Homes Bill

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Mr. Raynsford: Let me try to help the hon. Gentleman by amplifying my previous remarks in which I talked about general publicity for the existence of a new development and what triggers the obligation to produce a seller's pack. Publicity from a housebuilder saying that he expects to have a highly desirable development of exclusive five-bedroomed executive homes in an area would not trigger the obligation. However, when the developer states that he has six properties for sale, each with a name and number identifying which one is available, the property is regarded as having been put on the market, and that is the point at which the seller's pack obligation would arise.

Mr. Loughton: I do not think that we are getting to the bottom of the issue. Is the Minister saying that the seller's pack has to be made available when a property is advertised, even if the property has not been built and, as is often the case, only an artist's impression is available? Although we have agreed that there would not be a home condition report, there would still have to be things like damp-proof guarantees and a form of energy efficiency survey, as the Minister promised earlier. How can an energy efficiency survey be performed on a house that has not even been built?

Mr. Raynsford: The hon. Gentleman is obviously unaware of the existing obligation on all builders of new properties both to survey and to advertise the energy efficiency rating when they make properties available.

Mr. Brake: Will a slightly different timetable apply to the requirement for a seller's pack in relation to a development of a single property, given that there would be no need to notify that it was No. 1 such and such road, because it would be the only property on the site and clearly the one that was being advertised?

Mr. Raynsford: The hon. Gentleman makes a valid point. In such circumstances there would be a borderline between the point at which the developers were thinking of building on the plot, which would not be at a point at which the seller's pack requirement would apply because there would be no indication of the character, size or nature of the property, and the point where the builder says that he is building a five-bedroomed property with specific characteristics on a particular location and that the property is to be available for sale at a given time. At that point, because there specific reference had been made to a paraticular property, the concept of being put on the market would apply. The notion of the single dwelling-house was discussed in this morning's debate. The hon. Gentleman asked a question about the reference to dwelling-houses, and that is the reference that would bite.

Mr. Brake: On a related point, would planning permission have to have been granted for a development before a seller's pack had to be provided?

Mr. Raynsford: Any potential buyer would be extremely ill-advised to enter into any negotiations about a property for which no planning permission had been obtained, because there would no guarantee that it would become available for sale. That is one of the good reasons to have a seller's pack, in which the necessary planning permission has to be identified. In practice, it would not be possible for a property to be sold under the seller's pack arrangement if there was a clear gap where the necessary planning consent ought to be, because it would be identified by the buyer's solicitor who would prevent the buyer from getting into deep water. That is one more strong argument in favour of the seller's pack.

Dr. Brian Iddon (Bolton, South-East): For the record, will my hon. Friend make clear the position of a registered social landlord selling a house with shared ownership. Would it be covered by the Bill?

Mr. Raynsford: The obligations apply where properties are being sold. There is an equity element when such a property is sold and it is my understanding that the provisions would bite. I will take further advice, because shared ownership can take several different forms and I do not want to mislead the Committee by giving a blanket response. Subject to considering the issue more thoroughly, I think that, in principle, the answer that I have given is correct and that the provisions will cover the circumstances my hon. Friend describes.

Mr. David Curry (Skipton and Ripon): In the event of the sale of a council house to a sitting tenant, who presumably knows all there is to know about the house, will a seller's pack be required?

Mr. Raynsford: This morning, we debated whether vacant properties should be covered by a seller's pack; the issue raised by the right hon. Gentleman is the obverse of that coin. If the sitting tenant is a council tenant, he will usually purchase the property under the right to buy, whereas a private tenant may agree by private treaty to purchase from the landlord. In all normal circumstances, the seller's pack will apply to such transactions. The local authority will provide the seller's pack as part of its response to the right-to-buy notice, and the private landlord will be obliged to prepare a seller's pack.

I have given a slightly cautious answer, as the right hon. Gentleman will have noticed, because I intend later to deal with private sales between private individuals or family members in which there is no wider public involvement. Such sales will not be covered by a seller's pack. There is potential for a landlord and tenant to have such a private relationship, whereas, obviously, the provision will not apply to a local authority selling under right-to-buy legislation. A seller's pack will not necessarily be required if a private landlord has a close personal relationship with a private tenant and they agree a private transaction that does not involve any other party.

Mr. Curry: I seek clarification. Because there is inheritance of tenure, it is entirely possible that someone who has lived in a council property for 20 years, or someone whose parents lived in the property, will buy it. Is the Minister saying that a seller's pack is needed even when people have lived in a house for a long time, have urged the council to make constant improvements and therefore know a great deal more about the house than the landlord does? Would an exemption not make sense in cases involving those who have been tenants for a long time?

Mr. Raynsford: I am surprised by that question, because the right hon. Gentleman held the office that I hold and will be well aware of the number of council tenants who come to us as Members of Parliament with complaints about problems with or defects in their property of which they were unaware when they bought it. We are concerned to ensure that individuals do not acquire properties with defects or problems that carry potential cost implications on which they have not been properly advised. That is why it is all the more necessary for people in the position he describes to have access to a seller's pack.

On the question of how long a property remains on the market, clause 1(5) makes it clear that a property that has been put on the market—

Mr. Waterson: It might be better for the Minister to deal with my point before moving on. I thought that he intended to go into a little more detail on the private sale exception.

Mr. Raynsford: I do.

Mr. Waterson: In that case, I shall subside and intervene later.

Mr. Raynsford: I hope that the hon. Gentleman recognises that, when I give an undertaking to cover an issue, I do my best to so. As I mentioned at the outset and as our discussion has made clear, these are complex matters. I want to cover them in a logical sequence, which will, I hope, resolve some of the grey areas.

Clause 1(5) makes it clear that a property

    which has been put on the market is...regarded as remaining on the market—

and is therefore still subject to the seller's pack obligations—

    until it is taken off the market or sold.

Being ``taken off the market'' is not defined in the Bill; it carries its common meaning. Essentially, a property is not ``off the market'' if there is still marketing activity. Amendment No. 33 would change that.

5.45 pm

A property being marketed by an estate agent would be regarded as having been taken off the market as soon as the agent received a letter from the seller withdrawing instructions. The property would be off the market even if the agent carried on marketing the property, without instructions, in the hope of achieving a sale and persuading the vendor to change his or her mind. That runs contrary to the public understanding of when a property is taken off the market, and it is completely at odds with clause 2 subsections (4) and (8), which the Opposition have not sought to amend. That would be a clear recipe for confusion. Clause 2(4) provides that

    The responsibility of a person action as estate agent cease when both of the following conditions are satisfied, namely—

    (a) his contract with the seller is terminated...and

    (b) he has ceased to take any action which makes public the fact that the property is on the market.

I hope that the hon. Gentleman realises that it is important that both tests should apply.

Mr. Loughton: For want of being picky, it is fairly common that a seller's board would still be standing outside a property—on my understanding of the Minister's definition, that would amount to marketing—even once the agent had received an offer that had been accepted subject to contract. The agent would still be legally obliged to pass on to the vendor any further offers that he might receive, but he may not get round to taking down the board immediately, especially if the offer was made on a Friday. In such circumstances, and if nothing else happened during the weekend, the board would still be in place on Monday or Tuesday. That surely constitutes marketing. It is the other side of the two terms that the Minister has defined. It does not get round the problem.

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