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Lord Lea of Crondall: I indicated that this was a probing amendment, but the recognition of, and regular meetings with, residents' associations will become a big issue when the Bill is implemented. If circumstances arise under which the Bill does not

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reach the statute book soon, there may be scope for further consideration of how this matter can be addressed more satisfactorily. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 239A and 239B not moved.]

Clause 140 agreed to.

[Amendment No. 240 not moved.]

Clause 141 agreed to.

Lord Richard had given notice of his intention to move Amendment No. 240A:


    After Clause 141, insert the following new clause--

VARIATION OF LEASE


(" .--(1) The Landlord and Tenant Act 1987 is amended as follows.
(2) In section 35 of the 1987 Act (application by party to lease for variation of lease), leave out "court" and insert "leasehold valuation tribunal".
(3) In section 35(2)(a) of the 1987 Act (which provides the grounds for the variation of a lease of a flat based on repair or maintenance) after "under it" insert "circumstances when a lease "fails to make satisfactory provision" under this subsection includes the obligation to repair and maintain the property, the person responsible for the repair and maintenance and the frequency at which such works and services are undertaken".
(4) In section 35(2)(b) of the 1987 Act (which provides insurance matters as a ground for the variation of a lease of a flat) after "paragraph (a)(ii) or (iii)" insert "circumstances when a lease "fails to make satisfactory provision" under this subsection includes where the premises containing the flat are insured as part of a group of properties owned by the landlord or a superior landlord".
(5) In section 35(2)(e) of the 1987 Act (which provides that the recovery of expenditure by one party to a lease from another as a ground for the variation of a lease of a flat) after "other party" insert "reasonable expenditure means expenditure incurred or to be incurred as a result of repair, maintenance, management and administration of the building, insurance premiums and costs arising from loans in respect of works of repair and maintenance".
(6) After section 35(2)(f) of the 1987 Act insert--
(g) the payment and collection of service charges in advance of works (whether repairs or maintenance) being carried out;
(h) the charging and recovery of a reasonable rate of interest on arrears of service charges;
(i) such other grounds as shall be prescribed by the Secretary of State.
(7) In section 42(2) of the 1987 Act, substitute the words after "payee" for "in a separate bank or building society account designated as the client account specific to the building, or estate, subject to those charges".
(8) After section 42(2) of the 1987 Act insert--
"(2A) A person who without reasonable excuse, fails to comply with subsection (2) commits a summary offence and is liable on conviction to a fine not exceeding level 4 on the standard scale".
(9) In section 60(1) of the 1987 Act (general interpretation) at the end of the definition of "landlord", insert "or a party to such a tenancy otherwise than as landlord or tenant".").

The noble Lord said: This amendment is marked as already having been debated. It was in part debated when we considered an earlier group of amendments. I do not desire to reopen the matter. In so far as details of the amendment were not debated at an earlier stage, I give notice that I shall be contacting Ministers for their response.

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[Amendment No. 240A not moved.]

Schedule 10 agreed to.

Clause 142 [Requirement to notify long leaseholders that rent is due]:

Lord Hodgson of Astley Abbotts moved Amendment No. 240B:


    Page 64, line 10, at end insert (", and


(d) (in the case of houses) such information as to enfranchisement and lease extensions, and (in the case of flats) such information as to the right to manage and to collective enfranchisement and lease extensions, as may be prescribed,").

The noble Lord said: This amendment takes us back to an issue that we debated earlier this afternoon: the potential inequality in terms of expertise, sophistication and knowledge as between landlords and tenants. On the one hand, very often the landlord may have a special interest in property; on the other hand, the primary concern of a group of leaseholders is their flats as places in which to live. When we discussed this issue last week, the noble Lord, Lord Whitty, referred to one side being undergunned. This amendment is intended to bring up some extra artillery.

Some have argued that there should be a duty on the solicitor who has arranged a new lease, or the purchase of an existing one, to continue to take an interest and advise his client on the particular privileges or rights that he or she might have. This is either unduly onerous and long-lasting for the solicitor, and probably more likely to involve counsel. But the lease is a very important document; it concerns a person's home; it is long-lasting; and it has substantial financial and other consequences for the leaseholder.

