§ House again in Committee on Clause 6.
§ [Amendment No. 10 not moved.]
Lord Hesketh moved Amendment No. 11:
Page 5, line 22, leave out ("month") and insert ("period").
§ The noble Lord said: This is simply a drafting amendment. An amendment to subsection (3)(a) of Clause 6 made in another place extended from one month to three the period allowed for a landlord or tenant on whom notice is served under the clause to refer that notice to the Rent Assessment Committee. However, due to an oversight a necessary consequential amendment to the wording of subsection (3)(b) was omitted. The present amendment makes good the omission. I beg to move.
§ On Question, amendment agreed to.
§ Clause 6, as amended, agreed to.
§ Clause 7 agreed to.
§ Schedule 2 [Grounds for possession of dwelling-houses let on assured tenancies]:
Lord Graham of Edmonton moved Amendment No. 12:
Page 95, line 8, leave out ("(in either case)").
§ The noble Lord said: I understand that it would be for the convenience of the Committee if in addition to Amendment No. 12, which I now move, I also spoke to Amendments 13, 14, 15, 16 and 29. Those who follow these matters closely will understand that in effect they all hang together. They all deal with the gravamen of Schedule 2, which is the part of the Bill that deals with possession: the various grounds for possession; grounds on which the court must order possession; and grounds on which the court may order possession.
§ It is right to say in introducing these amendments that we recognise, as indeed do the Government in bringing forward the Bill in this shape, that everyone concerned in housing not only has obligations—and much of what we have been talking about earlier this evening was about obligations and responsibilities of landlords towards tenants—but we also recognise that landlords have rights in respect of the letting of their property.
§ At the same time, while they have the right to regain possession of their property under certain circumstances, there is also an obligation on the landlord to recognise that the tenant (who, under the terms of the Bill and indeed the terms of the amendments I move will be dispossessed) also has rights.
§ As has been said, the Government in this Part of the Bill are doing a great deal to improve the lot not only of landlords but also of tenants of a certain status. We think on this side of the Committee that, much though the Government are doing, there are ways in which their circumstances can be improved. The Minister and his advisers will understand our general sense of wanting to help people who could be in danger in the desperate circumstances of housing, whatever the legalities of the matter, of being dispossessed of their tenure.1556
§ We nevertheless also accept that it is right and proper in a Bill of this kind and at this time—because we shall be lambasting the Government more than once—to pay tribute to the fact that this Part of the Bill is not only unexceptionable in general from the point of view of its thrust, but we also recognise that there is a lot of common sense in it. What the Minister's advisers will assuredly have told him is that what we are doing here is shifting emphasis and making some alterations, without necessarily fundamentally either destroying or altering to a major extent what the Government are doing.
§ In effect, three of the amendments are small but necessary, and the major ones are seeking to change, or change around, or replace particularly the items in Schedule 2 on page 95 and the following pages. We hope that the Minister will accept that we are seeking to improve on the intention of the Government. We hope that the Government will not be arrogant enough to believe that at every stage they have got it right. Those people outside the House who advise us, based upon their fears and experiences, may have something to contribute to improve some parts of the Bill. That is the spirit in which I would ask the Minister to listen to what I have to say.
§ In the consultation paper outlining the Government's proposals on the private rented sector Ground 1 is presented as being an amalgamation and simplified version of a number of existing Rent Act grounds for possession. But in fact as drafted it is considerably wider in scope than those grounds, and leaves assured tenants with less security of tenure than regulated tenants. This series of amendments seeks to rectify this by establishing grounds equivalent to those applying to regulated tenants under Cases 11, 12 and 20 of Schedule 15 of the Rent Act 1977. I hope the Minister will accept that in essence the last sentence of mine encapsulates what this series of amendments is about.
§ In Schedule 2 we have a series of grounds on which the court must order possession. They are laid out there and I shall be referring to some of them as we go through. Ground 1 sets out two separate and distinct bases for possession. The purpose of the above amendments is first to modify Ground lA and secondly to delete Ground 1B as a mandatory ground. A separate amendment proposes its replacement by a new discretionary ground.
§ Case 11 of the Rent Act 1977 safeguards the position of owner occupiers or tenants who wish to let their own homes on a regulated tenancy during a temporary absence. For example, where an employment commitment has taken them abroad. The case guarantees the landlord possession at a later date provided that the court is satisfied that the landlord intends to resume occupation of the premises, or that other special circumstances have arisen. For instance, the landlord needs to sell the property in order to acquire a new home nearer his place of work. By contrast no such condition applies to the granting of a possession order under paragraph (a) of Ground 1. The mere fact that a landlord once occupied the premises will entitle him to possesion against all future assured tenants subject only to notice being served at the beginning of the tenancy that the ground applies to it.1557
§ I ask the Minister to accept that this is an anomaly and gives former owner-occupiers an additional mandatory ground for possession which is related neither to their own present circumstances or needs nor to the conduct of the tenant. It is also open to abuse as a landlord will be able to move into a property for a short time and later claim that it was his only or principal home. Such shams are difficult to expose, and tenants will require protection against abuse in the form of additional conditions governing the granting of possession.
§ The amendment to insert Ground 1B establishes that one of a number of conditions must be met before possession can be granted under paragraph (a) of Ground 1. These conditions, which are identical to those applying to regulated tenancies under Case 11, are set out in a further amendment to add a new Part V to Schedule 2. As amended, the grounds will properly safeguard the interests of the bona fide former owner-occupier who has genuine need of possession.
§ Paragraph (b) in the Bill as drafted sets out a second arm to Ground 1. Any landlord other than one who has acquired the property over the head of a sitting tenant will have an automatic right to possession if he satisfies the court that he requires the premises as his or his spouse's only or principal home. The nearest equivalent ground applying to regulated tenancies is contained in Case 9 of Schedule 15 to the Rent Act 1977. However, Case 9 is discretionary: the court may refuse to grant possession if it considers it unreasonable to do so. In addition, the court cannot make an order under Case 9 if it is of the opinion that greater hardship would be caused to the tenant by the granting of possession than would be caused to the landlord by refusing to grant possession.
§ In our view the greater hardship test strikes a reasonable balance between the interests of landlord and tenant. It also provides some safeguard to tenants in the event of a spurious claim by a landlord that the premises are required for his own use when the real intention is to sell the property with vacant possession and the omission of the test from Ground 1B will bear unduly harshly on tenants. The amendment deletes the present paragraph (b), thus removing the second arm of Ground 1. A separate amendment proposing a new Ground 17 seeks to introduce a new discretionary ground virtually identical to that applying to regulated tenants under Case 9.
§ I think that it is appropriate to mention one or two details in respect of the other amendments. Under Amendment No. 15, proposing Ground 1A, when paragraph (b) of current Ground 1 is deleted no special provision is left for owners who have acquired a property for future use as a retirement home and who have in the meantime let it on an assured tenancy. It is reasonable that such landlords should have a mandatory right to possession, provided that the court is satisfied that the landlord intends to take up possession of the property on retirement or that other special circumstances have arisen.
