EMPTY DWELLING MANAGEMENT ORDERS: INTRODUCTORY

HL Deb 13 September 2004 vol 664 cc904-32

(1) This Chapter deals with the making by a local housing authority of—

1. (a) an interim empty dwelling management order (an "interim EDMO"), or
2. (b) a final empty dwelling management order (a 'final EDMO"),

in respect of a dwelling.

(2) An interim EDMO is an order made to enable a local housing authority, with the consent of the relevant proprietor, to take steps for the purpose of securing that a dwelling becomes and continues to be occupied.

(3) A final EDMO is an order made, in succession to an interim EDMO or a previous final EDMO, for the purpose of securing that a dwelling is occupied.

(4) In this Chapter—

1. (a) "dwelling" means—
1. (i) a building intended to be occupied as a separate dwelling, or
2. (ii) a part of a building intended to be occupied as a separate dwelling which may be entered otherwise than through any non-residential accommodation in the building;
2. (b) any reference to "the dwelling", in relation to an interim EDMO or a final EDMO, is a reference to the dwelling to which the order relates;
3. (c) "relevant proprietor", in relation to a dwelling, means—
1. (i) if the dwelling is let under one or more leases with an unexpired term of 7 years or more, the lessee under whichever of those leases has the shortest unexpired term; or
2. (ii) in any other case, the person who has the freehold estate in the dwelling;
4. (d) "third party", in relation to a dwelling, means any person who has an estate or interest in the dwelling (other than the relevant proprietor and any person who is a tenant under a lease or licence granted under paragraph 2(3)(c) or 10(3)(c) of Schedule (Further provisions regarding empty dwelling management orders)); and
5. (e) any reference (however expressed) to rent or other payments in respect of occupation of a dwelling, includes any payments that the authority receive from persons in respect of unlawful occupation of the dwelling.

(5) In subsection (4)(c), the reference to an unexpired term of 7 years or more of a lease of a dwelling is—

1. (a) in relation to a dwelling in respect of which the local housing authority is considering making an interim EDMO, a reference to the unexpired term of the lease at the time the authority begin taking steps under section (Making of interim EDMOs)(3),
2. (b) in relation to a dwelling in respect of which an interim EDMO has been made, a reference to the unexpired term of the lease at the time the application for authorisation to make the interim EDMO was made under subsection ( 1) of that section, or
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3. (c) in relation to a dwelling in respect of which a local housing authority is considering making or has made a final EDMO, a reference to the unexpired term of the lease at the time the application for authorisation to make the preceding interim EDMO was made under subsection (1) of that section.

"Preceding interim EDMO", in relation to a final EDMO, means the interim EDMO that immediately preceded the final EDMO or, where there has been a succession of final EDMOs, the interim EDMO that immediately preceded the first of them.

(6) Schedule (Further provisions regarding empty dwelling management orders) (which makes further provision regarding EDMOs) has effect."

The noble Lord said: These amendments provide for the introduction of a new clause after Clause 122 entitled: Empty dwelling management orders: introductory". I shall speak to a host of government amendments explaining what we want to do about empty homes. I apologise for the length of the speech. Although this is not brand new material because the issue has been debated—and, indeed, requested from all sides of the House in the other place—it is new in the sense of the Government putting forward a proposal.

Amendments Nos. 171A to 171H, 174A to 174D and 210A provide for the introduction of empty dwelling management orders. Such management orders would enable local authorities to secure occupation of long-term, private sector empty homes in certain defined circumstances. The Committee will be familiar with the concept of management orders in Part 4 in respect of accommodation subject to the licensing provisions in Parts 2 and 3. They provide for local authorities to "step into" the shoes of property owners in order to ensure responsible management. The amendments extend the control provisions of Part 4 to empty homes.

The amendments give effect to the Government's commitment in the sustainable communities plan to allow local authorities to lease long-term, private sector empty homes. That commitment was made in response to a recommendation by a Select Committee in another place and we followed it up with a consultation paper, entitled, Empty Homes: Temporary Management, Lasting Solutions, which the Office of the Deputy Prime Minister published 17 months ago.

Empty homes present a significant problem, but they are also a significant opportunity. Last year, in England, local authorities reported some 718,000 vacant dwellings. Of those, nearly 84 per cent were privately owned. At the same time, local authorities reported that 308,000 privately-owned dwellings had been vacant for more than six months.

The presence of significant numbers of long-term empty homes, often heavily concentrated in areas of housing decline, can significantly affect the viability of an area. There are many examples in northern England where empty homes have contributed to blight and market failure. That is a matter we are tackling through the housing market renewal programme. But the problem of empty homes is by no means confined to such areas.

Empty homes may be less concentrated in other areas, but that does not mean they can be ignored. Nearly 2 per cent of the private housing stock in London—more than 43,000 homes—was vacant for more than six months at the last count in 2003. In overall terms, London and the south-east accounts for nearly as many long-term, privately-owned empty homes as the north-east and north-west. The presence of large numbers of empty homes in all parts of the country is something with which we ought to be concerned. But, particularly in areas of high housing demand, their presence is nothing short of a scandal.

Anyone who is unfortunate enough to have lived next door to a property that has been left empty for a long period of time will understand the sheer frustration that such a situation can create. Poorly maintained empty properties are magnets for vandals, drug users, squatters and even arsonists. Boarding them up to secure against break-in simply identifies properties as long-term empty. It is not sustainable.

From my former role as a constituency Member, I could give examples of empty homes that were not just inner-city terraced homes. They could be outer suburban three-bedroom semi-detached properties—in ordinary roads with trees and families—which were just left. The properties do not just stay the same: for example, gardens grow, they become derelict, odd windows are smashed but do not get repaired. As I have said, they are an invitation to problems for everyone. People get very frustrated and go to the council saying, "Do something about it". It replies, "Well, it is nothing to do with us. We do not own it". But, of course, the council is the responsible housing authority where people go when there is a problem. So there is a difficulty and we need to deal with it.

Notwithstanding the annoyance caused to neighbours and others, there is the abject waste of a dwelling. We have a crisis of dwellings in this country. We all know that our house-building programme is not good. It is the worst that it has been since 1924. Our replacement rate is appalling at something like 0.1 per cent a year, whereas in continental Europe it is 1 per cent per year. That is a massive difference. The average dwelling in this country is expected to be maintained for 1,200 years; on the continent it is 100 years. To even say that sounds stupid. But the fact is that that is the current situation with the present building programme and the rate of replacement.

We can therefore see that empty homes represent a waste of an asset. They are a wasted opportunity for owners who could otherwise make financial gains from selling or letting them. They present a wasted opportunity for those who cannot get a foothold in the housing market. Many local authorities are working extremely hard to develop empty property strategies that seek to offer a package of incentives and penalties to empty property owners. But they believe that their efforts are frustrated by a lack of effective enforcement powers.

The threat of compulsory purchase can be a useful weapon, but it like the nuclear option: it puts people off because they know how long it can take and how frustrating it is. From the responses to the consultation paper, we know that many local authorities are very reluctant to use compulsory purchase powers. They are very complicated and form part of a long and drawn-out procedure.

The issue is that the ownership of the property does not necessarily have to be changed in order to bring it back into use as a dwelling for people to live in. So the key is not necessarily the change of ownership. The key to unlocking the potential of empty homes is to get them back into use as homes as quickly as possible. That does not necessarily require a change of ownership. Where the owner is unwilling to do that, we should not be afraid to consider compulsion.

I recognise that the amendments will not completely solve the problem of empty homes. We are realistic enough to know that there will always be a certain proportion of housing stock that is vacant at any given time. Indeed, vacancy is essential. Without that the market cannot operate, which is why we are not seeking to deal with every empty property on the market. If every home was always fully occupied, buying and selling homes would grind to a halt.

Nor are we seeking to penalise people for leaving a home vacant for valid and reasonable reasons. Many people leave their principal home vacant while staying elsewhere. That can be through choice: for example, a person may be caring for someone, seeking job opportunities elsewhere, living with a partner or even living in a care home for a period of time with the expectation that he or she may return home.

