HL Deb 13 October 2004 vol 665 cc331-44

(1) For the purposes of this section an "unlicensed HMO" means an HMO which is required to be licensed under this Part but is not so licensed.

(2) Nothing in this Part affects—

  1. (a) any provision requiring the payment of rent or the making of any other periodical payment in connection with any tenancy or licence of a part of an unlicensed HMO, or
  2. (b) the operation of any other provision of such a tenancy or licence.

(3) But amounts paid in respect of rent or other periodical payments payable in connection with such a tenancy or licence may be recovered in accordance with subsection (4) and section (Further provisions about rent repayment orders).

(4) If

  1. (a) an application in respect of an HMO is made to a residential property tribunal by the local housing authority or an occupier of a part of the HMO, and
  2. (b) the tribunal is satisfied as to the matters mentioned in subsection (5) or (7),
the tribunal may make an order (a "rent repayment order") requiring the appropriate person to pay to the applicant such amount in respect of the housing benefit mentioned in subsection (5)(b), or (as the case may be) the periodical payments paid as mentioned in subsection (7)(b), as is specified in the order.

(5) If the application is made by the local housing authority, the tribunal must be satisfied as to the following matters—

  1. (a) that, at any time within the period of 12 months ending with the date of the notice of intended proceedings required by subsection (6), the appropriate person has committed an offence under section 72(1) in relation to the HMO (whether or not he has been charged or convicted),
  2. (b) that any housing benefit has been paid (to any person) in respect of periodical payments payable in connection with the occupation of a part or parts of the HMO during any period during which it appears to the tribunal that such an offence was being committed, and
  3. (c) that the requirements of subsection (6) have been complied with in relation to the application.

(6) Those requirements are as follows—

  1. (a) the authority must have served on the appropriate person a notice (a "notice of intended proceedings")—
    1. (i) informing him that the authority are proposing to make an application under subsection (4),
    2. (ii) setting out the reasons why they propose to do so,
    3. (iii) stating the amount that they will seek to recover under that subsection and how that amount is calculated, and
    4. (iv) inviting him to make representations to them within a period specified in the notice of not less than 28 days;
  2. (b) that period must have expired; and
  3. (c) the authority must have considered any representations made to them within that period by the appropriate person.

(7) If the application is made by an occupier of a part of the HMO, the tribunal must be satisfied as to the following matters—

  1. (a) that the appropriate person has been convicted of an offence under section 72(1) in relation to the HMO, or has been required by a rent repayment order to make a payment in respect of housing benefit paid in connection with occupation of a part or parts of the HMO,
  2. (b) that the occupier paid, to a person having control of or managing the HMO, periodical payments in respect of occupation of part of the HMO during any period during which it appears to the tribunal that such an offence was being committed in relation to the HMO, and
  3. (c) that the application is made within the period of 12 months beginning with—
    1. (i) the date of the conviction or order, or
    2. (ii) if such a conviction was followed by such an order (or vice versa), the date of the later of them.

(8) Where a local housing authority serve a notice of intended proceedings on any person under this section, they must ensure that a copy of the notice is received by the department of the authority responsible for granting the housing benefit to which the proceedings would relate.

(9) In this section—

The noble Lord said: My Lords, I shall repeat what I said earlier this afternoon. Government Amendments Nos. 70A, 72B, 72B, 85A, 86A and 86B are, in effect, a synthesis of the amendments tabled by the noble Baronesses, Lady Hamwee and Lady Maddock, and those tabled by the noble Baroness, Lady Hanham, and the noble Lord, Lord Hanningfield.

Before I speak about the detail behind the amendments, I want to take the opportunity, as I tried to do this afternoon, to thank all four colleagues in the House for their co-operation in this matter. They may not be aware of it, but they have co-operated. Early sight of their amendments has meant that civil servants who, it says in my brief, "worked like the clappers"—they were here until 11.30 last night—have been able to assemble the government amendments. We have been in a position therefore to respond by tabling amendments on Report for your Lordships' consideration. I hope that the package of government amendments will meet something that all three parties think should proceed. That is an example of how the House can work. I shall withdraw my amendment so that we can come back at Third Reading.

