Official Report: Minutes of Evidence

The Chairperson (Ms P Bradley): I welcome David Polley, Eilish O'Neill and Karen Barr from the Department for Communities. It is good to see you. Claire McCanny from the Bill Office is, as normal, following proceedings and will be available for the Committee for a closed session at the end of the meeting, should members wish to discuss options for amendments and instructions for drafting Committee amendments. We will devote an hour to deliberations, and, if we have time later, we will come back to them. Are members content to proceed in that manner?

The Chairperson (Ms P Bradley): Members, questions and comments should be focused on the clause under discussion. We will deal with the clauses by theme. The first theme is tenancy management, in clauses 1 and 2. David, will you give a very brief overview of each clause? Following that, I will highlight any specific issues on the clause that have come up in our evidence before I ask members whether they have any queries or concerns about the clauses.

Mr David Polley (Department for Communities): I thank the Committee for having us. I also thank the Clerk and the team for working with us. I know that there is an awful lot on, and that it is all hands to the pump, as we get to the end of the mandate, but we are looking forward to working with you to move on the Private Tenancies Bill as quickly as possible. We appreciate all the communication that we have had so far.

When reviewing the evidence that the Committee has received so far, the main thing that strikes me is the extent to which the Bill is supported by almost everybody. Yes, there are a few areas, but very few, about which there are some entirely legitimate questions, but the general tone of most of the consultation that the Committee has carried out aligns with what we have heard, which is that there is a concern that the Bill does not go far enough in many areas and that people want to see more done. On that point, I will state at the start that the Minister has been clear that the point of the Bill is to get on with things that are going to take some time but that need to be in place right away in order to get things moved on. We are going to do a second phase of work. It will pick up on a lot of the other issues that people have been talking about. It will include the likes of letting agent fees and work to ensure that rents are fair. We are also planning to start a notice-to-quit consultation very shortly. It will produce evidence about notices to quit and their correct length. That will help the Committee in its deliberations as the Bill goes through its legislative passage. On that, I ask the Committee to note that there is a clause later on that allows the amendment of notices to quit. Karen will start with clause 1.

Ms Eilish O'Neill (Department for Communities): It is me, David. I am starting on clause 1.

Mr Polley: Are you taking clause 1, Eilish? Sorry.

Ms O'Neill: Hello, Chair and Committee. Clause 1 states that tenants are to be given notice relating to the tenancy. It makes it mandatory for the landlord of a private tenancy to provide the tenant, free of charge, with a written statement of the main terms of the tenancy, or any alterations to it, within 28 days of the granting of the tenancy. Landlords of private residential tenancies must now provide a document to a tenant that sets out the roles, responsibilities and obligations of both parties. Regulation-making powers allow the Department to prescribe the detail required.

The Chairperson (Ms P Bradley): OK. Thank you for that, Eilish. Members, we have heard from many individuals on that, as well as about the Bill's possible unintended consequences, so it is important that we take our time with each clause.

On clause 1, the majority of respondents felt that it is suitable for regulation-making powers to prescribe the detail required in such a notice, although some felt that it would be better to have more detail in the Bill so that everyone is clear from the start. Mandatory tenancy information packs were suggested, as were models of such packs and models of private residential tenancy agreements, which are already used by some landlords. Those could be mandated to assist landlords. Clear requirements for tenants to be made aware of matters both past and present that could affect the property or their tenancy were also asked for. Respondents were asked whether they were aware of details of similar notices or statements of tenancy in other jurisdictions that work well, and several highlighted the Scottish model, which requires landlords to provide a written copy of the terms of the tenancy. Do members have any comments that they wish to make or any questions that they want to ask?

Ms Armstrong: I absolutely concur with what we have heard from our witnesses. An easy-read version of the guide needs to be provided. Links to support need to be provided for tenants to ensure that they know their rights. I cannot remember who it was, but I know that someone told us that those links should be provided by the Department on nidirect so that tenants can access them easily.

The Chairperson (Ms P Bradley): Those are all good points. Those issues were raised. Does any other member want to comment on clause 1? No? OK. Eilish, do you want to comment on what Kellie said, or are you happy to take it on board?

Ms O'Neill: We are happy to take it on board, Chair. We agree. There will be an easy-read guide, and we intend to have links to support tenants. Those will be available on nidirect. I know that one of the contributors said that there should be a template, setting out all the information, that landlords can download. We intend to make a template available for landlords to follow.

Ms Armstrong: Excellent.

The Chairperson (Ms P Bradley): That is good news.

Ms Armstrong: Chair, as we have heard, no charge can made to the tenant for the production of that document. Can we stipulate that anywhere to make sure that it is very clear? It may be in advice.

Ms O'Neill: Yes. It is in the clause that the tenant cannot be charged for that. It must be provided free of charge.

Ms Armstrong: Thank you.

Mr Frew: Where is that in the Bill?

