Commonhold and Leasehold Reform Bill [Lords]

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Ms Keeble: I welcome my hon. Friend's support for the clause, which serves a dual purpose. It will close the loophole that barred people who would normally be entitled to enfranchise from doing so, and the loophole that allowed certain people to become head lessees and then to realise a windfall profit.

Question put and agreed to.

Clause 135, as amended, ordered to stand part of the Bill.

Clause 136

Reduction of qualifying period as tenant etc

Mr. Cash: I beg to move amendment No. 50, in page 66, line 11, at end insert—

    '(1C) This Part of this Act shall not have effect to confer any right on the tenant of a house where—

    (i) the house is for the time being let as two or more flats or units; and

    (ii) the tenancy is superior to those held by the other tenants,

    unless, at the relevant time, the tenant has been occupying the house, or any part of it, as his only or main residence (whether or not he has been using it for other purposes)—

    (a) for the last two years; or

    (b) for periods amounting to two years in the last 10 years.'.

Column Number: 137

The clause introduces a requirement for the leaseholder to have held the lease for at least two years before exercising the right to enfranchise or to extend the lease. It also cuts out lease owners from the rights of their tenancy unless they can pass a residence test. That would involve their occupying the house as their only or main residence for the past two years or periods amounting to at least two years in the past 10. The purpose of amending clause 136 is to prevent that part of the Act from having the effect of conferring any right on the tenant of a house when

    ''the house is for the time being let as two or more flats or units; and the tenancy is superior to those held by the other tenants, unless, at the relevant time, the tenant has been occupying the house, or any part of it, as his only or main residence (whether or not he has been using it for other purposes) for the last two years; or for periods amounting to two years in the last 10 years.'.''

That seems to be a perfectly reasonable proposal, given the requirements of clause 136, and I shall be grateful to hear what the Minister has to say about it.

Ms Keeble: We have just agreed to amendment No. 102, which does virtually that. The hon. Gentleman said that he wanted to return to the issue on Report, having looked through all the provisions of the Government amendment. I would, therefore, ask him to withdraw this amendment and, if he wishes to return to the issue, to do so on Report, as he said he would.

The amendment would prevent the head lessee of a household from enfranchising if the house has been converted into flats that have been let to long leaseholders who qualify for the right to enfranchise collectively. It would achieve exactly the same as the amendment that we have just agreed to. The hon. Gentleman might like to consider the detail and come back on Report if he wants to do so.

Mr. Cash: I am happy to do so. I thought that it was important at least to ask the question, but I agree with the Minister. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 136 ordered to stand part of the Bill.

Clause 137

Exclusion of certain business tenancies

Amendments made: Nos. 103, in page 66, line 19, leave out '(1ZA)' and insert '(1ZB)'.

No. 104, in page 66, line 21, leave out '(1ZB)' and insert '(1ZC)'.

No. 105, in page 66, line 44, leave out '(1ZC)' and insert '(1ZD)'.

No. 106, in page 66, line 47, leave out '(1ZB)' and insert '(1ZC)'.—[Ms Keeble.]

Clause 137, as amended, ordered to stand part of the Bill.

Clause 138 ordered to stand part of the Bill.

Column Number: 138

Clause 139

Personal representatives

Shona McIsaac: I beg to move amendment No. 89, in page 67, line 33, leave out 'one year' and insert 'five years'.

The amendment is about family rights and personal representatives. It has always been the case that the family cannot inherit the right to enfranchise on the death of the leaseholder. Often the children who grew up in the house regard it as the family home, much as their parents did. That fact has caused a great deal of anguish in my constituency, so I welcome the fact that personal representatives—that is, family members—will have the right to enfranchise on the death of a family member.

The amendment would increase the period from one year to five. I believe that one year is too short a time. Such families suffer grief and are often distraught when a relative passes away. It can often take time to find out whether or not the property is leasehold. Before choosing whether to enfranchise, probate or letters of administration may have to be granted. If the family wish to move into that home, they may first have to sell their own property, and that could be another leasehold property. One year is too short a time to deal with such complex matters.

I am still trying to deal with one such case. The family have been struggling for about six years, following the death of a family member, to sort out the leasehold and freehold issues relating to a particular house. I want to increase the period allowed for consideration of such issues, and I hope that the Government will look favourably on my amendment.

