Mortgage Repossessions (Protection of Tenants Etc.) Bill

My Lords, I am honoured to be taking forward this Bill, which was introduced in another place by Dr Brian Iddon, Member of Parliament for Bolton South East. I pay tribute to his diligence and hard work in steering this Private Member’s Bill through all its stages in the other place, liaising with the Government and working with all the various bodies concerned with the issues covered by the Bill. I also thank the four charities that have campaigned for this legislation—Citizens Advice, Shelter, Crisis and the Chartered Institute of Housing—and I declare my own interest as chair of the Property Ombudsman Council, which seeks to resolve disputes between tenants, landlords and managing agents, as well as handling complaints against estate agents. I am also extremely grateful to the government Whips for finding the time for the Second Reading of this Bill, which should enable its progression into law before the end of this Parliament. The good that I believe will flow from the enactment of this legislation can be attributed to Dr Iddon, to the charities that have persisted in arguing the case and to the genuinely honourable politicians from all parties who have given it their support. Fortunately, my comments on this Bill can be brief, first, because consultation on the Bill’s content last summer, which was organised by the Department for Communities and Local Government, took on board important points raised by relevant professional bodies and associations—the Bill has the backing of the Residential Landlords Association, the British Property Federation, the National Housing Federation, the Royal Institution of Chartered Surveyors and the National Landlords Association, among others—and, secondly, because the Bill has strong cross-party support: the Government have given their full backing and the CLG has given expert input; the Liberal Democrats in this House have urged progress in bringing forward this legislation; and the Conservatives in the other place have been extremely supportive of the measures in the Bill. I will therefore confine myself to a short description of the significance of the Bill and I will be very willing to respond in my closing remarks to any points raised by your Lordships. The Bill seeks to protect the so-called unauthorised tenants of residential-turned-let—RTL—tenancies who are at risk of sudden eviction because their landlord has fallen into arrears and the lender has commenced repossession proceedings. In these cases, the landlord has rented out a property without the consent of the lender, who is almost always an owner-occupier who pays a lower rate on their borrowing than buy-to-let landlords. The tenants are unprotected by the relevant legislation and, when the lender seeks to repossess the property, tenants may be given no notice, even if they are only part-way through the fixed term of a tenancy agreement. Citizens Advice has furnished me with numerous examples of the problems that this brings. A citizens advice bureau in the north-east reported a client who was given 24 hours to vacate the property. He was a single man in receipt of incapacity benefit with no savings. The bailiffs arrived before he could even get all his possessions out of the house and several precious items were lost in the process. A CAB in the north-west reported the case of a couple who received a visit from the bailiffs, without any prior notice, to repossess their flat due to the landlord’s mortgage arrears. Their possessions were locked inside and they had to spend the night in a hotel. Tenants who have been required to pay rent in advance face the added blow of standing to lose substantial sums. A Surrey CAB reported the case of tenants who had paid not only the deposit but six months’ rent in advance. When they returned from overseas, the locks had been changed and their belongings were locked in the flat. The landlord promised to refund the rent, but this did not happen. Sometimes, unbeknown to the tenant, the landlord has already been in serious arrears before letting the property. A Wiltshire CAB reported the case of a couple with two children who took on a 12-month fixed-term tenancy in September 2009, unaware that the landlord was in mortgage arrears of some £6,000. The couple are now awaiting the outcome of possession proceedings. The Department for Communities and Local Government has estimated that there could have been more than 2,500 repossession cases of this kind last year, but advice agencies think that this is the tip of an iceberg. CLG estimates that some 330,000 RTL households are at risk of short-notice eviction if their home is repossessed. Since many of these households will never apply to a local authority for housing, they are unlikely to end up in any official statistics. There seems a real danger in these difficult economic times of more repossessions in the owner-occupied sector. If so, the number of RTL evictions could rise further. The Bill does not provide any long-term security for RTL tenants, but it does allow the courts to delay evictions for up to two months. First, the Bill provides that after the notice of court proceedings is sent to a property informing any occupier that repossession is a possibility, tenants who pick up this letter, usually addressed to the tenant or occupier, will have the right to be heard at the possession hearing. The Bill gives the judge discretion to delay the repossession for up to two months at that hearing. Secondly, it is possible that the tenant did not see the notice, which may have been missed among the usual junk mail; perhaps, following reassurance from the landlord, the tenant did not expect a possession to be granted and has taken no action; or, indeed, the tenancy may have started after the notice was served. The Bill therefore requires the lender to give notice at the property after an order for possession has been granted by the courts and before it is executed. This allows tenants who did not apply for a two-month postponement at the possession hearing to do so at this later stage. It is entirely at the discretion of the judge whether any period of notice will be granted and the court may make this conditional on rent payments continuing between the tenant and the lender. Alternatively, the lender may agree to the tenant continuing in situ and can appoint a receiver of rent to manage the property. The Bill does not inhibit them from doing this. The Bill will protect thousands of RTL tenants from becoming homeless by providing a breathing space of up to two months for them to search for alternative accommodation. In every respect, this seems a much needed and significant reform to end an unintended injustice. I strongly commend the Bill to your Lordships. I beg to move.