Ms O'Neill: I will have to get my copy of the Bill. I have my notes on clause-by-clause consideration in front of me.

Ms Karen Barr (Department for Communities): It is under proposed new article 4A(3), which states:

Mr Frew: Got it. Thank you very much.

The Chairperson (Ms P Bradley): Thank you for that. Are members content that we move on to clause 2?

The Chairperson (Ms P Bradley): Clause 2 is titled:

David, who is briefing us on it?

Mr Polley: I am fairly sure that it is Karen. [Laughter.]

Ms Barr: Yes. Clause 2 links closely to the first clause. It introduces schedule 1. That schedule will ensure that those tenants who would have received a notice under article 4 of the Private Tenancies (Northern Ireland) Order 2006 (PTO) but did not do so because of its accidental repeal and who are still in a tenancy on the date on which the Bill becomes an Act will receive a notice regarding their statement of terms. It is to cover the transitional period from when the Housing (Amendment) Act (Northern Ireland) 2011 repealed the statement of tenancy terms until when our Bill becomes law. It is to cover those people.

The Chairperson (Ms P Bradley): OK, Karen. Thank you. I did not know whether you had finished or frozen.

Mr Polley: Chair, we emailed the Clerk about the background to that. There is a gap in the legislation from 2011 until when this Bill becomes law. Clause 2 will make sure that people in that position who do not legally have to have a statement of tenancy terms get one when the Bill is enacted.

The Chairperson (Ms P Bradley): Thank you, David. On clause 2, which introduces schedule 1, respondents were asked whether they felt that the clause was sufficient to deal with certain past matters. The majority of respondents felt that it was sufficient in correcting the accidental repeal of article 4 of the 2006 Order. Housing Rights highlighted how accidental repeal had negatively impacted on tenants in a number of ways.

Respondents were also asked whether there were any other perceived issues about tenancy management that are not in the Bill that they wished to highlight to the Committee. Among the comments received was one that key aspects of the Department's 2017 proposals for change in the private rented sector, which relate directly to tenancy management, are not included in the Bill. Moreover, we heard that landlords may abuse the lack of knowledge surrounding the rules for renters. We were asked this:

We were also told that further engagement with tenants will be necessary in order to identify effective ways in which to increase tenants' awareness of their rights. That relates to what we were speaking about during our discussion on clause 1. Do members have any comments on that, other than what has already been brought up?

Ms Armstrong: I want to double-check something with the Department. Clause 2 relates to schedule 1, to which we are yet to come. When existing tenants have provided cash payments, will they also get the protections? If they have been paying in cash, will they be required to be given receipts for those payments?

Ms Barr: Yes. From the date on which the Bill comes in, they will be entitled to get their statement of terms, which will have all that in it.

Ms Armstrong: To be clear, that will not be retrospective.

Ms Barr: No, it will not be retrospective.

Ms Armstrong: OK. Thank you.

The Chairperson (Ms P Bradley): Does any other member want to ask a question or seek a point of clarification on clause 2? No?

Is there any further comment from yourselves on clause 2? Sorry. Is there any further comment from the Department on clause 2? That is who I mean when I say "yourselves".

Mr Polley: We ourselves? I want to pick up on the third point that you made, Chair. You quoted:

That will come in when the Bill becomes an Act, or when the provision is commenced. It will be a statement of tenancy terms at that point. What it will not mean is that, retrospectively, anything that has happened in the previous period will somehow become null and void. That will have been a verbal contract, and both parties will be required to stand over it.

The Chairperson (Ms P Bradley): That makes sense. I understand that. Does anybody have anything more to say on clause 2? No?

We will move on to the next theme, which is rental payments and rental deposits and covers clauses 3, 4, 5, 6 and 7. David or whoever it might be — this is great, because it is a wee surprise every time

— can you give us a brief overview of clause 3, please?

Ms O'Neill: It will be me, Chair. Karen and I are like a tag team today covering these clauses.

Clause 3 replaces article 5 of the 2006 Order and introduces a requirement, where rent is paid in cash, for the landlord of a private tenancy to provide the tenant, free of charge, with a rent receipt detailing the payment date and the amount that has been paid. If any amount remains outstanding, that is to be detailed, or, if it has been paid in full, the fact that it has been paid in full has to be detailed. It requires that the receipt must be provided at the time that the payment is made or, if that is not possible, as soon as is reasonably possible after that time. It provides that an offence is committed if the landlord fails to provide a notice with the correct information or provides a notice late. If the landlord has appointed a person, such as a letting agent, to provide a receipt, that person, in addition to the landlord, is guilty of an offence.

The Chairperson (Ms P Bradley): Thank you, Eilish. The majority of respondents felt that clause 3 offers sufficient protection to tenants through the provision of a rent receipt for cash payments. It was highlighted, however, that the Bill should be amended to provide for receipts to be issued for any other payments — cash for fees, deposits etc — and that that should be specified, as required.

