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Baroness Hanham: My Amendment No. 233C, which is in this group, seeks only to achieve what the noble Lord, Lord Goodhart, has suggested should happen; that is, a reduction of the period from 35 years to 21 years.

Lord McIntosh of Haringey: Amendments Nos. 232 and 233C, and also Amendment No. 233AA standing in the name of the noble Lord, Lord Hodgson, seek effectively to end the low rent test as it applies to houses. We are sympathetic to this proposal. It is only considerations of space which have prevented us from including it in the Bill so far. We will consider carefully what has been said, although we cannot make any commitment at this stage.

Lord Goodhart: I am most grateful for that reply. It is fair to say that any additional space taken up in this Bill would be at least matched by what is taken out of existing Acts. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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4.30 p.m.

Lord Goodhart moved Amendment No. 233:

    After Clause 133, insert the following new clause--

("Excluded tenancies
. In section 1AA of the 1967 Act, omit--
(a) in subsection (1), the words "and is not an excluded tenancy",
(b) subsection (3),
(c) subsection (5).").

The noble Lord said: This is another problem with the same section of the Leasehold Reform, Housing and Urban Development Act, as amended. Section 1AA excludes from enfranchisement houses that are held for a term which is greater than 35 years, if they are not at a low rent, if they are in certain rural areas designated by the Secretary of State, and if the freehold of the house is held together with adjoining land which is not occupied for residential purposes.

We note that properties which are let at a low rent are not excluded under that provision, so this applies only to houses which are held for a ground rent which is more than the low rent level; that is, of course, something which is very small.

The purpose of this exclusion is not clear. Is it to enable landlords to let off surplus farm cottages on terms which would enable them to get them back if they are leased? I understand that there are some villages where a large number of houses are covered by this exclusion. One village mentioned to me is the village of Adlestrop in Oxfordshire, which will be familiar to many people from Edward Thomas's poem of that name.

Can the Minister explain why this exclusion is justified? If the object is to enable landlords to get the cottages back, they are not likely to want to let the cottages for periods of more than 21 years. The exclusion seems to serve no useful purpose. If the recovery of these houses does not serve a purpose, how can the exclusion be justified? I beg to move.

Baroness Hanham: I have tabled an amendment similar to that of the noble Lord, Lord Goodhart, although he has outlined the issue far more eloquently than I could have done.

Lord McIntosh of Haringey : I remember Adlestrop. Before I go into the more general argument, we have spoken to a representative of the leaseholders of Adlestrop and, based on that conversation, we are not entirely sure whether the leaseholders are caught by the rural exemption. But that is a matter on which they must seek their own legal advice.

The rural exemption exists to prevent the break-up of country estates. When the right to enfranchise was first extended to leaseholders who could not pass the low rent test, it caused great concern among rural landowners. They argued that they would not have leased houses which were an integral part of their rural estate if they had thought there was any risk of the house being permanently detached from the estate as

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a result, and we have accepted that argument. There may be a case for amending the rural exemption to target it better at the kind of properties that we wish to exempt, and we are willing to look at this question in the longer term. However, I cannot make any greater commitment than that at this time. If we were to do that, we would have to consult interested parties, and I do not believe that we could realistically do that in time to deal with it in the Bill.

Lord Goodhart: I am grateful that the Minister is willing, in the longer term, to take another look at this issue. It seems to me that this problem is almost certainly over-estimated because, if the houses are potentially part of the estate, they are distinctly unlikely to be let for substantial terms. It is almost certainly an unjustified exemption.

Nevertheless, I accept that there would have to be consultation on the proposal in order to enable the landlords to put their case for retaining the exemption. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hanham moved Amendment No. 233A:

    After Clause 133, insert the following new clause--


(" .--(1) In section 7 of the 1967 Act (rights of members of family succeeding to tenancy on death), after subsection (8) insert--
"(8A) On the death of a person who has for the three years before his death been a qualifying tenant of a dwellinghouse, the rights conferred by this Act are exercisable, subject to and in accordance with this Act, by his personal representatives; and, accordingly, in such a case references in this Act to the tenant shall, in so far as the context permits, be to the personal representatives."
(2) In section 5 of the 1967 Act (general provisions as to claims to enfranchisement or extension), at the end of subsection (1) insert--
"A notice under this section may not be given by the personal representatives of a tenant later than six months after the grant of probate or letters of administration.".").

