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Teresa Pearce: I agree that that is a possibility, which is why we are proposing that new clause 56 would see the extension of the housing ombudsman scheme, at first through a pilot scheme in London and then potentially across the country. I believe this would help many tenants in resolving disputes.
On amendment 49, part 3 of the Bill makes provision for private landlords to recover abandoned premises from tenants without going to court. We appreciate the need for landlords to recover abandoned premises, but the measures give landlords dangerous powers to evict tenants with speed and ease. We believe the Bill does not provide safeguards for genuine cases where somebody could be away from the property legitimately, such as a stay in hospital or somebody working away from home. We believe the measures will lead to further pressure on our already stretched local authorities. As the measures stand, we believe they go against the spirit of other parts of the Bill where we have looked to crack down on rogue and criminal landlords through banning orders and a database, and to drive up standards. Instead, as they stand, the measures give the very same landlords a way to evict without recourse to the courts, and with speed and ease.
Many organisations contacted us to raise concerns about the proposed legislation. I raised their concerns in Committee, but it is worth raising them again. Crisis and Shelter have both spoken out against these clauses and recommended that they be removed from the Bill. They were particularly concerned that: vulnerable tenants could be unintentionally evicted; tenants will be unable to challenge their eviction effectively; and that there is insufficient evidence that abandonment is a widespread problem and that there is existing legal provision to deal with genuine cases of abandonment. In addition, they believe that by undermining the role of courts in the eviction process, the changes will put more tenants at risk of homelessness. Further representations were made in written and oral evidence to the Committee noting concern with the proposals. Crisis highlighted that the
“Bill creates a new ‘fast track’ eviction process for landlords to reclaim possession of a property which has been abandoned”
“robust evidence to suggest that abandonment is a significant or widespread problem.”
Citing the Bill and the Government’s impact assessment, it also stated:
“Landlord associations have estimated that 1% of calls made to their helplines relate to abandonment. There are approximately 1.4 million landlords. From this figure the government has extrapolated that there are only 1,750 tenancies abandoned every year, which amounts to only 0.04% of private renting households.”
We heard concern from legal organisations, such as the Housing Law Practitioners Association, which was unaware of any evidential basis suggesting the need for such a power as that in part 3 of the Bill and did not understand what was thought to be defective in the existing law. It also noted that the “trigger” rent arrears in clause 50 were plainly modelled on those in ground 8 in schedule 2 to the Housing Act 1988. If those arrears are made out, the landlord is already entitled to a mandatory possession order under ground 8. If a landlord has a mandatory right to possession already, why does he need a right to bypass the courts?
The association was also uneasy about the re-instatement provisions and had many concerns about the proposals. Others noted that they did not think the proposals were
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necessary at all. In fact, there is already legal provision for cases of abandonment in the form of the legal rule of implied surrender, which is where a tenant behaves in such a way that would make a landlord believe they wanted to end a tenancy, such as emptying the property of all its possessions or handing back the keys. Crucially, there has to be evidence of actual abandonment—evidence that the tenant has gone for good—and this could be evidence from neighbours or visual evidence, such as possessions being cleared. The landlord can accept this and then legally change the locks without any court proceedings being required. The question has been raised with us why the measures are being introduced, given the existing provisions protecting landlords in such circumstances.
Many of the organisations that approached us wanted the provisions to be withdrawn from the Bill altogether, but our amendment proposes an extra layer, requiring the local housing authority to confirm that it suspects that the property is abandoned before a landlord can recover the abandoned premises. Landlords could use the proposals in the Bill to secure eviction just by writing tenants a couple of letters, as an act of revenge or to kick out a legitimate tenant who is away on business or in hospital; and what would happen if a landlord says he has sent a letter but the tenant never receives it, after which the tenant goes away a couple of weeks later on holiday and the landlord evicts them while they are away?
The Bill requires the landlord only to say that the property is abandoned, rather than for it actually to be abandoned, and that could be open to abuse. That is why we would like to insert a reasonable extra layer in the proposals. Under the amendment, the local housing authority would need to confirm that it also suspects that the property is abandoned, ensuring that a landlord could not just say so. The amendment would add the voice of a local, respectable and accountable body, such as the council, to a landlord’s concerns and to the process and ensure that the measures are not open to abuse. Given that there are estimated to be only 1,750 occasions a year when such a situation would arise and that there are about 400 local authorities, it is unlikely to overburden local authorities. The clauses clearly need to be amended if they are to work, are not open to abuse and can be used appropriately on the rare occasions that a landlord requires a property back.
Amendments 47 and 48, also on abandoned premises, would extend the time period between the two letters needed to evict a tenant. Amendment 47 would specify that the date by which the tenant must reply must be after the 12-week period, while amendment 48 would provide longer between the first and second warnings. I spoke, on the previous amendment, about the flaws in the abandonment proposals and how they were open to abuse or error, meaning that landlords could use the proposals to evict tenants just by writing them a couple of letters.
I completely understand the situation a landlord is in when a tenant truly has abandoned a property. In Committee, I raised the need for local authorities to know not just who rogue landlords were but who rogue tenants were. Tenants also enter into a legal contract with a landlord when they take on a property, and they
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should not breach that agreement, just as landlords are not expected to breach their end of the agreement, yet these clauses give rogue landlords the ability to evict with speed and ease.
The Minister has already responded to the issues raised in Committee and added provision for a third wave of letters, for which I am grateful. It is still important, however, to safeguard these measures against abuse. We believe that by extending the minimum amount of time before a landlord is able to recover abandoned premises, those with legitimate reasons for absence from their property would be able to respond, which would help to safeguard against potential abuse.
One of the concerns raised about these proposals was the pressure on local housing authorities that might have a duty to rehouse tenants who have been evicted, even if just in emergency accommodation following the eviction. When faced with someone about to be evicted under section 21 notices, local housing authorities have the advantage of time in the current system to plan the resources; if they know that a resident is going to be evicted, they can try to do something about it before the date of eviction. Under the proposals in the Bill, however, residents could be evicted in haste, placing further pressure on local housing authorities.
The amendments would insert a little more time into the recovery of abandoned premises, which would ease the pressure on local housing authorities and help to avoid any abuse of the process. In addition, it would be advantageous to extend the time period between the first two letters needed to evict a tenant suspected of abandoning premises from four weeks to eight weeks, because that would safeguard against error and a landlord using the measure to kick out a legitimate tenant who is away on business, in hospital or even on holiday. By extending the time period between the letters, there is obviously less chance of that happening. That will safeguard against abuse and allow tenants more time to query the landlord or to seek housing advice. As there is no court involvement in this process, it gives the tenant more time to assess their options.
It is clear that the Bill’s proposals could affect all tenants in the private rented sector, and that all landlords will have the powers, even though they are open to abuse and abandonment accounts only for an estimated 1,750 occasions a year. Why not get this right so that it safeguards against abuse and does what it is supposed to do? That would allow landlords to recover abandoned premises and not allow rogue landlords to evict tenants with ease. Legislation on abandonment needs to be watertight, because although it affects only 0.04% of tenancies, it could be abused.
Dame Angela Watkinson (Hornchurch and Upminster) (Con): I am pleased to have the opportunity to speak to new clause 5, which is complementary to clause 26—previously clause 22—of this excellent Bill and which relates to rogue landlords and letting agents. The new clause simply requires local authorities to add a question to their council tax registration forms seeking information about the tenure of a property. It would not only be administratively easy to implement, but the cost would be de minimis. The purpose of the new clause is to provide a database for all local authorities, identifying the owners of privately rented properties.
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Currently, local authorities know who is paying council tax on a private property, but they have no way of knowing if it is owner-occupied or tenanted. Having easy access to such information would have numerous benefits for local planning authorities, environmental health departments, social services, tenants, HMRC and good landlords. The Residential Landlords Association fully supports this measure.
Mr Prisk: I strongly support new clause 5 and I hope that the Government will look favourably on it. Does my hon. Friend agree that one critical benefit of the new clause is the ability to use the information to track rogue landlords when they move from one place to another?
Dame Angela Watkinson: I thank my hon. Friend for that intervention. That is why it is so important that all local authorities adopt this measure; rogue landlords will have properties in more than one area.
The database would also assist local planners in measuring the size of the private rented sector in their area. That would help to develop future planning policy. Enforcement of existing regulations relating to the private rented sector would be made easier, as the landlord could be identified and contacted. Indeed, the absence of this information could alert local authorities to possible irregularities such as illegal subletting, unregulated houses in multiple occupation—this is becoming a problem in my Hornchurch and Upminster constituency—housing benefit fraud and public health issues. Finite resources could then be targeted at the most troublesome tenanted properties via the Land Registry.
11.45 pm
HMRC would be able to identify non-declaration of rental income for taxation purposes, but importantly this measure would help tenants by identifying rogue landlords who do not maintain their properties in safe, habitable condition or treat their tenants fairly. An estimated one third of privately rented properties do not meet decent homes criteria and one in six present a severe threat to health or safety because of unsafe gas and electrical appliances, leaking plumbing or roofs, faulty fire alarms, vermin and damp. Too many tenants live at the whim of rogue landlords, unaware of their rights, in squalid conditions with insecure tenancies.
Local authorities do not have the resources or capacity effectively to inspect and enforce all these issues. In clause 26, the Bill gives local housing authorities in England responsibility for maintaining the content of the database and ensures that
“local housing authorities are able to edit the database”
and to keep it updated. It is difficult to see how local authorities are going to be able to fulfil this function if they do not have the database to refer to and if they do not know which properties in their area are tenanted and who or where the landlords are.
The licensing of landlords has been shown to be complex and costly, with patchy results, as only the good landlords will register and the costs of registering passed on to the tenant. It has been argued that councils already have the power to collect tenure information on their council tax registration forms but, crucially, only a small handful do so. To be effective, all councils need to use this power consistently as rogue landlords often
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operate in more than one area. That is why the new clause makes the use of the power mandatory. It is not further regulation, but a measure to facilitate the enforcement of existing regulations affecting the private rented sector and the taxation of landlords. It is not administratively burdensome or a drain on scarce resources, but it would benefit tenants, good landlords, local authorities and HMRC. I look forward to hearing the Minister’s comments on the proposal when he responds to the debate.
Mr Betts: I thank the Government for taking up two of the proposals from the Select Committee’s report in the previous Parliament on rent recovery and civil penalties. That was something the Committee agreed unanimously. I see the hon. Member for Rugby (Mark Pawsey) in his place. He was a member of the Committee at that time. It is right to give local authorities a lighter-touch way of dealing with the less serious problems that may exist in private sector properties by introducing civil penalties and rent recovery. The idea that landlords should be getting public money when clearly providing a property that breaches legal requirements is outrageous. It is good that the Government are acting and legislating, I think with all-party support, to ensure that the money paid out in those wrongful circumstances can be properly recovered by the public sector and indeed by tenants where their money has been used to pay for rent for a property that has not met the legal standards.
