Commonhold and Leasehold Bill [Lords]

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New clause 16

Regulatory body for managers of property

    '(1) After such consultation as he considers appropriate, the Secretary of State may by regulations provide for the establishment of a professional regulatory body for managers of property under this Part.

    (2) The rules of the professional regulatory body shall be approved by him.

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    (3) The rules referred to in subsection (2) shall include provision for—

    (a) a scheme of membership,

    (b) standards for accreditation of members,

    (c) fees to be charged to members in order to fund the operations of the body,

    (d) procedures for complaints and disciplinary measures, and

    (e) procedures for extending eligibility for membership to other managers of property.

    (4) A statutory instrument containing regulations under subsection (1) shall not be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament'.—[Mr. Cash.]

Brought up, and read the First time.

Mr. Cash: I beg to move, That the clause be read a Second time.

I do not want the Minister to have to waste a lot of time explaining why it would be inappropriate for a matter of such importance to be dealt with by regulations, so I hasten to say that the new clause is probing. However, it contains some important matters, changes to which have been long overdue. The Committee has consistently asked about threats, intimidation, and how and when we tackle the operations of leases and leaseholds as well as the relationships between landlords and tenants.

We must remember the realities of life. Someone probably has a batch of properties administered not by him, as he sits by his pool in Tenerife with his pina colada, but by a managing agent. Some managing agents are good, so there is no point pretending that they are all tarred with the same brush and have a wrong approach to running properties. Some are extremely bad, however. The Rachman tragedies in the early 1960s carried matters to extremes, and I am glad to say that subsequent legislation has dealt with such problems.

Threat and intimidation are still issues, especially when related to elderly people, those in deprived circumstances such as widows, people who understandably do not comprehend the intricacies of leases, and the plain ignorant. If we could find the time, perhaps many of us ought to read more of the small print on the relevant arrangements. Trust is conferred on the agents, who know perfectly well how much at risk the people in the premises are. It therefore seems essential that, as we have done elsewhere so often in the recent past, we add to the licensing arrangements for those with responsibilities that have a profound impact on the public at large.

I cannot give figures on how many managing agents there are. Perhaps the Minister knows about that, but there is a serious problem. Although associations exist, people also have opportunities to set up at will. There are no significant legislative prohibitions on people deciding to be managing agents, and they could easily be completely unqualified and unscrupulous.

I do not want to take over too much of the speech that the Minister is about to make but, in another place, the Minister who considered the clause said that

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    ''the right course is to proceed with consultation . . . We should use our best endeavours to seek to achieve that''

via the first legislative vehicle available. He continued:

    ''I am not in a position to say when that would be. We should hope that it would be in the next Session, but plainly that would depend on a whole range of unpredictable issues on which I am not in a position to comment.''—[Official Report, House of Lords, 19 November 2001; Vol. 628, c. 942–43.]

That may still be the position now, only a couple of months on. However, it does not alter the fact that the proposal must be examined carefully, for all the reasons that we discussed. We talked about interweaving the realities of the running of these properties, including the fact that they are run by managing agents. It does not mean that managing agents will be driven out of business, just that they will be properly regulated.

We have heard representations from the Law Society, and from the Bar and all kinds of professional bodies, such as the Royal Institution of Chartered Surveyors. All those bodies are chartered. There are two ways of going about this. A body may be chartered and receive its charter from the Privy Council, subject to careful vetting and requirements to perform their functions in a particular manner, which sometimes have to be brought up to date. The alternative is the statutory licensing arrangement, which applies to many bodies, particularly in medicine, where bodies have grown up that have been endorsed by Acts of Parliament. I am pretty sure that, in the past, attempts have been made to legislate in that area.

I have made my point. It is important to address it, because when push comes to shove, the people sitting by their pools, or even running respectable property businesses, are not the people who enforce the threats and intimidation. They may not even know what the managing agent is doing. It is in everybody's interests to legislate on the matter, but it must be done on the basis of consultation. It must be reasonable and it must be fair.

