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Lord Dubs: I have looked at this amendment with interest. Obviously I feel sympathetic towards its aim. I congratulate the noble Baroness on having put it forward. Something of this sort is desirable, but I have some difficulties with some of the detail as suggested within the amendment. We do not, after all, want to impose upon local authorities something so cumbersome and complicated that it will be very time-consuming. I should look for something that was a bit simpler than the scheme proposed. I wonder whether that could be devised.
I am not happy that money which belongs properly to one tenant should be used for general purposes in an area, no matter how laudable they may be. I am worried that some of the earlier points are very detailed. We have something which is worthy and has a great deal of merit to it, but I am worried about some of the details as they are stated in the amendment.
Lord Mackay of Ardbrecknish: My noble friend's new clause would allow a local authority or an authorised body to set up a scheme to register and hold all rental deposit moneys charged by local landlords in its area. As we have heard, the scheme, which would have to be submitted to the Secretary of State for confirmation, would be able to specify a number of duties and conditions on the person receiving the deposit. Failure to comply with those would carry the sanction of a fine not exceeding level 3 on the standard scale.
In cases where there is no dispute, involving the local authority or a body authorised by the authority to register and hold deposits is likely to complicate and slow down arrangements which are already working satisfactorily.
My noble friend's amendment would also allow the authority or body operating the scheme to specify the methods to be used to resolve disputes. I recognise the very real difficulty that disputes can cause to both landlords and tenants. In those cases where there is a dispute, the key problem is finding a speedy and effective means of resolving who has the best claim to the deposit moneys. There will be cases where the landlord has a legitimate claim to some or all of the deposit to cover theft or damage. In other cases, the tenant will have every reason to expect the full deposit back.
In the light of what I have said, it is perhaps not surprising that my noble friend's proposal that the schemes could decide for themselves how they would handle disputes causes me some concern. That concern is, of course, that we might be asking the schemes to act in lieu of the courts. I cannot see how that would be appropriate. If I am not right about that, I am not clear what benefits these schemes would bring.
The small claims court already offers a cheap and relatively simple way of dealing with such disputes. If the claim is not contested there is no need for a court hearing. If it is, the amount in dispute is likely to be sufficiently small for the hearing to be dealt with under the informal, small claims arbitration procedure.
I do not want to appear dismissive of my noble friend's proposal. I should like to reassure her, like other noble Lords who have spoken, that I fully understand and share her concern that a small minority of landlords or agents should not be allowed to misappropriate their tenants' deposits. I am sympathetic to my noble friend's suggestion that we should look at schemes in other countries to see whether they have any advantages for our own situation. My noble friend, not surprisingly,
As I explained, the issue of handling disputes needs to be thought out very carefully. In that context perhaps I may suggest again that we should wait and take account of the forthcoming report of the noble and learned Lord, Lord Woolf, on access to justice, which I understand will recommend ways of speeding up cases through the small claims court.
While my noble friend has made an attempt to bring forward a possible framework for resolving some very difficult and unpleasant problems which may be occurring, we ought to be careful before we embark on what could turn out to be a fairly complex and bureaucratic system. Perhaps we should study systems in other parts of the world, as we are prepared to do, and wait on the report I mentioned before we come to any decisions on whether we ought to move and whether there is a reasonable scheme we could move to.
Baroness Gardner of Parkes: I thank those who have supported the amendment in principle. I feel that I must respond to one point made by the noble Lord, Lord Strabolgi. He referred to the tenant being evicted. I am not talking about cases of eviction. I am talking about cases where the tenant leaves and the same situation arises. I say to my noble friend the Minister that I am not really speaking entirely about cases where there is a dispute about how much money one should get back. I am more concerned about the type of case referred to by the noble Earl, Lord Lytton, where someone goes into liquidation or someone vanishes with all the money rather than an argument between the landlord and tenant. Perhaps the bonded scheme suggested by the letting agents is a good answer. However, the small property people make a point which I think is very important. Many unscrupulous tenants send out the advice through leaflets not to pay the last month's rent and in that way ensure that they will not be looking for their deposit. That seems equally unfair to the landlord because the deposit is there to cover dilapidation and any damage. I hope that we will be able to consider the principle further. I beg leave to withdraw the amendment.
The Deputy Chairman of Committees: The Question is that the amendment be agreed do. As many as are of that opinion will say "Content"; to the contrary "Not-Content". I think the "Not-Contents" have it. Clear the Bar.
The Deputy Chairman of Committees: Tellers for the "Contents" having not been appointed, pursuant to Standing Order No. 51, a Division therefore cannot take place. I declare that the "Not-Contents" have it.
Resolved in the affirmative, and clause agreed to accordingly.
House adjourned at thirteen minutes before eleven o'clock.
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