6.30 p.m.

These amendments are a synthesis of those tabled by the opposition parties. Their effect is to amend the existing provisions to provide that rent is payable but that a landlord who receives rent while operating an unlicensed property could be liable to a penalty equivalent to any rent received during the period of the offence, up to a maximum of 12 months. The residential property tribunal would be given the power to make a rent repayable order, imposing the penalty where it determined that an offence had been committed under Clause 72(1) or Clause 93(1) in Part 3 of the Bill.

A local housing authority would be entitled to make an application for such an order where it discovered that a landlord or managing agent was committing an offence, including circumstances where there had not been a prosecution, and any housing benefit that had been paid to that landlord either directly by the local housing authority or indirectly by the tenant during by period when such an offence was being committed.

Persons other than the local housing authority who had paid money to the landlord would also be permitted to make an application to the residential property tribunal for a rent repayable order where an order had already been granted to a local housing authority in respect of the same property or where the landlord had been convicted of the offence. Such rent would be recoverable as an ordinary civil debt.

The sanction proposed would help to prevent a landlord profiting from renting properties illegally, including cases where this would be at the expense of the public purse through housing benefit. It would also provide a civil sanction through the residential property tribunal for cases where potentially slow and resource-intensive action through the courts was not practical.

Amendments Nos. 72B and 86B remove the right to automatic possession in Section 21 of the Housing Act 1988 in relation to assured shorthold tenancies for unlicensed landlords. That would have the effect of bringing licensing in line with similar provisions that have been introduced in Part 6 of the Bill in respect of the tenancy deposit scheme. As well as providing consistency with the tenancy deposit scheme, it would also mean that there would be an incentive for landlords to obtain a licence and it would also prevent landlords evicting tenants to avoid licensing.

We have included additions in these government amendments over and above what would have been included in a pure synthesis, and these are chiefly down to the fact that a number of technical points need to be ironed out. That is precisely why we were grateful for sight of the opposition amendments on the basis that we were not—I repeat: not—going to table any amendments for the reasons that I gave earlier.

The technical points to be ironed out include notably, for example, changes to deal with the treatment of housing benefit and also to provide for a "notice of intended proceedings" procedure, giving landlords an opportunity to make representations before any application by the local housing authority to the tribunal. Otherwise, the amendments are self-explanatory, although I accept that they are lengthy. As I said, they pick up the content of the amendments tabled by noble Lords opposite.

I did not have time to write to noble Lords and noble Baronesses opposite at the voluminous length that is normally the case, but I promise to do so later this week—that is, before the end of the week; it is now Wednesday. As I said, when the time comes, I shall withdraw the amendments so that, between now and Third Reading, we can tidy them up as required by outsiders and ourselves. These things are never perfect and we never have them exactly right; there is always something that needs to be looked at. That said, I repeat that we are extremely grateful for the early sight of the opposition amendments, which we honestly did receive.

Baroness Maddock

My Lords, I am very grateful to the Minister for that explanation. What upset us most was the fact that we had no forewarning of this matter. Our amendment was not tabled very early because of an indication that we received during the previous stage of the Bill, when the noble Lord, Lord Bassam, said: Officials are at present consulting relevant stakeholders on the issues. The best we can say today is that while we are convinced that we have the principles right, it is only right for us to give som[...] further thought to the matter and report back at a later stage [...] the Bill. At present we should retain the clause and further consider the issues in concert with the LGA, Shelter and the other organisations which have expressed understandable concern about a potential spin-off from the clause".—[Official Report, 9/9/04; col. 771.] that spin-off being vulnerable tenants being evicted.

