My Lords, the first two amendments are in the name of my noble friend Lord Flight, who, unfortunately, cannot be here today. I should declare that I am a landlord.
My noble friend’s Amendment 24 provides that the relevant persons concept be removed, on the grounds that it is confusing and gives little or no protection to tenants. Where someone other than the tenant contributes to or pays in full the deposit for a home, they, as well as the tenant, are required to be given the prescribed information. Such a person is known as the relevant person. Failure to give the prescribed information leads to financial penalties, and the landlord’s inability to recover possession of their property should the need arise.
There is little need for this requirement, as the arrangement between the tenant and the relevant person is private, one that the landlord is not required to know about, despite being required to provide the relevant person with information. After all, the contract is between the landlord and the tenant, not some third party. Obviously, if the third party is party to the contract—for example, acting as a guarantor—that third party would and should receive the relevant information as to the whereabouts of a deposit, but not if the third party just helps out with the deposit. Surely that is a private matter between the third party and the tenant. A provision which can be forgotten about easily creates a needless trap for landlords, who are potentially hostage to unscrupulous tenants entering into such an arrangement and then seeking to conceal it from the landlord, who is left in breach of his obligations.
My noble friend’s second amendment concerns providing information electronically. Landlords are legally responsible for ensuring that deposits provided for a rented property are kept safe for the duration of the tenancy in an official tenancy deposit scheme. They are obliged to provide the tenant with details of where the deposit has been secured, known as the prescribed information. At present, the prescribed information must be issued to the tenant in paper form. In houses of multiple occupation, this can lead to volumes of paper.
The amendment would enable legal information on the location of deposit money, once secured in an official scheme, to be provided to tenants electronically. This already applies to some other communications, including the How to Rent guide, but would be best applied across the board, including to gas safety certificates and tenancy agreements. A recent survey of landlords found that 91% would prefer to send prescribed information to a tenant by email; 92% felt that their tenants would prefer such information to be sent by email and the emails stored; and 95% felt that serving information electronically would make the administration of letting out a property more efficient. We are constantly told that we now live in a paperless society, so it seems archaic to insist that prescribed information should continue to be sent only by paper.
My Amendments 26 and 31 are designed to address a particular issue which some landlords and tenants can face when seeking to reclaim a tenancy deposit held by the custodial tenancy deposit scheme. Under the Housing Act 2004, landlords are required to protect tenancy
deposits by either registering the deposit with an insured tenancy deposit scheme or physically transferring the tenancy deposit given by a tenant to a custodial tenancy deposit scheme, which holds the deposit during the tenancy. The Government have included in the Bill a streamlined repossession procedure when a tenant has abandoned the property. This presents an opportunity to amend Schedule 10 to the Housing Act 2004 to similarly streamline the custodial deposit repayment procedure where a tenant or landlord is not contactable at the end of the tenancy.
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The problem that I seek to address can arise at the end of a tenancy when a landlord or tenant seeks to obtain a repayment of the tenancy deposit from the custodial tenancy deposit scheme that holds it. Both the landlord and tenant have to agree on the amount of deposit to be returned for the scheme to release the funds to the relevant parties, failing which the matter can be referred to the dispute process of the scheme or to the courts. However, one of the significant issues which landlords and sometimes tenants face is recovering the deposit from the custodial scheme when the other party is simply not contactable or fails to respond to letters and emails. In these circumstances, a landlord has to go through a lengthy procedure to secure a repayment from the deposit held by the custodial scheme if they have suffered a loss. This involves the landlord drawing up a statutory declaration before a solicitor, setting out what deductions should be made and why the tenant is not contactable and forwarding this to the custodial scheme. It is a long-winded process which leads to delays and additional costs for the party making the statutory declaration.
Interestingly, legislation in Scotland and Northern Ireland approaches this problem in a different way, and my amendment to Schedule 10 to the Housing Act 2004 proposes that we should adopt that process here. In Scotland and Northern Ireland, where a tenant fails to respond to requests from the landlord regarding the deposit repayment, the portion of the deposit requested is paid by the custodial scheme to the landlord once the custodial tenancy deposit scheme is itself satisfied that the tenant has failed to respond. A similar process applies where the tenant says that the landlord is not responding. This means that the deposit is repaid more quickly, without recourse to solicitors and statutory declarations, while ensuring that if the tenant or indeed landlord later reappears, they can seek to recover any disputed deposit through the courts. I am further advised that the proposed process has been working very successfully in both Scotland and Northern Ireland for the last three to four years.
I am advised that the current statutory declaration process is used in over 4,000 cases each month. My amendment will lead to a significant streamlining of the deposit repayment process where parties fail to respond to repayment requests, and will lead to reduction in time, expense and worry for landlords and tenants who need to get the deposit repaid by the custodial scheme. I beg to move.