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The Deputy Chairman of Committees (Viscount Allenby of Megiddo): Before calling Amendment No. 140, I should inform the Committee that if this amendment is agreed to I cannot call Amendment No. 141.

Lord Howie of Troon moved Amendment No. 140:

Page 59, line 35, leave out subsection (1) and insert--
("(1) This part does not apply to a construction contract which is exclusively for the provision of a dwelling for one of the parties (whether the dwelling is provided by the erection or the conversion or enlargement of any building or structure) or which is for work done on or in relation to such a dwelling, including the means of ingress thereto or egress therefrom.").

The noble Lord said: Nothing would induce me to prevent my noble friend Lord Williams of Elvel from moving Amendment No. 141, so I shall not be pressing this amendment and therefore it will not be passed. I await Amendment No. 141 with bated breath.

As the Bill stands, its provisions do not apply to someone who "intends to occupy" a dwelling. We all know where good intentions lead. We also know that intentions may change. An intention to occupy, which can be changed at any time, will be sufficient to avoid the provisions of the Bill. I am perfectly sure that that cannot have been the intention of the Government. The dwelling in whole or part is required to be the subject of operations to which the contract relates. These operations may include non-dwellings, for example an office block with flats above. Therefore, it is important that only contracts relating solely to work in connection with a dwelling are excluded from the legislation by this provision. The amendment is intended to tighten up a part of the Bill that needs it. I beg to move.

Lord Williams of Elvel: The amendment moved by my noble friend Lord Howie of Troon is grouped with Amendments Nos. 141 to 143. I shall refer in particular to Amendment No. 141. The Committee will be aware that the problem described by my noble friend is a serious one. The expression in the Bill as it stands is rather vague and uncertain. The clause excludes contracts with the residential occupier from Part II of the Bill. It is intended that such properties should not be affected by the construction contract regime. My amendment has the effect of deleting the concept of occupation from Clause 103 and substituting mere possession of the residence as a qualification for exemption. The amendment is suggested by the Law Society of Scotland. It has examined the drafting with great care. It has serious doubts about what "occupation" means. Does it mean actual or constructive residence? When is the intention to occupy formed? Can a person occupy one property and simultaneously intend to occupy another? Those are questions which the Law Society of Scotland is worried about and which give rise to the amendment.

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Amendment No. 142 is also proposed by the society. Its effect is to modify the definition of "flat" by removing the need for a flat to be a self-contained property. In the view of the society, the concept of self-contained flats does not take account of Scottish law dealing with tenements or the nature of tenemental property. The ownership of Scottish tenements is qualified by the concept of common interest. That includes mutual obligations of support and maintenance, especially in terms of common property such as passages and stairs. The roof may also be common. Furthermore, the terms of Clause 103(2) take no account of the fact that many properties are not self-contained. There may be common elevators and car parking and refuse disposal facilities. In an undeveloped property there may even be a common water closet. The society believes that the amendment is necessary for clarification.

Amendment No. 143, which I endorse, stems from the same source. The amendment is consequential upon the Committee agreeing to Amendment No. 142. I hope very much that the Government will favourably consider amendments put forward on behalf of a serious body which has looked carefully at the issue. There are some problems in relation to Scottish law. I am sure that the Government are glad to be made aware of them.

Baroness Hamwee: A person may occupy one property and intend to occupy another, particularly if the other property is in the course of construction. Looking at Clause 102(1), that is not necessarily the case if the property is in the course of extension, and certainly not if it is being demolished or dismantled. The noble Lord, Lord Williams of Elvel, has made me think about the words, "as his residence". To occupy property as one's residence suggests that that may be one's main residence. I should like to know whether or not that is intended. If "any residence" is intended it may be clearer to have the words, "occupation of it as a residence".

Lord Hylton: It would be very helpful if, when the Minister replies, he explains why Clause 103 seeks to exclude residential occupiers. To my knowledge, there have been some very bad cases where individuals, who have not received professional advice, have entered into contracts, for example, for the purchase of prefabricated houses or other kinds of system built residences. In the event, it has been found to be unsuitable for the purpose. I would have thought that individual owner occupiers were exactly the kind of people who needed the protection of the Bill.

Lord Monkswell: I support the amendment moved by my noble friend Lord Howie of Troon. I, too, question why the exemption is needed at all. Perhaps the Government can explain the purpose of Clause 103.

Earl Ferrers: I am glad to say that none of the amendments in this group is at odds with the principle of having an exclusion for contracts with residential occupiers. We believe that such an exclusion is needed for two reasons. First, there is already in place considerable legislation to protect the right of the consumer. In this case, the client will be a consumer as

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it is a household contract. Secondly, there is a small but significant risk that unscrupulous contractors may try to browbeat those unfamiliar with the new law into paying for shoddy work. I hope that that satisfies the noble Lord, Lord Monkswell. It is prudent to ensure that the provision does not apply to those who carry out works on their own premises, but wanting an exclusion and getting it right are two very different matters. Even if Clause 103 is not yet quite right we must be careful that we do not make matters worse.

For example, Amendment No. 141, in the name of the noble Lord, Lord Williams of Elvel, would have the undesirable effect of removing the exclusion of contracts where the owner was not actually in residence at the time of the work. That would be likely to be the case if the house was being built or extensively repaired. I can think of an occasion when the noble Lord, Lord Williams, may buy a house and wish to do it up. He may desire to get out of the way while all the dust and filth is lying around. He may go off to somewhere like Crete and have a nice holiday and come back to find that everything is all right. Under the amendment that particular situation will not be excluded from the Bill. Similarly, although Amendment No. 140 in the name of the noble Lord, Lord Howie of Troon, has a great deal to commend it, it would not cover the situation where, for instance, one part of a house had been converted into a flat and the main householder wants to place a refurbishment contract for the whole building.

It is true that at present the residential exclusion would not apply to a contract which was related solely to work on common areas. We have to give more thought to that point. There is clearly a great deal to consider, particularly in the light of the views expressed by the noble Lord, Lord Williams of Elvel. I am concerned that it should be fair and workable.

The noble Baroness, Lady Hamwee, asked whether "residence" means main residence. When the Bill refers to "residence", it means any residence. So it would include a second home or a holiday cottage. I believe that covers her point. It would be a pity to insert any such constraining words as "main residence", because that muddles it up, and I understand that is not the noble Baroness's purpose. I hope that she will be content with the word "residence". It means her house in London, her house in the country, her house in Scotland, her house down at the seaside, or wherever she may be. If it is her residence, it is covered by the Bill.

I am not sure what the noble Lord, Lord Hylton, was aiming at, if I may be so rude as to say so. He asked a question which I find difficult to answer because I am not certain what he asked. I am not suggesting that he should necessarily ask it again, unless he wishes to do so. I should like to look at Hansard, consider what he said and to write to him to give him a proper answer.

6 p.m.

Lord Monkswell: I wonder whether I may intervene. The Minister suggested that under the terms of a contract under this Act, as it will become, a consumer might be required to pay for shoddy work. I am sure

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that he did not mean to suggest that one of the results of the Bill will be that parties to a contract have to pay for shoddy work. I am sure that he did not mean that, and I give him the opportunity to correct what he said.

The Minister explained that domestic consumers, if one can describe as a domestic consumer someone who is having work done on his house or building a new house, are covered by other legislation. But what about the contractor who may be at risk from an unscrupulous consumer?

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