§ (1) A person who proposes to apply for a licence in respect of an HMO within the area of a local housing authority or who proposes to become the manager of one or more houses within the area of a local housing authority may apply to that authority for a certificate that he is a fit and proper person for the purposes of section 65.
§ (2) The provisions of sections 62(2) to (7) and 65(1) to (3) shall apply in the case of an application for a certificate under this section.
§ (3) Local housing authorities shall grant a certificate if they are satisfied that the applicant is a fit and proper person for the purposes of section 63(3)(b)(i) and (d) and, in determining any subsequent application by the holder of the certificate in relation to an HMO licence, the holder of the certificate shall be treated as having satisfied the authority in relation to those matters unless proceedings are pending for the revocation of the certificate.
§ (4) Any certificate shall remain in force for the period of 5 years from the date of its grant unless revoked in the meantime but without prejudice to the right of the holder of the certificate to apply for a further certificate on the expiration of an earlier certificate.
§ (5) For the purposes of this section the following provisions of this Act shall apply—
- (a) section 69(1) (other than paragraph (c));
- (b) section 69(2) (a) and (b);
- (c) section 69(7), (8) and (9) (omitting the words "or a relevant person" in subsection (9));
- (d) paragraphs 22 to 25 and 29 in Part 2 of Schedule 5 (except that references to "the relevant person" shall be omitted);
§ (6) The provisions of Part 3 in Schedule 5 (appeals against licence decisions) shall also apply to decisions in respect of a refusal to grant a certificate or the revocation of a certificate (except that any reference to "a relevant person shall" be omitted for these purposes)."
§ The noble Baroness said: My Lords, this amendment comes back to the idea of fitness certificates. We spent some time on this in Committee, so I shall not detain the House for terribly long, except to say that, under the Bill, houses in multiple occupation and selected licences will be issued on an individual, house-by-house basis.
§ The purpose of the new clause is to improve and simplify the system. It would enable a prospective licence holder or manager of more than one property in a local authority area to apply to the authority for an individual certificate of fitness for the purposes of licensing. The authority would then need to investigate that person only once. That returns us to a previous provision, which means that every time someone put forward an application, he would have to have his funding arrangements re-examined. If found to be a fit and proper person, a certificate would be issued to that person under our amendment.
§ We have made considerable concessions since Committee. Under this new version of the new clause, a certificate of fitness once granted would last for 316 five years, not 10, as previously suggested, unless it was revoked for good reason in the mean time. There would be a right of appeal against the refusal of a certificate. Once the five-year period was up, the person concerned could reapply and be reconsidered.
§ That is important in some areas where one landlord owns a large number of properties. If that person has to be scrutinised each time he applies for a licence, that is administrative bureaucracy gone mad. The amendment would ensure that that was unnecessary. I beg to move.
§ Baroness Maddock
My Lords, I support the purpose of the amendment, which we discussed in Committee. I, too, was concerned that we should not make extra work for local authorities. In response to amendments that I have moved this afternoon, the Government have been keen not to make extra work for authorities. Casting my mind back to Committee, I think that we had at least some reassurance from the Government that there would be some allowance for local authorities, once they had agreed that someone was a fit and proper person, not to have to go through the whole process again. I think I remember that right, but perhaps that can be reiterated today, because I understand what the noble Baroness is saying and have great sympathy for it, as I have said previously.
§ Lord Bassam of Brighton
My Lords, we debated this amendment in Committee and I dealt with it at that stage. In fairness, I ought to point out that the amendment does not take account of the revision of clause numbers since the time it was debated in Committee. But I will not dwell on that point. I think I also said at the time that I saw some merit in the noble Baroness's argument, but the amendment does not eliminate the need for separate licence applications on different properties.
In many cases a landlord may own a single property which is subject to licensing, and in those cases it is appropriate that his fitness should be determined as part of the consideration of the application. However, there will be cases where a landlord owns multiple properties. It would be absurd if local authorities were required to carry out separate fitness inquiries in relation to every application in those sets of circumstances.
