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Orders and regulations

Amendment made: No. 33, in page 30, line 5, leave out from beginning to "by" in line 7.—[Mr. Wills.]

Clause 65

Registration procedure

Amendments made: No. 14, in page 30, line 22, leave out from "as" to end of line 24 and insert—

'land registration rules within the meaning of the Land Registration Act 2002,'.
No. 15, in page 30, line 26, leave out "rules under section 144" and insert "land registration rules".
No. 16, in page 30, line 27, leave out "rules under section 144" and insert "land registration rules".
No. 17, in page 30, line 33, leave out paragraph (b).
No. 18, in page 31, line 9, leave out—

'145 of the Land Registration Act 1925 (c. 21)'
and insert—

'102 of the Land Registration Act 2002'.
No. 19, in page 31, line 15, leave out "1925" and insert "2002".—[Mr. Wills.]

Clause 67

The register

Amendments made: No. 20, in page 31, line 30, leave out "1925" and insert "2002".
No. 21, in page 32, line 1, leave out subsection (6).—[Mr. Wills.]

Schedule 5

Commonhold: consequential amendments

Amendments made: No. 23, in page 98, line 6, leave out "(1) and (2)".
No. 24, in page 99, line 25, leave out "section 21" and insert "sections 21 and 22".—[Mr. Wills.]

Clause 69


Amendment made: No. 22, in page 32, line 19, leave out from "(c. 20)," to "defining" in line 20 and insert—

'the Companies Act 1985 or the Land Registration Act 2002'.—[Mr. Wills.]

11 Mar 2002 : Column 688

New Clause 12

Charges under estate management schemes

'(1) This section applies where a scheme under—

(a) section 19 of the 1967 Act (estate management schemes in connection with enfranchisement under that Act),

(b) Chapter 4 of Part 1 of the 1993 Act (estate management schemes in connection with enfranchisement under the 1967 Act or Chapter 1 of Part 1 of the 1993 Act), or

(c) section 94(6) of the 1993 Act (corresponding schemes in relation to areas occupied under leases from Crown),

includes provision imposing on persons occupying or interested in property an obligation to make payments ("estate charges").

(2) A variable estate charge is payable only to the extent that the amount of the charge is reasonable; and "variable estate charge" means an estate charge which is neither—

(a) specified in the scheme, nor

(b) calculated in accordance with a formula specified in the scheme.

(3) Any person on whom an obligation to pay an estate charge is imposed by the scheme may apply to a leasehold valuation tribunal for an order varying the scheme in such manner as is specified in the application on the grounds that—

(a) any estate charge specified in the scheme is unreasonable, or

(b) any formula specified in the scheme in accordance with which any estate charge is calculated is unreasonable.

(4) If the grounds on which the application was made are established to the satisfaction of the tribunal, it may make an order varying the scheme in such manner as is specified in the order.

(5) The variation specified in the order may be—

(a) the variation specified in the application, or

(b) such other variation as the tribunal thinks fit.

(6) An application may be made to a leasehold valuation tribunal for a determination whether an estate charge is payable by a person and, if it is, as to—

(a) the person by whom it is payable,

(b) the person to whom it is payable,

(c) the amount which is payable,

(d) the date at or by which it is payable, and

(e) the manner in which it is payable.

(7) Subsection (6) applies whether or not any payment has been made.

(8) The jurisdiction conferred on a leasehold valuation tribunal in respect of any matter by virtue of subsection (6) is in addition to any jurisdiction of a court in respect of the matter.

(9) No application under subsection (6) may be made in respect of a matter which—

(a) has been agreed or admitted by the person concerned,

(b) has been, or is to be, referred to arbitration pursuant to a post-dispute arbitration agreement to which that person is a party,

(c) has been the subject of determination by a court, or

(d) has been the subject of determination by an arbitral tribunal pursuant to a post-dispute arbitration agreement.

(10) But the person is not to be taken to have agreed or admitted any matter by reason only of having made any payment.

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(11) An agreement (other than a post-dispute arbitration agreement) is void in so far as it purports to provide for a determination—

(a) in a particular manner, or

(b) on particular evidence,

of any question which may be the subject matter of an application under subsection (6).

(12) In this section—

"post-dispute arbitration agreement", in relation to any matter, means an arbitration agreement made after a dispute about the matter has arisen, and

"arbitration agreement" and "arbitral tribunal" have the same meanings as in Part 1 of the Arbitration Act 1996 (c. 23).'.—[Ms Keeble.]
Brought up, and read the First time.

