GROUND 8: HOUSING ACT 1988 (C. 50)

HL Deb 20 October 2004 vol 665 cc905-18

(1) Section 7 of the Housing Act 1988 (c. 50) (orders for possession) is amended as follows.

(2) In subsection (3), for "subsections (5A) and (6)" substitute "subsections (5A), (6) and (6A)."

(3) In subsection (4), for "subsections (5A) and (6)" substitute "subsections (5A), (6) and (6A)."

(4) After subsection (6), insert—"

(6A) If the court is satisfied—

1. (a) that Ground 8 in Part I of Schedule 2 to this Act is established; and
906
2. (b) that rent is in arrears as mentioned in that Ground as a consequence of a delay or failure in the payment of relevant housing benefit, it shall not make an order for possession unless it considers it reasonable to do so."

(5) After subsection (7) insert—

"(7A) In this section "relevant housing benefit" means—

1. (a) any rent allowance or rent rebate to which the tenant was entitled in respect of the rent under the Housing Benefit (General) Regulations 1987 (S.I. 1987/1971); or
2. (b) any payment on account of any such entitlement awarded under Regulation 91 of those Regulations.

(7B) References to delay or failure in the payment of relevant housing benefit do not include such delay or failure so far as referable to any wilful act or omission of the tenant.—

The noble Baroness said: My Lords, the problem with housing Bills not coming along very often is that people take the opportunity to raise issues that are of the day and need dealing with. The clause amends Ground 8 of Schedule 2 to the Housing Act 1988. Private landlords and housing associations can use Ground 8 to seek possession of an assured tenancy where a tenant has arrears of more than two months' rent.

Unlike other rent arrears grounds for possession, Ground 8 is a mandatory ground. The court has no discretion to decide whether it is reasonable to make an order for possession. The proposed amendment to Ground 8 is designed to give courts discretion in cases where housing benefit issues are outstanding. For example, they can decide to adjourn a case or suspend an order for possession. That would help ensure that tenants are not evicted from their homes due to nonpayment or delay of housing benefit. I understand that the Scottish Executive has already made moves to do that. Originally, Ground 8 was included in the Housing Act 1988. It was aimed at stimulating the private rented sector and making it easier for private landlords to recover their property.

However, since 1993, private landlords have been able to gain possession quickly and without a hearing for assured shorthold tenancies under Section 21 of the Housing Act 1988. In practice, private landlords used that accelerated possession procedure, rather than Ground 8. More recently, various housing organisations, including those representing people who have been made homeless, such as Shelter, and the National Association of Citizens Advice Bureaux, have raised concerns about the increasing use of Ground 8 by housing associations against social tenants, especially where there are problems with housing benefit.

The hour is late; I could give a lot of examples; but I do not think that there is time to do that. Suffice it to say that the amendment is designed to be helpful. I do not think that the provision is needed as it was originally proposed. I beg to move.

Lord Rooker

My Lords, I will give a partially helpful reply. Registered social landlords do not grant full assured tenancies and are able to rely on Ground 8 on some occasions; a matter that is currently very much of interest to the Housing Corporation. The corporation is working actively with government, local authorities and registered social landlords to identify best practice and draw up guidance on possession actions by social landlords.

The Government believe—this is true—that a fairer approach to dealing with rent arrears in the public sector should be addressed. The amendment raises issues that need to be addressed in a wider context, especially the Law Commission's review on tenure. It published an initial report in November 2003 and expects to publish a draft Bill early next year. Under the Law Commission's proposals, there would be no mandatory grounds for possession in type 1 tenancies. Registered social landlords would lose the right to use their current mandatory grounds for possession, including the use of Ground 8. Instead, they would fall in line with local authorities, because all type 1 agreements could be brought to an end only at the discretion of the courts.

There is obviously much to be considered in the context of the Law Commission's proposals, and I hope that the noble Baroness will ensure that they provide a more suitable context to address the issue in due course, when we receive that Bill.