I want to raise one or two issues mentioned by my hon. Friend the Member for Erith and Thamesmead (Teresa Pearce) and refer to the Select Committee report. When the Committee published its report—I am sorry to cut slightly across my hon. Friend on this issue—we concluded that licensing schemes should be a matter for local discretion. We said that they were a useful tool in the armoury of local authorities to deal with particularly bad problems in areas with poor landlords and poor-quality housing, but we adopted a localist approach and said that in the end it should be a matter for local discretion. However, we did raise the problem—it is right that my hon. Friend raised the issue again—that many authorities chose not to take up licensing schemes, not because they thought they were a bad idea, but because the whole bureaucracy around the schemes deters authorities and makes it expensive to get them in place. I hope the Minister will have another look at that.
I speak from experience, not in my constituency but in the next-door constituency of Sheffield, Brightside and Hillsborough. A licensing scheme that was introduced in Page Hall has been very successful in dealing with the real problems caused by bad landlords and bad properties, but the process of establishing it involved a great deal of bureaucracy and money that could have been better spent on enforcement and attempts to deal with the inadequate housing situation.
Mark Pawsey: The hon. Gentleman led the production of the Select Committee report very effectively during the last Parliament. As he will recall, the evidence suggested that good landlords were happy to go on to the register, or, alternatively, were reluctant, but did so because they wanted to play by the rules. The rogue landlords, by definition, do not want to play by the rules and would not register in the first place. The process tends to be not terribly productive.
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Mr Betts: I think that when authorities have been able to target resources at a particular area, go for the bad landlords and try to get them to sign up, the system has been relatively successful. I have had experience of one case, but there is a bigger case in Newham, where the local authority has been licensing all the private sector properties in the borough.
If the necessary resources are put in, a licensing scheme can be effective. The difficulty is that local authorities can only charge for the administration costs. They cannot charge for the costs involved in following up inadequate properties, and trying to enforce proper conditions in those properties. The problem that currently affects private sector housing relates not to the powers that local authorities may or may not have, but to the fact that, in many instances, they do not have the resources that would enable them to use their powers effectively. That is a real challenge that needs to be addressed, and on which we ought to reflect further. I do not know whether the Government have any more ideas, but rent recovery and civil penalties may help a little.
Let me return to another issue that was raised by the Select Committee, and to which the Minister referred. Why cannot local authorities keep the fines that are imposed on bad landlords for failing in their duties? It seems a little odd that in the less serious cases authorities can keep the proceeds of civil penalties, but in the most serious cases, which often cost the most in terms of local authority officers’ time—and, in my experience, authorities often do not recover the costs when they go to court—the fines go back to the central Exchequer. What is the Government’s problem with allowing authorities that are involved in the most serious cases, with the greatest costs, to keep the fines that are levied?
Catherine West: In some instances, particularly in London boroughs, it is so lucrative to be a landlord that the civil penalties are not enough of a disincentive. People can be in court at one moment and building another shoddy flat at the next. They will simply pay the fine, because ultimately it will represent only a tiny proportion of their profit.
Mr Betts: That is true. I am pleased that the Government seem to want to increase the fine levels. I hope that eventually the banning orders will kick in, and a number of civil penalties will be imposed over a period. That is the intention of one of the amendments, and it, too, is welcome. I think that banning orders will have an impact if they are properly effective, along with other measures in the Bill that will help to deal with rogue landlords.
Before I say a few words about the ombudsman, I want to say something about new clause 5, which we heard about from the hon. Member for Hornchurch and Upminster (Dame Angela Watkinson). I think that it is an excellent measure, and the Government ought to think seriously about it. It is very simple, and would be very light on public sector resources. Indeed, it would probably save public money, because it would not be necessary to chase around finding out who owned properties when there was a problem with them. The information would be readily available, at little cost to the public purse. Local authorities would be able to do their jobs more effectively, as they would spend less time trying to
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find out who was the owner or the letting agent. Tenants often do not have that information, but by the time a problem occurs, authorities want to have it to hand so that they can take immediate action against those who are responsible.
The hon. Lady also put her finger on a very important point. In the case of the licensing scheme in Sheffield, I suddenly realised why landlords were so opposed to it. There was, of course, the possibility that local authorities would carry out more inspections of their properties, find faults and take action, but what most disturbed them, in my view, was that HMRC would know that a property was tenanted and rent was being paid to someone, and one or two further inquiries might follow. I think that is absolutely right: that should be done—the taxpayer ought to be paid their tax on rent that is collected. Very often in these properties there are not proper tenancy agreements, the rent is simply paid cash in hand and the taxpayer receives none of it. Having that information in the public domain that can be used for any proper purpose—I hope that would include being able to pass it on to the tax authorities—has another benefit to the public purse. That is a very sensible and simple measure, and I hope the Government will be prepared to support it.
Finally, I hope the Government will give further thought to the housing ombudsman covering the private rented sector. I know there may be the view that this is a private sector and therefore a public sector ombudsman should not be looking at these matters, but let us draw a comparison. The coalition Government extended the remit of the local authority ombudsman to cover social care homes even when the person in those homes was paying for themselves, so there was no direct public sector involvement. That remit was extended to social care homes because it was thought that it was somehow wrong that some people could not take an element of social care provision to the ombudsman for a decision while other people in the same care home could.
For example, if a local authority discharges its homelessness duty by allocating or placing someone in a private sector property and it all goes wrong, the local authority element of that, where it makes the placement, would presumably be under the jurisdiction of the local authority ombudsman. However, if it is the private landlord who does not deal with that tenancy properly, there would be no remit for the tenant to go to any ombudsman at all. Once the local authority discharges its duty and makes provision to have someone housed in the private sector, at some point in the transfer from someone being homeless to them receiving a private tenancy, there would be a switch from an individual having recourse to go to an ombudsman and their not having recourse to do so. There could be great dispute about whether the action of allocating someone a house in the private sector as part of a local authority’s homelessness responsibility was covered by an ombudsman or not. I therefore hope that the Government will reflect on the fact that this may be one of the gaps in the provision of the ombudsman’s service. I know that they are looking overall at reconfiguration of the service, and they might give some thought to this extension as a sensible way of covering one of the gaps.
Dr Blackman-Woods: I wish to make some comments about the Government new clauses on deregulation of housing associations and ask the Minister some questions.
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In Committee we raised several probing amendments relating to clause 78, which covered reducing regulation but did not specify what measures the Government would be taking to deregulate the social housing sector. Of course, we understand that the Government are now seeking, under amendment 4, to leave out clause 78 and replace it with new clause 6 and new schedule 1. As the Minister said in Committee in response to probing amendments:
“I intend to introduce a package of measures on Report. The ONS announced the reclassification decision on 30 October, which has not yet given us the time to carefully work through a package in time for the Committee.”––[Official Report, Housing and Planning Public Bill Committee, 1 December 2015; c. 465.]
This is our first opportunity to see these new measures.
We welcome replacing the general with the specific. Removing clause 78 and replacing it with new clause 6 and new schedule 1 is primary legislation. Clause 78 gave Ministers a sweeping open power to repeal regulations affecting housing associations. At least new clause 6 and new schedule 1 have merit in being precise—but they are very long. In total, the new clauses and schedules in this group amount to 34 pages of new legislation—almost a quarter as long as the Bill itself. They were tabled close to the deadline for debate on Report, and over the Christmas recess, so there is no way that this House, or the organisations and experts that have a direct interest in these provisions, can properly scrutinise or challenge the Government on the content of this newly introduced legislation. We can see that the new clauses and new schedule contain several elements that address some of the issues raised by the ONS as part of the reclassification of housing associations. They will address the issues through the removal of the Government’s consent power over how housing associations hold their assets.
12 midnight
As we observed in Committee, housing associations have said that artificial restrictions on valuations mean that association homes that have been transferred from local authorities can be valued at only 30% to 45% of what they are worth. They have asked for that restriction to be removed, because those homes, like other affordable homes owned by such associations, should be valued at about 60% of their market worth. The Government’s powers over the management of housing associations, and in particular the power of the regulator—the Homes and Communities Agency—to appoint managers and officers to housing associations, were also identified as key areas of concern by the ONS. Again, we can see that this question is being addressed through the new clauses.
New schedules 2 and 3, along with several of the new clauses, will introduce a special administration regime in the event of the potential insolvency of a housing association. That, too, was a matter that was raised by the housing associations. Government control over the voluntary winding up, dissolution and restructuring of housing associations was also cited by the ONS in its judgment. That question is now dealt with by new clauses 13 and 14, among others.
I want to ask the Minister three questions on these subjects. The House will know that the housing associations were shocked when the ONS decided to reclassify them as public bodies. That caught them unawares and it was seen as an unwelcome step. They are keen to see the reclassification reversed, and Ministers claim that changes
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in the Bill will do that, but on what basis can they give us that assurance? On what basis should we accept it? Is it simply the Minister’s assertion, or has he had detailed discussions with the ONS on whether the new clauses would lead to the reclassification of housing associations as private sector bodies?
Secondly, do the Government have any plans to conduct an independent impact assessment for the measures in new clauses 6 to 28 and for the new range of amendments on the deregulation of housing associations, relating to their ability to deliver more housing? Thirdly, what do the Government intend to do if reclassification back into the private sector does not take place?
Mr Marcus Jones: I shall try to keep my comments brief while I address as many of those points as I can. I am particularly grateful to my hon. Friend the Member for Hornchurch and Upminster (Dame Angela Watkinson) for tabling her new clause to require a local authority to request tenure information from residents, owners and managing agents whenever the authority requests council tax information. Like my hon. Friend, I am supportive of ensuring that local authorities have the tools necessary to tackle rogue landlords in the private rented sector in their areas. The Government are committed to promoting a strong, professional private rented sector in which good landlords can prosper and hard-working tenants can enjoy decent standards and receive a service that represents value for money for their rent.
I am sympathetic to my hon. Friend’s proposal, but we need to be mindful that we are increasing the tools that local authorities can use by requiring tenancy deposit protection schemes to provide tenancy deposit information, when requested, to local housing authorities and other relevant bodies in England, as set out in part 5 of the Bill. As my hon. Friend knows, local authorities already have powers in existing and draft legislation to seek information on housing tenure, through the Local Government Finance Act 1992 and the Housing Act 2004, as well as through Land Registry and housing benefit data. It will be important to establish why local authorities are not already using the powers they have at their disposal. I am therefore pleased to tell my hon. Friend that I propose to set up a working group to examine this important issue. The group will include experts from the sector, such as landlords, local authorities and the Local Government Association, and will report back to Ministers within three to six months. Given my hon. Friend’s strong interest in this area, I would like to invite her to be part of that working group.
Mr Betts: It is good that the Minister has an interest in pursuing the ideas that the hon. Lady has raised, but if the group reports back in three to six months, that means that this legislation will be passed without these changes being introduced. If the working group came up with the view that these proposals were needed, what is the earliest reasonable date by which they could be implemented?
Mr Jones:
I thank the Chairman of the Select Committee for that question. We first need to establish whether or not primary legislation is required, and we also need to establish exactly why local authorities are not using the powers they currently have at their disposal. That is what we intend to do, and it is why we have set up the
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working group. From that work, we will consider what measures are necessary—or not—to take forward the proposal made by my hon. Friend.
Mr Betts: I understand that there might be a need to establish why local authorities are not using powers they already have. Is the Minister saying to the House that local authorities currently have all the powers that are contained in the new clause proposed by the hon. Member for Hornchurch and Upminster (Dame Angela Watkinson)?
