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Local Land Charges (Fees) Bill

These notes refer to the Local Land Charges (Fees) Bill as introduced in the House of Commons on 23rd March 2004 [Bill 78]. LOCAL LAND CHARGES (FEES) BILL EXPLANATORY NOTES INTRODUCTION 1.     These explanatory notes relate to the Local Land Charges (Fees) Bill, as introduced in the House of Commons on 23rd March 2004. They have been provided by the Department for Constitutional Affairs, with the consent of David Borrow, the Member in charge of the Bill, in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament. 2.     The notes need to be read in conjunction with the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause or part of a clause does not seem to require any explanation or comment, none is given. SUMMARY 3.     The Bill amends the Local Land Charges Act 1975 ("the 1975 Act"). It aims with one exception, to replace the Lord Chancellor's power to set fees for local land charge related services in England with a provision giving individual registering authorities in England the power to set their own charges for these services. In setting the charges the registering authority must have regard to the guidance issued by the Lord Chancellor and cannot, taking one year with another, set fees that exceed the cost of providing the service. 4.     The exception is the power to prescribe the fee for a personal search of the local land charges register. Here the Lord Chancellor will retain responsibility, pending the outcome of a review of personal search fees. 5.     The Bill does not change the law in relation to Wales. [Bill 78—EN]     53/3 BACKGROUND Local land charges register 6.     The 1975 Act requires certain local authorities in England and Wales to maintain a local land charges register. They are referred to as registering authorities. Local land charges are matters of a public nature affecting a property of which persons interested in the land ought to be aware. Examples include tree preservation orders, access to countryside agreements, certain enforcement notices, planning obligations and designation as a conservation area. The register is divided into separate parts each dealing with land charges related to a specific topic. 7.     Registering authorities are required to search the register, or to permit the register to be searched, on payment of the prescribed fee and, if relevant, the use of the prescribed form. The 1975 Act provides that the register may be searched in two ways: by an official search carried out by the registering authority under section 9 or by a personal search by the applicant under section 8. Different fees are prescribed for each. The official search must be requested in form LLC1 or such electronic form as the registering authority may adopt. Local land charges fees 8.     The current fees for local land charge services were set in November 2003. These fees are set out in general terms below. Fees prescribed by the Local Land Charges (Amendment) Rules 2003 (2003 SI 2502) with effect from 3 November 2003 Registration of a charge in Part 11 of the register (light obstruction notices) £67.00 Filing a definitive certificate of the Lands Tribunal under rule 10(3) £2.50 Filing a judgement, order or application for the variation or cancellation of any entry in Part 11 of the register (light obstruction notices) £7.00 Inspection of documents filed under rule 10 in respect of each parcel of land £1.00 Personal search in the whole or in part of the register in respect of one parcel of land £11.00 and in addition, in respect of each additional parcel of land, where under rule 11(3) the search extends to more than one parcel, subject to a maximum of £16.00 £1.00 Official search (including issue of official search certificate) in respect of one parcel of land - (a) in any one part of the register £2.00 (b) in the whole of the register (i) where the requisition is made by electronic means in accordance with rule 16 £4.00 (ii) where the requisition is made in any other case £6.00 and in addition, in respect of each additional parcel of land, where under rule 11(3) more than one parcel is included in the same requisition (whether the requisition is for a search in the whole or any part of the register), subject to a maximum of £16.00 £1.00 Office copy of any entry in the register (save as below) £1.50 Office copy of any plan or other document filed pursuant to the Local Land Charge Rules 1977 (SI 1977/985) Such fee as may be reasonable according to the time and work involved 9.     Local land charge searches are most commonly encountered as part of the "local search" undertaken as part of the usual process of buying land. The local search comprises a search of the local land charges register and standard enquiries of the local authority in form CON 29. The form and content of the form CON 29 are the result of an agreement between the Law Society and the Local Government Association. 10.     Individual local authorities set their own fees for replying to CON 29 enquiries under the Local Authorities (Charges for Land Searches) Regulations 1994 (SI 1994/1885). These regulations provide that the charges made should take account of the cost of providing the service. The charges made by different local authorities for answering CON 29 enquiries vary but typically range between £80 and £200. Problems the Bill aims to resolve 11.     