Gareth Thomas: On Second Reading, I raised the issue of the need to regulate property managers in order to avoid abuse and exploitation, particularly of older people. There is some support among Labour Members for the sentiments expressed by the hon. Member for Stone. The Government need to re-examine the issue of regulation of property managers. The area is prone to abuse.

Ms Keeble: The new clause is designed to ensure that managing agents of leasehold properties meet certain standards. The Government certainly support that objective, and we have an open mind about the best way of achieving it. We intend to issue a consultation paper shortly, which will explain the options open to us. I have said that before, but I understand that the time frame has changed from ''shortly'' to ''very shortly''. Hopefully, the hon. Member for Stone will accept that there has been some improvement there.

Shona McIsaac: That is better than some time in the future.

Ms Keeble: Indeed.

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It would be wrong for us to pre-judge the outcome of that consultation process. However, the new clause appears to be intended to enable us to implement any kind of scheme that we might devise after the consultation process. I am very pleased that Opposition Members are prepared to trust the Government with such broad and sweeping powers—

Mr. Cash: I prefaced my remarks by saying that the new clause was a probing amendment. I do not expect the legislative package that eventually emerges to have the width, breadth and depth of its provisions, but I made that point in my speech.

Ms Keeble: That is fair enough. Perhaps it would help if I spoke about the different issues that must be examined when considering the regulation of agents. A licensing scheme would be an effective way to stop rogues operating without a licence; otherwise, they would simply carry on as they have always done, with complete disregard for the law. I suggest that, if we did decide to go down the regulatory route, we might want powers to allow leaseholders to withhold service charges under certain circumstances. We certainly need a power to impose fines, and we might want to explore the possibility of harsher measures for the hard cases. We would not want to leave such measures to secondary legislation; they would have to be explicit in the Bill.

We would also have to consider various practical issues. For example, we would need to include in the Bill a prescription for the constitution of any new body that was required. We are still considering whether any scheme should be confined to agents, given that problems may be caused by the landlord instead or, indeed, by any other person responsible for the management of the property.

4.30 pm

On the face of it, the new clause appears to allow us the flexibility to decide on that point at a later stage, as we would wish. However, it would not enable us to make arrangements for the replacement of, for example, a landlord. Therefore if, say, a landlord were banned from managing leasehold properties, there would be a sort of interregnum when no one would have the responsibility—or the power—to manage the property at all. That would hardly be satisfactory and we ought to make provision in the Bill to resolve any such difficulty.

This is further complicated by the fact that we can think of two different ways in which we could deal with that particular problem. It may be that, when we consult on this issue, people will come forward with a third, better option. Doubtless, there would be other matters that we would need to address on the face of the Bill that have not yet been brought to our attention. Creating a power to implement a scheme of unknown scope, nature and detail would clearly be unwise. The new clause has been helpful, since it has made it possible to set out some of the issues and clarify our intention to consult very shortly on the issue. I hope that the hon. Member for Stone will be satisfied by our clear commitment to consult and that he will withdraw his new clause.

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Mr. Cash: I am glad to withdraw the new clause in light of what the Minister has said. We will probably return to the realms of company limited by guarantee, but in a different context, because that is how management companies are generally set up. It may be that the matter has to be dealt with by a much broader licensing arrangement, but there are so many precedents that I do not think that the draftsmen and the Government will have any difficulty in coming up with the right parameters.

There is already a series of professional bodies that are regulated by Act of Parliament. Sometimes they are established by means of a private Member's Bill—that might be a hint to someone on this Committee, who might like to pick it up and run with it. If such a Bill were to receive the Government's support, so be it. The Minister's commitment is an important step in the right direction and I am glad to hear her remarks on the matter.

That brings me to the end, as far as amendments and new clauses are concerned, of my activity on this Committee, other than to listen to the discussion on the remaining Government amendments. I would like to say, before we finish, that I am glad that we have had a constructive debate. That is very important and I thank you, Mr. Hurst, for handling matters as you have. I beg to ask leave to withdraw the motion.

Motion and clause, by leave, withdrawn.

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