§ Amendment No. 16 deals with the special circumstances of members of the armed forces. 1558 Under new Ground 1B, we take into account that paragraph (b) of current Ground 1 leaves no special provision for members of the armed forces who have acquired a property as a future residence. The amendment inserts a new Ground 1B equivalent to the ground applying to regulated tenancies under Case 20 of Schedule 15 to the Rent Act 1977.
Under Amendment No. 29 there is proposed a new Part V, entitled,
Provisions Applying to Grounds 1, 1A, and 1B".
It sets out the conditions that will need to be satisfied before possession can be granted under Grounds 1, as amended, IA and 1B. It is equivalent to Part V of Schedule 15 to the Rent Act 1977.
§ I hope that the Minister will understand the spirit in which the amendments are moved. This is not an attempt to knock or decry the obligations, duties and—not least—the rights of a landlord, but we are anxious to ensure that tenants who may be very frail and much at risk are given the maximum protection possible. I beg to move.
§ 8.45 p.m.
The Earl of Caithness
Amendments Nos. 12 and 13 would make it a requirement of Ground 1 that both conditions in it should be fulfilled before the ground could be used. That is to say, a landlord who wanted to recover a property under this ground for himself or his wife to live in would have to live in the property first, and would have to live in it, or his wife would have to live in it, after possession had been recovered. But there arc many cases of people who buy property while they are working or living somewhere else, people in tied accommodation who want to have somewhere of their own to retire to, schoolmasters, members of the armed forces, many others. In many cases it is simply not practicable for them to live in the property before they let it out. We want to encourage people to make available for rent homes which they cannot actually live in themselves.
If we were to accept the Opposition amendments, we should make the ground so tight that it could not be used in many situations where it would only be fair and reasonable for the landlord to have his property back. I do not think that that is what members of the Committee want. Indeed, I think that it would do much to maintain some of the many barriers to encouraging landlords to let property that I believe they would like to let but fear letting under the present Acts.
I turn to Amendments Nos. 14, 15, 16 and 29. Taken together, they attempt to have adopted in the Bill various tests in the Rent Act that we have consciously decided to abandon. Amendment No. 29 reinstates provisions similar to those that exist in the Rent Act. It set out an additional part to the schedule containing conditions at least one of which must be fulfilled if an amended Ground 1, or as the noble Lord would like Ground 1 A or Ground 1B, is to apply. We have tried to simplify and streamline the grounds for possession.
The existence of a flexible, open-ended form of shorthold makes some of the more complicated grounds in the style of the Rent Act cases unnecessary. We do not want to provide grounds for 1559 possession that are so hedged around with conditions that they are virtually unuseable. For that reason, I am not attracted by the idea of reinstating these parts of the Rent Act.
Amendment No. 14 tries to bring back some parts of the Rent Act. It sets out a requirement that, for a particular ground to apply, certain conditions must be satisfied. Amendment No. 15 reinstates, in a form amended to cater for joint landlords, the retirement case for possession, Case 12. The arguments that I have already mentioned apply equally to these amendments. Ground 1 as it stands we believe to be perfectly adequate for the purposes of someone who wishes to repossess property to which he intends to retire. We do not need this additional Ground 1A, hedged around as it is by the restrictive conditions in the proposed part of the schedule.
Amendment No. 16 suggests that there is a need for a special ground for repossession for servicemen, similar to Case 20 of the Rent Act. However, I can assure them that the scope of Ground 1 is perfectly adequate to enable it to be used by servicemen for the usual reasons for which they wish to recover possession. I know that the noble Lord is particularly interested in the Armed Forces. I can assure Members of the Committee that I have the interests of servicemen very much at heart. If I thought they would not be able to recover their homes when returning from service, or for other reasons, I should have asked for this ground to be amended. But the serviceman is no different from any other landlord who returns home or otherwise needs his property for himself, or who purchases a property for his retirement. These are exactly the sorts of cases Ground 1 is designed for, and we do not need an additional ground to provide a definition of a serviceman or for any other reason.
We are moving away from the Rent Act regime, and we are attempting to encourage landlords to let property confident in the knowledge that they can recover it when they need it. This is the best way to increase the supply of privately rented accommodation. These amendments would not help our aim in that regard, but would hinder it.
I should like to take up a point specifically raised by the noble Lord, Lord Graham of Edmonton. He said that he was worried that a landlord could move into a property to establish residence and would set up a sham deal. If the landlord occupied the property only to establish residence and it was not his only or principal residence—in other words, it was a sham—and if the court could establish that it was a sham residence, the mandatory ground would not apply. There is a safeguard when the landlord goes to court and it will obviously look into the matter carefully.
§ Lord Graham of Edmonton
I listened carefully to what the Minister said. I shall need to study it and consult with those outside the House who have drawn our attention to the need for these amendments. In general the Minister has a much rosier view of what he believes (not what he hopes) the Bill will achieve in the circumstances of the housing market in 1989, 1990 and 1991.
1560 I do not wish to be offensive in saying that we on this side of the Committee not only rely upon but are moved by a different side of the ball game. I am not alluding to any undue pressure from any source. In looking at the housing situation I remember the time when my noble friend, I and others watched both fascinated and repulsed by the current situation which allows the iniquitous successor to Mr. Rachman to operate. We remember that two weeks ago we listened in a room upstairs to representatives from the Bayswater Housing Project. It has people living in substrata housing in which neither the Minister nor I, nor any other Member of the Committee, has or is ever likely to live. They are real people and they are suffering from the delusions which other Governments—it could have been my own—were seeking to solve. That is the reality.
We are far from sanguine. I believe that the Minister is far too sanguine—and that is not an offensive phrase—that the Bill will solve problems of that kind. It may well relieve the rented housing sector, free it and make it more flexible. However, it will not come near to a million miles of solving the problem of some of the people we have in mind.
I am disappointed by what the Minister has said. I shall read his words carefully and perhaps come back with some of these aspects at another stage. I appreciate the fact that the Minister and his advisers are taking the amendment seriously. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 13 to 16 not moved.]
Lord Graham of Edmonton moved Amendment No. 17:
Page 95, line 20, leave out lines 20 to 31.
§ The noble Lord said: The amendment seeks to delete the ground dealt with on page 95 at line 20.
§ Ground 2 seeks to give landlords of mortgaged properties a mandatory right to possession where the mortgagee requires vacant possession of the property in order to dispose of it under a power of sale. There is no equivalent ground applying to regulated tenancies in general, although it is incorporated into the specific grounds covering returning owner occupiers, retirement homes and the homes of serving members of the Armed Forces. They are Cases 11, 12 and 20 respectively of Schedule 15 to the Rent Act 1977.
§ The underlying purpose of the proposed ground is unclear. There is no particular reason why landlords in general should be entitled to possession where, for example, they have defaulted on their mortgage payments, although such an entitlement may be justified in cases (as provided for in the Rent Act) where the landlords have let their homes or intended retirement homes. Nor is there any overriding need to provide mortgagees with an additional safeguard, exercised through the landlord, against finding themselves unable to secure vacant possession on account of a sitting tenant. Most mortgage deeds contain a term prohibiting the borrower from letting the property, at least without consent, and it is well established that a tenancy granted in breach of such a term is not binding on the mortgagee as a protected 1561 tenancy within the meaning of the Rent Act. I refer to the case of Dudley and District Benefit Building Society v. Emerson, 1949.