Mr Jones: The significant difference in my hon. Friend’s new clause is that there is a compulsion on local authorities to obtain the information that it requires and then to act on that. At the moment, there is nothing to prevent local authorities from doing that, as they have the powers from the 1992 Act and they have the powers to use that information from the 2004 Act.
I shall move on to deal with new clause 55, which would require all local authorities to operate an accreditation and licensing scheme for private landlords. I do not believe that local authorities should be required to operate an accreditation scheme in their area. Accreditation is only of interest to good landlords who rent out decent accommodation, so it does not help to identify and tackle the criminal landlords, who we are tackling through other measures in the Bill. In addition, local authorities are in the best position to decide whether or not there is a need for an accreditation scheme in their area. I welcome the Chairman of the Select Committee’s comments about this new clause, particularly what he said about the civil penalties that the Bill includes and rent repayment orders. Both of those were measures that the Select Committee sought in the last Parliament. He mentioned bureaucracy, but he does need to consider that due process does need to be followed and full public consultation needs to take place. That is a challenge in regard to the concern that he had, but he did make an important point about best practice. Some local authorities are doing this very well and we need to spread that best practice and examine how we can do so.
New clause 56 seeks to widen the housing ombudsman’s role to cover private sector housing and disputes between tenants and private landlords in London through requiring the Secretary of State to set up a pilot scheme, and then potentially extend it nationwide. As I set out in Committee, private sector landlords can of course already join the housing ombudsman scheme on a voluntary basis. Indeed, many landlords who wish to assure their tenants of the quality of their services do so already. The Greater London Authority would need to take a view on whether it would be appropriate for the housing ombudsman to expand its role in London given linkages with the London rental standard. Were these landlords required to sign up, we would not expect the same level of engagement or compliance with the process, and determinations would not be enforceable. We would risk increasing costs while the tenants of reluctant landlords may not see the benefit.
Ms Buck:
Given that there are three quarters of a million properties in the private rented sector that have a category one hazard, does the Minister share my disappointment that only 250 landlords a year have
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been prosecuted over the past eight years? Why does he not think it sensible to make a simple change in the law to allow tenants themselves to take civil action against rogue landlords?
Mr Jones: I hear what the hon. Lady says, but with this Bill we are significantly changing the dynamic so that local authorities can keep the civil penalties—penalties of up to £30,000 on a landlord—and recover money paid in housing benefit through rent repayment orders. As for why a tenant cannot go ahead and invoke a banning order as a local authority can, we need to bear in mind that first-tier tribunals will be able to issue banning orders following an application from a local housing authority. Banning orders are being introduced to help deal with landlords who repeatedly fail to comply with their legal responsibilities. The important point is that local housing authorities will have the information about previous offences that have been committed by the landlord anywhere in England and will therefore be in the best position to determine whether a banning order will be the most appropriate sanction. Where a tenant or an organisation has information about a landlord’s transgression, they will be able to report it to the particular housing authority, which will now be more able to move forward with such action because they will have additional resource.
Catherine West: Will the Minister also clarify what he is thinking about in relation to increasing the fines? Is that still under consideration?
Mr Jones: As the hon. Lady will know from looking at the original Bill, the penalty—I use the word penalty rather than fine—is £5,000. That has now been increased with these amendments, which I hope she will support, to £30,000. In regard to amendments 47, 48 and 49, the process for serving warning notices in the operation of the unpaid rent condition means in practice that it will take a landlord at least 12 weeks to recover an abandoned property.
Amendments 48 and 49 would add at least a further four weeks, and amendment 47 would delay the process further if a landlord needed to seek the local authority’s view on whether the property had been abandoned. I can see that some kind of independent verification as a safeguard might, on first appearance, seem an attractive proposition. However, in addition to the obvious delay to the process that that would cause, I do not see how the local authority could deliver that verification with any more precision than the landlord. It would also create a significant new burden on local authorities.
The provisions can also be used where a property has been abandoned by the tenant and rent arrears continue to accrue. In those circumstances, it is important that landlords should be able to recover the premises with minimum delay, but while giving the tenant every opportunity to confirm that they have not abandoned it. We therefore believe that three months, or 12 weeks, is the right period. We brought forward a number of further safeguards in Committee including a third warning notice, which must be affixed to the property.
I am conscious of the time, and I hope that colleagues who have tabled amendments as part of this group will not divide the House unnecessarily. The Government amendments will also confirm our support for an
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independent housing association sector that has freedom to deliver the homes people need and I commend them to the House.
New clause 6 accordingly read a Second time, and added to the Bill.
Reducing social housing regulation
Part 1
Removal of disposal consent requirements
Housing Act 1985 (c. 68)
1 (1) Section 171D of the Housing Act 1985 (consent to certain disposals of housing obtained subject to the preserved right to buy) is amended as follows.
(2) After subsection (2) insert—
“(2ZA) Subsection (2) does not apply to a disposal of land by a private registered provider of social housing.”
(b) in paragraph (b), for “any other” substitute “a”.
Housing Act 1988 (c. 50)
2 The Housing Act 1988 is amended as follows.
3 (1) Section 81 (consent to certain disposals of housing obtained from housing action trusts) is amended as follows.
(2) In subsection (1), for “section 79(2)(za) or (a)” substitute “section 79(2)(a)”.
(b) in paragraph (b), for “any other” substitute “a”.
(4) In subsection (7), omit “section 148 or 172 of the Housing and Regeneration Act 2008,”.
4 (1) Section 133 (consent to certain disposals of housing obtained from local authorities) is amended as follows.
(b) in paragraph (b), for “any other” substitute “a”.
(3) For subsection (1B) substitute—
“(1B) This section does not apply if the original disposal was made to a private registered provider of social housing.”
(4) In subsection (7), omit “section 148 or 172 of the Housing and Regeneration Act 2008,”.
Local Government and Housing Act 1989 (c. 42)
5 (1) Section 173 of the Local Government and Housing Act 1989 (consent to certain disposals of housing obtained from new town corporations) is amended as follows.
(2) After subsection (1) insert—
“(1ZA) Subsection (1) does not apply to a disposal of land by a private registered provider of social housing.”
(b) in paragraph (b), for “any other” substitute “a”.
(4) In subsection (7), omit “section 148 or 172 of the Housing and Regeneration Act 2008,”.
Leasehold Reform, Housing and Urban Development Act 1993 (c. 28)
6 In Schedule 10 to the Leasehold Reform, Housing and Urban Development Act 1993 (acquisition of Interests from Local Authorities etc), in paragraph 1(2)(b), for “sections 148 and 172” substitute “section 148”.
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Housing and Regeneration Act 2008
7 The Housing and Regeneration Act 2008 is amended as follows.8 In section 60 (structural overview), in subsection (4), in the final column of the entry relating to Chapter 5 of Part 2 of the Act—
(a) for paragraph (b) (Regulator’s consent) substitute—
“(b) Notification of regulator”;
(b) omit paragraphs (c), (d) and (g).
9 After section 74 insert—
“74A Leaving the social housing stock: transfer by private providers
(1) A dwelling ceases to be social housing if a private registered provider of social housing owns the freehold or a leasehold interest and transfers it to a person who is not a registered provider of social housing.
(2) Subsection (1) does not apply if and for so long as the private registered provider has a right to have the interest transferred back to it.
(3) Subsection (1) does not apply where low cost home ownership accommodation is transferred to—
(a) the “buyer” under equity percentage arrangements (see section 70(5)), or
(b) the trustees under a shared ownership trust (see section 70(6)).
(4) See section 73 for circumstances when low cost home ownership accommodation ceases to be social housing.”
10 (1) Section 75 (leaving the social housing stock) is amended as follows.
(3) In subsections (2) and (3), for “”Subsections 1 and (1A) do” substitute “Subsection (1A) does”.
(4) In the heading, after “stock:” insert “local authority”.
11 In section 119 (de-registration: voluntary), in subsection (5), omit paragraph (a) and the “and” at the end of that paragraph.12 In section 149 (moratorium: exempted disposals)—
(b) in subsection (7), for “6” substitute “5”;
(c) in subsection (8), for “7” substitute “6”.
13 In section 171 (power to dispose), in subsection (3), omit “(which include provisions requiring the regulator’s consent for certain disposals)”.14 For the italic heading above section 172 substitute—“Notification of Regulator”.15 Omit sections 172 to 175 (disposal consents).16 For section 176 substitute—
(1) If a private registered provider disposes of a dwelling that is social housing it must notify the regulator.
(2) If a non-profit registered provider disposes of land other than a dwelling it must notify the regulator.
(3) Subsection (1) continues to apply to any land of a private registered provider even if it has ceased to be a dwelling.
(4) The regulator may give directions about—
(a) the period within which notifications under subsection (1) or (2) must be given;
(b) the content of those notifications.
(5) The regulator may give directions dispensing with the notification requirement in subsection (1) or (2).
(6) A direction under this section may be—
(b) specific (whether as to particular registered providers, as to particular property, as to particular forms of disposal or in any other way).
5 Jan 2016 : Column 183
(7) A direction dispensing with a notification requirement—
(a) may be expressed by reference to a policy for disposals submitted by a registered provider;
(8) The regulator must make arrangements for bringing a direction under this section to the attention of every registered provider to which it applies.”
17 Omit section 179 and the italic heading before it (application of provisions of the Housing Act 1996 that have a connection with disposal consents.)18 In section 186 (former registered providers), for “to 175” substitute “and 176 (apart from section 176(2))”.19 Omit section 187 (change of use, etc).20 Omit section 190 (consent to disposals under other legislation).21 In section 278A (power to nominate for consultation purposes), for paragraph (b) substitute—
Part 2
Restructuring and dissolution: removal of consent requirements etc
22 The Housing and Regeneration Act 2008 is amended as follows.23 In section 115 (profit-making and non-profit organisations), in subsection (9), after “non-profit organisation” insert “or vice versa”.24 For section 160 substitute—
“160 Company: arrangements and reconstructions
(1) This section applies to a non-profit registered provider which is a registered company. The registered provider must notify the regulator of any voluntary arrangement under Part 1 of the Insolvency Act 1986.
(2) The registered provider must notify the regulator of any order under section 899 of the Companies Act 2006 (court sanction for compromise or arrangement).
(3) An order under section 899 of Companies Act 2006 does not take effect until the registered provider has confirmed to the registrar of companies that the regulator has been notified.
(4) The registered provider must notify the regulator of any order under section 900 of the Companies Act 2006 (powers of court to facilitate reconstruction or amalgamation).
(5) The requirement in section 900(6) of the Companies Act 2006 (sending copy of order to registrar) is satisfied only if the copy is accompanied by confirmation that the regulator has been notified.”
25 For section 161 substitute—
“161 Company: conversion into registered society
(1) This section applies to a non-profit registered provider which is a registered company.
(2) The registered provider must notify the regulator of any resolution under section 115 of the Co-operative and Community Benefit Societies Act 2014 for converting the registered provider into a registered society.
(3) The registrar of companies may register a resolution under that section only if the registered provider has confirmed to the registrar that the regulator has been notified.
(4) The regulator must decide whether the new body is eligible for registration under section 112.
(5) If the new body is eligible for registration, the regulator must register it and designate it as a non-profit organisation.
(6) If the new body is not eligible for registration, the regulator must notify it of that fact.
