Renters’ Rights Bill

Committee (4th Day) (Continued)

21:19:00

Clause 14: Duty of landlord and contractor to give statement of terms etc

Amendment 136

Moved by

136: Clause 14, page 22, line 7, after “previous” insert “assured” Member’s explanatory statement This limits the exception to providing a written statement of terms to cases where there has been an implied surrender and re-grant of a previous assured tenancy.

My Lords, I will start with government Amendments 136, 138 and 139. These amendments make provision for the requirement to provide a written statement of terms for tenancies that become assured after they have begun. A tenancy may become assured during its lifetime for a range of reasons; for example, because it becomes the tenant’s principal home, or rent becomes payable on the property. Where this happens, landlords should be able to comply with the requirement to provide a written statement of terms. These amendments will therefore require landlords to provide a written statement of terms within 28 days of the tenancy becoming assured. Without this, landlords would be left in limbo, unable to comply with the duties in new Section 16D of the Housing Act 1988 to provide a written statement of terms at the outset of a tenancy, leaving them liable to penalties. It would also leave a tenant without the written statement of terms, a key benefit of the new system, despite their tenancy having become assured. I beg to move.

In view of the time that we have lost—and I must say publicly that I regret the pressure that we are putting ourselves under—I will just say that it is essential that written statements are mandated to help people resolve conflicts and provide evidence if disputes go to court. What these must contain, which is the essence of Amendment 140 from the noble Baroness, Lady Scott, is clearly important and needs to be widely known. There is quite a lot in the Bill that we feel needs to be widely known, and we have all had concerns about the level of knowledge. All I will say, with my tongue in my cheek for things down the road, is that that is all the more reason to regulate those who act for landlords—such as letting agents—to make sure that they act professionally and inform their tenants correctly.

My Lords, Clause 14 aims to strengthen the transparency of rental agreements by requiring landlords to provide written terms at the outset of a tenancy. This is a welcome step towards ensuring that tenants are fully informed about their rights and obligations, and that landlords are held to account for the terms they offer. Amendment 140, in my name, recognises that legislation alone is not enough. We must ensure that tenants, landlords and, indeed, any third-party contractors involved are informed and empowered. By requiring the Secretary of State to issue clear, accessible guidance, we help to make these rights and duties real and usable in practice. Without such guidance, even the most well-intentioned legislation risks becoming an abstract concept rather than a meaningful tool for change. This is why it is crucial that the Government take proactive steps to ensure that everyone involved in the rental process understands their roles and their responsibilities. Amendments 136, 138 and 139, tabled by the Minister, seek to refine the process through which written statements of terms are provided. The intention, as I understand it, is to ensure that landlords are held to account for providing these terms in a timely manner, which is certainly a step in the right direction. However, we must be careful to consider whether the amendments fully take into account the diverse needs and circumstances of both tenants and landlords. The Government have a clear opportunity here to provide a system that is not only fair and transparent but also practical and achievable for all those involved. We must ensure that these provisions do not overburden landlords with an administration task but, at the same time, protect the rights of tenants by providing them with the necessary information to make informed decisions about their tenancies. While the intention is to create more transparency, it is equally important, we feel, that we do not add unnecessary complexity or red tape that could inadvertently discourage smaller landlords or make the rental process more cumbersome. In light of these considerations, I would like to ask the Minister one or two questions. First, is the Minister confident that the 28-day requirement for landlords to provide written statements will not lead to confusion or delays? This timeline, while designed to allow time for landlords to issue the statements, may in practice create gaps in communication, potentially leaving tenants in a state of uncertainty about their rights and obligations. How do the Government intend to mitigate these potential delays? Furthermore, how do the Government plan to ensure that smaller landlords, who may not have the dedicated administration teams, will be able to comply with these provisions without facing excessive burdens? Small landlords, who often play a crucial role in our rental market, could face challenges in keeping up with increased administration requirements without support or resources. We must be mindful not inadvertently to create barriers that make it harder for these landlords to continue offering tenancies. In conclusion, while we acknowledge the Government’s intention to improve transparency in tenancy agreements and better protect tenants, we must consider the real-world impact of these changes. We must ensure that reforms are workable for both tenants and landlords, without increasing the complexities of the rental process or creating unnecessary barriers to housing. The amendments, while positive in some respects, do not fully address the practical challenges landlords and tenants face. Is the Minister confident that these provisions will not place undue burdens on landlords, especially those at the smaller end of the market, and that they will effectively protect tenants’ rights without creating new avenues for confusion and non-compliance? The legislation must strike a balance that promotes fairness and transparency while also being workable for all parties involved.