§ The ground would therefore appear to be both unreasonably wide in the scope of tenancies to which it applies and superfluous. Moreover, it is open to abuse because some landlords might seek to engineer through a linked company a sham arrangement for a mortgage in order to bring the tenancy within the scope of the ground.
§ The Minister has satisfied me that the sham grounds upon which I rested part of my case in respect of the earlier amendment was fairly rebutted by him. He will not need me to remind him that the kind of arrangement to which I have referred in respect of linked companies is rife in a certain strata of landlords. We are not castigating "landlordism" as such but we are speaking passionately and powerfully on behalf of some people who are affected by their activities. I beg to move.
§ 9 p.m.
The Earl of Caithness
My Lords, I believe I am right in saying that we are speaking to Amendment No. 17, and to the two consequential amendments, Nos. 26 and 30.
These amendments would drop an essential ground for possession and reinstate an amended version of tests in the Rent Act which we have consciously decided to abandon. Amendment No. 26 restores Case 9, the discretionary case for possession where a landlord wishes to obtain possession of his property for himself or certain specified family members to live in, but provides that it may not be used where the landlord purchased the property with a sitting tenant, or where the tenant previously occupied those same premises under a different tenancy, or lived elsewhere in the building purchased by the landlord. Amendment No. 30 restores the "greater hardship" test of the Rent Act. The court may only order possession under the "family member" ground where it is persuaded that greater hardship would not be caused by granting the order than by refusing it.
It is not an accident that this ground and the "greater hardship" test are not repeated in this Bill. It has been an invidious task for courts to decide whether the tenant or the landlord who wishes to repossess will suffer greater hardship if the order is not granted, and it has been notoriously difficult for the landlord to recover his property. It is of course a cardinal aim of this Bill to encourage landlords to make more accommodation available.
Here there is a difference of philosophy between Members on this side of the Dispatch Box and those opposite. The noble Lord, Lord Graham, said that we have a rosier outlook on the Bill than he—
§ Lord Graham of Edmonton,: I said more sanguine.
The Earl of Caithness
I remember sitting on those Benches opposite—not in the hallowed place at the Dispatch Box where the noble Lord opposite is standing and thinking that the Labour Party had a 1562 very rosy and sanguine outlook on some of their legislation which I did not think would work terribly well. However, there is a difference of philosophy between us. We believe that we shall not achieve some of our aims if we restore the more restrictive parts of the Rent Act. I consider that the two amendments do that.
I also cannot accept that Ground 2 should be deleted. If a mortgagee wishes to exercise a power of sale, that is in itself a good enough ground for possession. If a landlord has defaulted on his mortgage repayments, his mortgagee should be able to recover the property. We amend the Rent Act and the Housing Act 1980 to enable mortgagees to recover possession where a mortgagee was entitled to exercise a power of sale under the Law of Property Act 1925. That ground gives effect to those provisions in this Bill. Indeed, Amendment No. 29 reinstated such a provision in Schedule 5.
I do not accept that there is a need for a restrictive ground for possession, as in Amendment No. 26, or for the difficult hardship test in Amendment No. 30. We need Ground 2. The noble Lord, Lord Graham, also spoke of landlords setting up bogus mortgages to gain possession under Ground 2. Where Ground 2 could be used, the landlord must have served a notice under Ground 1 and so could recover possession. Therefore, the subterfuge mentioned by the noble Lord would not be as effective as I believe he thought it would be when he moved the amendment.
§ Lord Swinfen
Perhaps my noble friend would consider the case where a mortgage on a property is made some time after the tenancy has started. As I understand it, the grounds in the Bill are to cover cases where somebody has bought a house for his own use, has gone abroad for a time and has let it to pay the mortgage before returning. However, what about a case where there is already a tenant in the house; the landlord needs to raise money; obtains a mortgage on the house to raise the money and subsequently defaults on the mortgage and the mortgagee then wishes to sell the property to recover his money?
§ Lord McIntosh of Haringey
Surely in such a case the landlord is borrowing money on the market and uses the house as security. However, there is no reason that the tenant should suffer in any way under those circumstances.
The Earl of Caithness
As my noble friend knows, we are happy to consider anything which is put to us. I should like to consider that point. However, if a landlord applies for a mortgage or a bank loan on property which is subject to a tenancy at the time, it will doubtless be a far smaller mortgage than if the property were in vacant possession.
§ Lord Graham of Edmonton
That is not the answer to the problem that was raised. The Minister reminds us of the times when he sat on these Benches and took the same view as he says I am taking about Government action. The difference is that the Labour 1563 Government were right and the noble Earl was wrong. One might say that nothing has changed except the two sides of the Chamber.
I appreciate how careful the Minister has been. One of the purposes of our debates is to provide those outside the Committee with as full an explanation as possible of the raison d'être for those parts of the Bill which we are seeking to amend. There are those outside who are much closer to the problems of tenants—and not necessarily closer to the problems of landlords who I acknowledge have problems—and who are genuinely concerned primarily about the security of tenure and that there is no proper recourse to the law. However, I shall read what the Minister has said and possibly come back to the matter at a later stage. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
Lord McIntosh of Haringey moved Amendment No. 18:
Page 96, line 40, at end insert—
§ (c) suitable alternative accommodation is available for the tenant or will be available for him when the order for possession takes effect.").
§ The noble Lord said: In moving Amendment No. 18 1 shall also speak to Amendments Nos. 18A, 18B, 19, 20, 27 and 28. These amendments are concerned with the vexed issue of suitable alternative accommodation. It has to be recognised that throughout the whole history of housing legislation, the provision of suitable alternative accommodation as a reason for a landlord gaining possession of tenanted property has been peculiarly difficult. When the law is too lax, the landlord can offer a rabbit-hutch and the law will support him. When the law is too tight—although I am not sure that I can bring to mind any examples of the law being too tight—it becomes virtually impossible for the landlord to make a reasonable offer to a tenant in order to obtain possession for a perfectly reasonable purpose.
§ These amendments are particularly concerned with the case referred to in Ground 6 where the landlord needs possession—and we accept that that is a genuine situation—in order to redevelop the property. We are not saying that there should be no right of repossession. We are saying that the present Bill goes much too far in making it easy for the landlord to offer alternative accommodation which does not have the same quality or degree of security as the existing accommodation.
§ One of the most common abuses of the suitable alternative accommodation provision in housing legislation has been where the landlord has offered accommodation which is, in effect, tied accommodation, because it belongs to his business associates, his family or other connections which he has. In the past, indeed after the Landlord and Tenant Act 1954, business tenancies were used as a way of getting people out without any real intention to redevelop. It is possible to go through the motions of redevelopment, even to go so far as to seek planning permission, and then do nothing about it after the tenant has been evicted. We are anxious that that phoney redevelopment should not have effect. 1564 Therefore, we are asking that the words "suitable alternative accommodation" should be added into the reasons under Ground 6—the redevelopment ground—for mandatory possession in cases where a court must give an order for possession. That is in Amendment No. 18.
