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New Clause 9
Failure to pay small amount for short period
'(1) A landlord under a long lease of a dwelling may not exercise a right of re-entry or forfeiture for failure by a tenant to pay an amount consisting of rent, service charges or administration charges (or a combination of them) ("the unpaid amount") unless the unpaid amount—
(a) exceeds the prescribed sum, or
(b) consists of or includes an amount which has been payable for more than a prescribed period.
(2) The sum prescribed under subsection (1)(a) must not exceed £500.
(3) If the unpaid amount includes a default charge, it is to be treated for the purposes of subsection (1)(a) as reduced by the amount of the charge; and for this purpose "default charge" means an administration charge payable in respect of the tenant's failure to pay any part of the unpaid amount.
(4) In this section "long lease of a dwelling" does not include—
(a) a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies,
(b) a tenancy of an agricultural holding within the meaning of the Agricultural Holdings Act 1986 (c. 5) in relation to which that Act applies, or
(c) a farm business tenancy within the meaning of the Agricultural Tenancies Act 1995 (c. 8).
(5) In this section—
"administration charge" has the same meaning as in Part 1 of Schedule 11,
"dwelling" has the same meaning as in the 1985 Act,
"landlord" and "tenant" have the same meaning as in Chapter 1 of this Part,
"long lease" has the meaning given by sections 76 and 77 of this Act, except that a shared ownership lease is a long lease whatever the tenant's total share,
"prescribed" means prescribed by regulations made by the appropriate national authority, and
"service charge" has the meaning given by section 18(1) of the 1985 Act.'.—[Ms Keeble.]
Brought up, read the First and Second time, and added to the Bill.
New Clause 10
Power to prescribe additional or different requirements
'(1) The appropriate national authority may by regulations prescribe requirements which must be met before a right of re-entry or forfeiture may be exercised in relation to a breach of a covenant or condition in a long lease of an unmortgaged dwelling.
(2) The regulations may specify that the requirements are to be in addition to, or instead of, requirements imposed otherwise than by the regulations.
(3) In this section "long lease of a dwelling" does not include—
(a) a tenancy to which Part 2 of the Landlord and Tenant Act 1954 (c. 56) (business tenancies) applies,
(b) a tenancy of an agricultural holding within the meaning of the Agricultural Holdings Act 1986 (c. 5) in relation to which that Act applies, or
(c) a farm business tenancy within the meaning of the Agricultural Tenancies Act 1995 (c. 8).
(4) For the purposes of this section a dwelling is unmortgaged if it is not subject to a mortgage, charge or lien.
(5) In this section—
"dwelling" has the same meaning as in the 1985 Act, and
"long lease" has the meaning given by sections 76 and 77 of this Act, except that a shared ownership lease is a long lease whatever the tenant's total share.'.—[Ms Keeble.]
Brought up, read the First and Second time, and added to the Bill.
New Clause 11
Notice to accompany demands for service charges
'After section 21A of the 1985 Act (inserted by section 151) insert—
"21B Notice to accompany demands for service charges
(1) A demand for the payment of a service charge must be accompanied by a summary of the rights and obligations of tenants of dwellings in relation to service charges.
(2) The Secretary of State may make regulations prescribing requirements as to the form and content of such summaries of rights and obligations.
(3) A tenant may withhold payment of a service charge which has been demanded from him if subsection (1) is not complied with in relation to the demand.
(4) Where a tenant withholds a service charge under this section, any provisions of the lease relating to non-payment or late payment of service charges do not have effect in relation to the period for which he so withholds it.
(5) Regulations under subsection (2) may make different provision for different purposes.
(6) Regulations under subsection (2) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.".'.—[Ms Keeble.]
Brought up, read the First and Second time, and added to the Bill.
Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, and Prince of Wales's Consent, on behalf of the Duchy of Cornwall, signified.]
Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Spellar.]
