§ 2.55 p.m.
§ The PARLIAMENTARY UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin)My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
§ Moved, That the House do now again resolve itself into Committee.—(Lord Bellwin.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The Earl of LISTOWEL in the Chair.]
§ Clauses 49 and 50 agreed to.
§ Clause 51 [Protected shorthold tenancies]:
§
Lord BELLWIN moved Amendment No. 112: Page 35, line 39, leave out paragraph (c) and insert—
(" (c) either a rent for the dwelling-house is registered at the time the tenancy is granted or—
§ The noble Lord said: This amendment provides another important safeguard for the tenant under the Government's short-hold proposal. Clause 51 already provides that shorthold tenancies, unlike any other class of regulated tenancies, must have a registered fair rent. This amendment ensures that the fair rent will apply from the outset of the tenancy. I shall explain how this is achieved.
§ If a landlord grants a shorthold for a property for which there is already a registered rent, that rent will apply equally to the new shorthold tenancy. The Bill already provides satisfactorily for this. We are concerned here with properties which have no registered rent but which the landlord wishes to let as shorthold tenancies. At present the Bill requires that the registration of a fair rent is applied for within 28 days of the tenancy commencing. Although this in itself is a unique protection for the tenant, the point has been made in another place that there will be no fair rent until the rent is registered by the rent officer—perhaps three months after the tenant moves in. Our amendment bridges this gap. The amendment requires the landlord to obtain a certificate of fair rent from the rent officer before granting the tenancy as well as applying for the registration of a fair rent not more than 28 days after it starts. The rent specified in the certificate will be the maximum the landlord can charge before the fair rent is registered.
§ The certificates of fair rent provisions are well established ones. They already exist under Schedule 12 to the Rent Act 1977 and need no modification for this purpose. They are specially designed for circumstances where there is not yet a tenancy, and are, for instance, often used by housing associations before conversions or new dwellings are let. Once a certificate has been obtained, the subsequent application for a fair rent is a straightforward procedure, and unless there has been a change in circumstances the registered rent would normally be the same as that in the certificate. I should 352 add that nothing in this amendment implies that a landlord who gets a certificate must of necessity let on shorthold, or alters the status of certificates in relation to other lettings. The amendment gives the shorthold tenant the full benefit of knowing from the outset what the registered fair rent is likely to be, and paying no more than that. I beg to move.
§ Baroness BIRKWe start on a rather happy note. I am pleased to welcome the Government's amendment. I hope that this is going to be one of many concessions that we shall be seeing during the afternoon and evening.
§ On Question, amendment agreed to.
§ [Amendments Nos. 113 and 114 not moved.]
§
Lord EVANS of CLAUGHTON moved Amendment No. 115:
Page 35, line 43, at end insert ("; and
(d) the dwelling-house possesses at all times throughout the tenancy the amenities prescribed by Schedule 6 to the Housing Act 1974.").
§ The noble Lord said: This is a very simple, straightforward amendment which seeks to impose on landlords a minimum standard of repair with which they will have to comply if they wish to take advantage of the provision of shorthold tenancies. It states that Schedule 6 to the Housing Act 1974 should be incorporated, which merely provides that there should be a fixed bath or shower, a hand washbasin and a water closet. I should have thought that this was the kind of amendment which, with goodwill, the Government might accept, since I am sure that the Government, in introducing the concept of shorthold, would not want the shorthold tenant to be any worse off or any worse provided for than if he or she were in another type of tenancy. Therefore, this seems to me a reasonable amendment which might find acceptance with your Lordships, and I beg to move.
§ Lord BELLWINThe intention of this amendment would be to require that all dwellings to be let on shorthold would have to measure up to a particular standard. The Government cannot accept this. There seems to us to be no reason 353 why there should be a requirement in respect of shorthold when there is no such requirement at present in the public or private sectors. Of course, the Government want all property, whether it is owner-occupied or rented, to be brought up to as high a standard of improvement as possible. I am sure that is a view that is shared by noble Lords on all sides of this Chamber. But to produce a requirement of the kind that is proposed in this amendment for shorthold would materially reduce the availability of shorthold dwellings. Many furnished dwellings in the private sector already have shared amenities and therefore the tenants do not have exclusive use of all the amenities referred to in Schedule 6 to the Housing Act 1974. Many people, especially in cities, may be perfectly happy to enter into arrangements of this type where they share amenities. I do not think it would be right that they should he denied the possibility of taking a shorthold tenancy, and I wonder whether perhaps, on further reflection, the noble Lord may accept the validity of this point and perhaps feel able to withdraw his amendment.
