Land Registration Bill [Lords]

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Mr. Sanders: What is the Rule Committee and who are its members?

Mr. Cash: Members of the Rule Committee are deputed to give advice to the Lord Chancellor about the manner in which rules relating to registration are devised. I cannot give individual names.

Mr. Sanders: Perhaps my question should be addressed to the Minister. Is it not likely that members of the Rule Committee would be consulted by the Lord Chancellor in any event?

Mr. Cash: That is a valid point, but it would be better put to the Minister.

The other amendments are designed to prevent the rule-making power being used to introduce compulsory registration of five-year and shorter leases without further parliamentary consideration. Five-year leases are, indeed, common. They are usually occupational, business, residential or farming leases and are not assigned anything like as frequently as longer interests. There is no pressing practical need to register them, either to ensure that the purchaser and the superior interest find out about them, or to make it easier to buy and sell them.

Not only are five-year and shorter leases predominantly granted to tenants for their own occupation throughout the term and rarely assigned or under-let, the tenant holds all the documentation relevant to the assignee or under-tenant and would still do so were the lease registered. The benefits of registration to the parties would be small.

The Government said in Committee in the other place that registration of short leases would enable information to be collected that would be useful in creating transparency in the market. Even if it is accepted that there is a connected purpose in the long title of the Bill, making tenants register and pay fees for the privilege in furtherance of what the Government present as a general public interest would amount to levying tax. If it is permissible to comment on that, I suggest that that would be an unreasonable tax.

Mr. Wills: Both of the amendments would require the Lord Chancellor to consult the Rule Committee before making orders under the Bill. The hon. Member for Torbay (Mr. Sanders) asked a question about the Rule Committee and perhaps I can enlighten him. The hon. Member for Stone rightly said that that is the body that gives assistance and advice to the Lord Chancellor when he makes rules on Land Registration. Its current composition is a High Court judge from the Chancery Division, the Chief Land Registrar, a person chosen by the former Ministry for Agriculture, Fisheries and Food, a person chosen by the council of the Law Society and a person chosen by the General Council of the Bar.

The membership of the Rule Committee is to be broadened to include a nominee of the Council of Mortgage Lenders, a nominee of the Council of Licensed Conveyancers and a consumer affairs expert. It will no longer include a person chosen by the former MAFF, but will instead include a surveyor appointed by the Royal Institute of Chartered Surveyors.

I must resist both amendments. Amendment No. 8 deals with the important power given to the Lord Chancellor under clause 5 to extend compulsory registration by order, by adding further events that will trigger first registration. Amendment No. 74 would have a wider effect, making the same requirement in relation to all the order-making powers in clause 116. As a result of Government amendments in another place, the exercise of both those powers will be subject to the negative resolution procedure.

The Government also made a commitment in another place to consult the members of the Rule Committee before making an order under the clauses. Its members will undoubtedly have a valuable contribution to make to any consultation processes undertaken on secondary legislation made under the Bill. I have already described the professional membership of that committee. Its members will bring to the process the professional expertise that took them on to the committee and their experience of serving on it. I am happy to repeat that commitment, but I think that it is all that is required.

The duty to consult on both clauses is worded widely to enable the Lord Chancellor to consult with such persons as are appropriate for the issues being dealt with in the order and at the time. The clauses reflect the formal procedures for the preparation of the rules concerned. We cannot know at this stage when the need for consultation will arise, or what changes might occur in the meantime. It is therefore prudent for the clause not to be more prescriptive.

There is a further, more technical reason for resisting the amendments. When consultees are listed in statute, it can be thought that there is some justification in limiting consultation to those people, or treating their contributions as carrying greater weight than those of others. That is inadvisable when, as in this case, a large number of interests will have to be taken into account in the preparation of rules. I undertake to ensure that the members of the Rule Committee are included in any consultation process under the clauses. The Government maintain that it would be inappropriate and unnecessary to highlight one particular group by mentioning it in the Bill.

I hope that in the light of those commitments, the hon. Gentleman will be able to withdraw the amendment.

