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Lord Dubs: The noble Lord has put the case for Amendment No. 247B which stands in my name very well. He said that it is similar to Amendment No. 247A. My inspection of the two amendments suggests that it is identical, so the noble Lord could just as well accept my amendment as the government amendment. I am delighted that the noble Lord has put the case for the amendment and I suppose that he is at liberty to accept either of them.
On Question, amendment agreed to.
Lord Dubs moved Amendment No. 246CA:
The noble Lord said: The basic point of the amendment is not all that different from what the Minister said in relation to the previous amendment. When there is an order regarding management, in order that that should be discharged, it seems to me that it would be proper that the onus of proof should be somewhat different from the way it is in the Bill. That is to say, if it is right for fault to be established before the management can change, then that should apply equally to freehold landlords and leaseholders so that, if a landlord wishes the order to be discharged, there should be some onus of proof on him as to why the management was not proving effective. That makes it equal as between the situation before there was an order and when there is a request to have the order discharged. I hope that I have made that clear. The Minister looks rather puzzled. I beg to move.
Lord Lucas: On considering the amendment in detail, and, in particular, after listening to the eloquent words of the noble Lord, Lord Dubs, we are clear that the wording currently in the Bill needs looking at, particularly, as the noble Lord said, in relation to the amendments I have just moved, and to the arguments we accepted in that case, and to the potential which the wording in the Bill at the moment might give for an unscrupulous landlord merely to replace managers in never-ending succession, forcing tenants to start the whole procedure again. We do not feel comfortable with the amendment as drafted by the noble Lord, but we shall look at the matter again and write to him or take some suitable action before Report.
Lord Dubs: I thank the Minister for that. I am happy about that. I look forward to his eventual response when he has had a chance to consider the matter further. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas moved Amendments Nos. 246D and 246E:
The noble Lord said: I spoke to both amendments with Amendment No. 246C. I beg to move.
On Question, amendments agreed to.
Clause 81, as amended, agreed to.
Clause 82 [Appointment of manager: transfer of jurisdiction to leasehold valuation tribunal]:
Lord Lucas moved Amendments Nos. 246F, 246G, 247 and 247A:
The noble Lord said: I spoke to these amendments with Amendments Nos. 246C and 243. I beg to move.
On Question, amendments agreed to.
[Amendment No. 247B not moved.]
Lord Lucas moved Amendment No. 248:
The noble Lord said: I spoke to this amendment with Amendment No. 243. I beg to move.
On Question, amendment agreed to.
Clause 82, as amended, agreed to.
Schedule 5 [Text of Part II of the Landlord and Tenant Act 1987, as amended]:
Lord Lucas moved Amendments Nos. 248A, 248B, 248C, 248D, 248E, 248F and 248G:
The noble Lord said: I spoke to these amendments with Amendment No. 246C. I beg to move.
On Question, amendments agreed to.
Schedule 5, as amended, agreed to.
Clause 85 [Notice required to be given by landlord making disposal]:
Viscount Caldecote moved Amendment No. 248H:
The noble Viscount said: Before speaking to the amendment, I must declare an interest, in that I am a long leaseholder in a London flat and involvement in negotiations with the head lessor and the freeholder has brought home to me the chaotic state of the law in this area. The outcome of the amendments will not affect me in any way since the pass has already been sold under existing legislation.
In general, Government policy has been and still is to bring a more fair and sensible balance between long leaseholders and their superior landlords. Although during the past 10 years several Acts have made progress in that direction there are still loopholes in the law which seem to me to frustrate the broad intentions of Parliament.
A basic principle of this part of the Bill is that long leaseholders have a close interest in the property which is often his or her home and that interest is just as important as that of any superior landlord. In the case in which the superior landlord has made a relevant disposal of his interest in the property occupied by a long leaseholder, as defined in Section 11 of the Landlord and Tenant Act 1987, the latter is given certain rights, in particular the right of first refusal to buy the interest being sold.