(7) Pending registration, or notification that it is not eligible for registration, the new body is to be treated as if it were registered and designated as a non-profit organisation.
5 Jan 2016 : Column 184
26 For section 163 substitute—
“163 Registered society: restructuring
(1) This section applies to a non-profit registered provider which is a registered society.
(2) The registered provider must notify the regulator of any resolution passed by the society for the purposes of the restructuring provisions listed in subsection (4).
(3) The Financial Conduct Authority may register the resolution only if the registered provider has confirmed to the Financial Conduct Authority that the regulator has been notified.
(4) The following provisions of the Co-operative and Community Benefit Societies Act 2014 are the restructuring provisions—
(a) section 109 (amalgamation of societies);
(b) section 110 (transfer of engagements between societies);
(c) section 112 (conversion of society into a company etc).
(5) The regulator must decide whether the body created or to whom engagements are transferred (“the new body”) is eligible for registration under section 112.
(6) If the new body is eligible for registration, the regulator must register it and designate it as a non-profit organisation.
(7) If the new body is not eligible for registration, the regulator must notify it of that fact.
(8) Pending registration, or notification that it is not eligible for registration, the new body is to be treated as if it were registered and designated as a non-profit organisation.”
27 In section 165 (registered society: dissolution), for subsection (2) substitute—
“(2) The registered provider must notify the regulator.
(3) The Financial Conduct Authority may register the instrument under section 121 of that Act, or cause notice of the dissolution to be advertised under section 122 of that Act, only if the registered provider has confirmed to the Financial Conduct Authority that the regulator has been notified.”
28 Omit section 166 (winding up petition by regulator).29 After section 169 insert—
“Notification of constitutional changes
169A Registered societies: change of rules
A non-profit registered provider that is a registered society must notify the regulator of any change to the society’s rules.
169B Charity: change of objects
The trustees of a registered charity that is a non-profit registered provider must notify the regulator of any amendment to the charity’s objects.
169C Companies: change of articles etc
A non-profit registered provider that is a registered company must notify the regulator of—
(a) any amendment of the company’s articles of association,
(b) any change to its name or registered office.”
Directions about notifications
169D Directions about notifications
‘(1) The regulator may give directions about—
(a) the period within which notifications under sections 160 to 165 or 169A to 169C must be given by private registered providers;
(b) the content of those notifications.
(2) The regulator may give directions dispensing with notification requirements imposed by sections 160 to 165 or 169A to 169C.
(3) A direction under this section may be—
5 Jan 2016 : Column 185
(b) specific (whether as to particular registered providers, particular kinds of notification requirement or in any other way).
(4) A direction dispensing with a notification requirement may include conditions.
(5) The regulator must make arrangements for bringing a direction under this section to the attention of every registered provider to which it applies.”
30 In section 192 (overview), omit paragraph (c).31 Omit sections 211 to 214 and the italic heading before section 211 (constitutional changes to non-profit providers).
Part 3
Abolition of disposal proceeds fund
32 In the Housing and Regeneration Act 2008 omit—
(b) the italic heading before section 177.
33 Regulations under section152 in connection with the coming into force of paragraph 32 may, in particular, include provision to preserve the effect of sections 177 and 178 of the Housing and Regeneration Act 2008 for a period in relation to sums in a private registered provider’s disposal proceeds fund immediately before that paragraph comes into force (including later interest added under section 177(7) of that Act).
Part 4
enforcement powers
34 The Housing and Regeneration Act 2008 is amended as follows.35 In section 269 (appointment of new officers of non-profit registered providers) in subsection (1)(c), for “proper management of the body’s affairs” substitute “to ensure that the registered provider’s affairs are managed in accordance with legal requirements (imposed by or under an Act or otherwise)”.36 In section 275 (interpretation), for the definition of “mismanagement” substitute—
““mismanagement”, in relation to the affairs of a registered provider, means managed in breach of any legal requirements (imposed by or under an Act or otherwise);”.”—(Mr Marcus Jones.)
Brought up, read the First and Second time, and added to the Bill.
Amendment made: 4, page 33, line 6, leave out clause 78.—(Mr Marcus Jones.)
Clause 78 amends legislation that requires private registered providers to obtain consent before disposing of property. The purpose of the clause was to allow a disposal to refer to the right to buy deal. This clause is no longer needed because NS1 removes the general requirements for private registered providers to obtain consent before disposing of property.
Regulations: General
Amendments made: 6, page 76, line 22, leave out paragraph (b).
This is consequential on amendment 4.
Amendment 5, page 76, line 23, at end insert—
“( ) regulations under section (Conduct of housing administration etc) or paragraph 44 of Schedule (Conduct of housing administration: companies),”.—(Mr Marcus Jones.)
This ensures that the regulations mentioned in the amendment are subject to affirmative procedure.
5 Jan 2016 : Column 186
Recovery of social housing assistance: successors in title
“‘(1) Section 33 of the Housing and Regeneration Act 2008 (recovery of social housing assistance: interest and successors in title) is amended as follows.
(2) In subsection (6)(b), after “another person” insert “(“the successor”)”.
(3) After subsection (6) insert—
“(6A) But subsection (7) does not apply if—
(a) the successor is a person other than a registered provider of social housing, and
(b) at any time since the social housing assistance was given—
(i) a person has enforced a security over the social housing, or
(ii) the social housing has been disposed of by a body while it is being wound up or is in administration.””
(4) In subsection (7) for “that other person” substitute “the successor”.”.—(Mr Marcus Jones.)
Where the Homes and Community Agency gives financial assistance on condition that the recipient provides social housing, there are currently circumstances in which the financial assistance can be recovered from a successor in title to the recipient. The amendment limits the ability to recover from a successor in title in certain circumstances, for example where a mortgagee has taken steps to recover
possession
.
Brought up, read the First and Second time, and added to the Bill.
Housing administration order: providers of social housing in England
“‘(1) In this Chapter “housing administration order” means an order which—
(a) is made by the court in relation to a private registered provider of social housing that is—
(ii) a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014, or
(iii) a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011, and
(b) directs that, while the order is in force, the provider’s affairs, business and property are to be managed by a person appointed by the court.
(2) The person appointed for the purposes of the housing administration order is referred to in this Chapter as the “housing administrator”.
(3) The housing administrator must—
(a) manage the provider’s affairs, business and property so as to achieve the objective set out in section (Objective of housing administration), and
(b) carry out all other functions so as to achieve that objective.
(4) In relation to a housing administration order applying to a registered provider that is a foreign company, references in this section to the provider’s affairs, business and property are references to its UK affairs, business and property.”—(Mr Marcus Jones.)
This is the first of a number new clauses designed to introduce a special administration regime for private registered providers of social housing that have become insolvent. There are also restrictions on other insolvency procedures. The intention is for
5 Jan 2016 : Column 187 these new clauses to form a new Chapter in Part 4 of the Bill. References in the amendments to “this Chapter” or to “Chapter 3A” are to the new
Chapter
.
Brought up, read the First and Second time, and added to the Bill.
Objective of housing administration
“‘(1) The objective of a housing administration is to ensure that—
(a) that the registered provider’s social housing remains in the regulated housing sector, and
(b) that it becomes unnecessary, by one or more of the following means, for the housing administration order to remain in force for that purpose.
(a) the rescue as a going concern of the registered provider, and
(b) relevant transfers of some or all of the registered provider’s undertaking.
(3) A transfer is a “relevant” transfer if it is a transfer as a going concern to another private registered provider, or to two or more different providers, of so much of the undertaking as it is appropriate to transfer for the purpose of achieving the objective of the housing administration.
(4) The means by which relevant transfers may be effected in the case where the registered provider subject to the order is a company include, in particular—
(a) a transfer of the undertaking of the registered provider subject to the order, or of a part of its undertaking, to a wholly-owned subsidiary of that provider, and
(b) a transfer to a registered provider of securities of a wholly-owned subsidiary to which there has been a transfer within paragraph (a).
(5) In subsection (4) “wholly-owned subsidiary” has the meaning given by section 1159 of the Companies Act 2006.
(6) The objective of a housing administration may be achieved by relevant transfers to the extent only that—
(a) the rescue as a going concern of the registered provider is not reasonably practicable or is not reasonably practicable without the transfers,
(b) the rescue of the registered provider as a going concern would not achieve the objective of the housing administration or would not do so without the transfers,
(c) the transfers would produce a result for the registered provider’s creditors as a whole that is better than the result that would be produced without them, or
(d) the transfers would, without prejudicing the interests of the registered provider’s creditors as a whole, produce a result for the registered provider’s members as a whole that is better than the result that would be produced without them.
(7) In the case of a charitable incorporated organisation, the reference in subsection (6)(d) to the registered provider’s members is to be read as a reference to the charitable incorporated organisation.
(8) For the purposes of subsection (1)(a) social housing remains in the regulated housing sector for so long as it is owned by a private registered provider.”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
5 Jan 2016 : Column 188
Applications for housing administration orders
“‘(1) An application for a housing administration order may be made only—
(a) by the Secretary of State, or
(b) with the consent of the Secretary of State, by the Regulator of Social Housing.
(2) The applicant for a housing administration order in relation to a registered provider must give notice of the application to—
(a) every person who has appointed an administrative receiver of the provider,
(b) every person who is or may be entitled to appoint an administrative receiver of the registered provider, every person who is or may be entitled to make an appointment in relation to the registered provider under paragraph 14 of Schedule B1 to the Insolvency Act 1986 (appointment of administrators by holders of floating charges), and
(c) any other persons specified by housing administration rules.
(3) The notice must be given as soon as possible after the making of the application.
(4) In this section “administrative receiver” means—
(a) an administrative receiver within the meaning given by section 251 of the Insolvency Act 1986 for the purposes of Parts 1 to 7 of that Act, or in relation to a foreign company, a person whose functions are equivalent to those of an administrative receiver and relate only to its UK affairs, business and property.”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
Powers of court
“‘(1) On hearing an application for a housing administration order, the court has the following powers—
(b) it may dismiss the application,
(c) it may adjourn the hearing conditionally or unconditionally,
(d) it may make an interim order,
(e) it may treat the application as a winding-up petition and make any order the court could make under section 125 of the Insolvency Act 1986 (power of court on hearing winding-up petition), and
(f) it may make any other order which it thinks appropriate.
(2) The court may make a housing administration order in relation to a registered provider only if it is satisfied—
(a) that the registered provider is unable, or is likely to be unable, to pay its debts, or
(b) that, on a petition by the Secretary of State under section 124A of the Insolvency Act 1986, it would be just and equitable (disregarding the objective of the housing administration) to wind up the registered provider in the public interest.
(3) The court may not make a housing administration order on the ground set out in subsection (2)(b) unless the Secretary of State has certified to the court that the case is one in which the Secretary of State considers (disregarding the objective of the housing administration) that it would be appropriate to petition under section 124A of the Insolvency Act 1986.
5 Jan 2016 : Column 189
(4) The court has no power to make a housing administration order in relation to a registered provider which—
(a) is in administration under Schedule B1 to the Insolvency Act 1986, or
(b) has gone into liquidation (within the meaning of section 247(2) of the Insolvency Act 1986).
(5) A housing administration order comes into force—
(a) at the time appointed by the court, or
(b) if no time is appointed by the court, when the order is made.
