Renters’ Rights Bill

Committee (4th Day) (Continued)

Clause 14: Duty of landlord and contractor to give statement of terms etc

Amendment 136

136: Clause 14, page 22, line 7, after “previous” insert “assured” Member’s explanatory statement This limits the exception to providing a written statement of terms to cases where there has been an implied surrender and re-grant of a previous assured tenancy.

My Lords, I will start with government Amendments 136, 138 and 139. These amendments make provision for the requirement to provide a written statement of terms for tenancies that become assured after they have begun. A tenancy may become assured during its lifetime for a range of reasons; for example, because it becomes the tenant’s principal home, or rent becomes payable on the property.

Where this happens, landlords should be able to comply with the requirement to provide a written statement of terms. These amendments will therefore require landlords to provide a written statement of terms within 28 days of the tenancy becoming assured. Without this, landlords would be left in limbo, unable to comply with the duties in new Section 16D of the Housing Act 1988 to provide a written statement of terms at the outset of a tenancy, leaving them liable to penalties. It would also leave a tenant without the written statement of terms, a key benefit of the new system, despite their tenancy having become assured. I beg to move.

In view of the time that we have lost—and I must say publicly that I regret the pressure that we are putting ourselves under—I will just say that it is essential that written statements are mandated to help people resolve conflicts and provide evidence if disputes go to court. What these must contain, which is the essence of Amendment 140 from the noble Baroness, Lady Scott, is clearly important and needs to be widely known.

There is quite a lot in the Bill that we feel needs to be widely known, and we have all had concerns about the level of knowledge. All I will say, with my tongue in my cheek for things down the road, is that that is all the more reason to regulate those who act for landlords—such as letting agents—to make sure that they act professionally and inform their tenants correctly.

My Lords, Clause 14 aims to strengthen the transparency of rental agreements by requiring landlords to provide written terms at the outset of a tenancy. This is a welcome step towards ensuring that tenants are fully informed about their rights and obligations, and that landlords are held to account for the terms they offer.

Amendment 140, in my name, recognises that legislation alone is not enough. We must ensure that tenants, landlords and, indeed, any third-party contractors involved are informed and empowered. By requiring the Secretary of State to issue clear, accessible guidance, we help to make these rights and duties real and usable in practice. Without such guidance, even the most well-intentioned legislation risks becoming an abstract concept rather than a meaningful tool for change. This is why it is crucial that the Government take proactive steps to ensure that everyone involved in the rental process understands their roles and their responsibilities.

Amendments 136, 138 and 139, tabled by the Minister, seek to refine the process through which written statements of terms are provided. The intention, as I understand it, is to ensure that landlords are held to account for providing these terms in a timely manner, which is certainly a step in the right direction. However, we must be careful to consider whether the amendments fully take into account the diverse needs and circumstances of both tenants and landlords.

The Government have a clear opportunity here to provide a system that is not only fair and transparent but also practical and achievable for all those involved. We must ensure that these provisions do not overburden landlords with an administration task but, at the same time, protect the rights of tenants by providing them with the necessary information to make informed decisions about their tenancies. While the intention is to create more transparency, it is equally important, we feel, that we do not add unnecessary complexity or red tape that could inadvertently discourage smaller landlords or make the rental process more cumbersome.

My Lords, I have just a brief response to the points raised by the noble Baroness, Lady Scott; I also thank the noble Baroness, Lady Thornhill, for her comments.

Amendment 140 would require the Secretary of State to issue guidance on the new duty to provide tenants with a written statement of terms before a tenancy is entered into. We are already committed to supporting tenants, landlords and agents to understand and adjust to the new rules. I accept the point that the noble Baroness, Lady Thornhill, made about agents; I think we will come to that later.

We are engaging with stakeholders in developing the requirements for the written statement of term and are aware of how important it is for the sector to understand the duty. In response to the comments from the noble Baroness, Lady Scott, about small landlords and whether the 28-day period is reasonable, I am sure that will come out during our discussions with the sector. Because we are working that way, I am confident that we will be able to work through any pressures it may be concerned about. To help landlords and tenants, we will be providing a full suite of guidance, so these groups know exactly what the changes mean for them. For those reasons, I ask that Amendment 140 not be pressed.

Amendment 136 agreed.

Amendment 137

137: Clause 14, page 22, line 30, leave out “and section 16I(1)(a)” Member’s explanatory statement This amendment is consequential on another amendment in the name of Baroness Scott of Bybrook.

My Lords, the amendments in this group tabled in my name and that of my noble friend Lady Scott of Bybrook seek to limit the financial penalties by local authorities and probe the process on which non-judicial process is sought. Although it is right that those who deliberately flout the rules face financial penalties, it is also right that these financial penalties should be proportionate and applied fairly. Are fines of up to £40,000 reasonable? In many cases, they could be the equivalent of several years of rental income. We need a system that is balanced and just for both the tenant and the landlord.

I draw the Committee’s attention to Amendment 144, tabled by my noble friend Lady Scott of Bybrook. This amendment seeks to prevent local authorities issuing fines for offences that could be considered in courts against the legal standard of proof through a non-judicial process. This amendment is important because it would protect due process and the rights of individuals by ensuring that penalties such as fines are not imposed without proper legal scrutiny. Can the Minister clarify how this process will operate? Furthermore, does she agree that any determination requiring legal scrutiny should be conducted through a formal legal process by individuals with appropriate legal training?

Amendments 146 and 147 seek to limit the local housing authority’s powers to impose financial penalties. I ask the Minister how the Government determined £7,000 as an appropriate upper limit for a financial penalty. What specific conduct would constitute a £7,000 fine? Any fine, especially one imposed outside a court of law, must align with the principles of proportionality. We must not accept disproportionate penalties that may unfairly harm those with limited means. Many landlords are not wealthy, industrial, or professionalised tycoons; they are people who own a single property. Perhaps they inherited it from a parent, rely on it as an alternative to a pension, or became what some call accidental landlords. Owning a property does not automatically confer great wealth and it does not equip an individual to shoulder disproportionate financial penalties. We therefore wish to probe Government’s imposition of the £7,000 limit. How did the Government reach this figure? Why have they chosen it? Who have they consulted with to get this right? Simply: is this proportionate?

On the theme of proportionality, Amendment 147, tabled in my noble friend Lady Scott’s name, would cap the fine not against some arbitrary figure but against a sum equivalent to two months’ rent under the relevant tenancy agreement. This amendment once again probes the Government’s thinking. Fines should not treated as the cost of doing business; they should be seen as a deterrent. At the same time, they must be fair, implemented correctly and be a realistic sum that reflects a single landlord’s ability to pay.

Next, I draw the Committee’s attention to Amendment 154, which seeks to probe the Government’s reason for granting local housing authorities the power to impose a financial penalty of up to £40,000. Local housing authorities across the nation face significant cost pressures. Factors which are well rehearsed, such as population growth, homelessness and housing insecurity, have collided with tight budgets and increasing costs. Global inflationary pressures pushed up the price of building materials, maintenance, staffing and temporary accommodation. These pressures are not going away. The OBR has forecast that inflation is set to rise and the Chancellor’s inflationary policies will hurt these providers further.