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Baroness Scotland of Asthal: My Lords, I say straightaway that it is certainly not the Government's intention to be machiavellian. I hope that when I deal with our view of the matter I shall make that clear.

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Amendments Nos. 34 and 35 relate to interests which, when granted out of registered land, are required to be completed by registration. Amendment No. 39, as I understand it, is purely a consequential amendment on them. I will therefore deal with them all together.

Amendment No. 34 deals with the category of interests that are set out in Clause 27(2)(d). That category of interests relates to easements and profits a prendre as described in Section 1(2)(a) of the Law of Property Act 1925. They include both profits a prendre which are attached to land and those which exist independently of any land. Profits a prendre in gross are registrable in their own right for the first time as a result of the Bill's provisions.

The subsection certainly contains one exception. Where the interest is capable of registration as a right in common, it should be registered under the Commons Registration Act 1965, not under the land registration system. The amendment seeks to add a further exception--it seeks to exclude from the requirement to complete by registration an easement or profits a prendre which are contained by way or grant or reservation in a lease which is not, and does not have to be, registered.

The amendment goes against the fundamental objective of the Bill, which is that, where possible, any matters that affect that registered estate should be apparent from the register of title, thereby minimising the additional inquiries and inspections that have to be made. There should be excepted from registration only those matters where there is good reason to do so. In our view easements and profits a prendre that are contained in leases that are carved out of registered land do not fall within that category.

There are several reasons why that is so. First, easements granted or reserved for a term of years--however short--must be granted or reserved by deed. That is so even though the easement forms part of the arrangements arising from the grant of a lease of less than three years, which does not itself need to be in writing. Secondly, while the existence of a short leasehold interest is often apparent because the tenant is in actual occupation of the land, the fact that the arrangement includes an easement is not so apparent. In our view, therefore, the creation of that exception would undermine the transparency of the burdens affecting the land that this Bill seeks to bring about.

Amendment No. 35 seeks to make a similar exception to the interests that fall within paragraphs (b) and (e) of Section 1(2) of the Law of Property Act 1925. Those are less common in practice. While the paragraphs cover both rent-charges issuing out of land and also rights of entry that are exercisable over a legal lease or a legal rent-charge, in practice that exception is likely to be relevant only to a right of re-entry under a lease. The same considerations apply. If those matters were contained within a lease that would not otherwise be registered, they should be recorded on the register of title.

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Amendment No. 39 makes consequential amendments to Schedule 2(7), which sets out the registration requirements in respect of matters falling within the two paragraphs of Clause 27 that are the subject of the two amendments. Schedule 2(7)(3) is worthy of note in that context, as it goes some way to address the concerns raised by Amendment No. 35. That paragraph states that rules may specify how the normal registration requirement will be modified

    "in relation to a right of entry over or in respect of a term of years absolute".

The reason for that rule-making power is that currently the benefits of re-entry rights under a lease are not recorded on the title to the reversion to the lease. Although that practice may change in future, the power to modify the requirement means that the current position can be maintained for the present.

The clause and the amendments deal with the very edge of what is possible in registration. We will of course consider whether anything can be done. Frankly, at this stage we are not optimistic but we will look at the matter again. In light of those comments, I invite the noble Viscount to withdraw the amendment.

Viscount Bridgeman: My Lords, any implication that Machiavellianism was going on must of course be withdrawn. I am most grateful for the Minister's attention to our carefully structured example and look forward to further correspondence. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 35 to 42 not moved.]

Schedule 3 [Unregistered interests which override registered dispositions]:

Lord Bassam of Brighton moved Amendment No. 43:

    Page 49, line 32, leave out sub-paragraph (2).

On Question, amendment agreed to.

[Amendments Nos. 44 to 49 not moved.]

Clause 35 [Unilateral notices]:

Lord Bassam moved Amendment No. 50:

    Page 15, line 37, after "notice" insert ", or such other person as rules may provide,"

On Question, amendment agreed.

[Amendments Nos. 51 and 52 not moved.]

Clause 36 [Cancellation of unilateral notices]:

Lord Bassam moved Amendment No. 53:

    Page 16, line 11, at end insert ", or such other person as rules may provide"

On Question, amendment agreed to.

