Homes Bill

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Mr. Waterson: It might be a philosophical point, but in respect of items flagged as not being included in the initial seller's pack, the Minister appears to be falling back on the principle of caveat emptor, in the sense that the buyer will be on notice that there might or might not be a problem and can act accordingly. However, the whole thrust of the Bill is to undermine caveat emptor, although it does not say that. Would he like to comment on that?

Mr. Raynsford: I have already made it clear that the principle of caveat emptor remains. The important point is that the buyer is properly alerted at an early stage to issues that might be a cause of concern. In practice, warranties and guarantees—as I am sure the hon. Member for Eastbourne recognises—are often out of date and inappropriate and so do not matter a great deal, but they might in some cases, so the buyer should have the information. I repeat, the principle of caveat emptor remains and our proposals mean that the buyer will receive more information up front on which to judge whether or not it is appropriate to purchase the property and, if so, what is a reasonable price to offer.

The third point that the hon. Gentleman relates to criminal sanctions. He referred to my hon. Friend the Member for Upminster, who as I said this morning made a very useful contribution to the debate on Second Reading. I invited my hon. Friend to the Department last week to discuss his concerns and we had a useful discussion in which I pointed out to him that there were difficulties with his proposals. In practice, they would not achieve our objective of a system that works expeditiously and in which sanctions are clear and can be applied without causing the buyer unreasonable difficulty or expense, or requiring effort to enforce the procedure through civil sanctions. Although my hon. Friend's proposal is ingenious, it would not provide that effective sanction, because it would bite only at the end of the process. In such cases, the seller will generally not be the least bit interested if the sale has fallen through, so I am not convinced that my hon. Friend's proposal would be an effective sanction against a seller.

3 pm

The hon. Member for Bath asked me to set out the reasons for opting for criminal sanctions rather than the alternatives. I spent quite a lot of time this morning trying to do so—that is the purpose of Committee—and I responded specifically to the issues raised. I will respond in public in the same way as I responded in private this morning to the hon. Member for Cotswold. I hope that the hon. Member for Bath will accept that I have no wish to conceal anything and that I am happy to be open with the Committee. However, rather than put my officials to considerable trouble by requiring them to write down again what I have already said to the Committee, I ask the hon. Gentleman to bring to my attention now any doubts that he has about the arguments that I have advanced and I will try to respond.

Mr. Don Foster: The Minister asks me to bring to his attention matters about which I know nothing. He made it clear that the Department had seriously considered whether to go for a criminal offence and that many other options that had been proposed. The point I made through the hon. Member for Eastbourne was that to date not all those options had been explored in the Minister's remarks in Committee or elsewhere in public. I should be grateful to be told about those suggestions and the reasons why they were rejected. I cannot give the Minister examples, because I do not know what the suggestions were.

Mr. Raynsford: I am tempted to say, as my hon. Friend the Under-Secretary said to me sotto voce when the hon. Member for Bath said that he knew nothing about the subject, ``That has never stopped him speaking about it in the past,'' but that would be unkind. I have heard the hon. Gentleman's request and I shall try to ensure that he receives a succinct summary. He will have to accept that it will not be comprehensive and the gold-plated, Rolls-Royce version that we normally try to produce in such circumstances, because we must focus on moving forward, rather than look backward.

Fourthly, the hon. Member for Eastbourne advanced the Madonna argument—moving us into even more interesting territory. In a nutshell, the argument rests on the contention that a seller may have good reason to want to restrict access. A celebrity might be selling a house that is notorious or attractive to large numbers of fans. Such circumstances may constitute a perfectly good reason for wanting to restrict access. The hon. Gentleman asked whether the price charged for the seller's pack would be a way to achieve that. To some extent, it might be, because the seller's pack produced for the extremely expensive property that he describes is likely to be rather larger and contain more documents than the pack for an average house. However, the policy objective should not be achieved in that way.

If the hon. Gentleman looks ahead to clause 6(3)(c), he will see that we have made provision for the agent not to provide a seller's pack to categories of people whom the seller is unlikely to favour. That is a very difficult issue, and I hesitate to bring it up as it raises hard questions of compatibility with anti-discrimination legislation. At this point, suffice it to say that we have thought very carefully and we are completely satisfied that the provision allows a seller to indicate, for good reason, that certain categories of people should not be offered a seller's pack. That is entirely compatible with and in no way breaches anti-discrimination legislation, which will continue to apply and will bind the estate agent throughout these proceedings. We believe that the provision is the effective way to achieve our aim. I hesitate to get into this debate now, as we will come to it later, but I can see the hon. Gentleman wishes to intervene—

Mr. Waterson rose—

The Chairman: Order. No. I am sure the Ministers' remarks are helpful at this stage, but we will leave the matter there for now and deal with it when we debate clause 6.