Baroness Maddock

My Lords, I thank the Minister for that helpful reply. I would say only what I said earlier: these Bills do not come along very often. I recognise that the Law Commission will produce its report, but, oh golly, how long will we have to wait to get it on the statute book? Nevertheless, I thank the Minister for that helpful reply, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 213 [Powers and procedure of residential property tribunals]:

Lord Rooker moved Amendment No. 217:

Page 168, line 42, at end insert— ( ) directions requiring the payment of money by one party to the proceedings to another by way of compensation, damages or otherwise.

The noble Lord said: My Lords, Clause 213 sets out the powers and procedures of a residential property tribunal in considering appeals or applications before it. Amendment No. 217 clarifies that directions under subsection (5) can include those for payment of money by one party to another for damages or compensation in appropriate cases. I beg to move.

On Question, amendment agreed to.

Clause 215 [Register of licences and management orders]:

Lord Rooker moved Amendment No. 218:

Page 169, line 32, leave out "interim and final management orders made by them under" and insert "management orders made by them under Chapter 1 or 2 or'.

On Question, amendment agreed to.

Clause 216 [Approval of codes of practice with regard to the management of HMOs]:

Lord Rooker moved Amendment No. 219:

Page 170, line 12, at end insert "or of excepted accommodation"

The noble Lord said: My Lords, Amendments Nos. 219, 220, 221 and 222 commit the appropriate national authority to approve codes of practice for buildings that fall within the exemption of the house-in-multiple-occupation definition in Schedule 14. As we said during the debates on student accommodation in Committee, the Government do not want to extend regulation to this sector, as we do not think that it is needed for the reasons given. Nevertheless, we are concerned to ensure that universities manage their residential property properly. That is why we announced that Universities UK was looking into a code of practice for the management of university accommodation. That was welcomed. The amendments will enable the appropriate national authority to approve such a code.

Amendment No. 232 provides that, in deciding whether to exclude university-managed accommodation from the definition of a house in multiple occupation, the appropriate national authority can have regard to the degree to which the university or universities are managing their accommodation in accordance with the code of practice. Unless an establishment is specified in the regulations, its residential stock will come within the definition of a house in multiple occupation and will be subject to statutory controls under Parts 2, 4 and 7. Nevertheless, we anticipate that universities will continue to manage their properties properly, in accordance with the code. I beg to move.

On Question, amendment agreed to.

Baroness Maddock moved Amendment No. 219A:

Page 170, line 14, at end insert—

"( ) The appropriate national authority may by order—

1. (a) approve a code of practice (whether prepared by that authority or another person) laying down standards of conduct and practice to be followed with regard to the management of houses other than HMOs;
2. (b) approve a modification of such a code; or
3. (c) withdraw the authority's approval of such a code or modification."

The noble Baroness said: My Lords, I thank the Minister for the previous amendments, because they go some way towards meeting the purpose of my own amendments. My group of amendments would provide for a proportionate regulatory framework for all private renting, based on a statutory code of practice for private rented housing other than houses in multiple occupation and an expectation that all private landlords should be fit and proper persons. Provision is made for the code of practice to be enforced by a residential property tribunal. The concept of a "fit and proper landlord" is extended as a positive status with benefits, which can be withdrawn if the landlord acts in breach of the code or other relevant statutory requirements.

The amendments would underpin local landlord accreditation schemes by setting out national, consistent, minimum management requirements to which local accreditation schemes could attach their own additional requirements to reflect the property type—for example, university accommodation—or its location—for example, an area blighted by absentee landlordism.

The amendments would address the deficit in management standards for the private rented sector as a whole. The proposals for mandatory licensing of' houses in multiple occupation will cover only approximately 5 per cent of the private rented sector. Currently, poor management in the wider sector means that much of the stock is in bad condition and tenants can be treated poorly. That damages its reputation and investment potential.

The regulation that these provisions introduce would be significantly less onerous than that required by the proposals for houses in multiple occupation and selective licensing. They would be proportionate to the scale of the problem of poor management in the sector and would support the Government's proposals for increasing investment in the sector through the introduction of property investment funds.

The key features of the provisions are: a new statutory code of practice providing basic minimum management standards for the sector as a whole; provision for management disputes and breaches of the code to be dealt with by residential property tribunals; and the extension of the concept of "fit and proper landlords" to apply to all private landlords, not just those with licensable properties.