While we would caution against leaving a property vacant and unattended for long periods of time, that is a matter of personal choice in which state intervention is not warranted in the examples that I have given. The properties that are the subject of the amendments are entirely different. They are not the principal homes of absent owners, second homes or holiday homes; nor are they homes that are undergoing repair or alteration or are subject to a process that will, in time, lead them to being reoccupied. If they met all those criteria, there would not be a problem. To all intents and purposes, they are abandoned properties that are discarded by owners who are unable to provide a good reason for them not being occupied.

There are often significant underlying factors at work, such as disrepair, which prevent some homes being occupied. It is not always a question of owners of empty properties being culpable. Our aim is not to penalise people for failing to tackle a difficult problem. The home might be left to the owner as the result of a will. He may not be able to cope with it, or just does not want to know about it in the hope that it will all go away. Our objective is to persuade owners in these circumstances to pass the responsibility of bringing the property back into housing use to a local authority. Of course, we want this to be with their consent. But where that consent is not forthcoming, we do not apologise for granting local authorities powers to secure occupation without the need to obtain consent.

We have considered very carefully the human rights implications of these measures. We are sensitive about interfering with people's property rights. But the rights of owners to do as they choose with their property must be balanced against the rights of other property owners and the wider community in which they reside. It is the Government's view that these measures strike a fair balance that does not place owners at a financial disadvantage. Indeed, they stand to gain the benefit of an improved asset and an income, where previously they may have had to pay to keep the property empty.

Above all, the amendments send a clear message to property owners that, by leaving homes idle for long periods of time without good reason, they risk losing their right to make decisions about how the property is managed. We expect this message will help to persuade many more owners to enter into constructive dialogue with local authority empty property officers about the range of services on offer to assist them. The emphasis will remain with voluntary measures. The new powers available to local authorities would sit behind, as a back-up measure, only to be used where it is evident that voluntary measures will not resolve the vacancy.

I have already apologised for the length of time I am taking, but this is an important part and I am quite happy to go through each amendment, very briefly, because it will assist in the further stages of the Bill.

Amendment No. 171A describes interim and final empty dwelling management orders. It provides for a local housing authority to secure occupation of an unoccupied dwelling. A "dwelling" is defined as a building intended to be occupied as a separate dwelling, such as a house, or a part of a building so intended, such as a flat. It introduces the concept of "relevant proprietor"—that is, the person who the empty dwelling management order is made against. In most cases, this will be the freeholder of the dwelling, but where there is a leasehold interest of more than seven years, it is the person with the shortest unexpired term of more than seven years.

Amendment No. 171B requires a local authority to apply to a residential property tribunal for authorisation to make an interim empty dwelling management order. Prior to seeking authorisation, the local authority must attempt to notify the relevant proprietor of the fact, and ascertain if he has any intention to bring the dwelling back into occupation.

Amendment No. 171C requires that the residential property tribunal must be satisfied that various tests are met, and that the case does not fall within any category of exception prescribed by the appropriate national authority before authorising the making of an interim empty dwelling management order.

Amendment No. 171D requires the local authority to take any steps it considers appropriate to secure occupation and proper management of the dwelling, pending either a final empty dwelling management order or revocation of the interim empty dwelling management order. It cannot grant rights of occupation without the consent of the relevant proprietor.

Amendment No. 171E provides that the local authority may make a final empty dwelling management order to replace either an interim order or a previous final order if it considers the dwelling is likely to become or remain unoccupied. It does not require authorisation from the residential property tribunal.

Amendment No. 171F requires a local authority to take steps to secure occupation and proper management of the dwelling. The local housing authority does not require the consent of the relevant proprietor to grant rights of occupation. A final empty dwelling management order must contain a management scheme for setting out how the local authority intends to carry out its duties and how it will account for the moneys expended and collected.

Amendment No. 171G provides for a third party to apply to a residential property tribunal for compensation for any interference with his rights as a result of the making of an interim empty dwelling management order or to request the local authority to pay compensation for interference with his rights as a result of making a final empty dwelling management order.

Amendments Nos. 171H and 174A to 174D are consequential amendments. Amendment No. 210A covers a wide range of matters relating to the operation and effect of empty dwelling management orders and financial arrangements. It is a long and detailed schedule, and is fairly self-explanatory.

3.45 p.m.

The general effect of an interim empty dwelling management order is very similar to that of the interim management orders under Chapter 1 of Part 4 of the Bill, and can last for up to 12 months. While it is in force, the local authority takes over most of the rights and responsibilities of the relevant proprietor but does not become the legal owner of the dwelling. Rent collected while the order is in force must be used to meet relevant expenditure, or to pay compensation. Any balance must be paid to the relevant proprietor.

A local housing authority may vary or revoke an interim empty dwelling management order at any time, on its own initiative or at the request of someone with an interest in the dwelling. However, if the local authority has secured occupation of the dwelling, it may only revoke the order with the consent of the relevant proprietor. It may also refuse to revoke the order unless any expenditure it has incurred up to that point that has not been met by rental income is paid to it either by the relevant proprietor or someone else.

A final empty dwelling management order may last for a maximum of seven years. The general effect is the same as for an interim order. The only significant difference is that the local authority does not require the consent of the relevant proprietor to grant occupation rights. The procedure for varying or revoking a final order is similar to that for an interim order.

A local authority has a right to possession of any furniture in the dwelling while the empty dwelling management order is in force, but the relevant proprietor may request possession of it. The local authority may also supply furniture to the dwelling.

A retail property tribunal may terminate a lease of a dwelling on which an empty dwelling management order is made, if it considers the dwelling is not being occupied and the local authority requires possession to arrange for it to be occupied. This provision is necessary in order to prevent any sham arrangements being put in place to defeat the objective of the empty dwelling management orders. However, we recognise this could deprive someone of property rights, so the schedule provides for the retail property tribunal to order payment of compensation by local authorities to the person whose interest is determined.

On the termination of an empty dwelling management order, the local authority must pay to the relevant proprietor any balance of rent left after deduction of its relevant expenditure, and any compensation it has been required to pay. lf, on termination, the balance is in deficit, the local authority may seek to recover the deficit from the relevant proprietor if he has agreed to pay it, if it relates to a service charge paid by the local authority and, in the case of an interim empty dwelling management order, if the relevant proprietor unreasonably refused consent to the grant of occupation rights.

If none of these provisions apply, the local authority must meet the deficit itself. However, if a subsequent final empty dwelling management order is made, the local authority may instead seek to recover the deficit from any surplus made under that subsequent order.

There are a wide range of rights to appeal to a residential property tribunal against matters that affect a person with an interest in a dwelling on which an empty dwelling management order is made. A relevant person may appeal to the residential property tribunal against a decision of a local authority to make a final empty dwelling management order, or the terms of it; the terms of an interim order, including any terms regarding compensation payable to a third party or a dispossessed landlord or tenant; or a decision of a local authority to vary or revoke, or its refusal to vary or revoke, both an interim or final empty dwelling management order. A third party may also appeal to a residential property tribunal against a decision by a local authority not to pay compensation to him, or a decision relating to the amount of compensation payable.

In conclusion, we consider that these arrangements strike a fair balance between the right of property owners to determine how their property is used and the duty of local housing authorities to secure occupation of that property in the wider public interest. That should come as no surprise to noble Lords since we consulted on this over a very long period.

In particular I would point to the fact that the amendments provide for local authorities and residential property tribunals to balance the interests of the community against the effect the order will have on the rights of the owner and of third parties; local authorities would have the right to seek authorisation from a residential property tribunal to make an interim empty dwelling management order; there is a right to seek variation or revocation of an empty dwelling management order and a right to appeal against a refusal to do so; there is a right of appeal against the making of a final empty dwelling management order or the terms on which it is made; and compensation would be paid to persons other than the relevant proprietor whose interests are affected by the making of an empty dwelling management order and to dispossessed landlords and tenants whose leases are terminated by a residential property tribunal in authorising an empty dwelling management order. I beg to move.

