New
Clause
13Temporary
public ownership: reverse property
transfer ‘(1) This section
applies where the Treasury have made a property transfer order in
accordance with section 41(2) (“the original order”)
providing for the transfer of property, rights or liabilities to a
company wholly owned
by— (a) the Bank of
England, (b) the Treasury,
or (c) a nominee of the
Treasury. (2) The Treasury may
make one or more reverse property transfer orders in respect of
property, rights or liabilities of the transferee under the original
order. (3) A reverse property
transfer order is a property transfer order
which— (a) provides for
transfer to the transferor under the original
order; (b) makes other
provision for the purposes of, or in connection with, the transfer of
property, rights or liabilities which are, could be or could have been
transferred. (4) Sections 7, 8
and 9 do not apply to a reverse property transfer
order. (5) A reverse property
transfer order is to be
treated— (a) in the same
way as a share transfer order for the procedural purposes of section
24, but (b) as a property
transfer instrument for all other purposes (including for the purposes
of the application of a power under this
Part). (6) In the application
of section 36 by virtue of subsection (5)(b) above, the power to give
directions under section 36(7) vests in the Treasury (instead of the
Bank of England). (7) Before
making a reverse property transfer order the Treasury must
consult— (a) the FSA,
and (b) the Bank of
England. (8) Section 39 applies
where the Treasury have made a reverse property transfer
order.’.—[Ian
Pearson.] Brought
up, read the First and Second time, and added to the
Bill.
New Clause
17Continuity
obligations: consideration and
terms ‘(1) The Treasury may
by order specify matters which are to be or not to be considered in
determining— (a) what
amounts to reasonable consideration for the purpose of sections 57 to
60; (b) what provisions to
include in accordance with section 58(3)(b) or
60(3)(b). (2) An
order— (a) shall be made
by statutory instrument,
and (b) shall be subject to
annulment in pursuance of a resolution of either House of
Parliament. (3) A continuity
authority may give guarantees or indemnities in respect of
consideration for services or facilities provided or to be provided in
pursuance of a continuity
obligation. (4) In this section
“continuity
authority”— (a)
in relation to sections 57 and 58, means the Bank of England,
and (b) in relation to sections
59 and 60, has the same meaning as in those
sections.’.—[Ian
Pearson.] Brought
up, read the First and Second time, and added to the
Bill.
New
Clause
18Continuity
obligations: termination ‘(1)
The continuity authority may by notice terminate an obligation arising
under section 57 or 59. (2) The
power under subsection (1) is exerciseable by giving a notice to each
person— (a) on whom the
obligation is imposed, or (b)
who has benefited or might have expected to benefit from the
obligation. (3) In this section
“continuity
authority”— (a)
in relation to section 57, means the Bank of England,
and (b) in relation to section
59, has the same meaning as in that section.’.—[Ian
Pearson.] Brought
up, read the First and Second time, and added to the
Bill.
New
Clause
19Evidence ‘In
section 433(1) of the Insolvency Act 1986 (admissibility of statements
of affairs) after paragraph (aa) (inserted by section 115 above) insert
(before the
“and”)— “(ab)
a statement made in pursuance of a requirement imposed by or under Part
3 of that Act (bank administration),”.’.—[Ian
Pearson.] Brought
up, read the First and Second time, and added to the
Bill.
New
Clause
15Court’s
discretion in mortgage possession proceedings brought by a
bank ‘In the Housing Act 1980
(c. 51), after section 89
insert— “89A
Court’s discretion in mortgage possession proceedings brought by
a bank (1) This section applies
where, in possession proceedings brought by a mortgagee under a
mortgage agreement (whether or not regulated by any
enactment)—
(a) it appears to the court that the property is
occupied by a person or persons whose occupation derives from an
interest or licence created by the mortgagor under that agreement
(whether or not such interest or licence was created in breach of the
terms of that agreement),
and (b) the mortgagee is a bank
within the meaning of section 2 of the Banking Act
2008. (2) Where subsection (1)
applies, the court may postpone the date of possession, or stay or
suspend execution of the order, for such period or periods as the court
thinks just, not exceeding three months in
total. (3) On any such
postponement, stay or suspension as is referred to in subsection (1),
the court may, unless it considers that to do so would cause hardship
to the occupier or would otherwise be unreasonable, impose such
conditions as it thinks fit with regard to the payment by the occupier
of sums for the use and occupation of the premises (not exceeding the
amount of the rent or other contractual payment which the occupier was
liable to pay under his agreement with the
mortgagor). (4) Rules of court
shall provide for appropriate notices to be served on the residential
occupier of any premises prior to the commencement and in the course of
possession proceedings brought by a mortgagee of those premises; and
shall provide for the occupier to be heard by the court, whether by
being joined as a party to the proceedings or
otherwise. (5) In fixing the
period of any such postponement, stay or suspension as is referred to
in subsection (2) and in deciding whether to impose conditions under
subsection (3), the court shall have regard to all the circumstances,
including— (a) the
terms, and in particular the duration, of the agreement between the
occupier and mortgagor; (b) the
interests of any children or other vulnerable members of the
occupier’s
household; (c) the fact (if
applicable) that the occupier’s agreement with the mortgagor has
been terminated
prematurely; (d) the
availability of suitable alternative
accommodation; (e) whether the
tenancy or licence between the mortgagor and the occupier was created
in breach of the terms of the mortgage agreement, and whether the
occupier was aware that his occupation constituted such a
breach; (f) whether the
mortgagee knew, or ought to have known, that the premises were to be
let or licensed by the mortgagor, in the course of business or
otherwise; (g) any prejudice
which would be caused to the mortgagee by the deferment of possession
or execution; and (h) any
hardship which would be caused to the occupier by a decision not to
defer possession or
execution. (6) For the
avoidance of doubt, nothing in this section affects the right of a
person whose interest in the property pre-dates, or otherwise ranks in
preference to, the interests of the
mortgagee.”’.—[Ms
Keeble.] Brought
up, and read the First
time. Ms
Sally Keeble (Northampton, North) (Lab): I beg to move,
That the clause be read a Second
time.
