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Clause 72

Tribunals, Courts and Enforcement Bill [Lords] – in a Public Bill Committee at 9:00 am on 22nd March 2007.

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The rent recoverable

Photo of Henry Bellingham Henry Bellingham Shadow Minister (Justice)

I beg to move amendment No. 135, in clause 72, page 48, line 27, at end insert

‘, and must be set at a reasonable amount so that a landlord does not suffer hardship.’.

Clause 72 refers at some length to CRAR. The Committee will be aware of the background to the clause, which sets out how the rent is recoverable. Subsection (2) states that the

“amount of any rent recoverable by CRAR is reduced by any permitted deduction”,

while subsection (4) refers to the minimum amount of the rent and states:

“The minimum amount is to be calculated in accordance with regulations.”

That is clear to some extent, but the amendment would insert at the end:

“and must be set at a reasonable amount so that a landlord does not suffer hardship.”

It is a probing amendment suggested by a number of organisations that are interested in that part of the Bill. It might be slightly clumsily drafted and mightnot be ideal. However, in setting the minimum amount and calculating it, in accordance with regulations,there is some concern that in a small minority of circumstances, the interests of the landlord might not be considered. Obviously, one has to look at what the regulations say; some of them will presumably be laid at some future stage and it has been indicated that they will lay down certain parameters. In debating the Bill, we have talked about the interests of either the debtor or the tenant, but our small amendment is a probing one to ensure that the interests of the landlord are properly considered at all times, particularly when the minimum amount is being calculated.

Photo of Vera Baird Vera Baird Parliamentary Under-Secretary, Department for Constitutional Affairs

We are indeed in the land of CRAR and I should probably, therefore, say what it is: commercial rent arrears recovery. I am sure that we will talk about it a lot, and people might not have followed where we are.

CRAR is available only where the amount recoverable is in excess of a minimum amount, which, as the hon. Gentleman said, will be set up in accordance with regulations. That unpaid amount may not include accrued interest, VAT or other permitted deductions.

We will take care to ensure that the conflicting needs of landlord and tenant are managed by setting the minimum at an appropriate level. Our initial thinking suggests a trigger sum of something like one week’s rent or £200—whichever is the smaller—or four weeks’ arrears if the rent is less than £50. Currently those are, in our minds, perhaps appropriate minimums to apply for CRAR purposes. We are open to suggestions, but it seems to me that we are starting at a reasonable point. If we set the level at around that margin, we will not be allowing too onerous a penalty for too small a debt on the tenant and will not be cheating the landlord unless he has serious financial problems himself. I hope that the hon. Gentleman is reassured.

Photo of Henry Bellingham Henry Bellingham Shadow Minister (Justice)

I am grateful to the Minister for the clarification and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 72 ordered to stand part of the Bill.

Clauses 73 and 74 ordered to stand part of the Bill.