The Parliamentary Under-Secretary of State for Transport, Local Government and the Regions (Ms Sally Keeble): I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this it will be convenient to discuss the following: New clause 4—Enfranchised properties located within 'scheme area'

'.—(1) This Chapter shall from the commencement of this Act apply to a dwelling within the meaning of the Leasehold Reform Act 1967, as amended, and the Leasehold Reform, Housing and Urban Development Act 1993, as amended, which—
(a) has been enfranchised;
(b) is situated within an area ("scheme area") in respect of which a scheme of management has been approved and is in force pursuant to section 19 of the Leasehold Reform Act 1967 or Chapter IV of the Leasehold Reform, Housing and Urban Development Act 1993.
(2) The right to manage provisions of this Chapter shall come into operation two months after a notice has been served by, or on behalf of not less than one half of the owners of enfranchised properties within the scheme area, and the form of notice shall be prescribed by regulations and shall be deemed to have been served from the seventh day after the notice has been sent by first class recorded delivery post addressed to the landlord or his agent at his last known address or left at such premises.
(3) On demand, the landlord shall provide an enfranchised owner intending to join with others to serve a notice of right to manage with the names and addresses of all enfranchised owners within the scheme area.'.

Amendment No. 25, in clause 72, page 34, line 20, at end insert—

', or—
(d) they consist of individual houses and blocks of flats comprised in an estate management scheme.'.

Government amendment No. 35.

Ms Keeble: These new clauses and amendments deal with estate management schemes. I hope that they improve current arrangements.

I shall deal first with new clause 4 and amendment No. 25. The Government have considerable sympathy with the suggestion that leaseholders of an estate of leasehold properties managed as a single entity should be able to exercise the right to manage en bloc rather than on a property-by-property basis. However, several difficult technical problems would need to be addressed and overcome before we could introduce such a measure with confidence. There would be difficult questions as to how best to deal with situations in which a majority of

11 Mar 2002 : Column 690

leaseholders in the estate as a whole favoured exercise of the right to manage but in which leaseholders of one or more individual blocks were opposed. Furthermore, many leasehold estates are a mixture of flats and houses, and problems would therefore arise from differences between the existing leasehold law on flats and on houses. It is also not uncommon for estates managed as a whole to include freehold as well as leasehold properties. Clearly, much work would have to be done before a regime could be devised for such estates, and that would have to await a future legislative opportunity.

I shall now deal with new clause 12 and Government amendment No. 35, which will go some way towards dealing with some of the issues that hon. Members have legitimately raised. In the other place, my noble Friend Lord Falconer gave an undertaking that the Government would introduce an amendment on estate management schemes if possible. I am pleased to inform the House that we are now in a position to do so.

Since estate management schemes were first permitted under the Leasehold Reform Act 1967, Parliament has legislated to provide protection for tenants in respect of service charge payments. As hon. Members are aware, leaseholders who pay service charges have rights and protections against unreasonable charges. The Bill will improve and extend those rights and introduce comparable ones for administration charges made under a lease. There are not, however, any similar provisions in respect of charges made under estate management schemes. At present, therefore, anyone who enfranchises and is subject to a scheme will move from having protection against unreasonable charges under their lease to having no protection against unreasonable charges under the estate management scheme. That seems to be an anomaly.

Leaseholders who enfranchise in an area that is subject to an estate management scheme will find that, where they are obliged to contribute to the costs of services or maintenance charges provided or incurred by the landlord, they lose the right to challenge the level of charges for such services that they would have had as tenants under section 19 of the Landlord and Tenant Act 1985. We have introduced the new clause to remedy this situation. It will provide that charges under estate management schemes should be payable only to the extent that they are reasonable, and the leasehold valuation tribunal will have the power to determine the extent to which such charges are reasonable. I am sure that hon. Members will see the merit of the new clause, which will improve the position of those involved.

Amendment No. 35 is a technical amendment that is intended to ensure that it continues to be possible to request consent for the making of an application for the approval of an estate management scheme in connection with acquisitions under chapter I of part I of the Leasehold Reform, Housing and Urban Development Act 1993. It has come to our attention that, once clause 116 comes into force, we will remove an existing right to make an application for an estate management scheme under section 69 of the 1993 Act. That is clearly not our intention. The amendment will preserve the existing right.

11 Mar 2002 : Column 691

I commend new clause 12 and amendment No. 35 to the House and, in the light of what I have said and the assurance that I have given about the extension of rights, I invite the hon. Member for Guildford (Sue Doughty) not to press new clause 4 and amendment No. 25.

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