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Lord Bassam of Brighton: The amendment tabled by the noble Lord, Lord Goodhart, would make a number of changes to the appointment of a manager regime in Part II of the Landlord and Tenant Act 1987. We fully support his intentions, which are in line with our proposals set out in a consultation paper of August 2000.
I hope that the noble Lord has received and carefully read a letter from the noble and learned Lord, Lord Falconer, of 17th July about this amendment. If so, he will know that we believe that its intended effects are already achieved by Clauses 154 and 155 of the Bill.
As we understand it, subsection (2) of the new clause proposed by the noble Lord would relax the exemption from Part II of the 1987 Act for properties that are held by a "resident landlord". At present a block of flats and, therefore, its manager, enjoys that exemption if it is a converted property and the landlord both occupies one of the flats as his only or principal residence and has done so for at least the past 12 months. The amendment would qualify that, so that the exemption would not apply if more than half of the flats in the block were held on long leases. Clause 155 is intended to have the same effect, and we believe that it does.
We understand subsection (3) of the amendment to be aimed at ensuring that Part II of the 1987 Act applies against any manager, and not just the landlord. It is, of course, already possible to use the right to seek appointment of a manager against any party. However, the way that the right is currently constructed means that some of the grounds for appointing a new manager can be used only against a landlord. That makes it more difficult to use the right where, say, the existing manager is a third party appointed under the lease. The amendment seeks to put that right. Clause 154 is intended to do the same, and again we believe that it does achieve that objective.
I trust that having heard that explanation the noble Lord will see fit to withdraw his amendment.
Lord Goodhart: In the circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 10 [Service charges: minor and consequential amendments]:
Lord Goodhart moved Amendment No. 171A:
- Page 114, line 13, leave out paragraph 3.
The noble Lord said: This is a probing amendment. Paragraph 3 of Schedule 10 substitutes a new section of the 1985 Act which states:
- "The assignment of a tenancy does not affect any duty imposed by or by virtue of any of sections 21 to 23A; but a person is not required to comply with more than a reasonable number of requirements imposed by any one person".
It is not clear what a reasonable number of requirements from one person would be or why the inclusion of this paragraph is necessary. Can the Minister make clear the purpose of this paragraph? I beg to move.
7.30 p.m.
Lord Bassam of Brighton: We thought this might be a probing amendment. As we understand it, the amendment, if it were to pass into effect, would retain the existing Section 24 of the Landlord and Tenant Act 1985 rather than replace it with the new Section 24 provided for in the Bill.
Section 24 of the 1985 Act makes it clear that the assignment of a tenancy does not affect the validity of a request made under Sections 21, 22 or 23 of that Act for a summary or for supporting documentation held by a landlord or superior landlord. It needs updating in the light of the changes that the Bill would make to Sections 21 to 23 of the 1985 Act and, in particular, the creation of a new section--Section 23A--to cater for cases where there was a change of landlord.
The new Section 24 would also make slightly different provision where a person received repeated requests for information. The existing rules state that a request to inspect documentation need not be honoured more than once if it relates to the same dwelling and to the same period. The new Section 24 would provide that managers need not comply with more than a reasonable number of requests from the same person.
This reflects the fact that the new rules would allow leaseholders to exercise their right near the beginning of an accounting period with regard to a particular document that they knew their landlord possessed. We would not want them to be prevented from exercising the same right again later in the accounting year with regard to a different document entirely. I am sure that Members of the Committee will agree that a right to inspect documentation only once a year is not a terribly effective safeguard. We wish to ensure that there are effective safeguards. A great deal can happen during the course of a year. We think it proper that the right to inspect should be protected in those circumstances.
That explains our thinking behind this particular operation. I hope that the noble Lord, Lord Goodhart, feels able to withdraw his amendment.
Baroness Hamwee: Before my noble friend responds, I believe that this provision deals with a number of requests for the same requirement made repeatedly rather than different requirements. I am confused by the term "imposed" because that suggests a variety of requirements. It would be helpful if this could be the subject of discussion at the meeting which the noble Lord, Lord McIntosh, has agreed to have following this stage of the Bill. It is less precise language than one normally encounters in such a precise area as landlord and tenant law.