I want to share with the Committee some of the harrowing cases that have occurred since the 1967 Act, in which families have discovered the extent of their losses—

Mr. Wiggin: I am grateful to the hon. Lady for giving way before proceeding with her story. Does she foresee that, in an area with many elderly residents, her measure would allow a lot of leasehold properties to stand empty while people made a decision about whether or not to proceed with the purchase of the freehold? That would create empty areas that would very likely become run-down or vandalised. What is her view on that?

12.30 pm

Shona McIsaac: As leasehold law stands, many areas of Britain are already run-down and vandalised because of the nature of this form of housing tenure. When someone passes away and the family do not have a right to enfranchise, the house is already standing empty, and in a slow market will stand empty for some time. I do not envisage that the process would take up to five years, but the one-year period is far too short for people to deal with all the affairs relating to a close relative passing away. They will have to deal with all the legal issues surrounding that, particularly if the person died in difficult circumstances or in a

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hospital, making reports necessary. The financing must be sorted out and people may have to get a loan to buy the freehold. The one-year period is too short.

The deficiencies of the 1967 Act were brought into sharp relief by the case that I am about to describe. An old gentleman who lived in a house in my own street in Cleethorpes passed away, and in his will left his house to his stepson. The stepson initially had no idea that the house was a leasehold property, and the old gentleman had always said, ''When I pass away, you can come out of your council-rented property and this house will be here for you.''

As the tenant had not enfranchised, the price finally quoted to the stepson was £30,000 to purchase the freehold. He did not have a right in law. When we tracked down the landowners, they said, ''We give in, we'll sell it to you.'' The family could not afford to raise the £30,000 to buy a property that they had assumed was the family home anyway. The house was sold on the open market, on another 99-year lease—

Mr. Wiggin: How much did it sell for?

Shona McIsaac: The price was £25,000—I believe that there was some argument with the vendors. As a conscientious Member of Parliament, I knocked on the door of the new residents to tell them to buy the freehold pretty damn quick. The landlord was not terribly happy about that, but I did not want to see another family go through the trauma that the first family went through.

The old gentleman passed away in January. When I was trying to assist the family, we knew that the lease was due to run out in April. The landowners did not even reply with their figure of £30,000 until 15 March. All of us would probably find it difficult to raise £30,000 in a fortnight, and in a part of the country such as Cleethorpe incomes are very low and there is much poverty.

There are many other such cases where someone has passed away and the family home has been lost. That has happened on so many occasions in my constituency that I welcome the provisions on the rights of personal representatives. However, I do not want the one-year period to mean that normal people find out that although we have given them the right, they will not be able to exercise it because the period allowed is too short. I hope that the Minister gives the amendment serious consideration.

I shall not detain the Committee further with other cases. I felt that the one from my street was among the most serious. I shall continue to speak out about leasehold issues, because every time I am at home and I see that house, it reminds me of what that family had to go through because of the deficiencies of the 1967 Act.

Ms Keeble: My hon. Friends' amendment would extend to five years the period in which personal representatives can exercise the right to enfranchise or extend the lease of a house. My hon. Friend made a persuasive case for an extension and again illustrated

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how the law can apply unfairly to people in her area. She has made that case strongly and consistently for some time.

The main purpose of clause 139 is to remedy the position in which some personal representatives find themselves when they take over responsibility for a leasehold house that has a short remaining lease and find themselves unable to sell the remaining lease—or at least get a reasonable price for it. Some landlords have taken unfair advantage of personal representatives who find themselves in that situation, as my hon. Friend demonstrated very well. We recognise that it can take some time for personal representatives to deal with the affairs of a deceased person, especially if the person was a close relative, and we want to ensure that a reasonable period of time is allowed within which they can make a claim for the freehold or an extended lease.

Although we accept that determining such time periods invariably involves a degree of arbitrary consideration, in this case we have to bear in mind that the Bill already proposes that a lease on a house need only be held for two years to qualify for enfranchisement or lease extension. We are not therefore convinced that increasing the period beyond two years would serve any useful purpose. However, I am grateful to my hon. Friends for raising the issue and am happy to consider extending the period from one to two years by tabling a Government amendment on Report. At the same time, and in the interests of consistency, I will consider amending clause 129(2), which is the equivalent clause specifying the time period within which personal representatives need to make a claim for renewing a lease of a flat.

Those changes have been proposed in light of my hon. Friend's arguments and the strong case that she has made for some time. I hope that my hon. Friends are reassured and ask them to withdraw the amendment.

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