I beg to move amendment 65, in clause 62, page 89, line 25, after “residential landlord” insert—

“, whose property is not managed by an agent who is a member of an independent redress scheme approved by the Secretary of State,”.

This amendment would only require a residential landlord to be a member of the landlord redress scheme introduced by Clause 62 if their tenant does not already have access to one by virtue of the landlord using an agent who is a member of another approved independent redress scheme.

With this it will be convenient to discuss the following:

Government amendment 23.

Clause stand part.

Clauses 63 to 71 stand part.

Schedule 3.

Clause 72 stand part.

We move on to the chapter on landlord redress schemes. The Opposition agree on the need for effective measures, but we need to make sure that those measures are functional in practice.

The private rented sector has lagged behind other housing tenures when it comes to access to redress. For example, tenants in social housing have long been able to escalate complaints through the housing ombudsman’s social landlord redress scheme. Private tenants have had, in comparison, severely limited options for resolving issues, in spite of the fact that they suffer from poorer housing standards on average. I believe that once tenants no longer have the threat of section 21 evictions hanging over them, they will finally feel able to challenge poor practice from landlords at the disreputable end of the market without the fear of retaliatory evictions.

The Bill introduces a new mandatory landlord ombudsman service, which will give tenants free access to redress if their landlord fails to resolve a legitimate complaint. The landlord ombudsman scheme will be a non-adversarial route for escalating complaints, and it will empower tenants to challenge landlords who provide a poor level of service or who behave inappropriately. The ombudsman will benefit landlords who are committed to providing a decent home and a good service. It will give them access to an impartial decision maker to resolve complaints in the quickest and most cost-effective way. This will help to maintain landlord-tenant relationships and therefore, we hope, sustain tenancies for longer.

Clause 62 allows the Secretary of State to make regulations to require landlords, as defined under clause 61, to be members of the private rented sector landlord ombudsman. The provisions in clause 62 will allow prospective, current and former tenants to raise complaints to the ombudsman. This is because things can go wrong for tenants at any point in the rental process, so tenants should be able to seek redress for issues that occur during the pre-letting period or at the end of a tenancy.

Clause 62 will allow the ombudsman to provide voluntary services as well as mandatory redress, which could include mediation services. As I think I said in the evidence sessions last week and on Second Reading, we are exploring options for introducing landlord-initiated mediation to complement the landlord ombudsman service. That is another example of how we are trying to take pressure off the courts and tribunals system.

Government amendment 23 to clause 62 will enable us to require landlords to register all their properties with the landlord ombudsman and keep that information up to date. That was always the intention, and the amendment clarifies that in the legislation. If a landlord chooses not to provide the correct information, they will be liable for enforcement as set out in clauses 64 and 65. That will ensure that landlords pay the correct fee, where fees are based on the size of their property portfolio.

Clause 63 allows the Secretary of State to set out in regulations the conditions that a private rented sector redress scheme must meet before it is approved or designated by Government. By putting conditions in regulations, we will set the framework for a high-quality redress service that can adapt to an ever-changing housing market. For example, to be approved, the scheme must include provision about accepting tenant complaints and requiring landlords to put things right. That could be achieved by making a repair or paying compensation. We will ensure that the ombudsman’s decisions are enforceable by requiring the scheme to set out a route of expulsion. That means that if a landlord does not comply with a redress order, they could be expelled from the scheme and liable for local authority enforcement.

The clause allows the Secretary of State to set out in regulations how a scheme will be approved or designated. In pursuit of a simple and effective user journey, we will set out in regulations in due course that only one scheme will be operational at any one time. It is crucial that the ombudsman is supported by a robust enforcement regime, so that all landlords understand the importance of abiding by the requirements to join the scheme and tenants can get the resolution that they deserve.

Clauses 64 and 65 will give local councils the powers to take action against landlords who fail to join, or against anyone who markets a PRS property where the landlord is not registered. That will include civil penalties for initial breaches and potential criminal prosecution for continuing or repeat breaches.

Clause 64 gives local authorities the power to penalise landlords by imposing financial penalties on those who fail to join the ombudsman. Penalties can also be imposed on individuals who market a property when the landlord is not a member. That will include civil penalties of up to £7,000 for initial breaches, and up to £40,000 or criminal prosecution for continuing or repeated breaches. The fines can be imposed if the local authority is satisfied beyond reasonable doubt that regulatory requirements have been breached.