Mr. Waterson: I hope you will allow me to intervene on a more germane point, Mr. Gale. I acknowledge that we shall return to the issue later and probably discuss it at some length, so let us not deal with it now. The Minister has been helpful in explaining that link, but my real concern relates to use of the word ``reasonable''. Leaving aside matters relating other clauses, is the situation that we are discussing covered by that word?

Mr. Raynsford: The normal construction of the word ``reasonable'' is ``reasonable in relation to the expenditure that has been incurred'' which is why I made the point that because an elaborate and glossy brochure produced to promote the virtues of Madonnaville, or whatever the particular building is called, might be an expensive item, it would be reasonable to charge quite highly for it. However, I did say that I do not regard that as the most effective way to achieve a policy objective, so I hope that we shall return to the subject later.

Finally, the hon. Member for Cotswold raised a point that he discussed with me after this morning's sitting regarding the possibility of seeking a declaration from a trading standards officer in which the officer states his belief that an offence has been committed. That could then be presented to the solicitor acting for the buyer, which would be likely to have an effect of warning the buyer about such circumstances. As I pointed out to the hon. Gentleman, the difficulty with that approach is that a trading standards officer who could be sued for indicating incorrectly the likelihood of an offence having been committed would be highly unlikely to issue such a statement without very careful and thorough appraisal, which could take a considerable period of time.

It is not uncommon for anything relating to a sensitive issue that is put into the public arena by the Government—any Government—to be checked thoroughly by lawyers. I would imagine that a statement of such a nature coming from a trading standards officer would be crawled all over by local authority lawyers, and probably outside advisers as well, before it was put into the public arena, just because of the risk of legal challenge. I do not accept the hon. Gentleman's argument that that could be done expeditiously.

Such a sanction would in any case be post hoc. That is the difficulty with the proposals made by hon. Friend the Member for Upminster. It would not have the effect of providing a clear indication that would act as a deterrent to malpractice, which is the purpose of having sanctions to enforce measures of this nature. If an offence had been committed in the situation that the hon. Gentleman describes, by the time the conclusion of such a tortuous process had been reached, either the sale would have proceeded because the buyer had ignored it, or it would be history because the buyer's solicitor had advised strongly against proceeding in such circumstances. I honestly do not accept the hon. Gentleman's argument.

Mr. Clifton-Brown: The Minister may not accept my argument, but his precise arguments apply with a vengeance to the whole issue of criminal sanctions and issuing a prosecution notice, which will be scrutinised in even greater depth.

Mr. Raynsford: The hon. Gentleman ignores my key point that I was making: the provision exists to be a deterrent. I have said repeatedly that would expect the more extreme sanction of prosecution to be used only in cases of persistent and wilful breach of the law—for example, if an agent has chosen deliberately on a number of occasions not to provide a seller's pack. In the case of an individual who has unknowingly failed to provide a seller's pack or has accidentally forgotten to put an item in the seller's pack, the most likely response of trading standards officers, if it were brought to their attention, would be to issue nothing more than advice or a warning. That seems to be compatible with the fast-track procedures that we want, while retaining the deterrent of knowing that an agent who wilfully and repeatedly breaks the law risks criminal prosecution.

Such an arrangement is compatible with the Property Misdescriptions Act 1991 and is comparable to procedures used in New South Wales. The hon. Member for Cotswold was not paying full attention earlier, so I remind him that, unlike the authorities in New South Wales, it is not our intention to add hard labour to the other penalties that would apply.

I hope that the Committee accepts that there are sound policy reasons for having an effective system that can be enforced to prevent widespread malpractice, that the penalties should be proportionate, and that the right mechanism to achieve that is to allow trading standards officers considerable discretion to make an appropriate response when they believe that the provisions have been breached. I invite the Committee to accept that clause 3 should stand part of the Bill.

Question put and agreed to.

Clause 3, as amended, ordered to stand part of the Bill.

Clause 4Other duties of person acting as estate agent

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