Discussions took place with the department and Shelter, and I am very grateful to Shelter for being the go-between on this issue. But I think that in the end we got rather muddled. My impression was that we would have a discussion now and the Minister would come forward at Third Reading with these amendments, but then they suddenly appeared today and that makes life rather difficult. However, we are getting there in a spirit of co-operation.

Our other big concern related to people on housing benefit and what would happen if overpayments of housing benefit were made. Very vulnerable people could risk being homeless. The tenants involved are likely to be the most vulnerable and those who find it most difficult to cope with the system. They are also tenants for whom the administration of housing benefit is not absolutely A1, and problems could arise.

I have one or two queries about the Minister's amendments. There is no point in my talking at great length because the Minister has covered some of the issues. We are very pleased with Amendments Nos. 72B and 86B, which, as the Minister said, affect Section 21 powers—an issue that I raised on the previous occasion.

The housing benefit issue is still something of a problem. Obviously the clauses have been drafted by the Minister's department, which has been able to consider the matter in far more detail and has been able to dot the "i"s and cross the "t"s in a way that is much more difficult for us to do. The Minister may not be able to confirm this today but we need to ensure that no tenants will be thrown out of their homes because council officers decide to seek repayment of housing benefit paid to an unlicensed landlord. That is one area about which we need to be careful.

That said, I appreciate what the Government are doing and I think that all those who were concerned about the matter also appreciate it. I hope that by Third Reading we will have got it right. When we reach my amendment, I shall not move it as I have spoken to the whole group together.

Baroness Hanham

My Lords, we have tabled Amendments Nos. 72 and 73 in this group. To some extent, I was trying to say the same thing as the noble Baroness, Lady Maddock. It would have been more helpful if the government amendments had come after our amendments because, in relation to amending an amendment, it would have provided an opportunity for those of us who have tabled amendments to address them rather than being slightly cut off, as we have been. There is absolutely no point in now going through in detail the amendments that we have tabled.

I am grateful to the Minister for saying that he will withdraw or not move his amendments today because that then gives us an opportunity to talk to those who have been concerned about this matter. We have not been talking to Shelter, but the Residential Landlords Association has also been very concerned. We now need to ensure that the synthesising has not synthesised out something about which that organisation would have been concerned.

I presume that the Government will bring back these amendments at Third Reading. If necessary, we shall also bring back some amendments, and we can then finally sort out the matter.

Lord Rooker

My Lords, I do not know when Third Reading will be.

Baroness Hanham

My Lords, it will be at the beginning of November.

Lord Rooker

My Lords, then there is some time. We have put our amendments on the table. Before the end of the week I shall write to noble Lords. I am happy to arrange for discussions so that we have all three names on the same amendments rather than have amendments to amendments. We should use this time to achieve a 100 per cent agreed position, if that is possible.

Baroness Hanham

My Lords, I thank the Minister for that response. That would be really helpful. As I have had little opportunity sitting on the Bench, listening with one ear and looking with one eye, to try to check the amendments, I believe we should perhaps accept that that is the best way forward. We shall have the amendments checked; we shall ensure that they cover all the aspects about which we have been concerned; and we can have a discussion before Third Reading, which I understand will be at the beginning of November. For today's purposes I too will not press the amendments on this matter that I have tabled. I hope we can return with agreed amendments at the last stage.

The Deputy Speaker

My Lords, I hesitate to intervene, but the noble Lord, Lord Rooker, should perhaps indicate his intention on Amendment No. 70A now.

Lord Rooker

My Lords, my intention is to withdraw Amendment No. 70A and not to press all the government amendments associated with it.

Amendment, by leave, withdrawn.

Clause 73 [Further sanctions relating to unlicensed HMOs]:

[Amendments Nos. 71 to 74 not moved.]

Clause 77 [Licensing of houses to which this Par applies]:

Baroness Hanham moved Amendment No. 75:

Page 53, line 18, at end insert—

"(6) Whatever the arrangements of management, it is th[...] manager who shall be ultimately responsible for a house under [...] Part possessing a valid licence."