Respondents were also asked if there are any particular types of tenants who pay their rent in cash, and it is generally more vulnerable people. Among the comments received were:

Also:

Also:

And:

I will go to Paul first for comment, as he brought up issues around receipts at our last meeting.

Mr Frew: Thank you very much for your presentation. Clause 3 seeks to amend the 2006 Order to include, at article 5(3):

Given the nature of the clause and what you are trying to do, why is 5(3)(b) there?

Ms O'Neill: In our consultations and deliberations with landlords, they told us that there are some times when a tenant might give them a payment because they bumped into them accidentally, called at their place of work, made a cash payment or did not have a receipt book or the means to issue a receipt, so we introduced some flexibility that would allow for a landlord to get back to the tenant with the receipt when they were able to do so. That will not happen if there is a letting agent or the landlord has an office, but given that 82% of landlords in Northern Ireland own one or two properties and may know their tenants on an informal basis, there is the potential for a tenant to call with the landlord and make a cash payment at a time when a landlord is not physically able to produce a receipt. It is to allow for that flexibility.

Mr Frew: Is it advisable for any tenant to hand over money without gaining a receipt there and then? If not, is it advisable to have that in the Bill?

Ms O'Neill: We were trying acknowledge what happens on a day-to-day basis. I tend to agree with you: I personally would be loath to pass over cash and not receive some form of receipt. However, outside the Belfast area and in more rural areas, landlords and tenants may be known to each other and can sometimes be related or are friends, so there can be more informal arrangements in place. What we did not want was —. For example, some landlords reported that occasionally tenants would give them a deposit, and they would have some delay in getting it lodged with one of the schemes. They asked for a greater period of time to do that, so we did not want to have something so restrictive that landlords would constantly be getting fined by a council for not producing a receipt at the point in time that the cash was handed over, due to circumstances that were potentially outside their control.

Mr Frew: Does having that in the legislation give a certain licence to landlords to not provide a receipt?

Ms O'Neill: The requirement in the legislation is that a landlord must provide a receipt. If a period of time has elapsed and the tenant has not received a receipt from the landlord, it is an offence. That is a continuing offence, so if the landlord still does not provide a receipt after having a penalty imposed on them by the council, the offence will continue. There is an offence there if you do not provide a receipt; it is just that we have allowed for a period of time in which the receipt can be produced.

Mr Polley: This is creating a criminal offence —.

Mr Frew: What is the period of time?

Ms O'Neill: We said a reasonable period of time, because it depends on the individual circumstances as to why the receipt was not produced. It is hard to cover all scenarios, but if a tenant met the landlord as the landlord was about to go on holiday and handed over cash, you could say a week or two weeks would be appropriate because the landlord would not be physically available during that period of time to issue a receipt. If it is —.

Mr Frew: Sorry, can I stop you there? If someone was away on holidays, how you would expect them to receive the cash?

Ms O'Neill: We had an instance with a tenant's deposit where a tenant bumped into the landlord and said, "I was on my way to pay that deposit to you". The landlord was packed up and about to leave. They put the deposit away in a safe place, but did not get it lodged until they came back from holidays. What I am trying to say, probably very clumsily, is we imagined there could, very occasionally — we do not imagine that this would be commonplace, but there could be circumstances when the landlord receives a cash payment and do not physically have a receipt book to give a receipt to the tenant at that point in time, but they must do as soon as possible after they receive the cash payment. It is a criminal offence to

Mr Frew: So the defence —.

Mr Polley: We are creating a criminal offence here. The test of reasonableness is a legal one. It could ultimately fall to a court to decide whether or not the delay was reasonable. We have to think of all different circumstances. It is not at all the intention to create a loophole —

Mr Frew: Yes, but when you talk about —.

Mr Polley: — but if that is not there, and if those circumstances occur, that person is criminalised.

Mr Frew: Yes, but you talk about reasonableness. The defence you gave there was that someone was out of the country, not necessarily a reasonable length of time.

Ms O'Neill: That was just one example.

Mr Frew: I get that, but I do not see where you could produce an example of a reasonable amount of time. It would be a scenario where you have left the country or someone has been hospitalised. I cannot imagine any other scenario where someone is handing over cash and not receiving some sort of proof of receipt in any formal scenario. I fear for this part of the clause. What I have heard today has not changed my mind. I am still of a mind that that needs to come out.

Ms O'Neill: I will give you one example from my personal experience. A family member of mine was renting out a property, and he had gone to Australia. The tenant had a problem with their bank account payments for rent made via direct debit. There was a problem with that person's bank account. They knew where I lived and that the landlord was a family member of mine, and they called at my home to give me money to pass on to somebody who was out of the country. I am giving that just as an example.

You mentioned hospitalisation. If someone was in hospital, how would you hand over the cash? It could be passed to someone to pass on to the landlord —

Mr Frew: Yes, I get that.

