The
Committee consisted of the following
Members:
Crausby,
Mr. David
(Bolton, North-East)
(Lab)
Dorries,
Nadine
(Mid-Bedfordshire)
(Con)
Efford,
Clive
(Eltham) (Lab)
Gilroy,
Linda
(Plymouth, Sutton)
(Lab/Co-op)
Goldsworthy,
Julia
(Falmouth and Camborne)
(LD)
Howarth,
Mr. George
(Knowsley, North and Sefton, East)
(Lab)
Jackson,
Glenda
(Hampstead and Highgate)
(Lab)
Jackson,
Mr. Stewart
(Peterborough)
(Con)
Jenkins,
Mr. Brian
(Tamworth)
(Lab)
Scott,
Mr. Lee
(Ilford, North)
(Con)
Teather,
Sarah
(Brent, East)
(LD)
Turner,
Mr. Andrew
(Isle of Wight)
(Con)
Twigg,
Derek
(Halton) (Lab)
Watts,
Mr. Dave
(Lord Commissioner of Her Majesty's
Treasury)
Wilson,
Mr. Rob
(Reading, East)
(Con)
Wright,
Mr. Iain
(Parliamentary Under-Secretary of State for
Communities and Local
Government)Ed Waller, Eliot
Barrass, Committee Clerks
attended the Committee
First
Delegated Legislation
Committee
Monday
27 April
2009
[Mr.
Robert Key in the
Chair]
Draft
Housing (Replacement of Terminated Tenancies) (Successor Landlords)
(England) Order
2009
4.30
pm
The
Parliamentary Under-Secretary of State for Communities and Local
Government (Mr. Iain Wright): I beg to
move,
That the
Committee has considered the draft Housing (Replacement of Terminated
Tenancies) (Successor Landlords) (England) Order
2009.
Mr.
Key, it is a delight to serve under your chairmanship again. Last time,
I was far too gushing in my praise for you, so I will temper that
today.
The matter
under consideration is important. The order will extend the provisions
on existing tolerated trespassers in schedule 11 to the Housing and
Regeneration Act 2008 to situations where the landlord has changed
after the occupant became a tolerated trespasser. That is often seen to
be a complex area, not least by me, so it might be worth while if I set
out the concept.
Tolerated
trespassers are people who rent property, usually in social
housing, who have lost their status as tenants after the court has
granted the landlord a possession order, but whom either the landlord
or the court is allowing to remain in the property. A number of
problems face tolerated trespassers and their former landlords. Neither
can rely on the terms of their tenancy agreement or the provisions in
the various Housing Acts. For the ex-tenant, the most serious
consequence is probably that no succession will be possible on death.
For the ex-landlord, problems include uncertainty about entitlement to
annual increases in rent and whether tolerated trespassers should be
allowed to vote in stock transfer and tenant management
ballots.
Last
years Housing and Regeneration Act resolves the problem for
future tolerated trespassers and the vast majority of existing
tolerated trespassers. Part 1 of schedule 11 will ensure that, in
future, where a person is subject to a possession order, they will
retain their status as a tenant until they are evicted from the
property. Part 2 of the schedule will restore tenancy status to
existing tolerated trespassers by creating a new tenancy from the date
that the provisions come into force. It will apply to all tolerated
trespassers who remain in their home, with the exception of those whose
landlord has changed after the occupant became a tolerated
trespasserwhat may be referred to as successor landlord cases.
There could be a number of situations where ownership of the property
changes, but the most usual is a transfer from a local authority to a
registered social landlord following a large-scale voluntary
transfer.
We
did not deal with successor landlord cases in the 2008 Act when it was
in Committee because it was an issue on which we had not consulted and
we felt that landlords might have strong views. Instead, during the
passage of the Bill through the other place, a power was added for the
appropriate national authority, either the Secretary of State in
England or Welsh Ministers in Wales, to provide by order for part 2 of
schedule 11 to be extended to successor landlord cases, following
consultation.
In September
last year, my Department consulted on options for using the
order-making power. Responses to the consultation were unanimously in
favour of amending the legislation to restore tenancy status in
successor landlord cases. The draft order extends the provisions in
part 2 of schedule 11 to successor landlord cases, and makes
appropriate modifications where necessary.
