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Baroness Maddock: I strongly support the amendment. Indeed, I raised this issue at the Second Reading of the Bill. I do not understand why the Government have backtracked because, in the original Bill, they thought that this was an important point.

Today, many people expect best practice, wherever they are in life. If the Bill is to be successful, then we should promote best practice. Many people have written to us with stories about how they have suffered under leasehold. If we are to change that situation, what is proposed in the amendment seems absolutely fundamental.

I hope the Government can explain why they have changed their mind. It is not only in this area of housing that the Government seem to have cold feet in regulation; it is in other areas. The home is the most important part of a person's life and it is our duty to ensure that he or she can remain safely in that home and understand how to deal with the problem.

Lord Lea of Crondall: When the Minister responds to this important debate, can he clarify whether we are talking here about the regulation of managing agents in the context of RTM or the regulation of managing agents, period? If we are talking about the regulation of managing agents in the context solely of RTM, we could be in the position of making it more onerous to have responsibilities to be a managing agent vis-a-vis RTM than vis-a-vis a freeholder. This is a practical question, because the choice before people in a year's time will presumably be what are we going to take on, as the noble Lord, Lord Williams, has correctly identified with regard to RTM. Otherwise, we have the opportunity to carry on as we are where the managing agent is responsible solely to the freeholder. Many of the criticisms that have been made about what one

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might call the unsatisfactory tail of the profession are in regard to the present scenario. I query whether what is proposed will touch that.

Lord Hodgson of Astley Abbotts: I rise briefly to support the amendment in principle. It has a great deal to commend it. Within the RTM company, one may have tension between the leaseholder and the freeholder. If one adds to that slightly explosive mixture an incompetent managing agent, one will have something quite difficult to handle. If we raise too high the levels which people have to achieve to become managing agents, we will shut off the supply of firms prepared to take it on. Only a small number of firms will be prepared to do it. While I can see that the outline of the regulations proposed in the amendment are thoroughly worthy, there are such things as professional indemnity and fidelity insurance which may prove extremely expensive and difficult to get. That needs to be given further thought before we wave it on its way. However, in principle, it is a worthwhile idea.

Lord Kingsland: I rise to support the noble Lord, Lord Williams, my noble friend Lord Caithness and, indeed, everyone else who has spoken in this debate so far.

The original consultation document on the reform of residential leasehold law regarded the regulation of managing agents as one of the key elements of successful reform. However, the Government have not brought forward proposals in the Bill and their absence is the greatest single gap in that part of the legislation which deals with leasehold.

The need for greater regulation of managing agents is recognised by everyone involved in the leasehold sector. Regulation is the most effective way of ensuring that managing agents meet acceptable standards of knowledge and practice and are required to act with both professionalism and integrity. Many landlords are concerned that they may lose control of their investment to right to manage not through any fault of theirs as owners but through the inadequacies and incompetence of their managing agents.

Is it because the Government have yet to resolve in their own mind how they can take forward the regulation of managing agents that they do not feel able to compel people to make use of them? If so, that weakens their overall proposals since, if people could be required to use professional property managers who were working to a recognised standard, freeholder landlords would be much less nervous of the implications of a right to manage for the management of their investments.

Lord Whitty: Once again I have some sympathy with the objectives behind the amendment. The reason the Government are not prepared to accept it was touched upon by the noble Lords, Lord Lea and Lord Hodgson. What we would be doing here, if we were to legislate in this context, would be to require a certain standard of managing agents for RTM companies but not for anyone else. There are managing agents all over

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the place who work for freeholders, for leasehold companies and for various groups or organisations. There is a case for regulation--or certainly for higher professional standards--probably through a degree of registration and standard requirements for the profession as a whole.