Ms O'Neill: — and we do not imagine —.

Mr Frew: So a family member has given you the money. That is informal.

Ms O'Neill: No, it was the tenant in a property owned by a family member of mine, so it was not a family member who gave me money. It was a tenant.

Mr Frew: Let me tease that out. Someone gives a third person money. That is an informal exchange of money. That third person then goes to the landlord and pays over that money. That landlord should still be liable to give a receipt to that third person. That third person then has in their hand that receipt. That third person will then go to the tenant and give that tenant a receipt.

Ms O'Neill: Yes, but in the circumstances that I am quoting you, the landlord was in Australia, so the landlord was not here. I had to make arrangements to get that money lodged into an account.

Mr Frew: Someone should have received a receipt at the time of payment. You or any other third party could then email that receipt to the person in Australia.

Ms O'Neill: Yes.

Mr Frew: It is not about where the receipt goes. It is the exchange of money — cash — and receiving something in exchange at that time. There is no justification for handing money over at any time and not getting a receipt.

Mr Polley: We are aware of circumstances where tenants have done that. If we were to take this out, and circumstances were to arise where, for example, a tenant met his landlord at a family do, which happens quite a lot, gave him the rent, and the landlord did not have the receipt book, he would have to say, "No, bring that to my home tomorrow". Or if they met him at the airport —. In order for the landlord to avoid criminalising themselves, they would have to refuse to take the money.

Mr Frew: All the landlord has to do is refuse the payment, in which case he is not criminalising himself.

Mr Polley: Yes, that is what would have to happen. The landlord would have to refuse the payment.

Mr Frew: That is acceptable, if he cannot produce a receipt.

Mr Polley: Your point is that tenants should not be handing over cash if the landlord is not in a position to give them a receipt.

Mr Frew: Yes.

Mr Polley: Our point is that, in some cases, landlords and tenants meet each other, and, in all reasonableness, the landlord is not able to give them a receipt. The consequences of taking out that sub-clause as you are suggesting is that there would be times when a tenant would attempt to pay their rent, but would not be able to do so because the landlord would not want to criminalise himself. In those circumstances, the next step would be that the tenant would be in breach of their contract and might be making themselves liable to eviction.

Mr Frew: I am sure that we agree that it is not wise to hand over money without getting some sort of receipt.

Mr Polley: Absolutely. That is the point of the clause, is it not — to get a receipt issued?

Mr Frew: Is it not a far stretch to say that a landlord refusing payment from a tenant because he or she cannot give a receipt would put the tenant in breach of a contract?

Mr Polley: Technically, that is legally true, is it not? We are talking about what ultimately happens. In almost all circumstances, rent is not paid in cash, and in almost all circumstances when it is, a receipt will be provided. We are talking about what may happen in particular sets of circumstances which are very odd.

Mr Frew: Do you have any evidence of cash handed from the tenant to the landlord where it is then claimed that that money has not been paid?

Ms O'Neill: No, we do not have any information to that effect.

Mr Frew: Do you think it takes place?

Ms O'Neill: I would not say that it does not take place. A landlord saying that they have not received a payment of rent from a tenant is not something that has ever been brought to our attention.

Mr Polley: It might be useful to check with Housing Rights, Eilish.

Ms O'Neill: We will check that. It is the type of issue that would cause a dispute and end up in its mediation service.

Ms O'Neill: Yes.

The Chairperson (Ms P Bradley): We can check that out. The point was made in Committee, at evidence-gathering, that it does not always need to be an actual receipt book. A signed promissory note or piece of paper to say that payment was received on such-and-such date could suffice until a proper receipt was given from a receipt book. Andy, Kellie and Mark all want to ask questions on this. Andy is first.

Mr Allen: I am on the same page as Paul. Is there an option to use 28 days as the time in which a receipt has to be provided, as a compromise? I would not be fully comfortably with that, but it could be used if it was not "reasonably possible", in the case of hospitalisation, for example. It is just a thought. I am not sure that I would be 100% happy with that, because I believe that a receipt should be given at the time of payment, but I accept that there may be circumstances in which it cannot. I am inclined to believe that no payment should be made without a receipt being given.

The Chairperson (Ms P Bradley): That is another option that we could ask you to consider. I also thought that, if there was a time frame, should it say that it must be given within so many working days, unless there are exceptional circumstances?

Mr Allen: Twenty-eight days has been used in clause 1 in relation to the tenancy agreement, so there is a precedent there.

The Chairperson (Ms P Bradley): That is fair enough. I will bring in Kellie and Mark, and then we will go back to the Department.

