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Yvette Cooper: I acknowledge the hon. Gentleman's point, but it would simply not be possible for the Bill to proceed differently and in a way that would provide improvements. Whether someone is a fit or proper person to hold a licence for a particular property is in part going to depend on the kind of property. Somebody may be able to argue—this is why there is no automatic link—that they have the expertise to manage a small terraced property whereas they do not have the expertise to manage a large HMO. They may be able to put a case to the effect that they are a fit and proper person, with the skills or ability to do one and not the other. Local authorities will want to take into account all the evidence and make a judgement on that basis.
These cases need to be argued on their individual merits, rather than our attempting to prescribe in legislation either, for example, an automatic read-across from one to another, which does not give local authorities the flexibility to determine the cases separately, or, trying to define every aspect of what being fit and proper means, in the Bill or in guidance, when again it will depend on the individual circumstances.
Mr. Hayes: Forgive me for being so assertive, Mr. Pike, but I am not sure the Under-Secretary is right. The guidance would be helpful in this respect, because
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what the hon. Members for Southampton, Test and for Regent's Park and Kensington, North (Ms Buck) are beginning to tease out is that unless there is sufficient consistency in this area, it may well be that there could be a successful legal challenge. One of the classic bases of legal challenge is that someone has not been treated equitably, that they are being treated in entirely different ways in what could be cheek-by-jowl circumstances. This might be an area where the Bill needs to be tightened, at least through guidance—I put it no more strongly than that. The hon. Gentleman and the hon. Lady have a valid point, and it explains why my hon. Friend the Member for Poole was right to raise this issue.
Yvette Cooper: The need is to decide whether cases are precisely similar or whether there are different circumstances. That is why the judgment needs to be taken on the individual cases at stake. First, it is right for the local authority to be able look at the merits of the individual case and decide whether they are similar, relevant or different. Secondly, there should be an appeal to an independent tribunal, which can decide whether there are huge inconsistencies in the way local authorities are approaching this or are not taking account of relevant evidence about the differences. It would then be up to the independent tribunal to come to a different conclusion. Equally, where the local authority can demonstrate perfectly relevant information in taking into account people's experience managing other properties, the independent tribunal is likely to find in its favour.
The problem arises when we try to anticipate every possible local example and to solve those problems in this Committee. A system should be set up that allows local authorities the flexibility to take sensible decisions dependent upon those local circumstances, and for there to be an appeals process for landlords who feel unfairly treated. On that basis, I would ask the hon. Member for Poole to withdraw amendment No. 311.
Mr. Syms: This has been a useful debate and I am grateful to the hon. Member for Southampton, Test for explaining so that even I start to understand what we are trying to do. Putting that on the record is useful. I am extremely tempted to press to a vote what has been described as our Guy Fawkes amendment, as Her Majesty's Opposition are very keen that traitors should not be residential landlords or managers. However, I have been dissuaded from doing so because of the lateness of the hour. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 80 ordered to stand part of the Bill.
Clause 81 ordered to stand part of the Bill.
Clause 82
Offences in relation to licensing of houses
under this Part
3.30 pm
Mr. Syms: I beg to move amendment No. 299, in
clause 82, page 55, line 16, at end insert—
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The Chairman: With this it will be convenient to discuss amendment No. 300, in
Mr. Syms: Amendments Nos. 299 and 300 have been tabled because of the concern of the Council of Mortgage Lenders and other lenders that when taking over a property, or even several properties from one owner, they may in the event of his defaulting on payment end up being prosecuted because, almost inevitably, someone who gets into financial mess may also be in a mess in their other affairs.
We are looking to the Minister to reassure the various building societies, banks and other lenders that the Bill is sufficiently flexible, so that if they are in possession of a property in those extraordinary circumstances they will not face the sanctions of the law—or at least not for a period—and thus will have time to put their affairs in order. The general concern among mortgage lenders is that unless it is made clear, some of them might be tempted not to loan money to people in that sector—and we are anxious that there should be a decent supply of private rented property. I am looking for assurances from the Minister.
Keith Hill: Clause 82 provides that an offence punishable by a maximum fine of £20,000 is committed if a person has control of or manages a property required to be licensed, but which is not licensed. Clause 83 provides that no rent is payable by the occupiers, and no charge can be made in lieu of rent, during the period when a person is guilty of the offence of having control of or managing a house that should be licensed.
Amendment No. 299 seeks to exempt a lender who has taken possession of a property requiring to be licensed, but not licensed, from committing the offence, so that they would not be liable to the £20,000 fine. Amendment No. 300 goes a step further by seeking to exempt such a lender from the provision that no rent or charge is payable by the occupiers of the property, and that no charge can be made in lieu of rent during the period.
I understand the hon. Gentleman's reasons for moving the amendment. Its aim is to ensure that reputable mortgage lenders who need to repossess properties are not inadvertently caught out by the provisions, and thereby subjected to the heavy penalty. I shall explain why I believe it to be unnecessary.
First, I believe that a lender taking repossession of a property that could fall within the scope of licensing would be likely to seek to obtain vacant possession of the property. If the property was vacant, there would be no requirement for it to be licensed. Secondly, during any period when a lender had taken possession of a property and was taking steps to remove the occupiers, it would be possible to apply for a temporary exemption notice, and the local housing authority would be able to grant such a notice. However, if the lender had no lawful way of
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removing the occupiers of the repossessed property, or if it decided to continue to keep the property as rented accommodation, which would require a licence, we would expect the lender to seek to obtain a licence in order to ensure that the property was managed properly.
I do not envisage any difficulty in reputable lenders being granted a licence, as we expect that they should easily be able to satisfy the licensing criteria. There is potential for opening up a huge loophole in the legislation if any person or company, however big, small or disreputable, could be exempted from the licensing provisions merely because someone to whom they had loaned money had defaulted on the loan.
I hope that the hon. Gentleman is satisfied that provisions in the Bill safeguard the interests of reputable lenders. In those circumstances, I would naturally expect him to withdraw the amendment.
Mr. Syms: I am partly satisfied, although the Minister still has not gone far enough. It is possible that if there were a major landlord with several properties in a town, a lender trying to get vacant possession of several of those might cause a serious housing problem in the short term—if they had the right to do that. I repeat that if someone has got into financial difficulties, their affairs may not be in order and it may take a while for a reputable institution to sort things out. I would not want the full power of the law to fall on someone who was trying to sort out a situation for the benefit of the community—for the investors in a bank or building society, or the tenants, who might be glad that circumstances had changed. We may have to return to this item during later sittings. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: No. 47, in
clause 82, page 55, line 32, leave out from 'so,' to end of line 34 and insert
'one of the conditions set out in subsection (8) is met.
(8) The conditions are—
(a) that the period for appealing against the decision of the authority not to serve or grant such a notice or licence (or against any relevant decision of a residential property tribunal) has not expired, or
(b) that an appeal has been brought against the authority's decision (or against any relevant decision of such a tribunal) and the appeal has not been determined or withdrawn.
(9) In subsection (8) ''relevant decision'' means a decision which is given on an appeal to the tribunal and confirms the authority's decision (with or without variation).'.—[Yvette Cooper.]
Clause 82, as amended, ordered to stand part of the Bill.
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