Land Registration Bill [Lords]

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Mr. Wills: The debate has been a fascinating foray into the byways of 19th century history, as well as being very constructive. I am grateful to Opposition Members for acknowledging the enormous contribution made by the people whom I have already thanked for their work.

I reassure the hon. Member for Stone that although it will make no difference to him, his successors will, in doing conveyancing exams, be spared the vast consumption of Neurofen because of the Bill. I do not say that the proposals may not be capable of improvement. The debate has thrown up issues that we shall clearly have to tease out further in Committee, but I hope that the Committee shares the view that the policy aim of greater transparency in the property market is a good one—I expect that even the hon. Member for Torbay (Mr. Sanders) agrees about that—and that the Bill is a suitable vehicle for achieving that and a major contribution to law reform.

I shall deal relatively briefly with the many and various points that have been made. I hope that I shall cover all of them. The hon. Member for Stone made an important point about impostors and the use of electronic signatures. I am aware of widespread concern about security in that context, which has been extensively debated in another place. It is worth stating for the record that paper systems are not immune to security problems either. The ability to audit when and where electronic signatures are made will in many respects make them more secure than paper systems. With all such systems the technology and the systems used are equally important.

This is clearly one of the issues of greatest concern that has arisen in relation to the Bill. It is always aired when matters of electronic commerce are brought to the House. The Bill provides a remedy, I hope, to such concerns, in that people who have innocently suffered loss may receive an indemnity from the registry. I hope that that goes some way towards reassuring the hon. Gentleman, for the time being. I shall be happy to return to the matter later if necessary.

The hon. Gentleman's point about the length of registrable leases was probably the matter that took up most time in the discussion of the Bill in another place. As to the likelihood of the Land Registry being able to cope, the land registrar has given an unequivocal reassurance that it can cope with leases of seven years and probably less, without reducing the high standards of service that it offers. I shall come back to other points to do with the length of registrable leases.

I should like to address the issue of cost. Although I understand the hon. Gentleman's concerns, in articulating them he has not given us the whole picture. My officials have met the Country Landowners Association and have dealt with, or at least reduced, its concerns. The critical point is that although the reduction from 21 to seven years will involve additional costs—the conveyancer will have more work to do and there will be Land Registry fees—those are relatively minor in relation to the total cost of the lease, even for relatively small value leases for small businesses, let alone to the commercial value of the transaction.

As it is to be expected that well organised conveyancers will prepare material for registration as they go along, we estimate that less than an hour's work will be involved in preparing an application. The registry's typical fee for a commercial short lease is of the order of £100. Even for the largest transactions involving millions of pounds, the maximum fee is £800. Those are the costs, bit it is worth pointing out that that is spending to save. Unregistered conveyancing transactions are significantly more complicated than those drawn up under the simpler, more certain law applying to registered transactions in which the name and title of existing or intermediate leaseholders and the quality of their title is easier to establish, as is the identity and quality of the title of the freeholder.

Even if the conveyancing transaction remains a paper one, it should be much faster. It is conservatively estimated that some two and a half hours could be saved on each transaction. Every subsequent transaction involving the lease is saved all the complex work that is unnecessary once the lease has been registered. That will be of enormous benefit to business, particularly to small businesses on which such costs can bear heavily, as they have done in the past.

The hon. Gentleman also raised the question of confidentiality. All experience with the freehold residential market shows that the more reliable and neutral information about the market and its development that is publicly available, the better. I am sure that the hon. Member for Torbay will agree with me. The rules in this area, which will be subject to consultation, will follow the policy behind the Freedom of Information Act 2000. Under that Act, the presumption is to supply a copy of the document unless it falls within one of two exceptions. The two that are relevant to land registration are commercial confidentiality and data protection. Those exceptions will be built into the rules. It is not intended to make leases and charges exceptions as classes. I hope that that provides some reassurance for the hon. Gentleman.

The hon. Member for Torridge and West Devon made a point about giving notice of first registration to adjoining land. However, there are practical problems that mitigate against what is otherwise an interesting suggestion. It will not always be clear on whom notice is to be served, even when land is registered. When it is not registered, the registry will obviously have no record at all.