The main aims
of the draft order are twofold. First, it is to ensure that the
provisions in relation to successor landlord cases are kept as close as
possible to the provisions for other existing tolerated trespassers in
part 2 of schedule 11. Secondly, it is to provide, as far as possible,
that both landlord and tenant are in the same position as they would
have been had the tenant not become a tolerated trespasser, and that
neither tenant nor landlord is disadvantaged by the changes. The order
will restore tenancy status to tolerated trespassers whose landlord has
changed, by creating a new tenancy between the successor landlord and
the occupant, which will come into effect on the commencement
date.
The
draft order provides for the new tenancy to be of the same type as, or
as near an equivalent as possible to, the original tenancy. However, we
recognise that where there has been a change of landlord, in particular
where the nature of that landlord has changed, that may not always be
possible. Where the property has been transferred from one local
authority to another, the new tenancy will be the same as the original
in all but one case. The exception is where the original was an
introductory tenancy, but the new local authority landlord does not
operate such a scheme. In that case, the replacement will be a secure
tenancy. Where the property is being transferred from one RSL to
another, the new tenancy will also generally be the same as the
original one.
The stock
transfer situation when the property has transferred from a local
authority to an RSL is more complex. Former secure or introductory
tenants under the Housing Act 1985 cannot continue their previous
tenancy, but must become assured tenants under the Housing Act 1988
because of the mutually exclusive provisions regarding landlords of
secure and assured tenancies under the two
Acts.
The
draft order also provides for the terms and conditions of the
replacement tenancy to be the same as the original tenancy, subject to
any modifications that may be needed to reflect the fact that the two
tenancy types are different.
Mr.
George Howarth (Knowsley, North and Sefton, East) (Lab):
My hon. Friend the Minister might be about to deal with such matters,
but I want to give him the opportunity to consider my two questions
before he does. First, why does he consider that the measures are
necessary and, secondly, why has he used the term
trespasser in that context?
Mr.
Wright: As to why the measures are necessary, we estimated
during the passage of the Housing and Regeneration Act 2008 that about
250,000 to 300,000
people were affected adversely as a result of the peculiar anomaly under
the Act that they do not have rights. Given that they might not know
that they do not have rights and are put at a significant disadvantage,
often for years, we want to redress that anomaly and sense of
unfairness as much as
possible.
My
right hon. Friends second point was good.
Trespasser has negative connotations. Unfortunately,
that term has stuck, but we are keen to address the matter by giving
people as much security as possible and creating a sense of fairness,
in respect of the tenant as well as the landlord, a point to which I
shall to
return.
I
am keen to make sure that the creation of a new tenancy will not impact
unfairly on landlords or tenants. The order provides the court with the
power to allow claims during the tolerated trespasser period between
the newly restored tenant and the original landlord and/or the
successor landlord as appropriate. The aim is to reproduce as far as
possible the provisions under schedule 11 of the 2008 Act which give
the court discretion whether to allow such claims. In turn, they are
designed to continue the discretion that the courts currently have to
allow such
claims.
Finally,
I wish to make an important clarification. The order will apply only to
occupants who are still classed as tolerated trespassers on the date
that the order comes into force. That is in line with the provisions
under part 2 of schedule 11 to the Act. Accordingly, the order will
affect only those landlords who have failed to take action before the
commencement date, whether that action is to issue a new tenancy or to
proceed to eviction. It is our intention that, if the order is
approved, it will be brought into force at the same time as the
provisions under schedule 11. To that end, we have delayed commencement
of schedule 11. In an ideal world, we would not have done that, but we
felt that it was justifiable and appropriate to ensure that tolerated
trespassers who have transferred to a new landlord are not
disadvantaged by the timing of the changes. We shall be commencing the
measures under schedule 11 for England and Wales, and the Welsh
Assembly Government are introducing parallel affirmative orders in the
same terms as the order, which, all being well, will come into force on
the same
date.
We
recognise that this area of the law is complex, and we shall therefore
be issuing non-statutory guidance to landlords to assist them in
implementing the provisions under schedule 11 and the successor
landlord order. On the basis of that information, I hope that members
of the Committee will be minded to approve the order, but I look
forward to hearing any questions they might want to ask about
it.
4.39
pm
Mr.
Stewart Jackson (Peterborough) (Con): It is a pleasure to
serve under your chairmanship, Mr. Key. I concur
with the Minister about complexity: the order is like the
Schleswig-Holstein question in that the only people who understand must
be either mad or
dead.
