Clause
261
Certain
family intervention tenancies:
termination
Lembit
Öpik (Montgomeryshire) (LD): I beg to move
amendment No. 105, in
clause 261, page 108, line 2, at
end insert
(1A) In an
action for possession of a family intervention tenancy, the court shall
have power to
(a)
postpone the date for possession;
or
(b) stay or suspend
execution of the order
on such
terms as it thinks fit.
(1B)
The court shall not have the power referred to in subsection (1A) where
the notice in subsection (1) was served on the basis that the tenant or
a member of his household has been guilty of conduct causing or likely
to cause a nuisance or annoyance to a person residing, visiting or
otherwise engaging in a lawful activity in the
locality..
What
concerns us is that the legislation, as it is currently drafted, means
that the 28-day notice period for a FIT can be issued for any reason
and not solely
one linked to antisocial behaviour, for example due to rent arrears
caused by housing benefit delays, and so forth.
The test as to what behaviour
would merit possession, orto be more frank about it and use
common parlanceeviction is, in our view, simply not robust
enough. That is what the amendment attempts to correct. The purpose is
to allow the court to retain its discretion, which it has in the case
of a secure or assured tenancy, to dismiss a claim for possession, or
to grant a suspended possession, where the reason for the
landlords action is not antisocial behaviour, but something
else, such as rent arrears. The amendment would ensure that fast-track
eviction proceedings available for family intervention tenancies could
be used for antisocial behaviour reasons
only.
10.45
pm
The process for
family intervention projects and tenancies has been laid out by the
Government, which hopefully we all understand. However, under the Bill,
if the landlord decides to continue with proceedings for possession
after following the process for family intervention tenancies, the
county court cannot examine the reasons for doing so. We are concerned
about the inflexibility there, and the lack of discretion to refuse an
order raises alarm bells for us. We seek the Ministers
perspective on that, because we cannot believe that it is right, nor
the Governments intention, to create a process so inflexible
that it could be a breach of natural justice for the tenant. Although
landlords could use the provision in many ways, it goes against the
spirit of what I think the Government are trying to do with this
legislation. Shelter feels the same, and on its behalf I ask the
Minister to share his perspective and to take on board what I think is
a fairly common-sense modification to this part of the
Bill.
Mr.
Wright:
I disagree with the amendment, although I
appreciate the manner in which the hon. Gentleman moved it. If we
accepted the amendment, it would allow the courts to postpone, stay or
suspend an order for possession granted in respect of a common law
tenancy. As I think that he said, currently that is not the case. A
court must award possession if it is satisfied that due process has
been followed, and set the date on which the landlord can gain
possession of the property.
If, for instance, a family
wilfully refuse to pay rent for the family intervention project
accommodation that they are occupying, having voluntarily agreed to do
so, the amendment would mean that the courts had the power to decide
whether, and on what terms, the tenant might remain in the property.
That would create a situation similar to that of secure or assured
tenancies. I believe strongly that that would seriously undermine our
proposal that family intervention tenancies should be common law
tenancies. We want to provide landlords with greater flexibility in
arranging tenancies for families who have voluntarily accepted support
and who are housed in specialist
accommodation.
Family
intervention projects have been proven to deliver notable successes in
helping families address the root causes of antisocial behaviour. To
give courts the discretion proposed by this amendment would threaten
the use of family intervention tenancies as an effective
tool in encouraging families to comply with the terms of their support
contract. In other words, in voluntarily accepting a family
intervention tenancy, they should be aware of the consequences of their
actions. If they subsequently refuse to meet the conditions of the
tenancy, the landlord may move to evict
swiftly.
I understand
what the hon. Member for Montgomeryshire said, however, and his
concerns about clause 261. We are mindful already of the need to guard
against the misuse of family intervention tenancies and have provided
safeguards in this clause, including a right to a review of the reason
why eviction is being sought under a local authority family
intervention tenancy. In addition to that review procedure, it is
possible, if the tenant deems it necessary, to apply for judicial
review of the reason for a decision to
evict.
If one accepts
the premise, which I do not, that the courts should be given discretion
where possession under a family intervention tenancy is sought, I
question the validity of removing that discretion solely where
possession is sought on antisocial behaviour grounds. I think that the
hon. Gentleman made that point himself, so in some respects I am making
his argument for him, which was not my intention. However, it would
mean that courts would have discretion over matters such as rent
arrears, with which it is relatively easy to demonstrate matters of
fact, but not in cases of antisocial behaviour, in which issues are
often much more complex and open to subjectivity. On that basis, I
disagree with the amendment. I think that we have covered this matter
adequately in the Bill, and I hope that the hon. Gentleman will
withdraw his amendment.