Lord Hanningfield

I begin by saying that we are less than enthused by the way in which the Government have handled this part of the Bill, in particular the introduction of such a large and significant element at this stage. Earlier this year during the deliberations in Committee in the Commons, the Government announced that they would bring forward in this Bill a scheme for the handling of empty properties. To table and publish such an important part of the Bill only last Thursday when they had the whole summer in which to do so borders, I believe, on an abuse of Parliament. It has in effect denied opposition colleagues from being able to scrutinise it in the manner this House expects.

Part of my concern turns on the fact that this is in no way an insignificant inclusion. The provisions being moved by the Minister today will have a major impact on many citizens, along with the involvement of the state in their private lives—the taking into possession by local housing authorities of an empty but, I must stress, a private property.

This measure is designed to bring a greater number of properties into the housing sector. However, we have serious reservations about whether that ambition will be met by this scheme. This approach appears to he all stick and no carrot. We agree that there is an issue in relation to empty homes. The scandal of 730,000 houses and flats in England standing empty is one we should all be concerned about. However, we would have preferred some form of voluntary model. Such powers as those before the Committee today should have been introduced as one of a range of options backed up by other, stronger measures.

There are important questions and points that need to be clarified. For example, the Government need to give further consideration to the legal complexities that might apply in circumstances involving the application of an EDMO in respect of leasehold dwellings, in particular flats. In such circumstances the responsibilities of the lessee will continue, notwithstanding the existence of an EDMO. The OPDM needs to consider whether, given the necessary statutory amendments, this would be practical, or whether the power to make an EDMO is confined to freehold interests only.

The ODPM needs to consider dispute properties; for example, those where family breakdown has occurred and one of the parties refuses to agree to the property being sold so that the other party derives no benefit from the property as a form of punishment for the relationship breakdown.

There can he multi-owner disputes. On the death of a single or joint proprietor, ownership passes to one or more members of the family who are unable to agree on the future of the house. One person may wish to retain and improve the property for family use while the others wish to sell and realise the equity. This may also occur where the Court of Protection is involved and cautions have been placed on the sale by other family members in dispute of an agreement or will.

It should consider DIY owners, those who inherit or acquire empty, semi-derelict properties with a view to use as second or retirement homes. Having undertaken work on a do-it-yourself basis to reduce costs and as a hobby, they find that with the passage of time the condition of the property deteriorates and the costs escalate. They are reluctant to acknowledge that what had been a manageable project five years previously has now turned into a major headache with little chance of being turned around.

There are additionally issues around cost. Will the operation of the scheme be cost neutral to local authorities and be operated as a commercial enterprise, reclaiming financial expenditure through rent? How long will an authority wait before moving in, and on what grounds will a decision be made? Could we be left with a fragmented system where we have one local authority applying a different interpretation and being rather more keen to seize a property than the authority next door?

Of the 729,770 empty homes in England, 76,637 are under the tutelage of local authorities and a further 37,625 under registered social landlords. Some 10,110 are controlled by other public bodies and the remainder, 605,398, are in private hands. Surely there is a case for the Government and local authorities to get their own act in order before starting to eye up private properties. Over 100,000 houses are in state hands and yet are still lying empty.

A further question relates to what will happen to such properties once they have been made fit for human habitation by the local authority. Will they be let to key workers or homeless people in the vicinity? If that is the case, how will such a scheme operate? Who will these people he, and how will they be chosen? What guarantee can be given that such people will not, for whatever reason, subsequently damage the property they are renting? What redress will the owner have if such damage occurs? These are just some of the questions that remain unanswered.

As I have mentioned, we are not at all impressed by the short period of time we have had to scrutinise these provisions and we are unable to comment today in the detail we would like. I know that my noble friend Lady Hanham will also want to comment on these issues.

Baroness Maddock

I should say first that we welcome what the Government are doing here. Bodies such as Shelter and the Empty Homes Agency, of which I am patron, also welcome these provisions. However, I agree with the noble Lord in his remarks about the way they have been handled. Having spent the whole of the week before we came back trying to find out whether these amendments had been tabled in order to prepare, I found that they eventually arrived only last week. I am not in a position to employ full-time staff, so that makes life very difficult. I hope that, in the future, the Government will do better with this type of thing. I realise that that is not simple, but it was as far back as 19 May this year that the Government said that they would put forward amendments.

The Minister has made a number of important points explaining why this is such an important issue. We have a huge number of empty homes in Britain. The noble Lord who spoke before me was a little dismissive of the number of homes and how this would assist in providing the many homes that are needed. But it is a fact that 84 per cent of empty homes are not publicly owned buildings; they are in the private sector. That is why it has been so difficult to deal with them and why it has taken so long to devise a comprehensive and imaginative solution.

In introducing the provisions, the Minister talked of what happens in areas where there are lots of empty properties. It is a fact that in some of the most deprived areas of the country, we find that a much higher percentage of homes are left empty. Research has also shown that in areas where more than 5 per cent of the dwelling stock is empty, house prices reflect that fact and as a result are much lower. Given the facts—about which we could speak at length, but I will spare noble Lords that debate today—it is clear that there is a need to do something about empty homes.

I have campaigned on this issue for well over 20 years in my own political life, so I see the provisions to be put on the face of the Bill as something of a milestone. Noble Lords on the Liberal Democrat Benches have pushed for such provisions for a number of years and therefore we welcome them. My only regret is that something was not done sooner.

These amendments will provide a much-needed tool for local authorities, in particular where the owners of empty properties refuse to co-operate. It must be remembered that these will be provisions of last resort, and we hope that all the best practice we have seen introduced will enable local authorities to operate without having to undertake this kind of bureaucracy. However, it means that many more homes will be brought back into use and we will see more secure homes and a better quality of life for many families up and down the country.

4 p.m.

As the Minister said, a good many voluntary leasing schemes are already in operation. In recent times there has been renewed interest in these schemes across the country. Many registered social landlords have become involved; some are running with major portfolios. East Thames Housing Group now has more than 1,500 previously empty properties on its books. That is without this legislation, so it shows what can be done.

Across the country there is a patchwork quilt effect of private sector leasing. In some areas there are excellent partnership relationships between local authorities and the local registered social landlord, but there are areas where there is no interest from registered social landlords. We need to ensure that there are more incentives for registered social landlords to see that private sector leasing schemes are an integral part of their work.

I vented most of my anger about the late tabling of the amendments last week. As we have said, it has been difficult to get to grips with them. I tried to listen to what the Minister was saying but did not always catch it completely, so I hope that I am not asking about matters that he thought he had explained. We may pursue other matters on Report.

The Empty Homes Agency is concerned about compensation. It was not in the initial consultation, nor in the initial position of the Office of the Deputy Prime Minister. I understand that that is partly to do with human rights issues. Furthermore, in some cases consent from the owners of properties is required to rent them. Will the Minister set out the Government's thinking on those issues, the reasons why they came to their conclusions and the reasons for the amendments they have tabled?

Some people take the view that if people have left their properties empty for a long time they perhaps do not have any right to compensation. If I have read the notes to the amendments correctly, compensation would be awarded only if the owner was not receiving any rent from the property, which is what we hope would happen.

One of the points that is welcomed by people who work in the area is that if local authorities have not recouped the costs of the initial interim empty dwellings management order, they will he able to apply for another. That is welcome because it should convince local authorities that are averse to embracing the new power.

One area that is rather sad, although I understand the problem, is that the definition of a dwelling would preclude empty flats above shops if there were no separate access. I can see the problem and that it might be a legal minefield, but will the Minister reconsider it?

Subsection (2) of the proposed new clause under Amendment No. 171B requires a dwelling to be wholly unoccupied. However, the new schedule proposed by Clause 210A—in Paragraph 2(3)(a)—refers to the rights of existing occupiers. We are confused as to how that will work out; it seems inconsistent.

I am sure that we shall return to the issue in more detail on Report. With those few comments and questions I look forward to the Minister's response.

The Earl of Caithness

I am grateful to the noble Baroness, Lady Maddock, for her comments. She made a plea to the Government to be more timely in tabling amendments. We have been saying that for years; the noble Baroness said it again today, but the answer is that it just will not happen. We will be faced with the same situation as we have now: of little information on anything and late tabling of amendments.

