Consumers, Estate Agents and Redress Bill [HL]

I declare a couple of interests. The first is that I introduced a Bill on estate agents in the last Session. Had the Government seen themselves able to accept that Bill, we would not be sitting here now. We would have finished with the subject. The other is that I am in the process of trying to sell a house and buy another property. I could tell noble Lords a little more about estate agents than they might perhaps be aware of, but I will not take up the Committee’s time in going into anecdotes about estate agents—except to say that I feel pretty well informed about practices, both good and exemplary and not so good or exemplary. I appreciate that this is the Minister’s first Bill on assuming office. I wish him good luck with it and thank him for being so approachable on the whole issue of estate agents. I have had two conversations with him and have found him very open to discussion. He did not agree with me, but he is open to talking about the topic. I appreciate his willingness to engage in discussion and to be helpful to Members of this Committee. I support Amendment No. 123A, moved by the noble Earl, Lord Caithness. It is right that the legislation should cover an area of activity by estate agents that gives rise to more complaints than sales. It would give people who are quite vulnerable in relation to letting properties or management issues some security and safeguards. I hope the Government will consider adopting an amendment along the same lines. My noble friend Lord Borrie said earlier that some wishes to regulate by members of an industry were a measure to prevent competition. I do not want to get into the argument about the last amendment, but shall simply say this: on the issue covered by Amendment No. 123A, all the bodies in the industry seem to want this type of safeguard. It is a safeguard that should bite on all of them. It is not a matter of saying, ““Keep others out””, but of saying, ““We are willing to submit ourselves to further provisions to protect the consumer””. My noble friend nods in agreement. I would argue, therefore, that while most industries complain about being over-regulated, here is an industry that is represented by a number of bodies, all of whom want this approach. That is quite interesting and I hope it is persuasive to the Government. I turn to the two amendments standing in my name. Amendment No. 133 seeks to increase from six to 12 months the period during which an enforcement or penalty charge notice might be applied against an estate agent who has not registered. Six months might be quite a short period in which to get the necessary evidence. Sometimes it might be possible to take enforcement action within weeks. No one is saying it is a minimum period. I am worried that six months might be too short. To achieve the purposes of this part of the Bill, 12 months would not mean departing from what the Government are setting out to do, but might make it a bit more effective. It would certainly give trading standards a little more time to gather evidence. I can appreciate, particularly in view of my dealings with estate agents in the past little while, that this is a complicated area and that it can take trading standards some time to get the evidence necessary to enforce a penalty charge notice. I hope the Government will see their way to considering extending the period from six to 12 months. Similarly, Amendment No. 138 attempts to increase the amount of money an estate agent can be fined or penalised for not being a member of a redress scheme from £500 to £1,000. In the grand scheme of things, even £1,000 is a pretty small sum. If we take the average price of a house to be about £150,000—for heaven’s sake, I do not believe that is right; someone gave me that figure, but it is far more than that—then on a normal estate agent’s commission, that means an estate agent gets about £3,000. I hope my arithmetic is right. If we then move to house prices in the more expensive areas, we will find estate agents’ commissions of £10,000 or even more. Set against those kinds of sums, even £1,000 is pretty small beer. Five hundred pounds is in danger of being so small that it seems a trivial amount; so trivial that people will say, ““We can absorb this””. I hope the Minister will give us some comfort regarding this. Actually, I think even £1,000 is too low, but I do not want to get into an argument with myself in front of the Committee—not that arguing with oneself in front of the Committee is that unusual, but I do not intend to embark upon that here and now. What happens if someone is in breach? Can the trading standards office levy repeat fines on a non-complying estate agent? In other words, if an estate agent is liable for one of these notices and the fine is only £500, could the trading standards people repeat the process? That is not very satisfactory, though; it is better to levy a fine at a decent level once and for all. Could these notices be issued per instruction taken by an estate agent, rather than only per property sold? That is because estate agents take instruction on many more occasions than individual properties get sold. I do not know that, but I am told it is the case. Maybe it would be an additional safeguard if the Minister were to move somewhat in that direction. I believe that Amendments No. 133 and 138 are fairly minor matters in the scheme of things, but they would certainly help to improve the whole process. Obviously, they are here as probing amendments, and I am anxious to hear what the Minister has to say.