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Lord Bassam of Brighton moved Amendment No. 91:
- Page 66, line 13, leave out "six months" and insert "one year"
On Question, amendment agreed to.
Clause 141 [Tenant's share of marriage value]:
Clause 142 [Disregard of marriage value in case of very long leases]:
Lord Goodhart moved Amendment No. 94:
- Before Clause 146, insert the following new clause—
The noble Lord said: My Lords, we did not move this amendment in Committee this time round, but we moved a similar amendment during debate on the previous Bill, which fell because of the general election.
The purpose of the amendment is to require that all future residential leases of property at a premium should be for a period of not less than 300 years. The amendment has been proposed because my noble friend Lord Jacobs feels strongly about the matter and persuaded us that it was right to debate it. Unfortunately, although he was present earlier, he is unable to be present now because it is his 70th birthday and he has a long-standing commitment—a surprise party, but not as much of a surprise party as it might have been. So he has a good excuse for not being here.
The reason for the amendment is that the leasehold system has proved itself thoroughly unsatisfactory as a vehicle for holding residential property and should be phased out. It would be replaced by a mixture of commonhold, ordinary freehold and rentals. The problem is that until the difficulties with positive covenants, which we discussed earlier, have been resolved, in practice it is impossible to have freehold flats. Where commonhold is not practicable, leases should be of a length more or less equivalent to a freehold—300 years is probably enough; we doubt whether a 300-year lease will give rise to problems in 2301.
Of course, we cannot abolish existing leasehold property for a shorter term than that, and there would be difficulties if we provided that all renewals of existing leases should be for terms of 300 years. That might involve leaseholders who wanted to extend their lease for a shorter period having to pay more than necessary. Nevertheless, the amendment should receive serious consideration. I beg to move.
Baroness Gardner of Parkes: My Lords, I rise to support the amendment, because it contains an attractive principle. If the Government were to accept it, it would show that they had a real desire for commonhold—which I still doubt. For that reason I strongly support the amendment.
Lord McIntosh of Haringey: My Lords, I appreciate the concern expressed by the noble Lord, Lord Goodhart, on behalf of the noble Lord, Lord Jacobs. Perhaps I may, on behalf of Members on these Benches, ask the noble Lord to convey our congratulations to the noble Lord, Lord Jacobs, on reaching his alloted span.
As I understand it, the point raised by the noble Lord, Lord Goodhart, is that in order to promote the use of commonhold we should remove the attractiveness of the leasehold system to landlords and developers. Unlike the noble Baroness, Lady Gardner of Parkes, we are confident that commonhold will be attractive to developers and will be widely adopted. Many current developments already offer 999-year leases and a share in a leaseholders' management company.
However, until commonhold has been tried and tested, we consider it premature to restrict the use of leasehold in the way that the amendment provides. Any restriction on the granting of leases would limit the choice of the purchaser. If a person wishes to save on rent or fix his housing costs over a period by paying a capital sum for a short lease, he should be allowed to do so. As drafted, the amendment would prevent the granting of a six-month tenancy for a single payment.
A developer or landlord may have only a leasehold interest and be unable to grant leases beyond the term of his own interest. A long minimum term would mean that the landlord could rent units out only on periodic tenancies and could prevent development taking place. Some local authorities have properties on land which they hold on a leasehold basis. If such a lease runs for 150 years, should we be saying that because they cannot offer a lease of 300 years, they should be prevented from selling leases to tenants under the right to buy? That would not be popular.
Of course, we will monitor the development of commonhold after the Bill is enacted. We expect it to become the preferred form of tenure and that leasehold will gradually wither on the vine. We would be prepared to consider restrictions on its use in the longer term if there was a clear need to do so and the benefits to be gained outweighed the disadvantages. But at present, we cannot accept the amendment.
Lord Goodhart: My Lords, I am grateful to the Minister for at least raising the possibility of some move in that direction in the longer term, if not in the Bill. I have promised my noble friend Lord Jacobs that we will table the amendment at Third Reading to give him the opportunity to make the speech that he has been unable to deliver today. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 12 [Leasehold valuation tribunals: procedure]:
Baroness Gardner of Parkes moved Amendment No. 95:
The noble Baroness said: My Lords, I have been looking for some way of bringing up the situation of people who purchase their freehold and I must pay
I have been in correspondence with the noble and learned Lord, Lord Falconer, on this matter and that correspondence revealed that the jurisdiction for dealing with estate management schemes passed, under the 1993 Act, from the High Court, where it was vested under the 1967 Act, to the Leasehold Valuation Tribunal. I passed that information on to a gentleman who was anxious to know how he could do something to help himself, having enfranchised his own house and not realising, until he received the documents, that he would be handed a 30-page estate management scheme by which he would be bound and which would be more onerous and expensive than the previous lease.
It is a strange situation and I raised the point earlier today in your Lordships' House. I felt it was important that people should be obliged to disclose documents. The noble Lord, Lord McIntosh, said that he would write to me on this point. Omissions are as bad as wrong facts being put into information.
Returning to the case in point, I passed the information on to the gentleman in question, who rang the Leasehold Valuation Tribunal and said that he understood that that office could deal with it. Its answer was, "No, we have no jurisdiction. You must go to the High Court". I relayed that information back to the office of the noble and learned Lord, Lord Falconer, and by a process of time we located someone higher up in the Leasehold Valuation Tribunal who, whether due to the information they had been given by the office of the noble and learned Lord or from digging into the recesses of history, suddenly discovered that it does have jurisdiction to deal with estate management cases in terms of having powers to vary. When I raised this issue earlier the noble and learned Lord, Lord Falconer, said that every estate management scheme must have the powers of variation in it or a process by which it could be varied.
The gentleman in question was feeling rather aggrieved about being pushed backwards and forwards and obtaining different answers. I have since spoken to the vice-president or president of the Leasehold Valuation Tribunal and was told that there is no question but that it does have jurisdiction. I make that point now so that it will be recorded in Hansard, and any applicant wishing to take a case to the Leasehold Valuation Tribunal should be able to produce that copy of Hansard and say, "I do have the right to bring this case to you and you do have the jurisdiction".
It is extraordinary that the tribunal did not know it had jurisdiction; and that it then said that it had dealt with only two cases a long time ago which involved council estates and which were not a parallel. That gives the applicant the feeling that the tribunal is so unfamiliar with the process that he will not get a fair hearing even if he does take his case there. He feels that the members may all be prejudiced because he stirred the matter up.
I do not believe that. I believe the tribunal will conduct the case fairly. But it is important for people to know their rights and where they can obtain them. It is also necessary for the tribunal to issue either leaflets or instructions in some way to make clear what our rights are and a simple way of applying for them. The whole purpose of the leasehold valuation tribunal is for people to be able to deal with their own cases and not be involved in lengthy and expensive procedures. I beg to move.
"MINIMUM TERM FOR LEASES AT A PREMIUM
(1) No lease of a flat or house may be granted at a premium unless the term of this lease is not less than 300 years.
(2) In this section "flat" has the same meaning as in Chapter 1 of this Part and "home" has the same meaning as in Part 1 of the Leasehold Reform Act 1967 (c. 88)."
9 p.m.
Page 123, line 12, at end insert—
"PUBLIC INFORMATION
2A (1) Procedure regulations under paragraph 1 shall include provision about the public information to be provided by leasehold valuation tribunals.
(2) Such information referred to in sub-paragraph (1) above shall include—
(a) details about the jurisdiction of leasehold valuation tribunals,
(b) guidance on the ways of applying to leasehold valuation tribunals, and
(c) descriptions of recent decisions of leasehold valuation tribunals."
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