It is our intention—and I think this gets to the point raised by the noble Baroness, Lady Maddock—that the application forms for licensing will address that scenario by asking whether the applicant already holds a licence for other property in the area, or whether such an application is outstanding. In that way, the landlord will not be required to reprovide and re-present information that they have already provided to the authority. In effect that means that an initial application approval would act as a fitness certificate.
That does not mean that the local authority cannot make further inquiries, or is bound to grant further licences, as one would expect, because circumstances may change and it may be right in the case of later applications to refuse the licence on the basis of experience. So I think that the bureaucratic nightmare conjured up by the noble Baroness is not quite such a 317 horrific scenario as she envisaged when she embarked upon this worthy amendment. In the circumstances, I hope that she will feel able to withdraw it.
§ Baroness Hanham
My Lords, she would not have embarked upon it if it had been clear at the outset that that is what the situation would be. Half the reason for putting forward amendments is to pluck out from the Government what they have in mind. If it is right that the application form will make it clear that if one has more properties one makes that clear on the application, and therefore there will be only one examination—I fully accept that there may be occasions when it is necessary to do more than that—then I am content. But that information would not be available if we had not moved this amendment. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 67 [Licence conditions]:
§ Lord Bassam of Brighton moved Amendment No. 58:
§ Page 45, line 10, leave out "such steps as are reasonably practicable" and insert "reasonable and practicable steps"
§ The noble Lord said: My Lords, Amendment No. 58 is grouped with other amendments, two of which are non-government amendments. I will deal with the amendments in turn.
§ Clause 67 provides that the local authority may include conditions in Part 2 licences in addition to those mandatory conditions that must be included in every licence and which are laid out in Schedule 4. Subsection (2) sets out the conditions that a local authority may decide to include in a licence if appropriate in the circumstances. The list is not intended to be exhaustive.
Government Amendment No. 58 would alter Clause 67(2)(b), which has a licence condition relating to,
taking of such steps as are reasonably practicable to prevent or reduce anti-social behaviour by persons occupying or visiting the house".
§ The amendment replaces the words "reasonably practicable" with "reasonable and practicable". It is timely that the noble Baroness, Lady Hamwee, has arrived in the Chamber because this change was prompted by a debate in Committee on a point raised by the noble Baroness. I think her query was whether the words "reasonably practicable" in subsection (2)(b) necessarily implied that conditions had to be reasonable as well as practicable. She suggested that there might be steps which, although entirely practicable, would nevertheless be unreasonable for the landlord to take.
§ 5.45 p.m.
§ We do not wish there to be any possibility that landlords or managing agents are required to take unjustifiable steps regarding the behaviour of their tenants. Nor do we want there to be any danger that misinterpretation of this provision leads to landlords being able to validate harassment of their tenants. Therefore, this amendment will clarify the situation that licence holders, subject to a condition of this type, 318 can be expected or required only to take steps that are both reasonable and practicable when endeavouring to prevent or reduce anti-social behaviour. So, the noble Baroness has scored.
§ Amendment No. 61 is a non-government amendment. It would enable a local housing authority to serve a "breach of condition notice" on a licence holder who fails to comply with any of the licence conditions. The notice would require the licence holder to comply with the conditions specified in the notice within a period of not less than 28 days from the date the notice was served, but the period could be extended by the authority.
§ As I understand it, this amendment is aimed at ensuring that a person does not find himself or herself in an inadvertent breach of a licence condition and at risk of prosecution. It inserts a procedural step to give landlords a last chance before they face having to go to court.
§ It will be recalled that Clause 70 has now been amended and provides that a licence may be revoked only where there are serious or repeated breaches of licence conditions. It is hard to conceive of any situation where a prosecuting authority would consider it in the public interest to bring a prosecution for a single trivial breach of a licence condition when it could not even revoke the licence for that breach.
