Commonhold and Leasehold Reform Bill -
Amendments to be debated in the House of Lords
- continued
House of Lords

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Schedule 3
 
  
BY THE LORD KINGSLAND
 
     Page 71, line 38, leave out paragraph 2 
  
BY THE LORD KINSGLAND
 
     Page 71, line 38, leave out paragraph 2 and insert-- 
 ("Form and content of memorandum 
     . A memorandum of association produced under this Schedule shall take the following form-- 
 MEMORANDUM OF ASSOCIATION 
 1.  The Company's name is_____________________________________.

  2.  The Company is to be a private company.

  3.  The Company's registerd office is to be situated in England and Wales.

  4.  The Company's objects are to exercise the rights and undertake the obligations of a commonhold association in respect of land at ............ ("the Commonhold Land") pursuant to the provisions of Part I of the Commonhold & Leasehold Reform Act 2001 (as from time to time amended or substituted) and to do all such other things as may be deemed incidental thereto including (without limitation) the acquisition of land to be added to the Commonhold Land, the sale or disposal of all or any of its assets (including all or part of the Commonhold Land) and the distribution of any property of the Company (including the Commonhold Land) in specie among the members.

  5.  The liability of the members is limited.

  6.  The Company's share capital is £       divided into            shares of £1 each.



We, the subscribers to this Memorandum of Association, wish to be formed into a Company pursuant to this Memorandum; and we agree to take the number of shares shown opposite our respective names.



_____________________________________



Names and addresses of subscribers and number of shares taken by each subscriber



_____________________________________



_____________________________________



Dated

Witness to the above signatures:



_____________________________________



 
  
BY THE LORD KINGSLAND
 
     Page 71, line 38, leave out paragraph 2 and insert-- 
 ("Form and content of articles 
       .  Articles produced under this Schedule shall take the following form-- 
 ARTICLES OF ASSOCIATION 
 