The
Chairman: With this it will be convenient to discuss new
clause 16— Mortgage possession proceedings brought by a
bank— ‘At the beginning
of Part 4 of the Administration of Justice Act 1970
insert— “35A
Mortgage possession
proceedings (1) Section 35B
applies in the case of any mortgage possession proceedings brought by a
bank (within the meaning of section 2 of the Banking Act
2008). (2) Section 36 applies
in the case of any other such proceedings.
35B Mortgage possession proceedings brought by a
bank (1) All mortgages securing
a loan of money or other form of credit on residential premises shall
be enforceable only upon the mortgagee obtaining an order of the
court. (2) A power of sale
which becomes exercisable by a mortgagee of residential premises,
whether under the mortgage agreement or by virtue of sections 101 to
103 of the Law of Property Act 1925, shall be exercised only
following an order for possession granted by the
court. (3) Where a mortgagee
under a mortgage of residential premises brings an action in which he
claims possession, the court may exercise any of the powers in
subsection (4) if it appears to the court that it is reasonable in all
the circumstances to do so. (4)
In a possession claim of the kind specified in subsection (3) the court
may, if it considers it just to do
so— (a) adjourn the
proceedings; (b) make the
operation of any term of the order conditional on the doing of
specified acts by any party to the
proceedings; (c) suspend the
operation of any term of the order;
or (d) at any time before
execution of a judgment or order, postpone the date of possession, or
stay or suspend execution of the judgment or order, for such period or
periods as the court thinks reasonable or until such time as the court
subsequently directs. (5) For
the avoidance of doubt, the court’s powers under subsection (4)
exist in relation to any mortgage or charge under which a loan of any
kind is secured upon residential property, irrespective of the purpose
for which the loan was taken out or of the relative priority of the
loan or of regulation by any other
enactment. (6) On making an
order under subsection (4), the court shall impose such conditions with
regard to payment by the mortgagor of any sum secured by the mortgage
or the remedying of any default as the court thinks
fit. (7) Notwithstanding the
terms of any agreement, a mortgagee of residential premises shall be
entitled to charge to the mortgagor the costs of and ancillary to
proceedings for possession or for recovery of any sums due under the
mortgage only if, and to the extent that, the court makes an order for
costs in his favour. (8) The
remedy of foreclosure shall no longer apply to mortgages of residential
premises. (9) In this section
“residential premises” mean any premises comprising or
containing a dwelling. (10)
Nothing in this section affects the power of the court to make a time
order or other orders under sections 129 to 140B of the Consumer Credit
Act 1974 in relation to agreements regulated by that
Act.”’.
Ms
Keeble: New clause 15 deals in particular with the rights
of tenants in properties that are then repossessed. The new clause
ensures that they have some rights in the process, rather than, as
sometimes happens, their being left completely unaware of what is
happening, pretty much until the bailiff comes to evict them. I am
particularly grateful to Shelter, which has repeatedly raised that
concern on behalf of people it deals
with. The
new clause gives discretion to the courts to delay repossession for up
to 90 days, to look at the circumstances of children living in the
property, and to consider the nature of the tenancy. It also gives
tenants a right to be heard at the hearing—an important right,
which they do not have now. The new clause also sets out in more detail
the type of notice that tenants should be given and the frequency with
which they should be informed of what is happening to their home. That
is particularly important now, because one of the sectors affected by
the credit crunch is the buy-to-let market. A lot of private sector
rented property in this country belongs to landlords who own just a few
properties and live on the rental income. That sector is hard hit and
its tenants are particularly vulnerable to action that landlords might
take. The
new clause is particularly important now for a second reason. Often we
think of private sector rented housing being entirely a private sector
function, but increasingly that is not the case. Because of the
shortage of social housing, a large number of what would normally be
social tenants have been diverted into private sector rented property,
through the options interview process, while still living on housing
benefit. There are real concerns, therefore, about the level of
resources available to some tenants in private sector rented properties
and about their ability to move around and to find alternative
housing. I
come across that problem repeatedly, as I am sure do a good number of
other hon. Members. During advice surgeries, I have met people living
in private sector rented properties whose landlords have defaulted on
their mortgages. As a result, their properties have been repossessed
and they have been ordered to leave at extremely short notice. The
point of the new clause is not to prevent repossessions where people
have defaulted, but to ensure that when it happens, it happens in an
orderly fashion. The new clause would also ensure that, if a court
orders a delay, it has the power to determine rental levels and to put
in place arrangements for tenants to receive notice of what is
happening and to put their case in court, for the needs of the
household, especially children, to be considered and for the court to
have some regard to other housing in the
area. I
shall give an example of what can happen in the absence of an orderly
wind-down. I was visited recently by a constituent of mine who had a
tenancy in which the rent was inclusive of council tax. She was booted
out at extremely short notice, but arrangements were not made for the
proper winding down of the accounts and payments. One year later, after
she had settled in to a new property, she was presented with a
bailiffs’ bill for more than £1,000, which was the
estimated cost of recovering one month’s council tax of
£195. The landlord should have paid it, but had not. No process
had been in place for sorting that out, so she was simply dumped with
the bill. A process such as the one in the new clause would ensure that
instead of just giving consideration to the owner of a property being
repossessed, proper regard would also be given to those living in it.
Proper arrangements should be in place to protect them from some of the
worst excesses of the current
system.
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