Mr. Cash: I am sorry to disappoint the Minister. I understand the generosity that impels him to suggest that there will be consultation, but he referred to our amendments as prescriptive. All I can say is that we believe that there is a strong line for sustaining our position. I regret to have to say this, because it is not one of the most fundamental issues underlying the Bill and the Minister put his contribution in temperate terms, but an underlying question remains and I shall press the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 7.

Division No. 2]

AYES
Cash, Mr. William Hoban, Mr. Mark
O'Brien, Mr. Stephen Sanders, Mr. Adrian

NOES
Barnes, Mr Harry Dobbin, Jim Jones, Lynne Marsden, Mr Gordon
Mole, Chris Stringer, Mr. Graham Wills, Mr. Michael

Question accordingly negatived.

Clause 5 ordered to stand part of the Bill.

Clause 6

Duty to apply for registration of title

Mr. Cash: I beg to move amendment No. 10, in page 4, line 24, leave out ''must, before'' and insert ''has until''.

The Chairman: With this it will be convenient to take amendment No. 11, in page 4, line 24, after ''registration'', insert ''to''.

Mr. Cash: The Bill imposes a duty to register title to a registrable estate, but that duty seems somewhat toothless, because on the face of it, there appears to be no direct sanction. The Minister is studying his notes carefully as I speak, and I imagine that he has an answer to my point. I regard this as a probing amendment, but I hope that he will come up with such a sanction, because it is an extraordinary state of affairs if that duty is toothless.

The position is the same as at present. If a title that should be registered on the first registration is not registered, the transaction comes to nothing and the buyer who fails to register does not get the title to the property that he would expect to have. The amendments suggest rewording that is consistent with a reasonable approach of encouraging people to undertake the duty, rather than waving a non-existent sword. In practice, if a buyer applies for first registration out of time, the registrar makes an order permitting registration as a matter of course. I am informed that the Law Society, with all its experienced conveyancers on its specialist committee, cannot recall any case in which that has ever caused a difficulty.

Mr. Wills: As the hon. Gentleman has said, these are essentially drafting amendments and are apparently intended to make clause 6 more accurately reflect the nature of the obligation to apply for first registration. As a matter of drafting, I am unsure whether having until a specified time to do something is different from having to do something before such-and-such a time, which means that the amendment would not achieve its aim.

More importantly, accepting the amendment, which would change the wording established in the Land Registration Act 1997, would send the wrong signals about the Government's commitment to registration and could cause confusion. There should be no doubt about the fact that the Government want more land on the register. Since 1925, the effect of failure to register appears to have been sufficient encouragement to bring about registration. We want more land on the register, and the Bill is designed to bring that about. I see no need for the amendment and I hope that the hon. Gentleman will feel able to withdraw it.

Mr. Cash: In the light of that explanation, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 ordered to stand part of the Bill.

Clause 7 ordered to stand part of the Bill.

11.45 am

Clause 8

Liability for making good void transfers etc

Mr. Cash: I beg to move amendment No. 12 in page 5, line 17, at beginning insert—

'(1) Subject to subsection (2),'.

The Chairman: With this we may discuss amendment No. 13 in page 5, line 24, at end insert—

'(2) If the requirement of registration is applied because of section 4(1)(g) and the mortgagee applied for the registration of the estate, or undertook to do so, with or without the consent of the mortgagor, the mortgagee is liable as set out in subsection (1).'.

Mr. Cash: The amendments relate to liability for making good void transfers under clause 8. The amendments' purpose is to provide that where there is the grant of a mortgage with or without a transfer to the mortgagor, and where that leads to compulsory registration, the practice is for the mortgagee to apply for registration because they have the title deeds to protect their security. A late application for registration would be a serious matter for a mortgagor, and it would also be beyond their control.

It seems unlikely that failure to affect first registration would cause difficulty, so we are proposing that the consequences should fall on those who are responsible. When a person buys a property with a mortgage, the mortgagee immediately takes the deeds as security. In practice, it is the mortgagee who must deal with registration, although the responsibility may appear to rest with the mortgagor. If the mortgagee overlooks the matter, they are responsible for any loss.

 

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Prepared 11 December 2001