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Standing Committee Debates

Draft Private Tenancies (Northern Ireland) Order 2006

The Committee consisted of the following Members:

Chairman: Ann Winterton
Brown, Lyn (West Ham) (Lab)
Carswell, Mr. Douglas (Harwich) (Con)
Clelland, Mr. David (Tyne Bridge) (Lab)
Dorries, Mrs. Nadine (Mid-Bedfordshire) (Con)
Drew, Mr. David (Stroud) (Lab/Co-op)
Efford, Clive (Eltham) (Lab)
Foster, Mr. Michael (Worcester) (Lab)
Hanson, Mr. David (Minister of State, Northern Ireland Office)
Jackson, Mr. Stewart (Peterborough) (Con)
Öpik, Lembit (Montgomeryshire) (LD)
Robertson, Mr. Laurence (Tewkesbury) (Con)
Rosindell, Andrew (Romford) (Con)
Simpson, David (Upper Bann) (DUP)
Strang, Dr. Gavin (Edinburgh, East) (Lab)
Truswell, Mr. Paul (Pudsey) (Lab)
Walley, Joan (Stoke-on-Trent, North) (Lab)
Waltho, Lynda (Stourbridge) (Lab)
Gosia McBride, Committee Clerk
† attended the Committee

Fourth Standing Committee on Delegated Legislation

Wednesday 10 May 2006

[Ann Winterton in the Chair]

