Commonhold and Leasehold

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The Chairman: Order. I am not certain that the reading of letters amounts to an intervention.

Ms Keeble: My point about the basis that will underpin our debates during the next two sittings was intended to assist the hon. Members for Torbay and for Stone.

Experience has shown that residence tests are open to abuse because there is contention about what constitutes residence. The Bill removes or replaces residence tests and we would not favour creating another test. That is the correct approach. The right to manage is neither pro-landlord nor anti-landlord. It is a measure to ensure that management rights balance with property interests. As a holder of a stake in a property, the landlord is part of that interest.

The notion that the landlord cannot be trusted or might intimidate tenants underpinned the concerns of the hon. Member for Torbay. It is suggested that opposition to landlord membership is based on those presumptions, which is an unfair and inappropriate generalisation. The right is a no-fault right and its acquisition should not be tied to the previous conduct or predicted future conduct of the landlord. To suggest that a landlord cannot be trusted would pronounce that person guilty without any opportunity to prove otherwise. It also pre-supposes that all landlords are bad and all leaseholders are good and trustworthy.

Mr. Sanders: I did not mention the behaviour of landlords, but I understand where the Minister is coming from. It is unlikely that tenants would want to take over the management of a well-managed block. It is only in the event of poor management by a landlord that they are liable to want to form an RTM company. Therefore, guaranteeing the landlord an automatic

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place in the company would bring about the problems that people have raised in consultation.

Ms Keeble: That is a fair point. However, it makes a supposition about the reasons why people might want to exercise the right to manage. Many do so because they want to make decisions about their own properties.

Mr. Cash: Before the Minister moves on, did she suggest that the fact that the landlord might be on the board would effectively act as a veto? She must understand that it would not get to that point: participation is not the same as veto.

Ms Keeble: I accept that point. I was not suggesting that a landlord who is a member of a company has a right of veto. Some leasehold organisations have suggested that the presence of a landlord as a member of a company might be intimidating.

We are dealing with existing leasehold practice, where significant disputes between the two sides have arisen, so we have to reconcile different experiences and pressures.

Amendment No. 54 proposes that the freeholder should be given an unqualified right to become a member of the RTM company at any time. Members of the Committee will be aware that under clause 72(1)(b) the freeholder, together with any intermediate landlord, is already entitled to be a member of the RTM company. For the purposes of the clause, the freeholder will be the landlord of the qualifying tenants who exercise the right to manage.

The right granted to landlords under the clause is qualified in that a landlord may become a member of the RTM company only after the date on which that company acquires the right to manage the property. The qualification exists for a sensible, practical reason. Before it can acquire the right to manage, the RTM company is required to serve a claim notice on a range of existing management parties, including all the landlords. That allows the recipients to satisfy themselves that the leaseholders are properly entitled to the right to manage.

If landlords were also members of the company at this stage, they would be both the people who are being notified of a claim and a part of the body that notifies them, which does not make sense. Furthermore, it would give unscrupulous landlords a double opportunity to cause problems and delay. They could not only dispute the entitlement of the RTM company, but could slow the process down from within the company—an eventuality that we do not want.

For that reason, we cannot allow any of the landlords, including the freeholder, to become members of the RTM company before it acquires the right to manage. The Bill strikes a sensible balance in allowing landlords to protect their legitimate interests once the right is acquired, but preventing them from interfering before that date. That is the right solution.

Under amendment No. 55, the freeholder would have the right to appoint at least one director of the RTM company, which raises the difference between a member and a director. We believe that that provision

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is neither necessary nor appropriate. The right to manage will give everyone with a significant stake in a property a balanced and proportionate say in its management. I see no reason to unbalance the position by giving landlords the right to insist on their own directors, who should be elected by members of the company.

Those proposals are based on the unhelpful assumption that leaseholders cannot be trusted to manage the property in which they have acquired the majority stake and that landlords need special protection. We disagree. Nothing justifies the landlord, with a minority stake in the property, having a disproportionate degree of protection. We agree that everyone with a stake in the property should be able to take action to protect their interest where the RTM company is failing to do its job, but the Bill already provides for that. Our view remains that such rights should be granted on a fair and equitable basis.

We have had a thorough debate and I have tried to make our position clear. I ask the hon. Member for Torbay to withdraw the amendment.