§ As has been said before in your Lordships' House, most authorities are now signed up to the enforcement concordat. I think all local authorities ought to be signed up to that, but that is another matter. That makes it quite clear that prosecution is not appropriate in the case of any and all breaches of statutory obligations.
§ I share noble Lords' general objectives of ensuring that prosecutions are not brought inappropriately. I hope that our words on the record today make it quite clear that local authorities are not free to bring pointless prosecutions for trivial offences. As a responsible enforcement authority, the job for a local authority policing the licensing regime will be to give advice where this will help, to give a warning where a landlord is getting close to the mark and to take serious action—such as a prosecution or a revocation of a licence—only where such action is justified.
§ The unfortunate effect of the proposed amendment is that it would inhibit prosecutions where there had been deliberate and serious breaches of licence conditions. Some conditions are just not capable of being remedied within 28 days of service of a notice. Some breaches might be so serious as to warrant immediate prosecution. I know that the amendment has not yet been spoken to but I hope that the noble Lords who tabled that amendment will not press it having heard what I have said.
§ Amendment No. 62 is a government amendment. It follows on from the contents of Schedule 4. which impose an obligation on local housing authorities to impose particular conditions on all Part 2 and 3 licences. This includes a requirement to keep smoke alarms in working order and supply a declaration as to the condition and positioning of alarms to the local housing authority on demand. The government 319 amendment is a minor amendment which would clarify that this includes a requirement on landlords to install smoke alarms if smoke alarms are not already in place. The amendment removes some ambiguity from the draft. Most landlords are responsible and provide alarms in their properties. We are simply trying to plug a gap that may inadvertently exist.
§ Amendment No. 66 provides that a person having control of or managing an HMO—whom for convenience I shall refer to as the landlord—can be guilty of committing an offence under Clause 72(2) only if he or she knowingly permits another person to occupy the property so as to cause the house to be occupied by more persons than are permitted on the licence. An amendment was tabled to that effect in Committee by the noble Lords opposite. We agreed to take the matter away and give it further thought. We have done exactly that.
§ I note that the noble Baroness and the noble Lord have retabled their amendment. I should like to reassure them that government Amendment No. 66 serves the same purpose as non-government Amendment No. 67. Although the words are slightly different, we prefer our version. I therefore hope that noble Lords opposite will feel able not to press their amendment.
§ Non-government Amendment No. 70 seeks to reduce the penalty for the offence of managing an unlicensed property, or allowing a property to be overcrowded, to a fine not exceeding level 5 on the standard scale instead of the £20,000 fine currently provided for in Clause 72(6). We believe that running an HMO without a licence when one is required should be made a serious offence and we think that that should be reflected in the level of fine payable on conviction.
§ In the same vein, we believe that operating an HMO with a licence but allowing such property to be occupied by more people than the licence allows, although a breach of the conditions of the licence, breaches a fundamental term of the licence and should not be classed as a breach of other licence conditions. We therefore think it appropriate to classify this breach as running an HMO without a licence and to set the penalty of fine at the same level, at £20,000.
§ This amendment has been extensively debated. I can only reiterate that our intention in setting the exceptional level of maximum fine for these offences is simply to underline the seriousness with which the Government are treating the new compulsory licensing regimes and to set them apart from other housing offences which are pitched at a fine at level 5. The Government believe that the penalty for these offences should be sufficiently substantial to act as a strong deterrent to landlords who might otherwise seek to operate without a licence or may be tempted to allow a licensed property to be occupied by more people than the licence allows.
§ There are landlords out there—thankfully very few, and the ones who exist are notorious—who might see some merit in breaching these arrangements. I do not think that we should act in a way that offers them any encouragement at all.320
§ I turn, finally, to government Amendment No. 83. Clause 88 provides that a local authority may include conditions in Part 3 licences in addition to those mandatory conditions that must be included in every licence and are laid out in Schedule 4. Subsection (2) sets out the sorts of conditions that a local authority may decide to include in a licence if appropriate in the circumstances. It is not intended to be an exhaustive list.