9.27 pm
The Parliamentary Secretary, Lord Chancellor's Department (Mr. Michael Wills): It is usual at this stage of progress of a Bill to thank those who have scrutinised it in Committee, and that is a convention that I am very
happy to observe on this occasion. As the hon. Member for Stone (Mr. Cash) said before he began his marathon efforts on the first day of consideration on Monday, the content of the Bill has been considered in very great detail, both in this House and, because of the timing of the general election, twice on Second Reading and in Committee in the other place. Progress has been mostly good-natured, and important contributions have been made to improve what was already a good Bill.It is, of course, disappointing that, despite having logic and reason on our side, it has not proved possible for us to persuade Opposition Members of the underlying wisdom of the 100 per cent. rule or the even-handedness of the Bill's approach to marriage value. Nevertheless, the Government have been open to constructive criticism and assistance from both sides, inside and outside Parliament, and the Bill has undoubtedly been improved by the efforts of Members in both Houses. I hope that Opposition Members and indeed my hon. Friends will feel able to agree that although the final product that we shall send back to the Lords may not be all that they wanted, it is still a very good Bill.
First, and perhaps most important, the Bill introduces two entirely new concepts into the law relating to land. The no-fault right to manage in part 2 will give leaseholders who wish to employ it a right to make arrangements for the management of their homes. They will not have to prove that their landlord is in default of any of his duties, neither will they have to buy out his or her interest. At a stroke, that right will address many of the problems faced by many leaseholders.
The other new concept is, of course, commonhold. We have been criticised for not calling a halt to new leasehold developments and imposing commonhold as the new exclusive standard. We know why that has been suggested and we are not without sympathy for that point of view, but we have explained at length why we cannot go as far as that. None the less, we believe that commonhold could speedily take its place in the market as a robust alternative to long leasehold and we firmly expect that, over time, as people gain confidence in the scheme, it will supplant leasehold without the need for the Government meddling in the market, with all the possible unintended consequences of that.
The detailed consideration of the proposals in both places has helped to develop a scheme that will be practical, easy to use and therefore popular. Part 2, having introduced the right to manage, goes on to liberalise the right of collective enfranchisement. More leaseholders in many more properties will be able to take advantage of enfranchisement.
Once the Bill receives Royal Assent, as we hope it will, there will be much work to do publicising the new schemes that it introduces. The Lord Chancellor's Department and the Department for Transport, Local Government and the Regions believe in the Bill. It has been in successive manifestos and, as an earnest of the Government's commitment, it was reintroduced at the earliest opportunity after the last election. Plans are already in hand for making the contents better known and the advantages to all those whom it could affect widely realised. We shall promote it through many channels.
If, regrettably, some still believe that the Bill falls short of perfection, we are convinced that most, including Members on both sides of each House, recognise it as a
great step towards freeing leaseholders of the worries to which the current long leasehold system can give rise if its management is left in the wrong hands. This is a great step towards the ultimate goal, which I hope everyone in the House can support, of secure home ownership.9.32 pm
Mr. Cash: I concur with the Minister in saying that the Bill is a step forward, and I am extremely glad to be able to say that we have played a constructive part in the proceedings. The Bill has been through the best part of six stages, and we have covered an enormous amount of ground. If there were one or two harsh words towards the end of the proceedings, we can put them behind us now. We are glad that the Bill will go on to the statute book, but we still have a number of reservations.
First, as the Minister has just said, we have doubts about the unanimity rule. As I said in a letter to The Daily Telegraph yesterday, that will render the Bill largely unworkable. In fact, it will mean that its application will be confined largely to new developments. Time will tell. It is astonishing and a great shame that the Government should have stuck doggedly to something as indefensible, to our minds, as the unanimity rule. In a large block of flats, it will be almost impossible to get agreement across the board.
I happen to know that many Labour Members share that view. They may not has been as vociferous in the subsequent proceedings on the Bill as in the heat and fury that we saw on Second Reading, but I appreciate that the power of the Whips is all-pervasive. The pungent whiff of the crack of the whip gave me the impression that Labour Members had even faltered a little on forfeiture as well. However, the arguments have been deployed, and it is important in the House that we deploy arguments as well as voting on them.
There are other matters that other hon. Members will want to address, and I do not propose to say any more except to thank those in the various Departments who helped to put the Bill together. I am grateful also for the advice that we received from the Law Society and distinguished members of the Chancery Bar. These are complicated matters, and the Bill is technical. Proceedings on it have been good natured, and it is a step forward. It may be a faltering step; there is no reason why a few more things could not have been sorted out but, as they have not, we should be content with the Bill's progress and look forward to a time when further improvements can be made: we shall be glad to support them if they are in line with our thinking.
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