Shelter, the National Union of Students and the British Property Federation support my attempt to ensure a good standard across the whole private rented sector. As I said, I appreciate the Government's amendments and the fact that they have a backstop if universities do not look after their properties properly. I recognise that the Government will not accept my amendments today, but I will be interested to know whether they have in mind a way to ensure that we eventually get proper standards across the private rented sector. I beg to move.

10.45 p.m.

Lord Bassam of Brighton

My Lords, in general, of course we have a strategy to deal with the issue to which the noble Baroness refers. That is why we have the legislation in place and why we have taken measures and steps to strengthen and modernise the regulation of the private rented sector, but recognising its essential and central place in providing flexible and good quality accommodation.

Dealing with the amendments in turn, Amendment No. 219A provides that the appropriate national authority may by order approve codes of practice in respect of non-HMO accommodation. It seeks to extend the provisions in Clause 216 which apply to HMO accommodation.

The amendment is unnecessary. Section 87 of the Leasehold Reform, Housing and Urban Development Act 1993 already provides that the Secretary of State and, for that matter, the National Assembly for Wales may approve by order any code of practice which is designed to promote desirable practices in the management of residential property and may also approve modifications or withdraw approval for such codes. It is already there: it is not required. There is a power and a facility that will enable us to do that. The procedure has been used in recent months to approve a code of practice submitted by the Royal Institution of Chartered Surveyors.

Amendment No. 223A would provide that where there is a dispute about the management of a dwelling by a residential landlord, that dispute can be referred to the Residential Property Tribunal. The amendment simply does not work. There is no legal requirement to comply with any code of practice. For reasons that we have given on many occasions, the Government do not support the idea of imposing licensing on the whole of the private rented sector. That would be disproportionate and an excessive regulation of a sector which, for the main part, works extremely well. Obviously, we accept that there are deficiencies in quality in some sectors.

If we were to go along that route, we would have to invest far more in regulating the sector. We would also have to expand the way in which the sector is monitored and the work of local authorities in that area in a way that is probably disproportionate to the scope of the problems of which we are all very well aware.

Amendment No. 223B provides that the appropriate national authority may award to a residential property landlord or manager the status of "fit and proper landlord". The noble Baroness explained the scheme very well. It would allow the appropriate national authority to prescribe the procedure for awarding and revoking such status, how it could be used in publicity and how such status may attract tax allowances.

As we have said in speaking to earlier amendments, we consider that this amendment is neither necessary nor desirable in terms of licensing all residential property landlords and managers through the "fit and proper landlord" requirement. I am afraid that the same argument really works for this amendment as works for Amendment No. 223A. We think that it would be excessive in relation to the degree of difficulty and the problem.

Certainly, we understand the problem, which is why we have a private rented sector strategy. That is why we have put in place many of the measures that are included in the Bill on which we have been congratulated, and on which the noble Baroness has congratulated us in moving some of our earlier amendments. Having said that, I hope that the noble Baroness will feel more content in withdrawing her amendment.

Baroness Maddock

My Lords, I am not quite sure that I am more than content, but I am grateful for the Government outlining their position. It is not quite as I would have wished, but I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Rooker moved Amendments Nos. 220 to 222:

Page 170, line 18, at end insert "or (as the case may be) excepted accommodation of the kind in question"

Page 170, line 19, after "houses" insert "or accommodation"

Page 170, line 35, at end insert— ( ) In this section "excepted accommodation" means such description of living accommodation falling within any provision of Schedule 14 (buildings which are not HMOs for purposes of provisions other than Part 1) as is specified in an order under subsection (1).

On Question, amendments agreed to.

Clause 217 [Management regulations in respect of HMOs]:

Lord Rooker moved Amendment No. 223:

Page 171, line 1, after "particular" insert—

1. "(a) impose duties on the person managing a house in respect of the repair, maintenance, cleanliness and good order of the house and facilities and equipment in it;
2. (b)"

On Question, amendment agreed to.

[Amendments Nos. 223A and 223B not moved.]

Clause 222 [Powers of entry]:

Lord Rooker moved Amendment No. 224:

Page 173, line 24, leave out "an interim or final management order is in force under" and insert "a management order is in force under Chapter 1 or 2 of".