Lord Bassam of Brighton: It would be sensible to ensure that we have precision. We do not want to prevent people from having rights of access to information, but we appreciate the point that some persistent applications can become vexatious. We will discuss that further.
Lord Goodhart: The suggestion of my noble friend Lady Hamwee is a sensible one. While we have no objection to the principle behind this, we need to look at this rather unattractive piece of drafting and to try and clarify it. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 158 [Requirement to notify long leaseholders that rent is due]
[Amendment No. 172 not moved.]
Lord Goodhart: moved Amendment No. 172A:
- Page 80, line 2, leave out "must be in a prescribed form" and insert "must contain such information as may be prescribed"
The noble Lord said: The amendment is intended to ensure that prescribed information is contained in the notice but the notice does not fail on a technicality. We believe it is desirable to avoid the risk of any notice failing on a technicality, and this would make it considerably less likely. I beg to move.
Lord Bassam of Brighton: I can deal with this amendment in the briefest of terms. The amendment moved by the noble Lord, Lord Goodhart, is entirely unnecessary. Clause 158(2) already provides that the notice shall contain any such further information as may be prescribed. We argue that the provision is already there. I hope that the noble Lord will be satisfied by that, and in the meantime withdraw his amendment.
Lord Goodhart: I beg leave to withdraw the amendment. If the Law Society is not content with what the Minister has said it can mention it in the discussions to be arranged.
Amendment, by leave, withdrawn.
Clause 159 [No forfeiture notice before determination of breach]:
[Amendment No. 173 not moved.]
Schedule 12 [Leasehold valuation tribunals: procedure]:
Lord Kingsland moved Amendment No. 174:
- Page 123, line 31, after "tribunal" insert ", and to any such other party as the leasehold valuation tribunal may direct,"
The noble Lord said: In moving Amendment No. 174 I shall also speak to the numerous amendments in that group. All these amendments are concerned with the operation of the LVTs. I shall look first at Amendments Nos. 174 to 177. At present LVTs have no power to direct disclosure of documents or information relevant to an application. This is anomalous in the context of civil litigation and may lead to parties withholding information or documents harmful to their case without sanction. In short, LVTs need to be given teeth. Their new powers should be exercisable to the benefit and on the application of parties to proceedings before them.
As regards Amendments Nos. 178 to 180, the Explanatory Notes to this part of the Bill state that it provides a power to make regulations enabling LVTs to exclude the whole or parts of cases of parties who
fail to comply with directions. No such power appears in the Bill as it stands. At present LVTs cannot make directions as to the preparation for, and conduct of, an application and have no sanction except for adjourning, with no power to award costs, if a party does not heed its exhortations to produce reports and documents in good time before a hearing.As a result, all too often a party arrives on the day of a hearing with an expert's report that has not been disclosed before, leaving the other party with a dilemma; whether to go ahead without having a proper opportunity to verify the contents of the report, or to prepare a cross-examination on it, or whether to ask for an adjournment thereby losing the costs of the day. That practice has gained some notoriety among users of the LVT. It must cease; and it can do so only if the LVT is given the power envisaged by this group of amendments.
Paragraph 8 of Schedule 12, which is addressed by Amendment No. 182, provides for procedure regulations to include provision for the determination of applications or transferred proceedings without an oral hearing and by a single panel member. It is not clear what kind of applications are envisaged to be appropriate for determination in this way. It would be necessary, in order to satisfy the Human Rights Convention right to a fair and public trial, to require that such regulations should include provision entitling an aggrieved party to a hearing before a full tribunal.
In the circumstances, it is to be doubted whether the regulations, foreshadowed by paragraph 8, would have any real use, unless all the parties agreed to dispensing with a hearing and to a determination by a single panel member. That is the purpose of the proposed amendment.
I turn to Amendments Nos. 184 to 187. Paragraph 10 of Schedule 12 would, for the first time, provide the LVT with powers to award costs but only where an application was dismissed on the grounds that it was frivolous, vexatious or an abuse of process; or where the party in question had,
- "acted frivolously, vexatiously, abusively, disruptively or otherwise unreasonably in connection with the proceedings",
It would, perhaps, be wrong, bearing in mind the perception of the LVT as an informal, cheap tribunal, to empower LVTs to award costs following the event in all cases. However, there must be a greater power to impose sanctions where a party has failed to comply with directions, thereby occasioning an adjournment; or where although a party's conduct of the proceedings themselves (in procedural terms) might not have been unreasonable, he acted unreasonably in bringing the proceedings in the first place; or in pursuing them after a reasonable offer made by the other party; or where a party has been forced to take proceedings because of the unreasonable conduct or stance of the other party, thereby potentially throwing the costs of recovery on his fellow tenants through, for example, service charge provisions.
