Tenant Fees Bill — House of Commons, 2018-09-05
Topic: Housing
Rishi Sunak (Conservative, Centre-right): That ties in nicely with the point made by my hon. Friend the Member for Harrow East (Bob Blackman), but it would not be right for me to stand at the Dispatch Box and define what is reasonable in any particular case. There is a general test of reasonableness, which will vary from circumstance to circumstance. A simple key for a garden gate with no security attached to it will rightly cost very little—people can go down to Timpson or wherever to replace it—but a security identity fob for an alarm system may be much more expensive. The point is that the charges could not exceed the reasonable commercial or market value of such goods or services On that point, I reassure my hon. Friend that we want to go further than amendment 3, which was tabled by the hon. Member for Great Grimsby, would have us do. We have listened to concerns about the fact that tenants may find it difficult to challenge the reasonableness of default fees, and we believe that it would be easier for them to do so if they were offered up-front evidence of default charges. That is why amendment 28 introduces a requirement for landlords and agents to demonstrate their loss proactively by providing written evidence—for example, in the form of receipts or invoices—of the costs incurred before charging tenants. That will put the onus on landlords and agents to be clear about the charges that they want to levy, and it will give tenants additional assurance that they are paying a fair and reasonable amount To return to the intervention by my hon. Friend the Member for Carlisle (John Stevenson), the Government maintain that it would not be appropriate to list default charges in the Bill, given the risk that such a list will be incomplete or insufficient. We believe it is for the tenant and the landlord to determine what it is necessary and fair to include as default charges, on a case-by-case basis. There are other potential default charges besides those for late payment of rent and lost keys. Charges might also result from not parking in the space allotted to a property in a communal area, from the loss of a home automation smart remote and from the misuse of a common space—perhaps for a barbecue or other party event. Our amendments will increase transparency and fairness by ensuring that landlords and agents can recover their costs, while providing greater protection to tenants over the level of fees that they can be charged and further minimising the risk of abuse I turn to our other amendments regarding permitted payments. We want to ensure that the Bill delivers on the policy intention that the party who contracts a service should pay for the service. We have already been clear that where tenants procure their own third-party services—for example, a reference check or an inventory—they should be responsible for the cost. The legislation allows for that, although agents and landlords cannot, of course, require a tenant to use and pay for a third-party service Similarly, tenants should be able to make payments to agents whose services they contract for the purpose of finding accommodation, provided that the agent does not work on behalf of the landlord. That may be the case if a tenant lives overseas or otherwise requires assistance in relocating. We do not wish to prevent relocation agents from charging a fee for their services. Amendment 7 is designed to ensure that tenants are free to contract the services of a relocation or similar agent should they wish to do so, provided that the agent does not also act on behalf of the landlord with whom the tenancy is being agreed There are some further minor amendments to clause 28. Amendments 20 to 23 ensure that if a payment, such as a default charge, is required under a tenancy agreement that was entered into before the ban comes into force, that payment will be prohibited where it is paid to an agent after a period of 12 months. The Bill already prohibits that in relation to landlords, and we want to ensure that there is consistency with respect to agreements with agents Further to that, amendments 24, 25 and 29 to 42 make some minor drafting changes to clarify that a person acting on behalf of the tenant, or someone who has guaranteed the payment of rent—a relevant person—can also make a permitted payment. That will ensure that if somebody guarantees a tenant’s rent, they can make payments on the tenant’s behalf to a landlord or agent if required We have also tabled several amendments to clarify the enforcement and repayment provisions in the Bill. The amendments will ensure that the legislation can be effectively and fairly enforced, and that tenants have proper access to redress when things go wrong. First, amendments 13, 14 and 44 to 48 ensure that if a landlord or agent charges the tenant an unlawful payment, the landlord or agent must repay it as soon as is practically possible. Currently, when a tenant seeks repayment through the local authority or first-tier tribunal, a landlord or agent has 14 days or 28 days, respectively, to return the unlawfully charged payment once an enforcement order has been made We are talking about tenants’ money, and we want to ensure that tenants can recover it in good time. It is not fair for a tenant to be out of pocket because a landlord or an agent has charged a fee or unlawfully required a tenant to pay a third party. Our amendments will require a landlord or an agent to repay unlawful fees within seven to 14 days of the making of an order by the enforcement authority or the first-tier tribunal. The authority or tribunal will have discretion over when the payment is required, within that narrow period. We expect that most repayments will be made within seven days, but we have provided for a range because in certain circumstances it may not be possible for a landlord or agent to repay the money within seven days. I hope that this amendment addresses the concerns that we have heard about the speed of repayment when a landlord or agent is at fault, and we hope that it reassures tenants about the recovery of their money.