    1.  General
        1.1  Save insofar as they are excluded or modified in these Articles, the Regulations contained or incorporated in Table "A" in the Companies (Tables A to F) Regulations 1985 (hereinafter referred to as "Table A") as amended shall apply to the Company.
        1.2    Regulations 27, 54, 64, 65-69 inclusive, 76, 77, 87 and 94-97 inclusive shall not apply to the Company but the Articles hereinafter contained together with the remaining Regulations of Table A subject to the modifications expressed shall constitute the Regulations of the Company.
    2.  Interpretation
        2.1  Subject as follows, words and expressions contained in these Articles shall bear the same meaning as in the Act and in Table A.
        2.2  In these Articles:
      the Estate" means the land and buildings at [. . . . ];
      Leases" means the leases and underclasses of the [. . . . ] flats at [. . . . ] each for a term of . . . . years from . . . . . subsisting on [date of meeting adopting this Article] and references to the terms of such Leases means the terms of the Leases in the form subsisting on that date;
      Flat" means any of the flats comprised within the Estate;
      Lessee" means the lessee for the time being of any of the Flats.
        2.3  The provisions of the Interpretation Act 1978 shall apply in the interpretation of these Articles.
    3.  Share Capital
        3.1  The share capital of the Company is £250 divided into 250 ordinary shares at £1 each.
        3.2  Pursuant to the powers conferred upon them by these Articles of Association, for the purposes of Section 80 of the Act, the Directors are hereby generally and unconditionally authorised to allot the Company's authorised but unissued share capital. Such authority shall expire on the day before the fifth anniversary of the inbody corporate of the Company and the Directors are hereby empowered to allot equity securities pursuant to this authority as if section 89(1) of the Act did not apply.
        3.3  In accordance with section 91(1) of The Companies Act 1985, section 89(1) and section 90(1) to (6) thereof shall be excluded from applying the Company.
        3.4  All unissued shares shall be at the disposal of the Directors who may (subject to the provisions of these Articles) allot the same to such persons, at such times, and on such terms as they think proper, but so that no share shall be issued at a discount.
    4.  Membership
        4.1  No share in the Company shall be allotted to any person who is not at the date of such allotment a Lessee.
        4.2  Where a Lease is held jointly by more than one person, then each of those persons shall be entitled to have his name entered in the Company's Register of Members as the holder of such shares.
    5.  Lien
        The lien conferred by Regulation 8 of Table A shall extend also to fully paid up shares and the Company shall also have a first and paramount lien on all shares, whether fully paid up or not, registered in the name of a sole or joint holder for all moneys payable by him or his estate to the Company.
    6.  Transfer of Shares
        6.1  Subject to Article 6.2 hereof, a Member shall be entitled to transfer or dispose of any interest in or over any of his shares only in accordance with the provisions of this Article and if a Member or other person entitled to a share at any time attempts to deal with or dispose of any share in the Company or any interest therein otherwise than in the circumstances specified in Article 6.2 or to a person not being a person to whom he is entitled to dispose of his shares in accordance with that Article the Company shall not register the transfer.
        6.2  Where a Member being a Lessee disposes of his interest in the Flat in respect of which he is for the time being the Lessee, then on perfection of such disposal he shall transfer all of his shares in the Company at par to the person to whom such interest has been disposed ("the New Lessee").
        6.3  If a Member fails in the circumstances specified in Article 6.2 to dispose of his shares as required by that Article, then the following provisions of this Article shall apply:
      6.3.i  the Member in question shall be deemed to have appointed the Company (by its Board of Directors) as his agent empowered to sell all of the shares of which he is registered as the holder (together with all rights attaching thereto) to the New Lessee at par in accordance with the terms of this Article. Such appointment shall be deemed to have been made on the day on which such disposal was perfected;
      6.3.ii  the price payable by the New Lessee in respect of the shares to be transferred under this Article (being the par value thereof) shall be paid to the Company as Agent for the Member;
      6.3.iii  on payment of the price as aforesaid, the Member shall be obliged to transfer the shares to the New Lessee;
      6.3.iv  if such Member, having become bound to transfer any Shares pursuant to this Article, makes default in transferring the same the Directors may authorise some person to execute the necessary instrument of transfer of such Shares and may deliver it on his behalf and shall thereupon (subject to such instrument being duly stamped) cause the New Lessee to be registered as the holder of such transfer shares.
        6.4  The Directors may in their absolute discretion and without giving any reason therefor refuse to register any transfer of any share in the Company. Regulation 24 of Table A shall be modified accordingly.
    7.  Notice of General Meeting
        A Member who is in arrears with any payments due to the Company at the date at which Notice of a general meeting of the Company is to be given in accordance with these Articles shall not be entitled to receive notice of the meeting or to attend or vote thereat. Regulation 38 of Table A shall be modified accordingly.
    8.  Proceedings at General Meetings
        8.1  Subject to Articles 7 and 8.2 and to any other rights or restrictions attached to any shares, on a show of hands every member of the Company present shall have one vote and on a poll every Member present in person or by proxy shall have one vote.
        8.2  Where more than one person is registered in the Company's Register of Members as the holder of a share, then those persons shall together enjoy the rights of a single Member of the Company and the Company shall be entitled to treat those persons as a single member. The Company shall not be obliged to accept any instruction given or any vote cast in reference to any such share by any person other than that person whose name appears first in the Register of Members.
    9.  Directors
        9.1  Unless and until otherwise determined by the Company in General Meeting the number of Directors shall be not less than two but until so determined there shall be no maximum number of Directors.
        9.2  Unless otherwise resolved by the Company in General Meeting, the Directors of the Company shall be appointed from amongst the Lessees.
        9.3  A Director may hold any office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director and he or his firm may act in a professional capacity to the Company on such terms (as to remuneration or otherwise) as the Directors may determine.
 
 10.  Appointment and Retirement of Directors 
 
        10.1  The Company may at each Annual Geneal Meeting fill the office of each Director retiring by re-electing such Director or by electing another person thereto and may also elect additional Directors.
        10.2  No notice need be given to the Company of intention to propose a person for election as a Director prior to any Annual General Meeting at which the election of such person is to be proposed. A person shall be eligible for election as a Director at any Annual General Meeting provided that he shall be proposed by a Member duly qualified to attend and vote at such Meeting. Before concluding the item of business dealing with the election of Directors at any Annual General Meeting the Chairman shall enquire of the Meeting whether there are any further proposals for election of Directors and in the event of there being none (or after any such further proposals have been dealt with) the Meeting shall proceed to the next item of business or the Meeting shall be closed, as the case may be, and no further proposals for the election of Directors shall be made at that Annual General Meeting.
    11.  Directors' Expenses
        The Directors of the Company shall be entitled to receive such expenses as the Company may by Ordinary Resolution determine and Regulation 83 of Table A shall be modified accordingly.
    12.  Proceedings of Directors
        12.1  A Director who is absent from the United Kingdom may give to the Company an address at which notices may be given to him and he shall be entitled to have notice given to him at that address, but otherwise it shall not be necessary to give notice of a meeting to a Director who is absent from the United Kingdom. Regulation 88 of Table A shall be modified accordingly.
        12.2  A Director may participate in a meeting of the Directors by means of a conference telephone or similar communications equipment or facilities whereby all persons participating in the meeting can hear one another and participation in a meeting in this manner shall be deemed to constitute presence in person at such meeting.
        12.3  A Director who is in any way directly or indirectly interested in a transaction or arrangement or proposed transaction or arrangement with the Company may vote in respect of any such transaction or arrangement or any matter connected therewith and if he does vote his vote shall be counted and he shall be capable of being included in the calculation of a quorum at any meeting at which any such transaction or arrangement is considered and may retain for his absolute use and benefit all profits and advantages directly or indirectly accruing to him thereunder or in consequence thereof.
    13.  Notices
        13.1  A Member who is absent from the United Kingdom may give to the Company an address at which notices may be given to him and he shall be entitled to have notice given to him at that address, but otherwise it shall not be necessary to give notice of a meeting to a Member who is absent from the United Kingdom. Regulation 112 of Table A shall be modified accordingly.
        13.2  Where by these Articles notice is to be given to an address outside the United Kingdom, such notice may be given by courier, telex or facsimile transmission."")
 