(6) An interim order under subsection (1)(d) may, in particular—
(a) restrict the exercise of a power of the registered provider or of its relevant officers, or
(b) make provision conferring a discretion on a person qualified to act as an insolvency practitioner in relation to the registered provider.
(7) In subsection (6)(a) “relevant officer”—
(a) in relation to a company, means a director,
(b) in relation to a registered society, means a member of the management committee or other directing body of the society, and
(c) in relation to a charitable incorporated organisation, means a charity trustee (as defined by section 177 of the Charities Act 2011).
(8) In the case of a foreign company, subsection (6)(a) is to be read as a reference to restricting the exercise of a power of the registered provider or of its directors—
(a) within the United Kingdom, or
(b) in relation to the company’s UK affairs, business or property.
(9) For the purposes of this section a registered provider is unable to pay its debts if—
(a) it is deemed to be unable to pay its debts under section 123 of the Insolvency Act 1986, or
(b) it is an unregistered company which is deemed, as a result of any of sections 222 to 224 of the Insolvency Act 1986, to be so unable for the purposes of section 221 of that Act, or which would be so deemed if it were an unregistered company for the purposes of those sections.”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
Housing administrators
“‘(1) The housing administrator of a registered provider—
(a) is an officer of the court, and
(b) in carrying out functions in relation to the registered provider, is the registered provider’s agent.
(2) The management by the housing administrator of a registered provider of any of its affairs, business or property must be carried out for the purpose of achieving the objective of the housing administration as quickly and as efficiently as is reasonably practicable.
(3) The housing administrator of a registered provider must carry out functions in the way which, so far as it is consistent with the objective of the housing administration to do so, best protects—
(a) the interests of the registered provider’s creditors as a whole, and
(b) subject to those interests, the interests of the registered provider’s members as a whole.
(4) In the case of a charitable incorporated organisation, the reference in subsection (3)(b) to the interests of members is to the interests of the charitable incorporated organisation.
5 Jan 2016 : Column 190
(5) A person is not to be the housing administrator of a registered provider unless qualified to act as an insolvency practitioner in relation to the registered provider.
(6) If the court appoints two or more persons as the housing administrator of a registered provider, the appointment must set out—
(a) which (if any) of the functions of a housing administrator are to be carried out only by the appointees acting jointly,
(b) the circumstances (if any) in which functions of a housing administrator are functions of one of the appointees, or by particular appointees, acting alone, and
(c) the circumstances (if any) in which things done in relation to one of the appointees, or in relation to particular appointees, are to be treated as done in relation to all of them.”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
Conduct of administration etc
“‘(1) Schedule (Conduct of housing administration: companies) contains provision applying the provisions of Schedule B1 to the Insolvency Act 1986, and certain other legislation, to housing administration orders in relation to companies.
(2) The Secretary of State may by regulations provide for any provision of Schedule B1 to the Insolvency Act 1986 or any other insolvency legislation to apply, with or without modifications, to cases where a housing administration order is made in relation to a registered society or a charitable incorporated organisation.
(3) The Secretary of State may by regulations modify any insolvency legislation as it applies in relation to a registered society or a charitable incorporated organisation if the Secretary State considers the modifications are appropriate in connection with any provision made by or under this Chapter.
(4) In subsection (3) “insolvency legislation” means—
(a) the Insolvency Act 1986, or
(b) any other legislation (whenever passed or made) that relates to insolvency or makes provision by reference to anything that is or may be done under the Insolvency Act 1986.
(5) The power to make rules under section 411 of the Insolvency Act 1986 is to apply for the purpose of giving effect to this Chapter as it applies for the purpose of giving effect to Parts 1 to 7 of that Act (and, accordingly, as if references in that section to those Parts included references to this Chapter).
(6) Section 413(2) of the Insolvency Act 1986 (duty to consult Insolvency Rules Committee about rules) does not apply to rules made under section 411 of that Act as a result of this section.”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
Winding-up Orders
“‘(1) This section applies if a person other than the Secretary of State petitions for the winding-up of a registered provider that is—
(b) a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014, or
(c) a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011.
5 Jan 2016 : Column 191
(2) he court may not exercise its powers on a winding-up petition unless—If an application for a housing administration order in relation to the registered provider is made to the court in accordance with section (Applications for housing administration orders) before a winding-up order is made on the petition, the court may exercise its powers under section (Powers of court) (instead of exercising its powers on the petition).
(a) notice of the petition has been given to the Regulator of Social Housing, and
(b) a period of at least 28 days has elapsed since that notice was given.
(3) The Regulator of Social Housing must give the Secretary of State a copy of any notice given under subsection (2)(a).
(4) References in this section to the court’s powers on a winding-up petition are to—
(a) its powers under section 125 of the Insolvency Act 1986 (other than its power of adjournment), and
(b) its powers under section 135 of the Insolvency Act 1986.”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
Voluntary Winding Up
“‘(1) This section applies to a private registered provider that is—
(b) a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014, or
(c) a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011.
(2) The registered provider has no power to pass a resolution for voluntary winding up without the permission of the court.
(3) Permission may be granted by the court only on an application made by the registered provider.
(4) The court may not grant permission unless—
(a) notice of the application has been given to the Regulator of Social Housing, and
(b) a period of at least 28 days has elapsed since that notice was given.
(5) If an application for a housing administration order in relation to the registered provider is made to the court in accordance with section (Applications for housing administration orders) after an application for permission under this section has been made and before it is granted, the court may exercise its powers under section (Powers of court).
(6) The Regulator of Social Housing must give the Secretary of State a copy of any notice given under subsection (4)(a).
(7) In this section “a resolution for voluntary winding up” has the same meaning as in the Insolvency Act 1986.”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
Making of ordinary administration orders
“‘(1) This section applies if a person other than the Secretary of State makes an ordinary administration application in relation to a private registered provider that is—
(b) a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014, or
5 Jan 2016 : Column 192
(c) a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011.
(2) The court must dismiss the application if—
(a) a housing administration order is in force in relation to the registered provider, or
(b) a housing administration order has been made in relation to the registered provider but is not yet in force.
(3) If subsection (2) does not apply, the court, on hearing the application, must not exercise its powers under paragraph 13 of Schedule B1 to the Insolvency Act 1986 (other than its power of adjournment) unless—
(a) notice of the application has been given to the Regulator of Social Housing,
(b) a period of at least 28 days has elapsed since that notice was given, and
(c) there is no application for a housing administration order which is outstanding.
(4) The Regulator of Social Housing must give the Secretary of State a copy of any notice given under subsection (3)(a).
(5) Paragraph 44 of Schedule B1 to the Insolvency Act 1986 (interim moratorium) does not prevent, or require the permission of the court for, the making of an application for a housing administration order.
(6) On the making of a housing administration order in relation to a registered provider, the court must dismiss any ordinary administration application made in relation to the registered provider which is outstanding.
(7) In this section “ordinary administration application” means an application in accordance with paragraph 12 of Schedule B1 to the Insolvency Act 1986.”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
Administrator appointments by creditors
“‘(1) Subsections (2) to (4) make provision about appointments under paragraph 14 or 22 of Schedule B1 to the Insolvency Act 1986 (powers to appoint administrators) in relation to a private registered provider that is—
(b) a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014, or
(c) a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011.
(a) a housing administration order is in force in relation to the registered provider,
(b) a housing administration order has been made in relation to the registered provider but is not yet in force, or
(c) an application for a housing administration order in relation to the registered provider is outstanding,
a person may not take any step to make an appointment.
(3) In any other case, an appointment takes effect only if each of the following conditions are met.
(a) that notice of the appointment has been given to the Regulator of Social Housing, accompanied by a copy of every document in relation to the appointment that is filed or lodged with the court in accordance with paragraph 18 or 29 of Schedule B1 to the Insolvency Act 1986,
(b) that a period of 28 days has elapsed since that notice was given,
5 Jan 2016 : Column 193
(c) that there is no outstanding application to the court for a housing administration order in relation to the registered provider, and
(d) that the making of an application for a housing administration order in relation to the registered provider has not resulted in the making of a housing administration order which is in force or is still to come into force.
(5) The Regulator of Social Housing must give the Secretary of State a copy of any notice given under subsection (4)(a) (and a copy of the accompanying documents).
(6) Paragraph 44 of Schedule B1 to the Insolvency Act 1986 (interim moratorium) does not prevent, or require the permission of the court for, the making of an application for a housing administration order at any time before the appointment takes effect.”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
Enforcement of security
“‘(1) This section applies in relation to a private registered provider that is—
(b) a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014, or
(c) a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011
(2) A person may not take any step to enforce a security over property of the registered provider unless—
(a) notice of the intention to do so as been given to the Regulator of Social Housing, and
(b) a period of at least 28 days has elapsed since the notice was given.
(3) In the case of a company which is a foreign company, the reference to the property of the company is to its property in the United Kingdom.
(4) The Regulator of Social Housing must give the Secretary of State a copy of any notice given under subsection (2)(a).”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
Grants and loans where housing administration order is made
“‘(1) If a housing administration order has been made in relation to a registered provider, the Secretary of State may make grants or loans to the registered provider of such amounts as appear to the Secretary of State appropriate for achieving the objective of the housing administration.
(2) A grant under this section may be made on any terms and conditions the Secretary of State considers appropriate (including provision for repayment, with or without interest).”—(Mr Marcus Jones)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
5 Jan 2016 : Column 194
Indemnities where housing administration order is made
“‘(1) If a housing administration order has been made in relation to a registered provider, the Secretary of State may agree to indemnify persons in respect of one or both of the following—
(a) liabilities incurred in connection with the carrying out of functions by the housing administrator, and
(b) loss or damage sustained in that connection.
(2) The agreement may be made in whatever manner, and on whatever terms, the Secretary of State considers appropriate.
(3) As soon as practicable after agreeing to indemnify persons under this section, the Secretary of State must lay a statement of the agreement before Parliament.
(4) For repayment of sums paid by the Secretary of State in consequence of an indemnity agreed to under this section, see section (Indemnities: repayment by registered provideretc).
(5) The power of the Secretary of State to agree to indemnify persons—
(a) is confined to a power to agree to indemnify persons in respect of liabilities, loss and damage incurred or sustained by them as relevant persons, but
(b) includes power to agree to indemnify persons (whether or not they are identified or identifiable at the time of the agreement) who subsequently become relevant persons.
(6) The following are relevant persons for the purposes of this section—
(a) the housing administrator,
(b) an employee of the housing administrator,
(c) a partner or employee of a firm of which the housing administrator is a partner,
(d) a partner or employee of a firm of which the housing administrator is an employee,
(e) a partner of a firm of which the housing administrator was an employee or partner at a time when the order was in force,
(f) a body corporate which is the employer of the housing administrator,
(g) an officer, employee or member of such a body corporate, and
(h) a Scottish firm which is the employer of the housing administrator or of which the housing administrator is a partner.
(7) For the purposes of subsection (6)—
(a) references to the housing administrator are to be read, where two or more persons are appointed as the housing administrator, as references to any one or more of them, and
(b) references to a firm of which a person was a partner or employee at a particular time include a firm which holds itself out to be the successor of a firm of which the person was a partner or employee at that time.”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the first and second time, and added to the Bill.