I
want to make a few general points. We agree with the Minister and he
will not be surprised to learn that we do not intend to press the order
to a Division. It is sensible to facilitate the saving of the best part
of £200,000 of public money, the estimate made in the
impact assessment, provided that payment of current rent is being made
by existing tenants as well as arrears, which is obviously a
significant issue with registered social landlords. We would not wish
to make the situation worse by encouraging further possession orders to
be executed to make people homeless, not least because of the
bureaucratic difficulties of re-letting those properties.
We have a few
questions. I might have missed the Ministers remarks on this
matter, but I read in the impact assessment and the explanatory
memorandum that the consultation took place in summer 2007. I am
slightly surprised that the order was not dealt with then and a way
found to include this tidying-up exercise in the Housing and
Regeneration Act 2008, which was debated last spring and got Royal
Assent towards the end of the year. Perhaps the Minister will comment
on why the transfer of tolerated trespassers was not considered in the
summer 2007 consultation by the 500 key stakeholders who were
consulted.
We have
figures for the estimated number of tolerated trespassers only to 2006.
Will the Minister update us on the trend since then, and especially on
the most recent figures for the variation of possession orders that
have been sought and obtained? That is important. It would be invidious
to expect registered social landlords to have a separate system for
dealing with tenants who are tolerated trespassers. I accept the
reservations of the right hon. Member for Knowsley, North and Sefton,
East about the use of that term, but that is what we have.
Does the
Minister foresee any difficulties regarding the rights and
responsibilities of tolerated trespassers as voters in a large-scale
voluntary stock transfer from a local authority, for example, to a
housing association? Would the rights that now accrue to those
individuals as tolerated trespassers be different from the rights of
others who take part in a stock transfer ballot? With those questions,
I conclude my remarks. I hope that the Minister will be able to answer
those specific points.
4.43
pm
Sarah
Teather (Brent, East) (LD): It is a pleasure to serve
under your chairmanship, Mr Key. I see no reason to detain the
Committee for an extended period. I fully support the order, which is
long overdue, and echo the comments made by the hon. Member for
Peterborough about why this matter could not have been dealt with under
schedule 11 to the 2008 Act. I know that Shelter made representations
to the Government to try to deal with that point. It felt that this was
an obvious anomaly that should have been included in the Act.
The concept of
the tolerated trespasser has been unhelpful for landlords and tenants.
The measure extends the provisions of the 2008 Act to that group, which
has so far been left out. It was an obvious anomaly and I support the
Government in closing the loophole. I wish that they had done so
earlier, but I am glad to see them do it
today.
4.44
pm
Mr.
Wright: I thank hon. Members for their positive comments.
I am not entirely certain what I should say to the hon. Member for
Peterborough, who says that I am either mad or dead. I will let the
Committee decide which is more appropriate. I welcome his point about a
tolerated trespasser, if we must use that phrase, who is paying rent and
managing his or her arrears. It is right for us to correct that
anomaly.
The hon.
Gentleman makes a fair point regarding why we did not address this
matter in the Housing and Regeneration Act 2008. He points out that we
consulted on this in the summer of 2007. We did not consult
specifically on the issue of transferring tolerated trespassers. The
reason was that different stock-transfer RSLs deal differently with how
tolerated trespassers are transferred to them. Some grant full assured
tenancies and some only assured shorthold tenancies, often with the
promise of a full assured tenancy after a certain time if the tenant
behavesfor want of a better termappropriately. In some
cases, landlords proceed to eviction of some transferred tolerated
trespassers.
Given
the different approaches, we did not include any provision in the
Housing and Regeneration Act because we felt that doing so would remove
choices from some registered social landlords. We took the view, fairly
and appropriately, that we ought first to consult landlords. When
discussing the merits of the Bill, I recall pledging to do that.
Parliamentary approval
will ensure that the order comes into force at the same time as the
tolerated trespasser provisions under schedule 11 to the
2008 Actwe are correcting the anomaly. Going back slightly, one
striking thing from the subsequent consultation was that landlords
unanimously agreed that we should do something about the situation.
There is a large degree of consensus on the issue and on how we can
move
forward.
The
hon. Member for Peterborough mentioned the tolerated trespasser figures
and asked how many could be classed as successor landlord cases. In the
explanatory notes, we have estimated the figure to be as high as some
70,000 to 85,000hopefully, we can provide a great deal of
fairness for a large number of people. The figure for the number of
tolerated trespassers is in the region of 250,000 to 300,000, which
remains valid
data.
I
think that I have answered all the questions, so on that basis, and
given the positive spirit in which hon. Members have dealt with the
order, I hope that we can approve
it.
Question
put and agreed
to.
4.48
pm
Committee
rose.