The noble Baroness said: My Lords, considerable discussion on this issue in Cor[...] we felt that it deserved to be looked at[...] amendments require that applications for licences shall be made by the manager of a house. We are concerned that, as the Bill stands, the owner, rather than his agent—many owners employ agents to manage properties—remains responsible for licensing. Our amendments in this group are designed to target accurately the responsibilities by requiring that applications for licences be made by the manager of a house.

We need to consider what happens in relation to managing agents when a property is licensed to an owner who, within the terms of the licence, passes that responsibility to a managing agent; and whether managing agents need to have some form of licensing as well if they are to be responsible for the expanded nature of houses in multiple occupation. The purpose of the amendment is to scoop up the managing agents. I beg to move.

Lord Bassam of Brighton

My Lords, as the noble Baroness has said, we have had some discussion on these matters before. I shall try to summarise quickly why we think they are not a good idea.

In essence, the amendments would undermine one of the key provisions of the Bill. The licensing regime itself will identify who is the most appropriate person to hold the licence for any given property and that person will then be held responsible for resolving any issues that may subsequently arise. It would not be helpful, or indeed fair, to stipulate that the manager should always be the licence holder, regardless of the particular management arrangements that have been put in place.

6.45 p.m.

Amendment No. 75 seeks to add a new provision to Clause 77, placing the duty for obtaining a licence for a property in the designated area on the person managing, as opposed to the owner, of the property. From previous debates, I am aware that noble Lords opposite are concerned about the potential problem of a managing agent being paid to manage a property on behalf of the owner, but avoiding responsibility because the owner is the licence holder.

In the end, I believe that that is a fear that is unfounded. Under the provisions of Clause 86, an authority must be satisfied that the person holding the licence is the most appropriate person to do so. Therefore, if there is a fit and proper person willing to act as the manager, and he is the most appropriate person to hold the licence, we would expect the local authority to grant the licence to him rather than to the owner. In that case, as is right and proper, he will be the person liable should the property fail to comply with any of the provisions in this Bill.

On the other hand, it is often the case that the manager of a property is also a tenant. While he may technically have responsibility, the owner is, in fact, the person who is in control. In such situations, clearly it should be the owner who is the licence holder and not the manager.

Unfortunately, the amendment contains the phrase, Whatever the arrangements of management". That suggests to us that anyone with the title "manager" should be held accountable for applying for a licence, regardless of whether he has any genuine role in the management of the property. Needless to say, that is not how we would like to see licensing operate.

I am quite certain that the noble Baroness would not wish to enable bad landlords to avoid their responsibilities, but this amendment would allow an owner to employ someone at a nominal rate—possibly a tenant—to call that person the manager and thereby sidestep all the liability for provisions under this part of the Bill.

Amendment No. 82, also in this group, would replace the requirement that a local authority is satisfied with the management arrangements in place, with a requirement that the authority is satisfied that the manager has ultimate responsibility for the management of the property in question.

In a nutshell, there are two problems with this amendment: first, the subsection that it removes; and, secondly, the subsection that it introduces. I have already explained why an amendment making managers ultimately responsible for obtaining licences is unnecessary.

Clause 86(3)(d) is crucial to the efficacy of a licensing regime because it requires a local authority to approve the proposed management arrangements for a property when deciding whether or not to grant a licence to an applicant; for example, we do not want to end up with a situation where a manager is granted a licence because he is fit and proper, but no heed is paid to the fact that he cannot be reached in emergencies—or otherwise—because he will not divulge his telephone number.

It is for those practical, hard-nosed reasons that we believe that we have the balance of this part of the legislation right. I hope that the noble Baroness, having heard what I have said, will again agree to withdraw the amendment.

Baroness Hanham

My Lords, I thank the Minister for that explanation. Our concern remains with properties where the owner is absent. He cannot possibly be the manager of a house and have responsibility. I am sure that the Minister has many examples in Brighton of houses in multiple occupation which are owned by absentee landlords and where the responsibility for the management of the property is left in a vacuum or is passed to managing agents who may or may not look after the property.

