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'subject to this limit, that the fees payable in respect of any one application or reference by the court together with any proceedings before the tribunal arising out of that application or reference shall not exceed £500 or such other amount as may be specified by order of the Secretary of State.'.
(b), in page 54, line 6, leave out 'which, unless the order' and insert--
Lords amendments Nos. 103 and 104 agreed to.
Mr. Clappison:
I beg to move, That this House doth agree with the Lords in the said amendment.
Mr. Deputy Speaker:
With this, it will be convenient to discuss Lords amendments Nos. 106 to 113, Lords amendment No. 114, Government amendments (b) and (c) and Opposition amendment (a) in lieu thereof, Lords amendments Nos. 278 to 285, Lords amendment No. 286 and Government amendments (a) and (b) in lieu thereof.
Mr. Clappison:
We now come to a group of amendments that deal with applications to the leasehold valuation tribunal for the appointment of a manager. At the appropriate time, I shall ask the House to disagree with Lords amendment No. 114 and Opposition amendment (a) in lieu thereof.
These amendments make a number of changes to clauses 81 and 82 and to schedule 5, which establish the right of a tenant of a flat to apply to a leasehold valuation tribunal for the appointment of a manager on the ground that the landlord is in some way falling short in his management responsibilities.
Amendments Nos. 105 and 279 concern the grounds for appointing a manager set out in the existing legislation: that the landlord is in breach of his obligations under the lease and that this breach is likely to continue. The amendment deletes the second part. Also, under the two additional grounds introduced by clause 81, there is no express requirement for the tribunal to take account of the likely future behaviour of the landlord. This amendment therefore ensures a degree of consistency between the three grounds which the tribunal will have to consider and, most importantly, should improve the chances of tenants succeeding in cases where a history of bad management can be demonstrated.
Amendments Nos. 112 and 285 restrict the right of appeal from an LVT to the lands tribunal in cases for the appointment of a manager, by requiring that leave to appeal must be first obtained from either the LVT or the lands tribunal. An appeal will be possible only with the approval of either tribunal. That parallels the appeal procedures that we have introduced in relation to the new jurisdiction contained in clause 79 for leasehold valuation tribunals to determine the reasonableness of service charges.
Amendment No. 108 would require the LVT, when considering an application from a landlord for an order appointing a manager to be discharged, to be satisfied that the variation or discharge would not lead to a recurrence of the problems which led to the making of the original order and that it is just and convenient in all the circumstances of the case to vary or discharge the order.
I intend to ask the House to support Government amendments (b) and (c) in lieu of Lords amendment No. 114; Lords amendment No. 286 and Government amendments (a) and (b) in lieu thereof, and to resist Lords
amendment No. 114 and Opposition amendment (a) in lieu thereof. In effect, the issues here are very similar to those we have just discussed in relation to the level of fees chargeable by the tribunal for dealing with service charge disputes.
The new jurisdiction given to the LVT to consider applications by leaseholders for the appointment of an independent manager will run in parallel. This is an important new right for leaseholders to secure the efficient management of their homes, and it offers them a respite from an unsatisfactory or oppressive landlord. We have modified and strengthened the grounds that the LVT can consider when deciding whether a new manager should be appointed, and we have made it more difficult for the old landlord to come back and simply ask for another chance to do the job properly, without demonstrating clearly to the tribunal that he has mended his ways.
The current position in the Bill on fees for these cases is not the same as for the service charge procedures. A Government amendment on Third Reading in another place was accepted, so the Bill currently states that the level of fees must not exceed the cost of providing the service. As I said earlier, this gives the Government considerable flexibility in setting an adequate fee structure, but there is a very strong argument for establishing a maximum limit of £500 in each case, in exactly the same manner as for the service charge procedures. We will then adopt a closely parallel fee structure for the two procedures, which will be of great benefit in helping leaseholders to understand what is involved and in deciding which procedure would be most suitable for them.
For the same reasons as I gave at length in relation to the previous group of amendments, I cannot accept the Opposition's amendment, which would establish a very low maximum level of fee of about £120. The issues are similar. I believe that we have struck the right balance to provide for effective justice for tenants at an affordable price.
Mr. Raynsford:
We have before us very clear evidence of the problems caused by large-scale alterations to Bills at the last possible moment. Substantial amendments were made on Third Reading in the other place last Wednesday. Amendments and starred amendments have been tabled, with Government manuscript amendments being submitted only today because, at the last minute, the Government realised that there was an inconsistency between what they are doing in one part of the Bill and what they are doing in another.
