Commonhold and Leasehold Reform Bill [H.L.] -
Amendments to be debated in the House of Lords
- continued
House of Lords

back to previous amendments
 
  
Clause 71
 
  
BY THE LORD KINGSLAND
 
109     Page 30, line 34, leave out subsections (1) and (2) and insert--
 
    ("(1)  The persons who are entitled to be holders of "A" shares in an RTM company shall be qualifying tenants of flats contained in the premises.
 
    (1A)  Any person being--
    (a)  the landlord of the whole or any part of the premises (including mesne landlords), or
    (b)  a management company party to any lease of the premises or any part thereof,
who prior to the acquisition date had the right to manage the premises shall be entitled to be holders of "B" shares in an RTM company.
 
    (1B)  The acquisition date shall be the date on which the RTM company acquired the right to manage.
 
    (1C)  The paid-up capital of a "B" share in an RTM company shall be one pound and no person shall be required to hold more than one "B" share in an RTM company.
 
    (1D)  The holders of "B" shares in an RTM company shall have the right to appoint two directors to the board of directors of the company and the right on a requisition signed by a majority of them to call extraordinary general meetings of the RTM company.
 
    (1E)  The Secretary of State, after consultation with the National Assembly for Wales, shall (subject to section 70(2) and the previous subsections hereof) make regulations about the form and content of the memorandum of association and articles of association of RTM companies.
 
    (2)  Such regulations shall be laid before Parliament and shall be subject to an affirmative resolution of both Houses of Parliament.")
 
  
BY THE LORD GOODHART
THE BARONESS HAMWEE
 
110     Page 30, line 37, leave out paragraph (b) 
111     Page 30, line 39, at end insert (", and
    (  )  tenants under a long lease of any non-residential part of the premises")
 
  
BY THE LORD KINGSLAND
 
112     Page 31, line 1, leave out ("A") insert ("An") 
113     Page 31, line 3, leave out ("a") insert ("an") 
114     Page 31, line 5, leave out second ("a") insert ("an") 
115     Page 31, line 10, leave out ("a") insert ("an") 
  
After Clause 71
 
  
BY THE LORD WILLIAMS OF ELVEL
THE EARL OF CAITHNESS
 
116     Insert the following new Clause-- 
     ("  .--(1)  A person who wishes to practice as a managing agent and hold the service charge trust fund shall be required to--
    (a)  be subject to a code of practice,
    (b)  undergo yearly auditing of accounts,
    (c)  be covered by professional indemnity and fidelity insurance, and
    (d)  undergo a minimum quota of annual management training.
    (2)  Regulations shall make provision about the form and content of the above and make such other rules, requirements and restrictions as may be appropriate to ensure proper standards are maintained, and the interests of landlords, RTM companies and leaseholders are safeguarded.")
Regulation of managing agents.
  
Clause 72
 
  
BY THE BARONESS MADDOCK
THE LORD GOODHART
 
117     Page 31, line 17, at end insert ("or is a registered social landlord, as defined by the Housing Act 1996, owning a long lease and whose tenant is an assured tenant under the terms of the Housing Act 1988") 
  
BY THE LORD KINGSLAND
 
118     Page 31, line 17, at end insert--
 
("and is either--
    (a)  an individual residing in the flat; or
    (b)  a company controlled directly or indirectly by an individual residing in the flat or jointly by individuals both or all residing in the flat.")
 
  
BY THE LORD GOODHART
THE BARONESS HAMWEE
 
119     Page 31, line 18, leave out subsection (3) 
  
BY THE BARONESS MADDOCK
THE LORD GOODHART
 
120     Page 31, line 19, at end insert--
 
    ("(  )  Subsection (2) does not apply where--
    (a)  the immediate landlord under the lease is a charitable housing trust;
    (b)  the flat forms part of the housing accommodation provided by it in the pursuit of its charitable purposes;
and "charitable housing trust" means a housing trust within the meaning of the Housing Act 1985 which is a charity within the meaning of the Charities Act 1993.")
 
  
Clause 73
 
  
BY THE LORD GOODHART
THE BARONESS HAMWEE
 
121     Page 31, line 36, leave out ("21") and insert ("7") 
  
Clause 74
 
  
BY THE LORD GOODHART
THE BARONESS HAMWEE
 
122     Page 32, line 35, leave out "(21") and insert ("7") 
123     Page 32, line 38, leave out ("21") and insert ("7") 
124     Page 32, line 41, leave out ("21") and insert ("7") 
  
Clause 75
 
  
BY THE LORD KINGSLAND
 
125     Page 33, line 16, leave out ("a") insert ("an") 
126     Page 33, line 31, at end insert--
 
    ("(4)  The provisions of section 196 of the Law of Property Act 1925 as to service of notices shall apply to the service of notices under this section.
 