Ms Armstrong: On clause 3, my concern is that we do not define what a receipt is. Someone could say that they cannot provide a receipt because they are not at their computer, but a receipt could well be a text message or something that is written down. Is there a definition of "receipt"? It is not in the explanation and it is not in this. The new article 5(1) states:

I suggest that we remove the second "of" and change it to ", including rent, in cash". That means that it is all payments. The other thing that I want to check, looking further ahead, ties in with what Paul was talking about. If a tenant has a complaint that the landlord has not provided a receipt, where does that complaint go? It then moves on to:

but there is no explanation of where the complaint goes, who takes that prosecution or anything like that. I am very unclear about it. We can say what we want about a landlord not providing a receipt, but this goes back to the explanation to the tenant. Who do they complain to? They complain to their landlord. Proposed new article 5ZA(1) says:

How does it get to that stage? I am very unclear as to where a tenant complains to.

The Chairperson (Ms P Bradley): Given those two questions from Andy and Kellie, we will go to the Department before I bring Mark in, because they are pointed questions. Is there any response to those questions?

Mr Polley: The first one was about the 28 days. My understanding is that that is a limitation on the definition of "reasonable". We will go away and consider that point, but the suggestion there is that we are defining "reasonable" as also being within 28 days. We could say:

We can consider whether that would be possible. As I say, reasonableness is a legal test that could go to a judge. It is not carte blanche for the landlord to think of anything and use that as an excuse not to bother doing it. It means that you have to do it as soon as possible when the reasonable excuse lapses.

The second thing was about "all payments". We want to make the point that this is replacing an article of the 2006 Order that refers to payment of rent. We would need to be very careful if we are to expand it to all payments, but we will look at that for the Committee. It would need to be payments in respect of private tenancies. Those would be payments during the private tenancy, so that would exclude any other payments in cash between the two parties, which are probably fairly common between landlords and tenants, because quite a lot of landlords and tenants know each other. It might be family and things like that. It would also, therefore, exclude any payments before the tenancy begins or after the tenancy ends. The Committee will also know that there are separate arrangements for deposits. There has to be written confirmation that a tenant's deposit is protected, so you already get a written confirmation about your tenancy deposit.

Ms Armstrong: I just want clarification, because we have taken evidence and we know that payments for maintenance and other services have been required in cash. For instance, the tenant may need work done and may get the landlord to do it and then pay the landlord. We are talking about the private tenancy; it is connected to their tenancy. That is why we are looking for:

Mr Polley: I want to clarify those things, because they have been raised. Actually, I think that you raised it during the Second Reading, did you not?

Ms Armstrong: Yes.

Mr Polley: We want to make sure that we are clear what the parameters are. We will consider that and write to the Committee about it.

The last one — I think that I know the answer — is about where it goes if an offence is created.

Ms Armstrong: It is about where the tenant complains to. That is not listed anywhere in the Bill.

Mr Polley: This Bill amends the 2006 Order, so we are not replacing that bit of the process. It is already in the 2006 Order.

Ms Barr: The Bill says:

There is an offence there, and it would be up to the local councils to enforce that, as is normal under the 2006 Order. The tenant would approach the council, and the council could then issue a fine or a fixed penalty, or whatever the council will do.

Ms Armstrong: Is that the council area where the house is located or the area where the landlord lives?

Ms O'Neill: The tenant would report it to the council in the area where the property is.

Ms Armstrong: OK. Thank you. What about that receipt?

Mr Polley: I think there is one —.

The Chairperson (Ms P Bradley): Sorry, you were going to say about the receipt

Mr Polley: There is one last point about the definition of a receipt. A receipt is defined at proposed new article 5(2):

That is the definition of a receipt.

Ms Armstrong: What is a written receipt? A written receipt could be something that I write on a piece of paper. It could be a text. It could be a printed-out thing. I do not want anybody to think that they cannot provide a receipt at the time because they think that it is has to be something else. We are saying that it has to be a written receipt, but we are not saying what format it is. Is it a digital copy? Is it a paper copy? It could just be a receipt from one of those receipt books that you buy from a corner shop.

Ms Barr: I will come back on that. We spoke about how even a lot of retailers now email you your receipt. We are checking consumer law to see whether there is already something in the law that allows for "written" to include all of those things. We are looking into that.

Ms Armstrong: Excellent. Thank you.

Ms O'Neill: Digital is the way people do things now, so we want that to be included. The guidance that sets a lot of this out will be key. Although it is easy for us to say that the tenant can go to the council to complain, so many tenants are not aware of where they should go and of their rights. We completely acknowledge that.

The Chairperson (Ms P Bradley): Paul has something to add. Paul, can you be very quick, because I am conscious that Mark has been waiting a while?

Mr Frew: Yes. I am feverishly trying to look up the 2006 Order. I get your point entirely: you say that you are replacing that article with a new article on rent payment. That does not stop the Department from adding a new subsection to clause 3 that inserts into the 2006 Order "payments other than rent". That is, I suggest, within the scope.

