Homes Bill

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Mr. Tom Brake (Carshalton and Wallington): I take this opportunity to welcome you to the Chair, Mr Stevenson.

I am disappointed that no suggestion was made—I was expecting it—about a secret deal between the Liberal Democrats and the lady in the red sequinned dress. To move quickly away from that subject, I rise to support the Conservative amendments.

The Chairman: Order. It is a difficult matter, but further reference to people in the Public Gallery would be out of order. We should move on.

Mr. Brake: Thank you, Mr. Stevenson. I shall try not to re-offend.

The Liberal Democrats support amendment No. 49. It is absurd to claim that a residential property is on the market when the fact that it may become available for sale is first made public. As the hon. Member for Eastbourne said—[Interruption.]

The Chairman: Order. I am becoming increasingly worried about conversations taking place in the Room.

Mr. Brake: Thank you, Mr. Stevenson.

As the hon. Member for Eastbourne said, there are many circumstances in which a casual conversation could give rise to the impression that a property might become available. My hon. Friend the Member for Bath will refer to that later. We want the vague phrase ``or may become'' removed from the Bill.

On amendment No. 33, there are many cases in which a property will not be marketed by an estate agent. Specifically applying the provisions to an estate agent may be too tight a definition, although the amendment is more precise than the clause's reference to property being ``taken off the market''. The amendment is an improvement, but it could be extended to a wider range of possible scenarios.

Amendment No. 50 would remove the words

    or to a section of the public.

It is designed to elicit further information about the Minister's intentions. If I were to put an advertisement in the local Conservative ``In Touch'' newsletter, it would reach only a small section of the public in my constituency, whereas if I placed it in ``Focus''—

Mr. Raynsford rose—

Mr. Brake: I happily give way to the Minister.

Mr. Raynsford: The hon. Gentleman might reflect that, by the use of those two terms, he has just contradicted himself and so provided a poor example.

Mr. Brake: I have reflected at great length. I tend to put ``In'' and ``touch'' without a space, as it illustrates better what that newsletter seeks to achieve. To finish my point, if I placed the advertisement in ``Focus'' which is delivered to every household in my constituency, it would reach the public as a whole.

The phrase

    in whatever form and by whatever means

suggests that allowance is being made for electronic communications and the use of websites to advertise properties. We want to encourage such flexibility and to allow people to advertise on the internet without having to rely on the existence of a seller's pack for the property. If someone has chosen to advertise a property through an estate agent, it is clearly appropriate to have a seller's pack, but when an advert has been placed in a local newspaper or on a website, it is not. For those reasons we support amendment No. 50 and the others in the group.

Mr. Waterson: Another possibility has occurred to me. I do not know whether the hon. Gentleman has had a chance to reflect on the fact that, in some areas, particularly where desirable properties are involved, one hears of individuals, as well as estate agents, going around putting notes through doors inquiring about possible sales. A couple of relations by marriage were constantly receiving notes asking whether they wanted to sell because their home happened to be regarded as a jewel that comes up only once in a generation. How would that be affected by clause 1?

Mr. Brake: I must admit that I had not considered that possibility. It could be that the mere acceptance of that leaflet, if it did not go straight into the bin, could indicate that the property might become available for sale in the future. I hope that the Minister will be far more precise about what he means by ``may become available'', because it could become the subject of much protracted argument if it remains in the Bill.

Mr. Raynsford: We have had an interesting debate on some technically complex issues. I hope that it will help the Committee if I try to explain the purpose of the current wording, why it was chosen and, in particular, the significance of the phrase

    to the public or to a section of the public

which has preoccupied the Opposition.

Clause 1(4) and (5) define the circumstances in which a property is regarded as having been put on the market and the period during which it is regarded as remaining on the market. A property is put on the market when the fact that it is or may become available for sale is first made public. The effect of amendment No. 49 would be that a property was not regarded for the purposes of the Bill as being put on the market until the point at which it was available for sale. Any earlier marketing activity by the seller would not constitute putting the property on the market and would therefore not be subject to the obligation to have a seller's pack. That would open a potentially large and serious loophole, which sellers who were keen to evade the obligations of the production of the seller's pack could easily exploit.

If the amendment were made, a seller hoping to avoid the seller's pack obligation, could advertise that his property was likely to be available shortly and provide the address and other details in the hope that the potential buyer would take note and try to gain an advantage over other potential buyers by making a quick visit and putting in an offer. As the property would not have been put on the market, there would be no obligation on the seller to have the seller's pack. Several weeks and several hundred pounds later, the buyer could discover problems that he had not known anything about, but that he would have known about had the seller's pack been available.

5.15 pm

Mr. Waterson: I do not want derail the Minister's train of thought, but those are quite complex points. He talks about some buyer coming along and making a quick offer. Does that not suggest that the buyer might also want to achieve a quick transaction and is therefore the sort of person who probably does not need a seller's pack in the first place?

Mr. Raynsford: We have covered that ground before. Often, someone making a quick transaction is precisely the sort of person who would be best advised to have information available. We have talked about the problem that can arise when people make offers without full knowledge of a property's condition—it might be in poor condition or derelict—and are therefore at a disadvantage. It is in precisely those circumstances that we think the benefits of the seller's packs will be most applicable.

The point that I was trying to make was that the amendment would provide a loophole, through which people could drive a coach and horses by saying that their property is likely to be available in order to evade the obligation of having a seller's pack. That is why we do not feel that the amendment is helpful.

Clause 1(4) does not mean that a housebuilder would have to have a seller's pack if he advertised that he was planning to build a new estate of houses and provided some general information about the types of houses and their attractiveness. We have all seen the sort of publicity material that is provided when new developments are being envisaged and, provided there was no detail about the number of the property itself, it would constitute general material that did not have the effect of putting an individual property on the market. The provision would not compromise the ability of housebuilders to produce advance publicity about the development of a particular new group of houses. The objection is not valid—the seller's pack obligation would not apply.

Mr. Clifton-Brown: The Minister will be aware that it is common practice among developers to pre-sell a house—to sell it before it is built. In such circumstances, at what point would the seller's pack have to be prepared?

Mr. Raynsford: In the earlier debate, I made it clear that there should be a seller's pack for all sales, including new properties sold off-plan. There would be no obligation for a home condition report, provided there was a warranty or building guarantee of the sort provided by the National House Building Council or Zurich Municipal. However, there would be an obligation to prepare a seller's pack. As we discussed, housebuilders would want to produce material containing fundamental and necessary information, including the title deeds, other documentation and the contract. All those items are prescribed in the seller's pack, which the house builder would have to make available to process the sale. The seller's pack requirement would apply where a property was being sold off-plan, but there would not be a requirement for a house condition report.

Mr. Clifton-Brown: It is very important to clarify that point. Will the Minister state at precisely what point in the negotiations the pre-seller's pack would have to be prepared? He says that a home condition report would not have to be available. Given that in many estates each house is different, what information would have to be provided?

Mr. Raynsford: The point I was making is that the seller's pack obligation would not kick in until the advertising identified the specific houses and the specific location of those houses. By that stage, the marketing operation would have begun. That would be the point at which marketing begins and the property is put on the market. That important concept is fundamental to clause 1, as it defines the point at which the obligation arises.

Mr. Clifton-Brown: This is an important point. It is common, especially in more desirable areas, for word get around that a developer is developing an estate. Someone interested in that estate can arrange a pre-sale with the developer. At what point in that type of arrangement would the pre-seller's pack have to be prepared?

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