Hansard

The bill currently provides that “The Scottish ministers may, by regulations, set out a code of practice” for letting agents. Amendment 76 would place a duty on Scottish ministers to do so. Amendment 126, in my name, will require the first code of practice, and replacement codes, to be subject to affirmative procedure. If the amendment is accepted, Parliament will be required to approve regulations that set out the first and any future replacement code, before the regulations can be made. The Scottish ministers will not be able to make those regulations without parliamentary approval, so to put on ministers the duty that amendment 76 proposes would pre-empt Parliament’s ability to agree, or not to agree, the code. Therefore, it would not be appropriate to make the change. On that basis, I invite Alex Johnstone to seek to withdraw amendment 76. The bill provides for ministers to develop a code of practice on professional standards, in consultation with stakeholders. At stage 1, Parliament called for further detail of what is to be included in the code of practice to be put in the text of the bill. Amendment 77 responds to that request and ensures that the important matters of client money protection and professional indemnity arrangements will be included in the code. The bill provides that the code of practice will be subject to negative procedure. The Delegated Powers and Law Reform Committee expressed concerns about that; it considers that affirmative procedure would be a more suitable level of parliamentary scrutiny, given the significant legal consequences of failure to comply with the code. I have reconsidered the issue, and amendment 126 will apply affirmative procedure to the first code and to any replacement code. Any adjustments to the code will be subject to negative procedure. I believe that that is a balanced approach. Amendment 77 is therefore intended to reassure Parliament by providing in the text of the bill more detail on what the code will cover. Amendment 126 will also allow for an increased level of parliamentary scrutiny of the first, and any future, code. Patrick Harvie’s amendment 127 also aims to ensure that the code of practice for letting agents will be subject to affirmative procedure. That would mean that any change to the code, no matter how minor, would be subject to affirmative procedure. Amendment 126, in my name, provides for the first code and any full revision of the code to be subject to affirmative procedure, so I invite Patrick Harvie not to move amendment 127, in favour of the more balanced approach. I turn to amendment 130, which is in the name of Patrick Harvie. I share his wish to see progress being made to develop the code of practice, but I want to ensure that the code is drafted with proper consideration of its aims, the desired outcomes and how it will be enforced. There is no question that there will be any delay on my part in implementing the code. It is, however, important that we allow sufficient time to enable the Scottish Government to consult fully the industry and the public. Furthermore, the code cannot be finalised until the associated tribunals legislation has been commenced. The Tribunals (Scotland) Act 2014 was recently enacted by Parliament. Tribunal reform is progressing and the first-tier tribunal is expected to be up and running by 2016. I wish to reassure Mr Harvie about my commitment to progressing development of the code, which I expect to be laid before Parliament within 18 months of the bill’s enactment. I ask him not to move amendment 130, because it does not allow sufficient time for the practicalities of full public consultation. I turn to amendments 137, 138, 139 and 143. I have given careful consideration to the amendments because, like Mr Harvie, I too have heard of the many and varied practices of letting agents, and of the adverse effect that they can have on tenants. That is why we are proposing regulation of the letting agent industry. However, matters such as rent, deposits, providing documentation and compliance with the repairing standard are legal responsibilities of the landlord. There are already a number of legal requirements relating to such matters. For example, the Tenancy Deposit Schemes (Scotland) Regulations 2011 set out what the legal obligations on a landlord are if they choose to take a deposit. Letting agents need to comply with the law when managing a property and acting on behalf of a landlord. That is why it is important that the code of practice will set out the standards that both tenants and landlords should expect, and why it is important that letting agents can demonstrate that they have the necessary training for registration. Let me make it clear that I want the regime to be effective. I am willing to consider what people have to say on the important issues that are covered by the amendments in the group and their views on what should be included in the code of practice, but I think that the right time to do that will be when we consult on the draft code. It will be subject to public consultation, and because it is to be dealt with using affirmative procedure, the committee will have an opportunity to consider the detail of the code once it is drafted. I therefore cannot support amendments 137, 138, 139 and 143. I turn to amendments 140, 141 and 142. I sympathise with people who are struggling to find affordable rented property while they are in receipt of state benefits, and with people whose immigration status is uncertain. However, there are a number of practical difficulties with the amendments. It is ultimately for the landlord, not the letting agent, to decide to whom they will let their property, although the letting agent may provide advice and support to the landlord. I am not clear about how amendment 140 could be enforced, because most landlords would want to check that the tenant could afford the rent. On amendment 141, let me be clear that I disapprove of the use of the term “no DSS”. Discrimination and the other matters that Patrick Harvie raises in his amendments will be taken up by the Scottish Government with the letting agent industry through the process of developing the code of practice. The Scottish Government will encourage equal opportunities throughout the industry, in order to address the matters that Patrick Harvie raises. I therefore cannot support amendments 140, 141 and 142. Amendment 144, in the name of Mary Fee, proposes a specific reference to the need for a letting agent to “comply with the Letting Agent Code of Practice.” However, the bill already provides for compliance with the code of practice to be a key aspect of the fit-and-proper-person test for registration. The code will be enforced by application to a tribunal, and decisions found against a letting agency will be reported back to ministers. Like Mary Fee, and as I have already noted with reference to Patrick Harvie’s amendments, I know of the many and varied practices of letting agents who try to avoid protecting tenancy deposits with one of the three approved schemes. The tenancy deposit scheme has its own enforcement requirements, so proposed paragraph (a) in amendment 144 is unnecessary. Unintentionally, that proposed provision could also be problematic if a landlord wanted to receive the deposit from the letting agent so that the landlord could put it into a scheme, which is permitted. With regard to proposed paragraph (b) in amendment 144, I am well aware of letting agents who have charged premiums and of the effect that those charges can have on tenants. That is why we have already clarified the law to make crystal clear what is allowed. On proposed paragraphs (c) and (d) in amendment 144, I sympathise with people who are struggling to find affordable rented property while they are in receipt of state benefits, especially families. All Scottish Government policies reflect Scottish values of fairness and opportunity, and promote equality and social cohesion. As I said in my response to Patrick Harvie’s amendments 140 to 142, the Scottish Government will discuss equality issues with the letting agents industry through the process of developing the code of practice. We will take that seriously. We encourage the discussion of equality issues, which will be part of the code of practice. I invite Mary Fee not to move her amendment.