I want to ask about your point where you have a landlord and a tenant and we define this as "any other payment". This could be a friendship group, and somebody could owe £200 between mates from three years ago, and they are paying that £20 back. They might fall into a trap and be caught out by this clause because one happens to be a tenant and the other happens to be his landlord. I get that. It needs to defined that it is purely to do with the property that the landlord has and which the tenant is enjoying. Surely it is not beyond the scope of the Bill and the Department to look at payments other than rent. I understand why you do not want to amend the new article 5, but is there not scope to insert another new article into the 2006 Order?

Ms O'Neill: Yes, we are content to look at that.

Mr Polley: We are content to look at it. What we wanted to do is highlight some of the parameters that we need to consider. The Committee has now confirmed what it means, which will help us when we look at it.

The Chairperson (Ms P Bradley): Grand. I will bring in Mark, who has been waiting patiently.

Mr Durkan: I would not say "patiently", Chair. I have been waiting and cursing as all the points that I was going to make have been made, but there are a couple of other ones. As for what is acceptable as a receipt, the notion that a landlord could just scribble something down on the back of an envelope or a cigarette packet and give it to a tenant on receipt of cash that was given to them unexpectedly does not afford the landlord any protection. Perhaps we should look at defining a minimum standard of receipt. Say a landlord receives the rent, scribbles something down on an envelope and hands it to the tenant. If there were a dispute further down the line, the tenant could say that they did not receive a receipt, and the landlord would have no copy of it.

Mr Polley: Chair, we will check consumer law. The definition of "receipt" is, in my mind, surely well defined in consumer law. We will come back to the Committee with some information about exactly what that is. The Member makes a really good point. The point of a receipt is that both parties have it, not just, in this case, the tenant. The landlord needs to have a copy too.

Mr Durkan: I have one other wee thing. New article 5(5) provides that an offence is committed where a landlord fails to provide notice of the correct information or provides a notice late.

If the landlord appointed a person to provide a receipt, that person is guilty in such circumstances in addition to the landlord being guilty. That is an agent, so, if an agent has not done their job, the landlord is guilty as well.

Ms O'Neill: Yes. That was to prevent landlords from abdicating responsibility for making sure that the agent they employed to look after their properties was doing their job properly. They have a responsibility to make sure that their letting agent or whoever is acting on their behalf is complying with the legislation. It would not be enough to say, "It is really not my responsibility", and to pass that off as being the responsibility of the letting agent. That is why it is an offence for both parties.

Mr Polley: Letting agents undertake tasks. They provide services on behalf of landlords, so the landlord is choosing to discharge their obligations through a letting agent.

Mr Durkan: Yes, so that they do not have to chase after someone every month, do receipts and stuff. They really should be getting something from the letting agent every month as evidence that receipts were issued and rent received.

The Chairperson (Ms P Bradley): Thanks, Mark, for highlighting that point. Sometimes, we can get lost in protecting the tenant. This is also to protect the landlord, so that was a good point.

Are members content that we move on to clause 4?

The Chairperson (Ms P Bradley): OK, surprise us and let us have a brief overview of clause 4, please.

Ms Barr: Clause 4 is " Limit on tenancy deposit amount". New clause 5ZD,"Breach of tenancy deposit limit: recoverability of excess", limits the amount of deposit that is required in connection with a private tenancy to no more than one month's rent. The clause provides a definition of "one month's rent" in cases where the private tenancy does not calculate rent monthly, and makes provision concerning the recoverability of excess. It provides that a tenant or other person who paid a tenancy deposit or had a tenancy deposit retained can recover the deposit to the extent that it exceeds one month's rent.

The Chairperson (Ms P Bradley): Thank you for that, Karen.

Respondents were asked how appropriate they considered the limit of no more than one month's rent as the amount of deposit required in connection with a private tenancy. There was general support from housing groups and tenants. Among comments received was that they welcomed a limit of no more than one month's rent on the amount of deposit required, and that it was an important first step in addressing affordability issues faced by private renters.

They said that it was good by not allowing landlords to insist on a deposit of more than one month's rent in normal circumstances. However, there needed to be provision to allow for a deposit of more than one month's rent in certain circumstances. Also, a limit was absolutely necessary because a requirement for a deposit of two or three months' rent stopped poorer people from renting. There was a call for a restriction on the amount of rent requested in advance as that could be used to circumvent the limit on the tenancy deposit amount.

There were comments from those in the sector that landlords needed the protection of a deposit of greater than one month's rent in some cases, and had to be confident that the cost of damage beyond wear and tear could be recouped if a ready supply of private rented sector property was to be maintained. A larger deposit for a pet, for example, has often been seen as a safeguard against the associated risks.

Do members want to ask anything of the Department on this clause? I know from the housing rights conference yesterday that there are still a lot of people for whom one month's rent is a lot of money to get together. That limit will not suit everyone, although there was general feeling that one month was certainly much better than what has gone before.

Ms Armstrong: This clause deals with deposits, not rent in advance. I want to assure myself that how much advance rent could be asked for will be dealt with in legislation that is coming forward.

