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Baroness Hanham: The noble Baroness, Lady Hamwee, has said something that I was going to say. A number of the amendments that I have produced are technical, but they concern practical issues that have arisen as a result of previous legislation not working as well and as comprehensively as it should.

I hope that the Minister will not tire of me saying that I am grateful for his response. I hope that we can keep an eye on these matters and, as appropriate legislation becomes available during the coming months and years, we can look forward to an opportunity to put them right.

Lord Monson: Many of the amendments of the noble Baroness, Lady Hanham, are indeed technical. She is right to ask the Government to get them through at some stage. However, Amendment No. 247 is more than technical; it is quite serious. I admit that I was caught off guard and have not studied it, but I hope that the Government will think carefully before adopting it. It represents quite a major change and should not be accepted, even in principle, without very serious thought.

Lord Whitty: The noble Baroness, Lady Hamwee, said that she did not expect a response; the noble Baroness, Lady Hanham, then added to that. Clearly, we take this matter seriously; the Government will look at it further.

As to the plea of the noble Baroness, Lady Hamwee, which seemed to presume the result of the general election, the contents of the Queen's Speech, and the parliamentary programme for the next Session, I could not possibly comment.

Amendment, by leave, withdrawn.

Clause 143 agreed to.

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Clause 144 [Section 143: supplementary]:

Lord Whitty moved Amendments Nos. 248 and 249:


    Page 66, leave out lines 13 to 15.


    Page 66, line 17, at end insert (", and


"long lease" has the meaning given by sections 73 and 74 of this Act, except that a shared ownership lease is a long lease whatever the tenant's total share.").

On Question, amendments agreed to.

Clause 144, as amended, agreed to.

Clause 145 agreed to.

Baroness Hanham moved Amendment No. 250:


    After Clause 145, insert the following new clause--

CONTINUATION OF TENANCIES


(" . In section 3 of the Landlord and Tenant Act 1954 (continuation of tenancies to which section 1 applies), omit subsection (3).").

The noble Baroness said: In moving Amendment No. 250, I shall speak also to Amendment No. 251. Since the passing of the Landlord and Tenant Act 1954, under which other leasehold tenants were given security of tenure, tenants of houses with higher rateable values have been without security of tenure at the end of a lease. That has had an impact particularly in inner city areas, where higher rateable values are likely to be the most prevalent.

The Bill again fails to give security of tenure to such leaseholders. Instead, it gives security of tenure at the end of the lease to leaseholders who surrender their rights to security of tenure in exchange for a 50 year extension of lease, without premium but as a modern ground rent. This does not really address the problem of those houses with a higher rateable value.

Amendment No. 251 deals with the valuation basis on which such tenants face enfranchisement. It is because of their higher rateable values that they come under the special valuation basis which was introduced into the Housing Act in 1974. The Hansard report of the debate in this House on this aspect made it clear that there was an assumption of security of tenure at that time.

Schedule 15 to the Leasehold Reform, Housing and Urban Development Act 1993 provides for this assumption in respect of houses that came into eligibility for enfranchisement under the Housing Act 1974. It does not, however, provide for it if the house is coming into eligibility under the 1993 Act. This proposed amendment is again aimed at tidying up unfinished business as far as enfranchisement is concerned.

Baroness Hamwee : Perhaps I may take the opportunity to clarify my previous remarks. Whichever party is running the Government, and whoever sits on the Front Bench, the civil servants will be there.

6.30 p.m.

Lord McIntosh of Haringey: Although we are sympathetic to the amendment of the noble Baroness, Lady Hanham, it is not possible to include it in this

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Bill, or any successor to it. The real problem raised by the noble Baroness, which is security of tenure for high value houses, is not faced simply by long leaseholders; it also affects those who rent such property. The Long Title of the Bill is restricted to commonhold and leasehold property, and if one were to cover this problem properly one would require a more general housing Bill. Even if there were no general election and we had time to deal with it, the matter would not fall within the scope of the Long Title.

To some extent, that also applies to Amendment No. 251 which would alter the valuation basis of higher value houses. Obviously, the vacant possession value of a house is greater than the value of the house with a tenant in it, particularly when the tenant has security of tenure. This means that leaseholders without security of tenure have to pay more for their freehold. Amendment No. 251 would mean that a house would be valued as though the leaseholder was entitled to security of tenure even though that was not the case. We do not believe that it is proper to accept that amendment. If the law does not give security of tenure, we cannot pretend that it does so for valuation purposes.

Baroness Hanham: Even if I have not flushed out too much sympathy, I have elicited the fact that there will be a general election quite soon. I am grateful for confirmation of that given the way that the Minister put it. I note what he says and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 251 not moved.]

Clause 146 agreed to.

Baroness Hanham moved Amendment No. 251A:


    After Clause 146, insert the following new clause--

("Notices of claim to be overriding interest
NOTICE OF CLAIM TO BE OVERRIDING INTEREST
.--(1) Section 5 of the Leasehold Reform Act 1967 is amended as follows.
(2) In subsection (5), the words "nor shall any right of a tenant arising from a notice under this Act of his desire to have the freehold or to have an extended lease be an overriding interest within the meaning of the Land Registration Act 1925; but any such notice shall be registrable under the Land Charges Act 1925 or may be the subject of a notice or caution under the Land Registration Act 1925, as if it were an estate contract" are omitted.
(3) In section 70(1) of the Land Registration Act 1925, after paragraph (f) there is inserted the following new paragraph--
"(fa) The right of every tenant of a dwelling held on a long tenancy at a low rent within the meaning of the Leasehold Reform Act 1967, as amended, and the Leasehold Reform, Housing and Urban Development Act 1993, as amended, arising out of a written notice of his desire to have the freehold or an extended lease;".").

The noble Baroness said: This is a shorter matter. The purpose of this amendment is to make a tenant's notice of his wish to have the freehold on an extended lease an over-riding interest within the meaning of Section 71 of the Land Registration Act 1925.

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The registration of a caution against the landlord's title is an unnecessary expense and burden on a tenant. As the law now stands, a notice of claim unprotected by a caution is not binding on a purchaser, although such a disposition to a third party will be a breach of contract.

It is not unknown for landlords to try to thwart a leaseholder's claim by transferring the freehold, subject to a claim, to a third party such as an associated company. This amendment serves to protect the tenant's position without the complication of the registration of a caution. I beg to move.

Lord Whitty: This amendment would deal with a situation where in the middle of an enfranchisement process a landlord sold the freehold to a third party. It is obviously desirable in those circumstances to ensure that one does not have to start the process all over again. As the Bill now stands, leaseholders can register with the land registry the fact that they have issued a notice of their intention to enfranchise or to obtain an extended lease. If they do so, anyone who purchases the freehold before the enfranchisement process is complete, or the lease has been extended, is already bound to complete the process.

Moreover, in the case of flats the new owner will often have to offer the freehold to the leaseholders under the right of first refusal. The amendment will therefore simply save the leaseholders the expense of registering their notice. On the other hand, it would have the effect of meaning that a potential purchaser would no longer have anywhere to check whether there was an outstanding enfranchisement process in train when the existing lessees had expressed their wish to the existing owner to buy the freehold or extend their lease. This would encourage non-registration and therefore make it more difficult in a moving property market for a potential third party buyer to establish whether there was a process proceeding or not--unless the vendor of the freehold informed them of the position.

Although I have some sympathy with the amendment, it would have a detrimental effect because it would not allow the process to move smoothly and ensure that everyone knew that an enfranchisement process had started.


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