We move into an area where we change from a partnership between owners of properties and local authorities into confiscation. The Government are giving draconian powers to local authorities to take away someone's private property for a period of years. That should be done only with the greatest reluctance and after the greatest scrutiny. We are only just beginning our scrutiny and the other place will not scrutinise the provision at all.

The Minister said that he listened to the committee in another place that analysed the draft Bill. If he listened to the committee on this issue I only wish that he had listened to its other recommendations when it comes to the home condition report and the pack we are about to discuss under Part 5, because clearly they have not listened to the committee at all on those issues.

The Minister kindly put in the Printed Paper Office the final regulatory impact assessment, which he signed on 7 September. Four different options were put forward. Option 1 was the status quo and options 2, 3 and 4 referred to EDMOs. Under option 2, there are 165,000 properties at stake. Under option 3, about 300,000 are involved, and under option 4, 165,000 properties, the same as in option 2. Needless to say, the Government have gone for the largest number of properties. Will the Minister explain why that action was taken?

When the Government are doing something as controversial as this, would it not have been sensible to go for either option 2 or option 4, where a smaller number of properties is available, to see how that worked before tackling a bigger problem?

When we look at the results of the consultation and the analysis, it does not surprise me considering that the majority of the respondents were either local authorities or housing organisations. Out of the 134 respondents, only 10 were individuals. That tends to be the case, but it is a bad way to make decisions. The Government decided to go for option 3, which is the preferred option of only 14 per cent of the respondents. Why are they making decisions when such a small minority is in favour of such a draconian power?

Like the noble Baroness, Lady Maddock, I have not had the chance to look at the amendment in as much detail as I would have liked. From what she says, I know that I have carried out less work than she has. Is it true that the EDMO has to have a tribunal agreement; does the local authority have to have the tribunal's agreement before it makes an EDMO, or can it make one without the tribunal?

Does the local authority have to act on every one of the tribunal's decisions, or if the tribunal makes a set of recommendations, can it ignore them and do its own thing? I was confused when the Minister talked about compensation to the owner. I will read in the Official Report tomorrow what he said, but when he replies will he say a little more about how compensation to the owner will work? That might be helpful.

Can the Minster confirm that when a local authority confiscates a property from an owner under an EDMO, it will take on all the liabilities that go with the property? If it is a flat, can he confirm whether the rental will be paid; and, if it is a house or a flat, whether the council tax, the water rates and so on will be paid by the local authority?

Can the Minister confirm that the local authority will indemnify the owner once an EDMO has been taken out? Why should the owner be responsible if his property has been confiscated for a period of years? If an EDMO has been taken out, the local authority should be obliged to leave the property in good order. Can the Minister confirm that that is the case?

Following up the point made by my noble friend Lord Hanningfield about the many situations that could arise and result in a property being left empty, what will occur in the case he mentioned where a family is discussing what should happen to a property, and then resolve that issue in year one of the seven years of the EDMO? Will they be able to apply to the local authority or the tribunal to have the EDMO rescinded and take back the property with vacant possession in order that they may do what they like with it?

Can the Minister confirm that at the end of the EDMO the property will be returned to the owner with vacant possession and that there will be no security of tenure for any of the occupants that the local authority may have put therein?

4.15 p.m.

Lord Greaves

I declare an interest in that I am a member of Pendle Borough Council, an area of northeast Lancashire. I represent a ward which has a large number of empty properties. I recognise the situation described by the Minister when he refers to the problems created by empty properties in areas of otherwise good older housing. He could have been describing a large number of places, such as Colne in Lancashire.

I regret having been unable to attend on any of the previous days during which the Committee has discussed the Bill because it goes to the very heart of the areas in which I have been involved for the past 35 years in trying to tackle the problem of poor and sub-standard housing. There are many decent streets of good housing in which one or two houses cause the blight of social problems described by the Minister.

The aims of the government amendments are admirable. I want to stand on a little hill, wave a flag and cheer the Government—which I do not do very often—because their aims and objectives are quite brilliant.

I share some of the questions that have been raised, including some of those raised by the noble Earl, Lord Caithness. He comes from the opposite end of the scale of rights involved—I start with the problem of the empty houses and he starts with the rights of the owners—but somewhere in between there has to be a balance. Some of the practical problems that have been raised need answering. I hope the Minister will be tolerant if on Report we go into more detail on some of these issues than we would have had they been discussed in the depth that they should have been in Committee.

Having said that, I wish to raise one or two questions. I am slightly confused about some of the wording in the amendment. It may be that I have not understood it properly. It is highly complex and it is quite likely that I have not understood it properly; I look forward to the Minister explaining it to me. Under the clause heading "Empty dwelling management orders: introductory", subsection (2) of the proposed new clause states that, An interim EDMO is an order made to enable a local housing authority, with the consent of the relevant proprietor"— and then, in subsection (3), it suggests that the final EDMO is a successor to the interim EDMO. I do not understand why it states, with the consent of the relevant proprietor", when much of the remainder of the amendment deals with a situation where there is no consent from the relevant proprietor. It may be that I have misread it, but that would seem to be the initial definition of interim EDMOs and final EDMOs. It is a matter which can be looked at, or it can be explained why I am wrong.

The problems in Birmingham that the Minister described are exactly the same as those of which I am aware. Many properties are not in good condition for a reason—they have been left empty for several years. Even in the best of areas, houses which have been left empty for several years often deteriorate; repairs are needed, water gets in, leakages are not repaired and so on. In areas which have more social problems, as the Minister said, windows get broken, kids get in, people break in and steal, traditionally, the fire-back boilers and various other kinds of equipment. Slowly, over a period of time, such houses become derelict or semi-derelict and the local authority steps in and boards them up.

A process takes place: it starts off with a perfectly reasonable house—which is left empty—and slowly, over a period of time, it gets worse and worse until eventually it becomes derelict. I am not clear about what condition of house the EDMOs are intended to deal with. Quite clearly, if a local authority takes over houses which are not in a decent condition for people to live in, which are not fit to live in or do not meet the new health and safety housing standards, how much spending on such houses will the Government expect local authorities reasonably to undertake?

If it is a question of a few hundred pounds to put them in order, that would be one thing, but with many of these houses you are talking about thousands of pounds. A figure of £20,000 is not unusual for a house which a local authority may, at the moment, compulsory purchase because it is in such a poor condition. It then has to do it up. It might be more than £20,000, but taking that figure, if you let the property for, say, £60 a week, which might be on the low side, it would take seven years to recoup the money—and that is assuming that there are no other management costs associated with it and no on-going repairs in the future, which quite clearly there will be. It may therefore be a long-term operation.

I am not clear from what the Minister said and from what the amendment sets out whether it is really intended to deal with that kind of situation or whether, if a house reaches a condition below a certain threshold, other measures will be brought in. If the house is in one of the new select licensing areas, if I have got the terminology right, it may be that the other measures will be there to deal with the matter and the authority may have to go down the CPO route.

But if a property is not in such an area—and, as I understand it, the EDMOs are designed to deal with properties which are not in these designated areas—it may be much more difficult. I should like to get my mind around this question and understand the Government's thinking about the circumstances in which these orders might be made.

I take the point made by the noble Earl, Lord Caithness, about the combination of sticks and carrots and that this is all sticks. In the old days—I say the "old days"; I am going back to the 1970s, when there was a great deal more money in areas such as my own for improvement grants—local authorities had far more resources than they have now, or at least have had until the recent housing market collapse in partnership areas. We are one of those areas and so we may now be getting far more resources to deal with these problems in different ways.

The annual capital programme for housing of my own authority of Pendle, for example, was up to £6 million or £7 million in the late 1970s, which was a reasonable amount of money for an ordinary small district. Despite inflation, that amount fell towards the end of the 1990s to less than £2 million. So the amount of money available to local authorities in many of those areas collapsed. Of course, some of that money had to be spent on council housing as well, although in many authorities in north-east Lancashire and others with lots of old terraced housing, the proportion of the HIP that went into the private sector was always much higher than went into council housing. That was just the nature of the situation.

