which will have the effect of converting the contract into a protected tenancy. The circumstances to which I want to draw the attention of the Lord Privy Seal are those in which a landlord has read the Bill and has seen that by moving into the block in between the publication of the Bill and its coming into effect he can prevent all the tenants in that block from becoming protected tenants.

This is not a hypothetical instance. I have received a letter, as I believe one or two other noble Lords have, from a person who is a tenant in W.5. He says he has been a tenant of a furnished fiat in a house for 13 years and another tenant has been there for 10 years. But he and the other tenants have recently been given notice to quit. The landlord who has owned the house for only two years and lives somewhere else, is now proposing to move into the house and into rooms which, fortunately for him, happen to have become vacant. He will thus be able to circumvent the Bill by becoming a resident owner before the Bill becomes law. I promised this gentleman I would attempt to table an Amendment to deal with his point, which is a valid one. I have not been able to formulate an Amendment in time for this Committee stage, and I was intending to return to this by the Report stage. From what the noble Lord, Lord Shepherd, has said already, it may be unnecessary for me to bend my mind to the process of drafting, and he will kindly do it for me. I hope that this point, as well as those of an analogous kind which we have discussed on Schedule 2, will be taken into account.

Schedule 3 agreed to.

Schedule 4 [Enactments repealed]:

10.25 p.m.

LORD GIFFORD moved Amendment No. 38: Page 20, line 14, at end insert— ("Section 5. Section 33(3).")

The noble Lord said: This Amendment moves the debate into a different realm. It follows a number of references which were made on Second Reading of the Bill as to the position so far as security of tenure is concerned for tenants of council accommodation, housing trust accommodation and housing association lettings. I said in my speech on Second Reading that, by and large, such tenants enjoyed security of tenure. In practice that is the case. I am not suggesting by this Amendment that there is a very widespread misuse of power by housing departments of local authorities. However, in law it is not the case that tenants of those social landlords have any security of tenure at all. The protection given by Section 5 of the Rent Act 1968 does not apply to the tenants of local authority housing trust and housing association accommodation at all. I am wishing at this stage to take the opportunity which this Bill provides merely to ask why these tenants do not enjoy security.

There is a further object because although, as I have stated, most housing officers act with fairness and moderation towards their tenants, there have been some extremely bad cases. Some were mentioned in a report known as the Grieve Report which was produced by Shelter, which gave as the cause of homelessness in quite a number of cases the fact that people had been evicted from council accommodation having been in arrears of rent, but having offered in many cases the whole or a substantial part of the arrears before the case came to court. Nevertheless, the local authority persisted in its application and the court had no alternative—and has no alternative in such cases—but to make an order for possession. I see no reason at all why local authorities and housing trusts and housing associations should not be subject to the judicial control that the Rent Acts give. For instance, if there are arrears of rent the court has the power to look into the matter and make a suspended order for possession if there is a real possibility of the rent's being paid. I should not have thought that any responsible council or any responsible housing trust or housing association would wish to evict a tenant unless one of the grounds specified in the Rent Acts applied to his case, or unless, as provided in the Rent Acts, some suitable alternative accomodation was offered to him. There have been some bad cases. No doubt this is something which would have to be looked into quite thoroughly before any final decision could be taken, but I am anxious to know whether in fact there is any basic objection to this protection, as it seems to me unnecessary protection, of local authorities being brought to an end.

My speech related only to Section 5. and I hope that I may move the deletion of Section 33(3) separately. I beg to move Amendment No. 38.

10.28 p.m.

LORD SHEPHERD

I have listened with great care to what my noble friend has said. The effect of the Amendment would be to repeal Section 5 of the Rent Act 1968 and also Section 5 of the Rent (Scotland) Act 1971, which provides that a tenancy granted by a local authority or New Town Development Corporation or housing association shall not be a protected or statutory tenancy, and would thus extend security of tenure to tenants of local authorities, New Towns and housing associations. My noble friend may be aware that the Minister for Housing and Construction made the position clear on this issue during the Committee stage of the Housing Bill in another place. He said that it had been his view for some time that there should be a generality of security applied, while recognising that in practice this would mean little as regards local authorities and indeed housing associations, of whom only a minority acted irresponsibly; and the same is true of the New Town Corporations. He therefore agreed in principle with the view of those who had raised the matter.

In the early months of a new Government we have been fully occupied with the urgent problems with which this Bill seeks to deal, and our proposals for the repeal of the Housing Finance Act and the Housing Bill to which I have referred. We have not had time to consider how we should proceed so far as the remaining areas of unprotected tenancies are concerned, but I can assure my noble friend that the matter is very much in our minds. It would not be right for the Government to take action on this matter without full consultation with the local authority associations and the other bodies concerned, but I hope that I have indicated the attitude generally of the Government in this matter. Time is an important factor and at the moment we have not got it quite on our side. However, I hope that we can look forward to a period of office when we can continue our consultations with the authorities and perhaps meet the point which the noble Lord has in mind.