My Lords, I have just a brief response to the points raised by the noble Baroness, Lady Scott; I also thank the noble Baroness, Lady Thornhill, for her comments. Amendment 140 would require the Secretary of State to issue guidance on the new duty to provide tenants with a written statement of terms before a tenancy is entered into. We are already committed to supporting tenants, landlords and agents to understand and adjust to the new rules. I accept the point that the noble Baroness, Lady Thornhill, made about agents; I think we will come to that later. We are engaging with stakeholders in developing the requirements for the written statement of term and are aware of how important it is for the sector to understand the duty. In response to the comments from the noble Baroness, Lady Scott, about small landlords and whether the 28-day period is reasonable, I am sure that will come out during our discussions with the sector. Because we are working that way, I am confident that we will be able to work through any pressures it may be concerned about. To help landlords and tenants, we will be providing a full suite of guidance, so these groups know exactly what the changes mean for them. For those reasons, I ask that Amendment 140 not be pressed.

Amendment 136 agreed.

Amendment 137

Moved by

137: Clause 14, page 22, line 30, leave out “and section 16I(1)(a)” Member’s explanatory statement This amendment is consequential on another amendment in the name of Baroness Scott of Bybrook.

My Lords, the amendments in this group tabled in my name and that of my noble friend Lady Scott of Bybrook seek to limit the financial penalties by local authorities and probe the process on which non-judicial process is sought. Although it is right that those who deliberately flout the rules face financial penalties, it is also right that these financial penalties should be proportionate and applied fairly. Are fines of up to £40,000 reasonable? In many cases, they could be the equivalent of several years of rental income. We need a system that is balanced and just for both the tenant and the landlord.

21:30:00

I draw the Committee’s attention to Amendment 144, tabled by my noble friend Lady Scott of Bybrook. This amendment seeks to prevent local authorities issuing fines for offences that could be considered in courts against the legal standard of proof through a non-judicial process. This amendment is important because it would protect due process and the rights of individuals by ensuring that penalties such as fines are not imposed without proper legal scrutiny. Can the Minister clarify how this process will operate? Furthermore, does she agree that any determination requiring legal scrutiny should be conducted through a formal legal process by individuals with appropriate legal training?

Amendments 146 and 147 seek to limit the local housing authority’s powers to impose financial penalties. I ask the Minister how the Government determined £7,000 as an appropriate upper limit for a financial penalty. What specific conduct would constitute a £7,000 fine? Any fine, especially one imposed outside a court of law, must align with the principles of proportionality. We must not accept disproportionate penalties that may unfairly harm those with limited means. Many landlords are not wealthy, industrial, or professionalised tycoons; they are people who own a single property. Perhaps they inherited it from a parent, rely on it as an alternative to a pension, or became what some call accidental landlords. Owning a property does not automatically confer great wealth and it does not equip an individual to shoulder disproportionate financial penalties. We therefore wish to probe Government’s imposition of the £7,000 limit. How did the Government reach this figure? Why have they chosen it? Who have they consulted with to get this right? Simply: is this proportionate?

