Tribunals, Courts and Enforcement Bill [HL]

I am grateful to the noble Lord for raising this issue. He will be aware that the provision is based on the observation of the Law Commission’s report Distress for Rent in 1991, which was itself based on existing case law in this area. It said that rent should only comprise sums that are directly attributable to the tenant’s enjoyment of the land belonging to the landlord. Items such as service charges, repair costs, insurance premiums and so on may well be directly attributable to something other than enjoyment of the use of the land and for that reason do not fall within the definition of rent for CRAR purposes. The fact that in the past some landlords have passed off these charges as rent—and, indeed, distrained for them as though they were rent—does not mean that the practice should be carried forward to the new regime. In its report, the Law Commission questioned whether such action was ever correct. The issue of certainty is very important here, given that CRAR is a non-court-based remedy. The rent will of course be certain, whereas the service charge may not be; it may be variable and therefore not covered within this. It should go without saying that any method of calculating the minimum amount payable will take into account the sometimes conflicting needs of both landlords and tenants. Landlords need to know that they will be able to enforce their debts swiftly, but tenants need protection from unduly vigorous pursuit of relatively small debts. So our initial proposal for CRAR purposes is that the trigger sum should be either one week’s rent or £200, whichever is the smaller, or four weeks’ arrears if the rent is less than £50 per week. As to the two stages, the minimum rent needs to be outstanding at issue of notice and when recovery action is actually taken to stop the pursuit of unduly small arrears. CRAR cannot be used if you cannot identify the split for the split rent and use for possession. I hope that gives the noble Lord an explanation of the policy behind this part of the Bill and that he can withdraw his amendment.