Draft Private Tenancies (Northern Ireland) Order 2006

2.30 pm
The Minister of State, Northern Ireland Office(Mr. David Hanson): I beg to move,
That the Committee has considered the draft Private Tenancies (Northern Ireland) Order 2006.
I welcome you to the Chair, Lady Winterton. I hope that the order will prove relatively uncontroversial, but I am obviously willing to take questions in due course.
A draft of the order was laid before the House on24 April. It introduces a series of measures that will create a new framework for the private rented sector in Northern Ireland. The private rented sector plays an important role in meeting the housing needs of a large number of people. However, it can currently be divided into two distinct parts. The uncontrolled sector is subject to minimal regulation and Government intervention, and its tenants have few rights. The controlled sector is subject to significant legislation, and tenants have major rights.
The Rent (Northern Ireland) Order 1978 is complex and cumbersome. It has created a situation in which tenants in properties subject to rent control have significant rights, whereas those in uncontrolled property have only basic housing rights. However, major problems in the controlled sector are caused by the unfitness of some properties. The determining factor in deciding whether a property should be subject to rent control is its status in 1978 rather than its current condition. The 1978 order makes no contribution to the Department’s objective of creating a viable private rented sector.
One reason for introducing today’s order is that we want to focus on the main problems in the private rented sector and remove the unnecessary complexity of existing legislation. I am pleased to tell the Committee—I know that it is a matter of interest to hon. Members—that the order was subject to a thorough process of consultation, which lasted from 2004 until April 2006, when it was laid before the House.
The draft order introduces a new system of repair enforcement and rent control over private tenancies in Northern Ireland. In future, the key question in determining whether rent controls should apply will be the fitness of the tenancy. If a tenancy is found on inspection by the district council to be unfit for human habitation, rent control will be imposed by the Housing Executive and the district council. The district council will also have the power to enforce the necessary remedial work to bring the property up to fitness standards. Repeat offences by landlords who prove unable to undertake their responsibilities will result in strong action being taken.
The order rationalises the existing complex system of regulation. Under the order, once an existing protected or statutory tenancy comes to an end, a property will no longer be subject to rent control unless it fails to meet the fitness standards. However, existing protected tenants will retain security of tenure.
The order contains provisions to clarify landlord and tenant responsibilities. Private landlords will have to provide tenants with statements giving the terms of their tenancies, which will include details of who is responsible for repairs; and if there is no such written statement, the order provides for default terms to apply—in effect, those rights will be given by default.
The order is the first major initiative in this growing sector of the housing market for 28 years. It will provide the basis for a co-ordinated inter-agency approach to tackle poor repair and disrepair in the sector, involving district councils and the Housing Executive. It will have a real impact on the unacceptably high level of unfitness among rented properties in Northern Ireland. Tenants, who are my main concern—many of them are elderly and vulnerable—will have the opportunity to live in better quality homes, with more security of tenure and more basic rights than they have now. Landlords with good quality accommodation will receive a fair return for their investment.
The order will provide better rights and better housing conditions in Northern Ireland. I commend it to the Committee.
2.34 pm
Mr. Laurence Robertson (Tewkesbury) (Con): I welcome you to the Chair, Lady Winterton. I also congratulate the Minister on remaining in his position; it has been a pleasure working with him so far, and I look forward to doing so in future.
The Opposition broadly welcome the order. I regret that it is not being considered by the Assembly, which I hope will be able to consider other orders in the not-too-distant future. I would also like to place on record my thanks to the National Landlords Association for providing me with some of the background to this matter and with some of its thoughts, which were very useful.
I should like to raise one or two points. Why is there a requirement to provide a rent book for all tenancies? That seems cumbersome and rather onerous in this day and age. Will the Minister explain the thinking behind that provision? Regarding articles 64 and 65, will he explain how the landlord-tenant relationship could be interfered with, if at all? Will he also confirm that no fees will be chargeable for certificates of fitness?
Article 45 allows registered rent to be reviewed only if a change of circumstances has occurred. That seems rather a wide phrase to use. Will the Minister explain why such a phrase was used and what those circumstances could be? Will he confirm that general increases in local rent levels would constitute a change in circumstances sufficient to allow a rent to be reviewed? The powers in article 55 allow district councils to review the register of rents. How does he envisage that power being used?
As to the unfit properties to which the Minister referred towards the end of his speech, I understand that renovation grant aid might be available from the Northern Ireland Housing Executive. He probably cannot give a figure off the top of his head, but can he estimate what percentage of those properties would qualify? I understand why the term “unfit properties” is used to judge the degree of regulation that may be needed, and that may sound fair, but I wonder whether it is a bit of an arbitrary way of judging which properties should qualify for a certain regulation. Will he give us a little more detail on how that would work?
