Hansard

Amendment 57 is a minor consequential amendment. Section 27 sets out how rent officers and the first-tier tribunal are to determine the open market rent for a rented property. In doing so, it makes reference to the eviction grounds, which currently require or include a pre-tenancy notice. Amendments 90 and 98 propose to remove the requirement for those notices, meaning that the reference to them in section 27 will no longer be appropriate. The bill contains repossession grounds that enable a landlord to regain possession of a let property if he or she intends to sell it, live in it, refurbish it or change its use. Amendment 88 strengthens the “landlord intends to sell” repossession ground by ensuring that a landlord cannot give his property away or sell it for a nominal sum in order to evict a tenant. Instead, a landlord will be able to apply to the tribunal for an eviction order only when they are looking to sell their property on the open market. When a repossession ground refers to a landlord’s intention, the landlord must provide evidence to the first-tier tribunal of his or her intention and the tribunal must be satisfied that the ground is met before granting recovery of possession to the landlord. The issue of the robustness of the grounds was raised during the stage 1 debate—in particular, mention was made of those grounds that include the landlord’s intention. Some stakeholders are concerned that those grounds may be open to misuse, which is why I have lodged amendments 89, 91, 94 and 95. Amendment 89 provides examples of the type of evidence that the first-tier tribunal may consider when determining whether the landlord genuinely wants to sell, including a letter of engagement from an estate agent or a recently prepared document such as a home report. For refurbishment of the property, amendment 91 includes examples of evidence such as planning permission or a contract between the landlord and an architect. When the landlord or a family member intends to live in the property, amendment 94 provides that an example of evidence that might be used is an affidavit stating that the person has that intention. If the use of the property is to be changed, amendment 95 provides that an example of evidence that might be used is the planning permission that would be required. That responds to calls from stakeholders for examples of the types of evidence that may be required to demonstrate that ground to be on the face of the bill. Deciding on whether the ground is met is entirely up to the tribunal; it will be for the tribunal to consider whether the evidence that is presented to it during any repossession case is sufficient. I move on to amendment 90. Schedule 3 provides a mandatory ground for eviction when a property has been repossessed by the lender. The tribunal must order repossession of a property if a mortgage lender intends to sell the let property and certain specified conditions are met. One of those conditions is that the tenant was given notice before the tenancy began that the tenancy might be ended on that ground. If the tenant was not made aware of that fact before the tenancy begins, the tribunal will have discretion on whether to evict the tenant. Amendment 90 removes the requirement for the tenant to be given notice before the tenancy began and therefore removes the discretionary strand of that repossession ground. In its evidence to the Infrastructure and Capital Investment Committee, the Council of Mortgage Lenders outlined that lenders do not need to be notified when tenants change and new tenancies are entered into. Therefore, they have no involvement in the tenancy contract that is entered into between the landlord and tenant and have no way of ensuring that a landlord issues a pre-notice to the tenant to advise them that that ground for eviction might be used. I fully appreciate that lenders require certainty that they can obtain vacant possession in the event of a mortgage default. Having reconsidered this ground, I agree that lenders must continue to have the confidence in their lending under the new tenancy. Amendment 90 will achieve that, by removing the discretionary element of the ground. Amendments 92 and 93 will mean that beneficiaries who have property held in trust for them can make use of the eviction ground that the landlord or a family member intends to live in the property if the beneficiary wishes to use the property as his or her home. That eviction ground is provided for in schedule 3. Amendments 92 and 93 provide that, where property is held in trust, the reference to a landlord in that eviction ground is to be read as a reference to those with certain rights under the trust—essentially the trust beneficiaries. The amendments recognise that a trust beneficiary is the one with the true interest in the property, so the idea of the landlord intending to occupy needs to be modified accordingly. That will enable the trustees to recover a let property for a person for whom that property is held in trust if that person wishes to live in the property. I move on to amendments 96 to 99. Schedule 3 currently contains an eviction ground that enables a landlord to regain possession of a property if it is required for use in connection with the purposes of a religion, as a residence from which a religious worker's duties are performed. The ground in the bill has a requirement to notify the tenant, before the tenancy begins, that that ground may be used to repossess. Amendments 96, 97 and 99 amend the ground by providing that the property must have been used for that purpose previously. The effect is that a landlord may repossess a property on the ground that it is required to house a religious worker as a residence from which their duties are performed only if it had previously been used for that purpose. During stage 1 some stakeholders expressed concern that the ground continues the use of pre-tenancy notices, which are currently used in the assured tenancies regime. Amendment 98 removes the requirement for the tenant to be given notice, before the tenancy begins, that the tenancy might be ended on that ground. Amendments 96 to 99 reaffirm my position that pre-tenancy notices are not required under the new tenancy and make the eviction ground narrower by ensuring that a landlord may regain possession of a property under those circumstances only if it has been previously used for that purpose. The purpose of amendment 177 is to add an eviction ground that would apply when the landlord is a company that intends to let the property to a shareholder. The effect would be to add another mandatory ground whereby a tenant may be evicted from his or her home. I have sought to strike a fair balance in setting the grounds for repossession in schedule 3 by carefully considering rights of landlords to own and use their property and the rights of tenants to have a home. For example, when a landlord wants to recover possession to live there themselves or to house a family member, they have the right to recover the property. I have also lodged amendments 92 and 93 to ensure that this eviction ground works when the property is held in trust so that a beneficiary may be housed. However, I do not consider it fair that a tenant can be evicted from his or her home when the landlord is purely a limited company that wants to let the property to one of its shareholders. That ground may also be open to abuse, as there is no limit on the number of shares that a shareholder must have in order for the ground to apply. Amendment 178 would insert an eviction ground when the landlord is a trust and the intention is to let the property to a beneficiary of that trust. I understand why Mr Johnstone has lodged the amendment and thank him for doing so but, as he will just have heard, amendment 93 deals with the situation when a property is held by trustees. Rather than inserting that as a separate eviction ground, I propose inserting it as a variation in the application of the existing eviction ground that applies when a landlord or family member wishes to occupy the property. I suggest that that is more appropriate, as the amendment is not really about adding a new eviction ground but is rather about modifying the application of the existing one to accommodate trust ownership. I therefore urge Mr Johnstone not to move amendment 178 but to support amendment 93 instead. Amendment 179 would enable a landlord to evict a tenant so that the landlord could let the property to an employee or retired employee. I have concerns about the amendment, as it could result in a family being evicted from their home so that an employee or a retired employee of the landlord could move in. I think that it would be unfair to allow a family to be moved out in those circumstances. Indeed, such a result would be counter to the purpose of the bill, which is to give people security of tenure in their home in the private sector. For that reason, I cannot support the amendment. I believe that we have got the balance of the grounds right and that we have now captured the reasonable circumstances that a landlord would need to evidence in order to recover possession of their property. There is nothing in the bill that would stop landlords retaining particular properties as tied housing for employees. I move amendment 57 and ask Alex Johnstone not to move his amendments.