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Lord Lucas: Yes, my Lords; the noble Lord, Lord Strabolgi, is indeed right. My noble friend Lady Gardner of Parkes also struck me as being right when she questioned whether 25 per cent. of the tenants should, effectively, be able to force the other 75 per cent. to enfranchise. That, I believe, would be the import of the amendment. If I may say so, that is the telling point against proceeding down the road proposed by the noble Lord, Lord Dubs.

The current position is that 66 per cent. of tenants have to say that they wish to enfranchise. Of those, one half have to be qualifying tenants. Therefore, the noble Lord, Lord Dubs, is not seeking to move very far in terms of the percentage that he proposes. At present the percentage is one third who qualify and he is moving it to one quarter. The difference is only a matter of 8 per cent. or so, and, in many cases, it would make very little difference; indeed, perhaps just one tenant. Therefore, I do not believe that we are looking at a large change. However, in terms of the way in which the amendment is phrased, we prefer our current arrangement where the process must at least be initiated by a majority of tenants, even if the question then arises as to what percentage of them need to be qualifying tenants.

As I mentioned at an earlier stage, we are undertaking research into the experience of those seeking to use the enfranchisement legislation. We are not yet persuaded

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that it would be right to relax the qualifying conditions. I would not hold out the hope that the Government would wish to do so in future. But if it does emerge that there is a significant difficulty in preventing what one might describe as "genuine" cases from going ahead--for example, if there is, as in the problem outlined by the noble Lord, Lord Dubs, a real and significant problem to be addressed--then obviously the issue will be examined in the light of our research. I appreciate that that is not the answer that the noble Lord, Lord Dubs, wanted. Nonetheless, I hope that he will feel able to withdraw the amendment.

Lord Dubs: My Lords, I thank the Minister for his response. Indeed, it was not quite the answer that I had hoped for. Nevertheless, I shall read his remarks in Hansard tomorrow and consider what he said. I may then possibly get in touch with him. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lucas moved Amendment No. 161:

Before Clause 112, insert the following new clause--

Minor amendment of section 1(1)(a) of Leasehold Reform Act 1967

(". In section 1 of the Leasehold Reform Act 1967 (tenants entitled to enfranchisement or extension), in subsection (1)(a)--
(a) in sub-paragraph (i), for the words from "or (where" to "that date," there shall be substituted ", or on or after 1st April 1990 in pursuance of a contract made before that date, and the house and premises had a rateable value at the date of commencement of the tenancy or else at any time before 1st April 1990,", and
(b) in sub-paragraph (ii), for the words from "is entered" to "1990)," there shall be substituted "does not fall within sub-paragraph (i) above,".").

The noble Lord said: My Lords, I spoke to the above amendment when moving Amendment No. 150. I beg to move.

On Question, amendment agreed to.

Lord Lucas moved Amendment No. 162:

After Clause 112, insert the following new clause--

Compensation for postponement of termination in connection with ineffective claims

(". Schedule (Compensation for postponement in connection with ineffective claims) (which makes, in relation to claims to enfranchisement or an extended lease under Part I of the Leasehold Reform Act 1967 and claims to collective enfranchisement or a new lease under Chapter I or II of Part I of the Leasehold Reform, Housing and Urban Development Act 1993, provision for compensation of the landlord where the claim has prolonged an existing tenancy, but is ineffective) shall have effect.").

The noble Lord said: My Lords, in moving this amendment, I shall, with the leave of the House, speak also to Amendment No. 163. Amendment No. 163 is of inordinate length. I think that the two amendments together occupy about 10 pages, or will occupy about 10 pages in the Bill, if they are accepted. They deal with what is essentially a fairly simple problem.

Noble Lords will observe that Amendment No. 163, long and complex though it is, consists of three parallel sets of provisions: for cases under the Leasehold Reform

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Act 1967; for collective enfranchisement under the Leasehold Reform Housing and Urban Development Act 1993; and for lease renewal under the same Act.

The problem which these amendments seek to resolve concerns the situation where a claim for enfranchisement or a new lease is made shortly before expiry of the existing long lease, usually in the final few months. If the term date of the lease is reached before the claim is settled, the legislation provides for the lease to be continued during the currency of the claim and for three months afterwards.

