House of Lords - Explanatory Note
You are here: Parliament home page > Parliamentary business > Bills and legislation > Bills before Parliament > Explanatory Notes
      
House of Lords		 Session 2003 - 04
Publications on the internet
Other Bills before Parliament
Arrangement of Clauses (Contents)

Housing Bill

 

These notes refer to the Housing Bill
as brought from the House of Commons on 13th May 2004 [HL Bill 71]

HOUSING BILL

     

     EXPLANATORY NOTES

INTRODUCTION

1.     These explanatory notes relate to the Housing Bill as brought from the House of Commons on 13th May 2004. They have been prepared by the Office of the Deputy Prime Minister in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament.

2.     The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given.

SUMMARY

3.     This Bill will replace the existing housing fitness standard with the Housing Health and Safety Rating System. It will introduce two new licensing regimes for private rented properties. There will be a new requirement to produce a home information pack before marketing a property. And the Bill will make other provisions about housing, including changing the right to buy scheme.

BACKGROUND

4.     Details of the legislative framework for each of the provisions of the Bill is contained in the overview.

5.     The Bill will take forward provisions contained in the Housing Green Paper (2000) and subsequent policy statement, and responses to these documents.

6.     The main provisions of the Bill have been subject to public consultation, including consultation and pre-legislative scrutiny following the publication of the draft Housing Bill in March 2003.

OVERVIEW

7.     These notes are divided into seven main parts, reflecting the main parts of the Bill.

Part 1 - Housing conditions

Part 2 - Licensing of houses in multiple occupation

Part 3 - Selective licensing of other residential accommodation

Part 4 - Additional control provisions in relation to residential accommodation

Part 5 - Home information packs

Part 6 - Other provisions about housing

Part 7 - Supplementary and final provisions

Expressions and abbreviations used throughout these notes

8.     Local housing authority is defined in clause 223. Throughout these notes this has been abbreviated to LHA.

9.     House in Multiple Occupation is defined in clauses 217 to 222. Throughout these notes, this has been abbreviated to HMO.

10.     Interim Management Order and Final Management Order are covered by Part 4 of the Bill. For the purposes of these notes, they are referred to as IMOs and FMOs.

11.     The Bill confers powers to make secondary legislation and give approvals on the appropriate national authority. This is defined in clause 223 (1) to mean the Secretary of State in relation to England and the National Assembly for Wales in relation to Wales.

Part 1: Housing conditions

12.     Part 1 of the Bill replaces the existing housing fitness standard contained in the Housing Act 1985 with the Housing Health and Safety Rating System (HHSRS). It also adapts and extends the powers currently available to LHAs to tackle poor housing conditions by means of enforcement.

13.     These changes are intended to help LHAs to prioritise their intervention based on the severity of the health and safety hazards in the home.

14.     The new framework is largely through free-standing provisions, although some of the provisions of the 1985 Act will remain in that Act with appropriate amendments.

Part 2: Licensing of houses in multiple occupation (HMOs)

15.     Part 2 of the Bill introduces a mandatory scheme to licence what we perceive as larger, higher-risk HMOs. It will also allow discretionary licensing, subject to carrying out consultation and to the approval of the appropriate national authority, if LHAs wish to extend the licensing regime to other HMOs where there is a need to improve standards of management and physical amenities.

16.     The term HMO applies to a wide range of housing types, mainly in the private rented sector, that are typically occupied by young lower-income single people, including some particularly vulnerable and disadvantaged groups. Physical and management standards in HMOs are often low. Current statutory controls on HMOs are confusing and have grown up over several decades.

Part 3: Selective licensing of other residential accommodation

17.     Part 3 of the Bill introduces a power for LHAs to introduce selective licensing to deal with particular problems in an area. Selective licensing will be primarily focused on:

  • areas of low housing demand, or that are likely to fall into that category; and

  • other areas suffering from anti-social behaviour.