Clause 65 sets out the circumstances in which an offence is committed for failure to adhere to the redress scheme membership requirements, which will be set out in regulations under clause 62. That includes the requirement for the landlord to be a member of the ombudsman when a property is marketed for let. Landlords who continually or repeatedly fail to sign up to the ombudsman, and individuals or businesses who persistently market a property when the landlord is not a member, will be denying tenants access to redress and therefore should, in our view, be liable for criminal offences. The clause therefore provides for local authorities to be able to pursue criminal convictions as an alternative to imposing the fines provided for in clause 64. If a landlord is convicted of an offence under clause 65, an unlimited fine can be imposed.

Those provisions should be sufficient to deter people from breaching the redress requirements. If someone persistently continues to break the law, however, it is only right that local councils can take further, more stringent action. Tenants will also be able to seek a rent repayment order against landlords who commit an offence by continually breaching the requirement to be a member of the ombudsman scheme. That is provided for in clause 96, which we will debate in due course. Local authorities will have discretion over the levels of fines they impose, and that will support consistency. Clause 64 allows the Secretary of State to issue guidance to local councils on issuing penalties.

In addition to the robust enforcement provisions in clauses 64 and 65, clause 66 gives the Secretary of State the power to make regulations that would allow the administrator of the ombudsman to apply to the court or a tribunal for a redress decision to be enforced as if it were a court order. We can make regulations under this power if significant numbers of landlords refuse to comply with ombudsman decisions, in spite of the risk of being expelled and facing enforcement action. Furthermore, clause 66 rightly includes a requirement for the Government to consult with landlord and tenant representatives before exercising the power.

The Government are keen to ensure that the new ombudsman service will fit into the existing landscape of redress, regulation and enforcement. That will ensure that the new service is as effective as possible from launch, by being complementary rather than duplicative. That is why clauses 68, 70 and 71, and schedule 3, are drafted to support the service to work collaboratively with other relevant organisations.

Local authorities currently enforce regulations in the PRS, as we have discussed, often in response to tenant complaints. We intend for the ombudsman and local authorities to support each other, and that was a point we delved into at the evidence session with the chair of the Housing Ombudsman Service, Richard Blakeway.

Clause 68 allows the Secretary of State to issue or approve guidance on co-operation between local authorities and the new ombudsman. Local authorities and the ombudsman must both have regard to such guidance. Using the provisions in clause 68, we intend to publish guidance that will clarify the respective roles of each in situations where there may be an overlap in their remits. We have been engaging with local councils to understand their needs, and that work will feed into the final guidance.

I am afraid, Mrs Harris, that I have some way to go on this group of clauses. Clause 70 makes changes to the Housing Act 1996, which established mandatory redress for social housing tenants. In pursuit of a streamlined service, clause 70 ensures that private landlords who have voluntarily joined a scheme for social housing are instead required to join the new scheme for their private landlord activities. That will not prevent one organisation from providing both social and private redress, but it will ensure that all private landlords are members of one scheme.

Clause 70 also allows the Government to appoint one person to the role of social and private rented sector ombudsman if the final decision is taken to deliver through the Housing Ombudsman Service. It does that by enabling the Secretary of State to publicly appoint the ombudsman for social housing redress under a body corporate structure, which the service may adopt under the Housing Act 1996. We will set out in regulations that the Secretary of State must also have the power to appoint the ombudsman for private rented sector redress. That would give the Government substantial oversight over the ombudsman and provide for effective and strategic leadership over a large, cross-tenure service.

Clause 71 inserts schedule 3, which makes legislative amendments to allow the private landlord ombudsman to co-operate and share information with the Local Government and Social Care Ombudsman, the Housing Ombudsman Service and the Building Safety Regulator. It is imperative for the new ombudsman to work effectively, where necessary, with those bodies, which are responsible for redress and regulation connected to the private rented sector. Schedule 3 provides the legislative basis for joint investigations and information sharing to facilitate that. It also makes some minor consequential amendments.

Clause 72 closes a gap between the remits of the Local Government and Social Care Ombudsman and the Housing Ombudsman Service. As things stand, members of the public who wish to complain about how their local council has acted in its capacity as a social housing landlord, but who are not tenants of the local council, cannot bring their complaints to either redress body. That issue typically affects the neighbours of social tenants and leaves them with nowhere to turn when things go wrong, and we seek to address it. The clause will allow those complaints to be brought to the Local Government and Social Care Ombudsman, and it will provide greater access to justice for that group of residents.

Amendment 65, which was tabled by the shadow Minister, would mean that landlords were longer required to be a member of the new landlord ombudsman scheme if they had a managing agent who was a member of an independent redress scheme approved by the Secretary of State. In our view, that would contradict the Government’s intention for tenants in the private rented sector to have access to landlord redress through a single ombudsman service. The fact that a landlord employs a managing agent does not mean that tenants do not need to be able to seek redress from their landlord. Many significant issues relating to housing quality or the treatment of tenants are the responsibility of the landlord, not the managing agent. As an example, structural issues with a building that give rise to damp and mould would typically be a landlord’s responsibility, and access to agent redress would not provide a satisfactory solution.

