Mr. Raynsford: Because the trustee would be acting in a professional capacity, my understanding is that that would not be a private transaction, but one by an agent. It is absolutely clear from the legislation that such trustees, although perhaps not technically estate agents, are acting as agents for the people for whom their trust applies.
Mr. Loughton: I am not a lawyer, but I do not think that that is right. Trustees are effectively owners of the assets of a trust. They are not acting as agents, but as the owners of the trust. Theirs is the decision as to the disposal of the trust, acting within the terms of the trust deed. They are entirely different from and cannot be compared with estate agents or any other agents.
Mr. Raynsford: The distinction that we are making is that a sale by an individual to another individual or within the family may be exempt, as it is a private transaction. A sale through an agent``agent'' is not defined as ``estate agent''will in all circumstances require a seller's pack. In individual cases, facts about the roles of the trustees will need to be considered, such as whether they are acting on behalf of the beneficiary.
Mr. Loughton: They would be trustees.
Mr. Raynsford: Well, the trustee could be acting on behalf of the beneficiary, and could be seen to be an agent acting for that person. I am not a lawyer either, and the facts of the case would clearly need to be considered. The principle that I have tried to clarify is that there is a distinction to be made about someone acting as an agent for the owner of the property or the beneficiary. For example, executors acting for someone who is deceased are clearly acting as professionals on behalf of the individual who owned the property.
Mr. Loughton: I shall try one last time. It might be useful for the Minister to come back to the subject later, as the occurrence that I describe is not rare. The two ends of the transaction are that a mother and a father are, say, handing on property assets to a son or daughter. There is a clear family connection. The only people involved in that equation are mother, father, son and daughter. The transaction could be carried out through the conduit of a trust for tax reasons or perhaps because the children have not reached maturity. In the spirit of the terms that the Minister sets down, the transaction is surely a family one, yet he is clearly sayingand I think that he is wrong in his definition of the agency rolethat it would not count as a family transaction. Will he return to us with a more considered reply?
Mr. Raynsford: In that specific case, it is likely that my earlier example would apply and that the sale would be seen as one within the family. [Interruption.] The hon. Gentleman described a situation that involved four family membersa mother, a father, a son and a daughter. As only those members of the family are involved, that seems to be a transaction within the family.
The hon. Gentleman raised the subject of trusts in his earlier question. I may not have heard him clearly, but I thought that there was a wider application, as trusts exist for a variety of purposes. I was simply explaining that, when a trust was selling an asset on behalf of its beneficiary, I would see it as being likely to qualify as the agent. I stressed that much depended on the facts of each case. I accept that the subject is highly complex, and I am more than happy to take further advice and to write to all members of the Committee, and to you, Mr. Stevenson, clarifying that point. It is complex territory, but we are trying to establish the distinction between a purely private transaction and something that involves the wider public.
Amendment No. 50 would extend far beyond the sort of private arrangements to which I have referred. It would result in a large number of sales being conducted without seller's packs, which would have the wholly undesirable effect of bringing about a two-track transaction process where, in a chain, sales without seller's packs would delay and endanger transactions with them.
The hon. Member for Eastbourne was right to say that amendment No. 52 was significant. It would correct a drafting error in amendment No. 33, so we can pass over that.
Other issues were raised. I have dealt with the question of swaps raised by the hon. Member for Cotswold. I have dealt with the lack of a definition of ``taken off the market''. The hon. Member for Eastbourne asked about the definition of ``sold''. Clause 1(7) includes a definition of ``sale''. It is normal practice to construe the past tense accordingly. I hope that hon. Members will accept that the word ``sold'' is defined by inference from the word ``sale''.
These are complex and important areas. Given the information that I have outlined to the Committee, I hope that hon. Members recognise that the amendments are not appropriate and that the hon. Member for Eastbourne will withdraw them.
Mr. Waterson: We have a virtual smorgasbord of legal points to cover, and I apologise if I miss some. Even the Minister was struggling at the end, but we shall all read Hansard.
I shall deal first with the last pointnot in a gratuitous attempt to confuse the Committee but simply to ensure that I do not forget it. It was reasonable for the Minister to say that ``sold'' is the past tense of ``sale'', but subsection (7) provides that
Do I take it that it does not necessarily mean a concluded sale, but the acceptance of an offer, and whether that might also include an agreement to accept an offer subject to contract or survey? The Minister might want to write to the Committee about that, or we might become bogged down in detail. He is not a lawyer and I am not a conveyancer, and it would be wrong to answer such points on the hoof.
That brings me naturally to the next point, which is the question of trustees. My hon. Friend the Member for East Worthing and Shoreham has stumbled across an important point. I commend him, a non-lawyer, for that.
Mr. Loughton: I did not stumble on it.