18.     Low house prices in areas of low demand have resulted in an influx of unprofessional landlords purchasing properties to rent. These people frequently show no interest in managing their properties properly, often letting to anti-social tenants who cause a range of problems. This, in turn, can create misery for the local community and cause further destabilisation of these areas.

19.     Although these problems tend to be concentrated in areas of low housing demand, other districts also suffer from the activities of poor landlords and anti-social tenants. Accordingly this power will be available to LHAs to tackle problems of anti-social behaviour in areas that do not experience low housing demand.

20.     The Bill provides a discretionary power, subject to carrying out consultation and to the approval of the appropriate national authority, for LHAs to license all private landlords in a designated area with the intention of ensuring that a minimum standard of management is met. In order for a scheme to be approved, such a selective licensing scheme must be shown to be co-ordinated with an authority's wider strategies to deal with anti-social behaviour and regeneration.

21.     The Bill also provides the appropriate national authority with powers to prescribe by regulation other circumstances in which discretionary schemes may be made.

Part 4: Additional control provisions in relation to residential accommodation.

22.     Part 4 contains provisions for enforcement action in respect of properties required to be licensed under Parts 2 and 3 and for individual properties where a residential property tribunal is satisfied that a property which is not required to be licensed requires the intervention of the LHA. The Part also contains provisions on overcrowding in non-licensable HMOs.

Part 5 - Home information packs

23.     Part 5 of the Bill introduces a new legal duty on people marketing residential properties in England and Wales. Before marketing a property, the seller or, more usually, their estate agent must have a home information pack of standard documents available for prospective buyers.

24.     These proposals were contained in Part 1 of the Homes Bill 2000. That Bill fell when Parliament was dissolved for the general election in 2001. The provisions in this Bill are similar to those in the Homes Bill, except that the description 'home information pack' has replaced 'seller's pack' and enforcement of the home information pack duties is proposed to be by civil rather than criminal remedies.

25.     In England and Wales, an offer to buy a property and acceptance of that offer are made 'subject to contract'. Such an offer and its acceptance do not constitute a legally binding agreement. This is usually only achieved with an exchange of contracts. Between agreeing terms and exchanging contracts, both the buyer and seller do a number of things. For the seller, this could include:

  • obtaining the title deeds to the property;

  • establishing title and producing Land Registry office copy entries where the property is registered;

  • replying to pre-contract enquiries;

  • preparing a draft contract.

26.     The buyer will usually carry out local searches and make other enquiries of the local authority and other organisations. The buyer may also arrange a survey.

27.     These documents and information are important to the decisions home buyers and sellers need to take and yet, under current practices, they normally become available only after terms have been negotiated and agreed "subject to contract".

28.     Part 5 of the Bill aims to bring forward the availability of this important information to the start of the process. It requires the person responsible for marketing a residential property to have a home information pack before marketing begins. The pack is expected to contain documents and information similar to those mentioned above, including a report on the condition of the property.

Part 6: Other provisions about housing

29.     The Bill gives LHAs further tools to tackle anti-social behaviour in social housing. These measures complement those introduced by the Anti-social Behaviour Act 2003.

30.     Part 6 will also introduce changes to the Right to Buy (RTB) scheme. This is a statutory scheme enabling secure tenants to buy the homes that they live in, at a discount, from their landlord. Landlords are most often LHAs, but Registered Social Landlords may also have tenants who have the RTB, both for historical reasons and as a result of large-scale voluntary transfers of properties from LHA ownership. Provisions in the Bill will amend the RTB scheme with a view to tackling exploitation of the rules by property developers and tenants.

31.     Part 6 also contains provisions to better protect mobile home occupiers. These changes are intended to deter unscrupulous site owners from exploiting and harassing occupiers, and give a power to the Secretary of State to make further changes to the implied terms of occupation agreements.

32.     The powers of the Housing Corporation and the National Assembly for Wales under the Housing Act 1996 will be extended to allow them to give grants to bodies other than Registered Social Landlords for specified purposes.