So resources were not there. I was chairman of my local authority's housing committee, for my sins, back in the mid-1970s. We used to have a combined carrot-and-stick approach of saying to owners of empty properties such as those which the proposals concern, "We're going to CPO it, but we don't want to CPO it. And we will give you a grant. We will work with you to do the house up and do it that way". That approach fell by the wayside when it stopped being possible for local authorities to give grants to private landlords in that way and they had to rely more on the stick than the carrot. Since the local authority did not have the resources anyway, the number of houses which were dealt with like that went down from scores every year to a handful.

If the Government now intend to allow local authorities to intervene again and to tackle the problem of houses which I call "rotten teeth" in areas which have a future and are not going to he cleared, but which nevertheless require this intervention just to deal with such houses, that would be very worthwhile and welcome. However, there is then the question of resources. Where is the money coming from for the local authority to intervene? If the local authority makes an empty dwelling management order, where is the money coming from in the first instance to pay for the repairs in that property before the rent starts coming back to pay for it?

I am asking the Government these questions because their aims are brilliant, but until we can see how the proposals are going to work in practice, along with the other raft of measures in the Bill—a Bill which I am enthused by as a whole—we will not know whether they are going to work.

My final point is about compensation and echoes that of the noble Earl. Lord Caithness. Compensation is mentioned in the Bill, but there is no indication of the scale of compensation that the Government think is going to be involved. Will compensation be paid exceptionally—something that happens now and again—or will it be paid as a matter of course? On what kind of scale will it be paid? Will it be related to rents? Will it be related to capital values when the houses are taken over? Or will it be related to capital values after the council has fettled the houses up and made them decent? The whole question of compensation needs a great deal more elaboration.

Lord Avebury

I agree with the Minister that the problem of empty homes is nothing short of a scandal. I am also in agreement with my noble friend Lord Greaves in thinking that it is a pity that the scheme could not have been extended to deal with the large number of properties over shops which still remain vacant. Although some of them are being modernised—I have noticed this even in my own area in south London—there does not seem to be enough of an incentive for landlords to do it on a larger scale. Therefore, if one looks up above the shops in almost any parade in south London, one will see available property which could be put back into use and which is gradually falling into dereliction.

My principal reason for intervening is that I tried to find out what was happening to the contracts into which NASS had entered for accommodation for asylum seekers, but which would no longer be required because of the sharp fall in the number of people coming here and seeking asylum, bearing in mind that those were long-term contracts, some of which did not contain escape clauses. When I tried to find out about the matter—first, by asking NASS and, secondly, by tabling Questions on the Order Paper—I was told that those contracts were "commercial in confidence", but that all but two of the contracts signed by NASS expire some time in 2005 and the remaining two in 2006. That means that a large number of properties will be falling vacant in this sector.

Will it be possible to make an EDMO for properties which NASS no longer requires, but which it cannot relinquish because the contracts do not contain an escape clause? Will the Minister say how many of the 110,000 properties in other forms of public sector ownership that were mentioned by the noble Lord, Lord Hanningfield, actually belong to NASS? I suspect that it is the majority of them. Therefore, it is worth spending a little time thinking about how we deal with the matter.

NASS is the most opaque public sector organisation of all. One cannot get a thing out of it. It has not published its budget even for 2003–04, let alone for 2004–05, but we know that it spent more than £0.5 billion in the year to March 2003. Therefore, we are not talking about small sums of money and small numbers of properties.

I hope that the Minister can assure me that, as part of the new scheme that is outlined in the amendments, a very close look will be taken at NASS. He should also bear in mind that if the ODPM does not do it, the National Audit Office is extremely interested in the way that NASS manages its properties.

Baroness Hanham

The inevitable way in which the amendments have been put down has meant that we have ended up with comments that would have been better made at Second Reading, but I shall add a few more questions to those that have been asked.

We all acknowledge that there are properties that are left empty for unacceptable reasons. How does one deal with that problem in a way that does not appear to be confiscatory and that does not lead a politically motivated local authority to act in way that it should not?

The Minister spoke about compulsory purchase orders and the slowness of the process. I agree with that. We went some way in the Planning and Compulsory Purchase Act 2004 towards dealing with that. However, a compulsory purchase order is quite a threat. I know from my experience in my authority that a property comes back into proper order amazingly quickly at the mere threat of compulsory purchase.

In authorising the making of an interim EDMO, should the residential property tribunal not be expressly required to consider all the reasons why a property is unoccupied? The reasons why an unoccupied property should not be taken over are given in the Government's amendments, but the residential property tribunal does not appear to be required to make sure that those reasons are valid and have not been ignored by the local authority.

Should not a final, as well as an interim, EDMO require the prior authorisation of the residential property tribunal? It is our understanding that a final EDMO does not require it, but that is the moment when it all begins to bite.

4.30 p.m.

As to the question of the rent that will be raised, and what it will be used for when the dwelling is let, is it the Minister's understanding that the local authority will have to obtain the best rent that it can? Who is the property going to be let to? If the private sector is involved, will the property be let to people on the waiting list, or will it be let through an agency to people who want to rent or acquire a property in the private sector? Who will manage the property—the local authority, a residential landlord or a housing association? Who will have responsibility, and from where can redress be sought?

I turn to specific amendments. Subsection (5)(a) of Amendment No. 171A is extraordinarily vague. What is meant by the local authority "taking steps"? When is the moment for a local authority to take steps, and after what investigations? Who is going to inquire into the reason why a property is vacant, and who is going to make a judgment on the conditions that have been laid down?

In subsection (2)(b) of Amendment No. 171C, what is meant by "immediate"? An owner may be prepared to take steps to put the property right, but, if works are required, there are often delays with letting contracts, planning permission or building regulation approval. It ought to be made clear within these clauses that the owners are allowed a reasonable time in such circumstances.

In subsection (2) of Amendment No. 171 D, the steps to be taken should not be those that the authority considers appropriate, but those which are objectively considered so—presumably by an independent person who understands property conditions.

In subsection (4) of Amendment No. 171D, surely if the property cannot be let, the order should be revoked. Subsection (5) of Amendment No. 171D needs to be expanded to make it clear that the local authority is under other duties as a responsible property manager, for example, securing the property and taking reasonable steps to prevent damage, preventing burst pipes and so on in winter.

As the unfortunate way these amendments have come about means that, inevitably, a lot of this afternoon's questions cannot be answered beforehand, there will be a raft of amendments on Report. That is doubly unfortunate, because on Report we do not have the same opportunity to intervene as we do in Committee. It is deeply unfortunate that we did not have the amendments in time for us to have the opportunity to table our own amendments, which will have to come at a later stage.

Lord Rooker

I appreciate the tone of the speeches on the group of amendments. I will not go over the details of why they were put down only last week. I will just refer to the fact that, to varying degrees, both the Liberal Democrats and the Conservative Party in the Commons called for action on empty homes, as has the Labour Party in the past. We can argue about which homes are actually empty, but we are talking about the totality of such homes. The Government are now proposing a fairly modest scheme, for reasons I will seek to explain. It is not a question of fobbing colleagues off. I have specific answers to some of the questions I have been asked in the past few minutes, and obviously on Report we will have a more meaningful discussion.

I have said that this scheme is essentially a longstop. It is not the first port of call. In other words, by and large it is a voluntary scheme. No legislation is required for such schemes, and we want to get the job done on a voluntary basis if we can. Regarding the point made by the noble Baroness, Lady Hanham, about CPOs, our central point, as I said earlier, is that we are not concerned about the dwelling's change of ownership. We do not want the state to take ownership of the dwelling—that would genuinely look like confiscation. That is not the purpose here and it could destroy the scheme. The ownership of the dwelling is a by-product. It is irrelevant to what we are trying to do, which is to get the dwelling used as a home. In fact, we want mixed tenure.

Even if CPOs were easy, and were not long and drawn-out, there might be good reasons for not going down the CPO route anyway, as that would take the ownership of the dwelling away from the owner. I suspect that that would raise more human rights issues than what we are proposing. I take the noble Baroness's point—that essentially it is possible to get voluntary action with the threat of legislative action, and in some ways that is what is proposed here, but as a last resort.

I have jumped the gun a little bit. Our estimate is that local authorities will make about three orders a year—that is, a thousand dwellings. That does not mean to say that there will be a total of only three dwellings in each authority; we are absolutely convinced that, because of the backup of the legislation as a sanction, we will get more empty properties back into use. We do not need legislation for a voluntary scheme.