The 1975 Act requires the Lord Chancellor, with the consent of HM Treasury, to set fees for local land charge services for the whole of England and Wales. The fees have, in practice, been revised from time to time following an application for an increase by the Local Government Association to the Lord Chancellor. However, although the registering authorities are under the same duty to maintain a local land charges register, their individual circumstances and the method by which they do so differ considerably. The costs of providing local land charge services do, therefore, vary considerably from authority to authority. These variations cannot be reflected in a single national fee. This does not encourage efficiency. 12.     The Bill implements, in part, the recommendation of the 1997 Efficiency Scrutiny Review of Consent Regimes that local authorities in England should have the power to set their own charges for local land charge searches. A consent regime is a regime under which fees are charged by local authorities with the consent of central government. The 1997 Report did not distinguish between fees for official and personal searches. However, the Bill does not amend the law relating to personal search fees. They are intended to be the subject of a further review before any decision to change the present regime is taken. COMMENTARY ON CLAUSES Clause 1: specification of fees by registering authorities in England 13.     This clause amends the 1975 Act by inserting a new section 13A after section 13. The new section applies to England only. References to sections in this commentary are to sections of the 1975 Act unless otherwise stated. 14.     Section 13A(1) provides that every registering authority in England must specify fees for the services it provides in relation to local land charges. The authority may specify different fees for different services or different descriptions of services. Thus, different fees might be specified for obtaining office copies of entries in the register and for office copies of documents filed in the register. Different fees might also be specified for different methods of delivering what would otherwise be the same service. For example, a different fee might be specified for official searches of the register where the result is dispatched electronically from a search result sent by post (section 13A(3)). 15.     "Registering authorities" are defined in section 16(1) as being, in relation to any land or local land charge, the authority or authorities in whose area or areas the land or the land affected by a local land charge is situated. The Bill does not amend this definition. Section 3 provides that each district council, London borough council and the Common Council of the City of London is a registering authority. 16.     The duty in section 13A(1) replaces, in relation to England, the power of the Lord Chancellor, with the consent of HM Treasury, to set fees for filing documents with an authority, making, cancelling, varying or supplying copies of an entry on a register, and making a search of the register (other than personal searches) (section 14(1)(h)). It also replaces to that extent the power to set fees in relation to statutory provisions by virtue of which a matter is a local land charge (section 14(2)(a)). 17.     In performing its duty to specify fees, the authority must ensure that the cost of providing a service, description of service, or a group of services or descriptions of service is not, taking one financial year with another, exceeded by the fee income generated (section 13A(5)). In specifying fees, the authority must also have regard to any guidance issued by the Lord Chancellor (section 13A(9)). The guidance is expected to offer advice on the duty to set fees; the definition of the services; the limitation to cost recovery; the calculation of the costs; setting the fees; competition and the effect on local businesses; the manner of payment and the publication of the fees. To allow cost accounting to be carried out at an appropriate level of detail within an authority, authorities are to be permitted to group different services or descriptions of services relating to local land charges for the purposes of calculating costs (section 13A(5)). 18.     'Local land charges' are defined in sections 1 and 2. The definition is lengthy but is not changed by the Bill. See paragraph 6 above. 19.     The duty under section 13A does not extend to fees for personal searches (section 13A(2)). These fees will continue to be set by the Lord Chancellor, with the consent of HM Treasury, under section 14(1)(h) (see clause 2(4)). 20.     The duty under section 13A does not prevent the provision of services free of charge (section 13A(4)). 21.     Before any fees are brought into force, the registering authority must publish details of the fees and when they are to be payable (section 13A(6) and (7)). Where fees are to remain unchanged from one financial year to the next, details of the fees must be published shortly before the beginning of April in each year (section 13A(8) and (11)). In publishing details of the fees, the authority must have regard to any guidance issued by the Lord Chancellor (section 13A(9)). 