In that connection I welcome the provisions of Clause 85(1), which go some way to closing a loophole in the existing law. Until now that has enabled a superior landlord to avoid his obligations by taking a share in the buying company and so making it an associated company as provided for in Section 4(1)(l) of the Landlord and Tenant Act 1987. However, the amendment to that section, which is contained in Clause 85 of the Bill, requires the interest in the associated company to have been held for two years. For a competent property company, planning two years ahead presents no difficulty but this could seriously jeopardise the exercise of the rights of the long leaseholder, who is often relatively inexperienced in these matters. Amendment No. 248H increases the period from two to five years, which will make it much more difficult for the superior landlord to avoid his obligations and will provide a fairer balance between the two parties involved.
I submit that only a slick property owner wanting to take advantage of the relative inexperience of long leaseholders can logically object to the amendment. It more accurately reflects the intentions of Parliament. I hope that the Government will accept it. I beg to move.
Lord Coleraine: I support the amendment because on 20th May 1993 I moved an amendment to the
Lord Lucas: I very much appreciate what my two extremely experienced noble friends have said on this matter. This is clearly a problematic area and it is also clearly an area which is likely to remain problematic, since, if one were to go the whole hog in preventing such activities, one would freeze up the entire structure of property companies which own leasehold properties and might go so far as to prevent trading in the shares of a public company which happened to own a leasehold property somewhere in its tentacles.
It is necessary for us to strike a practical balance between doing the best that we can as regards the protection of leaseholders without hindering genuine corporate restructuring activity. Although I sympathise with my noble friend's desire to make things more difficult for people who wish to avoid the provisions of the 1987 Act, we believe that Amendment No. 248H would go too far in inhibiting the commercial freedom of bona fide associated companies. I appreciate that this is a matter of fine judgment but I hope that my noble friend will withdraw the amendment.
Page 56, line 13, at end insert--
("( ) In subsection (9) (applications to vary or discharge a management order) at beginning insert the words "Subject to subsection (9A)".
( ) After subsection (9) insert--
"(9A) An order made under this section shall not be varied or discharged (whether conditionally or unconditionally) by the court on the application of the landlord unless the court is satisfied that the conduct of the manager appointed by the court under this section would have satisfied the conditions for the appointment of a manager contained in subsection (2) had the manager been the landlord.".").
Page 56, line 14, leave out ("made") and insert ("for an order").
Page 56, line 15, after ("1987") insert ("which are made").
Page 56, line 25, after ("context") insert ("in those sections").
Page 56, line 31, at end insert (", and
(b) in paragraph (a), for "rules" substitute "regulations".").
Page 56, line 45, at end insert--
("( ) Procedure regulations may, in particular, make provision--
(a) for securing consistency where numerous applications under this Part are or may be brought in respect of the same or substantially the same matters; and
(b) empowering a leasehold valuation tribunal to dismiss an application, in whole or in part, on the ground that it is frivolous or vexatious or otherwise an abuse of the process of the tribunal.").
Page 57, line 11, at end insert--
("( ) No appeal shall lie to the Lands Tribunal from a decision of a leasehold valuation tribunal under this Part without the leave of the leasehold valuation tribunal concerned or the Lands Tribunal.").
Page 57, line 31, leave out ("amount") and insert ("whole or part").
Page 142, line 22, leave out ("rules") and insert ("regulations").
Page 142, leave out lines 40 and 41.
Page 142, line 44, leave out ("court") and insert ("tribunal").
Page 142, line 49, leave out ("court") and insert ("tribunal").
Page 143, line 3, leave out ("court") and insert ("tribunal").
Page 143, line 37, leave out ("court") and insert ("tribunal").
Page 144, line 25, at end insert--
("( ) No appeal shall lie to the Lands Tribunal from a decision of a leasehold valuation tribunal under this Part without the leave of the leasehold valuation tribunal concerned or the Lands Tribunal.").
Page 58, line 20, leave out ("two") and insert ("five").
9.30 p.m.
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