The noble Lord, Lord Hanningfield, raised the issue of technical problems with long leases. I am not a long lease expert, but I agree with him that they are technical problems. We think the detailed provisions cover most of the problems that have been raised in the consultation, but we are prepared to accept that there may be some issues about the service of notices relating to leasehold matters. We will certainly give that further consideration and come back on Report. This issue has not yet bottomed out.

It is outrageous that too many state-owned properties are empty, but no legislation is required at this stage to deal with them. They form just 16 per cent of all such properties. There used to be more; it is well-known that the Ministry of Defence, for lots of reasons, needs to keep many empty properties, although it floated off a number of them some years ago.

In the case of local authorities, for similar reasons to the private sector housing market, there will never be a situation where every dwelling is occupied, because that would block people from moving around and swapping tenancies, just as it would block them from buying and selling properties. We are concerned with dwellings kept empty for longer than six months for no reasonable reason. We are cutting out a huge number of dwellings anyway, but we want to do all we can to encourage local authorities to combat all the empty properties in their areas, including the state-owned ones. There is no argument that we want to deal with that.

I was asked to whom the local authorities will let the properties, and whether it would be to key workers. That will he entirely up to the local authority. We could not be prescriptive from the centre, simply because of the variety of local authorities, who understand the issues in their areas. If the strategic authority takes the view that for its definition of "key workers"—in my view everyone is a key worker, but at present the phrase has certain definitions—then that is a good idea, and it may be the case that some authorities can do that.

I also want to deal with the issue of "compensation". I looked through the notes again yesterday, and I have listened to noble Lords today. "Compensation" is the wrong word. I suspect the lawyers and the drafters will say that is the word that has to be in the legislation, but it is not compensation as used by noble Lords and Baronesses asking the questions. I will come back to the question on more than one occasion. The relevant proprietor will not receive compensation per se, but rather the balance of any surplus on the rent and the capital appreciation of the property. There is compensation that could go to third parties, perhaps where a lease has been arranged and a finance company is involved. I believe that human rights legislation dictates that a lease is property and, therefore, there is a degree of compensation. The idea that the owner of the empty dwelling will receive loads and loads of compensation because the local authority has taken over the management of the property is not true. "Compensation" is not the correct word. We may consider that. It certainly requires a better explanation.

What the noble Baroness, Lady Maddock, said about flats above shops is absolutely right. The separate access issue refers to the definition of a dwelling. I fully agree with those who raised the issue about flats above empty shops. Since I was responsible for the housing and planning brief, and indeed since Keith Hill took it over, we have moved much further forward and action is under way.

Generally speaking, the tenants of shops which are used mainly—but not exclusively—as retail premises and which have flats above do not want to be landlords and neither do the property owners. That difficulty has been identified for some time; we need an intermediary who can deal with that. I must make it absolutely clear that this Bill cannot deal with that. Action in the department is under way on that.

Subsection (2) of Amendment No. 171B refers to where, the dwelling is wholly unoccupied". There is a reference to the rights of existing occupiers in the schedule. The reference to "existing occupiers" relates to people who occupy a formerly empty property at the point when an interim or final empty dwelling management order is made. Some tenancies were granted and the schedule protects the rights of those people at the point when the final empty dwelling management order is made.

The key order here is the first one, the interim one. One has to go to the residential property tribunal to obtain that order. Following that, one can get people into the property. They are then living there and they are the people referred to. That is why there is this apparent contradiction; but there is not a contradiction because people can live in the property when the final empty dwelling management order is made. That may sound barmy, but they are there because the interim order was made in the first place.

The noble Earl, Lord Caithness, asked some detailed questions and I hope I have some detailed answers, although I thought that he came a little too close to defending unacceptable practices in the property market. On whether every interim empty dwelling management order requires the authorisation of the residential property tribunal, the answer is yes. Does a local authority have to act on every order authorising an interim empty dwelling management order? The answer is no. The noble Earl then asked whether the residential property tribunal has to approve a final empty dwelling management order. The answer is no. Will a local authority indemnify the owner? The answer is yes. Must a local authority leave a property in good order? I thought that was a brass-neck question. Most of these properties will be in a scandalous condition, but they will be done up, at the end of the day, by the rent obtained from the order. but they will he dilapidated. Yes, it will not be in any worse condition—as left by the owner when it was empty—than it was found in to start with. The answer to his question is yes, it will be left in good order.

The noble Earl also asked whether the owner can ask for an empty dwelling management order to be revoked. The answer is yes, if the residential property tribunal agrees. Will the property be returned with vacant possession? The answer is yes.

I am grateful to the noble Lord, Lord Greaves., for the general thrust of what he said. I almost interrupted him but decided against it. He raised the issue of how much a local authority will spend on a dwelling. In a way, it is for a local authority to make an assessment of the housing needs, market values and the rental incomes in its area. It would not make sense to spend money that it believed it could not get back, say, over a seven-year period. In some ways it shares part of the risk. It is also an incentive against local authorities spending a huge amount of money on properties that they do not own but which they think they will get back from the owners in due course. They may not get that money back from the owners in due course. They have to make a judgment about the best route in their areas. Of course, there may be other schemes that they could follow.

The noble Lord asked about doing this with the consent of the relevant proprietor—that was under the introductory clause. The answer is that a local housing authority can grant a tenancy only during an interim empty dwelling management order with the consent of the owner. If no consent is forthcoming, the solution is to make a final empty dwelling management order. The hope is that it will not be necessary to make final orders in every case if owners co-operate with a local authority and take on the management themselves. The making of an interim empty management order does not require the consent of an owner, but it requires authorisation from the residential property tribunal.

I have partially covered the issue of compensation, but I now have a note which may provide a better explanation. The note says, "More detail on compensation". As a non-lawyer and as a lay person, I believe that compensation is the wrong word and gives the wrong impression. We do not expect that compensation will be paid in all or in many cases. I can give an example. A property may be subject to a lease of, say, four years' duration. The person who benefits from the lease is not using it. We know that because the dwelling is empty. The residential property tribunal can cancel the short-term lease and so permit the local housing authority to grant tenancies.

The problem is that human rights case law is quite clear. A lease is a possession and if the state is to deprive an owner of his possession there must be compensation, but the compensation does not have to be excessive. In regard to the owner, called in the amendments "the relevant proprietor", there is no deprivation of a possession. There is a control on his use of that possession and so no requirement to pay compensation arises.

I have covered a fair amount of the issue. The noble Baroness, Lady Hanham, asked me about making inquiries. We are dealing with properties that have been empty for more than six months for no good reason—I shall not go over the exemptions that I raised earlier. A local authority will have to show the residential property tribunal that it has made full and extensive inquiries about the ownership of the property, or if it has found the owner, it will have to show why nothing has been done about it. A local authority will not be able to walk straight into empty properties and get things cracking straightaway. There have to be good and proper checks. As I said earlier, this is a major change in public policy regarding private sector housing for the greater public interest.

The noble Baroness also asked about the level of rent and tenants. Those would be matters for a local authority. It may subcontract the management. It will have acquired the management orders from the tribunal and if it has made a final one, so be it. But there has to be a schedule. It all has to be written down and there has to be a set of rules about how a property is managed and the rents that are charged, which will vary around the country. It will be up to a local housing authority.

As I have said, I agree with the noble Lord, Lord Avebury, regarding shops. He referred also to the National Asylum Support Service and to empty properties. It is interesting to see that a note has not winged its way to me on that. It is hardly surprising as I do not know the answer myself and it certainly has not appeared in any of my briefings. Such properties are, by definition, owned in the private sector; they are empty but income is being received on them because the Home Office, through NASS, is paying for them in case they are required.

It is true that contracts were taken out when asylum applications were far higher than they are now, but I defend NASS. I know that problems have arisen. People tend to forget what was happening in London and the south-east counties at the height of the massive influx of asylum seekers. There was almost a collapse in social services and in housing where there were great pressures in Kent, East Sussex and some of the London boroughs. People tend to forget what was happening a few years ago. Operating NASS to disperse asylum seekers was not easy, and from a standing start literally tens of thousands were dispersed successfully around the country so that they could pursue their claims. That was not done without massive operational efforts in securing properties. Some were local authority properties, but one has to go generally into the market because the vast majority of empty properties in this country, as I have made abundantly clear, are in the private sector and longer-term contracts were needed.