§ Lord EVANS of CLAUGHTONThere is a world of difference between tenants in the private and the public sector. The tenant in the public sector can go to his councillor and complain about the quality of the amenities that he enjoys or fails to enjoy. The private tenant has the security of tenure. The shorthold tenant does not have security of tenure, except for the limited period from one year to five years, and he or she therefore might perhaps not feel quite the same courage about challenging his or her landlord as regards the quality of the tenancy's amenities. Therefore, there is in my opinion a considerable difference between the level of competition, as it were, that the tenant enjoys in relation to his landlord in a shorthold tenancy as against that which he would enjoy in a public or private tenancy. Therefore I think that the tenant of a shorthold tenancy is much less protected as regards the rights that he enjoys than is a tenant in the private or public sector. That is the reason why I moved the amendment, and I think it makes it a different proposition from that which the noble Lord put before your Lordships.
§ Lord SHINWELLMay I ask the noble Lord a question arising from this amendment? Perhaps he can clarify the position for me. In the event of a shorthold agreement being arranged, is it not likely—indeed almost a certainty—that there would be some increase in the rent? In that event, surely the tenant has the right to demand that the premises should be raised to a reasonable standard: first, because it ought to happen and, secondly, because the tenant is called upon to pay an increased rent. Surely he has the right to say to the landlord: "Before I pay any increased rent you must promote a reasonable standard of conditions." Can the noble Lord clear up that point?
§ Lord BELLWINI am glad to clear up one point, namely, that in the case of shorthold it is not a matter of their being an existing rent at all. A tenant will only go into a shorthold which would be new premises. Where any tenant at present has a regulated tenancy, with all that flows from it, the Bill says quite clearly that it cannot be switched into shorthold. That is an express condition in the Bill. Therefore the matter of it being a new rent does not arise at all, because we are starting from scratch with a whole new area of accommodation; so switching or increasing rents does not arise.
I think the noble Lord's question helps me to come to the point which was made by the noble Lord, Lord Evans, when he said that surely a shorthold tenant will have less security, and so on, and therefore will be less protected. We shall be discussing shorthold at some length in the next hour or so, I imagine, and no doubt we can cover this point and others then. But at this moment, since it concerns the amendment, I would say that the whole purpose of shorthold is that it should be what it says: shorthold. In other words, it is a tenancy for a limited period of time of up to five years. A prospective tenant who goes into such premises as will be offered and as we hope will come on to the market and be newly available, where at present they do not exist, will have the opportunity of inspecting the place where he is hoping to live and will be able to decide whether or not it is of a standard which he thinks is good enough. He will then either accept or reject the 355 opportunity to be a tenant; but to suggest that he should move in and from that point during the short term of his tenancy, then have a new right, which does not exist even in the private sector at the moment, to have the premises brought up to a certain standard, is creating the kind of restriction that indeed, like a number of other restrictions that are called for in the amendments, would defeat one of the objects of shorthold. For that reason—and I hope that the noble Lord will understand this point—the Government cannot accept this amendment.
§ Lord EVANS of CLAUGHTONAs the noble Lord will appreciate and as I am sure his noble friends will also appreciate, many of us have considerable reservations about the whole concept of shortholds. Some of us think they might conceivably be worth experimenting with if there were adequate safeguards for the tenants; and this is one of the safeguards that I thought might be an example of the kind of safeguards we are looking for. The Government have said that shortholds will make tenancies available, say, to young married couples starting out on the great journey of life. I would have thought that young couples, perhaps with a child, would want a fixed bath or shower, a hand washbasin and a water closet in their premises. I would have thought therefore that, because of the exposure that the shorthold tenant is in in relation to his landlord, these were the kinds of protection—these and many others—that your Lordships should be willing to impose on a landlord who is in a very advantageous position in relation to his tenants.
