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Baroness Buscombe: I thank the Minister for her full response to the amendment. We entirely understand the Government's objective of having a register that is as complete and accurate as possible, but surely we must balance that primary concern against the regulatory burden. It is one thing to say that the system will be quick and easy, but it will also be an added cost and burden. Five-year leases are very common, particularly among small businesses and residential and farming leases. There is no pressing practical need to register those leases, either to ensure that a purchaser of the superior interest finds out about them or to make it easier to buy and sell them.

We understand the objectives of the Bill, but we are concerned to protect the interests of those who will be burdened with more costs and regulation in meeting those objectives. We shall think carefully about what the Minister has said and decide whether to return to the point on Report. We also believe that such a fundamental issue should be subject to primary legislation.

Baroness Scotland of Asthal: I can respond to the noble Baroness on cost. We hope that the whole Bill

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will reduce costs. The noble Baroness will know that, at the moment, the preparation work for lawyers and others for unregistered land in particular can be very complicated and time-consuming. We know, for example, that, because of their complexity, deeds can take up an incredibly large amount of time. We hope that, by introducing the registration of those processes, the procedure will become simpler, quicker, easier and cheaper so that the burden on business and on those who wish to participate in such a transaction should, over time, be reduced. That is one of the main benefits that we consider the procedure will guarantee to those who operate within it.

Baroness Buscombe: I thank the Minister for returning to that point. I believe that, for the time being, to some extent we must beg to differ, not least because the representations made to us from business and from the farming industry in particular indicate that they also beg to differ. However, I shall consult them again and, on that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 5 agreed to.

Clause 6 [Duty to apply for registration of title]:

Viscount Bridgeman moved Amendment No. 7:

    Page 4, line 38, at end insert--

"( ) An application under subsection (5) may be made either before or after the expiration of the period of 2 months mentioned in subsection (4), or any later date which the registrar has specified under subsection (5)."

The noble Viscount said: The purpose of this amendment is to clarify the position so as to ensure that an application can be made after the period has expired. I beg to move.

Baroness Scotland of Asthal: Clause 6(5) allows the registrar to extend the period during which the application for first registration may be made. There is good reason for doing so. Unless such an order is made, the period for registration will expire after two months.

The noble Viscount's amendment would make it clear that such an order can be made both before and after the expiry of the two-month period and before or after the expiry of any extension of the period for registration granted by a registrar's order. It will, indeed, be desirable to give the registrar adequate flexibility to make the order when the parties need it, regardless of whether or not the original period for registration has passed.

I can reassure the noble Viscount that the clause as drafted does not contain a time limitation on the registrar's ability to make an order. It is implicit in the clause that the registrar can make the order at any time. That interpretation is endorsed by the next clause. Clause 7(3) clearly envisages that the order could be made after the two-month period or any extended period has expired. In those circumstances, the adverse effect of failing to register within the specified period is removed retrospectively by Clause 7(3) when an order is made.

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Therefore, it is also implicit that the application to the registrar can be made at any time. In practice, the extension order is usually sought after the period for registration has expired and when the matter comes to the attention of the applicant's advisers. Quite often, it is sought in conjunction with the application for first registration. There is no intention to change that practice. Therefore, I respectfully suggest that the amendment is not necessary.

Viscount Bridgeman: I am most grateful to the Minister for those full assurances, in the light of which I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Clause 7 agreed to.

Clause 8 [Liability for making good void transfers etc]:

Viscount Bridgeman moved Amendment No. 8:

    Page 5, line 24, at end insert--

"( ) For the purposes of section 12A of the Stamp Act 1891 (c. 39), an instrument to which section 7(1) above applies shall be treated as having been accidentally spoiled."

The noble Viscount said: This is a probing amendment. It seeks to ensure that if an instrument is avoided by a failure to apply for registration, the stamp duty paid on it can be used on any replacement instrument executed to give effect to the original transaction. That may not be strictly necessary for instruments which replace outright transfers under Clause 4(1)(a) and (b) because, under Clause 7(2)(a), the transferor becomes bare trustee for the transferee, and there is no stamp duty on the transfer of a legal estate by a nominee to his principal. However, if a lease becomes void for non-registration under Clause 7(2)(b), it has effect as a contract to grant the intended lease. Therefore, the replacement lease may incur stamp duty. I beg to move.

4.15 p.m.

Baroness Scotland of Asthal: I hope that I shall be able to reassure the noble Viscount. Clause 6 imposes a duty to apply for first registration of title within a specified period. Clause 7(1) states the effect of failure to apply for registration in accordance with that duty. The consequence is severe. The instrument which disposes of an interest in the property is made void so that the legal title reverts to the previous owner.

Therefore, the registrar can make an order to extend the period for registration, which he will almost always do. That has the effect of removing the adverse consequence as if it had never happened. In the unlikely event that the registrar refuses to make an order, a further instrument must be prepared at the expense of the person who failed to apply. That would then operate to transfer the legal title back to where it should have been.

The proposed amendment serves the most sensible of purposes. It ensures that, in that unlikely situation, stamp duty would not be paid twice. It seeks to achieve

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that by treating the instrument as spoilt under Section 12A of the Stamp Act 1891. I hope that Members of the Committee will not mind my pointing out that the spoiling of instruments is covered by Section 12A of the Stamp Duties Management Act of the same year. That means that, so long as the Commissioners of Inland Revenue are satisfied that the instrument is to be treated as though it had been spoiled, no duty will be charged on the replacement instrument.

The noble Viscount has raised a very helpful issue. I hope that he will not mind if I do not simply accept the amendment at this point. We shall hold further discussions. Talks that we have already held with the Inland Revenue have revealed that other ways may exist in which this desirable state of affairs could be achieved under the stamping Acts as they currently stand, some of which may turn out to be more convenient.

Therefore, I undertake to ensure that the matter is fully investigated and, on Report, I shall report back to the House on the results of those deliberations. I am grateful to Members of the Committee for raising this point. However, in the light of that undertaking, I hope that at this stage the noble Viscount and the noble Baroness, Lady Buscombe, will feel able to withdraw the amendment.

Viscount Bridgeman: I am most grateful for those reassurances. I look forward to further progress on Report, in the light of which I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8 agreed to.

Clauses 9 and 10 agreed to.

Clause 11 [Freehold estates]:

Baroness Buscombe moved Amendment No. 9:

    Page 7, line 9, leave out paragraph (c) and insert--

"(c) interests of any person in adverse possession, within the meaning of the Limitation Act 1980 (c. 58), of the land or any part of it."

The noble Baroness said: In moving Amendment No. 9, I shall speak also to Amendments Nos. 10, 17, 59 and 105. Briefly, the reasons for Clauses 11(4)(c) and 12(4)(d) are given in paragraphs 3.46 and 3.47 of the Land Registration for the Twenty-First Century report. In effect, a first registered proprietor should be protected where he buys a paper title which a squatter has time-barred if the squatter is out of possession and the purchaser/proprietor has no notice of the defect in title. A squatter who was in possession for 12 years or more but who has vacated the property deserves no particular sympathy. However, if a squatter has been in residence for 12 years or more and is still in possession, anyone who buys the paper title is on notice of the position. We believe that the amendments are designed to give accurate effect to the intention. I beg to move.

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