Clause 37 [Unregistered interests]:

Baroness Buscombe moved Amendment No. 54:

    Page 16, line 19, at end insert "after giving notice to the person who appears to the registrar to be entitled to the benefit of that interest"

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The noble Baroness said: My Lords, the effect of the registration of a notice of an overriding interest in Schedule 3 is to cancel the automatic protection of its priority in Clause 29(2)(a)(ii). It is only right that the beneficiary should be warned that a notice is to be registered. The general principle must surely be that where somebody is deprived of a right, he ought at least be given notice of the fact.

Amendment No. 54 is substantially the same as government Amendment No. 55--which we welcome in response to our concern in Committee that the beneficiary of the interest might be unaware of its change of status. While we are in principle supportive of the government amendment, ours is preferable--in part, because the substance of what is required is in the legislation itself rather than in rules.

More importantly, because Amendment No. 54 requires notice to be given before the entry is made, that will facilitate the cheap and speedy resolution of any question that may arise as to whether and on what terms an entry should be made. The government amendment appears to have the effect that notice will only be given after the entry has been made. We look forward to the Minister's reassurance. I beg to move.

Lord Bassam of Brighton: My Lords, I believe that I will be able to provide the reassurance that the noble Baroness seeks. We are approaching the same problem in not dissimilar ways but perhaps with greater flexibility. Amendment No. 54 seeks to make the service of a notice on the person entitled to the benefit of the overriding interest a prerequisite to the noting of the interest on the register under Clause 37.

Government Amendment No. 55 provides that, when making the entry, the registrar is obliged to serve notice of that fact on persons specified in rules. As the entry of the notice can occur without a specific application, there will be occasions when the registered proprietor will need to be informed. Rules would be the most appropriate way in which to make provision for informing the beneficiary of the interest because of the difficulty in identifying the owner of that overriding interest or in discovering a current address at which they can be contacted.

The use of rules also provides the flexibility needed to improve the provisions if difficulties are experienced in implementing them. In light of those comments and the noble Baroness's welcome for the government amendment, I hope that she will feel able to withdraw Amendment No. 54. If she continues to have concerns, we will be happy to listen when the important meeting to discuss some of the minor irritations in the Bill takes place.

Baroness Buscombe: My Lords, I thank the Minister for his response. I should have made it clearer that I welcome the government amendment in principle but prefer ours in practice. On the basis of the Minister's comments, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Lord Bassam of Brighton moved Amendment No. 55:

    Page 16, line 19, at end insert--

"(2) The registrar must give notice of an entry under this section to such persons as rules may provide."

On Question, amendment agreed to.

Clause 44 [Obligatory restrictions]:

Viscount Bridgeman moved Amendment No. 56:

    Page 18, line 20, after "restrictions" insert ", if any,"

The noble Viscount said: My Lords, this probing amendment is to clarify that no restriction needs to be entered where co-proprietors are beneficial joint tenants. The amendment is intended to ensure that the legislation cannot be read as making it mandatory for the rules to require a restriction in some form to be entered in all cases of co-proprietorship--even where the co-proprietors are beneficially entitled as joint tenants and no one else has any interest--so that the survivor will be entitled to the whole land.

In those circumstances, there is no need for a restriction to make sure that the general law is observed. Under the present rules, no restriction is required. I beg to move.

6.30 p.m.

Baroness Scotland of Asthal: My Lords, I can reassure the noble Viscount that the intention is to replicate the current arrangements. No restriction is entered in cases where both the legal and beneficial interests are held by the trustees as joint tenants because the survivor of them can deal unrestrictedly with the legal interest in the land as the sole owner of it.

Rules will therefore only be made under this clause to address the other situation in which co-ownership occurs. The amendment seeks to make it clear that only such restrictions as are to be prescribed by the rules need to be entered in the circumstances the rules provide. In our view that is implicit in the permissive way in which the rule-making powers have been formulated, though I agree with the noble Viscount as to the situation that would be achieved as a result of the making of rules under this clause.

In our view, therefore, the amendment is unnecessary, although I can understand it being raised as a probing device. In the light of those comments, and my reassurance that there is no intention to change the current practice, I invite the noble Viscount to withdraw the amendment.

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