On the theme of proportionality, Amendment 147, tabled in my noble friend Lady Scott’s name, would cap the fine not against some arbitrary figure but against a sum equivalent to two months’ rent under the relevant tenancy agreement. This amendment once again probes the Government’s thinking. Fines should not treated as the cost of doing business; they should be seen as a deterrent. At the same time, they must be fair, implemented correctly and be a realistic sum that reflects a single landlord’s ability to pay.

Next, I draw the Committee’s attention to Amendment 154, which seeks to probe the Government’s reason for granting local housing authorities the power to impose a financial penalty of up to £40,000. Local housing authorities across the nation face significant cost pressures. Factors which are well rehearsed, such as population growth, homelessness and housing insecurity, have collided with tight budgets and increasing costs. Global inflationary pressures pushed up the price of building materials, maintenance, staffing and temporary accommodation. These pressures are not going away. The OBR has forecast that inflation is set to rise and the Chancellor’s inflationary policies will hurt these providers further.

Simultaneously, authorities are being tasked with additional responsibilities, including the enforcement of new housing standards and regulatory duties, most notably the new consumer standards. Although these Benches agree with high standards, we must understand that the growing regulatory burden is another strain on local housing associations. With this in mind, again, how did the Government derive a figure of £40,000? Can the Minister set out how the Government reached these limits? I trust that the Minister considered the ability to pay, the right to redress and the proportionality of the fines when reaching her conclusion.

Finally, Amendment 157 would require the Secretary of State to produce an annual report on the financial assistance provided to local housing authorities. This amendment would provide transparency and clarity, and thereby help to uphold accountability. When public money is tight and the fiscal landscape is bleak, it is right that taxpayers know where their hard-earned cash is headed. I hope the Minister will consider ways in which we can promote accountability and transparency when large sums of financial assistance are provided.

At the heart of this group of concerns lies a simple question: why? Why have the Government chosen these specific figures, and why have they set the thresholds where they have? The Government have a duty not only to explain their overall policy but to justify the rationale behind the specific numbers they have adopted. If we are to fulfil our role as His Majesty’s loyal Opposition, we must be able to scrutinise both the methodology and the final outcomes.

For the interest of the Committee, Amendments 137, 141, 149 to 151, 156 to 164, 293 and 294 are consequential amendments to the five main amendments in this group. I hope that the Minister, if she is unable to provide clear answers today, will return to the House in due course with an explanation of the Government’s reasoning. At present, it is difficult to see how she can stand behind figures that appear arbitrary. I beg to move.

My Lords, I rise to speak to Amendments 153, 201, 217 and 241, in the name of the noble and learned Lord, Lord Etherton, who cannot attend the Committee today. I know the whole Committee will join me in wishing him well. These amendments seek to limit the financial penalty that local authorities can impose for offences under these clauses. In the absence of the noble and learned Lord, Lord Etherton, I will briefly set out my reasons for supporting his amendments in this group. I should declare an interest that, as a practising solicitor for over 50 years, I am always concerned about penalties that are outside the judicial process, but my concern increases when the level of financial penalty is as high as is proposed. I agree with the noble and learned Lord, Lord Etherton, that the level of financial penalty set by the Bill is extremely high. A financial penalty of £40,000 would be ruinous for most landlords. According to the Government’s own Property Rental Income Statistics: 2024, the “average income from UK property remained relatively stable at around £17,000 between 2018 to 2019 and 2022 to 2023”. Therefore, a £40,000 penalty would, in effect, represent more than double the rental income of an average property. In certain egregious cases, a penalty of that severity may seem appropriate, but those cases can be dealt with by the courts. We must ask ourselves what effect this new level of financial penalty that can be imposed by local authorities will have on landlords today. We have serious concerns that the risk of a large financial penalty being imposed may encourage existing landlords to leave the sector and discourage new landlords from entering it. A more reasonable level of financial penalty would prevent that chilling effect. I have carefully heard the words of my noble friend Lord Jamieson on the Front Bench, and I know that my noble friend Lady Scott of Bybrook, also on the Front Bench, will surely agree with the noble and learned Lord, Lord Etherton, on this and consider the warning that we have given. Of course we accept that the Government will have their Bill, which should be effective in delivering its objectives, but we are seriously concerned and worried about the impact that these excessive financial penalties will have on the rental market.

