My Lords, I support the amendment, but I do not think it goes far enough. I shall go on to talk about that in a minute. The noble Baroness has raised some interesting points and I was rather cheered to hear about her lack of success with the Labour Government because I am finding the same at the moment with the Conservative Government as regards the regulation of managing agents. I should say at the outset that that is what I think is missing
here, and I hope to bring forward an amendment on Report to cover the regulation of managing agents of leasehold properties.
The noble Baroness mentioned the private rented sector. I am aware of what that is, but unfortunately we still seem to be unable to deal with the invisible private sector, which is quite worrying. I meet people all the time who are being forced out of a bedsit or something because the rent is being put up. The landlord does not even declare that he has any tenants—much less use any letting agents—and when the tenants try to find another place to go to, just a simple room, they are joining a huge queue of people. The rent is increasing even as they wait for their opportunity to get a room.
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I was interested to read Labour’s declaration that it is going to protect tenants, but all Governments should be looking at some way of dealing with this situation. I understand that some authorities are going round to check whether a place really is available and unoccupied or whether it has these illegal tenants. However, one reads about the cases in Acton where landlords have built sheds and filled them with 10 tenants who are living in almost subhuman conditions. The landlords are now being caught up with, I believe, but how could this point have been reached in this country? It is because of the desperate housing situation. We definitely need more housing, and what we have we need to handle better. I have great hopes that the present Housing Minister might be encouraged to look into ways of making things better.
Rogue agents were mentioned and, sure enough, there are rogue agents in everything. This, again, is why I very much favour regulation of all sorts of agents, rather than just letting agents. This amendment, which would make it mandatory to be part of a redress scheme, would at least be big progress. At present, the figures for the scheme mentioned by the noble Baroness, Lady Hayter, are correct, but it is entirely voluntary. The fee to belong to the scheme and be part of the ombudsman system is £150. If you are any sort of an agent at all, surely £150 is only petty cash for your business. The scheme is very effective for those who need to use it. All complaints are free—you can bring any issue up and it costs you nothing. The maximum award that has been made against anyone has been £25,000. It is therefore an effective scheme and is not frightening for people. Nevertheless, the proposals in the amendments would be good and I very much support the idea of a mandatory redress scheme. However, it should apply to managing agents, estate agents and letting agents—all these categories.
Nothing demonstrated the situation more clearly than today when my Question became such a flop. Noble Lords had no idea what the leasehold valuation tribunal was doing. I am waiting to receive a letter back because the Minister said it was going to be replaced by some other system. I would like to know whether that will work better.
People are now at the stage where they are in danger of forfeiture of their homes due to disputed cases in the leasehold valuation tribunal where, win or lose, the landlord is charging his costs back through
service charges to the residents. Labour does not seem to care too much about this because it believes that it is middle-class people—there are plenty of us here—who have leasehold properties. However, those affected are not all middle class. Some people have no spare money; they have lived in a place for a long time, the lease might even be nearing its end, but it is their home and they want to stay. Suddenly, they find that the costs have increased enormously, there is no transparency and they have no idea what the money is being spent on. The noble Baroness mentioned rogue letting agents. The rogue managing agents are perhaps even worse because they often take out insurance policies through companies that are owned by their freeholders or head lessees, who are taking 50% of that insurance premium back themselves. There are proven cases of this happening, so I am not talking out of the blue.
I do not mind going on a bit because the noble Lord, Lord Browne, went on for such a long time at the previous session of the Bill on Monday that I could not believe that anyone could manage to do so. It demonstrated to me that there is no time restriction at this stage of the Bill. I am sorry that you are all stuck with a dose of it. Perhaps I am making up for the lack of opportunity to address this at my Question today.
The list of those who support the amendments is impressive. The British Property Federation is always cited as being opposed to mandatory systems. However, it has written to many people—I have seen the letters—saying that it is not opposed to those systems. This is a misapprehension under which the previous Government and this one seem to be suffering. I make it clear now that the British Property Federation, which is a very big and powerful organisation, is in favour of proper regulation of these bodies. That is very important as the federation is hugely influential in this field. It is very important that this redress scheme should become mandatory. If a high proportion of bodies already belong to it, the only ones you are going to catch are those which have no intention of offering redress. It would be very good if they were obliged to be part of such a scheme.
I emphasise that I will come back with an amendment of my own about managing agents. The noble Baroness, Lady Oppenheim-Barnes, who attended the Committee until the very last minute of the session on Monday night but cannot be here today, feels very strongly about the managing agent issue. She might speak on that point on a future occasion but I know that she supports the general principle of the measure and is very pleased that managing agents have been included in the definition. I strongly support the measure, not just on account of the redress scheme but because the definition has been widened to cover these most important issues.