§ Our amendment would alter Clause 88(2)(b), which is the suggested licence condition relating to taking such steps as are reasonably practicable to prevent or reduce anti-social behaviour by persons occupying or visiting the house. The amendment replaces the words "reasonably practicable" with "reasonable and practicable", in line with the earlier amendment.
§ I hope that noble Lords will agree that we have responded to some of the concerns raised in Committee. We have tried to replace words that needed to be put on the face of the Bill with ones that work better. I would certainly resist amendments that weaken our approach to landlords who, unfortunately, step out of line and commit serious breaches of their conditions. I beg to move.
§ Lord Hanningfield
My Lords, I thank the Minister for many of those comments, many of which related to some of our amendments. It was difficult to follow how his lengthy remarks related to amendments that we will debate later today. Therefore, it still seems necessary for us to move our amendments, after which the Minister can say that the point has already been covered. The Government have, for example, tabled an amendment that is almost identical to our Amendment No. 67. I think that we will have to reiterate the point when we reach those amendments to avoid any confusion. Nevertheless, the Minister's remarks were very helpful.
§ Baroness Hamwee
My Lords, I thank the Minister and the Government, although I am sure they realise that they are tempting me to go on being picky about legislation. I do not promise not to be. I am grateful to them for taking up the point.
§ On Question, amendment agreed to.
§ Lord Hanningfield moved Amendment No. 59:
§ Page 45, line 36, at end insert "but (except in the case of prescribed standards under section 65(3)) the authority shall not do so unless it has first carried out an inspection of the house under section 4 and has determined that a category 1 or category 2 hazard exists"
§ The noble Lord said: My Lords, in Committee the Minister indicated that the reference to other facilities in Clause 65(4)(b) included such things as fire alarms. Currently, Clause 67(4)(b) makes it clear that the authority can impose licence conditions relating to installations even if the same result can be achieved as a result of an HHSRS assessment under Part 1 of the Bill.
§ There could consequently be a mismatch, in that if the authority acted under Part 1, then it must carry out a proper hazard assessment and decide on the most appropriate course of action. As the Bill stands, that is 321 not required if the local authority goes down the licence route. There should be a proper HHSRS assessment in the same way as the licence conditions operate under Part 1. Without that requirement an unnecessary facility may be required. A proper assessment under the HHSRS system would show whether that was necessary in the first place. Otherwise, landlords could face considerable costs for meeting licence conditions in respect of something that is not really necessary in the first place. I beg to move.
§ Lord Rooker
My Lords, as a general rule, an authority is required to address health and safety issues through Part 1 functions and not by means of the licence conditions. However, Clause 67(4)(b) provides that it may impose conditions relating to the installation or maintenance of facilities or equipment as part of that licence. Amendment No. 59 would require that licence conditions made under the clause relating to the installation or maintenance of facilities can exceed national minimum standards prescribed under Clause 65(3) only if a housing health and safety rating system assessment has been carried out on the property in question and a category 1 or 2 hazard has been discovered.
We think that the amendment proceeds on a false basis. Part 1 functions must be dealt with under Part 1. Therefore, if a category 1 or 2 hazard is discovered in a property, there will be no need for a licence condition to address the hazard because it will be dealt with via the rating system regime. So, contrary to what the amendment envisages—that licence conditions need to he restricted by combating category 1 and 2 hazards—the conditions are already more restricted than the amendment proposes.
I understand that the amendment derives from a fear that landlords will be required by licence conditions to install unnecessary equipment. We think that that fear is unfounded. Clause 67 makes it clear that authorities must be reasonable when setting licence conditions by including the wording,so far as appropriate in the circumstances".Moreover, landlords may, of course, appeal to a residential property tribunal if they believe that any licence condition is unfair.
Earlier this week and following our discussions in Committee, I wrote to the noble Lord and other Peers concerning fire safety standards. As my letter made clear, we will not be using these provisions to prescribe inappropriately sophisticated fire safety equipment. Rather, we will be using the prescribed standards to ensure that all licensed houses in multiple occupation comply with basic fire safety standards.