I need to consider this amendment again in the light of what the Minister has said. I know we have addressed the matter once before. It is important that we ensure that people who manage properties are licensed and responsible. I shall withdraw the amendment today, but I cannot say that I shall not return to the issue again at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 78 [Designation of selective licensing areas]:

[Amendment No. 76 not moved.]

Clause 82 [Duration, review and revocation of designations]:

Lord Hanningfield moved Amendment No. 77:

Page 56, line 21, leave out "from time to time" and insert "keep under"

The noble Lord said: My Lords, in tabling this amendment again we are responding to a request from many noble Lords in Committee, including the noble Baroness, Lady Hamwee. I look forward to support from all noble Lords on this amendment. The words "from time to time" do not mean the same as "keeping under review". "Keeping under review" is a permanent action. We believe that this is far more important when it comes to a local authority reviewing the designations that it has made under this part of the Bill. I believe that even the Minister hinted that he preferred the terminology that I put forward in Committee. Therefore, in much anticipation, I beg to move.

Lord Bassam of Brighton

My Lords, we have been there before and I do not have a great deal to add. We discussed earlier the question of how best to monitor the effectiveness of a licensing scheme. The noble Baroness expressed concern about the term "from time to time", suggesting that it was insufficiently precise.

I do not think that there is a great deal of difference in our positions. I understand the point the noble Lord is making. None of us wants selective licensing schemes to continue in force when they are no longer performing any useful role. That would be completely unnecessary regulation. However, I do not think that the amendment offers an improvement to the provisions as drafted. To keep a scheme under review implies a continuous element to the review, and it is difficult to see how this would work in practice. "From time to time" encapsulates the level of monitoring that is reasonable under the circumstances.

I know that the words have been used by my noble friend, and there was perhaps a slight case of overheating at the time. However, I think it fair to say that "from time to time" is the legal equivalent of being kept under permanent review, and that was the point which the noble Lord made at an earlier stage.

I believe that there is understanding of the expression as we have it in the Bill, and I hope that the noble Lord, having made his point, will withdraw his amendment.

Lord Hanningfield

My Lords, I am very disappointed indeed that the Minister could not accept this amendment, as we almost had it agreed in Committee. As the Minister will not accept it today, it may be that we shall have to vote on it at Third Reading. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 83 [Requirement for Part 3 houses to be licensed]:

Lord Rooker moved Amendment No. 78:

Page 56, leave out line 36 and insert—

"(c) a management order is in force in relation to it under Chapter 1 or 2 of"

On Question, amendment agreed to.

Clause 85 [Applications for licences]:

[Amendment No. 79 not moved.]

Lord Rooker moved Amendments Nos. 80 and 81:

Page 58, line 34, after "under" insert "Chapter 1 of".

Page 58, line 36, leave out "Part" and insert "Chapter".

On Question, amendments agreed to.

Clause 86 [Grant or refusal of licence]:

[Amendment No. 82 not moved.]

Clause 88 [Licence conditions]:

Lord Rooker moved Amendment No. 83:

Page 60, line 24, leave out "such steps as are reasonably practicable" and insert "reasonable and practicable steps"

On Question, amendment agreed to.

Clause 89 [Licences: general requirements and duration]:

[Amendment No. 84 not moved.]

Clause 93 [Offences in relation to licensing of houses under this Part]:

[Amendment No. 85 not moved.]

Clause 94 [Further sanctions relating to unlicensed Part 3 houses]:

[Amendments Nos. 85A to 87 not moved.]

Clause 97 [Interim and final management orders: introductory]:

Lord Rooker moved Amendments Nos. 88 and 89:

Page 67, line 10, leave out subsections (5) and (6).

Page 67, line 29, at end insert— (9) In this Chapter "third party", in relation to a house, means any person who has an estate or interest in the house (other than an immediate landlord and any person who is a tenant under a lease or licence granted under section 103(3)(c) or 112(3)(c)).