33.     Part 6 sets up the office of Social Housing Ombudsman for Wales (SHOW) to investigate complaints against social landlords in Wales.

34.     Part 6 will extend eligibility for disabled facilities grant to include all those occupying caravans as their only or main residence.

Part 7: Supplementary and final provisions

35.     Part 7 requires LHAs to keep registers of licences and management orders. It also provides for the approval of statutory codes of management practice, and for the making of management regulations, relating to HMOs.

36.     For the purposes of Parts 1-4 of the Bill it provides for documents and other information to be produced. It provides for powers of entry to property and to prescribe for the production of forms, licences and other documents.

37.     Its other supplementary provisions provide for the way in which orders and regulations are to be made.

38.     Part 7, in conjunction with Schedule 11, provides a definition of HMO.

TERRITORIAL APPLICATION

39.     The Bill has been drafted in liaison with officials from the National Assembly for Wales.

40.     All provisions of the Bill apply to England and Wales with two exceptions, clause 193 and Schedule 9, which make amendments to the Housing Act 1996 so as to provide for a Social Housing Ombudsman for Wales. These amended provisions will only apply in relation to Wales.

COMMENTARY ON CLAUSES

PART 1 - HOUSING CONDITIONS

Chapter 1 - Enforcement Of Housing Standards: General

Clause 1: New system for assessing housing conditions and enforcing housing standards

41.     Clause 1 introduces a new system for assessing housing conditions that is to be used in the enforcement of housing standards.

42.     Subsection (2) provides for the new system to operate by reference to the existence of category 1 or category 2 hazards (defined in clause 2) in residential premises. This subsection also replaces the existing system based on the test of fitness for human habitation in section 604 of the Housing Act 1985 ("the 1985 Act").

43.     Subsection (3) introduces the kinds of enforcement options which will be available to LHAs under the Bill. These options are set out in detail in Chapter 2 of Part 1 of the Bill, and in provisions of the 1985 Act which are substituted by Chapter 4 of Part 1.

44.     Subsections (4) to (8) define some of the terms used in Part 1.

45.     The purpose of the assessment system introduced by clause 1 is to apply objective information to the taking of enforcement decisions by LHAs. It is intended that HHSRS will enable LHAs to assess 29 categories of hazard and, by means of the method to be prescribed in regulations under clause 2(2) and (3), provide a rating for each hazard. The assessment will be based on the risk to the most vulnerable potential occupant of that dwelling, whether or not anyone, or a most vulnerable occupant, is resident in the premises at the time of the inspection. The impact of hazards on actual occupants is a factor the LHA may take into account when considering the appropriateness of action under clause 5 or 7. Advice on issues of occupation will be given under clause 8.

Clause 2: Meaning of "category 1 hazard" and "category 2 hazard"

46.     Subsection (1) provides a definition of "hazard" for the purposes of Part 1. It also provides for the prescription by regulations of two categories of hazard - category 1 and category 2 - according to their seriousness as calculated under the method prescribed in regulations under subsections (2) and (3).

47.     Under subsections (2) and (3) a method for calculating the seriousness of hazards on residential premises may be prescribed by secondary legislation. It is intended that, as a result of that calculation, any hazards identified by the inspection will be placed in a band determined by their score. Hazards falling within bands A to C are to be described as category 1 hazards. Those within bands D to J are to be category 2 hazards. Banding is intended to avoid the impression of spurious accuracy. The system relates poor housing conditions to the kinds of harm attributable to such conditions - it does not try to assess a specific health outcome in relation to the current occupant. Under clause 5, LHAs will have a general duty to take action to deal with category 1 hazards, and under clause 7 they will have discretionary powers to take action to deal with category 2 hazards.

48.     The enforcement action an LHA takes under the provisions of Part 1 will be based on (a) the band into which the hazard falls as a result of the HHSRS calculation; (b) whether the LHA has a duty or a power to act; and (c) the LHA's judgement as to the best means of dealing with that hazard.