Mr. Waterson: I withdraw my reference to stumbling. In his usual fashion, he incisively cut to the heart of the clause. It is first-year law student stuff, but we do not have a first-year law student here. The point of putting property in the hands of a trustee is to ensure that the property is effectively invested in the trustee for the beneficiary and possibly subject to the terms of the trust. People make trusts for tax purposesto remove money from the immediate control of the beneficiary so that the beneficiary does not have to stump up a lot of tax unnecessarily.
I would not presume to provide the answer to such complex issues, but they should be dealt with. I appreciate that this is complex, but Opposition Members are all doing their best to improve the legislation and the regulations that will be made under it. I hope that the Minister is suitably appreciative.
Mr. Clifton-Brown: Does my hon. Friend accept that some of those trusts are set up specifically for sale to a beneficiary under certain circumstancesfor example, when that beneficiary attains the age of 21 or 30? Under such circumstances, there is every expectation at the inception of the trust that the property will be sold to a beneficiary who might be related to the trustees. That would seem to fall within the Minister's definition of close family.
Mr. Waterson: It may well do. My hon. Friend makes an important point. We are all in the business of trying to produce legislation that will withstand the test, not only of time, but of litigation. Clause 1 is fraught with potential problems. If law is certain, the potential for lawyers to wax rich and successful on advising people is reduced, as is the prospect of litigation.
Mr. Love: I approach the matter with some trepidation, not being a lawyer. However, my understanding of a trustee's role is that he or she is impelled to maximise the benefit to the beneficiary. When the beneficiary is not a close family member, is the trustee obliged to advertise the sale rather than keep it between two parties?
Mr. Waterson: Not necessarilyas was being said, sotto voce, during that intervention. However, that is often the case, and the issue is related to that of gazumping, a word that, curiously, has not crossed anyone's lips so far. You will forgive me a small digression, Mr. Stevenson, I know. It is extraordinary, given that the Bill was hyped on the basis that it would solve the problem of gazumping, that I am the first member of the Committee to utter that word. It has certainly not passed the Minister's lips. It is interesting that under the sort of circumstances described by the hon. Member for Edmonton (Mr. Love) trustees are sometimes under a legal obligation to get the best possible price, and are therefore under a legal obligation to gazump. That is one of the practical difficulties that have, presumably, made the Government back off from the whole idea of tackling gazumping in any radical way.
The Minister talked about the use of the phrase ``available for sale'', saying that it was a loophole, a coach and horses and so on. That may be right, and I would never claim that my draftsmanship is better than anybody else'sfar from it. However, if one leaves vague phraseology in the Bill, one is asking for trouble. There may be other ways of approaching the issue, and I hope that the Minister will not have a wholly closed mind about that, even if I am minded to accept his point about a loophole.
I am still far from happy about the example of new developments, and ``off- plan'' being used to describe sales. As my hon. Friend the Member for Cotswold has said, it is very common for developers to acquire the land and put the whole deal together even before they have laid a brick or dug a foundation, because cash flow is king. They put together the famous artist's impression, which, as we all know, sometimes bears little resemblance to what actually happens. On that basis, an office is opened and a publicity and sales campaign is launched. I think that I am right in saying that that is one of the issues touched on in one of the Minister's most recent letters to the Committee about the potential contents of draft regulations. We shall return to it later, but I wanted to foreshadow the factas I did this morning, Mr. Stevensonthat when we reach clause 5, I shall want to debate draft regulations in greater detail. It verges on the pointless to debate draft regulations when we have no such regulations before us.
On the question of taking a property off the market, I see the force of the Minister's two-tests approach. Many examples have been tossed around the Committee of where it is unclear whether properties are being taken off the market. My hon. Friend the Member for East Worthing and Shoreham rightly said that there is often no incentive for agents to take down boards rapidly or to remove adverts about properties from their shop windows. Their reasons are commercial: we may not think them right or proper, but such action is likely when the market is slack and agents do not want to have gaps in the shop windows or because it amounts to free advertising. Few property sale boards fail to blazon the names of the agent in large letters across them. Taking property off the market is an important issue.
On private sales and sections of the public, the Minister has made it clear that private sales will not be covered by a seller's pack and that there will be no requirement to do so. It will be a matter for regulation, but once again we are in no position to examine the draft regulations. I repeat that we have reservations about how the regulations could be drafted in a watertight fashion.
The Minister referred to three broad categories: family members, friends or individuals. I see the force of arguing that family members should not be encouraged to squabble about sellers' packs or become embroiled in litigation. We believe that compulsory packs with the contents envisaged by the Government are not beneficial, but if we are going to have them, why should friends or individuals be excluded from the presumed benefits. Some friends are likely to become ex-friends as a result of the problems they encounter in the process.
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