My Lords, I am deeply grateful to the noble Lord, Lord Hunt, for introducing the amendments of the noble and learned Lord, Lord Etherton, so well. I spoke to the noble and learned Lord about these amendments before his illness, and I was going to pass on only two or three comments that I recall he made to me. The £40,000 is a life-changing amount of money—I think that was the way he put it. The reason I have my iPad here is that he referred to the civil penalties under the Housing and Planning Act 2016, on which the MHCLG has issued a very helpful note. It is so complex that local authorities needed a 20-page note to tell them how to implement this. The maximum under that Act is £30,000, and I do not see why we have suddenly gone to a £40,000 world. The £30,000 was reserved for a relatively small number of offences, and each involved knowingly doing something truly evil and wrong. I feel that that, as a principle, is conceded, as it were, even though £30,000 is a bit rich. Therefore, I agree on the £40,000; I do not understand why we have had to go up from £30,000. With the next group, we will come to the issue of knowing and recklessness, which is deeply serious as well. I will pause briefly on some of the amendments. Amendment 153 refers to a schedule. This is one of the ones where it is up to £40,000 currently. It refers to a very complex schedule—yet there is a recklessness trigger for a fine of up to £40,000. It seemed to me that that was not as serious as some of the things that are a £30,000 offence under the Housing and Planning Act 2016. So I was dubious about whether that was truly worthy of a £30,000 lump. I therefore agree very much with the £7,000, which is where the noble and learned Lord, Lord Etherton, had come to. On Amendment 241, there are a couple of things here that trigger the £40,000. Again, recklessness is for mistakes made in giving data to the new database. When people give data to databases, it is inevitably quite boring, and things can go wrong. Recklessness is an incredibly difficult thing to cope with, as we will discuss next, no doubt. So I felt, again, that this was very different from the £30,000 triggers under the Housing and Planning Act 2016. I felt that there was a strong case for moving the maximum down to £7,000. I am going to stop there in the analysis, because it was better done by the noble Lord, Lord Hunt, but that line of thinking—bringing it down to £7,000 from £40,000—was intended to improve standards of justice because, if people have been truly evil and truly wrong, the courts are there for that. They are made for that, and they can be a lot heavier with people. But, for local authorities, roughly £7,000 per offence—it could be multiple offences, of course—or 50% of an average year’s rental income, would be proportionate.