Where there is no claim for enfranchisement and a long lease expires, most tenants can hold over at or near a market rent. This arrangement is overridden when an enfranchisement claim is in progress, and so the landlord would only receive the ground rent in this period. This is seen to be unfair when the claim is unsuccessful because the landlord is denied the market rent from the original term date which he would have received had there been no claim. This could be a significant sum for high quality properties in desirable locations. We are aware of some persistent abuse along these lines and we do not see the people indulging in that abuse as a particularly deserving or needy class. The present arrangement can be an incentive for tenants to spin out procedures, even if they decide that they cannot go through with the claim, as they will prolong the period during which they pay only ground rent. In addition, the landlord will not have the benefit of a capital sum at the end of the process.

These amendments will apply only when the claim is made within two years of the expiry of the long lease term. Once such a claim has been determined as unsuccessful, the tenant would become liable to pay the landlord the difference between what the tenant would have paid in market rent and what he has actually paid in ground rent over the following period (called the appropriate period in Amendment No. 163). Broadly speaking, this period begins with the earliest date when the long lease could have terminated (this will usually be the date of expiry of the long lease term) and ends with the date when the claim for enfranchisement etcetera ceases to have effect. These amendments would remove any incentive for tenants to prolong the procedures. Provision is also made to cope with cases where there has been a change in the leaseholder's immediate landlord.

The provision will apply to claims made on or after 15th January 1999. This is the changeover date for the statutory regimes for holding over after a long lease expires (that is, Schedule 10 to the Local Government and Housing Act 1989, will replace Part I of the Landlord and Tenant Act 1954). Tenants will therefore have adequate time to prepare and submit a claim before these provisions come into force. I beg to move.

Lord Strabolgi: My Lords, as the noble Lord, Lord Lucas, said, this is of course a whopping amendment, about 12 pages long. I congratulate him on the brief and succinct way in which he has boiled it down to quite a small number of words. Having said that, I must say I am not really happy about it. This

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amendment seems to have been tabled virtually entirely for the benefit of the large estates, mainly in London. I hasten to say that I live on one of them, the Grosvenor Estate. I declare an interest as a committee member of the Belgravia Residents Association. I do not include the estate in any criticism because the Grosvenor Estate is an extremely good landlord and on the whole has a happy relationship with the people who live on the estate. It looks after the estate in a most magnificent way so that it remains one of the most beautiful--probably the most beautiful--parts of London. I hope it will never be broken up in the way that Pimlico was broken up when the previous duke but one died. I must say I would rather live under a duke any time than one of these new fangled property companies or overseas banks.

Having said that, I do not think that all the other estates are equally good in the way that they treat their tenants. Some landlords have for some years pursued a policy of not renewing or extending leases as they reduce in years but instead deliberately let them run out, with enormous resultant hardship, loss and misery to the many long-term tenants living on the estate.

In coming to an assessment of the price to be paid for the freehold or new lease, however, these tenants are profoundly disadvantaged by the fact that they were not granted an extension of lease at an earlier stage and are now coming, through absolutely no fault of their own, to enfranchise or buy a new lease with little equity on their side. The price will be high because they have to start from scratch. For many it will be a difficult business to complete the process. The whole undertaking is, therefore, fraught with anxiety and uncertainty for some tenants on some of the estates of London.

If this leasehold enfranchisement gets under way--and, I believe, collective commonhold is also on the far horizon--I hope that the Government will be able to fulfil what they promise when an election comes. I suppose that next spring they will promise it all over again. In the meantime, I hope that they will try to get the issue resolved so that we do not have to live with these large estates for much longer.

I do not believe that because someone owned a few fields 300 years ago they should be able to continue to let property on leasehold for 100 or 200 years, gaining it back after that period. I do not believe that that situation should continue until the end of time. I hope that one day this Government or a Labour Government will bring that situation to an end.

9.30 p.m.

Lord Dubs: My Lords, I have listened with interest and I largely agree with my noble friend Lord Strabolgi. I also listened to what the Minister said. Given the length of the amendment and the fact that it is marked with a star--although it was put down a few days ago, it was changed yesterday and we have this version today--it is difficult to engage with the details of the amendment and to make a proper assessment. The Government may have had good reason for bringing forward such a large amendment so late. It runs to some

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10 pages or so and is very complicated. The only information that I have received makes me concerned about its possible effects: that it will not be helpful to some people living on some larger estates.

Having said that, I wish to protest that we have been given such a complicated amendment without the benefit of the Government's view until a few moments ago. I appreciate that the Minister was succinct and clear in what he said. I sought to relate that to the amendment. It is rather difficult. I am not sure that we are in the best position to consider such a complicated amendment at Report stage when we cannot engage in any further discussion beyond one intervention in the debate.

I express a reservation about how the provision has been handled. It makes the position very difficult for us.

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