However, as the noble Lord, Lord Bellwin, said, we shall have ample opportunity, of which I am sure we shall take full advantage, of probing the shorthold tenancies and trying to limit the exposure of the tenant in these circumstances. Because of that, and because, if I am not satisfied by the end of the Committee stage on this matter, I know that I shall be able to reserve the right to raise this matter again at Report stage, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
356§ 3.9 p.m.
§
Baroness BIRK moved Amendment No. 116:
Page 36, line 4, at end insert (", or any other dwelling-house in the same building or any other dwelling-house owned by the landlord (within the same registration area within the meaning of section 62 of the 1977 Act).")
§ The noble Baroness said: One of the most disturbing aspects of shorthold when it was proposed in the first version of the Bill has now, it is true, been partially rectified. At first it appeared there was nothing to protect a tenant who was fully protected from having an insecure short-hold tenancy perhaps foisted upon him. Although that was denied, the Government introduced in another place an amendment which spells out that such a tenant will retain protection. However, there is a snag even here, because the safeguard only applies to the accommodation actually occupied. It would be easy for a landlord to offer a shorthold agreement instead of whatever fixed-term agreement he is accustomed to use.
§ This was expressed very well by the chairman of the Westminster Housing Committee, Councillor Weeks, as reported in a press release put out by Westminster Council; which, incidentally, is a Conservative controlled council. He said that he supported Sir Brandon Rhys Williams in the view that it was important to ensure that landlords would not be able to "winkle out" tenants from existing tenancies where they may be secure and into a new one which was less secure. He went on to say that he would like to see the shorthold tenancy procedures tightened up considerably. That was since the Government amendment was incorporated in the Bill.
§ This danger of "winkling" still remains in the Bill, particularly as so many of the people involved will not be lawyers or knowledgeable about their own situation and may in certain circumstances take a shorthold agreement and lose the protection which they originally had. That is because if they move from the fiat or house where they have complete security, that security goes when they leave and nothing remains with the flat or house that is left.
§ The example I have in mind is that a landlord may make a fully protected tenant an offer which he finds difficult 357 to refuse. One may say that he should refuse it and ought to realise that he will be losing security, but when we legislate we must remember that not everybody is highly knowledgeable about these very complex matters. A protected tenant in a small room in a multi-occupied house may be offered a larger room somewhere else in the house, but this time it would be under shorthold. Eviction could then take place at the end of a one-year term.
§ In different circumstances a protected tenant would be threatened if the landlord has several houses and the tenant accepts the offer of alternative accommodation in another house. Here, again, he would be exchanging complete security for a shorthold. We must tighten up these loopholes. Through no fault of his own, and through not understanding these very complicated rent laws, a tenant might work himself from a completely secure tenancy into one that is insecure. As the Government appear to have made it clear that that is not what they want to see, it seems to me that, having gone as far as they did in another place, they should accept this amendment which would tighten up the procedure even further and in a way that is necessary. If the Government do not want this "winkling out" position to arise, then they must tighten up the procedure even more than they have done so far. Therefore I hope that the Government will accept the amendment. I beg to move.
§ Lord EVANS of CLAUGHTONI am delighted to be associated with the amendment moved by the noble Baroness. I said in the Second Reading debate, and I say it again, that the vast majority of landlords are good landlords: I do not dispute that for one second. As a solicitor, I act for very many good landlords. But the point of laws is not to protect us against the good, but to protect us against the evil.
There is a minority of landlords who look for the nooks and crannies and loopholes of the law in order that they can obtain advantages which the law never intended they should have. I remember how under previous legislation loopholes were exploited by ruthless landlords. I had plenty of cases, both as a lawyer and as a councillor, of tenants who did not know their rights. Perhaps they should have known their rights, but the 358 complexity of legislation and of Government forms is very difficult for people who may not be very well educated, or who are elderly or confused by problems. They do not think of going to the citizens advice bureaux, because they are confused and frightened.
I must say, from my own personal experience under previous legislation and from my own personal fears about a small minority of landlords, that the Government would be well advised to accept this amendment to prevent what could be a very pernicious style of Rachmanism, of oppression of tenants, which could happen under the legislation as drawn at present. I hope that the Government will accept this amendment.
Lord JANNERMay I support this amendment, particularly from the point of view already expressed by my noble friend and by the noble Lord, Lord Evans. Your Lordships will realise how in legal matters people take for granted things which they should know about but which they do not trouble to know about. Consequently, when trouble arises they come along to people in my profession and say, "What on earth is happening? I did not know this".