21:45:00

My Lords, I have spent some time looking at this and I have listened very carefully to the amendments in this clause from the noble Baroness, Lady Scott, and the noble Lord, Lord Jamieson, as well as listening to the words of the noble Lord, Lord Hunt, and the noble Earl, Lord Kinnoull. I am neither a lawyer nor a solicitor, but we are troubled by Amendment 144 in particular, as it would in effect delete all of the new Section 16I of the Housing Act 1988, inserted by Clause 18. In doing so, it would remove the ability of local housing authorities to issue civil penalties for a range of offences, pushing them into the courts. Having listened to the noble Lord, Lord Hunt, and the noble Earl, Lord Kinnoull, I think that there probably is a debate about what should be pushed back to the courts, but in general I see a legitimate role for local authorities to issue penalty notices. I also feel that in much of the Bill we have talked about the courts’ capacity to deal with things, so I would be a little reluctant to increase the burden on the courts, which we are already arguing are stretched. I would also be interested in hearing from the noble Baroness, Lady Scott, why Clause 15 of the previous Government’s Renters (Reform) Bill gave similar powers to the local housing authorities as in Clause 17 of this Bill, albeit with a much lower maximum fine. To us, the proposal undermines the regime in the Bill that empowers local housing authorities to issue civil penalty notices. It is part of the tools in the box to give local authorities more powers to enforce across the many and various sections of the Bill. If the one objective of the Bill is to raise standards and root out rogue landlords, the Bill is right to give greater powers to local authorities to do so and raise the level of fines that can be imposed to be an effective deterrent. At this point, when the noble Lord, Lord Jamieson, very nicely pointed out the one person who has inherited and the this and the that—I do not think that those landlords need to be worried at all about this measure, as they are not the people whom the Bill is aimed at. In fact, there is a tiny degree of scaremongering in this. As I understand the aim, and I am sure that the Minister will correct me if I am wrong, we are looking at the bottom end of the market. The answer to the landlords mentioned in the list cited by the noble Lord, Lord Jamieson, is, “If it is so ruinous to you, don’t do it—don’t do the thing that will result in that fine being imposed”. I am absolutely certain that the majority of good landlords would go nowhere near it—but actually, as the noble Earl said, some of our worst landlords do terrible things. It is very often a shock to talk to the people who deal with bailiffs, evictions and all that, to actually see the conditions that some landlords will subject human beings to. But it is a legitimate argument to talk about what should go to the courts or not as a result of what we have been talking about. Amendments in this group seeking to reduce the amount that a local authority can charge in civil penalties will be generally resisted by ourselves, precisely because this Bill enables these fines to be used as revenue to provide resources for a strong and effective enforcement service. The capacity and capability of local authorities to carry out positive enforcement is a serious matter—and, of course, we will cover that in the next group. Councils keep the fines that they impose, whereas fines from the courts go to the Treasury, although it must be said that the LGA is still concerned that there will be a funding gap, the amount of which is going to be fairly speculative at this stage, which makes the reasons for wide-ranging reviews, which we will discuss in later groups, to be imperative. Perhaps the Minister could give us some reassurances on funding. Amendment 144 removes the power of local housing authorities to enforce several provisions in the Bill that we strongly agree with, such as purporting to end a tenancy by serving a notice to quit orally or serving a purported notice of possession—in other words, not using the Section 8 process. In other words, it is conning a tenant that they have to leave. Councils must have the right to enforce this, as it goes to the heart of the Bill. Amendment 144 therefore reduces the powers of local housing authorities to enforce, and Amendments 146 and 154 go on to reduce the penalties that can be imposed, which we opposed. Amendments 147 and 155, as well as all the amendments from the noble and learned Lords, Lord Etherton and Lord Keen, and the noble Earl, Lord Kinnoull, are an interesting variation on that theme, using rental payment as a measure of the penalty. I can see some logic in that, given that rents vary enormously depending on the property. But two months’ rent in a small house in Lancashire might well be several hundred pounds, whereas a similar property in Hertfordshire might be several thousand. There is a fairness of argument there, which is probably why there is a range of fines the authority can use, and I am sure the noble Baroness will enlighten us. Finally, we can agree on Amendment 157. The burden on local authorities cannot be understated, and therefore it should be contingent on the Government to specifically look at this aspect and not just rely on the LGA and others to point it out. We are not convinced that it needs to be in the Bill, but it should be a genuine commitment.

