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Housing and Regeneration Bill

moved Amendment No. 114CFA: 114CFA: Schedule 11, page 204, line 19, after ““which”” insert ““, subject to subsections (7A) and (7B)”” The noble Lord said: The amendment deals with the exercise by the Secretary of State and Welsh Ministers of the regulation-making powers that they will be given in the Bill to make provision about the service charge information that landlords will have to supply to their tenants. It provides that the first use of this power shall be subject to the affirmative resolution procedure. It may help the Committee if I set out the background to those regulation-making powers. Section 21 of the Landlord and Tenant Act 1985 currently provides that tenants paying variable service charges are entitled to request certain accounting information about those charges from their landlords. Service charges are the sums that tenants are required to pay to their landlords for things such as the maintenance and repair of the common parts of the buildings and other common areas. However, it was decided that the rights of tenants in this area could and should be improved on. Specifically, it was decided that there was a need to ensure that all service charge payers were provided with a minimum level of transparency about the moneys that they were required to pay and any balances of such funds held on their behalf. That would be done by prescribing that certain accounting information should be supplied by landlords as a matter of course, within a period of time from the end of each accounting period. Further, that would be backed by a right to withhold service charges where the information was not provided. Other related provisions will also be introduced, dealing with the holding of service charge money in designated accounts. Provisions were subsequently included in the Commonhold and Leasehold Reform Act 2002, which set out certain requirements for the service charge statement of accounting and the accompanying accountant's report. Following extensive consultation with stakeholders about the more detailed requirements for these provisions, it became clear that amendments were needed to the new Section 21 of the 1985 Act, in order to ensure that when regulations are made they can provide more effectively for detailed service charge information to be supplied that is more appropriate to different sets of circumstances. Therefore, the amended Section 21 will now provide a broader framework than under the original proposals for the regulation-making power to be used. In the light of the wider regulation-making power being provided, and following the advice of the Delegated Powers and Regulatory Reform Committee, it is being proposed that the first set of regulations to be made under that power should be subject to the affirmative resolution procedure of both Houses. I beg to move. On Question, amendment agreed to.