Clause 3:Local housing authorities to review housing conditions in their districts

49.     Subsection (1) requires LHAs to keep under review the housing conditions in their district with a view to identifying what, if any, action to take under the provisions mentioned in subsection (2). This provision replaces, with modifications, section 605 of the 1985 Act.

50.     Subsection (2) specifies the provisions to which the duty in subsection (1) applies. These include the powers and duties in Parts 1 to 4 of the Bill, together with those in other legislation which enable LHAs to declare a renewal area and provide financial assistance towards the cost of improvement and repair of residential property.

Clause 4: Inspections by local housing authorities to see whether category 1 or 2 hazards exist

51.     This provision replaces, with modifications, section 606 of the 1985 Act. Under subsection (1) if the LHA considers that it would be appropriate to inspect residential premises in their district to establish whether or not there is a category 1 or category 2 hazard, the authority must arrange for an inspection to be carried out. Under subsection (2) where a proper officer of an LHA has received an official complaint from a Justice of the Peace or a parish or community council that a category 1 or 2 hazard may exist on residential premises, or that an area should be dealt with as a clearance area, the proper officer must inspect the premises or area.

52.     Inspections of premises under clause 4 must be carried out in accordance with regulations made under clause 4(4). Where, following an inspection as a result of an official complaint, the proper officer is of the opinion that a category 1 or category 2 hazard exists on residential premises, or that an area should be declared a clearance area, he is required to make a report in writing to the LHA, which must consider the report as soon as possible.

Clause 5: Category 1 hazards: general duty to take enforcement action

53.     Clause 5 provides a general duty on LHAs to take enforcement action where there is a category 1 hazard. Subsection (1) sets out the courses of action that may be available to the local housing authority:

  • to serve an improvement notice under clause 10;

  • to make a prohibition order under clause 19;

  • to serve a hazard awareness notice under clause 27;

  • to take emergency remedial action under clause 39;

  • to make an emergency prohibition order under clause 42;

  • to make a demolition order under section 265(1) or (2) of the 1985 Act as substituted by clause 45;

  • to declare a clearance area under section 289 (2) of the 1985 Act as substituted by clause 46.

54.     Under subsections (3) and (4), the LHA is under a duty to take the best course of action available to it in relation to the hazard. LHAs cannot simultaneously take more than one of the actions set out in subsection (2), for example make a prohibition order and serve an improvement notice dealing with the same hazard. This is to ensure that LHAs have properly considered the appropriate action and owners are not asked to comply unnecessarily with more than one requirement.

55.     Subsection (5) enables an LHA to take the same course or a different course of action if the action already taken has not proved satisfactory. It also provides that, where an LHA has given notice, under section 289 of the 1985 Act, that it intends to declare a clearance area containing a property to which the duty in clause 5 applies, but has decided to exclude that property from the area, it remains under a duty to take one of the remaining courses of action in clause 5(2) in relation to the hazard.

Clause 6: Category 1 hazards: how duty under section 5 operates in certain cases

56.     Clause 6 enables an LHA, instead of making a prohibition order or a demolition order under clause 5(2) in respect of a property, to make a determination under section 300(1) or (2) of the 1985 Act, enabling it to purchase the property if it is capable of providing adequate accommodation for temporary housing use. Clause 6 also provides that the option of declaring a clearance area under clause 5(2) is not available to an LHA in respect of a property if that property has already been proposed for inclusion within a clearance area but excluded from it. Subsections (3) and (4) have the effect of enabling LHAs to take emergency remedial action and another course of action as a single step rather than wait until the emergency action has proved effective. This is because the LHA will be aware that certain emergency remedial action will not have the effect of removing the category 1 hazard entirely.