Lembit
Öpik:
Well, Mr. Gale, the Minister makes
the case for the amendment, and then asks me to withdraw it. In
fairness to the Government, they have shown active recognition of the
link between antisocial behaviour and the social needs of
perpetratorswe all agree on that. Also, Shelter has done some
research to back up the effectiveness of taking a support approach, so
there is no disagreement there. In terms of enforcement, communities
need protection, and it is appropriate for housing providers to use
measures available to them to enforce the responsibilities laid out in
tenancy agreements. However, the Ministers argument goes wrong
on its non-acceptance that this approach balances the legislation
against the tenant and in favour of the landlord. The FIPs are
voluntary, as he says, but surely this is a significant disincentive to
families taking part in the project, not least because it seems to make
their tenancies less secure.
Mr.
Wright:
Is not that precisely the point? The voluntary
natureI remind the hon. Gentleman of our discussions on
previous amendmentshelps to strengthen the information provided
to families, so that they are fully aware of the consequences. Families
have to enter the process voluntarily.
Lembit
Öpik:
That involves an assumption that every family
will have a full and confident grasp of the legislation and terms of
the tenancy, but such families often are not good advocates for their
own best interests. In some senses, that is why they have
difficulties in the first place. The Minister is ignoring the reality
that various families will not be able to digest and interpret the
legislation in their interests and are therefore susceptible to being
victimised by its effective use by others. The notice to quit on a
family intervention tenancy can be issued for any reason, not solely
for antisocial behaviour. That is wrong.
The test as to what behaviour
would merit possession is not robust enough. Landlords often feel that
possession is merited, but that view has not always been backed by the
courts. The position taken here will actively alter circumstances for
many families. That is why the courts should have the power to exercise
discretion when antisocial behaviour is not the basis on which the
landlord seeks possession.
This part of the legislation
was conceived primarily to deal with antisocial issues, but mission
creep has meant that it now has a broader remit. We are uncomfortable
about the clause, as is Shelter. In other circumstances, I would push
the matter to a vote, but I shall not do so, given the shortage of
time. However, I give notice that we may return to this issue on
Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave,
withdrawn.
Clause
261 ordered to stand part of the
Bill.
Clauses
262 to 264 ordered to stand part of the
Bill.
Clause
265
Former
right to buy flats etc: service charge
loans
Question
proposed, That the clause stand part of the
Bill.
The
Chairman:
With this it will be convenient to discuss the
following: Government new clause 27 Former right to buy and
other flats: equity share
purchases.
Government
amendment No.
132
Mr.
Wright:
This important clause enables the Secretary of
State to empower housing authorities to offer equity
loansinterest-free loans which pay a percentage of the market
value when the property in question is sold. Owners of flats in blocks,
who are known as leaseholders, cannot maintain and improve the fabric
of the building and estate grounds. Instead, their landlord does that
and reclaims a share of the cost by levying major works service
charges. Owners of ex-council flats bought under the right to buy or on
the open market will remain as leaseholders and will therefore remain
responsible, under the terms of their leases, for contributing to the
cost of repairs, maintenance and improvements.
A survey by London councils
suggests that up to March 2007, of 154,000 council leaseholders in 26
London boroughs, 9,100 have received or expect to receive major works
bills for £10,000 or more. I have met hon. Members with regard
to this who are concerned about leaseholders facing high bills for
major works. Clause 265 widens the range of options that landlords can
use to assist their leaseholders in paying such bills.
Section 450B of the Housing Act
1985 enables landlords at their discretion to offer leaseholders
interest-bearing loans. The clause amends section 450C of the 1985 Act
regarding the Secretary of States powers to make regulations.
The Housing (Service Charge Loans) Regulations 1992 already allow
housing authorities to offer loans for service charges on properties
bought under right to buy. In specified circumstances, loans to the
original right-to-buy purchasers are mandatory. Interest must then be
charged, and administrative expenses up to £100 may also be
charged to the
borrower.
The
regulations also give housing authorities discretion to offer loans to
help with service charge bills on terms of their choosing to any of
their leaseholders, but it is not clear whether they are currently able
to offer equity loan terms, or whether they must charge
interest.
A working
group of London boroughs concluded in 2005 that if landlords had the
option of offering interest-free equity loans, it would increase the
likelihood that leaseholders would be able to pay the money that they
owe. Interest-bearing loans may be unattractive to leaseholders because
the proportion of interest to principal grows over time so much that
the borrower becomes liable to repay twice or even three times the
amount originally
borrowed.