Mr. Burnett: I take the Minister's point. Nevertheless there is a system in planning law under which one posts a notice for something like 28 days that could possibly draw to the attention of the owner of adjoining, unregistered land the fact that the land is to be compulsorily registered for the first time.

Mr. Wills: I am happy to give the hon. Gentleman an undertaking to look carefully at that and return to him. There might be a way forward, or there could be practical problems. He also made a point about the verification of copy documents. As he knows, copy documents are generally certified by solicitors or licensed conveyancers, but the Land Registry will accept certification by officers at banks, building societies and other similar bodies.

The hon. Gentleman made a point about those who transgress. The Land Registry works closely with the profession and will offer any firm in such circumstances the opportunity to improve its performance through the use of Land Registry expertise. Only in extreme cases would a report to the professional body be considered. He also asked about the accountability of the adjudicator, who will be a judicial officer accountable only to a higher court. The Lord Chancellor will make the appointment and a competition will be launched shortly.

Mr. Burnett: I am grateful to the Minister for his reply on the initial points that I made on the proposed adjudicator. Will there be oral hearings as well as written submissions? Will a cost element be involved as well?

Mr. Wills: As the hon. Gentleman has already divined, the answer to both those questions is yes. He was concerned that the jurisdiction of the courts would not be ousted, which is the case. The Bill expressly provides that a person may appeal against a decision by the adjudicator to the High Court.

The hon. Gentleman also asked about the status of fees and the basis behind their charging. As is the case for other Government fees, the Land Registry aims only to cover the cost of its services and a 6 per cent. return on the average capital employed. For a variety of reasons over time, a surplus has built up. It is relatively small in relation to the total of the transactions, and some of it is being used to build on the impressive technological improvements that the registry has been engaged on for some time. He asked a specific question, so I shall ask the Department to consider more carefully the past five years and I shall write to him with precise figures for them.

Another issue that the hon. Gentleman asked about was maladministration and fees in such circumstances. When maladministration occurs, the Land Registry has discretion to make ex gratia payments to cover the applicants costs and the fees paid. He mentioned Lord Goodhart's amendments with some approval. Another place considered them at length, and it is probably best to return to them at a later stage. I will undertake to consider them again but, so far, the Government have not been convinced by them. The hon. Gentleman also asked when it would be possible to access the land charges register electronically, but that is already possible.

My hon. Friend the Member for North-East Derbyshire (Mr. Barnes) raised some concerns that several colleagues will have experienced in their constituencies. I reassure him that the Bill will help to deal with many of them. He asked what the registry could do to make the fixing of a boundary easier and cheaper. There are procedures for applying to the registry for boundaries, but they are not much used. Mapping technology changes all the time. In years to come, a cheaper and less time-consuming method of fixing boundaries may be practicable. The power to fix has been included in the Bill, so advantage can be taken of any relevant technological developments in future. Anyone who visits a land registry can see the enormous steps forward that have been taken in a relatively short time. Given the speed at which technology changes, I hope that we will see real change in the not-so-distant future. In time, that technology will help to reduce problems.

My hon. Friend may be interested to note that the Bill will enable boundaries to be fixed by the registry so that any dispute can be decided, which will resolve difficulties once and for all. He also alluded to the problem of destroyed deeds. Electronic storage makes such problems much less pressing. Inevitably, it will reduce the risk of essential documents being destroyed irrevocably by fire or any other means.

We then had an interesting contribution from the hon. Member for Torbay, who raised several political and technical points. He had an interesting construction on the European convention on human rights, which had not automatically occurred to me. Despite his eloquence, I am minded to disagree with him on that interpretation. We must put his concern into context. Despite his strong statement at the beginning of his speech, by the end I felt that he was edging towards us, increasingly perceiving the value of our proposals for creating greater transparency. I understand his desire to see all land registered, but we should put that in context. More than 80 per cent. of titles are registered. We have already heard from the hon. Member for Stone about some of the powers, about increasing compulsion—

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Prepared 29 November 2001