As we have noted during the Committee stage, there are a number of critical points in a lease. For example, we have agreed to the 80-year click-over point for marriage value coming in and having an impact. I am not sure how many unsophisticated groups of tenants would realise in advance the significance of, and the difference between, 80 years and one day and 79 years and 364 days. I suspect there are many other examples as well.

Perhaps I may compare this with other similar instruments without stretching the analogy too far. An endowment mortgage has a similar long-lasting impact for people. Policy holders receive a yearly statement which explains the value that they have so far built up within their endowment; it shows the gap, if any; and it shows the additional contributions that may be required in funding. If that is true of endowment mortgages, it is even more true about pensions, which have a similar long tail to them.

My amendment seeks to try to balance the knowledge and sophistication of the parties involved by requiring additional information about the leaseholder's rights to be included in the rent demand made by the landlord. These should remain by regulation; they clearly cannot be prescribed on the

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face of the Bill. I do not suggest that the amendment is perfectly worded, but the general impact is to have the kind of warning bell that you have on a prospectus; a warning bell which says, "Get professional advice on these points or risk damage to your life and/or your financial health". I beg to move.

The Earl of Caithness: My Amendments Nos. 241 and 242 are grouped with this amendment. They concern a totally different point. It may be for the benefit of the Committee if the Minister answers the point raised by Amendment No. 240B and then deals with my amendments.

Lord Whitty: Amendment No. 240B proposes that we should require certain information relating to other statutory rights to be included in the notice demanding ground rent, and this clause is about ground rent. I appreciate, and have some sympathy with, the concerns about the balance of information and negotiating power which lie behind that suggestion. It is clearly important that leaseholders are aware of all the background information relating to their leasehold position and the options which are open to them. Under the present legislation, it is clear that many do not. Many do not even realise that they are leaseholders in that sense.

There is a gap in the balance of information but I do not agree that this clause is the right place to deal with it. This is a targeted provision--as I shall explain when we come to deal with the amendments of the noble Earl, Lord Caithness--to deal with a specific abuse. It would be inappropriate to use this clause as a portmanteau provision to make leaseholders aware of their rights more generally, not least because not all of the rights that the noble Lord is concerned about have any relationship to ground rent as such.

Our view is that this is probably best dealt with outside the statutory provisions and to make people more generally aware of their rights and obligations as leaseholders when this legislation comes into force. Even if I were persuaded that this should be on the face of the Bill, this would not be the appropriate clause to which to attach it.

Lord Hodgson of Astley Abbotts: I understand the point about the right clause. However, leaseholders have certain fundamental privileges and rights and there should be some obligation for them to be informed about those rights. It is good practice. It appears in other financial instruments of a similar nature; in contracts with a long tail, for example. I am disappointed that the Minister does not feel able to undertake to put this matter somewhere on the face of the Bill, although not in this particular clause. In begging leave to withdraw the amendment, I should like the opportunity to think about this matter, and I give notice that I may wish to return to it at a later stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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6 p.m.

The Earl of Caithness moved Amendment No. 241:


    Page 64, line 12, leave out subsection (3).

The noble Earl said: In moving this amendment, I should like to speak also to Amendment No. 242. As the Minister said to my noble friend Lord Hodgson in responding to the previous amendment, here we are talking about ground rents. Subsection (3) prescribes that the tenant is not liable to make payment of ground rent before a period of 30 days, but no more than 60 days, has elapsed. These are very small payments. In relation to some leases that I have dealt with the rent is £1; in other cases it is a peppercorn. In one particular case the ground rent was one red rose. Why does one require a period of 30 days for such a payment? The average person will shelve that immediately; he will look at the rent demand, realise that he has 30 days to pay the one red rose, if that is claimed by the landlord, and put it into the filing tray. That is not how it is done in practice. I believe that in this case the Minister is being somewhat over-officious and making a relatively simple procedure complicated.

I believe that subsection (3) should be deleted but that a landlord ought to give notice of his right to recover through proceedings. In particular, there should be written notice of 30 days should he wish to recover two or more periods. He may wish to claim a previous red rose that has not wilted. That is the reason for Amendment No. 2.

While I am on my feet, it may save the Committee's time if I raise one matter that I could deal with on clause stand part. I refer to subsection (6). Given the chaos of the Post Office at the moment, must the landlord present proof or certification of posting? Given the number of letters lost in the post, is this a requirement? I beg to move.


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