Commonhold and Leasehold

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Mr. Cash: I am grateful to the Minister for acceding to my request. I do not mean to be curmudgeonly, but we should look back a little. The Bill has been through five stages in the other place where such matters have been considered exhaustively, and has had a Second

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Reading in the House. I mentioned what the Deregulation and Regulatory Reform Committee said on the matter with the Parliamentary Secretary, Lord Chancellor's Department, who was surprised that the regulations had not been produced. We are now being offered, not the regulations that that Committee said should be made available, but drafts based on those regulations. We have now reached the part of the Bill that deals with the question relating to—

The Chairman: Order. If the hon. Gentleman wishes to speak to that amendment he must do so after the Minister, not during her speech.

Mr. Cash: I should be happy to do so, Mr. Hurst, as I want to continue the argument, but I could bring what I want to say to a close very rapidly. It is cutting it a bit fine to let us have the regulations just before Report, when the opportunity to make amendments will have passed. I could wrap that into a point of order if you wish, Mr. Hurst.

Ms Keeble: These are drafts of the proposals for the constitution of the RTM company that would normally go through a long process of consultation—

Mr. Cash: It is in the Bill.

Ms Keeble: The hon. Gentleman is trying to make a meal out of a reasonably straightforward point. Realising that there would be interest in the matter, I have ensured that drafts—they are no more than that—are available and they can be seen. The regulations that the hon. Gentleman asked for prior to this sitting—he spoke to me outside the Committee Room—were provided, although admittedly just before the sitting. I am making a genuine offer to ensure that hon. Members get full information and can see the draft constitution at an early stage so that they can take part in a process that will continue long after these proceedings have finished, because there must be proper consultation with the interested parties. It is up to the hon. Gentleman, but I am making a genuine offer to be helpful.

The thrust of the hon. Gentleman's argument is the unfair exclusion of the landlord and I have difficulty seeing how the proposal would work. The amendment states:

    ''Such regulations shall provide for the holder of the freehold of the premises to be able to appoint at least one director of the RTM company''.

There is clearly a difference between a member and a director and we argue that the freeholder, as someone with a proper interest in the property, should be entitled to be a member of the right-to-manage company and have all the benefits of membership, which include receiving information and, elsewhere in the Bill, the ability to challenge decisions that the directors make.

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As I have said, a number of measures in the Bill are intended to reconcile different views and competing pressures and priorities. Some people on the leaseholder side of the argument do not think that the freeholder should have the right even to be a member of the company. That argument is not sound

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because the freeholder has an interest in the property and that should be properly recognised.

In addition, this is a no-fault right and, as Opposition Members have consistently argued, including the hon. Member for Torbay, it is in everyone's best interests that the right-to-manage company works in an amicable fashion. We should not have this constant argument between who is a freeholder and who is a leaseholder. There are sharp differences of interest, but to all intents and purposes, the interests of both freeholders and leaseholders should in most cases be the proper management of the company and the building in which they have interests and investments.

It is simply not the case that the freeholder is being excluded by our proposals. We are not saying that the freeholder should have any rights, in terms of board membership, over and above all of the other people who have an interest in the building. It seems to be perfectly fair that the members of the company should elect the directors they want. That matter should be entirely determined by the members of the company. It would be wrong to say that one member should have superior rights to others.

We recognise the property rights of the freeholder. Those people who are totally opposed to the leasehold system would not want us to recognise those rights. The way properly to recognise them is to put them on the same footing as every other person with an interest in the premises, which is to be a member of the company.

Clearly, there is an option for members to stand for the board of directors. When a landlord has an interest in a large number of properties, it will not be practical for him or her to be on the board of directors of every single property that has set up a right-to-manage company. They will certainly not be excluded, however, from company membership.