I understand that hon. Members may have concerns about proliferating redress routes for different issues. The Government have listened to the calls from stakeholders and the Select Committee to make the redress landscape as coherent as possible. With that in mind, although no final decision has been made, I announced on Second Reading that we remain of the view that the existing Housing Ombudsman Service is best placed to deliver the new PRS redress service, providing streamlined, cross-tenure redress.

Amendment 65 would contradict that aim by excluding some private tenants from access to landlord redress. It would create confusion about the different but complementary purposes of landlord and agent redress, and that would make it more challenging for tenants to know where to raise their complaints. I am confident that that was not the shadow Minister’s intention in tabling his amendment, but it would create inconsistencies in tenants’ access to redress, depending on the landlord’s business model. It would give rise to new sources of complexity and unfairness across the sector and open loopholes for unscrupulous landlords and agents to exploit. The Government remain committed to requiring all landlords in the PRS to be members of the new ombudsman scheme. I therefore respectfully ask the shadow Minister to withdraw his amendment.

It has been helpful to hear from the Minister in detail on those points. The intention of amendment 65 was to avoid a risk of double jeopardy for a landlord if they had a managing agent who was a member of the redress scheme, but if they were also required separately to be a member of the redress scheme by virtue of the fact that they were a landlord. The Minister has set out how he intends to deal with that in regulation.

I ask the Minister to clarify something—perhaps not today, but in due course. He mentioned examples of where damp and mould would be considered a landlord issue as opposed to a managing agent issue. We are all aware that certain blocks, which may be owned by an absentee landlord or someone who works abroad, are let and managed entirely by an agent who handles the day-to-day responsibility in return for payment and under a contract. We do not wish to exclude completely the possibility of redress through the agent, where the agent has been explicitly given responsibility for dealing with such things, by saying that that will always be a matter for the landlord. Will the Minister write to me to explain how that issue—most of us have seen it from time to time in our constituencies—will be dealt with, should it arise in practice?

I am more than happy to write to the shadow Minister to clarify that. If I have understood him properly, there are certain issues that we think are the landlord’s responsibility, and that is why our approach is the right one. To address his point directly, I will happily set out in some detail in written correspondence how that will operate when landlords are completely absent for the process, and the managing agent’s role in that situation vis-à-vis the new redress scheme.

It is a pleasure to serve under your chairmanship, Mrs Harris. The shadow Minister’s amendment refers to agents, such as managing agents, and their redress schemes. Managing agents are often also letting agents—they are the same kinds of companies. Can the Minister comment on the case for regulating those agents, for which this Bill provides an excellent opportunity? Members of the other place who are experts in housing have spoken to me about the need to do that. The Liberal Democrats would certainly support such a move, and I would be grateful if the Minister commented on it.

I suspect I know the noble Lord that the hon. Gentleman refers to. I have had many extensive conversations with the noble Lord about the matter, and I will continue to engage with him. We supported the implementation of the Lord Best review in opposition. We took the view that the Bill was not the appropriate place to consider those measures, but we intend to set out our approach to the regulation of managing agents, letting agents and estate agents in due course. If the hon. Gentleman wants a specific comment from me, I refer him to the answer I gave in oral questions a few a days ago on this point in response to one of his colleagues. We understand the necessity for regulation in this area, and I hope to have further discussions with him and others in due course.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: 23, in clause 62, page 90, line 16, at end insert—

“(4A) Regulations under subsection (1) may require a person—

(a) to provide relevant property information to the administrator of a landlord redress scheme, on applying to become a member of the scheme;

(b) at any time after becoming a member of a landlord redress scheme, to notify the administrator of the scheme of any change to relevant property information previously provided by the person as soon as reasonably practicable, or within a period, as specified in the regulations.

(4B) For the purposes of subsection (4A), ‘relevant property information’ means such information as may be specified in the regulations relating to—

(a) any residential tenancy under which the person is the residential landlord;

(b) any dwelling which is proposed to be marketed for the purpose of creating a residential tenancy under which the person will be the residential landlord.”—(Matthew Pennycook.)

This enables regulations made under clause 62 (landlord redress schemes) to require a person on applying to join a landlord redress scheme to provide certain information about residential tenancies of which they are the landlord, or dwellings that will be marketed for the purpose of becoming residential tenancies of which they will be the landlord. There is also a separate duty to notify the scheme administrator of any changes to such information.

Clause 62, as amended, ordered to stand part of the Bill.

Clauses 63 to 71 ordered to stand part of the Bill.

Schedule 3 agreed to.

Clause 72 ordered to stand part of the Bill.