Let me give your Lordships a very simple illustration. A large number of people have no idea that when their leaseholds expire their homes fall into the hands of the freeholder. They will come into a solicitor's office—and I am sure that this happens all over the country—and say that when they bought their leaseholds they thought that they were all right, and that they would never he taken from them. I remember that when the leases fell in in a certain area, hundreds of houses suddenly fell into the hands of the landlord. I can appreciate the point that the noble Lord, Lord Evans, made that a large number of landlords have some kind of human understanding, but there are others who might attempt to sell the freeholds for very large sums. People do not know, not because they do not want to know hut because they think they are all right until something untoward happens. Therefore any precaution in the nature of the one that is proposed here is something that we should consider very carefully, to enable the tenant to understand his position.
359 The noble Lord, Lord Bellwin, knows what we all know about the shorthold business, and I shall not go into that yet. But people do not understand it, and if a landlord offered alternative accommodation people would not go to a lawyer to ask what the difference would be, and would feel that their protection was the same as previously. I hope that the noble Lord will take that into consideration. It is not a great thing to ask of him, and I trust that he will agree to the amendment.
§ 3.20 p.m.
§ Lord BELLWINI do indeed know what Members who sit opposite feel about shortholds, and I trust that in turn they know what we on this side feel about them. We shall have several opportunities, very shortly, to debate in depth the basic intentions behind the shorthold proposals. For the moment, I ought to stick strictly to this amendment. It would have the effect of preventing somebody who is already a statutory or protected tenant from being granted a shorthold in the same building or in any other dwelling-house in the same registration area belonging to the same landlord. I recognise the concern which has been expressed: that existing statutory and protected tenants may be persuaded to sign away their security by agreeing to take shortholds. That is why we have specifically provided in subsection (2) of the clause that a shorthold of the same dwelling cannot be granted to an existing statutory or protected tenant.
This amendment seeks to go further. It would prevent a shorthold from being granted to an existing tenant not only of the same dwelling but also of any dwelling in the same building, or even of any dwelling belonging to the same landlord in that registration area.
We have considered whether there should be circumstances of this kind—whether landlords should be prevented from granting a shorthold to an existing tenant. Our view is that they should not, for two reasons. First, there may be circumstances in which it would be in a tenant's interests to take the shorthold of a different dwelling from the same landlord. Secondly, it would be difficult to draft a provision which would be foolproof.
360 For example, would two subsidiary companies be the same landlord? This is the sort of difficulty which would arise with a provision of this kind.
However, we recognise the need to prevent existing tenants from being tricked out of their statutory security by being offered shortholds without realising what this involves. Our solution lies in the use of the prescribed notice that the landlord must serve on the tenant under Clause 51(1)(b). This notice will specifically draw to the attention of any prospective shorthold tenant who is already a protected or statutory tenant that short-hold offers him less security than his present tenancy.
This seems to me the best way of ensuring that tenants know what a short-hold entails. It seems better than denying tenants who may want to do so the opportunity to take a shorthold tenancy. As I have said, there are many more aspects of this shorthold proposal which we need to talk about. We can talk very much about loopholes, and I am sure that we shall do so, but in the interests of progress I think that I should stay with it at that and ask the Committee to reject the amendment.
§ Lord GIFFORDIn his reply to the amendment the noble Lord has not given the Committee a good reason why it should not be accepted. I find it quite impossible to imagine circumstances in which it could he in the interests of a tenant to change from having a protected tenancy, with full security at a fair rent, to having a protected tenancy, without any security beyond a year, for a fair rent.
When looking at this amendment and at some of the others which are to be moved later this afternoon, I think we should bear in mind that in times—and they are frequent—when the value of property rises steeply, the difference between the value of a house with vacant possession and the value of a house with protected tenants is measured in tens of thousands of pounds. A landlord who wishes to realise the full value of a house with vacant possession can, and will, go to his legal advisers and say, "What can I legally do?" As the Bill is now drafted, they can tell him that one of the things he can legally do is to invite his tenants to move around from one floor 361 to another or from one house to the neighbouring house. Without even misrepresenting the position it can be put in a most attractive way to a tenant who may not be enjoying a fair rent that he can have a fixed term for a year and that he can have a fair rent, a lower rent, and perhaps a larger place. All that will be repaid one hundredfold when, in a year's time, the vacant possession value can be realised.