I assure the right hon. Gentleman that his fears are not borne out by the provision in the Bill, which strikes the right balance between the need to respect the property interests of everyone who is involved and provide for the proper arrangements for the property concerned. On that basis, although I suspect there will be further discussion about this matter, I ask the hon. Gentleman to withdraw the amendments.

Mr. Taylor rose—

Mr. Cash: I would be happy to allow my hon. Friend the opportunity to go first, if that is convenient.

Mr. Taylor: I am grateful to my hon. Friend. In her perfectly proper and appropriate declaration of interest, the Minister said that she and her husband had enfranchised, what I assumed to be a leasehold house and that they had acquired the freehold reversion. I can tell from her body language that I am mistaken in that, but I would like to leave a question with her. This is really an exercise in impertinence, and she does not have to answer, but I would be interested to know whether the Minister and her husband in acquiring their freehold reversion, enjoyed the benefit of certainty of valuation. The

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Committee will know that that is one of the directions—

Ms Keeble: I shall stop any speculation: we are currently leaseholders. I was referring to a flat that I had owned previously.

Mr. Taylor: So the Minister, in a previous existence, acquired the reversion on a flat. I would like to leave her with this impertinent and pertinent question. Did she enjoy certainty of valuation or did she start off miles away from the figure required for reversion? The Committee will realise that I am interested in certainty of valuation. When the Minister's officials inquire into the rights of the deserted spouse, about which I am concerned, they may want to know that the seminal case was Bendall vs McWhirter. It was taken to its groundbreaking conclusion by a brilliant firm of solicitors in the west midlands, which employed me.

Andrew Selous: Does the Minister agree that my hon. Friend the Member for Stone tabled the amendment to allow ease of communication? It is easier for leaseholders to communicate with the freeholder at a directors meeting, if the freeholder can be present. Otherwise, if the board of directors and the freeholder disagree, they will have to engage in correspondence, further meetings and so on. As my hon. Friend the Member for Solihull commented, where meetings have taken place and the freeholder was present, it was easier to thrash such matters out.

Mr. Cash: The reference to McWhirter made me wonder whether it was anything to do with the distinguished founder of the Freedom Association. Perhaps some people have to learn important lessons about the exercise of freedom. That takes me to the Human Rights Act 1998. The Minister has certified compatibility with the convention on human rights at the beginning of the Bill. I notice that Government Members have suddenly acquired that alert expression that I usually associate with the fact that the buzzers on their controllers are going. For any Conservative Member to mention human rights is regarded by Labour Members as close to treason. In fact, the Human Rights Act 1998 has clear provision on property rights and I would be surprised if no one raised that question in relation to the explicit exclusion of the freeholder.

We do not regard the function of the landlord in the historical sense with which the Duke of Westminster was raised. We recognise the importance of the tenant. In my own family, a Member of Parliament in the 1840s was the secretary of the tenants' rights association in Ireland. One cannot get more closely related to tenants' rights than that. Anyone who cares to look up what Mr. Lucas's functions were at that time and the battles in which he had to engage on behalf of the Irish tenants would understand where I am coming from. It is not only a question of landlord and tenant; it is a question of the balance that must be struck in communication and the interests of everyone.

The Minister question protested that the landlord could be outvoted if he was on the board. It will be difficult to see to what extent the proposals in the draft documents that she made available mesh into her arguments, although it may not be as difficult if we

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manage to accelerate our consideration of the provisions. She will know that, when it comes to the crunch these days, the courts can interpret what a Minister says in the House. That is an onerous responsibility, which can cause some difficulty. Unnecessary uncertainty could arise in relation to the provisions if the Committee has not had the opportunity at the right time to evaluate the regulations and their interaction with the Minister's remarks or the interpretation of the intention behind those remarks.

I hope that we can return to the issue on Report or pursue it in some other way. We have debated it at length, and I hope that you have not found it uninteresting, Mr. Hurst. There are some important questions about attitudes and culture, as well as practicalities. We intend to press the matter to a vote.

 
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Prepared 17 January 2002