My Lords, I thank the noble Baroness, Lady Scott, and the noble Lord, Lord Jamieson, for moving those amendments. I send my get-well wishes to the noble and learned Lord, Lord Etherton, as well, and thank the noble Lord, Lord Hunt of Wirral, for moving the noble and learned Lord’s amendments. I thank the noble Earl, Lord Kinnoull, and the noble Baroness, Lady Thornhill, for taking part in the debate. It might help if I start with a brief bit of context. We are taking a clear escalatory approach to civil penalties here. Across the Bill, less serious, one-off breaches will be subject only to the maximum penalty of £7,000. Only if landlords persist in not signing up to the database or the ombudsman will they become liable for a civil penalty of up to £40,000—and that is the maximum. Where landlords continue to fail to remedy unacceptable conditions in a property, they may be faced with a civil penalty of up to £40,000 or indeed criminal prosecution. Where there is evidence that landlords and letting agents continue to discriminate in the letting process, they can face multiple fines. But as the noble Baroness, Lady Thornhill, said, good landlords—there are many of them—will not be subject to any of these fines because they do not commit the offences that would lead to those fines. The answer is to follow the outlines in the Bill and then there will not be any need for landlords to be fined. Amendment 144 would remove the ability of local authorities to impose financial penalties for non-compliance with the tenancy requirements where this is not a criminal offence. Effective enforcement against landlords who flout the rules is a key part of ensuring that our reforms deliver their full benefits. Across the provisions in the Bill, as I said, we have taken a consistent, proportionate and escalating approach to penalties. The civil penalties of up to £7,000 for less serious or first-time non-compliance is an important part of that approach. Removing the ability of local authorities to impose civil penalties for non-criminal breaches of the tenancy requirement would create a gap. How would landlords who, for example, failed to issue tenants with a written tenancy agreement or ended a tenancy illegally be held to account? Transferring responsibility for determining fines for these breaches to the courts would be a poor alternative and, as mentioned by the noble Baroness, Lady Thornhill, it would unnecessarily increase pressures on the courts. We have had many debates about that in this House in response to other areas in the Bill. In response to the question from the noble Lord, Lord Jamieson, about the capacity of local authorities to deal with this, local authorities have significant experience of imposing civil penalties. I do not see a good reason for excluding breaches of the tenancy requirements from this well-established practice. Amendments 137, 141, 149 to 151, 156, 158 to 164, 293 and 294 are consequential on Amendment 144 and remove references to new Section 16I of the Housing Act 1988, which Amendment 144 would delete. Amendment 146 would reduce the maximum penalty for a breach of the tenancy requirements from £7,000 to £5,000. Amendment 147 would, in the alternative, set the maximum penalty for a breach of the tenancy requirements at two months’ rent. Amendment 154 would reduce the maximum financial penalty for tenancy offences from £40,000 to £30,000. Amendment 155 would set the maximum penalty for tenancy offences at 12 months’ rent. Amendments 153, 201, 217 and 241 would reduce the maximum civil penalties for offences in relation to tenancy reform, illegal eviction, the database and the ombudsman from £40,000 to £7,000. Civil penalties need to be set at a level that provides an appropriate punishment and acts as an effective deterrent to future non-compliance. To respond to the question from the noble Lord, Lord Jamieson, about the level of the fines, we have set the maximum civil penalty for offences across the Bill at £40,000. This mirrors existing maximum civil penalties for offences under the Housing Act 2004, which are currently £30,000, but this takes account of inflation since those came into force. We intend also to increase the Housing Act 2004 maximum penalties to £40,000, via regulations, to reflect those changes in the value of money. The £7,000 maximum penalty for breaches represents a similar percentage uprating to reflect inflation, compared with a maximum fine level of £5,000 for less serious non-compliance in other housing legislation; for example, the Tenant Fees Act 2019. Increasing maximum fine levels to reflect inflation ensures that the deterrent effect of the penalties is maintained. However, I emphasise that these are maximum levels: they will not be the normal penalty level. Local authorities will need to look at the particular circumstances of each instance of non-compliance. They will need to take account of aggravating or mitigating factors and arrive at the final penalty in line with their policy. When considering whether to issue a civil penalty, local authorities are required to issue a notice of intent, allowing time for landlords to make representations. The local authority will need to be satisfied beyond reasonable doubt that the landlord has committed an offence. If the landlord disagrees with the imposition or amount of the penalty, they will of course be able to appeal to the First-tier Tribunal.