On Question, amendments agreed to.

Clause 98 [Making of interim management orders]:

Lord Hanningfield moved Amendment No. 90:

Page 67, line 44, at end insert ", and (c) on an application by the authority to a residential property tribunal, the tribunal by order authorises them to make such an order; and the authority may make such an order despite any pending appeal against the order of the tribunal (but this is without prejudice to any order that may be made on the disposal of any such appeal).

The noble Lord said: My lords, the purpose of these amendments is to ensure that all interim management orders require the prior authorisation of the residential property tribunal. An interim management order is a severe remedy, under which the local authority takes over management and control of a property.

The local housing authority is under a duty to make an interim management order if an HMO is a Part 3 house which requires a licence, is not licensed, and they consider either that there is no reasonable prospect of it being licensed in the near future or that the health and safety condition is satisfied. An interim management order must also be made where they have revoked the licence and consider that, on the revocation coming into force, there is either no reasonable possibility of the house being licensed in the near future or that the health and safety condition will be satisfied.

The authority can make an interim management order where the health and safety condition alone is satisfied, but here they need the prior approval of the RPT. This is an inconsistent approach, especially as prior authorisation is required for all interim empty-dwelling management orders.

There is a right of appeal against an interim management order, but only after the event. By then, the local authority will have taken over the property and, if it transpires that the order has been made unjustly, the damage will have long since been done. There are already problems of delays in hearing appeals before RPTs.

If advance RPT authorisation is required in one category of case, why not in all? There are judgments to be made by the local authority before making an interim management order, so there is always the potential for disagreement as to whether an order should be made.

Arguments could well arise between the landlord and the authority as to whether there are prospects of the property being licensed in the near future. Issues could also arise as to whether the health and safety condition is fulfilled. These are matters where the landlord should be able to make representations to the RPT before any order is made, not afterwards on appeal. I beg to move.

Lord Bassam of Brighton

My Lords, the amendment would require the approval of a tribunal before an authority could make an interim management order in respect of a house which is required to be licensed under Part 2 or Part 3 but is not licensed, and where the authority consider that there is either no reasonable prospect of it being licensed in the near future or the health and safety condition in Clause 100 is satisfied.

As currently drafted, the Bill requires the approval of a tribunal for discretionary interim management orders, such as special interim management orders under Clause 98 and interim management orders for non-licensable houses in multiple occupation.

This recognises that an interim management order is a significant imposition upon landlords' rights. The requirement for approval by a tribunal is an appropriate safeguard where an authority is exercising its discretion. However, in regard to licensable HMOs the decision to make an interim management order is not a result of the exercise of discretion but, rather, a response to a set of circumstances prescribed in the Bill.

The local authority must make an interim management order in two defined sets of circumstances, the first of which is where there is no reasonable prospect of it being so licensed in the near future. This is the circumstance in which the landlord fails to apply for a licence or the landlord or managing agent cannot meet the fit and proper person test under the requirements of the Bill. In such circumstances, the local authority must make an interim management order.

Interim management orders are implemented in situations which require a local authority to step into the manager's shoes where a suitable person cannot be found. Hence they need to be practical, workable and as unbureaucratic as possible—unlike the current control orders, which some authorities find far too cumbersome.

The other circumstance in which a local authority may make an interim management order is where the health and safety condition of the Bill is satisfied. This represents a very serious set of circumstances, in which the local authority is required to manage the property to protect the health, safety or welfare of the occupiers or licensable properties, or of people living nearby. In such cases it may be essential to the health and safety of the relevant persons that effective management controls should be put in place very quickly, not weeks or months down the line after a tribunal has considered the issue.

It is important to recognise that if a landlord disagrees with the local authority's decision to make an order, he or she can appeal against that decision to the tribunal. The tribunal has wide powers in these circumstances and can confirm the order, with or without amendments to the terms, or revoke it and order that a licence should be granted, or a temporary exemption notice issued.