Whether we are talking about landlords, leaseholders who have been enfranchised or RTM companies, we know that it is desirable to have a competent manager. We know also that all bodies under existing kinds of tenure have difficulties with management agents. We therefore indicated in the consultation paper, as the noble Lord, Lord Kingsland, and the noble Baroness, Lady Maddock, said, that we would look at the whole question of the quality of management agents and that we would produce a consultation paper on it across the board. We still intend to produce such a paper. The issue is complicated. I understand why people feel that they have had to wait a long time for the paper, but are working on the matter and we hope that its publication is not too distant.

The options that will be considered in the consultation paper may range from a full-scale licensing scheme, which was favoured by many people who responded to the original consultation paper, to something closer to a self-regulatory system. This will include obligations of the kind to be found in the clause, to which the noble Lord, Lord Williams, referred, but will be imposed on those who employ management agents more generally.

Each of the options within that spectrum has its own advantages and disadvantages. The consultation period will allow us to address them not only for RTM companies but also for those who seek and need the services of management agents more generally. Were we, however, to legislate in this field and establish a register of management agents solely for RTM companies, as the noble Lord, Lord Lea, said, that would of itself create a further threshold and barrier to the creation of RTM companies. The Government's view is that the issue should be addressed in the round. A consultation paper should be available within the next few months and the results of that would clearly be intended to apply right across the form of tenure for everybody employed as a managing agent.

Lord Williams of Elvel: I am grateful to my noble friend for that reply, although I find it disappointing. As I said, this is a piece of a jigsaw and Members of the Committee--with the exception, to a certain extent, of my noble friend Lord Lea and the noble Lord, Lord Hodgson-- supported the idea that it is part of a jigsaw. It is no good giving people the right to manage property unless one controls the people who are going to manage that property.

The Government appear to have ducked a rather important issue. We have heard of consultation papers before; they take a long time. There is a consultation period and then, as a result, there is usually a White Paper. There then follows deliberation on the White Paper and, if we are lucky, there is then legislative

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time--which will see us all out of this House and probably, if I may say so, see my noble friend promoted to a greater job in the future.

I am rather disappointed by my noble friend's reply. I shall not press the amendment at this stage but, nevertheless, I believe that we shall have to come back to this debate on Report. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 72 [Long leases]:

The Deputy Chairman of Committees: In calling Amendment No. 117, I should point out that if it is agreed to I cannot call Amendment No. 118 owing to pre-emption.

[The Sitting was suspended for a Division in the House from 4.44 to 4.54 p.m.]

Baroness Maddock moved Amendment No. 117:


    Page 31, line 17, at end insert (or is a registered social landlord, as defined by the Housing Act 1996, owning a long lease and whose tenant is an assured tenant under the terms of the Housing Act 1988").

The noble Baroness said: Amendments Nos. 117 and 120 deal with those who are in housing association accommodation. Amendment No. 117 deals with the situation of assured tenants in a housing association. As the Bill is drafted, it is my understanding that they would not be permitted to be members of a right-to-manage company. That being so, it would seem that they should get some rights somehow, and the amendments I have put forward would mean that the housing association under which they were assured tenants would take on that responsibility for them. That seemed to be the best way of ensuring that tenants' interests were represented in the management of the block. It may be that the Government think there is a better way of dealing with this, but it is a problem at the moment and it is something raised by housing associations. I hope that the Government can respond to that in a positive way.

Amendment No. 120 deals with a slightly different situation, and I know from having read the housing press that the Housing Minister in another place, Nick Raynsford, certainly does not agree with this. It deals with charitable housing associations where the leasehold schemes are for a particular group of people. That may be elderly people who have a professional background. Teachers, for example, often set up blocks of this type.

The purpose of the amendment is to put back something that was included in the original draft Bill, which will enable charitable housing trusts to be managed in the way that reflects whatever their purpose. It is fairly specific, and it would not allow all kinds of other groups to join the bandwagon. I hope that the Government will look positively at this, and if it is not the right way to do it they may be able to come forward with another way of dealing with it. I beg to move.


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