Homes Bill

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Mr. Brake: I support the amendments. If the seller's packs will be as useful and in as much demand as we are told, they will sell themselves and become common in the industry. They will become best practice, so I do not understand the need for fines.

It appears that the Government intend to introduce a list of exceptions. They have already suggested that, for technical reasons, it will be acceptable for certain parts of the seller's packs to be unavailable. By making their use mandatory but allowing technical exceptions they are opening many avenues for challenge. Perhaps doing away with fines and introducing seller's packs on a voluntary basis might simplify matters with respect to the possibility of legal challenge.

Finally, will the Minister would clarify the upper limit of a level 5 fine?

Mr. Clifton-Brown: I support the argument of my hon. Friend the Member for Eastbourne, who succinctly described the worst aspect of the Bill. We have already heard numerous scenarios that suggest that the Bill will be difficult to implement. I understand that the measure is intended to speed up property transactions, but the more burdensome the requirements of the seller's pack become, the slower the transaction is likely to be. It will take longer to prepare the pack and for purchasers' solicitors to check it.

Another consideration is that, the more burdensome the seller's pack, the more cursory will be the information. Estate agents and others involved will ask, ``What is it that we've got to provide solely to comply with the Act?'' A seller's pack that gives an accurate and complete picture is needed, because that is what purchasers and their solicitors want when they buy a property. However, if the obligation is too burdensome and criminal sanctions are involved, those involved—human beings being what they are—will naturally provide minimal and cursory information. I say that the spirit of offering helpful advice to Ministers in their consideration of what to include in regulations.

There is a worrying trend in this country toward making criminal sanctions available to additional groups of public servants. There must be something wrong with a country that does that. After all, we are talking not just about the fine levied at the time: when a person contravenes the regulations, not only will he have to pay the fine, but he will receive a criminal record. The knock-on effect on a person and his family can be huge, resulting in people being unable to get credit or suffering various other problems. We should use regulations that involve criminal sanctions very sparingly. A matter that essentially involves civil contractual law should not in any way be extended into criminal sanctions. To do that would be wholly reprehensible.

Another aspect relates to trading standards officers. They receive good and extensive training in how to deal with many matters, but they are not trained to be specialists in property transactions. When they see a complicated extract of title, how will they know whether a full and complete extract has been supplied? They will have to undergo new training. Then, there will be huge arguments about whether a seller has provided full and complete information. Litigation will follow and there will be court cases about whether the trading standards officer considers that the estate agent has provided the full information to comply with the law.

I hope that the Minister will reconsider the matter. A fine at level 5 is £5,000—a substantial sum. Through our constituency cases, we all know that some officials are more zealous than others. I can fully envisage circumstances in which over-zealous trading standards officers, perhaps because they have a grudge against an estate agent, make that agent's life very difficult. As I said, the imposition of criminal sanctions would be wrong. My hon. Friend the Member for Eastbourne has suggested a neat alternative mechanism, whereby a person could not register a property until he had paid a penalty, which is similar to the arrangements regarding stamp duty. Such penalties would essentially be civil fines, which would be a much better way of imposing sanctions under the Bill.

I do not think that I will be the last person to raise the issue of criminal sanctions. Eminent lawyers in the other place will shred this part of the Bill when they get hold of it. If the Minister does not respond satisfactorily today, people in the other place will want answers.

11.15 am

Mr. Raynsford: I am happy to rise to that challenge. Let me put this important issue in context. As the prelude to reform, we conducted the most extensive research ever into the home buying and selling process in this country. The results of that research and the following consultation exercise show that the proposed changes are warmly supported not only by the public, who will benefit, but by many professionals, who see enormous advantages in having information up front, at the start of the process.

Our proposals are the result not of theoretical analysis but of very detailed research, followed by a pilot study and accompanied by detailed discussions with many people. The public are fed up with the present system, which is slow, inefficient and extremely expensive. Although the costs may seem to be low, as the hon. Member for Eastbourne said in a previous sitting, about £350 million—a huge sum—is incurred by the failure of 28 per cent. of transactions between acceptance of an offer and the point at which contracts are normally exchanged. That is a scandal that the public want to eliminate. They want a more efficient system and that is what we seek to deliver.

Despite all the support from the public—I have no doubt that the packs will be popular—their benefits will not become universally available unless they are made mandatory. Even if the overwhelming majority, say 95 per cent., of the public adhered to the system, there would always be freeloaders who wanted to enjoy the benefit of a seller's pack when buying a property, but did not offer one for the property that they are selling. Not only is that cheating, but it puts the whole process at risk. It requires only one sale not to have the benefit of a pack for problems to emerge when a buyer conducts surveys and searches; the whole chain, involving many people, can be disrupted. The failure of one individual to participate in the process can have knock-on consequences for many others. I fully understand the argument of the hon. Member for Carshalton and Wallington that if the packs are so popular they should sell themselves, but it requires only one person cheating the system for personal benefit to wreck not only one transaction, but many.

Mr. Brake: Is it not ultimately the decision of the person in the chain who decides to proceed whether or not the person from whom he or she is buying has a seller's pack?

Mr. Raynsford: The hon. Gentleman has not understood my point. It is precisely where an individual decision to allow progression to take place without a seller's pack that all the problems inherent in the current system are likely to re-emerge. Unless buyers were very foolish they would, on the advice of their lawyers, undertake searches that might reveal something problematic, thereby possibly initiating the process with which we are all so familiar of the price being renegotiated, a row developing and the sale collapsing—affecting not just that sale but all the others in the chain. To use the analogy of motor insurance, while the vast majority of responsible, sensible people want to arrange such insurance, some freeloaders try to evade it. That is why we have a sanction against people driving a car without being insured. Seller's packs are an exactly parallel case.

The amendments would remove the sanctions that we have put in place, leaving civil proceedings as the only means of redress for a person who suffers as a result of a failure to comply with the seller's pack obligations. We looked closely at civil sanctions as one of the enforcement options discussed in our consultation paper, but concluded that they could not offer effective safeguards. They would depend on a buyer suing the person who had marketed the property without a seller's pack, and to require buyers to incur the costs and effort of initiating such action would impose an unreasonable burden on them. In most cases, they simply would not bother, so there would be no effective sanction against someone who was systematically breaking the law. While I understand the readiness of the hon. Member for Eastbourne to reach for a writ at the first opportunity—I refer to his comments on the previous amendment—the vast majority of members of the public would not feel similarly inclined. The inevitable result would be that the law fell into disrepute through lack of enforcement.

Criminal sanctions would not have to rely on action by the buyer, as local trading standards officers could initiate enforcement action. As I made clear to the right hon. Member for Skipton and Ripon (Mr. Curry), their response would depend on the circumstances, and they would have a large measure of discretion. Our view that criminal sanctions are the right way to ensure compliance is supported by the Consumers Association and the National Association of Estate Agents. The NAEA's members will be most affected by and are most likely to be prosecuted under these arrangements, so their support is a telling recognition of the need for our approach, as the system would otherwise fall into disrepute and would not work.

Mr. Don Foster: I am listening with great care to the Minister. I shall reflect long and hard on his argument. He has implied that the only alternative to criminal sanctions is civil proceedings and he has pointed out the difficulties associated with that. Other hon. Members, including some of his hon. Friends, have proposed alternatives to civil proceedings. Will he explain why they would not work?

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