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Baroness Gardner of Parkes: Perhaps I may ask the Minister to clarify something. I believe the noble Lord said that my 80 per cent would be higher than the number of people required. He said that there would be a much lower number of people, provided that everyone who took part in the ballot voted unanimously for it. If that is correct, what is the lowest number that can qualify to vote? Perhaps the noble Lord is able to clarify whether a very small number--just one or two--can make such a tremendously important decision in the absence of all the others.

Lord Bach: As always, the noble Baroness asks a good question, the answer to which will not come as a complete surprise. The number required to make the vote valid will be set out in the memorandum and articles. I say straight away that that is not a satisfactory response to the question, and a better answer is needed before we deal with the matter at Report.

Lord Goodhart: I am not sure that that answer is correct. The position is that the resolution must be moved at a meeting of the association which has to be quorate, but I do not believe that in any ordinary memorandum and articles there is any requirement for a minimum number of people to vote on the resolution, and I do not see any in these particular ones.

Lord Bach: The minimum would be the quorum but at this stage we have not said what the quorum should be. That will be set in the memorandum and articles.

Lord Goodhart: That will indeed be set in the memorandum but, provided the meeting is quorate and some of the members at the meeting decide to abstain, the resolution will still be valid.

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Lord Jacobs: Is the Minister aware that the statement appears to provide that the quorum for proceedings at general meetings should be 20 per cent of the members? Is it proposed that there should be a different quorum?

Baroness Gardner of Parkes: My noble friend refers to the document that we have just received from the Printed Paper Office.

Lord Bach: That is the figure in the draft document which the noble Lord has. There is as yet no concluded view.

Lord Goodhart: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 20 agreed to.

7.15 p.m.

Clause 21 [Part-units]:

Lord Kingsland moved Amendment No. 34:

    Page 10, line 1, leave out subsections (1) and (2) and insert--

("( ) An instrument or agreement which creates an interest or charge in or over--
(a) part only of a commonhold unit, or
(b) part only of an interest in a commercial unit,
shall have effect subject to any provision of the commonhold community statement.").

The noble Lord said: I rise to move Amendment No. 34 and also to speak to Amendments Nos. 35 and 36. These amendments enable the creation of an interest or charge over part of a unit, as long as that is permitted by the commonhold community statement.

Clause 21 imposes yet another restriction on unit-holders. The intention as stated in the Explanatory Notes is

    "to preserve the integrity of the unit and also to ensure that no event takes place that would require a change to the commonhold community statement which is not in the control of the commonhold association".

However, there may be circumstances where it is convenient or financially necessary for a unit-holder to deal with only part of his unit; for example, if he wishes to accommodate an aged parent in a granny flat to which she has contributed her own money. For the same reasons as have been given already in relation to the omission of other such restrictions, in our view any such restriction as may be justified is more appropriately to be imposed by the CCS. I beg to move.

Lord Bach: The amendment, and the others spoken to, would change the policy of the Government to restrict the creation of charges or interests over parts of units. The reason why we arrived at our policy is not difficult to understand, and I try to explain it by way of example. Consider a small estate of very up-market houses, each in its own plot of half an acre with a large garage. The unit-holder wishes to build--to coin the noble Lord's phrase--a granny flat over his garage. He wants to borrow to build it and offers as security the

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half acre of garden in this prime location. For the sake of the example, let us assume that a lender is rash enough to lend on that security.

When in due course--and this is a sad tale--the unit-holder defaults on his repayments and the lender forecloses, what happens then? The land now owned by the lender is commonhold land and is surrounded by commonhold land. If it is to be taken out of the commonhold, how will this work? If it is to stay within the commonhold, what effect will that have on the commonhold community statement and the payment of commonhold assessments? And how will it be registered? Is the new owner to be a member of the commonhold association, and on what terms? If the charge sits over the whole property, none of these problems arise. The difficulty occurs with the bits that have to be carved out of the commonhold.

A significant argument for commonhold, and part of the system, is the generally standard terms of the CCS. The tenor of the amendments is to allow for wide-ranging variations in matters of central importance, to be subject only to the terms of the CCS which, to do the job, as the noble Lord seems to see it, will become less and less standard. One of the biggest headaches facing those moving from leasehold property to leasehold property is the wide variation in terms of leases. That is something from which we are trying to distance ourselves. The Bill which his government produced in 1996 was more prescriptive than this Bill. We believe that we have struck the right balance between prescription and freedom of choice, and we have prescribed only what seems genuinely necessary for the benefit of those concerned.

If carried to its conclusion, these amendments would have the potential to make the management of the commonhold desperately difficult, and perhaps eventually to bring it down.

Lord Kingsland: I am not at all happy with what the Minister has said but I shall not press him on it. In any event, it would be futile to do so because we cannot vote. I shall simply lick my wounds, remind myself that I must return to this matter at the Report stage, and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 35 to 36 not moved.]

Clause 21 agreed to.

Clause 22 [Changing size]:

[Amendment No. 36A not moved.]

Clause 22 agreed to.

Clause 23 [Changing size: charged unit]:

[Amendment No. 36B not moved.]

Clause 23 agreed to.

[The Sitting was suspended for a Division in the House from 7.21 to 7.31 p.m.]

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Clause 24 [Definition]:

Baroness Gardner of Parkes moved Amendment No. 37:

    Page 11, line 5, at end insert--

("( ) Where a statement under subsection (2) above relates to a parking space, such space shall be deemed part of the commonhold unit.").

The noble Baroness said: I feel strongly about this. People are very aware of the importance of a parking space in their lives. If a parking space is just provided in a unit, it will not have the same appeal as if it were on the title and registered with the commonhold. That has certainly been the case with any unit I have ever had.

It has the disadvantage that some people might have two car parking spaces and although others may wish they also had two, they cannot because the spaces are an integral part of the commonhold title. It is a good thing, however, as well as a commercial consideration, as more attractive car parking spaces add more to the value of the unit. By that, I mean that if there is a low beam in the car parking area so that only a small car can fit underneath it, that unit will have a lower price because it cannot accommodate a four-wheel drive, which lots of people may wish to fit in. It is an important point, therefore, in the selling of the commonhold units to those people wishing to buy them. It should be clearly set out that it would be part of the commonhold title. I beg to move.

Lord McIntosh of Haringey: I can assure the noble Baroness, Lady Gardner, that nothing in the Bill prevents units being sold with the benefit of a reserved space. They would be part of the commonhold of the unit and they would change hands with the unit. Thus, there is no problem with what she wants, nor is there a problem in a case where somebody wants more than one space; he could have two. The problem would be if there were not enough car parking spaces and there were, for example, a waiting list. Somebody would then get a space only when it became available. There is also the problem of transfer. For those reasons, we do not need the amendment.

Baroness Gardner of Parkes: I thank the Minister for his reply and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 24 agreed to.

Clause 25 [Use and maintenance]:

[Amendments Nos. 38 to 40 not moved.]

Clause 25 agreed to.

Clause 26 agreed to.

Clause 27 [Charges: general prohibition]:

[Amendment No. 41 not moved.]

Clause 27 agreed to.

Clause 28 [New legal mortgages]:

[Amendment No. 42 not moved.]

Clause 28 agreed to.

Clause 29 agreed to.

20 Feb 2001 : Column CWH865

Clause 30 [Form and content: general]:

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