This is not the place for us to debate the issue of why there were no get-out clauses, but before Report stage I will find out about the number of properties and whether there is anything that could be done about that. I suspect that by the time the clause comes into force and is fully operating those contracts will have come to an end. Nevertheless, I will seek further advice on the issue.

I apologise again for the lateness but it would be wasting time to go over it. We have been requested by all political parties to do something about empty properties; 84 per cent are in the private sector and that is our modest response.

Baroness Hamwee

The Minister's replies have been extremely helpful. There are a number of points which he clarified today, such as when consent is required and the situation of a wholly unoccupied property. It strikes me that it would be extremely helpful if the department were to produce a flowchart of what is required and when—something that would help us and the people who will operate the system. That would stop me muttering to my noble friend about whether we need to ask for a recommitment of this clause.

Lord Rooker

That is a reasonable request and I will pass it on to see what can be done. This is an innovative scheme. I do not accept that the scheme is a form of confiscation, as I heard mentioned earlier. Someone is not using an asset; it is not being confiscated—the ownership and the rights of ownership are not being confiscated. The rights of the use are being confiscated, but the asset is not being used for the greater public good. I suspect that there will be some literature produced about empty homes so that everyone understands exactly what the procedures are, what the rights are and what happens. If that is the case, the chances are that we will get a lot of voluntary co-operation.

The Earl of Caithness

I, too, am grateful for what the Minister said. In some cases he clarified the situation; in others he confused it for me. It might be my hearing but I thought at a couple of stages he referred to the "retail property tribunal". I think he meant the residential property tribunal. As far as I am aware there is no retail property tribunal.

Given the Minister's answer to me about how the local authority should leave the property, presumably that now requires that there should be a schedule of condition before the local authority takes occupancy of the property for somebody. Is that requirement in the Bill?

The Minister said that we should have a sensible discussion on Report. I do not think that is at all possible. This is such a complicated area. What we have done today is a Second Reading. I see the Whip sitting there and I know what the Whip will say when it comes to Report. We are allowed to talk only once, and rightly so. He will get up and tell us that we are talking more than once. We will not have a sensible discussion.

I therefore ask the Minister to talk to his noble friend the Chief Whip to recommit this part of the Bill. That is the only way that we will get a sensible discussion. The clause will not be discussed in another place. If we are going to have EDMOs, it is our responsibility now to make certain that they are right and that they function properly. We cannot do that just at Report stage. The clause is too big, too complicated, with a big schedule. I will not speak at length when we recommit, because it would be wrong to abuse it. However, in this instance it is a very good argument to say that we should recommit just this section.

Lord Greaves

May I—

Lord Rooker

Could I just respond to that while we are in Committee? I could go back down the list but I have just given the noble Earl more "yes/no" answers to every one of his specific questions, save for one, than I think I have ever given in answer to a set of questions from the Dispatch Box. I shall not go to my noble friend arguing for recommitment because I was able to give the noble Earl such specific "yes/no" answers to his questions.

Lord Greaves

I was very grateful for a lot of what the Minister said. I shall read Hansard with my usual enthusiasm tomorrow. So far, I have read all the Hansard reports on this Bill. As regards the definition at the beginning—I wrote down the words carefully—the Minister said: The making of an interim EDMO does not need the consent of the owner". However, my reading of subsection (2) in Amendment No. 171A is that it does. It states: An interim EDMO is an order made to enable a local housing authority, with the consent of the relevant proprietor". There seem to be two opposite provisions. I agree entirely that the threat of compulsion is put there in order to encourage people to volunteer; indeed, that is very clear. The threat of compulsion has to be there, because that is the whole thrust. However, it does not seem to read clearly

The Minister also said that one cannot put a tenant in an EDMO without the consent of the owner. Yet Amendment No. 171D(2) states quite clearly that the authority, having made an EDMO, must take such steps as they consider appropriate for the purpose of securing that the dwelling becomes and continues to be occupied". I am not trying to pick holes in order to make dastardly political points because the thrust of this proposal has my enthusiastic support, but perhaps it was drafted in a hurry at the last minute. Perhaps people need to look at some of the wording to make sure that it works. We do not want to pass legislation and have nice glossy pamphlets telling people how it will work, only to find that it does not stack up when it comes to the courts.

Lord Rooker

Although I have not gone back to that section, the answer is probably the difference between the interim empty dwelling management order and the final empty dwelling management order. It is the distinction between the two. Perhaps when the flowcharts are organised, the noble Lord will find that that section is clear. We will have a look at that point.

On Question, amendment agreed to.

Lord Rooker moved Amendments Nos. 171B to 171G:

After Clause 122, insert the following new clause—

"MAKING OF INTERIM EDMOS

(1) A local housing authority may make an interim EDMO in respect of a dwelling if—

1. (a) it is a dwelling to which this section applies, and
2. (b) on an application by the authority to a residential property tribunal, the tribunal by order authorises them under section (Authorisation to make interim EDMOs) to make such an order, either in the terms of a draft order submitted by them or in those terms as varied by the tribunal.

(2) This section applies to a dwelling if—

1. (a) the dwelling is wholly unoccupied, and
2. (b) the relevant proprietor is not a public sector body.

"Wholly unoccupied" means that no part is occupied, whether lawfully or unlawfully.

(3) Before determining whether to make an application to a residential property tribunal for an authorisation under section (Authorisation to make interim EDMOs), the authority must make reasonable efforts—

1. (a) to notify the relevant proprietor that they are considering making an interim EDMO in respect of the dwelling under this section, and
2. (b) to ascertain what steps (if any) he is taking, or is intending to take, to secure that the dwelling is occupied.

(4) In determining whether to make an application to a residential property tribunal for an authorisation under section (Authorisation to make interim EDMOs), the authority must take into account the rights of the relevant proprietor of the dwelling and the interests of the wider community.

(5) The authority may make an interim EDMO in respect of the dwelling 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).

(6) An application to a residential property tribunal under this section for authorisation to make an interim EDMO in respect of a dwelling may include an application for an order under paragraph 22 of Schedule (Further provisions regarding empty duelling management orders) determining a lease or licence of the dwelling.

(7) In this section "public sector body" means a body mentioned in any of paragraphs (a) to (f) of paragraph 2(1) of Schedule 11.

(8) Part 1 of Schedule 6 applies in relation to the making of an interim EDMO in respect of a dwelling as it applies in relation to the making of an interim management order in respect of a house, subject to the following modifications—

1. (a) paragraph 7(2) does not apply;
2. (b) paragraph 7(4)(c) is to be read as referring instead to the date on which the order is to cease to have effect in accordance with paragraph 1(3) and (4) or 9(3) to (5) of Schedule (Further provisions regarding empty dwelling management orders);
3. (c) paragraph 8(4) is to be read as defining "relevant person" as any person who, to the knowledge of the local housing authority, is a person having an estate or interest in the dwelling (other than a person who is a tenant under a lease or licence granted under paragraph 2(3)(c) of Schedule (Further provisions regarding empty dwelling management orders))."

After Clause 122, insert the following new clause—

"AUTHORISATION TO MAKE INTERIM EDMOS

(1) A residential property tribunal may authorise a local housing authority to make an interim EDMO in respect of a dwelling to which section (Making of interim EDMOs) applies if the tribunal—

1. (a) is satisfied as to the matters mentioned in subsection (2), and
2. (b) is not satisfied that the case falls within one of the prescribed exceptions.

(2) The matters as to which the tribunal must be satisfied are—

1. (a) that the dwelling has been wholly unoccupied for at least the prescribed period of time,
2. (b) that the relevant proprietor of the dwelling does not intend to take immediate steps to secure that the dwelling becomes occupied,
3. (c) that, if an interim order is made, there is a reasonable prospect that the dwelling will become occupied,
4. (d) that the authority have complied with section (Making of interim EDMOs)(3), and
5. (e) that any prescribed requirements have been complied with.