The noble Baroness said: In moving Amendment No. 233A, I shall speak also to Amendments Nos. 234A and 234B. Amendment No. 233B is also in this grouping but it slightly different.

This brings us to a discrepancy in the Bill. Benefits will accrue from the Bill to those who occupy flats but not to those who live in houses. This clause raises the question of the eligibility for obtaining a new lease following the death of the owner. Under Clause 128, to which we have referred today, the personal representative of a qualifying tenant of a flat who dies will continue to be able to exercise the right to a new lease for a period of six months after the grant of probate or letters of administration. However, no such provision is available to those who are the personal representatives of house leaseholders.

Section 7 of the Leasehold Reform Act 1967 provides that the heirs of a deceased qualifying tenant can inherit the right to serve a claim, but only if they are themselves resident in the property. Non-resident heirs cannot inherit the benefit of a claim if it has already been served before the death of the qualifying

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tenant. They cannot inherit the right to enfranchise or extend the lease if they do not fulfil the residence qualification. As the Bill stands, that will continue to be three years for a house leaseholder.

In practice, this residential qualification has caused serious difficulties for families when elderly parents die long after the children have stopped living at home. The problems arise particularly in the Midlands and north-east England where families have tended to treat their homes as family properties, even though they are leasehold. This amendment would give the same rights to house leaseholders as are being given to flat leaseholders enabling personal representatives to both inherit the right to enfranchise or to extend the lease.

I turn to Amendment No. 233B. Under the Leasehold Reform Act 1967, the owner of the leasehold house--which is where the differences arise--must satisfy a test which involves clocking up three years' residence in order to enjoy the statutory right to acquire the freehold. A more or less equivalent test applies in respect of flat owners under the Leasehold Reform, Housing and Urban Development Act 1993 in relation to collective enfranchisement, and also in relation to the individual leaseholder's right to acquire a 90-year extension to his or her lease.

The Bill, as we have discussed, scraps the residence test in respect of flats, replacing it with the two-year ownership, but it does not do that in respect of houses. In other words, it amends the 1993 Act but it does not amend the 1967 Act.

That all seems rather odd in the light of the remarks in the consultation paper of August 2000, which accompanied a previous draft Bill which drew attention to the,

    "need to reform leasehold law and rationalise the rules and procedures where this would be justified and beneficial".

That consultation paper goes on to state:

    "We propose to abolish the resident test for houses in the Leasehold Reform Act 1967. However, we propose to replace it with a requirement that the lease should have been held for at least two years".

That would of course have brought it into line. Had that been done, it would have prevented the inconsistency which is now about to be enshrined in this Bill. My amendment seeks to prevent such a thing happening. I beg to move.

Lord McIntosh of Haringey: These amendments are mainly intended to provide the same kind of changes to the rights of leaseholders of houses to enfranchise or extend their leases to the rights of leaseholders of flats, as we were discussing a few minutes ago. The amendments tabled by the noble Lord, Lord Hodgson, the noble Baroness, Lady Hanham, and the noble Lord, Lord Richard, propose the abolition of the existing residence test. The noble Baroness, Lady Hanham, proposes to allow the personal representatives of deceased leaseholders, who would have qualified for the rights, to exercise them within six months of granting probate or letters of administration.

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I assure the Committee that the Government are keen to achieve a more consistent approach between the law on flats and houses. As the noble Baroness, Lady Hanham, reminded us, we made this clear in the consultation paper which accompanied the draft Bill. Unfortunately, we have not been able to include in this Bill as many changes as we would have liked. We appreciate the strength of feeling on this matter and, although I cannot make firm commitments, we will consider very carefully the views that have been put forward.

Amendments Nos. 233B and 235C also affect agricultural tenancies and charitable housing trusts. As that aspect has not been addressed, I assume that it was not intended, so I will not reply to it.

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