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Baroness Buscombe: I thank the Minister for his response to the grouping without notice, if I may put it that way. I thank the Minister for the reassurance he gave in relation to Clause 24 and Amendment No. 29. We believe that that is an important amendment and we are grateful that the Minister responded so positively. We look forward to discussing it again on Report. I shall consider with care what the Minister said on Amendment No. 30. We are still concerned that Clause 25 offers the possibility of incorrect interpretation. However, for the moment I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 24 agreed to.

Clause 25 [Mode of exercise]:

[Amendment No. 30 not moved.]

Clause 25 agreed to.

17 Jul 2001 : Column 1426

6.15 p.m.

Clause 26 [Protection of disponees]:

Baroness Buscombe moved Amendment No. 31:


    Page 11, line 37, after "this" insert "or any other"

The noble Baroness said: Without having given notice, I should be grateful if I could group Amendment No. 31 with Amendment No. 32. I do so in response to a rather rushed exercise on our part given the time frame within which we have had to respond to the document, Land Registration for the Twenty-First Century.

I shall be brief. I look forward to hearing the Minister's response because the amendments raise an important point. They would ensure that where local authorities or other statutory corporations are so constituted that they can only perform acts which the relevant statute authorises, and purported actions not so authorised are absolutely void, such ultra vires acts are not validated or partly validated because, or in so far as, they happen to affect registered land. It is also important to ensure that anyone dealing with such an entity is not caught out by statutory limitations on its powers. I beg to move.

Baroness Scotland of Asthal: I fully understand what the noble Baroness says in relation to Amendment No. 31. However, I am afraid that it would undermine the structure of the Bill as regards the powers of a registered proprietor and the protection of buyers from those owners.

If a registered proprietor is subject to statutory limitations on his powers, he should enter a restriction. I am afraid that we do not see why the risk of a proprietor breaching such a statutory limitation should be placed upon the buyer. That very much accords with the policy of the Bill that a person should be able to rely upon the register and restrictions on a registered proprietor's powers should be apparent from the register. An example of the effect of the amendment would be that it would not be necessary to enter a restriction to reflect the limitation on the powers of a tenant for life under the Settled Land Act 1925. We envisage that there would be real problems with the measure. I hope that the noble Baroness will see the force of those arguments and perhaps be minded to withdraw the amendment.

I turn to Amendment No. 32. As the noble Baroness said, this amendment adds, in effect, a further subsection to Clause 26. Clause 26 reflects one of the major principles behind the Bill. That principle is that a person dealing with a registered proprietor can assume that his powers of disposition are unlimited unless there is an entry on the register to the contrary. That is one of the fundamental points that we hope the Bill will deliver.

The amendment imposes a duty on the Lord Chancellor to make rules to ensure that when the powers of a body corporate to deal with its land are limited, for whatever reason, that fact is recorded on the register by the entry of a restriction. The idea is to prevent a void transfer operating to pass the legal title in such cases under Clause 26.

17 Jul 2001 : Column 1427

I absolutely appreciate the concerns behind this amendment. It is highly desirable to avoid such situations arising. I am pleased therefore to be able to reassure the noble Baroness that the registration of compulsory restrictions in these circumstances is frequently undertaken by the registry at present. A few examples of such restrictions show how this works--restrictions are entered when a company is in liquidation, when a charity owns land and needs consent to disposal from the Charity Commission and when a public sector landlord must meet certain conditions when selling property. Usually they need the consent of the Housing Corporation. I could go on. There are many situations which are thus covered.

I reassure the noble Baroness that there is no intention to alter that approach. There is no intention to change the types or number of such restrictions following the coming into force of the Bill. The need for such restrictions is monitored quite closely by the registry and amended to reflect new and altered powers of disposal set out in new primary legislation.

The registrar is given specific power under subsection (1) of Clause 42 to enter restrictions to prevent invalidity or unlawfulness in relation to dispositions of a registered estate or charge. The decision to enter a restriction depends on the circumstances of a particular case. As the Committee will know, some corporations have different powers of disposal for different parts of their asset base. For example, insurance companies have limited powers to deal with the funds representing their long-term business assets. The power for the registrar to enter such restriction needs to be very general, as set out in Clause 42.

I can reassure the Committee that the registrar must be able to exercise that judgment on a case-by-case basis. Greater detail of what that means in practice appears in a number of internal practice manuals and in the leading text book on land registration. I shall not reiterate them now. I invite the noble Baroness to look at them. They are helpful; she might find assistance. We believe that it is not appropriate or practical to deal with such dynamic issues in rules.