§ Amendments Nos. 27 and 28 are consequential amendments. Amendments Nos. 18A and 18B are two different ways—complementary rather than conflicting—of approaching the issue which I addressed a few moments ago. That is, the phoney alternative where the landlord offers the chance of moving to other property of the same landlord, an associated company, relative, business associate, or whatever it may be. It will be obvious to the Committee that when that happens the degree of security in the new property will not be comparable to the original. It will provide far too easy a ground for the landlord to obtain possession in the redevelopment case.
§ Therefore, all these amendments are designed to provide some safeguards for tenants. It is not that we are opposed to repossession where there is a genuine need for redevelopment. However, bearing in mind the experiences which have unfortunately shown over many years that, in the end, many of these claims for repossession on grounds of redevelopment are phoney, we want to provide a certain number of restrictions around such a ground.
§ I can see what the Minister has down for his reply. He will say that it is in the Rent Act which we are deliberately moving away from. I have eagle eyes in these matters. However, that is not good enough. The abuse that has taken place over many years in which we have had legislation relating to rent control—and, above all, security of tenure—does not give us any confidence that the existing ground (particularly the ground that requires that this is a mandatory reason for possession in which the court must give possession of the property) is adequate to meet the abuses which have taken place, are taking place and I fear will continue to take place under the proposed legislation. I beg to move.
§ Lord Seebohm
This is an interesting amendment. I have had the same experience. I was turned out of my accommodation because of the danger from asbestos and all the floors had to be taken up. However, I had a right of re-entry. Perhaps the amendment is not absolutely correct and the noble Earl might consider whether an amendment is required to give a right of return when the necessary work is completed.
§ The Earl of Lytton
I have great sympathy with what the noble Lord, Lord McIntosh of Haringey, has put forward. He referred to the commercial landlord and tenant legislation and the grounds upon which a landlord can seek possession of property because of redevelopment.
My understanding is that the courts have interpreted that fairly strictly and that the present position is not simply that you must have planning consent but that you must also have a genuine scheme which is, so to speak, ready, willing and able to go ahead. That is my understanding of the position. 1565 Therefore, I do not see an analogy there as being anything less than what the noble Lord is asking for.
I certainly believe that the redevelopment criterion should not be used as a ploy for getting out tenants where there is no intention to proceed with any such scheme. Clearly that would be an abuse of the system.
I am a little unclear—perhaps the noble Lord could clarify the position—regarding the provision of alternative accommodation. Is he suggesting that there should be an offer as part and parcel of exercising this redevelopment option, if I may call it that? Is he suggesting that alternative accommodation should be provided? If so, that would appear to be a duplication of what is provided for elsewhere in the Bill.
As we heard earlier, we are referring to new tenancies. It would appear to me no great difficulty for landlords to look forward a little and include in their tenancy agreement a provision for re-entry in the same way as is dealt with in the commercial field. There should be a redevelopment clause with an appropriate period of notice. Then the tenant can hardly say that he has not been warned about it. It puts the landlord into the position of making his intentions quite clear from the outset. I wonder whether the Minister would care to comment upon that also.
§ 9.15 p.m.
The Earl of Caithness
I shall take first Amendment No. 18 and the consequential Amendments Nos. 27 and 28. The issue whether suitable alternative accommodation should be provided by a landlord wishing to use this ground was, as the Committee knows, discussed in Committee in another place. This ground is for people who wish to develop property. It is based on the well-known and well-tried similar gound in the Landlord and Tenant Act 1954. It is already tightly drawn so that it cannot be used where the landlord purchases the property with sitting tenants, or where he can do the development work around the tenant without actually displacing him. We do not want to circumscribe it so tightly that it can never be used at all, and that is what would happen if the landlord were obliged to find suitable alternative accommodation for the tenant every time he wished to redevelop. It would make largescale development impossible. I know that the noble Earl, Lord Lytton, will be the first to appreciate that developers of necessity have to operate to tight timescales, and they cannot afford the sorts of complication and delays that would be entailed if we were to accept these amendments. There is in any event a discretionary ground for possession where the landlord is able to provide suitable alternative accommodation, and if he can offer it, he does not need to use this ground.
The noble Lord, Lord McIntosh, was right to mention to the Committee the question of the landlord who might have no intention to develop notwithstanding the fact that that was the ground under which he was trying to obtain possession. The noble Earl, Lord Lytton, is right in saying that there is extensive case law under the Landlord and Tenant Act 1954 as regards business tenancies which shows 1566 that the courts require extensive evidence of the landlord's intention to develop if possession is to be given. If the landlord misrepresents the position or conceals material facts, the tenant can seek compensation under Clause 12.
I appreciate the intentions behind amendments Nos. 18A and 18B. The noble Lord, Lord McIntosh of Haringey, will have noted that we have drafted the ground so that it cannot be used by a landlord who employs the device of granting a new tenancy to the same tenant of the same property and then claims that the ground applies because he acquired the property before the start of that tenancy. These amendments seek to catch the landlord who would try to evade the requirements of the ground by granting subsequent tenancies through associate companies or persons with whom he was otherwise connected. Unfortunately, the amendments also have the effect of depriving landlords who acquire their interest in a property other than by purchase, say by inheritance, from using the ground. The amendment bites not only on people who should not be able to use the ground, but also on those whose predecessors other than by purchase had a legitimate case to use the ground. I might add that the amendments as drafted do not work because the new landlord must be immediately before the grant the same as the old landlord. I believe that to be a practical impossibility. So I appreciate the intention behind these amendments, but I trust the noble Lord, Lord McIntosh, will accept that they bite on the good just as hard as they bite on the bad.
Amendment No. 19 is again aimed at abuse, but it is drawn so widely that it would actually prevent the sort of redevelopment which this ground should facilitate. As drafted, the amendment would mean that a landlord could not use the ground where he had granted a tenancy to someone who was a former tenant of his but of different accommodation. It would prevent the sort of development where a landlord buys an empty block, lets some of it and moves tenants around as he redevelops. This is how development often happens. The ground as it is drafted aims at protecting tenants, particularly sitting tenants whose property is bought over their heads; but it also aims at enabling landlords to undertake large development projects, letting the property in the course of development, and obtaining possession where they need to because the work cannot be done round the tenant. I believe that as drafted it achieves these aims. The noble Lord, Lord McIntosh, has excellent eyesight, as we all know, and he suggested that I might be using words like "we want to get away from the existing Rent Act" when I answered this amendment. I believe he misread the brief.
§ Lord McIntosh of Haringey
Before I make up my mind what to do about Amendment No. 18, can I press the Minister for a moment more regarding Amendments Nos. 18A and 18B? I accept what he says and I appreciate that it is a defect of the amendments that they cover property which changed hands through inheritance rather than by purchase. I accept that the effect of the amendments would be, as he said, to bite on the good as well as on the bad. If 1567 the Minister accepts that biting on the bad is a good thing—if I may put it that way—would he be prepared to consider sympathetically amendments which do not have the defects which he has pointed out or would the Minister be prepared to join with me in seeking to draft amendments which bite on the bad but not on the good?
The Earl of Caithness
I am always happy to discuss with the noble Lord anything that would be an improvement to the Bill.
§ Lord McIntosh of Haringey
I am grateful to the Minister. We could together make some improvements of real value.