(3) In deciding whether to authorise a local housing authority to make an interim EDMO in respect of a dwelling, the tribunal must take into account—

1. (a) the interests of the community, and
2. (b) the effect that the order will have on the rights of the relevant proprietor and may have on the rights of third parties.

(4) On authorising a local housing authority to make an interim EDMO in respect of a dwelling, the tribunal may, if it thinks fit, make an order requiring the authority (if they make the EDMO) to pay to any third party specified in the order an amount of compensation in respect of any interference in consequence of the order with the rights of the third party.

(5) The appropriate national authority may by order—

1. (a) prescribe exceptions for the purposes of subsection (1)( b),
2. (b) prescribe a period of time for the purposes of subsection (2)(a), and
3. (c) prescribe requirements for the purposes of subsection (2)(e).

(6) An order under subsection (5)(a) may, in particular, include exceptions in relation to—

1. (a) dwellings that have been occupied solely or principally by the relevant proprietor who is at the material time temporarily resident elsewhere;
2. (b) dwellings that are holiday homes or that are otherwise occupied by the relevant proprietor or his guests on a temporary basis from time to time;
3. (c) dwellings undergoing repairs or renovation;
4. (d) dwellings in respect of which an application for planning permission or building control approval is outstanding;
5. (e) dwellings which are genuinely on the market for sale or letting;
6. (f) dwellings where the relevant proprietor has died not more than the prescribed number of months before the material time.

(7) In this section— building control approval" means approval for the carrying out of any works under building regulations; planning permission" has the meaning given by section 336(1) of the Town and Country Planning Act 990 (c. 8); prescribed" means prescribed by an order under subsection (5); wholly unoccupied" means that no part is occupied, whether lawfully or unlawfully.

After Clause 122, insert the following new clause—

"LOCAL HOUSING AUTHORITY'S DUTIES ONCE INTERIM EDMO IN FORCE

(1) A local housing authority who have made an interim EDMO in respect of a dwelling must comply with the following provisions as soon as practicable after the order has come into force (see paragraph 1 of Schedule (Further provisions regarding empty dwelling management orders)).

(2) The authority must take such steps as they consider appropriate for the purpose of securing that the dwelling becomes and continues to be occupied.

(3) The authority must also take such other steps as they consider appropriate with a view to the proper management of the dwelling pending—

1. (a) the making of a final EDMO in respect of the dwelling under section (Making of final EDMOs), or
2. (b) the revocation of the interim EDMO.

(4) If the local housing authority conclude that there are no steps which they could appropriately take under the order for the purpose of securing that the dwelling becomes occupied, the authority must either—

1. (a) make a final EDMO in respect of the dwelling under section (Making of final EDMOs), or
2. (b) revoke the order under paragraph 7 of Schedule (Further provisions regarding empty dwelling management orders) without taking any further action.

(5) For the avoidance of doubt, the authority's duty under subsection (3) includes taking such steps as are necessary to ensure that, while the order is in force, reasonable provision is made for insurance of the dwelling against destruction or damage by fire or other causes."

After Clause 122, insert the following new clause—

"MAKING OF FINAL EDMOS

(1) A local housing authority may make a final EDMO to replace an interim EDMO made under section (Making of interim EDMOs) if—

1. (a) they consider that, unless a final EDMO is made in respect of the dwelling, the dwelling is likely to become or remain unoccupied;
2. (b) where the dwelling is unoccupied, they have taken all such steps as it was appropriate for them to take under the interim EDMO with a view to securing the occupation of the dwelling.

(2) A local housing authority may make a new final EDMO so as to replace a final EDMO made under this section if—

1. (a) they consider that unless a new final EDMO is made in respect of the dwelling, the dwelling is likely to become or remain unoccupied; and
2. (b) where the dwelling is unoccupied, they have taken all such steps as it was appropriate for them to take under the existing final EDMO with a view to securing the occupation of the dwelling.

(3) In deciding whether to make a final EDMO in respect of a dwelling, the authority must take into account—

1. (a) the interests of the community, and
2. (b) the effect that the order will have on the rights of the relevant proprietor and may have on the rights of third parties.

(4) Before making a final EDMO under this section. the authority must consider whether compensation should be paid by them to any third party in respect of any interference in consequence of the order with the rights of the third party.

(5) Part I of Schedule 6 applies in relation to the making of a final EDMO in respect of a dwelling as it applies in relation to the making of a final management order in respect of a house, subject to the following modifications—

1. (a) paragraph 7(2) does not apply;
2. (b) paragraph 7(4)(c) is to be read as referring instead to the date on which the order is to cease to have effect in accordance with paragraph 1(3) and (4) or 9(3) to (5) of Schedule (Further provisions regarding empty dwelling management orders);
3. (c) paragraph 7(6) is to be read as requiring the notice under sub-paragraph (5) also to contain—
1. (i) the decision of the authority as to whether to pay compensation to any third party,
2. (ii) the amount of any such compensation to be paid, and
3. (iii) information about the right of appeal against the decision under paragraph 34 of Schedule (Further provisions regarding empty dwelling management orders);
4. (d) paragraph 8(4) is to be read as defining "relevant person" as any person who, to the knowledge of the local housing authority, is a person having an estate or interest in the dwelling (other than a person who is a tenant under a lease or licence granted under paragraph 2(3)(c) or 10(3)(c) of Schedule (Further provisions regarding empty dwelling management orders))."

After Clause 122, insert the following new clause—

"LOCAL HOUSING AUTHORITY'S DUTIES ONCE FINAL EDMO IN FORCE

(1) A local housing authority who have made a final EDMO in respect of a dwelling must comply with the following provisions once the order has come into force (see paragraph 9 of Schedule (Further provisions regarding empty dwelling management orders)).

(2) The authority must take such steps as they consider appropriate for the purpose of securing that the dwelling is occupied.

(3) The authority must also take such other steps as they consider appropriate with a view to the proper management of the dwelling in accordance with the management scheme contained in the order (see paragraph 13 of Schedule (Further provisions regarding empty dwelling management orders)).

(4) The authority must from time to time review—

1. (a) the operation of the order and in particular the management scheme contained in it,
2. (b) whether, if the dwelling is unoccupied, there are any steps which they could appropriately take under the order for the purpose of securing that the dwelling becomes occupied, and
3. (c) whether keeping the order in force in relation to the dwelling (with or without making any variations under paragraph 15 of Schedule (Further provisions regarding empty dwelling management orders)) is necessary to secure that the dwelling becomes or remains occupied.

(5) If on a review the authority consider that any variations should be made under paragraph 15 of Schedule (Further provisions regarding empty dwelling management orders), they must proceed to make those variations.

(6) If the dwelling is unoccupied and on a review the authority conclude that either—

1. (a) there are no steps which they could appropriately take as mentioned in subsection (4)(b), or
2. (b) keeping the order in force is not necessary as mentioned in subsection (4)(c),

they must proceed to revoke the order.

(7) For the avoidance of doubt, the authority's duty under subsection (3) includes taking such steps as are necessary to ensure that, while the order is in force, reasonable provision is made for insurance of the dwelling against destruction or damage by fire or other causes."

After Clause 122, insert the following new clause—

"COMPENSATION PAYABLE TO THIRD PARTIES

(1) A third party may, while an interim EDMO is in force in respect of a dwelling, apply to a residential property tribunal for an order requiring the local housing authority to pay to him compensation in respect of any interference in consequence of the order with his rights in respect of the dwelling.

(2) On such an application, the tribunal may, if it thinks fit, make an order requiring the authority to pay to the third party an amount by way of compensation in respect of any such interference.

(3) If a third party requests them to do so at any time, the local housing authority must consider whether an amount by way of compensation should be paid to him in respect of any interference in consequence of a final EDMO with his rights.

(4) The authority must notify the third party of their decision as soon as practicable.

(5) Where the local housing authority decide under subsection (3) that compensation ought to be paid to a third party, they must vary the management scheme contained in the order so as to specify the amount of the compensation to be paid and to make provision as to its payment."

On Question, amendments agreed to.

Lord Davies of Oldham

I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.