Ms Barr: Yes, that is 100% correct.

Mr Polley: This is deposits. The point of a deposit is that it goes into the tenancy deposit scheme: it is the tenant's money and, all things being equal and well, they will get it back. That is different from advance rent, which is an advance payment for a service — to live in the house — that the tenant will get. That is the landlord's money.

Ms O'Neill: Absolutely. The point about advance rent will be covered when we come to the whole area of fees and charges, including letting agents' fees and charges. That will form part of that bigger piece of work.

Mr Polley: It falls into the general area of barriers to access to the private-rented sector. As the Chair alluded to, discussions on that focus on the general area of barriers and people's inability to access a private tenancy in the first place.

Ms Armstrong: Can I tease out a scenario that an agent brought up with me? The agent, as opposed to the landlord, is the person who puts the money into the tenancy deposit scheme. Legally, who is required to do that? The landlord is the owner and employs an agent who is supposed to put the money into a tenancy deposit scheme. If, at the time that the tenant is leaving, the money is not in the tenancy deposit scheme, how does the tenant get proof that they paid the money, and who is legally required to deposit the money into the tenancy deposit scheme? Is it the agent or the landlord, or are they both liable.

Ms O'Neill: We are flicking madly through the Private Tenancies Order (PTO) to get to the bit about the tenancy deposit scheme. Sorry, please bear with us.

Ms Armstrong: No problem.

The Chairperson (Ms P Bradley): This is a good chance to say that we should all be reading the Order along with the Bill at all stages.

Mr Frew: I have it in front of me, Chair.

The Chairperson (Ms P Bradley): We know you would, Paul.

Ms Armstrong: I could not find it in the Order.

The Chairperson (Ms P Bradley): You can come back to us on it.

Mr Frew: Part II, clause 5A entitled, "Tenancy deposit scheme".

Ms O'Neill: Sorry, can we come back to you on that?

Mr Polley: If we come back to you, we can tell you properly.

The Chairperson (Ms P Bradley): Yes, that is not a problem. Come back to us on that point.

Mr Polley: We all think we know what the answer is, but we want to check it.

Ms Armstrong: I know.

The Chairperson (Ms P Bradley): We want a definitive answer on it. Is there anything else in what I read out that you wish to comment on?

Mr Polley: Just to agree that it one area of the Bill that has been the subject of quite a lot of discussion. The Department feels that it is very important to ensure that people have access to private tenancies and that unfair barriers are not put up. Landlords have made the point that they generally do not charge more than a month's deposit, but in some cases they do. It will fall to the Assembly to decide on the amount that is reasonable. There is broad support for a cap on the amount.

Finally, I make the point that this came out of the consultation when we were talking about limiting notices to quit. The point was made by tenants that, given the power relationship and the power that landlords have, landlords could merely ask for higher deposits, which would mean that a longer notice to quit might actually be a disbenefit to tenants because it would stop them from getting the house in the first place. That is how the Department was led to make legislation in the area.

Ms Barr: Restricting deposits and measures like that have to be balanced against any impact on supply and keeping landlords in the sector. That is why we are looking at limiting deposits but not at rent in advance. We are trying to keep a balance: we know that there are good landlords out there and do not want to bring in too many regulatory measures that drive them out.

Ms Armstrong: Can I ask a question for clarification? Some of the witnesses that we heard from said that they would like to ask for more than one month's rent in particular circumstances, and the Chair mentioned a larger deposit for those who have pets. I am very aware of the Disability Discrimination Act 1995. Is there a chance that people with assistance dogs would be treated in that way, potentially, and that, therefore, anybody with a disability who has an assistance dog would be required to pay more of a deposit than someone who does not have a disability? Is there any way in which those particular circumstances could be written in or defined to protect people with disabilities?

Ms O'Neill: There are no exemptions in the current clause, so the amount of deposit that a landlord can ask for any tenancy is limited to one month's rent. Under the Bill, there is no exemption whereby they can ask for an increased deposit if a person has a pet. There will be nothing in the Bill that means that a landlord can ask for additional money.

Mr Polley: Is that what the member was asking?

Ms Armstrong: If there was an amendment or consideration of a deposit of more than one month's rent in particular circumstances, we must ensure that those circumstances are not in breach of the Disability Discrimination Act and that a person with a disability who uses an assistance dog would not be liable for that type of increase. They have an assistance dog because of their disability.

Mr Polley: We do not have any exemptions, so you could not charge more to have any type of pet, never mind an assistance dog. If the decision was made to put in an exemption that you could charge more of a deposit if the person had a pet, I presume that we would want to make that exemption not apply to anyone who had an assistance dog. We have not thought that through because we do not have any exemptions.