I was especially interested in the comments of the noble Lord, Lord Seebohm, and of the noble Earl, Lord Lytton, both of whom spoke about the right of re-entry as a protection to tenants as opposed to the straightforward possession procedures which occupy most of this Part of the Bill. I see the force of what the Minister was saying about the process of development of residential property: work is carried out down through the house, tenants are moved out and they are perhaps them moved back into their original part of the building. This is especially true of blocks of flats. I am sure that that is a sensible approach to redevelopment which ought to be encouraged. If my amendments make that more difficult, I am happy to withdraw them. I shall not ask the Minister to make a commitment now; but there is scope for further consultation between now and later stages on the question of re-entry. I am sure that we can bring forward amendments which do not contain the difficulties of the amendments that I have just moved but yet provide real protection for tenants in this sector of housing.
I listened with interest to the comments of the noble Earl, Lord Lytton, about business tenancies. I am a business tenant and for 19 years 1 have had a redevelopment clause in my lease. As a result, I have had a lower rent and I have taken the risk of being redeveloped out of my premises for all of that time. I consider it a risk worth taking. As a businessman I am perfectly content with that. I am not sure that the same conditions apply to residential property. Indeed, I am sure that they do not apply for residential property, and I am sure that we need greater protection for people whose homes are at stake than for those who simply have to move their businesses to another location.
In the light both of the Minister's indications that there is scope for further amendment and of the comments that have been made, and without any undertaking that we shall not return to this matter at a later stage, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 18A to 20 not moved.]
Lord McIntosh of Haringey moved Amendment No. 21:
Page 97, line 13, leave out lines 13 to 24.
§ The noble Lord said: This amendment refers to another ground for possession, that of rent arrears. I 1568 note that, although I am not speaking to them, the amendments in the name of the noble Lord, Lord Monson, Amendments Nos. 22 to 26, seek to go in the direction opposite to that in which I want to go. I have no doubt that we shall debate those amendments in due course.
§ The intention of Amendment No. 21 is to replace the mandatory possession criterion for rent arrears with a discretion for the courts. If we have that wrong, I apologise; but I believe that the drafting in this respect is correct. Ground 8 is one of the mandatory grounds on which the court must grant possession. It says that if both at the time of service of the notice seeking possession and at the time of the hearing more than three months' arrears are owed the court must grant possession. On the face of it, it may seem that the provision that the arrears must be owing both at the time of the service of the notice and at the time of the hearing is a protection for the tenant. I want to suggest to the Committee that that is not the case.
§ The gap between the two times will not be very great. Under the Bill, it is possible, for example, for a landlord to give only two weeks' notice prior to starting proceedings. I am not expert on the law's delays, but I should imagine that a fairly simple matter of this kind could reach the courts quite rapidly. I think the idea that the courts must order possession in such a case is peculiarly objectionable. Under the terms of the Bill as drafted, the court cannot consider why the rent has fallen into arrears; it cannot consider what the present financial situation of the tenant is, and it cannot consider whether the tenant is willing or able to make realistic proposals to clear the arrears. Further, it cannot suspend a possession order on the basis that the arrears will be paid off within a given time.
§ I am sure that those Members of the Committee who are magistrates will wish to keep the kind of discretion which the courts have at present to order something other than that a person should be driven out of his home, unless there is really no alternative available. There are many reasons why a tenant may fall behind with his rent. For example, it is unfortunately not uncommon for housing benefit claims to take three months or more to be processed. While that is happening, the tenant cannot pay. It is possible, for example, for a mother with children to be reliant upon maintenance payments from a husband or ex-husband. It is not uncommon either for husbands or ex-husbands not to keep up with their maintenance payments, and it can be difficult to trace them. Under those circumstances, the tenant cannot pay.
§ It is also possible for a tenant to fall behind with his rent because of unemployment or ill-health, both of which might be temporary. If those situations are permanent then clearly other arrangements must be made. But they could be temporary and the arrears could be recovered. The court in its wisdom and discretion may feel that temporary financial difficulties are not a reason for shifting people out of their homes, but should be a reason for a sensible assessment of the tenant's ability to pay and whether the payments can be made up.1569
§ There is also, I am sorry to say, the possibility that landlords may encourage rent arrears in order to gain possession. It is not uncommon for landlords to refuse to collect the rent, to fail to collect the rent—for what appear to be plausible reasons—or even to fail to provide receipts for rent. Of course, the law says that you should not do that, but landlords do. Indeed, we know of far too many such cases. Surely it is preferable that courts which have much experience in the matter should be given the possibility of ordering that the arrears should be paid off—which they sometimes cannot be between the service of notice and the time of the hearing.
§ The discretionary Ground 10, which we are not seeking to change, provides a perfectly adequate remedy for cases of rent arrears; namely, the suspension of the order and an order to pay off over a period of time in addition to the current rent. All of those are perfectly possible and reasonable, and the courts have effectively exercised such powers for many years. It would be a great pity if in the Bill, without anyone noticing very much, we should suddenly take away from courts—especially magistrates' courts—the discretion to seek to get the money for the landlord without the upheaval of a repossession, which is clearly undesirable. Moreover, in many cases it may be costly to the public purse because those who are thrown out for reasons of inability to pay are almost certainly going to land up before the local authority as homeless or needing housing help of some kind. Therefore in the interests of prudent public economy, as well as in the interests of compassion and common sense, I hope that the Government will see tit to agree to the amendment. I beg to move.
§ 9.30 p.m.
§ The Deputy Chairman of Committees (Lord Ampthill)
I should remind the Committee that if this amendment is agreed to, then I cannot call Amendments Nos. 22 to 25.
§ The Earl of Lytton
There seems to be one element which the noble Lord, Lord McIntosh has overlooked in the matter; namely, that if, as the Government claim, the Bill will produce an increase in supply then the consequence on the risk of being thrown out of one's accommodation is that much less.
There is just one point that I should like to pick him up on. It concerns the time-scale between the service of notice and the proceedings before a court. Under the present pattern of events, I do not see that being anything other than protracted. There is ample time for the tenant to come to some arrangement with the landlord.
I know that the noble Lord, Lord McIntosh, will say, "He would say that, wouldn't he?" but my next point is, who is ultimately supposed to bolster up the sagging resources of the tenant? Is it the landlord, who has let in good faith in the hope of getting a reasonable return on his capital, or should it be the public sector; and, if so, how? I put that question without necessarily offering an answer.
1570 With regard to the noble Lord's point about the possible claim of failure to pay, such as a receipt not being issued, if a tenant could demonstrate to a court that he had paid, and the landlord was trying to make out that he had not, that would be a matter of fact which, clearly, if proved in the tenant's favour, would defeat the landlord straight away.
I do not believe that landlords incur the costs of going to court to evict their tenants unless they feel frustrated by not being able to get their rent or they have no other choice. The noble Lord referred earlier today to a certain gentleman, whose name I shall not mention, who might be regarded very much as a fringe operator, and certainly a well-publicised one. Not all landlords fall into that category. An enormous number of landlords genuinely and honestly try to discharge their duties as landlords towards their tenants; but there are a number of tenants who deliberately work the system in every possible way to the detriment of landlords. I am sure that those in this place who are private landlords will know that that is so. Therefore, while I have sympathy with what the noble Lord put forward, I am frankly pessimistic about his grounds. I hope to be able to support the noble Lord, Lord Monson, on an amendment which will be moved shortly.