In general, however, I am happy to welcome the order. As someone who has been a landlord in the past and is still a tenant, I am well aware of some of the difficulties that can arise from such arrangements. Although I do not want to see overburdensome regulation, I think that fairness to both tenants and landlords is important. It is also important to remember that we must be fair to landlords, because if they are overburdened, the rented sector that so many people need will not be available. With those comments, I welcome the order.
2.38 pm
David Simpson (Upper Bann) (DUP): I congratulate you on your chairmanship, Lady Winterton, and I wish you well in it.
I do not see anything really controversial in the order, but I should like to raise a couple of issues. I am concerned about rent books, to back up what my hon. Friend the Member for Tewkesbury (Mr. Robertson) said about that subject. Will the Minister also explain whether the order covers property owners who put 10 to 15 people into one home, for example, in relation to renting and standards? People come from other countries to work in Northern Ireland and they are put into rented accommodation like hens in a hatchery. We need to know whether the order covers that issue, but apart from those points, I am happy enough with it.
2.39 pm
Lembit Öpik (Montgomeryshire) (LD): May I add my welcome to you, Mrs. Winterton? I was hoping that we would have a good Chairman, but instead we have the very best.
The Chairman: You will go far. [Laughter.]
Lembit Öpik: Watch and learn.
May I also say how delighted I am that the Minister survived the night of the long knives? It is clear that, on reflection, the Prime Minister decided that the hon. Gentleman had not suffered enough, so we shall make it our business to try to correct that.
I feel obliged to point out once again that we are now getting to the stage of having an incessant torrent of Statutory Instrument Committees in respect of Northern Ireland. The Government’s insistence on overloading the parliamentary agenda with Northern Ireland business that, if dealt with over a longer period of time, would enable us to focus on the core business of securing a lasting peace, is not in their interest or in the interest of those of us who have for a long time demonstrated good will. I counsel the Minister not to squander for relatively little gain the good will and good faith that many of us have shown.
Turning to the legislation, the hon. Member for Tewkesbury accurately highlighted the issues that concern me as well. There is only one point to add: there may be a temptation for the Government to supplement this relatively straightforward measure with add-on parts. That has happened before, and we began to have difficulties as unintended consequences cropped up, making the new system as complicated as the one that it is was meant to simplify. I ask the Minister for an assurance that the Government will resist any temptation to fiddle at the edges before the order has been allowed to function for, say, five years, and that if there are to be further additions to tenancy regulation, they will be introduced in a strategically cohesive way, dealing with the whole legislation rather than simply tacking bits on.
I make those remarks also because my experience is that legislation relating to tenancy agreements has been notoriously prone to reinterpretation by opportunists, whether on the side of the tenant or the landlord. The Government must recognise that they will not eliminate all dodgy dealing just by introducing legislation. I seek an assurance from the Minister that they will let the thing ride for a period, even if some minor issues crop up, rather than fiddle with it. If they do fiddle, we will end up with a quagmire rather like the one that he seeks to replace.
2.42 pm
Mr. Hanson: I shall try to answer the points that Opposition Members have made. First, may I say to the hon. Members for Tewkesbury and for Montgomeryshire (Lembit Öpik) what we say on all these occasions? I too believe that today’s process is unsatisfactory. Both hon. Members know that one of my prime functions as the Northern Ireland Office Minister with responsibility for political development is to secure the return of the Assembly so that it can manage the issues that I now deal with in respect of not only housing, but other devolved matters. Nevertheless, until such time as we get the Assembly back, this is the situation in which we find ourselves.
As hon. Members know, we have had correspondence on the procedures for dealing with matters such as those before us. Today, we are dealing with what is, in effect, a 75-clause Bill, but it will be taken in this sitting, which has the potential to last two and a half hours, as an Order in Council. If it were a housing Bill in Northern Ireland, it would go through Second Reading, Committee and a range of other scrutiny. I understand the unacceptability of the situation, but the difficulty is that we must get the Assembly back. That is one of my prime responsibilities. Hon. Members will understand that I wish for greater scrutiny, and that I hope that the 108-Member Assembly will return shortly to scrutinise and take charge of such matters.
The hon. Member for Tewkesbury raised a number of points, all of which are valid. The first, on the rent book, was also raised by the hon. Members for Montgomeryshire and for Upper Bann. Rent books and statutory tenancy agreements have different functions. The rent book is a record of payments, which shows that payment has been made by a tenant to a landlord. That is why we want to retain it. A tenancy statement, for which we provide in the order, will be a contract between landlord and tenant giving rights to both and dividing their responsibilities. The rent book and the tenancy statement are separate matters and should be kept so. Rent books are required by law and are necessary to prove that payments have been made. I hope that that answers the points made on the matter.