    (5)  If a notice of invitation to participate is not served in accordance with this section, every director and officer of an RTM company at the time of the breach shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.
 
    (6)  If any director or officer of an RTM intentionally fails to give notice to any qualifying tenant in accordance with this section, such director or officer shall be liable on summary conviction to not more than 3 months imprisonment and a fine not exceeding level 5 on the standard scale.")
 
  
After Clause 75
 
  
BY THE LORD WILLIAMS OF ELVEL
 
127     Insert the following new Clause-- 
     ("  .--(1)  To prepare for future management, prior to the service of a notice of invitation to participate, the RTM company may appoint a surveyor in accordance with section 84 of the Housing Act 1996 (right to appoint surveyor to advise on matters relating to service charges).
 
    (2)  A surveyor appointed under subsection (1) shall report on the current condition of the property, both physical and financial.")
Appointment
of surveyor.
  
BY THE LORD WILLIAMS OF ELVEL
THE EARL OF CAITHNESS
 
128     Insert the following new Clause-- 
     ("  .--(1)  A notice of invitation to participate shall be accompanied by a prospectus which shall include--
    (a)  a financial plan to deal with the potential shortfall between the service charge income and expenditure,
    (b)  the names of any professional advisors the RTM company intends to appoint,
    (c)  any major plans for expenditure in the first year of management, and
    (d)  a copy of the memorandum and articles of the RTM company.
    (2)  Regulations shall make provision about the form and content of the above.")
Prospectus.
  
Clause 76
 
  
BY THE LORD KINGSLAND
 
129     Page 33, line 33, after ("person") insert ("who has a right to manage the premises or any part thereof") 
130     Page 33, line 35, leave out paragraphs (a) and (b) 
131     Page 33, line 38, after ("information") insert ("which is in his possession, knowledge or control, and as to the matters required by section 78(3) and (4) to be stated in a claim notice") 
132     Page 34, line 5, at end insert--
 
    ("(4)  A failure without reasonable excuse to comply with such a notice shall be an offence, punishable on summary conviction with a fine not exceeding level 3 on the standard scale.")
 
  
Clause 77
 
  
BY THE LORD KINGSLAND
 
133     Page 34, line 38, at end insert--
 
    ("(10)  Regulations may provide for the procedure for an RTM company to apply to a leasehold valuation tribunal for the acquisition of the right to manage earlier than six months after the relevant date.")
 
  
Clause 78
 
  
BY THE LORD KINGSLAND
 
134     Page 35, line 12, leave out ("one month") and insert ("six months") 
135     Page 35, line 14, at end insert ("or must state that the RTM company intends to apply to the leasehold valuation tribunal for it to acquire the right to manage at an earlier date") 
  
BY THE EARL OF CAITHNESS
THE LORD WILLIAMS OF ELVEL
 
136     Page 35, line 14, at end insert--
 
    ("(  )  It must state that each person who becomes a member of the RTM company shall be liable for costs incurred (jointly and severally with the RTM company and each other person who is so liable) by those persons specified in section 85(1) should the events set out in section 86(1) occur.")
 
  
Clause 81
 
  
BY THE LORD KINGSLAND
 
137     Page 36, line 27, at end insert ("or
    (c)  that it is not just or convenient that the RTM company should acquire the right to manage,")
 
138     Page 36, line 41, after ("(2)(b)") insert ("or (c)") 
139     Page 36, line 48, at end insert--
 
    ("(  )  In considering whether it is or is not just or convenient that the RTM company should acquire the right to manage, the leasehold valuation tribunal shall consider, in particular--
    (a)  whether the objector has managed the premises satisfactorily,
    (b)  whether the RTM company is likely to manage the premises more satisfactorily,
    (c)  any financial losses which the objector may suffer by virtue of losing the right to manage,
    (d)  any actual or potential effect on the value of the reversion to the premises of giving the RTM company the right to manage,
    (e)  whether the objector is resident at the premises,
    (f)  the wishes of any tenants of any part of the premises who are not qualifying tenants, and
    (g)  the wishes of any qualifying tenants of any part of the premises who are not members of the RTM company.")
 
140     Page 37, line 3, at end insert--
 
    ("(  )  If on an application under subsection (3) it is finally determined that the company was on relevant date entitled to acquire the right to manage the premises, the leasehold valuation tribunal or any tribunal or court finally determining the application shall specify a date, not less than three months from the date of final determination, on which the RTM company shall acquire the right to manage.")
 