§ Lord Trafford
Perhaps I may ask the noble Lord, Lord McIntosh, one question about this matter. I believe that I fully understood his argument. How long does he feel would he a reasonable time in respect of the landlord's difficulties with regard to rent arrears, as opposed to the tenant's difficulty in keeping up with his rent? They should be balanced out. In this instance, under this schedule, it is three months. If he believes that that is unreasonable as a length of time, what length of time does he suggest is reasonable before someone goes to court, or does he think that the matter should never go to the court and that some discretion should always be used?
I can understand that point with regard to the public sector, but I should have a great deal of difficulty in appreciating that from the small landlord's point of view, although perhaps not from the point of view of the largest landlords. The small landlord's cash flow may not be much better than that of his tenant in many cases. How long does the noble Lord feel that rent arrears should be allowed to run before some sort of action is taken? I gather that he excludes 13 weeks as being too short.
§ Lord McIntosh of Haringey
No. I believe that both noble Lords have misunderstood the purpose of the amendment. I am not attacking the three-month period or the power of the landlord to go to the courts, which the noble Earl, Lord Lytton, seems to think I am. In the amendment I am saying that when the landlord goes to the court after three months—there are different periods for different types of tenant, which again I am not attacking—the court should have an opportunity to order something such as repayment, a suspended payment, or whatever it may be, rather than be forced to order possession without any discretion. That is the basis of my argument.
§ Lord Trafford
I am sorry, I think that the noble Lord may have misunderstood my point. I understand what he was saying. I referred to the 13 weeks as it happens to be in the Bill as it stands. What I was asking the noble Lord is, bearing in mind the problems which small landlords in particular might face, is it not better, to put it another way, to clarify the issue by putting in some specific date to show when it becomes virtually mandatory? It seems to me that when one starts to refer to the discretion of courts in the private sector of letting, one can frequently be absolutely ruining the landlord under these circumstances.
In the public sector the courts have far greater discretion, partly because of the sheer size of the usual public sector landlord, which is the local authority. It would be perfectly reasonable, I agree, if a tenant were in such a position as the noble Lord described of being three or four months behind. The tenant has plenty of time to make arrangements if he is unemployed or ill or in difficulties, etc. —the kind of thing the noble Lord mentioned. But how long should it be allowed to go on before it becomes mandatory'? It does not seem wrong to me to tidy up the legislation and have a firm point so that everybody, landlord and tenant, is aware exactly how much leeway there is.
§ Lord McIntosh of Haringey
I have not misunderstood the noble Lord, Lord Trafford, at all. I must insist that I am not suggesting any change in the period as proposed by the Government. I am saying that there may be the circumstances which I gave where the landlord had failed to collect the rent or had not given proper receipts, as well as circumstances where the arrears were totally out of the tenant's control and would be put right as soon as the housing benefit or the maintenance payments were made. It would be put right as soon as the court was satisfied that there was no doubt that the housing benefit or the maintenance payments would be paid. Under those circumstances I am suggesting that a court's discretion is better than a mandatory possession order. That is regardless of the period of arrears.
§ Lord Coleraine
I should like to ask my noble friend one question about Ground 8. Subsection (c) says:at least one quarter's rent is more than three months in arrears".That subsection could mean something quite different if the rent were payable in advance than if it were payable in arrears. Where the rent is payable in advance it could only be three months in arrears. Where the rent itself is payable in arrears, it is six months. I should have thought that Ground 8 ought to make some provision for this.
The Earl of Caithness
The private landlord rents out property—and he is encouraged to do so—on a commercial basis. He does it for profit and we believe there is nothing dishonourable in that. If the activity is unprofitable, he cannot be expected to continue with it, and that would be to the detriment of tenants 1572 as well. One of the things which matters most to a landlord is that the tenant should pay the agreed rent on time. It is one of the features of the Rent Act which causes constant criticism from private landlords that tenants are able to run up arrears with impunity, knowing that only in the most extreme cases will the courts award possession. If we are to attract private investment into housing on any scale, it is essential that we should provide some mechanism to deal with this problem. That is the purpose of Ground 8 of Schedule 2, which this amendment seeks to delete.
This ground enables a landlord to seek possession where the tenant is, broadly speaking, three months in arrears with the rent both at the date when proceedings are begun and at the date of the court hearing. Unlike the other rent arrears grounds in Part II of the schedule, it is a mandatory ground. So, if the ground is made out, the court must grant possession.
The noble Lord, Lord McIntosh of Haringey, has protested that this is too harsh on the tenant, especially in cases where the arrears of rent are not the tenant's own fault. The Government do not agree. In practice it will normally take six to eight weeks for the case to come to court. So if the landlord is to succeed, the tenant will often be four to five months in arrears with the rent. It does not seem at all unreasonable that landlords should be able to gain possession in these circumstances, rather than, as often occurs under the present system, the court allowing a tenant to pay off the arrears perhaps over a period of years. All that a tenant faced with an action under this ground needs to do is to pay an amount before the court hearing sufficient to bring the arrears below three months. If he does that, the ground will not apply.
The noble Lord, Lord McIntosh, mentioned a specific case where a tenant had offered to pay rent and the landlord had refused it. I wish to make it clear that if a landlord refuses to accept rent from a tenant, the tenant cannot be in arrears with his rent and would be able to prove that.
My noble friend Lord Coleraine asked about paragraph (c) of the ground. I believe that that works, whether rent is payable in advance or in arrears. The ground applies where a quarter's rent is three months in arrears. So, whether it is payable in advance or in arrears, once the three-month period is up the ground begins to work and take effect.
The noble Lord, Lord McIntosh, raised the question of housing benefit delays. Yes, delays occur, although most local authorities claim to deal with applications within the statutory limit of 14 days. Where a local authority is so inefficient that it cannot deal with benefit applications within four to five months I simply do not see why the landlord should suffer. I see no reason why, where a tenant has received notice of possession proceedings under this ground, it should not be possible for the local authority to sort out matters before the case gets to court. I see three very eminent local government people on the other side of the Committee. I am sure that they would be the first to condemn a local authority should it be so inefficient that it could not get housing benefit out in four to five months.
§ Lord Dean of Beswick
I am grateful to the Minister for giving way to one of those three very eminent persons, as he described them. Is he not aware that this particular provision concerning the mandatory action of the court is nothing new? If one goes not too far back in history, one will find that there used to be an Act called, I believe, the Small Tenancies Act under which landlords could apply to the magistrates' court. The only thing that the magistrates' court could do was order an eviction; it had no discretion in the matter whatever.
It was because of the difficulties that that situation caused years ago—and I am going back to the early 1960s—that it was decided that rent arrears court cases had to go to the County Court, where discretion could be used. In this particular situation I believe that the overwhelming majority of landlords will not opt for the discretionary clause; they will go straightaway for possession.
