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The Earl of Caithness: My Lords, can the noble Baroness explain a little further how the Government arrived at the figure of seven? As my noble friend Lady Buscombe said, the consultation document did not contain an agreed figure, although the Minister was increasingly enthusiastic about the three-year period, which we discussed in Committee. If that is such a desirable period, why have the Government decided to backtrack from the Minister's enthusiastic support for it? When she said that the Land Registry could move from the seven-year period to the three-year period, I believe that she added that it could do so in the short term. What does that mean in her book?

Baroness Scotland of Asthal: My Lords, I was trying to strike a balance between caution and enthusiasm. The noble Baroness outlined her concerns about whether the registry could cope and about how quickly it could do so. In that regard, the way in which we proceeded was judicious. The most important thing was for the proposal to work on the ground, to work well and efficiently and to inspire confidence. Some would argue--rightly so--that the registry put the "C" into "caution". It has indeed been very cautious. It is cautiously optimistic that the move from seven years to three years would be possible in the short term.

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Obviously, it will be able to go much more quickly once e-conveyancing is on stream. It currently has to consider whether it would be possible to increase the workload by 5 per cent, which is necessary in order to conduct conveyances for seven years within the current framework; it is confident that it can do that. It is not necessarily as confident that it could immediately and practically deal with a reduction to three years. That may be possible, but it would be far more risky and would not be as cautiously prudent. The registry has been very prudent in the advice that it has given. All noble Lords want the proposal to work well and smoothly and to be without difficulty. Confidence will breed greater confidence and we shall be able to go more quickly in the long term.

Baroness Buscombe: My Lords, I thank the Minister for her response. I heard clearly what she said--much of it was said in Committee. We are in an interesting situation. We are all in touch with experts in the field but there is clearly a difference between those with whom we are talking and those to whom the Government are talking because those with whom we are talking--senior representatives in the property industry and related professions--do not share the confidence that the Land Registry will be able to cope with what is in its view a dramatic change. In that case, we feel that 14 years would be a much more sensible period for the time being.

I shall think carefully about the Minister's remarks. I shall discuss the matter further with those with whom we are in consultation before deciding whether or not to return to the point on Third Reading. On that basis, and for the time being, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

3.45 p.m.

Baroness Buscombe moved Amendment No. 4:

    Page 3, line 19, at end insert ", unless at that date the person to whom the grant is made is the tenant of the whole of the land comprised therein for a term which is not registered (and is not subject to the requirement of registration) and will expire on or after the date on which the estate granted will take effect in possession".

The noble Baroness said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 32 and 42.

The amendments are designed to remove the need to register a lease that takes effect in possession more than three months after it is granted, if it is not otherwise required to be registered, in a situation in which it is a renewal of an existing lease to a tenant who is already in possession.

We made the reason for making such a "reversionary" lease very clear in Committee. That reason is given in paragraph 3.32 of the report. It is that if that is not registered, a buyer of a landlord's interest may not be able to find out about it before the term actually begins because the tenant would not be in possession. As we said in Committee, that objection does not apply when the reversionary lease is a renewal to an existing tenant. In that situation there is no

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practical need for such a lease to be registered merely because it does not take effect immediately. As the Bill stands, a renewal for a year--or for an even shorter period--that was granted during the midsummer in relation to a lease that will expire at Michaelmas would be registrable and, as we said, a trap.

We have taken notice of what the Government said in Committee in response to our proposals about the need to reduce inquiries relating to matters that are not on the register. The amendments are therefore restricted to a reversionary lease to a tenant whose existing lease is not subject to registration. We accept that a tenant who is within the registration system can fairly be required to register a renewal.

When the tenant is not already within the system, we think that the balance of advantage is emphatically on the side of the amendments. A buyer of the landlord's interest will have to check what the tenant's rights are. It is no real burden for such a buyer to have to ask not only, "Is this the lease?" but also, "Is there any other relevant document?".

A tenant renewing a comparatively short lease may well do so without specialist advice. The Bill as it stands would create a very significant trap. If the renewed lease is registrable but unregistered, it will always be overridden by a disposition of the landlord's interest not only before it falls into possession but at any time thereafter during the renewed term.

Paragraph 1(a) of Schedule 3 will stop a registrable reversionary lease from ever being an overriding interest in the common situation in which the landlord's interest is registered. I beg to move.

Baroness Scotland of Asthal: My Lords, before I respond to the amendments, I say to the noble Baroness that we thoroughly appreciate the hard work that has been done by all Members of the House in relation to the Bill. If, in relation to these amendments or any others, she feels that it would be helpful, when we have completed the Report stage, for there to be a meeting with Ministers or with officials, I should be more than happy to facilitate that. We may be able to give greater information that would allay her concerns. I say that generally and in relation to any amendments with which we shall deal this evening and not simply in relation to the amendments that we have already considered.

As the noble Baroness said, Amendments Nos. 4 and 32 seek to exclude leases of a particular kind from compulsory first registration if the landlord's title is unregistered. Those are, of course, reversionary leases when the lease is a renewal and the tenant under the lease is also a tenant under an existing lease of the type that is set out in the amendment. Amendment No. 42 seeks to provide that such leases should be capable of being protected by actual occupation and so override registered dispositions.

Noble Lords will recall that in Committee we debated similar amendments. The difference in this context is that the tenant's existing lease must also be one that is not registered or subject to the requirement registration. Our view of such amendments, despite

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the noble Baroness's eloquence, has not, I am afraid, changed since our debate in Committee. Noble Lords may recall that in Committee I mentioned that existing provisions in the Bill will give effect to a recommendation in the Law Commission and the Land Registry joint consultative document that was unanimously supported by all those who responded to it.

The amendments would place an unreasonable burden on the intending buyers. They would have no way of knowing from the register that the reversionary lease existed and would have to inquire of an existing tenant in circumstances where they might not expect to have to incur that additional step; for example, where they have had produced to them by the seller the tenant's existing lease which makes no option of, say, an option for a further grant.

If, as can happen with estates of some size, the intending buyer is purchasing a portfolio of properties, the problem could be magnified. With the advent of electronic conveyancing, the number of inquiries should be kept to a minimum, so that a buyer can rely as much as possible on the entries in the register. Where such a reversionary lease is not on the register, an intending buyer of, say, the freehold reversion will not know from the register of the existence of the lease. Furthermore, the fact that a new lease taking effect more than three months in the future has to be registered enables the buyer to protect his or her position by registering an estate contract or by making a priority search under Clause 72.

The Bill seeks as far as possible and practicable to make the register as comprehensive as possible, particularly with the advent of e-conveyancing. The proposed amendments would hinder that objective and make the law more complicated, by excluding from the category of reversionary leases in Clause 4 or Clause 27 certain leases by reference to the status of the tenant under the lease.

Another if perhaps less-serious problem is the possibility that the first lease dealt with under the subsection could, in theory, also be a reversionary lease of some sort. If that were the case, the tenant would not be in occupation under either lease. That would only multiple the problems facing the prospective buyer.

I readily accept that in certain circumstances the reversionary lease that will be required to be registered may be short. But it is a matter of balancing that against the benefits to buyers and others of a more comprehensive register. Although the noble Baroness points to short leases being caught, the amendments would catch also relevant leases not exceeding seven years. The discovery of such a reversion by a buyer after completion of the purchase would cause him or her financial and emotional distress. In light of that explanation, I invite the noble Baroness to withdraw the amendment.

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