BARONESS YOUNG

Before the noble Lord concludes his remarks, I hope that lie will not undertake any alteration without the fullest consultation with local government. I think that he has given us this assurance, which I believe to be important. I agree that it appears to be completely inconsistent that local authority tenants should not have security of tenure when, as the noble Lord, Lord Shepherd, has indicated, there are some local authorities which act irresponsibly. The same argument has been applied in the case of private landlords. Then it is said that if one is irresponsible everybody should have security. There appears to be a complete inconsistency of argument. However, I am quite sure that it would be wrong, on an Amendment to this Bill, to alter something because this is affecting so many local authorities up and down the country. I believe that there should be the widest possible consultation before any such step is taken.

LORD GIFFORD

I agree with both my noble friend and the noble Baroness that this is a matter upon which there should be full consultation. It is heartening to find that neither of the spokesmen from the two Front Benches can put forward a reason why this exemption should continue. Some soundings which I know have been taken among certain local authorities in London indicate that the local authorities themselves would be quite happy to submit to the overview of the courts in their demands for possession. However, having raised the matter and having been interested exceedingly by the comments which have been made by both Front Benches, I beg leave to withdraw that part of the Amendment which relates to Section 5.

Amendment, by leave, withdrawn.

10.34 p.m.

LORD GIFFORD moved Amendment No. 39: Page 20, line 31, at end insert— ("Section 5. Section 31(3).")

The noble Lord said: Perhaps I can conveniently speak to the last Amendment, which is to delete Section 31(3) of the Rent (Scotland) Act, and also to that part of Amendment No. 38 which deals with the deletion of Section 33(3) of the Rent Act 1968. Although the last Amendment is one of the least significant and important ones which I have had to move, it has this importance. Under the existing law, a landlord of furnished accommodation who charges his tenant more than the rent which has been registered by the rent tribunal must repay it on action taken by the tenant, and is liable to repay it up to the full length of the contract or the full length of the limitation time, which is normally six years. However, with the rents registered by the rent officer, if the landlord then charges more than the rent registered by Section 33(3) of the Rent Act the tenant can recover only the amount overpaid up to a period of two years. I fail to see the reason for the difference between the consequences of over-charging in the two different types of letting. This Bill will see a lot more tenancies brought into the rent officer's orbit and therefore the likelihood of more overcharging on the rent officer side, and it seems to me that possibly the two areas of law could be brought into line. I beg to move.

LORD SHEPHERD

My noble friend has set out the reasons for moving his Amendment. I am sure he will agree that the provision which we are dealing with has been firmly embedded in the rent legislation for some considerable time. This provision has been firmly embedded in rent legislation for some considerable time. The Rent and Mortgage Interest Restrictions Act 1923 prescribed a maximum period of six months for the recovery of any excess rent paid and this was extended to two years by the Increase of Rent and Mortgage (Restrictions) Act 1938. The provision was retained when the body of rent legislation was consolidated in the 1968 Act. There was, however, no comparable provision in the Furnished Houses (Rent Control) Act 1946, and therefore Part IV does not contain a similar provision. Section 76(2) allows a tenant who has paid more than the registered rent to recover the excess, without placing any restriction on the time during which he may do this.

When the limitation on the period within which a tenant may recover overpaid rent was first introduced, the maximum rent recoverable under legislation was the standard rent. The difficulties of establishing what this was in any individual case were so enormous that a landlord might in all innocence have contravened the provisions in the belief that a standard rent for the dwelling-house did not exist. It was therefore decided to limit the period of recovery. It is still difficult in many cases to establish what is the maximum recoverable rent. In these circumstances, and because I certainly have seen no evidence to show that tenants have experienced any real hardship on account of the limitation, it is thought unwise to change this long standing provision. I hope with those words the noble Lord will be willing to withdraw his Amendment.

LORD GIFFORD

I should certainly like to consider what my noble friend has said. I am bound to say that I am not here armed with evidence of substantial hardship and it may be that I shall not want to deal with the matter further. I am grateful for the noble Lord's reply and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Schedule 4 agreed to.

LORD SHEPHERD

My Lords, before we complete this Committee stage, I should like to express my very sincere appreciation to the noble Baroness, Lady Young, for having been willing to sit for very long hours, in company with others, in considering the Committee stage of the Bill. I am also particularly grateful to my two noble friends who have given a great deal of thought and care to this Bill, and I am pleased that I have been able to meet some of the points that they have made. I hope that at the Report stage we shall be able to show the benefit of their work. I should like to express considerable appreciation to all those who have helped in getting this Committee stage through today.

BARONESS YOUNG

I should like to thank the noble Lord, Lord Shepherd, for his help to me in providing me with notes on clauses. As we have said, this is a very difficult Bill but it has certainly helped in one's understanding of it. I should also like to thank my noble friends who have supported me on the various Amendments. I am dad that at any rate the noble Lord, Lord Shepherd, has agreed to look at one or two of them, and of course we shall see what turns up at the Report stage.

House resumed: Bill reported with the Amendments.