On Question, amendment agreed to.

Baroness Hanham moved Amendment No. 224A:

Page 173, line 34, at end insert "only after the issuing of a warrant in relation to the premises issued by a justice of the peace"

The noble Baroness said: My Lords, I shall move this briefly because it returns to a matter that we dealt with last time. We are concerned about the provisions under Clause 222, entitled, "Powers of entry". Under the provisions, an authority could authorise someone to enter a property that it owns or that is owned by someone else who is licensed. With either 24 hours' notice or under subsection (7) with no notice at all, they would have the right to enter the property for the purposes of seeing whether an offence was being committed. We understand that there may be occasions when there is a requirement to go and see what is going on, but we believe that that should be authorised by at least a JP and/or a warrant. I beg to move.

Lord Bassam of Brighton

My Lords, we believe that these amendments are too restrictive. Clause 222 does not enable an authority to simply force its way into a property. To do so, it would need a warrant under Clause 223. There would seem to be little point in adding to the burdens on authorities and justices when the owner or the landlord of a property is, in any event, happy to co-operate with an authority's request for entry.

We set out our view on the amendments in our letter of 11 October. We believe that we have sufficiently assured the Joint Committee on Human Rights that powers of entry will not be used lightly or foolishly. I do not think that most local authorities would ever consider using them lightly or frivolously; I am sure the noble Baroness's local authority would not.

Clause 226 now requires that where an authority wishes to exercise its powers of entry under Clause 222, entry must be authorised by an officer at the level of deputy chief officer or above—that is a very high level of seniority in any local authority. I hope that that will satisfy the noble Baroness. It is not our intention that these powers should be used lightly or frivolously.

Baroness Hanham

My Lords, Clause 226, to which the noble Lord referred, states: Any such authorisation must be given by the appropriate officer of the local housing authority". Is the Minister clarifying that as being someone of the level of town clerk, chief executive or deputy chief executive?

Lord Bassam of Brighton

My Lords, I thought I had made clear that it would be a deputy chief officer or above. So, yes, it would include town clerks, borough solicitors, solicitors to the council, chief executives and so on. It has to be at the level of deputy chief officer or above.

Baroness Hanham

My Lords, that clarifies the point. The only other issue I wish to raise with the Minister is that subsection (7) is more draconian than he makes out. You do not have to give any prior notice, although I now understand that the entry would have to be authorised by someone senior on the council. However, I still think that going into someone's premises without any notice whatever—whether or not you have the authority of the chief executive—is probably insufficient and that there should be a warrant.

Nevertheless, I hear what the Minister says. I thank him for that extra explanation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Rooker moved Amendment No. 225: Page 173, line 36, after "under" insert "Chapter 1 of".

On Question, amendment agreed to.

[Amendment No. 225A not moved.]

Clause 223 [Warrant to authorise entry]:

Lord Rooker moved Amendment No. 226:

Page 175, line 4, leave out "an interim or final management order is in force under" and insert "a management order is in force under Chapter 1 or 2 of".

On Question, amendment agreed to.

Clause 227 [Power to prescribe forms]:

[Amendment No. 226A not moved.]

Clause 229 [Service of documents]:

Lord Rooker moved Amendments Nos. 227 and 228:

Page 177, line 21, after "under" insert "Chapter 1 of".

Page 177, line 35, after "under" insert "Chapter 1 of".

On Question, amendments agreed to.

Clause 231 [Timing and location of things done electronically]:

[Amendment No. 228A not moved.]

Clause 234 [Offences by bodies corporate]:

Baroness Hanham moved Amendment No. 228B:

Page 181, line 1, at end insert— (c) the appropriate national authority,

The noble Baroness said: My Lords, I want to elicit from the Government when a body corporate would be liable to prosecution. The phrase "body corporate" is beginning to sneak into legislation all over the place and is getting itself a fine reputation.

This is a very vague clause. What would be the offence and what would be the punishment for such a body corporate in this terribly difficult position? Can the Minister say what constitutes a body corporate under this clause? It is probably something like a local authority but we need to be clear about it. Is it the senior elected officials on a local authority? Is it the chief executive of a residential social landlord or housing association? Would such provision extend to private individuals? Can a private individual be a body corporate? I doubt it, but perhaps it is possible. Would such provision also extend to companies that would, under the Bill, play a major role in, for instance, the licensing regime or the development of housing via the use of social housing grants, which we have just discussed?