     Leave out Schedule 3 
  
Clause 34
 
  
BY THE LORD CHANCELLOR
 
     Page 15, line 6, after ("unit-holder") insert ("(the "defaulter")") 
  
BY THE LORD KINGSLAND
 
     Page 15, line 8, leave out paragraph (a) 
  
BY THE LORD CHANCELLOR
 
     Page 15, line 10, after ("unit-holders") insert ("and that it will not cause any unit-holder (other than the defaulter) significant loss or significant disadvantage,") 
  
BY THE LORD KINGSLAND
 
     Page 15, line 11, leave out ("shall") and insert ("may") 
  
BY THE LORD CHANCELLOR
 
     Page 15, line 12, after ("procedures") insert ("(including referral under a scheme approved under section (Ombudsman))") 
  
BY THE LORD KINGSLAND
 
     Page 15, line 12, leave out ("wherever possible") 
     Page 15, line 13, at end insert--
    ("provided that if the unit-holder in default is a director, that director shall be disqualified from taking part in any deliberation and decision as to the action to be taken or not taken for as long as he is in default")
 
     Page 15, line 13, at end insert--
        ("(  )  In discharging their duties under this section, the directors of a commonhold association shall at all times act in the best interests of the commonhold association as a whole.")
 
     Page 15, line 14, leave out subsection (4) 
  
Clause 35
 
  
BY THE LORD CHANCELLOR
 
     Page 15, line 17, leave out ("depends on") and insert ("refers to") 
  
Clause 36
 
  
BY THE LORD KINGSLAND
 
     Page 16, line 7, leave out paragraph (g) 
     Page 16, line 11, leave out paragraph (i) 
     Page 16, line 12, at end insert--
      ("(j)  enabling a tenant to offset any payments made to the association against any monies owing to the unit-holder as landlord")
 
  
BY THE LORD CHANCELLOR
THE LORD KINGSLAND
 
     Page 16, line 14, leave out ("may") and insert ("shall") 
  
BY THE LORD KINGSLAND
 
     Page 16, line 17, at end insert--
      ("(c)  provision for charging the interest of a unit-holder who is in breach of any such duty to secure payment of any compensation or costs and interest thereon which he is liable to pay in respect of that breach of duty;
      (d)  provision for the payment of costs")
 
  
Clause 37
 
  
BY THE LORD KINGSLAND
 
     Page 16, line 22, after ("to") insert ("prepare an annual statement of projected expenses which the association might reasonably expect to incur and") 
     Page 16, line 28, leave out from ("the") to ("which") in line 29 and insert ("method by which the calculation of the proportion of the estimate of the expenses of the commohold association") 
     Page 16, line 31, leave out ("percentage") and insert ("proportion") 
  
BY THE LORD CHANCELLOR
 
     Page 16, line 34, at end insert ("and the date on which each payment is due.") 
  
BY THE LORD KINGSLAND
 
     Page 16, line 34, at end insert (", and
      (f)  for the recalculation of the proportion of the estimate of the expenses of the commonhold association, such provision to take effect in the event that there is any change in the number of units")
 
     Page 16, line 36, leave out paragraph (a) 
     Page 16, line 38, leave out ("0 per cent. in relation to a unit") and insert ("that a unit's proportion of the estimate of the expenses of the commonhold association is zero") 
 
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Prepared 6 April 2001