Let me give
an example, albeit I have to admit an extreme one. If a leaseholder
faced a bill for major works for £30,000 and there was a period
of 15 years before the property was sold, at an interest rate of 7 per
cent. the amount due would be £82,771nearly three times
the amount borrowed. However, with equity share loans, the amount to be
repaid will depend on the movement of the market value of the property
over the period of the
loan.
If leaseholders
are unable to pay what they owe, the landlord has to make up the
difference. Although it is always open to landlords to take the
leaseholder to court and obtain a judgment that can be enforced by a
charge on the property, it is clearly preferable to all concerned if
that can be avoided. It is in the interests of leaseholders themselves,
and of taxpayers and tenants, that landlords can offer the widest
possible range of payment options. The amendment to the regulations
which may be made as a result of the clause will place no obligation on
landlords. Instead, it will add to the range of options available to
them to use if, in their judgment, the circumstances justify
it.
The provision
regarding valuation of the property will enable the Secretary of State
to amend the 1992 regulations so that if a landlord and leaseholder
agree to a loan on equity share terms, an impartial assessment can be
made by district valuers of the market value both on commencement and
eventual payment of the loan. Provision can also be made for paying for
the district valuers
services.
New clause
27 seeks to give local authorities and registered social landlords the
power to buy a shareformally, an equitable interestin
flats that they have let on long leases. The power is to be used for
the purpose of assisting the owner of such a flat to meet some or all
of the service charges that he or she is liable to pay. The new clause
fulfils the Governments
commitment in our statement to Parliament on 29 March 2007 to give
landlords such a power. Under the new clause, the Government, or, in
Wales, the Welsh Assembly, may make regulations that give landlords
this power and also impose conditions where appropriate on how it will
work in practice.
We
have specified that the landlord must pay the purchase price by
cancelling part or all of the service charge that the leaseholder is
liable to pay. This is to ensure that the money is used for this
purpose only. The purchase price will be a price related to market
value that is acceptable to both the landlord and the leaseholder.
Either party may ask the district valuer to determine the value. The
regulations may specify, as I mentioned, that the district
valuers costs in such cases will be met by the leaseholder and
deducted from the purchase
price.
I should make
it clear that the power to buy an equity share is not mandatory. It
will be one more way in which landlords can help leaseholders to meet
their obligations, and entering into such an agreement will be entirely
voluntary for both parties. The Government are not seeking to specify
in detail any of the terms of the contract. It will be up to the
parties to reach agreement, but we intend to provide a framework so
that landlords have the necessary powers.
On the
basis of the hardship that some leaseholders face as a result of high
service charges, I am keen to help as much as possible. I have met
representatives of London boroughs to discuss the matter and instructed
officials to consider using existing resources, such as funding from
the regional housing pot and the private sector renewal fund, to target
and assist leaseholders who might not be able to pay their service
charges by any other means. That is consistent with our aim that those
funds should help those in need and on low
incomes.
11
am
I have to point
out, though, that many local authority landlords already offer a range
of payment options, but if none of those appear suitable, landlords
will be able to use the power introduced by the new clause to purchase
equitable shares if they and the leaseholders agree that it is the best
way to help the leaseholders meet their obligations under the
lease.
The new power
to purchase equity shares will be introduced by means of regulations,
and amendment No. 132 ensures that the new clause will be commenced by
order when the regulations are laid. I hope that I have made the
situation clear and that the Committee will accept the new clause and
amendment.
Andrew
George:
I refer to a point made in an earlier debate on
the application of stamp duty to the purchase of portions of a
property. If the Government want to facilitate a means by which a
tenant can take ownership of an equity or other share of the property,
does the Minister agree that it would be unhelpful if, because of the
market value of the property, the tenant found himself or herself
having to pay stamp duty on the purchase of that equity
share?
Mr.
Wright:
I can understand what the hon. Gentleman is
saying. In certain circumstances, stamp duty does not apply to areas
that are classed as
deprived areas. I am not certain what those circumstances are, but they
may apply to such a case. I will examine what the hon. Gentleman said
and write to him about
it.
On the important
basis that a number of families in London and elsewhere are facing high
service charges and major works bills, I hope that the Committee will
accept the new clause and
amendment.
Question
put and agreed
to.
Clause 265
ordered to stand part of the
Bill.
Clauses
266 and 267 ordered to stand part of the
Bill.
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