Ms O'Neill: No, we have not. We have received communication from some pet owners who feel that they are being discriminated against because they are being asked for more of a deposit, and they want to make sure that they cannot be asked for more of a deposit. You make an interesting point. It is aside from what we are talking about, but if a landlord advertises a property and says, "No pets allowed", and someone with a disability who has an assistance dog does not get a tenancy because the landlord will not allow pets, would the landlord be breaching the Disability Discrimination Act?

Mr Polley: It is an interesting point. It is beyond the Bill, but I imagine that that could end up in court, even under existing legislation.

Ms Armstrong: I appreciate that it is outside of the Bill, but it is maybe something to think about when considering advance rent; something might be brought in in the future.

The Chairperson (Ms P Bradley): Following Kellie's point, we know, because it has been brought up here, that landlords are asking for extra deposit if there is a pet. That is happening. The Bill states that it should not be any more than one month's rent, but we do not want landlords finding ways round that. They will find ways round it when it comes to pets. People with pets are entitled to homes and want homes, and they will pay the extra to enable them to have a home, so that will happen along the road.

No other members have asked to come in on clause 4. I will carry on and see if we can get through clause 5 before we take a break. Clause 5 is entitled "Increase in time limits for requirements relating to tenancy deposits". Will you give us a brief overview of clause 5, please?

Ms O'Neill: It is an extension of the tenancy deposit scheme. Clause 5 amends article 5B of the 2006 Order. It extends the time limits for a deposit to be protected in an approved scheme from 14 days to 28 days, gives additional time for a landlord to provide the information to the tenant and amends article 6B from 28 days to 35 days. That is something that came out from the consultation with landlords on protecting a deposit. They wanted an extension from two weeks to four weeks to get the deposit protected.

The Chairperson (Ms P Bradley): Thank you. Respondents were asked if extending the time limit that is outlined in the clause was sufficient and necessary. The majority stated that they agreed that it was sufficient. However, there were a number of comments that the clause appears to be designed for landlords and/or agents of several properties where the tenancies change at specific times of the year. We know that that happens frequently, especially in the case of students. Members, do you have any comments to make on that? Members have no further comments. Do officials want to come back in on any of the Committee comments?

Ms O'Neill: This was not designed specifically for larger landlords or for those landlords of large houses in multiple occupation (HMO) properties where there are a lot of students. It was to accommodate any of the landlords who had raised it with us during our review period.

The Chairperson (Ms P Bradley): I will let Mark Durkan come in, in case he has a question for you.

Mr Durkan: I have a wee query about article 5B and the amendment in paragraph (6)(b) from 28 days to 35 days for the landlord to provide information to the tenant. Is it that therefore determined to be reasonable time?

Ms O'Neill: That is set down. The clause does not state that that is a reasonable time. It is set down that they must, within 35 days of the deposit being protected, notify the tenant of where their deposit is, who is holding it and the sort of scheme it is being protected in.

Mr Polley: It places a duty on the landlord.

Ms O'Neill: It places a duty on the landlord to do it within 35 days.

Mr Durkan: The Department must think that that is a reasonable time within which they should do so. For consistency across the Bill, might there be merit in bringing that into the other clause on which we had the discussion about a reasonable time?

Ms O'Neill: OK. Yes. The reasonable time for giving the receipt.

Mr Polley: We consulted on this, Eilish.

Ms O'Neill: We did.

Ms O'Neill: The 35 days is to provide the information, so, if we are giving 28 days to make the deposit, there is a week after that to tell the tenant that the deposit has been made. The two cannot be the same.

Mr Durkan: The 28 days, then, is reasonable.

Mr Polley: The 28 days is a reasonable time for the deposit to be given to the tenancy deposit scheme. The 35 days gives you another week to send a letter to the tenant to confirm that. That is what the 35 days is for.

Ms Barr: It is more consistent throughout the Private Tenancies Order. The 28 day would be the more —.

Ms O'Neill: It is a good point about reflecting 28 days as a reasonable period to protect the deposit in the other clause on which there have been queries about a reasonable period of time where we have not set out a number of days. We have said that we will look at it again.

Mr Durkan: Thanks, Eilish.

Ms O'Neill: Absolutely.

Mr Frew: On clause 5, the argument is completely different from what is was before. Mark is trying to get you on the consistency point about what is reasonable. In clause 5, we are amending article 5B of the 2006 Order, those periods of 14 and 28 days are in that Act, and and that will be common practice. All we are doing here in both cases is extending the time for the landlord to produce what they need to produce. It is not the same argument, to be fair. I can understand why you are stretching that period out. I do not have any complaints about clause 5 and what it does to the 2006 Order.

Ms O'Neill: Thank you.

The Chairperson (Ms P Bradley): Folks, is there anything that you want to add on clause 5, or will we call a halt to our proceedings, and, if we have time at the end, pick up on clause 6? From clause 6 onwards, I imagine, there will be a bit more discussion. Everyone is content with that.

Thank you, David, Karen and Eilish. Hopefully, we will see you before too long, if we get through business.