On a point of clarification, if I may, the Minister has made it very clear that there will be a range of fines that a local authority will be able to impose, and, as the noble Earl, Lord Kinnoull, pointed out earlier, with the 2016 Act, there was—I am not sure that I would say very clear, but let us call it very extensive—guidance on what would constitute a fine, with what burdens of proof, and whether it was knowingly reckless or unintentional. Is it the intention of the Government to provide very clear guidance to councils as to what level of fines they should impose related to what level of offence and so forth?

I thank the noble Lord for his question. Of course, local authorities will need to have a clear rationale for why they have set a civil penalty at a particular level and apply aggravating and mitigating factors to that, but local authorities need to be able to pursue penalties that are high enough to deter landlords from committing offences, but not so high that they are unfair. I take his point about guidance, and I will come back to him on that point, if that is okay. Setting maximum penalty levels by reference to rent received on a property introduces unnecessary complexity and runs counter to well established practice. The noble Baroness, Lady Thornhill, asked whether it could be set at levels of rent. Local authorities may take account of local rent levels when arriving at the final penalty. It is clearer and simpler, though, for the maximum to be prescribed and be the same wherever in England the same breach or offence is committed. Amendment 157 would require the Secretary of State to make an annual statement to Parliament of the funding provided to local housing authorities to support their enforcement of the tenancy requirements. To respond to the point from the noble Lord, Lord Jamieson, about the cost to local authorities, we recognise that the enforcement duties we are placing on local housing authorities in the Bill represent an additional net cost. In accordance with the new burdens doctrine, we will ensure that additional burdens created by the new system are funded. We will set out the funding we are making available to meet those new burdens in due course. We expect enforcing the new tenancy requirements to be a significant part of the additional costs on local authorities. Local authorities will, though, have flexibility on how they use the funding provided—a point made by the noble Baroness, Lady Thornhill—and we do not intend to specify the detail of what it should be used for. For the reasons I have set out, I respectfully ask the noble Lord to withdraw the amendment.

22:00:00

I thank noble Lords for their contributions to this group. I owe a particular debt of gratitude to the noble and learned Lord, Lord Etherton, for bringing amendments to this House. I also wish him all the best for his recovery. These amendments, while similar in spirit to ours, would go even further in addressing the limits placed on local housing authorities. The noble and learned Lord is right to highlight both the challenges faced by local authorities and the significant scale of the proposed fines. As there appeared to be a little bit of confusion, let us be absolutely clear: we need powers to hold to account rogue landlords who deliberately and maliciously break the rules to the detriment of tenants. That is something we can all agree on. However, we need a system that is fair and proportionate and does not ensnare essentially innocent landlords who inadvertently —or not maliciously—fall foul of the rules. They need to be encouraged to stay in the rental game. As my noble friend Lord Hunt said, we need more rental homes, we need people to stay in the rental market and we need more people to come into it. We need to be very wary of coming up with systems where they fear very significant fines that they may perceive as arbitrary. Hence, I was very keen to get clear guidance from the Minister about how these fines would be placed and at what levels. I look forward to hearing further from her on this. I also appreciated what the noble Earl, Lord Kinnoull, said around the 2016 Act and the importance of guidance on that. I thank the Minister for her reply and the commitment to share some reasoning for the figures that the Government have arrived at and some guidance— it appeared she would, anyway. Without insight into the rationale for the figures selected and the thresholds imposed, we are left to critique in the dark. For scrutiny to be effective and informed, the Government must provide not just partial explanations but a full and transparent account of how these conclusions were reached. Only then can Parliament properly fulfil its role in holding the Executive to account. I hope that the Minister will enable us to do this by sharing some of the Government’s reasoning and further guidance on how those fines will be brought forward. Getting penalties right is not a technical detail; it is fundamental to the fairness and effectiveness of a system designed to remedy an offence. Significant fines and penalties for rogue landlords are appropriate and proportionate. However, as I said earlier, significant fines for someone who unintentionally falls foul of the law would be inappropriate. We need to be careful and calibrated to ensure that they deter offences but do not distort the functionality of the housing market. Although we want to address rogue landlords, we also want a thriving rental market and to avoid deterring good landlords who might perceive a significant risk of large, arbitrary fines. I will finish with this message: a well-designed penalty framework should uphold the law, encourage compliance and support the functioning of housing authorities. The success of this legislation depends not just on good intentions but on practical deliverability, balanced implementation and trust from those who must operate within it.