Only when the LVT has the powers envisaged by the amendment will landlords and tenants perhaps be deterred from playing the system as both do at present. Furthermore, a costs limit of £500 is both arbitrary and too low to operate as a sanction in the case of wealthy parties. The LVT should be empowered to award costs at such level as it thinks fit up to the full amount incurred by the innocent party, subject only to an obligation to have regard to the paying party's needs.
Finally, under Clause 86, an RTM would be liable for a landlord's costs before the LVT if the tribunal dismissed its application for a determination that it was entitled to the right to manage premises. As things stand, such a power would be anomalous in the context of the LVT's limited powers as to costs in general and paragraph 10(4) of Schedule 12 would appear to be inconsistent with Clause 86. This group of amendments would reduce the anomaly and remove the inconsistency.
I turn to Amendment No. 189. Members of the Committee will recall that Clause 71(2) of the Bill gives the appropriate national authority the power to make regulations about the content and form of the memorandum and articles of RTM companies. As at present drafted, the regulations are subject to the negative resolution procedure.
The Delegated Powers and Deregulation Committee has already given its view that these kinds of regulations which touch on central points should be the subject of the affirmative approval procedure. We agree. As with the memorandum and articles of commonhold associations, the memorandum and articles of RTM companies are of critical importance to the running of these companies. It is right that Parliament should be entitled to debate and vote on the memorandum and articles.
I turn to Amendment No. 188. At present, an appeal to the Lands Tribunal is by way of a complete rehearing. The parties are forced to call all their evidence again and little or no regard is paid either to the evidence given by the leasehold valuation tribunal or to the reasons given for that tribunal's decision. As a result, an appeal gives a dissatisfied party a second bite of the cherry, and can be used by a wealthier party as an instrument of oppression, notwithstanding the proposed requirement for leave to appeal.
A mandatory appeal by way of rehearing is anomalous in the area of civil litigation, particularly in the light of the Civil Procedure Rules, introduced by the noble and learned Lord, Lord Woolf. Moreover, it suggests a lack of faith in the LVT's decision-making, which hardly accords with the extension of its powers, both in recent years and as proposed elsewhere in the Bill. The proposed amendment would bring appeals to the Lands Tribunal into line with other civil appeals. I beg to move.
7.45 p.m.
Baroness Gardner of Parkes: My Amendment No. 188A appears in this group. In some ways it is
relevant but in others it is totally contradictory to half of what my noble friend Lord Kingsland said. It is a strange grouping.I agree with my noble friend's Amendment No. 188. It is right that there should not be a routine right to rehear a case at the Lands Tribunal. A case should be reheard only on the basis of new evidence. I have tabled my amendment because when I took an active part in the passing of the 1993 Act it clearly emerged that it would be expensive for people to use the LVT. When I asked what the costs would be I was told that the cost would cover everything, even the milk for the office cat. Everyone in the your Lordships' House was shocked because we believed that the procedure was to be inexpensive and effective. There was such an uproar that finally a maximum figure of £500 was set. That has worked well.
However, the system has been abused because if it moves on to the next stage--that is, an appeals to the Lands Tribunal--the costs can be unlimited. When we discussed the LVT we suggested that a rich person who wanted to win his case would be able to have expert people and the daily charges would mount up the longer the case continued. Such a problem was dealt with by introducing the £500 maximum.
I have previously asked questions in the House about this matter because we have read in the press of repeated cases of abuse. People are taking cases on appeal to the Lands Tribunal and they are continuing for days and days. The costs can be enormous and the mere threat of a case being taken to the Lands Tribunal can disadvantage the person who cannot meet those financial costs. I believe that the abuse should be stopped. My argument comes from a different direction, although I support Amendment No. 188, tabled by my noble friend Lord Kingsland.
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