We need a little more explanation about this. I beg to move.

Lord Rooker

My Lords, I think that I can say—if I am wrong, I will be told—that the body corporate in this clause is exactly the same as was inserted in umpteen other pieces of legislation by the previous government. In other words, this is a standard clause used in legislation today. There is nothing special about it at all. It simply makes provision for offences by a body corporate. It provides that an officer of the body corporate, or a person purporting to be such an officer, may be jointly liable with the body corporate if an offence is committed with the consent or connivance of such an officer or person, or where the offence is proved to be attributable to any neglect of such an officer or person.

This is a standard clause used in legislation today. I could go into a lot more detail about the effect of the amendment, but I do not think that that was the purpose.

Baroness Hanham

My Lords, I thank the Minister for that reply. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 235 [Power to up-rate level of fines for certain offences]:

[Amendment No. 228C not moved.]

Clause 237 [Meaning of "house in multiple occupation"]:

Lord Rooker moved Amendment No. 229:

Page 181, line 36, leave out "a declaration notice" and insert "an HMO declaration"

On Question, amendment agreed to.

Baroness Maddock moved Amendment No. 230:

Page 182, line 10, after "accommodation" insert "or such accommodation is accommodation contracted by the National Asylum Support Services under Part VI of the Immigration and Asylum Act 1999 (c. 33);"

The noble Baroness said: My Lords, this is a probing amendment, but it is designed to ensure that houses in multiple occupation that have been contracted out by the National Asylum Support Service are covered by the definition of a house in multiple occupation and therefore could be brought within the scope of the licensing regime.

Clause 237(2)(e) states that a building is to be considered as a house in multiple occupation if, rents are payable or other consideration is to be provided by at least one of those persons in respect of their occupation of the living accommodation".

Asylum seekers placed in accommodation by the National Asylum Support Service do not pay rent. The service leases the property from a private landlord and simply places asylum seekers in the accommodation. We are therefore very concerned that dwellings contracted by NASS will not be covered by either the licensing scheme or the management regulations in Clause 217.

Responding to similar concerns when the Bill was in Standing Committee in the House of Commons, the Housing Minister, Keith Hill, said: Let me begin by reassuring the hon. Member for Ludlow that there is no hidden agenda. There is no intention to introduce larger swathes of exemption beyond those identified in the Bill. The hon. Gentleman asked about asylum seekers in private rented accommodation and whether the type of accommodation organised by NASS is likely to be exempted. The exemptions would apply only if such people were housed in accommodation owned by a registered social landlord or a local authority".—[Official Report, Commons Standing Committee E, 27/1/04; col. 174.]

I hope that the Minister will use this opportunity to confirm that NASS-contracted houses in multiple occupation are covered by the definition. If they are not, I hope that he will give a commitment to bring forward an amendment on Third Reading that will deal with the problem. I beg to move.

Lord Rooker

My Lords, I shall come back to this on Third Reading.

Government Amendment No. 233 is a technical amendment to correct an anomaly. Government Amendment No. 234 corrects an omission in the definition of a single household.

Baroness Maddock

My Lords, I thank the Minister for his reply. I forgot to speak to Amendment No. 231 and may return to it at a later stage. In the mean time, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 231 not moved.]

Lord Rooker moved Amendment No. 232:

Page 278, line 19, at end insert—

"(3) Sub-paragraph (4) applies in connection with any decision by the appropriate national authority as to whether to make, or revoke, any regulations specifying—

1. (a) a particular educational establishment, or
2. (b) a particular description of educational establishments.

(4) The appropriate national authority may have regard to the extent to which, in its opinion—

1. (a) the management by or on behalf of the establishment in question of any building or buildings occupied for connected educational purposes is in conformity with any code of practice for the time being approved under section 216 which appears to the authority to be relevant, or
2. (b) the management of such buildings by or on behalf of establishments of the description in question is in general in conformity with any such code of practice,

as the case may be.