Before we get to the substance of this debate, I must tell the Minister that this is no way to proceed with a crucial issue such as leasehold reform. Once again, last- minute changes are being made in a hurry without proper time to consider them and without opportunity for proper scrutiny. I say clearly tonight that this will not be the last word. The hon. Member for Kensington (Mr. Fishburn) said the same in the previous debate. This cannot be the final word on leasehold reform. We will need to return to the issue, because the Bill goes only some way towards resolving the problems, and does even that in an inherently unsatisfactory way.
Through this series of amendments, we are dealing with the whole issue of the management of leasehold blocks. We are considering the problems faced by leaseholders
who have incompetent or, frankly, unscrupulous and dishonest landlords. We know of examples of landlords who have failed to do the things that they ought to have done and who have not maintained their blocks properly. Often, that has been because of incompetence--but we also know of a new breed of rogue landlords who have been determined to abuse their privileges and use their powers as freeholders to intimidate and extort more money from their leaseholders than they should pay for various charges. It is to provide redress against incompetence on the one side and dishonesty and extortion on the other that new measures are required to give leaseholders rights and to prevent landlords from abusing the system.
That right to manage mirrors an equivalent right that the Government have given to council tenants. It is a clear, simple, straightforward mechanism, and it would have been the right solution. It is common sense that those who have the greatest interest in the future management of a property--the leaseholders--should themselves be able to take on the responsibility if they feel that they can discharge it better than the freeholder. The remedy is effective, because it sends unscrupulous landlords a clear message that, if they fail to provide a good service, the leaseholders will be able to take over management; but it is not against the interests of good landlords.
Along with others, I have made that point on many occasions. There is no threat to the good landlord who does not exploit tenants, and charges a reasonable amount for services. In such circumstances, leaseholders would not want to take over management, because they would not be able to make any savings or provide a more efficient service. Equally, given the way in which the right to manage was proposed, it would have provided a proper safeguard for landlords' interests by ensuring their representation on the management company.
Despite all those strong arguments in favour of a right to manage, however, the Government chose on Report to vote down the proposal, albeit by a narrow margin. We have now been presented with the alternative--which is very much a second best--of an opportunity for leaseholders to seek redress by means of a leasehold valuation tribunal. The earlier arrangement laid down in the Landlord and Tenant Act 1987, allowing leaseholders to seek redress through the courts, has proved entirely ineffective. It has not enabled leaseholders to get rid of unscrupulous or incompetent landlords; the number of cases in which leaseholders have obtained orders to change the management of their blocks has been derisory.
This procedure depends on leaseholders' having to demonstrate fault. That will cause difficulties: it is not the simple, clear-cut procedure that applies when leaseholders say that they wish to take over the management of a
property because they are confident that they can manage it better than the freeholder. They will have to present a case, and demonstrate that the landlord has been at fault. It will be difficult to prove fault, and there will be opportunities for unscrupulous landlords--often aided and abetted by crafty lawyers--to try to get around the provisions. This will not be a satisfactory alternative; moreover, the issue of costs will arise again.
We have discussed that issue in previous debates, and I will not detain the House by repeating the arguments at length. Suffice it to say that a leaseholder with a bad landlord who is not managing the property decently will be nervous about seeking redress through the leasehold valuation tribunal if the cost will be a £500 fee, with no guarantee of reimbursement. The same deterrent will apply as in the case of service charge disputes, which we debated earlier.
We are dealing with a serious problem, which requires a proper, long-term solution. The Government are offering only a limited and partial response, which is typical of their approach to leasehold reform. While they, and Conservative Back Benchers, are only too happy to protest their support for leaseholders and to say that they favour leasehold reform, when it comes to the crunch they repeatedly vote for measures that do not provide leaseholders with proper and effective remedies. On Report, when we had the opportunity to keep the right to manage in the Bill, all the Conservative Members who had spoken so passionately about leaseholders' interests voted with the Government to destroy that right. That is an indication of the extent to which the Conservative party has betrayed leaseholders' interests.
'( )No order altering the limit under subsection (3) shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.
( ) Any other order under this section, unless it'.--[Mr. Brandreth.]
Lords amendment: No. 105, in page 55, line 29, after ("made)") insert
(", in paragraph (a) (breach of obligation by landlord), omit sub-paragraph (ii) (requirement that circumstances likely to continue).
( ) In that subsection,")
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