  
Clause 82
 
  
BY THE LORD KINGSLAND
 
141     Page 37, line 14, leave out ("a") and insert ("an") 
  
BY THE EARL OF CAITHNESS
THE LORD WILLIAMS OF ELVEL
 
142     Page 37, line 21, leave out ("court") and insert ("leasehold valuation tribunal") 
143     Page 37, line 40, leave out ("court") and insert ("leasehold valuation tribunal") 
144     Page 38, line 7, leave out ("court") and insert ("leasehold valuation tribunal") 
  
Clause 83
 
  
BY THE LORD KINGSLAND
 
145     Page 38, line 11, leave out ("A") and insert ("An") 
  
Clause 84
 
  
BY THE LORD KINGSLAND
 
146     Page 38, line 22, leave out ("a") and insert ("an") 
  
Clause 85
 
  
BY THE LORD GOODHART
THE BARONESS HAMWEE
 
     The above-named Lords give notice of their intention to oppose the Question that Clause 85 stand part of the Bill. 
  
Clause 86
 
  
BY THE LORD GOODHART
THE BARONESS HAMWEE
 
     The above-named Lords give notice of their intention to oppose the Question that Clause 86 stand part of the Bill. 
  
After Clause 86
 
  
BY THE LORD KINGSLAND
 
147     Insert the following new Clause-- 
 ("CESSATION OF RTM COMPANY RIGHTs 
     .--(1)  After an RTM company acquires the right to manage any premises, from time to time any person who is--
    (a)  a qualifying tenant,
    (b)  a tenant of any part of the premises who is not a qualifying tenant, or
    (c)  the landlord of the whole or any part of the premises (including mesne landlords) or a management company party to any lease of the premises or any part thereof who prior to the acquisition date had the right to manage the premises,
may apply to the leasehold valuation tribunal for an order that the RTM company cease to have the right to manage.
 
    (2)  The grounds on which such an application may be made are that on the date of the application--
    (a)  that where there are only two flats in the premises the tenants of both flats are not both qualifying tenants and members of the RTM company,
    (b)  if there be more than two flats in the premises the tenants of fewer than one half of all the flats in the premises are both qualifying tenants and members of the RTM company, or
    (c)  it is not just or convenient that the RTM company should continue to have the right to manage the premises.
    (3)  The application must be served on--
    (a)  the RTM company, and
    (b)  the landlord of the whole or any part of the premises (including mesne landlords) and any management company party to any lease of the premises or any part thereof who but for the RTM company's right to manage would have the right to manage the premises.
    (4)  The Secretary of State may make regulations for the procedure for such applications, including provisions as to costs.")
Cessation of RTM company rights.
  
Clause 87
 
  
BY THE LORD KINGSLAND
 
148*     Page 40, line 1, leave out ("a") and insert ("an") 
  
Clause 88
 
  
BY THE LORD KINGSLAND
 
149*     Page 40, line 25, leave out ("a") and insert ("an") 
150*     Page 40, line 44, leave out ("or tenant") and insert (", tenant or surety") 
  
After Clause 89
 
  
BY THE EARL OF CAITHNESS
THE LORD WILLIAMS OF ELVEL
 
151     Insert the following new Clause-- 
     ("  .--(1)  Upon the acquisition date previous contracts shall be null and void.
 
    (2)  The RTM company shall be under no obligation to continue contracts but the rules relating to frustrated contracts shall apply.
 
    (3)  Costs incurred at the date of frustration shall be recoverable, otherwise compensation shall not be payable.")
Duration of contracts.
  
BY THE LORD GOODHART
THE BARONESS HAMWEE
 
152*     Insert the following new Clause-- 
     ("  .--(1)  An existing management contract entered into after the date on which the claim notice under section 77(6) is given to the landlord may be terminated by the RTM company on not less than one month's notice unless the RTM company has agreed to the contract being entered into.
 
    (2)  Any other existing management contract may be terminated by the RTM company on not less than one month's notice if, in the opinion of the directors of the RTM--
    (a)  the consideration payable to the contractor party is excessive;
    (b)  the services to be provided or other things to be done under the contract are inappropriate; or
    (c)  the contractor party is not a fit and proper person to provide the services or do the other things required by the contract.
    (3)  Any term of a contract which provides for any compensation to be payable for the exercise by a RTM company of rights under subsection (1) or (2) is void.")
Terminations of existing management contracts.
 
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Prepared 19 February 2001