Before the noble Lord sits down, can I just ask him: did he really feel, in his time as chair of the Local Government Association and leader of a reputable authority, that local authorities were dishing out fines willy-nilly or were disproportionate in their measures when they were considering things? I found the opposite—there were times when I wished we would be a bit tougher and stronger and go a bit further. I do not recognise this picture that the noble Lord is painting: that landlords might perceive that it is terrible and feel bad about it. I genuinely believe that most good landlords have nowt to fear—it is not those that the Bill is gunning for. We have a duty to convey that message and not to make good landlords feel threatened by the fact that there is an escalation in fees.

I thank the noble Baroness very much. She is absolutely right: most councils in this country are very good and proportionate and do not levy fines—or whatever—willy-nilly. I absolutely agree with that. However, it is very much in the eye of the beholder, and we need to do everything we can to encourage a successful and thriving rental market with good landlords. Within that, one needs to think what that single-, two- or three-home landlord will look at. They will see the potential risk of £40,000, and it is perception. I absolutely concur that councils act appropriately in many instances, but if a landlord feels that there is a risk, and particularly when that risk can be two, three, or, in some cases in the north of England, four years’ rent, they may just say, “I do not want to take that risk, I will sell my property”. That is one less house for somebody to rent and one more person on a council’s housing waiting list.

Before the noble Lord sits down, I am sorry, but I have to challenge that because the opposite to that is true. I think most good landlords are actually waiting for this to come into place because it damages their reputation when we have rogue landlords who cause their tenants the sorts of problems we are talking about. You will not come across the penalty regime unless you are the sort of landlord that causes your tenant problems. It is those landlords we want the Bill to impact. Just to clarify the point on guidance, we will be issuing revised guidance on setting financial penalties to provide a national framework for local housing authorities. That will help to ensure the consistent approach which takes account of the seriousness of the offence and harm caused to the tenant and will help reduce the likelihood of reductions on appeal. I want to be absolutely clear that this whole enforcement regime is aimed at those bad landlords we have heard too much about. Landlords want us to do this: they want to see that those people who do not do the job properly get an appropriate penalty for it.

Can I just ask a point of clarification? The Minister talked about publishing guidance. Will that be available before Report so that we can consider the Bill in that context?

I will come back to the noble Lord on that point.

I withdraw the amendment.

Amendment 137 withdrawn.

Amendments 138 and 139

Moved by

138: Clause 14, page 22, line 32, leave out “and (6)” and insert “to (6A)” Member’s explanatory statement This amendment is consequential on the amendment to clause 14 in the Minister’s name amending section 16D of the Housing Act 1988 to insert new subsection (6A).

139: Clause 14, page 23, line 8, at end insert— “(6A) In any other case where a tenancy becomes a tenancy to which this section applies, the statement under subsection (2) must be given within the period of 28 days beginning with the date on which the tenancy becomes an assured tenancy.”Member’s explanatory statement Where an existing tenancy becomes an assured tenancy, this amendment requires a landlord to provide a written statement of terms within 28 days rather than being required to provide such a statement before the tenancy is entered into.

Amendments 138 and 139 agreed.

Amendment 140 not moved.

Clause 14, as amended, agreed.

Clause 15: Other duties

Amendments 141 to 143 not moved.

Clause 15 agreed.

Clause 16 agreed.

Clause 17: Landlords etc: financial penalties and offences

Amendment 144 not moved.

House resumed.

House adjourned at 10.09 pm.