Indemnities: repayment by registered provider etc
“‘(1) This section applies where a sum is paid out by the Secretary of State in consequence of an indemnity agreed to under section (Indemnities where housing administration order is made) in relation to the housing administrator of a registered provider.
5 Jan 2016 : Column 195
(2) The registered provider must pay the Secretary of State—
(a) such amounts in or towards the repayment to the Secretary of State of that sum as the Secretary of State may direct, and
(b) interest on amounts outstanding under this subsection at such rates as the Secretary of State may direct.
(3) The payments must be made by the registered provider at such times and in such manner as the Secretary of State may determine.
(4) Subsection (2) does not apply in the case of a sum paid by the Secretary of State for indemnifying a person in respect of a liability to the registered provider.
(5) The Secretary of State must lay before Parliament a statement, relating to the sum paid out in consequence of the indemnity—
(a) as soon as practicable after the end of the financial year in which the sum is paid out, and
(b) if subsection (2) applies to the sum, as soon as practicable after the end of each subsequent financial year in relation to which the repayment condition has not been met.
(6) The repayment condition is met in relation to a financial year if—
(a) the whole of the sum has been repaid to the Secretary of State before the beginning of the year, and
(b) the registered provider was not at any time during the year liable to pay interest on amounts that became due in respect of the sum.”(Mr Marcus Jones.)
See Member’s explanatory statement for NC8.
Brought up, read the first and second time, and added to the Bill.
Guarantees where housing administration order is made
“‘(1) If a housing administration order has been made in relation to a registered provider the Secretary of State may guarantee—
(a) the repayment of any sum borrowed by the registered provider while that order is in force,
(b) the payment of interest on any sum borrowed by the registered provider while that order is in force, and
(c) the discharge of any other financial obligation of the registered provider in connection with the borrowing of any sum while that order is in force.
(2) The Secretary of State may give the guarantees in whatever manner, and on whatever terms, the Secretary of State considers appropriate.
(3) As soon as practicable after giving a guarantee under this section, the Secretary of State must lay a statement of the guarantee before Parliament.
(4) For repayment of sums paid by the Secretary of State under a guarantee given under this section, see section (Guarantees: repayment by registered provider etc).”—(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the first and second time, and added to the Bill.
Guarantees: repayment by registered provider etc
“‘(1) This section applies where a sum is paid out by the Secretary of State under a guarantee given by the Secretary of State under section (Guarantees where housing administration order is made) in relation to a registered provider.
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(2) The registered provider must pay the Secretary of State—
(a) such amounts in or towards the repayment to the Secretary of State of that sum as the Secretary of State may direct, and
(b) interest on amounts outstanding under this subsection at such rates as the Secretary of State may direct.
(3) The payments must be made by the registered provider at such times, and in such manner, as the Secretary of State may from time to time direct.
(4) The Secretary of State must lay before Parliament a statement, relating to the sum paid out under the guarantee—
(a) as soon as practicable after the end of the financial year in which the sum is paid out, and
(b) as soon as practicable after the end of each subsequent financial year in relation to which the repayment condition has not been met.
(5) The repayment condition is met in relation to a financial year if—
(a) the whole of the sum has been repaid to the Secretary of State before the beginning of the year, and
(b) the registered provider was not at any time during the year liable to pay interest on amounts that became due in respect of the sum.” —(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
Modification of this Chapter under the Enterprise Act 2002
‘(1) The power to modify or apply enactments conferred on the Secretary of State by each of the sections of the Enterprise Act 2002 mentioned in subsection (2) includes power to make such consequential modifications of this Chapter as the Secretary of State considers appropriate in connection with any other provision made under that section.
(a) sections 248 and 277 of the Enterprise Act 2002 (amendments consequential on that Act), and
(b) section 254 of the Enterprise Act 2002 (power to apply insolvency law to foreign companies).” —(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
Registered societies: ordinary administration procedure etc
In section 118 of the Co-operative and Community Benefit Societies Act 2014 (power to apply provisions about company arrangements and administration to registered societies, subject to exception in subsection (3)(a) for registered providers), in subsection (3), omit paragraph (a).” —(Mr Marcus Jones.)
Section 118 of the Co-operative and Community Benefit Societies Act 2014 confers an order-making power to apply legislation about company arrangements and administration in relation to registered societies other than registered providers of social housing. This new Clause removes the exclusion in relation to registered providers of social
housing
.
Brought up, read the First and Second time, and added to the Bill.
5 Jan 2016 : Column 197
Amendments to housing moratorium and consequential amendments
Schedule (Amendments to housing moratorium and consequential amendments) contains amendments to do with this Chapter.”—(Mr Marcus Jones.)
Brought up, read the First and Second time, and added to the Bill.
Interpretation of Chapter
‘(1) In this Chapter— In this Chapter references to the housing administrator of a registered provider—
“business”, “member”, “property” and “security” have the same meaning as in the Insolvency Act 1986;
“charitable incorporated organisation” means a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011;
(a) a company registered under the Companies Act 2006, or(b) an unregistered company;
“the court”, in relation to a company or registered society, means the court having jurisdiction to wind up the company or registered society;
“foreign company” means a company incorporated outside the United Kingdom;
“housing administration order” has the meaning given by section (Housing administration order);
“housing administration rules” means rules made under section 411 of the Insolvency Act 1986 as a result of section (Conduct of housing administration) above;
“housing administrator” has the meaning given by section (Housing administration order) and is to be read in accordance with subsection (3) below;
“financial year” means a period of 12 months ending with 31 March;
“legislation” includes provision made by or under—
(a) an Act,(b) an Act of the Scottish Parliament,(c) Northern Ireland legislation, or(d) a Measure or Act of the National assembly for Wales
“objective of the housing administration” is to be read in accordance with section (Objective of a housing administration);
“private registered provider” means a private registered provider of social housing (see section 80 of the Housing and Regeneration Act 2008);
“registered provider” means a registered provider of social housing (see section 80 of the Housing and Regeneration Act 2008);
“registered society” has the same meaning as in the Co-operative and Community Benefit Societies Act 2014;
“Regulator of Social Housing” has the meaning given by section 92A of the Housing and Regeneration Act 2008;
“Scottish firm” means a firm constituted under the law of Scotland;
“UK affairs, business and property”, in relation to a company, means—
(a) its affairs and business so far as carried on in the United Kingdom, and(b) its property in the United Kingdom;
“unregistered company” means a company that is not registered under the Companies Act 2006.
5 Jan 2016 : Column 198
(a) include a person appointed under paragraph 91 or 103 of Schedule B1 to the Insolvency Act 1986, as applied by Part 1 of Schedule (Conduct of housing administration) to this Act or regulations under section (Conduct of housing administration etc), to be the housing administrator of the registered provider, and
(b) if two or more persons are appointed as the housing administrator of the registered provider, are to be read in accordance with the provision made under section (Housing administrators).
(2) References in this Chapter to a person qualified to act as an insolvency practitioner in relation to a registered provider are to be read in accordance with Part 13 of the Insolvency Act 1986, but as if references in that Part to a company included a company registered under the Companies Act 2006 in Northern Ireland.
(3) For the purposes of this Chapter an application made to the court is outstanding if it—
(a) has not yet been granted or dismissed, and
(4) An application is not to be taken as having been dismissed if an appeal against the dismissal of the application, or a subsequent appeal, is pending.
(5) An appeal is to be treated as pending for this purpose if—
(a) an appeal has been brought and has not been determined or withdrawn,
(b) an application for permission to appeal has been made but has not been determined or withdrawn, or
(c) no appeal has been brought and the period for bringing one is still running.
(6) References in this Chapter to a provision of the Insolvency Act 1986 (except the references in subsection (2) above)—
(a) in relation to a company, are to that provision without the modifications made by Part 1 of Schedule (Conduct of housing administration etc) to this Act,
(b) in relation to a registered society, are to that provision as it applies to registered societies otherwise than by virtue of regulations under section (Conduct of housing administration etc) (if at all), and
(c) in relation to a charitable incorporated organisation, are to that provision as it applies to charitable incorporated organisations otherwise than by virtue of regulations under section (Conduct of housing administration etc) (if at all).” —(Mr Marcus Jones.)
See Member’s explanatory statement for NC8.
Brought up, read the First and Second time, and added to the Bill.
Application of Part to Northern Ireland
‘(1) This section makes provision about the application of this Chapter to Northern Ireland.
(2) Any reference to any provision of the Insolvency Act 1986 is to have effect as a reference to the corresponding provision of the Insolvency (Northern Ireland) Order 1989.
(3) Section (Interpretation of Part)(3) is to have effect as if the reference to Northern Ireland were to England and Wales or Scotland.” —(Mr Marcus Jones.)
See Member’s explanatory statement for
NC8
.
Brought up, read the First and Second time, and added to the Bill.
5 Jan 2016 : Column 199
Conduct of housing administration: companies
Part 1
Modifications of Schedule B1 to the Insolvency Act 1981
Introductory
1 (1) The applicable provisions of Schedule B1 to the Insolvency Act 1986 are to have effect in relation to a housing administration order that applies to a company as they have effect in relation to an administration order under that Schedule applies to a company, but with the modifications set out in this Part of this Schedule.
(2) The applicable provisions of Schedule B1 to the Insolvency Act 1986 are—
(a) paragraphs 1, 40 to 49, 54, 59 to 68, 70 to 75, 79, 83 to 91, 98 to 107, 109 to 111 and 112 to 116, and
(b) paragraph 50 (until the repeal of that paragraph by Schedule 10 to the Small Business, Enterprise and Employment Act 2015 comes into force).
General modifications of the applicable provisions
2 Those paragraphs are to have effect as if—
(a) for “administration application”, in each place, there were substituted “housing administration application”,
(b) for “administration order”, in each place, there were substituted “housing administration order”,
(c) for “administrator”, in each place, there were substituted “housing administrator”,
(d) for “enters administration”, in each place, there were substituted “enters housing administration”,
(e) for “in administration”, in each place, there were substituted “in housing administration”, and
(f) for “purpose of administration”, in each place (other than in paragraph 111(1)), there were substituted “objective of the housing administration”.
Specific modifications
3 Paragraph 1 (administration) is to have effect as if—
(a) for sub-paragraph (1) there were substituted—
“(1) In this Schedule “housing administrator”, in relation to a company, means a person appointed by the court for the purposes of a housing administration order to manage its affairs, business and property.”, and
(b) in sub-paragraph (2), for “Act” there were substituted “Schedule”.
4 Paragraph 40 (dismissal of pending winding-up petition) is to have effect as if sub-paragraphs (1)(b), (2) and (3) were omitted.
5 Paragraph 42 (moratorium on insolvency proceedings) is to have effect as if sub-paragraphs (4) and (5) were omitted.
6 Paragraph 44 (interim moratorium) is to have effect as if sub-paragraphs (2) to (4), (6) and (7)(a) to (c) were omitted.
7 Paragraph 46(6) (date for notifying administrator’s appointment) is to have effect as if for paragraphs (a) to (c) there were substituted “the date on which the housing administration order comes into force”.
