Mortgage Repossessions (Protection of Tenants Etc.) Bill

My Lords, I am grateful to the noble Lord, Lord Best, for bringing forward this measure. The Government became aware of the issue of unauthorised tenants and short notice evictions just over a year ago, and since then have been 100 per cent supportive of any measures to ensure that tenants who find themselves unexpectedly subject to short notice eviction as a result of landlords’ arrears and repossessions have adequate time to find an alternative home and move into it. It is a testament to the robustness of the legislation that this Bill has come from another place unchanged from when it was first published. It has not had to be redrafted to take account of any amendments, and this in itself says something about the need for and urgency of this legislation. The noble Lord, Lord Best, has explained why it is needed and I do not intend to repeat that, but the Council of Mortgage Lenders has recently revised its forecast for possessions in 2010 to 53,000. The Government have a package of support in place for home owners who are in arrears and under threat of repossession. Help is available to ensure that repossession is always a last resort. However, some of these repossessions will be from landlords unable or unwilling to meet their mortgage payments, and some of these properties at risk will contain tenants where the landlord has not obtained consent to let from the lender. This makes the tenant unauthorised and puts them at risk of losing their home in a very abrupt manner. It is only by legislating in the way proposed in the Bill that unauthorised tenants will be protected if their landlord falls into arrears and is subsequently repossessed by the lender. An unauthorised tenant is often stuck in a form of no-man’s-land where neither the mortgage lender nor a judge in a possession case is able to recognise the tenant’s existence or take account of them and their circumstances. This is a strange, historical quirk of our mortgage and property law that can easily be resolved by the Bill before us. As we have heard, the legislation will give unauthorised tenants affected by landlord repossession an opportunity to seek a delay to that repossession in order to find an alternative home. If they are a genuine tenant, they should find a lender who is sympathetic to their situation. The Bill gives some protection to tenants in that if the lender in question is less than sympathetic and refuses to recognise the tenant, they have the ability to engage with the court to resolve the issue. This offers a level of comfort and assurance to any tenants in this position that there are means for fair consideration and, if necessary, an independent process to consider and remedy their situation. This same process will of course protect lenders from spurious and vexatious applications by individuals who do not have a genuine tenancy. The Bill will put unauthorised tenants on a level playing field with authorised tenants, giving the former the rights that they have always believed they had. It is unfair that unauthorised tenants should have to suffer short notice eviction or the risk of it where the situation is not of their making, but that of a landlord who has failed to comply with the terms of his or her mortgage. Perhaps I may pick up on a couple of points that have been made. The noble and learned Lord, Lord Scott of Foscote, suggested that these amendments could be made by rules of court rather than by legislation. We have been advised that this would be a lengthy process and we could not take that route as it would not be appropriate to confer benefits on tenants through court rules. This has to be done through legislation. He also asked whether the Bill applies to all types of unauthorised tenant, those who have a relationship with the mortgagee and mortgager and those who do not. I should say that squatters, who he mentioned, are excluded by Clause 1(8) because unauthorised tenancies are defined as those tenants who have an agreement with their landlord that does not bind the lender. Obviously, squatters would not have any agreement on which they could rely to use the protections of the Bill.