I hope that has provided sufficient assurance to the noble Lord that there are safeguards in place to ensure that management orders are only made when it is appropriate to make them. I doubt whether the noble Lord has ever had any experience of an interim management order. In all the years I was a member of my local authority, I can remember only a few. They have to be approached very carefully by officers; they can take months to put in place; great care is taken to achieve the objective; and usually they are made only in dire circumstances.

All that I have said applies also to Amendment No. 91. It is probably even less appropriate in those circumstances. I hope that the noble Lord feels able to withdraw both amendments.

Lord Hanningfield

My Lords, I thank the noble Lord for his reply, which was helpful. As with several other amendments, we shall have to analyse it in some detail, but it probably covers the points that I was making. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

7 p.m.

[Amendment No. 91 not moved.]

Lord Hanningfield moved Amendment No. 92:

Page 68, line 46, leave out subsection (8).

The noble Lord said: My Lords, I tabled the amendment again in the hope that the Minister would be able to furnish me with any further examples of what would be incorporated within subsection (8). I am still not entirely comfortable with the explanation on the face of the Bill.

Perhaps the Minister would explain how this would work in practice; for instance how would a housing authority know if part of the house was in shared ownership or in some other shared agreement? I beg to move.

Lord Rooker

My Lords, I recollect using most of my notes here in Committee when the noble Lord proposed similar amendments. I understand why he has raised the matter again, given the question that he has just asked.

The amendment would take away the local authority's discretion to make an interim management order which did not apply to any part of a house occupied by a resident landlord. I gave examples where it might be necessary to include a landlord's accommodation in the order, where, for example, he may have taken a room or set of rooms and shared facilities with the tenants such as a bathroom or kitchen, or if he was behaving in an anti-social manner or was harassing the tenants. Inclusion in the order in those circumstances would make it far more practical for the local authority to be able to take effective legal action against him—it would know which part of the house he was occupying. The landlord may occupy a self-contained basement flat and it may be reasonable for the authority to exclude that flat from an interim management order so that it does not have to carry out repairs or do other things at the landlord's expense. That landlord would himself have the discretion to determine how the money, which would otherwise be deducted from his rental income, was spent on the repair of the area in which he privately resides.

If the landlord is aggrieved by any decision to include or exclude his personal accommodation from the interim management order he will have a right to appeal against that decision to the residential property tribunal. I should mention that the exact precedent for this provision is contained in Section 380 of the Housing Act 1985, in relation to "control orders". So there is nothing new being proposed in this regard in the Bill. It is just a practical measure to ensure that controls are not imposed over owner occupiers—the landlords—unless they are essential. That is the purpose of the exercise.

Lord Hanningfield

My Lords, I thank the Minister for that reply. It seems that there will still be much dispute on this issue. How will a local authority know the situation without looking in every room in every house to ask, "do you live there or not", which the landlords might dispute? The Minister said that people could appeal. It seems that there will be many appeals on this matter. However, I have listened to the Minister and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 105 [General effect of interim management orders:immediate landlords, mortgagees etc.]:

Lord Rooker moved Amendments Nos. 93 and 94:

Page 74, line 43, leave out "and in" and insert— except to the extent that any of those rights or remedies would prevent the local housing authority from exercising their power under section 103(3)(c). ( ) In

Page 75, line 8, leave out subsection (6).

On Question, amendments agreed to.

Clause 106 [Financial arrangements while order is in force]:

Lord Rooker moved Amendments Nos. 95 and 96:

Page 75, line 19, leave out "relevant expenditure." and insert— ( ) relevant expenditure, and ( ) any amounts of compensation payable to a third party by virtue of a decision of the authority under section (Compensation).

Page 75, line 24, after "expenditure" insert "and any amounts of compensation payable as mentioned in that subsection"

On Question, amendments agreed to.

Lord Hanningfield moved Amendment No. 97:

After Clause 111, insert the following new clause—