8 Paragraph 49 (administrator’s proposals) is to have effect as if—
(a) in sub-paragraph (2)(b) for “objective mentioned in paragraph 3(1)(a) or (b) cannot be achieved” there were substituted “objective of the housing administration should be achieved by means other than just a rescue of the company as a going concern”, and
(b) in sub-paragraph (4), after paragraph (a) there were inserted—
“(aa) to the Secretary of State and the Regulator of Social Housing,”.
5 Jan 2016 : Column 200
9 Paragraph 54 is to have effect as if the following were substituted for it—
“54 (1) The housing administrator of a company may on one or more occasions revise the proposals included in the statement made under paragraph 49 in relation to the company.
(2) If the housing administrator thinks that a revision is substantial, the housing administrator must send a copy of the revised proposals—
(a) to the registrar of companies,
(b) to the Secretary of State and the Regulator of Social Housing,
(c) to every creditor of the company, other than an opted-out creditor, of whose claim and address the housing administrator is aware, and
(d) to every member of the company of whose address the housing administrator is aware.
(3) A copy sent in accordance with sub-paragraph (2) must be sent within the prescribed period.
(4) The housing administrator is to be taken to have complied with sub-paragraph (2)(d) if the housing administrator publishes, in the prescribed manner, a notice undertaking to provide a copy of the revised proposals free of charge to any member of the company who applies in writing to a specified address.
(5) A housing administrator who fails without reasonable excuse to comply with this paragraph commits an offence.”
10 Paragraph 60 (powers of an administrator) has effect as if after that sub-paragraph (2) there were inserted—
“(3) The housing administrator of a company has the power to act on behalf of the company for the purposes of provision contained in any legislation which confers a power on the company or imposes a duty on it.
(4) In sub-paragraph (2) “legislation” has the same meaning as in the Chapter 3A of Part 4 of the Housing and Planning Act 2015.”
11 Paragraph 68 (management duties of an administrator) is to have effect as if—
(a) in sub-paragraph (1), for paragraphs (a) to (c) there were substituted “the proposals as—
(a) set out in the statement made under paragraph 49 in relation to the company, and
(b) from time to time revised under paragraph 54,
for achieving the objective of the housing administration.”, and
(b) in sub-paragraph (3), for paragraphs (a) to (d) there were substituted “the directions are consistent with the achievement of the objective of the housing administration”.
12 Paragraph 73(3) (protection for secured or preferential creditor) is to have effect as if for “or modified” there were substituted “under paragraph 54”.
13 Paragraph 74 (challenge to administrator’s conduct) is to have effect as if—
(a) for sub-paragraph (2) there were substituted—
“(2) If a company is in housing administration, a person mentioned in sub-paragraph (2A) may apply to the court claiming that the housing administrator is acting in a manner preventing the achievement of the objective of the housing administration as quickly and efficiently as is reasonably practicable.
(2A) The persons who may apply to the court are—
(b) with the consent of the Secretary of State, the Regulator of Social Housing;
(c) a creditor or member of the company.”,
5 Jan 2016 : Column 201
(i) at the end of paragraph (b) there were inserted “or”, and
(ii) paragraph (c) (and the “or” before it) were omitted, and
(c) after that sub-paragraph there were inserted—
“(7) In the case of a claim made otherwise than by the Secretary of State or the Regulator of Social Housing, the court may grant a remedy or relief or make an order under this paragraph only if it has given the Secretary of State or the Regulator a reasonable opportunity of making representations about the claim and the proposed remedy, relief or order.
(8) The court may grant a remedy or relief or make an order on an application under this paragraph only if it is satisfied, in relation to the matters that are the subject of the application, that the housing administrator—
in a way that is inconsistent with the achievement of the objective of the housing administration as quickly and as efficiently as is reasonably practicable.
(9) Before the making of an order of the kind mentioned in sub-paragraph (4)(d)—
(a) the court must notify the housing administrator of the proposed order and of a period during which the housing administrator is to have the opportunity of taking steps falling within sub-paragraphs (10) to (12), and
(b) the period notified must have expired without the taking of such of those steps as the court thinks should have been taken,
and that period must be a reasonable period.
(10) In the case of a claim under sub-paragraph (1)(a), the steps referred to in sub-paragraph (9) are—
(a) ceasing to act in a manner that unfairly harms the interests to which the claim relates,
(b) remedying any harm unfairly caused to those interests, and
(c) steps for ensuring that there is no repetition of conduct unfairly causing harm to those interests.
(11) In the case of a claim under sub-paragraph (1)(b), the steps referred to in sub-paragraph (9) are steps for ensuring that the interests to which the claim relates are not unfairly harmed.
(12) In the case of a claim under sub-paragraph (2), the steps referred to in sub-paragraph (9) are—
(a) ceasing to act in a manner preventing the achievement of the objective of the housing administration as quickly and as efficiently as is reasonably practicable,
(b) remedying the consequences of the housing administrator having acted in such a manner, and
(c) steps for ensuring that there is no repetition of conduct preventing the achievement of the objective of the housing administration as quickly and as efficiently as is reasonably practicable.”
14 Paragraph 75(2) (misfeasance) is to have effect as if after paragraph (b) there were inserted—
“(ba) a person appointed as an administrator of the company under the provisions of this Act, as they have effect in relation to administrators other than housing administrators,”.
15 Paragraph 79 (end of administration) is to have effect as if—
(a) for sub-paragraphs (1) and (2) there were substituted—
“(1) On an application made by a person mentioned in sub-paragraph (2), the court may provide for the appointment of a housing administrator of a company to cease to have effect from a specified time.
5 Jan 2016 : Column 202
(2) An application may be made to the court under this paragraph—
(a) by the Secretary of State,
(b) with the consent of the Secretary of State, by the Regulator of Social Housing, or
(c) with the consent of the Secretary of State, by the housing administrator.”, and
(b) sub-paragraph (3) were omitted.
16 Paragraph 83(3) (notice to registrar when moving to voluntary liquidation) is to have effect as if after “may” there were inserted “, with the consent of the Secretary of State or of the Regulator of Social Housing,”.
17 Paragraph 84 (notice to registrar when moving to dissolution) is to have effect as if—
(a) in sub-paragraph (1), for “to the registrar of companies” there were substituted—
(a) to the Secretary of State and the Regulator of Social Housing, and
(b) if directed to do so by either the Secretary of State or the Regulator of Social Housing, to the registrar of companies.”,
(b) sub-paragraph (2) were omitted, and
(c) in sub-paragraphs (3) to (6), for “(1)”, in each place, there were substituted “(1)(b)”.
18 Paragraph 87(2) (resignation of administrator) is to have effect as if for paragraphs (a) to (d) there were substituted “by notice in writing to the court”.
19 Paragraph 89(2) (administrator ceasing to be qualified) is to have effect as if for paragraphs (a) to (d) there were substituted “to the court”.
20 Paragraph 90 (filling vacancy in office of administrator) is to have effect as if for “Paragraphs 91 to 95 apply” there were substituted “Paragraph 91 applies”.
21 Paragraph 91 (vacancies in court appointments) is to have effect as if—
(a) for sub-paragraph (1) there were substituted—
“(1) The court may replace the housing administrator on an application made—
(a) by the Secretary of State,
(b) with the consent of the Secretary of State, by the Regulator of Social Housing, or
(c) where more than one person was appointed to act jointly as the housing administrator, by any of those persons who remains in office.”
(b) sub-paragraph (2) were omitted.
22 Paragraph 98 (discharge from liability on vacation of office) is to have effect as if sub-paragraphs (2)(b) and (ba), (3) and (3A) were omitted.
23 Paragraph 99 (charges and liabilities upon vacation of office by administrator) is to have effect as if—
(a) in sub-paragraph (4), for the words from the beginning to “cessation”, in the first place, there were substituted “A sum falling within sub-paragraph (4A)”,
(b) after that sub-paragraph there were inserted—
“(4A) A sum falls within this sub-paragraph if it is—
(a) a sum payable in respect of a debt or other liability arising out of a contract that was entered into before cessation by the former housing administrator or a predecessor,
(b) a sum that must be repaid by the company in respect of a grant that was made under section (Grants and loans where housing administration order is made) of the Housing and Planning Act 2015 before cessation,
(c) a sum that must be repaid by the company in respect of a loan made under that section before cessation or that must be paid by the company in respect of interest payable on such a loan,
5 Jan 2016 : Column 203
(d) a sum payable by the company under section (Indemnities: repayment by registered provider etc) of that Act in respect of an agreement to indemnify made before cessation, or
(e) a sum payable by the company under section (Guarantees: repayment by registered provider etc) of that Act in respect of a guarantee given before cessation.”, and
(c) in sub-paragraph (5), for “(4)” there were substituted “(4A)(a)”.
24 Paragraph 100 (joint and concurrent administrators) is to have effect as if sub-paragraph (2) were omitted.
25 Paragraph 101(3) (joint administrators) is to have effect as if after “87 to” there were inserted “91, 98 and”.
26 Paragraph 103 (appointment of additional administrators) is to have effect as if—
(a) in sub-paragraph (2) the words from the beginning to “order” were omitted and for paragraph (a) there were substituted—
(aa) the Regulator of Social Housing, or”,
(b) after that sub-paragraph there were inserted—
“(2A) The consent of the Secretary of State is required for an application by the Regulator of Social Housing for the purposes of sub-paragraph (2).”, and
(c) sub-paragraphs (3) to (5) were omitted.
27 Paragraph 106(2) (penalties) is to have effect as if paragraphs (a), (b), (f), (g), (i) and (l) to (n) were omitted.
28 Paragraph 109 (references to extended periods) is to have effect as if “or 108” were omitted.
29 Paragraph 111 (interpretation) is to have effect as if—
(a) in sub-paragraph (1), the definitions of “correspondence”, “holder of a qualifying floating charge”, “the purpose of administration” and “unable to pay its debts” were omitted,
(b) in that sub-paragraph, at the appropriate places were inserted—
““company” and “court” have the same meaning as in Chapter 3A of Part 4 of the Housing and Planning Act 2015,”,
““housing administration application” means an application to the court for a housing administration order under Chapter 3A of Part 4 of the Housing and Planning Act 2015;”,
““housing administration order” has the same meaning as in Chapter 3A of Part 4 of the Housing and Planning Act 2015;”,
““objective”, in relation to a housing administration, is to be read in accordance with section (Objective of housing administration) of the Housing and Planning Act 2015,”, and
““prescribed” means prescribed by housing administration rules within the meaning of Chapter 3A of Part 4 of the Housing and Planning Act 2015.”,
(c) sub-paragraphs (1A) and (1B) were omitted, and
(d) after sub-paragraph (3) there were inserted—
“(4) For the purposes of this Schedule a reference to a housing administration order includes a reference to an appointment under paragraph 91 or 103.”
Part 2
Further modifications of Schedule B1 to Insolvency Act 1986: foreign companies
Introductory
30 (1) This Part of this Schedule applies in the case of a housing administration order applying to a foreign company.
(2) The provisions of Schedule B1 to the Insolvency Act 1986 mentioned in paragraph 1 above (as modified by Part 1 of this Schedule) have effect in relation to the company with the further modifications set out in this Part of this Schedule.
(3) The Secretary of State may by regulations amend this Part of this Schedule so as to add more modifications.
5 Jan 2016 : Column 204
(a) the provisions of Schedule B1 to the Insolvency Act 1986 that are mentioned in paragraph 1 above are referred to as the applicable provisions, and
(b) references to those provisions, or to provisions comprised in them, are references to those provisions as modified by Part 1 of this Schedule.