22.     In guidance issued for the purposes of section 13A, the Lord Chancellor may adopt guidance issued by another person, such as, for example, the Local Government Association (section 13A(10)). Clause 2: further amendments 23.     Clause 2 makes minor and consequential amendments to the 1975 Act. 24.     Clause 2(2) inserts two new subsections to replace section 9(3). Section 9(3) provides that a registering authority can specify how a fee for an official search is to be paid. At present, such fees must be paid in advance (section 16(1) and Local Land Charge Rules 1977, r 14). In Wales the present law will be retained. 25.     Clause 2(3) makes consequential drafting amendments to section 9(4). 26.     Clause 2(4) replaces the existing section 14(1)(h). As mentioned in paragraph 16 above, this section contains the power of the Lord Chancellor, with the consent of HM Treasury, to set fees for England and Wales. As a result of the transfer of that power to registering authorities in England under the new section 13A (see paragraph 14 above), section 14(1)(h) has had to be amended. The new section 14(1)(h) accordingly only gives power to the Lord Chancellor, with the consent of HM Treasury, to set fees in respect of personal searches (see paragraph 7 above) so far as England is concerned. The power of the Lord Chancellor to set fees in Wales is unchanged. FINANCIAL EFFECTS 27.     This Bill is deregulatory in nature. Implementation of its provisions will impose no additional burden on the Consolidated or National Loans Fund and will not have a significant effect on total public expenditure. PUBLIC SERVICE MANPOWER 28.     No significant change in the workload of any Government department or agency is anticipated on implementation of this Bill. 29.     Registering authorities will need to apply resources to calculating appropriate fees. However, they already do so for the enquiries in form CON 29 (see paragraph 9 above) and will benefit by being able to set a fee which reflects local circumstances. REGULATORY IMPACT ASSESSMENT 30.     The fees payable for local land charge services are very small in the context of buying property and are likely to remain so whether set centrally or by registering authorities. They are also relatively small in relation to fees now set for replying to form CON 29 (see paragraphs 8 and 10 above). The proposed devolution will enable registering authorities to recover a reasonable charge for the work they do, whilst ensuring consumers do not have to pay more than cost. The present arrangement of a single national fee for all authorities with widely differing circumstances discourages efficiency. By enabling registering authorities in England to set fees appropriate to their own circumstances, greater efficiency will be encouraged and comparisons between the charges of different authorities will be possible. 31.     There is no regulatory impact on those paying the fees save that there may be a greater variety of charges. However, where, as is usually the case, a search of the local land charges register is part of a full local search, the searcher already has to find out the fee chargeable by the local authority in question for replies to form CON 29. The regulatory impact on the authority of having to comply with guidance in setting fees is minimal and thought to be outweighed by the benefit of being able to set a fee which reflects its own costs. 32.     Business, charities, the voluntary sector and public sector bodies will have to pay any fees that may properly be set, but the impact seems likely to be negligible in the context of the purchase of, and other dealings with, property. 33.     Implementation of the Bill will have no discernible environmental impact and no impact on health, diversity or equal opportunities. 34.     Since the impact on business, charities and the voluntary sector is expected to be negligible no Regulatory Impact Assessment is provided. This has been discussed with the Cabinet Office Regulatory Impact Unit. EUROPEAN CONVENTION ON HUMAN RIGHTS 35.     The Bill has no human rights implications. TERRITORIAL EXTENT 36.     The Bill extends to England and Wales only but only changes the law in relation to England. TERRITORIAL APPLICATION: WALES 37.     The Bill will not change the law in relation to local land charges in Wales. Although local land charges are not a devolved matter, the Welsh Assembly Government has indicated to the Department for Constitutional Affairs that it wishes the Lord Chancellor's fee setting power in relation to local land charges to be transferred to the National Assembly for Wales rather than to registering authorities in Wales. The Bill is not an appropriate vehicle to implement this policy. 38.     For the time being the Lord Chancellor will retain responsibility, with the consent of HM Treasury, for setting local land charge fees in Wales. COMMENCEMENT DATE 39.     The Bill will be brought into force on a date to be fixed by way of a commencement order made by the Lord Chancellor.