That is why we need to make the Bill tight. In the Rent Act, it was recognised that tenants should not be subjected to the danger of being shifted from one part of a building to another. That is already part of the law—Clause 12 of the Rent Act 1977. Why at least can this not be considered where the invitation is that a tenant should move from one part of a building to another, which is the most likely invitation because it is the least disruptive to a tenant and one which he in his ignorance may most readily accept? Will not the Minister give some ground upon the amendment? It cannot be to anybody's detriment for this amendment, or something like it, to be accepted.
§ Lord HYLTONI appreciate the concern which has obviously motivated this amendment. Also I appreciate very much what my noble friend said in his very careful reply. May I put to him this question and suggestion regarding the notice which is provided for under Clause 51(1)(b): In future, would the department draft a model notice which could then be circulated to landlords' organisations and to solicitors and their professional bodies and generally made as widely known as possible? If this could be done, I think it would be helpful.
Lord JANNERBefore the Minister replies, may I underline the suggestion which has been made? If the Minister does not accept the amendment will he at least give an undertaking that in the notice which is handed by the landlord to the tenant, or when a landlord wants to persuade a tenant to move, it will be stated categorically—and I say "categorically" with emphasis—that his protection is being taken away from him?
§ 3.28 p.m.
§ Lord BELLWINI am grateful to my noble friend Lord Hylton for the point 362 he has made. I thought I had said, when speaking, that the notice would be a prescribed notice. That was the word which I used. It would be just that. I am certainly able to assuage his concern. But if there should be any doubt whatsoever that it is not as I have said, then we shall very carefully consider it. I am absolutely sure that the notice will be categorical, that it will be clear and that it will be in a prescribed form, but now that my noble friend has emphasised it I will look more closely into it. I am fairly confident that I can assure him about it.
As to the rest of the observations made, I cannot accept them because I do not believe in them. We have to consider what it is that these proposals set out to do. Again I am being very tempted to get into the debate we shall be coming to in a few moments. I shall try as best I can not to do so, but I must make the point that the basic objective of these proposals for shorthold is to give to landlords—those who own homes, those who live in them, those who have premises which they have deliberately kept vacant, for whatever reason—an incentive to bring that accommodation on to the market for tenants who would like to be in it.
I take the point which noble Lords have made, especially the point made by the noble Lord, Lord Gifford, about the kind of situation he envisages. Of course it is not impossible. Nobody can say that anything would ever be impossible, whatever the regulations. And who would know that, may I say with respect, more than the noble Lord who does a good deal of work in this field? But with the safeguard I have mentioned of the kind of notice that we propose, offsetting that, and the great need that exists for this kind of accommodation on the one hand, against the possibility that has been referred to—which I do not entirely deny, because who could?—on balance we say that to achieve our overall objective in the whole of these shorthold proposals we could not accept this amendment. I cannot go further than that.
§ Baroness BIRKI shall restrict myself at the moment entirely to this amendment. In view of what the Minister has said, although I think we have gone rather 363 wide now, I will withdraw the amendment for the time being, but it will be subject to the production of a draft of the sort of notice the Government are thinking of issuing. Obviously I do not expect the Minister to say at this moment what will be in it, but if he is really considering that then I will not press the amendment. If he is not, or if he is going to be halfhearted about it, then I will press the amendment. But if he will produce something along the lines that my noble friend Lord Janner suggested, in time for us to be able to see it before Report stage, then I will withdraw the amendment for the time being.
§ Lord BELLWINI cannot say that I will reproduce this before Report stage, but what I do undertake is to take it away. I believe this is a critical part of what we are proposing. I entirely understand that, and I gladly assure the noble Baroness that if it is at all possible I will try to do it. But I cannot give an undertaking so to do. If I fail so to do because I cannot, then she will have to decide her course of action.
§ Amendment, by leave, withdrawn.
§ Lord MOWBRAY and STOURTONThere is a Statement to be made, and I beg to move that the House do now resume.
§ Moved accordingly, and, on Question, Motion agreed to.
§ House resumed.