32 In the case of a foreign company—
(a) paragraphs 42(2), 83 and 84 of Schedule B1 to the Insolvency Act 1986 do not apply,
(b) paragraphs 46(4), 49(4)(a), 54(2)(a), 71(5) and (6), 72(4) and (5) and 86 of that Schedule apply only if the company is subject to a requirement imposed by regulations under section 1043 or 1046 of the Companies Act 2006 (unregistered UK companies or overseas companies), and
(c) paragraph 61 of that Schedule does not apply.
33 (1) The applicable provisions and Schedule 1 to the Insolvency Act 1986 (as applied by paragraph 60(1) of Schedule B1 to that Act) are to be read by reference to the limitation imposed on the scope of the housing administration order in question as a result of section (Housing administration order)(4) above.
(2) Sub-paragraph (1) has effect, in particular, so that—
(a) a power conferred, or duty imposed, on the housing administrator by or under the applicable provisions or Schedule 1 to the Insolvency Act 1986 is to be read as being conferred or imposed in relation to the company’s UK affairs, business and property,
(b) references to the company’s affairs, business or property are to be read as references to its UK affairs, business and property,
(c) references to goods in the company’s possession are to be read as references to goods in its possession in the United Kingdom,
(d) references to premises let to the company are to be read as references to premises let to it in the United Kingdom, and
(e) references to legal process instituted or continued against the company or its property are to be read as references to such legal process relating to its UK affairs, business and property.
34 Paragraph 41 of Schedule B1 to the Insolvency Act 1986 (dismissal of receivers) is to have effect as if—
(a) for sub-paragraph (1) there were substituted—
“(1) Where a housing administration order takes effect in respect of a company—
(a) a person appointed to perform functions equivalent to those of an administrative receiver, and
(b) if the housing administrator so requires, a person appointed to perform functions equivalent to those of a receiver,
must refrain, during the period specified in sub-paragraph (1A), from performing those functions in the United Kingdom or in relation to any of the company’s property in the United Kingdom.
(a) in the case of a person mentioned in sub-paragraph (1)(a), the period while the company is in housing administration, and
(b) in the case of a person mentioned in sub-paragraph (1)(b), during so much of that period as is after the date on which the person is required by the housing administrator to refrain from performing functions.”, and
(b) sub-paragraphs (2) to (4) were omitted.
5 Jan 2016 : Column 205
35 Paragraph 43(6A) of Schedule B1 to the Insolvency Act 1986 (moratorium on appointment to receiverships) is to have effect as if for “An administrative receiver” there were substituted “A person with functions equivalent to those of an administrative receiver”.
36 Paragraph 44(7) of Schedule B1 to the Insolvency Act 1986 (proceedings to which interim moratorium does not apply) is to have effect as if for paragraph (d) there were substituted—
(d) the carrying out of functions by a person who (whenever appointed) has functions equivalent to those of an administrative receiver of the company.”
37 Paragraph 64 of Schedule B1 to the Insolvency Act 1986 (general powers of administrator) is to have effect as if—
(a) in sub-paragraph (1), after “power” there were inserted “in relation to the affairs or business of the company so far as carried on in the United Kingdom or to its property in the United Kingdom”, and
(b) in sub-paragraph (2)(b), after “instrument” there were inserted “or by the law of the place where the company is incorporated”.
Part 3
Other modifications
General modifications
38 (1) References within sub-paragraph (2) which are contained—
(a) in the Insolvency Act 1986 (other than Schedule B1 to that Act), or
(b) in other legislation passed or made before this Act,
include references to whatever corresponds to them for the purposes of this paragraph.
(2) The references are those (however expressed) which are or include references to—
(a) an administrator appointed by an administration order,
(c) an application for an administration order,
(d) a company in administration,
(e) entering into administration, and
(f) Schedule B1 to the Insolvency Act 1986 or a provision of that Schedule.
(3) For the purposes of this paragraph—
(a) a housing administrator of a company corresponds to an administrator appointed by an administration order,
(b) a housing administration order in relation to a company corresponds to an administration order,
(c) an application for a housing administration order in relation to a company corresponds to an application for an administration order,
(d) a company in housing administration corresponds to a company in administration,
(e) entering into housing administration in relation to a company corresponds to entering into administration, and
(f) what corresponds to Schedule B1 to the Insolvency Act 1986 or a provision of that Schedule is that Schedule or that provision as applied by Part 1 of this Schedule.
39 (1) Paragraph 38, in its application to section 1(3) of the Insolvency Act 1986, does not entitle the housing administrator of an unregistered company to make a proposal under Part 1 of the Insolvency Act 1986 (company voluntary arrangements).
(2) Paragraph 38 does not confer any right under section 7(4) of the Insolvency Act 1986 (implementation of voluntary arrangements) for a supervisor of voluntary arrangements to apply for a housing administration order in relation to a company that is a private registered provider.
5 Jan 2016 : Column 206
(3) Paragraph 38 does not apply to section 359 of the Financial Services and Markets Act 2000 (administration order).
Modifications of the Insolvency Act 1986
40 The following provisions of the Insolvency Act 1986 are to have effect in the case of any housing administration with the following modifications.
41 Section 5 (effect of approval of voluntary arrangements) is to have effect as if after subsection (4) there were inserted—
“(4A) Where the company is in housing administration, the court must not make an order or give a direction under subsection (3) unless—
(a) the court has given the Secretary of State or the Regulator of Social Housing a reasonable opportunity of making representations to it about the proposed order or direction, and
(b) the order or direction is consistent with the objective of the housing administration.
(4B) In subsection (4A) “in housing administration” and “objective of the housing administration” are to be read in accordance with Schedule B1 to this Act, as applied by Part 1 of Schedule (Conduct of housing administration: companies) to the Housing and Planning Act 2015.”
42 Section 6 (challenge of decisions in relation to voluntary arrangements) is to have effect as if—
(a) in subsection (2), for “this section” there were substituted “subsection (1)”,
(b) after that subsection there were inserted—
“(2AA) Subject to this section, where a voluntary arrangement in relation to a company in housing administration is approved at the meetings summoned under section 3, an application to the court may be made—
(a) by the Secretary of State, or
(b) with the consent of the Secretary of State, by the Regulator of Social Housing,
on the ground that the voluntary arrangement is not consistent with the achievement of the objective of the housing administration.”,
(c) in subsection (4), after “subsection (1)” there were inserted “or, in the case of an application under subsection (2AA), as to the ground mentioned in that subsection”, and
(d) after subsection (7) there were inserted—
“(7A) In this section “in housing administration” and “objective of the housing administration” are to be read in accordance with Schedule B1 to this Act, as applied by Part 1 of Schedule (Conduct of housing administration: companies) to the Housing and Planning Act 2015.”
43 In section 129(1A) (commencement of winding up), the reference to paragraph 13(1)(e) of Schedule B1 is to include section (Powers of court)(1)(e) of this Act.
Power to make further modifications
44 (1) The Secretary of State may by regulations amend this Part of this Schedule so as to add further modifications.
(2) The further modifications that may be made are confined to such modifications of—
(a) the Insolvency Act 1986, or
(b) other legislation passed or made before this Act that relate to insolvency or make provision by reference to anything that is or may be done under the Insolvency Act 1986,
as the Secretary of State considers appropriate in relation to any provision made by or under this Chapter.
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Interpretation of Part 3 of Schedule
45 In this Part of this Schedule—
“administration order”, “administrator”, “enters administration” and “in administration” are to be read in accordance with Schedule B1 to the Insolvency Act 1986 (disregarding Part 1 of this Schedule), and
“enters housing administration” and “in housing administration” are to be read in accordance with Schedule B1 to the Insolvency Act 1986 (as applied by Part 1 of this Schedule).”(Mr Marcus Jones)
See Member’s explanatory statement for
NC8
.
—
Brought up, read the First and Second time, and added to the Bill.
Amendments to housing moratorium and consequential amendments
“1 The Housing and Regeneration Act 2008 is amended as follows.
2 Omit section 144 (insolvency: preparatory steps notice).
(none) A moratorium on the disposal of land by a private registered provider begins if a notice is given to the regulator under any of the following provisions of the Housing and Planning Act 2015—
(a) section (Winding-up orders)(2)(a) (notice of winding up petition);
(b) section (Voluntary winding up)(4)(a) (notice of application for permission to pass a resolution for voluntary winding up);
(c) section (Making of ordinary administration orders)(3)(a) (notice of ordinary administration application);
(d) section (Administrator appointments by creditors)(4)(a) (notice of appointment of ordinary administrator);
(e) section (Enforcement of security)(2)(a) (notice of intention to enforce security).”
4 (1) Section 146 (duration of moratorium) is amended as follows.
(2) For subsections (1) and (2) substitute—
“(1) The moratorium begins when the notice mentioned in section 145 is given.
(2) The moratorium ends when one of the following occurs—
(a) the expiry of the relevant period,
(b) the making of a housing administration order under Chapter 3A of Part 4 of the Housing and Planning Act 2015 in relation to the registered provider, or
(c) the cancellation of the moratorium (see subsection (5)).
(2A) The “relevant period” is—
(a) the period of 28 days beginning with the day on which the notice mentioned in section 145 is given, plus
(b) any period by which that period is extended under subsection (3).”
(4) For subsection (9) substitute—
“(9) If a notice mentioned in section 145 is given during a moratorium, that does not—
(a) start a new moratorium, or
(b) alter the existing moratorium’s duration.”
5 (1) Section 147 (further moratorium) is amended as follows.
(2) In subsection (1)(b), for “step specified in section 145 is taken” substitute “notice mentioned in section 145 is given”.
(3) In subsection (2), for “step” substitute “notice”.
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6 In section 154 (proposals: effect), in subsection (2), after paragraph (a) insert—
“(aa) in the case of a charitable incorporated organisation, its charity trustees (as defined by section 177 of the Charities Act 2011),”.
7 Omit section 162 (consent to company winding up).
8 Omit section 164 (consent to registered society winding up).
9 In section 275 (general interpretation), omit the definition of “working day”.
10 In section 276 (index of defined terms), omit the entry relating to “working day”.”(Mr Marcus Jones)
See Member’s explanatory statement for NC8.
Brought up, read the First and Second time, and added to the Bill.
Extent
Amendment made: 7, page 77, line 4, leave out “This Part extends” and insert
“Chapter 3A of Part 4 and this Part extend”
.
—
(Mr Marcus Jones.)
This ensures that the new clauses about special administration for private registered providers etc (see Member’s explanatory statement for NC8 extend throughout the United Kingdom.
Content of banning order: company involvement
“‘(1) A banning order may include provision banning the person against whom it is made from being involved in any company that carries out an activity that the person is banned by the order from carrying out.
(2) For this purpose a person is “involved” in a company if the person acts as a officer of the company or directly or indirectly takes part in or is concerned in the management of the company.”
This new Clause allows the Tribunal when making a banning order under Part 2 of the Bill to ban a person from being involved in certain companies. It is intended, in part, as an anti-avoidance measure.
—
(Mr Marcus Jones.)
Brought up, read the First and Second time, and added to the Bill.
“Banning order” and “banning order offence”