(5) In sub-paragraph (4) "occupied for connected educational purposes", in relation to a building managed by or on behalf of an educational establishment, means occupied solely or principally by persons who occupy it for the purpose of undertaking a full-time course of further or higher education at the establishment."

On Question, motion agreed to.

Clause 241 [HMOs: persons not forming a single household]:

Lord Rooker moved Amendments Nos. 233 and 234:

Page 186, line 15, leave out first "a relative or' and insert ", or is a relative of,"

Page 186, line 21, leave out "or niece" and insert ", niece or cousin"

On Question, amendments agreed to.

[Amendment No. 234A not moved.]

Clause 246 [Meaning of "person having control" and "person managing" etc]:

Baroness Hanham moved Amendment No. 235:

Page 189, line 40, at end insert—

"(6) "Person having control" shall not include a person—

1. (a) who lets premises as agent for another person,
2. (b) whose only function is to introduce a tenant or licensee for those premises,
916
3. (c) who only receives the rack rent from a tenant or licensee introduced no later than the time when any tenancy or licence agreement is entered into in respect of the letting or licence granted to the tenant or licensee introduced by him."

The noble Baroness said: My Lords, many estate agents offer a letting-only service. Management of a property is then left to the landlord or another agent. A letting agent will normally receive the first payment of rent, so they are caught by the current definition of "person having control". That means that they will be caught in the provisions of the Act if the property is unlicensed when a licence is required even though they have no involvement with the management of the property. The purpose of the amendment is to exempt someone who simply lets a property and receives an initial payment of rent, but then ceases to be involved in the management of the property. I beg to move.

Lord Rooker

My Lords, the amendment would change the definition of "person in control" to exclude a letting agent from that definition. I hope to assure the noble Baroness that bona fide letting agents are excluded from the definition. I shall briefly explain why. The "person in control" is the person who receives the rack rent, not a person who had received it. The use of the present tense in Clause 246(1) is the key to the conundrum. A letting agent who collects the rent in advance of the tenancy being granted has received it. Provided that the rent is transferred on the grant of the tenancy, the transferee is the "person having control" because he or she receives it. With that assurance—it says here—I hope that the noble Baroness will withdraw the amendment.

Baroness Hanham

My Lords, with that assurance, as it says here, the noble Baroness does. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 15 [Minor and consequential amendments]:

Lord Rooker moved Amendments Nos. 236 to 239:

Page 280, line 39, after "carrying" insert "out"

Page 284, line 10, leave out "an interim or final management order under" and insert "a management order under Chapter 1 or 2 of

Page 292, line 3, at end insert— In section 54 (determinations requiring approval), at the end of paragraph (b) insert "or (c) any determination under section 27B (transfer of property funded by grants under section 27A),",

Page 292, line 29, at end insert—

"Local Government Act 2003 (c. 26)

In section 87 of the Local Government Act 2003 (c. 26) (housing strategies and statements) for subsection (4) substitute—

"(4) In this section— housing" includes accommodation needs for gypsies and travellers within the meaning of section (Duties of local housing authorities: accommodation needs of gypsies and travellers) of the Housing Act 2004; local housing authority" has the same meaning as in the Housing Act 1985 (c. 68)."

On Question, amendments agreed to.

[Amendments Nos. 239A and 239B not moved.]

Clause 253 [Short title, commencement and extent]:

Lord Rooker moved Amendments Nos. 240 to 243:

Page 191, line 18, leave out "200" and insert "(Protected sites to include sites for gypsies) to (Suspension of eviction orders)".

Page 191, line 18, after "207," insert "(Rights of pre-emption in connection with assured tenancies),".

Page 191, line 30, after "208," insert "(Extension of right to acquire),"

Page 191, line 30, after "208," insert "(Duties of local housing authorities: accommodation needs of gypsies and travellers), (Guidance in relation to section (Duties of local housing authorities: accommodation needs of gypsies and travellers)),".

On Question, amendments agreed to.

[Amendment No. 243A not moved.]

In the Title:

Lord Rooker moved Amendment No. 244:

Line 5, after "homes" insert "and the accommodation needs of gypsies and travellers"

On Question, amendment agreed to.

House adjourned at four minutes past eleven o'clock.