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Amendment No. 116, in page 106, line 18, leave out '18', and insert '36'.
Amendment No. 117, in page 106, line 21, leave out '18', and insert '36'.
Amendment No. 94, in page 108, line 12, at end insert—
'16 The Right to Buy does not apply in a rural area if the area has been exempted by regulations made by the Secretary of State.'.
Government amendments Nos. 72 to 74 and 26.
Yvette Cooper: I shall confine my remarks to the Government amendments and new clauses.
Paragraph 11 of schedule 5 to the Housing Act 1985 provides that a landlord may deny tenants the right to buy if the home is particularly suitable for occupation by elderly people. It also provides that tenants may appeal to the Secretary of State if they are denied the right to buy on those grounds. The number of such appeals has risen in recent years to more than 400 in 2003, with 20 to 25 per cent. being successful, enabling the tenants to buy their homes, usually because all the relevant factors have not been taken into account or because local
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circumstances have changed. To help landlords and tenants, we will shortly consult stakeholders on ways of clarifying and improving the guidance issued in 1993.
New clause 8 transfers the jurisdiction for determining appeals of this kind by tenants living in England from the Secretary of State to a residential property tribunal. That will make no substantive difference to the determination of appeals. We do not propose to change the statutory rules in paragraph 11 that determine whether a property is particularly suitable for occupation by elderly persons. Determinations by a residential property tribunal will be subject to judicial review, as are those of the Secretary of State at present. That will have the benefit of making the process more transparent and bringing together housing and related appeals and determinations under a single jurisdiction, and will over time afford opportunities for greater efficiency. The National Assembly for Wales will assess the position there independently.
On Government new clause 9 and Government amendment No. 71, there has been concern in local communities and in the House about people speculating on regeneration and demolition projects and exercising the right to buy purely to make a profit out of compulsory purchase orders, increasing the cost of regeneration and demolition schemes and also threatening their viability. Clause 158 adds to the exceptions that apply to the right to buy under schedule 5 of the Housing Act 1985 the provision that the right to buy "does not arise" where a demolition notice is in force stating that the landlord intends to demolish the property during the next 18 months. That means that no new claim for the right to buy can be made in relation to such properties. The aim is to address an existing loophole.
It has been suggested that, as worded, the clause could fail in its effect, because an advertisement placed by a landlord to the effect that he intended to demolish a building could persuade a tenant to apply for the right to buy before any demolition notice had been served. The wording in clause 158 does not make it sufficiently clear that existing claims as well as future claims should be covered. We do not want to create a mad race between people trying to get in a right to buy application and the serving of a demolition notice just to address the loophole. New clause 9 therefore makes it clear that a demolition notice properly served in accordance with the requirements of clause 158 will bring to an end any outstanding right to buy application in respect of the property in question.
We recognise that tenants may have put in right-to-buy applications at a much earlier stage in good faith, believing that they would proceed, and may incur fees and professional costs and expenses. The new clause therefore also provides for compensation to be paid in respect of any such expenditure that has been reasonably incurred in respect of a right-to-buy claim established before a demolition notice comes into force. Amendment No. 71 amends clause 158 so that a demolition notice will have to explain the right to compensation and how it may be exercised.
Government new clause 10 tackles another form of exploitation of the right to buy rules by companies and tenants. Under the Housing Act 1985, landlords may impose a timetable on tenants who are perceived to be
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delaying the purchase of their homes under the right-to-buy scheme. A landlord may serve a first notice to complete under section 140 of the Act, and then a second notice to complete and subsequent requirements. If the tenant does not comply with these notices, the right-to-buy application is deemed to have been withdrawn, but only after a minimum of 16 months can any sanction be imposed upon the tenant. If there are other matters outstanding—perhaps a dispute about the value of the property—it can be delayed further.
That can mean that, in a rising property market, the longer a tenant waits, the less he will pay for the property in real terms. The opposite, however, is true for the landlord, who has to sell the property at a price that is increasingly lower than its market value at the time of completion, and has to incur the expense of chasing a tenant who is delaying matters deliberately. In exceptional cases, that has allowed tenants, by reselling quickly, to make a substantial profit even after repaying some or all of their right-to-buy discount. By contrast, section 153A of the Housing Act 1985 allows a tenant to take action against a slow landlord much more swiftly. Tenants have at least 16 months to complete their purchase, while landlords face a financial penalty if they delay the process for more than one month. The new clause attempts to shift the balance so that, instead of having to wait for at least 12 months, a landlord can serve a first notice to complete after three months, if they wish. It still gives the tenant more time than the landlord, it brings the total time in line with the private sector and it addresses a loophole that people have exploited.
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Government new clause 11 gives the landlord of secure tenants a further weapon by which to tackle antisocial behaviour. In some instances, the right-to-buy scheme gives tenants who behave antisocially a means of escaping the consequences of their behaviour by purchasing their home. In such cases, the landlord cannot use the same measures over the tenant and the property, which is clearly an unintended consequence.
New clause 11 enables landlords of secure tenants to seek an order suspending the right to buy for a specified period in respect of the tenancy on the ground of antisocial behaviour. The court may grant a suspension order only if it is satisfied that the tenant or a person residing in or visiting the property has engaged in, or threatened to engage in, antisocial behaviour, and that it is reasonable to make the order. A suspension order will end any existing applications and prevent any new applications from being made during the period specified by the court, but it will not impact on the accumulation of discount.
Government amendments Nos. 72 and 73 further strengthen the measures to combat antisocial behaviour by allowing landlords not to complete a right-to-buy claim if an order to suspend it is pending. Government amendment No. 74 contains a provision similar to that in clause 167 that allows right-to-buy tenants to apply for the right to acquire or the preserved right to buy, which means that their landlords can also access the information that they require to carry out their functions under clause 166.
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Government new clause 12 seeks to remedy an unintended consequence of leasehold legislation that has only just come to light. Under the Leasehold Reform, Housing and Urban Development Act 1993, qualifying tenants of flats were given rights to purchase the freehold collectively, with a mandatory leaseback to the housing association of remaining rented flats. The unintended consequence is that RSL assured tenants stand to lose their statutory right to acquire their rented home if others in a block of flats have exercised their right to enfranchisement. So far, no cases in which a tenant has lost their right to acquire their rented property have come to our attention, but the Housing Corporation notified us about the problem, and, because the change is recent and we anticipate future cases, we think it right to act now.
Mr. Clifton-Brown: New clauses 8 to 10 restrict a person's right to buy. What steps will be taken to notify people who fall within those new clauses that their rights are being restricted? The matter is clearly complicated, and, as with other legislation on the Rent Acts, I hope that any notice sent to tenants will include a bold warning stating that their rights are being restricted and that if they have any doubts about the meaning of the notice they should consult a citizens advice bureau.
Yvette Cooper: New clause 8 does not restrict the right to buy. The provisions in new clause 9 refer to demolition notices, which must explain the right to compensation. They require that accurate information be given to tenants and I reassure the hon. Gentleman that we expect appropriate information to be given to tenants in all such cases. At a later stage, I will be happy further to discuss with him exactly what kinds of information will be available for tenants under each of those clauses. As he rightly says, the matter is complex because each new clause has a different objective, and some of them—for example, new clause 12—protect the right to acquire or the right to buy.
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