There will be change. We have to be able to respond quickly to those changes. The registrar has the necessary discretion to deal with them appropriately. I hope, therefore, that the noble Baroness will feel able to withdraw the amendment.

Baroness Buscombe: I thank the Minister for her robust response to Amendment No. 31. I accept entirely what she said in regard to that amendment. I appreciate the reassurances that the noble Baroness has been able to give in relation to Amendment No. 32 by express reference to Clause 42(1) and the specific powers of the registrar. I shall read with care what she said. I am somewhat satisfied that her response has met our concern. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 32 not moved.]

Clause 26 agreed to.

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Clause 27 [Dispositions required to be registered]:

[Amendments Nos. 33 to 36 not moved.]

Baroness Buscombe moved Amendment No. 37:


    Page 12, line 26, at end insert "or one which is appurtenant to a term of years absolute which is not registered or required to be registered"

The noble Baroness said: Amendments Nos. 36, 38 and 43 were grouped together. Subsequently we decided to move Amendment No. 37 and speak to Amendments Nos. 39 and 44 because we think that they are preferable. I do so now.

These amendments are intended to ensure that easements and rights of entry for short terms of years do not have to be registered or noted on the title to the servient land. Such easements or rights will almost always be appurtenant to or exercisable over short leases and a requirement to register them where the lease is not itself registrable is a trap and unnecessary. Anyone dealing with the servient land will be expected to inspect it and will see that there are rights of way, light and so on. But as the Bill stands, easements appurtenant to a short lease will be registrable under Clause 27(2)(d) (and equivalent rights of entry under paragraph (e)) and under Clause 27(1) they will not operate at law unless registered against the servient title--paragraph 7(2)(a) of Schedule 2. Therefore on a subsequent dealing with the servient title they will not be overriding interests under paragraph 3(1) of Schedule 3 because that applies only to legal easements. I beg to move.

Lord Bassam of Brighton: Amendments Nos. 37 and 39 deal with the same policy issue. They relate to the scope of compulsory registration of property rights. Amendment No. 44 is consequential on them both. I shall therefore consider all three together.

Amendment No. 37 amends the scope of the category of registrable interest set out in subsection 2(d) of Clause 27. That category relates to interests falling within subsection (1)(2)(a) of the Law of Property Act 1925--namely easements, rights and privileges. As originally drafted, there is only excepted from the requirement to register such of those interests as can be registered under the Commons Registration Act 1965. A buyer can readily search against the commons register. This approach accords with the main objective of the Bill--to get as much information about the land on to the register of title for those interested to discover easily and online.

Amendment No. 37 widens the exception. It excludes from the effect of registration any easements rights or privileges which are attached to an unregistered lease, which does not have to be registered. This goes against the deliberate policy of requiring appurtenant rights to be protected on the register even if they are appurtenant to an estate that is not registered and is not required to be registered. The reason for the policy is to protect buyers. How are they to know that the land is subject to an easement that has been expressly granted or reserved in favour of a lease of 10 years if it is not in fact recorded on the register? The effect is to increase the enquiries that a buyer

17 Jul 2001 : Column 1429

needs to make. Those to whom easements are granted should protect them on the register. They should not put others to the expense and trouble of discovering their rights.

Amendment No. 39 deals with the same policy issue. It amends the scope of the categories of registrable interest set out in subsections 2(e) of Clause 27. That category relates to interests falling within subsections (1)(2)(b) and (e) of the Law of Property Act 1925. Subsection (b) relates to rentcharges issuing out of or charged on land. Subsection (e) relates to rights of entry exercisable over or in respect of a legal term of years of a rentcharge. The amendment introduces exceptions to both these categories. It excludes from the effect of registration any rentcharges under subsection (b) or rights of entry under subsection (e) which are attached to an unregistered lease which is not required to be registered. This also goes against the deliberate policy of requiring appurtenant rights to be protected on the register even if they are appurtenant to an estate that is not registered and is not required to be registered. The effect is to increase the enquiries that a buyer needs to make. Those to whom such rights are granted should protect them on the register. They should not put others to the expense and trouble of discovering their rights.

Amendment No. 44 is a consequential amendment to Schedule 2. The schedule sets out the registration requirements for each category of interest which is required to be registered to have effect. The point is that until those registration requirements are met, the document has no effect. This amendment amends paragraph 7 of the schedule to reduce the scope of dispositions to which the paragraph applies to correspond with Amendments Nos. 37 and 39.

Having heard those detailed points, I hope that the noble Baroness will feel able to withdraw the amendment.


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