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Lord Dubs moved Amendment No. 241:

After Clause 73, insert the following new clause--

Control orders: supplementary

(".--(1) In section 379 of the Housing Act 1985 (making of control order), at the end insert--
"(5) Within eight weeks of the date of service of the control order, the local housing authority shall serve on the dispossessed proprietor notice of their intention to--
(a) retain the control order;
(b) revoke the control order; or
(c) make a compulsory purchase order.
(6) Where the authority have exercised their powers under subsection (5) above, the dispossessed proprietor may appeal within twenty-one days to the county court on the grounds that the decision of the local authority was unreasonable."
(2) In subsection (2) of section 384 of the Housing Act 1985 (appeal against control order), for the words "local authority serve a copy of a management scheme relating to the house in accordance with section 386, or such longer period as the authority may in writing allow"substitute the words "control order was made and served".
(3) For section 386 of the Housing Act 1985 (duty to prepare management scheme), substitute--
"Management accounts etc.
386.--(1) After a control order has been made, the local housing authority shall maintain management accounts which record income and expenditure in respect of the property.
(2) The authority shall balance such accounts at six monthly intervals, and at the point of revocation of the control order, and shall pay any surpluses to the dispossessed proprietor.

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(3) In the event of any deficit on an account, the local housing authority shall seek payment from the dispossessed proprietor and shall have the powers conferred by Schedule 10 to this Act where accounts are not settled."
(4) Section 389 of the Housing Act 1985 (compensation payable to dispossessed proprietor) shall cease to have effect.
(5) In Schedule 13 to the Housing Act 1985, Part I (management schemes) and Part II (payment of compensation to dispossessed proprietor) shall cease to have effect.
(6) In Part III of Schedule 13 to the Housing Act 1985, for paragraph 16(1) substitute--
"16.--(1) When a control order ceases to have effect, a final balance shall be struck in the management accounts.
(2) Where such balance is--
(a) in surplus, it shall be paid to the dispossessed proprietor, and
(b) in deficit, it shall be recoverable from the dispossessed proprietor in accordance with the provisions of Schedule 10 to this Act."
(7) In Part III of Schedule 13 to the Housing Act 1985, for paragraph 18 substitute--
"18. If a control order is revoked by the county court on an appeal against the order, the local housing authority shall strike a final balance in the management accounts and shall deal with such surpluses or deficits as may exist as set out in paragraph 16."
(8) In Part IV of Schedule 13 to the Housing Act 1985, for paragraph 22 substitute--
"22. The provisions of this Part of this Schedule apply where the local housing authority make a control order with respect to a house, and within eight weeks of the making of that order determine to make a compulsory purchase order for the acquisition of the house."
(9) In Part IV of Schedule 13 to the Housing Act 1985, paragraph 23 shall cease to have effect.
(10) In Part IV of Schedule 13 to the Housing Act 1985, for paragraph 25 substitute--
"25.--(1) Where a control order ceases to have effect by virtue of paragraph 24, the local housing authority shall pay to the dispossessed proprietor such surplus on management account as may have accrued.
(2) Where any deficit on account exists, the provisions of Schedule 10 to this Act relating to recovery of expenses shall apply."
(11) In Part IV of Schedule 13 to the Housing Act 1985, paragraph 26 shall cease to have effect.").

The noble Lord said: Amendment No. 241 in the name of my noble friend Lord Williams of Elvel and the noble Baroness, Lady Hamwee, deals with control orders, which are the strongest powers available to local authorities to deal with dangerous houses in multiple occupation. Because those powers are particularly strong ones, the amendment concerns itself with a number of points of detail. The difficulty is that there have been changes to the rented sector over the years and one of the areas of particular concern has been houses in multiple occupation.

Perhaps I may set out briefly what the amendment will do. It introduces a new requirement for a local authority to reach a decision within eight weeks of making a control order on its future proposals for what it wants to do with the property. Secondly, it will simplify procedures by substituting a requirement for the local authority to make a management scheme with a requirement merely to maintain management accounts. Thirdly, it will streamline the final accounting methods when the new management accounts are closed. Fourthly, it will streamline the arrangements when a

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control order is ended following confirmation of a compulsory purchase order. The amendment helps in the way in which control orders are exercised by local authorities. I beg to move.

11.15 p.m.