Moreover, there is the broader point that the provisions of Clause 67(4)(b) are not intended to refer only to health and safety-related facilities and equipment. They are about guaranteeing basic standards of accommodation for some of the most vulnerable tenants.
322 I hope that that is a satisfactory explanation. It is not meant to be a bucket of cold water. However, issues relating to Part 1 can and must be dealt with using the powers under Part 1.
§ Lord Hanningfield
My Lords, I thank the Minister for his detailed reply. Unfortunately, during some of it I was occupied in talking about the previous amendment. I heard the gist of it and I will examine it in Hansard in some detail to see whether we need to return to the matter. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ 6 p.m.
§ Lord Hanningfield moved Amendment No. 60:
§ Page 45, line 46, at end insert—
§ "(7) A licence may not include conditions imposing restrictions or obligations imposed under the management regulations or which are contained in a code of practice approved for the purposes of section 216."
§ The noble Lord said: My Lords, HMOs will be subject to control or regulation under the HHSRS standard, licence conditions, management regulations and the approved code of practice. Owners of HMOs are in the main small business people faced with a tremendous amount of regulation. It is a great burden to them. Experience shows with planning permissions how licensed conditions can grow and multiply.
§ The amendment's purpose is to cut down the risk of such duplication. If matters are dealt with in the management regulations or subject to the code of practice, there is no leave for them to be repeated as licence conditions. There is also the risk that, with the code of practice, matters that are really recommendations of good practice are given legal force by the imposition of licence conditions. I beg to move.
§ Lord Rooker
My Lords, I regret that my reply is longer than the noble Lord's speech in moving the amendment. As he said, Amendment No 60 would require that licence conditions do not duplicate restrictions or obligations already covered by the management regulations provided for under Clause 217 or the approved code of practice as provided for under Clause 216.
We have some sympathy with part of the amendment. The Bill's provisions would appear to allow the possibility of a landlord who breached a management regulation and a licence condition that replicated it being subject to double jeopardy; that is, prosecuted twice for the same offence. We do not want that situation to arise. I am pleased to say that it will not. If a local authority were foolish enough to pursue such a course, the attempted second prosecution would be thrown out as an abuse of process, regardless of whether the first prosecution was successful. It will pay the necessary cost, because it should not be a burden on the landlord.
We do not wish authorities to generate superfluous regulation. We have already noted that Clause 67 makes it clear that local authorities must be reasonable 323 when setting the licence conditions. I have mentioned that landlords will have the right of appeal against any licence condition they consider unduly burdensome or inappropriate. We would expect local authorities to be aware that if, for example, they sought without good reason to impose a licence condition that closely duplicated the effect of a management regulation, such a condition would be deemed unreasonable and could successfully be appealed.
With regard to licence conditions duplicating elements of an approved code of practice, we appreciate that there is some circumspection about what is best practice becoming legally enforceable through replication as a licence condition. None the less, if a local authority has good reasons for including such a condition in a licence, we would not wish to prevent it from doing so.
As I said, landlords can always appeal against conditions they believe to be unfair or unnecessary. It would be perverse if something considered to be such a prime example of good management that it was included in the code of good management practice were banned from being a licence condition.
The management code has not yet been finalised. We hope that when it is finalised it will recommend that good landlords will ensure that smoke alarms are installed and regularly checked. We are certain that it is appropriate also to have a condition in every licence issued that the licensee will ensure that smoke alarms are installed and maintained. That is a requirement contained in Schedule 4.
It would make more difficult the task of driving up management standards in houses in multiple occupation if the amendment were pressed. I hope that it will not be and that my reply is satisfactory to the noble Lord.
§ Lord Hanningfield
My Lords, I thank the Minister. Again, we will analyse his answer. I was trying to make the point that I have made before: many HMOs are owned by small businesses and one does not want duplication or too much onerous bureaucracy in the processes. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord Hanningfield moved Amendment No. 61:
§ After Clause 67, insert the following new clause—