If I am correct on this matter—and the Minister may not be able to give me a pat reply—if one goes back in history one will see that this has been tried before. As a result of the unpleasant consequences, successive governments moved away from it and decided that eviction of tenants from property had to go through the County Court.
The Earl of Caithness
I shall certainly look again at the situation that the noble Lord mentioned. But I think I am right in saying that as regards the cases he mentioned housing benefit was not available. Therefore a lot of the problems to which the noble Lord referred will now be accounted for as, it is to be hoped, after a short interim period which has been pretty detrimental, more efficient and reasonable local authorities are now back in power who will try to keep within the statutory limit of 14 days.
Conversely to the amendment of the noble Lord, Lord McIntosh, there was the amendment spoken to by the noble Earl, Lord Lytton. The noble Earl wished to go the other way and to reduce the amount of arrears which must be outstanding before a landlord has a mandatory right to possession. But I am afraid that I cannot go with the noble Earl down that road. We have, in Ground 10, provided a discretionary ground which the landlord can use where smaller amounts of rent are overdue. Moreover, Ground 11 can be used where the tenant has persistently delayed paying the rent. We think therefore that we have struck the right balance in the mandatory Ground 8, and we would not be willing to see it widened in the way that the noble Earl wished. It appears that the Government have got it right between what the noble Lord, Lord McIntosh, wants on one hand and what the noble Earl, Lord Lytton, wants on the other.
§ Lord Swinfen
Before my noble friend sits down, perhaps he will tell the Committee whether, if a tenant is in difficulties through a delay in housing benefit or through illness, he can get help with his rent from the Social Fund.
§ 9.45 p.m.
The Earl of Caithness
Offhand, I cannot tell my noble friend the answer to that question. I shall look 1574 into that matter. If, as I suggested, someone was subject to possession proceedings because the local authority had not paid housing benefit for four or five months—that is the length of time involved; there must be three months of arrears and a court case would not follow until six or eight weeks later—I am sure that the local authority would be able to help in that situation.
§ Lord McIntosh of Haringey
This is the second time today that the Minister has sought to use the argument that because there are arguments on either side of his position, he must be right. I do not know the correct syllogistic formulation for that fallacy. However, I assure him that it is a fallacy. We put forward reasonable arguments; the Government give unreasonable answers; other noble Lords put forward extremely unreasonable answers; and on that basis the Government claim that they are right. That will not wash. The Minister ought to stop using that argument.
The Minister fell back, as the Government often do in seeking to rebut our amendments, on the one case which I cited involving the responsibility of local authorities. I agree that local authorities ought to deal with housing benefit within a statutory 14 days. I agree that it would be extremely unreasonable if cases were not dealt with within four or five months. However, by diverting attention to one example, the Minister totally ignored the other examples which I gave.
For instance, maintenance payments are not the responsibiliity of local authorities; they are the responsibility of those who are required to make the payments and of the courts. The Minister did not attempt to deny that there are many cases where maintenance payments are in arrears by four or five months. He was also unable to answer the question posed by his noble friend Lord Swinfen as regards payments for illness from the Social Fund.
In the cases which I cited I was not arguing that the time period for rent arrears should be changed. I was arguing that the discretion of the courts ought to be maintained. I notice that the Minister failed to answer all but a tiny minority of cases. I am not convinced by the answers that he gave. I believe that they were addressed to the wrong issue.
If the Minister has no faith in the courts to act reasonably as regards assessment of right or wrong between discretion and the ordering of repayments, so be it. Many of those who are involved in this very common kind of case will resent such an implication. They will feel that better guidance from the Government, the Magistrates' Association or the Association of County Court Clerks on how to deal with such cases would be more helpful than taking discretion away altogether, as Ground 8 does.
I am far from convinced that the blanket denial of court discretion in cases of arrears is the right way to proceed. I am sure that those who are involved in the administration of justice will agree with me. Were it not for the lateness of the hour, I believe that this is a matter on which I ought to test the opinion of the Committee. I give notice that it is highly likely that we shall return to the matter at a later stage. It is only on 1575 that basis that I am prepared to beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
Lord Monson moved Amendment No. 22:
Page 97, line 16, leave out ("thirteen") and insert ("eight").
§ The noble Lord said: With the leave of the Committee, in moving the amendment, I should like to speak at the same time to Amendments Nos. 23, 24 and 25. Those amendments were not grouped with Amendment No. 21, which is why I have kept quiet until now.
§ As the Bill stands at present, a landlord cannot be certain of being able to repossess his property from a defaulting tenant until the tenant is at least three months in arrears with his rent. Before that time the court may help the landlord, as has been pointed out; but, again, it may not. Courts have a natural tendency to sympathise with the tenant who falls on hard times.
§ That may be a burden which a large landlord can shoulder without excessive difficulty, assuming that he owns a number of properties over which the deficit can be spread. However, the delay in receiving backrents amounting to between, say, £200 and more than £1,000 will be extremely burdensome for a small landlord owning only one, two or three houses, as the noble Lord, Lord Trafford, pointed out when speaking to the earlier amendment. The noble Earl, Lord Caithness, also pointed out when speaking to the previous amendment that because of court delays the burden imposed upon a small landlord will be much greater so that double the amounts I mentioned could be outstanding.
§ The landlord in question may well have spent recently two or three times that sum on repairing the tenant's roof. What is more, the rent due may not only be delayed, it may be lost altogether.
§ Lord McIntosh of Haringey
If the noble Lord will permit me, I am curious about the phrase "repairing the tenant's roof". Presumably he is repairing his own roof if he is the landlord.
§ Lord Monson
The noble Lord is perfectly correct in pointing out my error. That gives me the opportunity to point out that the repair of the roof could wipe out an entire year's rent very easily indeed. The noble Lord may not have realised that. A tenant who is evicted for non-payment of rent may well abscond after the court orders his eviction. The small landlord will not have the financial resources or legal expertise to track him down and obtain judgment for the moneys due. I suggest that allowing an improvident tenant to fall two months behind with his rent, as this amendment does, is more than generous. I beg to move.
§ The Earl of Lytton
I should like to rise in support of the noble Lord, Lord Monson. It should be borne in mind that we are talking about a commercial arrangement between landlord and tenant, not related to commercial property but nonetheless a commercial bargain all the same. In most similar contractual arrangements the period after which a 1576 tenant is in default and after which forfeiture provisions bite is very much shorter than the noble Lord, Lord Monson, has proposed. I see no reason why a private landlord who, as the noble Lord pointed out, may have only one property to let should subsidise for a period of time a tenant who falls into arrears. It seems to me that in the context of landlord and tenant the payment of rent ought to be one of the first considerations and not one of the last. Therefore, I wholeheartedly support the amendment.
§ Baroness Gardner of Parkes
I do not support the amendment. However, I recognise that there is a very real situation in which a landlord may be losing a lot of money. I wonder whether the courts are allowed to award interest for the period that the rent was not received; and, if that is not so, whether it could be considered.
The Earl of Caithness
I am grateful to the noble Lord, Lord Monson, for having moved the amendment because it gives me the opportunity to say to my noble friend Lord Swinfen that the social fund is not available for housing purposes. Housing benefit is available for housing costs so the tenant could not obtain an emergency payment from that particular fund.
