Localism Bill

My Lords, the proposed new clause amends ground 8 of Schedule 2 to the Housing Act 1988. At present, private landlords and housing associations can use ground 8 to seek possession of accommodation let on an assured tenancy where a tenant has arrears equal to more than two months' rent. The important point is that, unlike other rent arrears grounds for possession, ground 8 is mandatory: only in this instance does the court have no discretion to decide whether it is reasonable to make an order for possession. The amendment to ground 8 is designed to give discretion to the courts in cases where housing benefit issues are outstanding. I am sure that many noble Lords have seen such examples. The court can decide to adjourn the case or suspend an order for possession. This will help to ensure that tenants are not evicted from their homes because of non-payment of, or delay in the payment of, housing benefit. The amendment would also prevent housing associations and other private registered providers of social housing using ground 8. The reason for this reform is that it is not appropriate for social landlords to seek to deprive the court of its discretion by mandating that it must make an outright order for possession, whatever the circumstances of the case. The Minister will know that most housing associations choose not to use ground 8, but some do. Local authorities do not have a mandatory ground for possession based on rent arrears. There is no need or justification for a mandatory arrears ground where social tenancies are concerned. I was most grateful to the Minister for writing in advance of my moving this amendment. I almost moved it in Committee. I think I was the last person standing when I was asked to withdraw and sit down in a welter of confusion, so it is rather like ““Groundhog Day””, and I am back again. The Minister replied very clearly about the Government’s views, but I wonder whether they have quite taken into account the comments I made and those that I am going to make. It is true that housing associations should follow the rent arrears pre-action protocol and use ground 8 only as a last resort. The Minister mentioned the pre-action protocol. However because ground 8 is a mandatory ground, the protocol does not contain any effective sanction when a landlord does not comply, whereas on a discretionary ground, which is the purpose of this amendment, the court can adjourn or dismiss the case for failure to comply. The reason for this important amendment is that the Bill does not address the principal concern that it is wrong for a housing association, as a social landlord and a public body, to seek to deprive the court—that is the important point—of its powers and discretion to do what is reasonable in the particular case. If it is reasonable for an outright possession order to be made, the court will make one, and the court should be able to exercise that discretion. A lot has been written about this very technical ground 8 procedure, but perhaps I can explain it best to those who have not followed it all by talking about a particular case as an example: the Matthews case. The problems caused by ground 8 were starkly illustrated in the case of North British Housing Association v Matthews and three other cases that were decided by the Court of Appeal in December 2004. In these cases, the housing association had brought possession proceedings on ground 8 despite being aware that the tenant had an outstanding housing benefit claim. The county court judge decided that he had no choice but to grant an outright possession order because of ground 8, yet Miss Matthews subsequently received a backdated payment of housing benefit—how many of us have dealt with problems and know that housing benefits are backdated?—which cleared her arrears completely and put her rent account into credit. Nevertheless, the possession order still stood. The Court of Appeal held that where ground 8 is involved, the county court has no power even to adjourn the hearing for a short period to await a housing benefit payment unless there are exceptional circumstances. The court was troubled by this situation, and Lord Justice Dyson spoke very eloquently about how he sympathised, but was bound by ground 8 not to exercise discretion. All I am asking the Minister is to reconsider whether ground 8 needs to be dealt with so that the court has discretion to evict or not evict. It is wrong for a certain class of people, very often with rent benefits that have taken a long time to come through which has given rise to the arrears. Ground 8 needs to be amended, and I hope that the Minister will take that into account. I beg to move.