Lord Lucas: I have listened with interest to the noble Lord's arguments. I am aware that the current system seems rather bureaucratic and can be complex to administer. The Committee will appreciate, however, that the power to make a control order is the most drastic power available to a local authority. We think it is correct that it should require careful consideration before it is embarked on and fastidious handling while the order is in place. After all, a local authority is in effect confiscating an asset and running it on behalf of the owner. Control orders are not often used but they provide an essential last resort.

The noble Lord's amendment suggests radical changes to the control order provisions. First, it seeks to abolish the requirement on a local authority to prepare a management scheme shortly after it makes a control order. Under existing legislation, as part of a management scheme, a local authority must list the works it intends to carry out to the property and the owner has a right to appeal if he considers that those are excessive or unreasonable. Removing this right of appeal would be unfair to an HMO owner who, in the long run, will have to pay for any works which are carried out.

The amendment also removes the automatic right of the owner to receive an amount of compensation every three months. Surpluses, to which the amendment refers, are most unlikely to accrue if there are major works. The owner may well have obligations such as a mortgage to keep up on the property. It would be totally unacceptable, therefore, to remove his source of income when the authority is not prepared to buy the property. In the long run, a local authority can still recover compensation payments when the control order ceases.

For these reasons we are unable to accept the major elements of the noble Lord's amendment. There is one aspect, however, about which we are happy to think further. I refer to the provision to stretch the time limit from four to eight weeks, which would give the local authority a more sensible deadline in which to decide what is the best way forward. We should like to reflect on this point. I hope that, with that very small crumb of comfort and the recognition that giving in to three Opposition amendments in a day without a murmur is an extraordinary event, the noble Lord will feel able to withdraw the amendment.

Lord Dubs: I hope it is the merit of the Opposition amendments rather than the quantity which influences the Minister's reaction to them. I should like to read in Hansard what the Minister said and reflect more fully on his response to the amendment. In the meantime, I beg leave to withdraw it.

Amendment, by leave, withdrawn.

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Clause 74 [Codes of practice]:

Lord Gisborough moved Amendment No. 242:

Page 48, line 43, at end insert--
("Codes of practice: disputes.
395B. Where the Secretary of State has under section 395A approved a code or codes of practice giving guidance on the requirements of subsection (1A) of section 352 or on the duties referred to in section 353A if--
(a) a dispute arises between a local housing authority and the person having control of a house subject to the provisions of such a code or codes--
(i) as to whether the house complies with the requirements of the code of practice, or
(ii) as to whether works being carried out or proposed to be carried out will enable the house to achieve compliance with the code; and
(b) the local housing authority has given notice that it is minded to issue a notice under section 352, the matter may, at the request of the person having control, be referred to the Secretary of State for determination.".").

The noble Lord said: Amendment No. 242 relates to the proposed code of practice on standards in HMOs. My amendment proposes that there should be an appeal mechanism where disputes arise between landlord and local authority over interpretations of the code. As the Bill is currently drafted, if there were a dispute over the requirements of the code, there is no mechanism for resolving that dispute other than the local authority serving a Section 352 notice requiring works, and the landlord appealing through the county court against that notice.

This strikes me as being particularly unsatisfactory. County courts are ill-equipped to deal with, and make judgments on, technical matters relating to building standards. My amendment to the Bill seeks to ensure that there is a simple, quick and cost-effective way of resolving disputes between landlords and local authorities over the interpretation of the code. Planning applications, building controls and fair rent determinations all have appeal procedures that do not involve the court system.

I know that organisations as diverse as the British Property Federation and the National Federation of Housing Associations favour an alternative approach to dealing with disputes of this type.

In my amendment I have suggested that these disputes should be resolved by reference to the Secretary of State. Such an appeal system would encourage a fair, reasonable and consistent interpretation of the code both within individual authorities and between different authorities. Moreover, the very fact that an appeal procedure was in place would encourage both landlords and local authorities to have a constructive and co-operative approach to the implementation of the code of practice and the improvement of standards in HMOs in their areas.

It may be that an appeal to the Secretary of State is not the most appropriate mechanism. The National Federation of Housing Associations has suggested that the model appeals mechanism introduced by the Deregulation and Contracting Out Act 1994 should be

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used in respect of the code of practice and that might provide a suitable alternative appeal mechanism. It would also be consistent with the Government's original proposal that the local authorities' powers should be implemented in line with the model enforcement regime recommended by Section 5 of that Act. This proposal seems, however, not now to feature in the Bill.

Whichever mechanism is deemed most appropriate, I would urge the Government to give very careful consideration to the possibility of approving an appeals system that does not involve the courts. I beg to move.

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