Clause 7: Category 2 hazards: power to take enforcement action

57.     Clause 7 lists the powers available to LHAs to take enforcement action where there exists on residential premises a category 2 hazard as defined in clause 2. Subsection (2) sets out the courses of action that may be available to the LHA:

  • to serve an improvement notice under clause 11;

  • to make a prohibition order under clause 20;

  • to serve a hazard awareness notice under clause 28;

  • to make a demolition order under s265 (3) or (4) of the 1985 Act as substituted by clause 45 but only in circumstances prescribed by the Secretary of State or (by virtue of clause 223) the National Assembly for Wales;

  • to include the premises in the declaration of a clearance area under s 289(2ZB) of the 1985 Act as substituted by clause 46, but only in circumstances so prescribed.

58.     Subsection (3) makes clear that an LHA can take the same course or a different course of action if the action already taken has not proved satisfactory.

Clause 8: Guidance about inspections and enforcement action

59.     Clause 8 enables the appropriate national authority to give statutory guidance to LHAs on the inspections to be carried out under the system prescribed by clause 2(2) and on their use of the enforcement functions set out in clauses 5 and 7. It places a duty on LHAs to have regard to such guidance. It is intended that the technical guidance will include the profiles of the potential health and safety hazards, their causes and preventive measures. The enforcement guidance will apply both where an LHA is exercising a duty in respect of a category 1 hazard and where it is exercising a discretionary power to take action in respect of a category 2 hazard. The guidance must be laid in draft before each House before it is given.

Clause 9: Consultation with fire authorities in certain cases

60.     Clause 9 requires an LHA to consult the local fire authority before taking enforcement action in respect of a prescribed fire hazard in an HMO or in the common parts of a building containing flats. The form of the consultation is not to be prescribed but advice will be contained in the enforcement guidance to be given under clause 8. In the case of action under the emergency measures in Chapter 3, the LHA must consult the local fire authority so far as is practicable. A fire hazard prescribed for the purposes of consultation will be one which is prescribed in regulations under clause 2.

Chapter 2 - Improvement Notices, Prohibition Orders and Hazard Awareness Notices

Clause 10: Improvement notices relating to category 1 hazards: duty of authority serve notice

61.     Subsection (1) provides that if a category 1 hazard exists on any residential premises, serving an improvement notice is one of the courses of action available to an LHA in discharging its general duty under clause 5 (to take the most appropriate enforcement action to deal with such a hazard), so long as the premises in respect of which the notice is to be served are not the subject of an IMO or FMO under Part 4. Subsection (2) explains that an improvement notice is a notice requiring the person on whom it is served to take the remedial action specified in the notice.

62.     Subsection (3) sets out the premises and common parts in respect of which an improvement notice may require remedial action to be taken. Subsection (4) restricts remedial action in respect of non-residential premises to cases where the deficiency giving rise to the hazard is located there, and the remedial action is necessary for the health or safety of actual or potential residential occupiers.

63.     Subsection (5) provides that the remedial action must, as a minimum, remove the category 1 hazard, but may go further.

64.     Subsection (7) provides that the operation of a notice may be suspended in accordance with clause 13.

Clause 11: Improvement notices relating to category 2 hazards: power of authority to serve notice.

65.     Subsection (1) provides a discretionary power for an LHA to serve an improvement notice if it is satisfied that a category 2 hazard exists on residential premises and the premises in respect of which the notice is to be served are not the subject of an IMO or FMO under Part 4.

66.     Subsection (2) explains that an improvement notice is a notice requiring the person on whom the notice is served to take the remedial action specified in the notice.

67.     Subsection (3) applies subsections (3) and (4) of clause 10, which set out the premises and common parts in respect of which an improvement notice may require remedial action to be taken, and enable action to be taken in respect of non-residential premises if the deficiency giving rise to the hazard is located there and the remedial action is necessary for the health or safety of actual or potential occupiers.

68.     Subsection (6) provides that the operation of a notice may be suspended in accordance with clause 13.

 
contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search Page enquiries index
© Parliamentary copyright 2004
Prepared: 18 May 2004