10.30 am

Mr. John Taylor (Solihull): First, may I say how much I have enjoyed serving under your chairmanship for the first time, Mr. Hurst,. The tenor and tone of the Committee has been most agreeable.

In common with the Minister, I have found it difficult always to hear what is being said. I hope that the Committee can hear me satisfactorily. The Minister did not quite catch the words of the hon. Member for Torbay, and neither did I. It may be the consequence of advancing years, but if it is not merely that could you, Mr. Hurst, use your good offices and influence to arrange for some ear trumpets to be distributed in the Committee? I complimented you on your chairmanship and they would be extremely valuable.

I want to reassure the Minister, although she is full of confidence and may not need it. At one stage, she admitted that she was not a qualified lawyer, but being a qualified lawyer is a profound disadvantage, although lawyers tend to get more fun out of these occasions, even though they keep it to themselves. There is not much rollicking hilarity; the pleasure is inward. It is a glow of self-satisfaction that, contrary to all precedents of the House of Commons, one finds oneself in the position of knowing about what one is discussing. That is normally ill-advised in the House and the silent ones—the Whips—normally ensure that Committees are selected so that no member knows what they are talking about. That gives the Minister an easy ride, which is what the Whips are all about.

The Minister seems to be bending over backwards to avoid being partisan in favour of the tenant against landlord. There is a traditional tension in the House that always presumed that the Tories were in favour of landlords and Labour in favour of tenants. There is a great anxiety in new Labour to get away from that past and in some senses that is admirable. However, there is a good reason for trapping the landlord in the management company, which is that the tenants can then intimidate the landlord. We did that in the

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development in which I live in Solihull. We ensured that the landlord was a member of the management committee, so that he could not avoid hearing us let rip at him.

Finally, as I know that my interventions are normally unwanted in this Committee—[Hon. Members: ''Shame'']. Faint praise. The Minister said that she would be writing to the Committee on some technical points and I am sure that that is welcome. I believe that the proper convention is that the Minister should write to you, Mr. Hurst, because you are in charge and send copies to the rest of us. I remind her that her colleague, the Parliamentary Secretary, who was with us on Tuesday, undertook to write to me about the priority of the rights of the deserted spouse. I will not dig the ground again, but it is extremely important and we should not lose sight of it. I come to this Committee with two priorities. One is to ensure that the position of the deserted spouse is covered in rank priority to both arrears and a first or second mortgagee. The second, which we have not yet reached, is that I wish to secure in the Minister's mind the importance—

The Chairman: Order. If we have not yet reached the point in the Bill, it is not appropriate to pursue it.

Mr. Taylor: I accept your guidance, Mr. Hurst. My intervention has lasted far too long and I thank you for the courtesy of your rebuke.

Mr. Cash: I am glad that you have been complimented on your handling of the Committee, Mr. Hurst, and that the Minister had the opportunity to speak before me, because it allowed me to hear her arguments before I spoke. The more I heard, the less I liked.

A curious situation is developing, which is that the landlord might be thought capable of intimidating the tenants. As my hon. Friend the Member for Solihull (Mr. Taylor) rightly said, in certain circumstances, it is not a question of intimidation. It is a question of participation in an important and complex process. Among other things, we are dealing with relationships between different people, some of whom may be downright difficult. My experience in dealing with such people is that they are difficult just for the sake of it. Equally, landlords can be difficult.

It may amaze the Committee to learn that difficult people who live in blocks of flats are not necessarily Conservative, Labour, new Labour, Liberal Democrat or anything else. They do not come from a particular political party; they are just plain difficult. We must get the balance right in the interests of the people who will live in such premises, to avoid what has, historically, been an arm's length relationship. The landlord has an interest and the tenants have an interest in what the landlord is thinking.

Those of us who watched ''Doctor Zhivago'' for the sixth time over Christmas may recall what happened when Zhivago returned. Just before Alec Guinness appears, we see an amazing sight: the Leninist committee has appropriated the property of Ralph Richardson, the father-in-law. The landlord is

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excluded from the premises. He lives there, but the whole building has been taken over. I do not wish to carry this too far, but those who have seen the film may find the questions that it raises interesting.

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Prepared 17 January 2002