To the noble Lord, Lord Monson, I repeat that I understand the points he has made. As I said when speaking to the last amendment we had to make a judgment about the amount of arrears which would justify a mandatory ground for possession—and it is a mandatory ground, as my noble friend Lord Trafford said. It clarifies the rather vague position in which we are now as a result of the Rent Act, and an area which, as I said, had led to immense difficulties.
We chose three months. On balance, I think that two months is too short, and therefore I cannot recommend the Committee to accept the amendments that the noble Lord has moved. Finally, I confirm to my noble friend Lady Gardner of Parkes that courts can add interest on if there is a delay.
§ Lord Swinfen
I should like to pick up a remark made by my noble friend. I find the answer that he has given to me somewhat disturbing under certain circumstances. As an example, let us take a self-employed person who does not have any sickness benefit for one reason or another. If, through injury and no fault of his own, he were off work for two or three months, he would lose the roof from over his head as well possibly as his business. I think that that is something that he should bring to the attention of his noble and right honourable friends in the Department of Health and Social Security.
The Earl of Caithness
Of course I should like to look into the point raised by my noble friend; but although local authorities cannot make payments to tenants from the Social Fund, they can make interim payments of benefit where they are not yet in possession of all the information necessary to make the regular housing benefit payments. It is in the local authority's interest to make such payments because otherwise it could be faced with a homeless person to house.
§ Lord Monson
I have naturally taken notes of the Minister's remarks. I appreciate that the Government genuinely believe that they have the balance right. However, I have to say that the Government seem to have only a slightly better perception of the problems confronting the landlord at the sharp end (to use a dreadful but useful modern clich½) than does the noble Lord, Lord McIntosh.
Let me correct that view. The Government may be well aware of the thought processes and motivations of the large, mainly institutional, landlords. I know very little about them; but perhaps large landlords will be happy to live with the Bill as it stands. If the Government believe that they can successfully float off this Bill when it is enacted on the backs of large landlords only, then all well and good; but I think that on the whole small landlords will not be happy to live with it as it stands.
Earlier this afternoon the noble Lord, Lord Bellwin, spoke of something in the order of 200,000 houses and flats that were waiting to be released onto the market if this Bill is successful and if landlords are attracted back into the market. Unless the Government stop loading the dice against the small landlords—I know that they indignantly refute the suggestion that they are doing so—most of those 200,000 houses and flats will remain unlet. I may come back to this matter at a later stage, but for the moment I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendments Nos. 23 to 30 not moved.]
§ Schedule 2, agreed to.
§ Clause 8 [Notice of proceedings for possession]:
§ [Amendment No. 31 not moved.]
Lord McIntosh of Haringey moved Amendment No. 32:
Page 7, line 10, leave out ("that ground is") and insert ("both that ground and particulars thereof are").
The noble Lord said: In listening to some noble Lords speak in this debate, I have been reminded of a song that I learnt when I was a member of the National Association of Labour Student Organisations. I shall not sing it. The title of the song is "Pity the down-trodden landlord":
The landlord whose house he has lent,
Oh, heed his fond prayers,
Don't ask for repairs,
And don't get behind with the rent".
I shall sing it to any noble Lords who wish to hear the song afterwards.
§ This is a fall-back amendment. We failed to persuade the Government that it was right to restore the court's discretion to provide alternatives to eviction in the case of arrears of rent. Now that I consider it, eviction is a much better term than possession. It is eviction from the tenant's point of view—and there are far more tenants than landlords. Possession sounds all right except to those of us who know what eviction means. It means your furniture being put out on the street and yourself being forced on the tender mercies of the local authority or the charities. We are talking about eviction and not possession.1578
§ However, a particular case is referred to in Amendment No. 32. It is the case where a tenant who has had a possession order taken out against him is unable to find out the grounds of that possession order. If it is rent arrears, he does not know the claims that are being made to the court. He does not know whether he is being accused of three months' rent arrears or a greater period. He knows what he thinks the rent arrears are. He may well think that the rent arrears are less than three months. Unfortunately there is all too much experience of disputes between the tenant and landlord about how much rent has been paid and what arrears there are.
§ The same argument would apply to Ground 11, which is discretionary. It refers to partial rent arrears. It may apply to Ground 12, which refers to breach of a tenancy obligation where, as the Bill is drafted, the landlord is not obliged to tell the tenant what tenancy obligation has been breached. If there is any nuisance or annoyance under Ground 14, the landlord is not obliged to give any detail of the alleged misconduct, as the Bill is at present drafted.
§ It is therefore very difficult for the tenant to find out what he needs to do in order to meet the conditions which the court may apply. Quite unjustly and wrongly, as a result of withholding relevant information by the landlord, we may find a possession order being taken out. The tenant is unable to defend himself adequately in the court because he has not been given notice.
§ I understand that in some civil cases there are provisions for disclosure of the argument in advance of a court hearing.
§ Lord McIntosh of Haringey
I am grateful to the noble Lord, Lord Renton. It is indeed the facts in support of the argument that we are asking for rather than the argument. I apologise for my mis-statement of the law. However, it will be readily seen that when I talk about the ground, and the particulars thereof, I am talking about the facts and not about any argument. It will be consistent with other aspects of the civil law. It will be patently just that the landlord should give particulars of his complaint—of basis on which possession is being sought—before the court is required to give any decision on the matter. I beg to move.
§ Lord Renton
The noble Lord, Lord McIntosh, has a good point here. I am not absolutely certain that it is necessary to specify that the particulars may or should be given. However, I think that it is a wise precaution. I hope that my noble friends on the Front Bench will regard this sympathetically.
§ 10 p.m.
§ Lord Hesketh
If a landlord is to obtain possession from a tenant with an assured tenancy he must serve a notice in the prescribed form. The notice must state the ground in Schedule 2 on which possession is sought and must give the tenant the information set out in subsection (3) of Clause 8.
1579 The noble Lord in this amendment wants to go a little further. He has argued that the notice should state not only the ground on which possession is sought, but also the details—for instance, how much rent the tenant is alleged to owe, which obligation of the tenancy he is said to have broken, and so on. We agree that it is reasonable that the tenant should have this information.
We had proposed, in prescribing the form of the notice under subsection (3) of Clause 8, to include a requirement to this effect. But there is no harm in including this on the face of the Bill, and therefore if the noble Lord will withdraw his amendment I undertake that we shall bring forward one of our own to the same effect.
§ Lord McIntosh of Haringey
I could not ask for more than that. I am grateful to the Government, and beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 8 agreed to.
§ Clauses 9 to 12 agreed to.
§ Clause 13 [Increases of rent under assured periodic tenancies]:
§ [Amendments Nos. 33 and 34 not moved.]
§ Clause 13 agreed to.
§ Clause 14 [Determination of rent by rent assessment committee]:
§ [Amendments Nos. 35 to 37 not moved.]
§ Clause 14 agreed to.
§ Clause 15 [Limited prohibition on assignment etc. without consent]:
§ [Amendments Nos. 38 and 39 not moved.]
§ Clause 15 agreed to.
§ Clause 16 agreed to.
§ Moved accordingly, and, on Question, Motion agreed to.
§ House resumed.