The hon. Member for Tewkesbury referred to fee charging. It is important, and we will be issuing guidance and details on it if the order receives Royal Assent. It is clear that district councils must recoup their costs either through general ratepayers’ resources or a charge to the service recipients. That will be a matter for those councils. They will be empowered to make a modest charge for conducting fitness inspections, if they wish to do so, and there may be further charges if they need to take remedial action. I do not anticipate that there will be significant charges, and I would be surprised if they were more than £250 to £300. They may well be significantly less. I will produce guidelines, and we have consulted district councils, landlords and other organisations on the matter. They have accepted the basic principle, and flexibility in charging will be up to the district council. I am keen to ensure that safeguards are in place if charges are to be passed on to tenants. I will issue guidance on that in the coming months.
The hon. Member for Tewkesbury also mentioned articles 64 and 65, which relate to the collection of information about tenancies and the ownership of dwelling houses respectively. We know that, in many cases, tenants have no written tenancy agreement. The order will impose default tenancy terms where none has been agreed or a tenancy agreement fails to cover the specified items. That is essential in the case of repair enforcement and it does not overturn the right of a landlord and tenant to come to any agreement that they want.
The hon. Member for Tewkesbury also mentioned article 45, dealing with a change of circumstances, and article 55, which is about a review of registered rents. Article 45 will affect only protected tenancies for which rent control applies regardless of fitness, and it will allow landlords and tenants to be given recognition for any work that is done to a property so that agreements can reflect improvements or a change in circumstances. I hope that that satisfies the hon. Gentleman. Article 55 deals with rents for other controlled tenancies. It will enable rents to be increased by the Department, solely on the recommendation of a rent officer. I hope that that will give some security to both tenants and landlords.
My final point relates to the comments made by the hon. Member for Montgomeryshire on the review of the strategy. I am keen to ensure that we modernise housing policy in Northern Ireland while I have this job. That may only be for the next two weeks, because we will, I hope, get the Assembly back on 23 May. In that case, I shall remain a Minister in the Northern Ireland Office, but without responsibility for devolved matters. That is as it should be. If either I or a colleague continue to have that responsibility, we will certainly wish to review a range of issues in the housing strategy. I hope that my colleagues in the devolved Administration would do the same.
Northern Ireland legislation on the private rented sector has historically followed a different path to that in England and Wales. The order will bring the two jurisdictions closer together. It will give tenants improved rights and security, and bring a better level of fitness to the most unfit properties. However—this is the point that the hon. Member for Montgomeryshire mentioned—it will be part of a wider strategy of helping to promote the private rented sector and indeed the housing sector generally. We will be looking at that matter over the next few months and years. I expect to bring forward, should I still be in this post, a number of issues such as tenancy deposit schemes, landlord registration and selective licensing of accommodation. Those are issues that we are currently considering in-house, and I expect to bring them forward in due course.
Lembit Öpik: In that case, I wish to make a plea: let us ensure that the whole thing fits together. As we have seen previously, there is a danger that meddling with one part of rental regulations can cause unintended consequences in another. Will the Minister therefore consult as widely as possible and ensure that we do not start recreating the very problems that the order is intended to solve?
The Chairman: Order. Before the Minister responds, I should point out that we are straying slightly wide of the order. It would be helpful if we could return to the order.
Mr. Hanson: I accept that guidance, Lady Winterton. I would simply say that I am happy to look at other aspects, and the Government are looking at a range of issues that will supplement the work of the order in due course.
David Simpson: The Minister said that if there were any specific difficulties in relation to multiple occupancy we should contact the Housing Executive. In the past we have done that, and there seems to be a reluctance in the Housing Executive to take on the tenants or landlords involved. Will the Minister make sure that the information goes back to the Housing Executive?
While I am on my feet, may I also congratulate the Minister, as I omitted to do so earlier? Contrary to rumour, we have a reasonable working relationship. We wish him well. He suggested that perhaps over the next two weeks, we should have an Executive up and running. I think that he is safe enough for the next six at least.
Mr. Hanson: I am not sure whether to accept the grateful thanks of the nation. I would really like the hon. Gentleman to be back in the Assembly rather than encouraging me to do my job here now. It really is his responsibility to look after these matters, as he knows. I am sure that at some point we will convince him that he can take those matters forward.
The Labour Government passed legislation on houses in multiple occupation to ensure that landlords and tenants operate in a decent and fair society. If the hon. Gentleman has a concern about the way in which the Housing Executive is implementing the measures, he should raise it with that body, but I would be grateful if he raised it with me too. I will follow through any specific concerns that he has, and ensure that the Housing Executive examines them in due course.
I hope that I have satisfied all members of the Committee. May I thank you for your chairmanship, Lady Winterton? I thank our colleagues who have taken the Hansard record and who have serviced the Committee. I also thank housing officials at the Department for Social Development who have worked for two years on this process. I have been involved with this measure for only 13 months, and they deserve much of the credit for the work in bringing the proposal before us. I commend the order to the Committee.
That the Committee has considered the draft Private Tenancies (Northern Ireland) Order 2006.
Committee rose at seven minutes to Three o’clock.

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