Land Registration Bill [Lords]

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Mr. Cash: Will the Minister address one or two points? Surely, if the experience of a limited change suggests that a further reduction is desirable and will not overstretch the industry, that reduction could be made by order, after consultation under clause 5. Why can we not have a little more time to consider and observe this in operation and then, after consultation, bring in new provisions by order?

How many leases of between seven and 14 years are likely to be registrable, and how is that figure arrived at? Can the Minister assure us that from the beginning the registry will be able to be cope with the work load without difficulty? Can he also give an indication—if not now, later—of the fees for registering a seven-year lease?

11 am

Mr. Wills: Let me start addressing those questions by again stating that we have been categorically reassured by the Land Registry that it can cope with what is being proposed. I urge all those who remain concerned about the possibility of extra work from extended registration to talk to the Land Registry. It is important to recognise that the registry has historically shown itself to be an organisation fundamentally concerned to help in the business of buying and selling land, not to hinder it. I am confident that the registry would not have given us such an assurance unless it could deliver on it.

The hon. Member for Stone asked why we could not wait to extend registry to seven years, and do it under order. We want to extend the benefits of registration as quickly as possible, and as was said in another place, our intention is to bring the level of registration down to three years when we are confident that the profession and the Land Registry are ready to deal with that. In the meantime, we want to move as quickly as possible to expand the boundaries of registration as widely as possible. We know that we can cope with seven years because, for various reasons, we have more information about leases for seven years and 14 years than about other leases; the information on leases between three and seven years is somewhat murky. Leases of more than seven years must be declared to the district valuers and we have information about them—that is the basis of the assurance that we received from the Land Registry.

The hon. Member for Stone asked me for some figures on the cost to register leases. Fees are calculated by value and the maximum is £800 for the most expensive. The figures can be quite complicated, so rather than trawling through my files and holding up Committee proceedings I will write to him.

Mr. Cash: I am grateful for the assurance that we will get the figures. However, as the Minister knows, such matters have already been raised in the other place and it seems extraordinary that we are in the position of not having accurate figures at this stage. When one is dealing with questions that relate to the length of leases, and the dramatic change that that represents, a huge number of people may be affected—I could not put a figure on how many and nor could anyone. The cost of the operation and the extent to which it will impose difficulties, is therefore of interest to the public.

It was acknowledged, even in the report that led to the Bill, that no consensus emerged, despite huge efforts to achieve one. Now that the Bill has been through the other House, and various reports and consultations have taken place, there remains no consensus. I ask myself why the Government are so insistent. I have heard the Minister's argument, but the issue is contentious and one on which there is no resolution. My troops have just arrived, so I am now in a position to advise the Minister that we intend to divide the Committee on the amendment.

Mr. Wills: Before the hon. Gentleman does that, he need no longer be astonished that we do not have the figures. I simply did not want to delay the Committee on something that was not salient to his point. However, while he delayed the Committee with his further intervention, I took the opportunity to find the figures in my files and can now give them to him.

In the financial years 1999–2000 and 1998–99, the stamp office stamped some 75,000 and 100,000 new leases respectively. The overwhelming majority were already registrable, but 9,000 and 12,000 respectively were for between 14 and 20 years, and 11,000 and 17,000 respectively were for between seven and 13 years. The Land Registry can therefore expect the Bill's proposals to result in between 20,000 and 30,000 new leases, plus assignments of extant unregistered leases where the un-expired residue exceeds the relevant minimum. Figures on leases from the investment property data bank are of the same order, but the figures should be seen in the context of the overall work load. In 1999, the Land Registry received 373,000 first registrations and more than 3 million applications to change the register following a dealing with the whole or part of the registered estate. Figures of 20,000 to 30,000 should therefore be compared with 3 million and 373,000. It is against that background that the chief land registrar has offered his assurances.

Figures on leases are extremely complicated and would take a very long time to explain. It should suffice for our purposes to point out that the maximum fee is £800. Given that leases can be worth millions of pounds, and given the legal and other professional costs involved in such huge commercial transactions, I hope that the hon. Gentleman will accept that such fees are relatively insignificant.

I hope that I have reassured the hon. Gentleman sufficiently. I hear what he says about pressing the matter to a vote, and if he is still minded to do so despite my persuasive arguments to the contrary, that is a matter for him. However, I hope that he will think again and accept our compelling arguments.

Mr. Cash: I am certainly grateful to the Minister for that additional information, and I admire the way in which he fished it out of his incredibly complex documents. It helps to get such matters on the record, but substantial questions remain unanswered that underpin our objections to the Bill. We shall therefore press the amendment to a vote.

Question put, That the amendment be made:—

The Committee divided: Ayes 3, Noes 8.

Division No. 1]

Cash, Mr. William Hoban, Mr. Mark
O'Brien, Mr. Stephen

Barnes, Mr Harry Dobbin, Jim Jones, Lynne Marsden, Mr Gordon
Mole, Chris Sanders, Mr. Adrian Stringer, Mr. Graham Wills, Mr. Michael

Question accordingly negatived.

Mr. Cash: I beg to move amendment No. 4, in page 3, line 14, 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 Chairman: With this we may discuss the following amendments: No. 27, in clause 27, page 12, line 27, 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.'.

No. 37, in schedule 3, page 49, line 31, at end insert—

    ', unless at that time the person to whom the grant was 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'.

Mr. Cash: The amendment would remove the need to register a lease that takes effect in possession more than three months after it is granted, if registration is not otherwise required, and where such a lease is a renewal of an existing lease to a tenant who is already in possession. The need for such a reversionary lease is explained in paragraph 3.32 of the report that preceded the Bill. If it is not registered, the buyer of a landlord's interest may not be able to find out about that before their term begins, because the tenant would not be in possession. That objection does not apply where the reversionary lease is a renewal to an existing tenant. In that situation, there is no practical need for such a lease to be registered merely because it does not take effect at once. Under the Bill as drafted, a renewal for a year or less, granted during mid-summer for a lease that will expire at Michaelmas, would be registrable and, as we said, would attract.

The amendments would restrict 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 reasonably be required to register a renewal. When a tenant is not already within the system, the balance of advantage is emphatically on the side of our amendments. A buyer of the landlord's interest would have to establish the tenant's rights, and it would surely impose no real burden to require such a buyer to ask not only whether there is a lease but whether there is any other relevant document. A tenant renewal on a comparatively short lease—

The Chairman: Order. I apologise for interrupting the hon. Gentleman in mid-speech, but I should point out that the hon. Member for Birmingham, Erdington (Mr. Simon) is not a member of the Committee and is therefore not allowed to remain in the Room.

11.12 am

Sitting suspended.


On resuming —

Mr. Sanders: On a point of order, Mr. Illsley. Given the break that we have just had, there are no objections from Opposition Members to the hon. Member for Birmingham, Erdington joining the Committee, if that is an issue.

On Thursday, the Liberal Democrat Whips Office was told that this meeting was yet to be arranged and we were not informed at any point about when it was to be held. Although cards were issued stating that the Committee was meeting today, they were not drawn to my attention until yesterday morning, by which time it was too late for us to table amendments. I want to put that on the record.

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