Commonhold and Leasehold

[back to previous text]

Mr. Sanders: When I moved amendment No. 7, I thought the discussion would be short and sweet. I did not realise that it would develop into such a wide-ranging debate on issues such as ear trumpets, the films of David Lean and Obi-Wan Kinobe—perhaps Sir Alec Guiness's best role—in Star Wars.

I presume that I may withdraw my amendment while allowing the amendment tabled by the hon. Member for Stone (Mr. Cash) to be pressed to a vote? I listened carefully to the Minister and I accept what she said. Our concern is that people will want to move to the right to manage because of a bad experience with a landlord. The Minister believes that some people may take advantage of that. She may be right, but it remains to be seen. As things stand, the greatest incentive to want to exercise the right to manage would be a bad experience with a landlord and the desire to be distanced from that landlord once the right-to-manage company was set up. It has been a fascinating debate.

I beg to ask leave to withdraw the amendment.

Hon. Members: No.

Amendment proposed: No. 7, in page 34, line 20, leave out from 'premises' to end of line 23.—[Mr. Sanders.]

Question put, That the amendment be made.

The Committee divided: Ayes 5, Noes 14.

Division No. 3]

AYES
Cash, Mr. William Lewis, Dr. Julian Selous, Andrew
Taylor, Mr. John Wiggin, Mr. Bill

NOES
Crausby, Mr. David Doughty, Sue Hendrick, Mr. Mark Hepburn, Mr. Stephen Iddon, Dr. Brian Keeble, Ms Sally McIsaac, Shona
Marsden, Mr. Gordon Moffat, Laura Sanders, Mr. Adrian Stringer, Mr. Graham Thomas, Gareth Woolas, Mr. Phil Wright, David

Question accordingly negatived.

Amendment proposed: No. 54, in page 34, line 23, at end insert

    ', and

Column Number: 88

    (c) the holder of the freehold of the premises'.—[Mr. Cash.]

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 14.

Division No. 4]

AYES
Cash, Mr. William Lewis, Dr. Julian Selous, Andrew
Taylor, Mr. John Wiggin, Mr. Bill

NOES
Crausby, Mr. David Doughty, Sue Hendrick, Mr. Mark Hepburn, Mr. Stephen Iddon, Dr. Brian Keeble, Ms Sally McIsaac, Shona
Marsden, Mr. Gordon Moffat, Laura Sanders, Mr. Adrian Stringer, Mr. Graham Thomas, Gareth Woolas, Mr. Phil Wright, David

Question accordingly negatived.

The Chairman: The Committee has divided on the hon. Member for Torbay's amendment No. 7. The hon. Member for Stone asked that his amendment No. 54 be put, to which I acceded, and we divided on it. I believe that he now wishes to move amendment No. 55.

Amendment proposed: No. 55, in page 34, line 26, at end insert—

    '(2A) 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.'.—[Mr. Cash.]

Question put, That the amendment be made:—

The Committee divided: Ayes 5, Noes 14.

Division No. 5]

AYES
Cash, Mr. William Lewis, Dr. Julian Selous, Andrew
Taylor, Mr. John Wiggin, Mr. Bill

NOES
Crausby, Mr. David Doughty, Sue Hendrick, Mr. Mark Hepburn, Mr. Stephen Iddon, Dr. Brian Keeble, Ms Sally McIsaac, Shona
Marsden, Mr. Gordon Moffat, Laura Sanders, Mr. Adrian Stringer, Mr. Graham Thomas, Gareth Woolas, Mr. Phil Wright, David

Question accordingly negatived.

Clause 72 ordered to stand part of the Bill.

Clause 73

Qualifying tenants

Mr. Sanders: I beg to move amendment No. 9, in page 35, line 17, at end insert—

    '(8) Where the tenancy of a flat under a long lease is assigned, the assignee shall become the qualifying tenant for the purposes of this section.'.

I am extremely reluctant to say that this will not take long. I am going to be brief once again, but I have no idea whether the rest of the Committee will follow suit. This is a probing amendment to establish the Government's position. We welcome the extension of the right of collective enfranchisement to several leaseholders who previously did not have it. One defect remains, but the Minister may be able to put us right about it.

The Bill does not require the automatic transfer of membership of a right-to- enfranchise company on the

Column Number: 89

assignment of a lease. The central purpose of a right-to enfranchise company is to give leaseholders the right to participate in ownership. We view the concept of an RTE as an embryonic commonhold association. Do the Government share that view?

Ms Keeble: We are talking about right-to-manage companies at this stage.

Mr. Sanders: In that case, the amendment obviously deals with the wrong part of the Bill. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Ms Keeble: When I explained that we were using company law, some hon. Members may have wondered what I was talking about. Now they can see the point. The right-to-manage company falls under the ambit of company law, so a person becomes a member of a company, enters into a contract and agrees to be bound by the provisions of the memorandum and articles of association. In an RTM company the assignee does not acquire a share, but becomes a guarantor. The law requires that the person must formally agree to that. It is not right to force people to become members of a company in the way suggested by the hon. Member for Torbay. The usual provisions of company law should apply.

Mr. Cash: There is a slight problem, but it will be ironed out as people become familiar with companies limited by guarantee. It is easy for people to imagine a company as a company, but a company limited by guarantee—as the Railtrack experience well

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illustrates—is different in respect of management and control. Also, there is a different shareholder relationship to that in a normal company. People should not be deluded into believing that the proprietorial right that develops out ownership in a normal company applies to a company limited by guarantee. They would be sadly mistaken if they believed that the two sorts of company were the same, which is an important point about the framework. It will certainly be interesting to see precisely what the drafts say about the constitution, memorandum and articles of association.

Ms Keeble: I do not want to detain the Committee. To be helpful, I note the remarks of the hon. Member for Stone.

Question put and agreed to.

Clause 73 ordered to stand part of the Bill.

The Chairman: I have an announcement. An application has been made to move the Committee to another Room because we are so cramped here. Investigations have taken place, but proved unsuccessful. The Committee will have to continue to sit in this Room for the duration of the Bill.

Mr. Taylor: On a point of order, Mr. Hurst. Will it be convenient for us to leave our papers here until this afternoon?

The Chairman: Yes, the Room will be secure.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

The following Members attended the Committee:
Alan Hurst, Mr. (Chairman)
Cash, Mr.
Crausby, Mr.
Doughty, Sue
Hendrick, Mr.
Hepburn, Mr.
Iddon, Dr.
Keeble, Ms
Lewis, Dr. Julian
McIsaac, Shona
Marsden, Mr. Gordon
Moffat, Laura
Sanders, Mr.
Selous, Andrew
Stringer, Mr.
Taylor, Mr. John
Thomas, Gareth
Wiggin, Mr.
Woolas, Mr.
Wright, David

 
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Prepared 17 January 2002