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Lord Goodhart: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 agreed to.

Schedule 2 [Land which may not be commonhold land]:

[Amendments Nos. 14 and 15 not moved.]

Schedule 2 agreed to.

Clause 5 agreed to.

Clause 6 [Registration in error]:

Lord Kingsland moved Amendment No. 16:

("(2) The register may be rectified by the Registrar if--
(a) he is satisfied that the error is a minor matter; or
(b) if all relevant parties consent to the rectification.").

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The noble Lord said: This time I shall be mercifully telegraphic. Clause 6 effectively provides a new mechanism to rectify any errors in the registration of a commonhold. We believe that this is an unnecessary complication. The amendment would permit the registrar to correct minor errors which all the concerned parties are agreed should be rectified.

The chief land registrar already has wide powers to rectify errors and we see no reason why these are not thought to be adequate. They would ensure that minor or uncontested errors were quickly resolved. If he does not consider the matter to be minor, or if the parties do not agree, it is appropriate to refer the question to the courts to decide.

I shall speak also to Amendment No. 17. This amendment would enable anyone who thought that he might be adversely affected by an error at some time in the future to seek rectification. A person may be aware that he might be adversely affected by an error in registration, but may not be directly affected at present. The amendment would enable him in those circumstances to seek rectification. I beg to move.

Lord Bach: The two amendments would weaken a control which we believe would help to prevent fraudulent or reckless applications for the registration of commonhold. Perhaps I may remind the Committee that under the clause as it stands the three circumstances in Clause 6(1) which would trigger the use of the court to make a declaration are, first, that the application did not accord with Clause 2; secondly, that the certificate to be given by the directors of the commonhold association was incorrect; or, thirdly, that the registration itself contravenes some provisions of Part I of the Bill. Our case is that none of those possibilities is a trivial matter and we believe that none of them is easily likely to happen by accident. That is why we have specified that it should not be possible to rectify the register, but that the courts should be invited to declare that the estate should not have been registered as commonhold with all that flows from that.

Amendment No. 16 would allow rectification if either the registrar was satisfied that the matter was a minor one, or that the affected parties consented. In our view, that weakens the protection against possible malpractice, or very serious carelessness. If the parties have to come within Clause (6)(1), the circumstances cannot be trivial. The parties, if they have gone so far as to formulate an application that would deal with those circumstances, are unlikely to consent.

Amendment No. 17 would allow the courts to hear the application not only from someone who was affected by the erroneous registration but from someone who might reasonably expect themselves to be adversely affected in the future. I have tried to explain why we believe that the first amendment should not be made. The second would invite the court to speculate about future circumstances. Under the present provision, you would have to be satisfied that the applicant was adversely affected by the registration before considering making a declaration.

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Amendment No. 17 would allow the courts to consider the possibility that the applicant might be so affected at some presumably unspecified time in the future. We do not believe that that would be a proper application to allow in the circumstances. I invite the noble Lord to withdraw the amendment.

5.15 p.m.

Lord Kingsland: I am obliged for the noble Lord's response. I have some sympathy with his views on my Amendment No. 17 but none with his views on my Amendment No. 16. Were we able to vote in the august surroundings of the Moses Room, I would call a Division but, as it is, I shall have to rely on the Regulatory Reform Bill of the noble Lord, Lord McIntosh, some years down the line in order for justice finally to be done. In those circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 17 not moved.]

Clause 6 agreed to.

Clause 7 [Registration without unit-holders]:

[Amendment No. 18 not moved.]

Clause 7 agreed to.

Clause 8 [Transitional period]:

The Earl of Caithness moved Amendment No. 19:

    Page 4, line 32, after ("Part") insert (""the first").

The noble Earl said: In moving Amendment No. 19, I shall speak also to Amendments Nos. 20 to 22. We move on to the transitional period and I hope that my comments on this amendment will receive greater favour from the Minister, because we are now talking about a new build or a redevelopment of a property.

As it stands, Clause 8 provides for a transitional period between registration of the estate as commonhold and registration of the first unit-holder as proprietor. During this period the Bill provides that commonhold regulations may be disapplied or modified but--and here we come to the difficult part--the Bill makes no mention of who the members of the commonhold association will be during the time from the sale of the first unit and the end of the construction and the selling period. I believe that clarification is needed for this just as clarification is needed for the responsibilities during this time.

In a good property market, buildings can be sold almost before the development is complete. In a bad property market--we all know bad property markets--it can take some time. What happens during the period where there are units that are unsold, that have not been taken up, and repairs need to be done? Where does the commonhold stand on that? Where does the individual unit-holder stand? If, as a result of a storm, major repairs are needed to save the roof, and three flats have gone in the building and there are 17 still to go, is it right that the three flats should bear the responsibility? It is not clear in the Bill who should

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take the responsibility. How will it be apportioned? Clarity will be necessary to save a lot of wrangling and disputes later. I beg to move.

Lord McIntosh of Haringey: As the Committee will know, these four amendments, if I may take them together, will add to the Bill a new concept of a second transitional period during which further regulations would introduce a special regime to govern the actions and responsibilities of the commonhold association between the sale of the first unit and the sale of the last. I understand the problem raised by the noble Earl, Lord Caithness, but our intention is that the commonhold community statement should come into force as soon as the first unit is sold and govern the management of the commonhold from that time.

Let us take the example of a 20-unit block, three of which have been sold. From that moment the members of the commonhold association are the three owners of the commonhold units together with the developer. They have proportionate financial responsibilities: one-twentieth, not 25 per cent, for each of the three who are in occupation and the remainder for the developer on his own behalf and on behalf of the units that he has not sold. That is the limit of their responsibility.

As to whether the roof is damaged in a storm, or it is part of the development and, therefore, the responsibility of the developer, the commonhold community statement, which will already be in effect and govern it, will protect the first three commonholders against being drawn in to pay the developer's costs. That is the fundamental concern which has been expressed by the noble Earl, Lord Caithness. The responsibility for paying commonhold assessments will apply to all unit-holders in the proportions laid down in the statement based on a budget.

It is not likely that a developer will find himself in a position where one unit is sold and many others are on his hands, although I recognise that property markets go up and down. However, we believe that the provisions of the Bill will act as a real incentive to a developer to move quickly, sell units and fully establish the commonhold, because the responsibility of maintaining the unsold units is his and will become more onerous as time passes.

Baroness Hamwee: Before the noble Earl responds, can the Minister direct the Committee to the commonhold community statement? I have not had time to familiarise myself with the details, but the insurance provision states that if there is a default by any unit-holder the commonhold association shall arrange for and maintain insurance on the common parts. That does not appear to provide for the scenario which the Minister explained, unless for these purposes the developer himself is regarded as a unit-holder. I may be reading the wrong passage, but the Committee may be assisted if it is directed to the correct part later.

Lord McIntosh of Haringey: The common parts are distinct from the unlet commonhold units. In the

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example of the noble Earl, Lord Caithness, the developer is regarded as 17 commonhold unit-holders and, therefore, is responsible for seventeen-twentieths of those matters which are properly the concern of the commonhold association.

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