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Lord Selsdon: My Lords, I had not intended to speak. However, I declare an interest as a director of a house building organisation that sells used and new homes. We seem to be having a lot of what are almost Second Reading speeches. The Government have tried extraordinarily hard and consulted very widely on the Bill. In all my time in the House I have never seen so much paper going to and fro, often on what I would describe as useless issues.
The view of "my gang", if I can describe them thus, is that everyone wants to legislate more and more. If you want to sell a house, you provide as much information as you can. In a good market you have the maximum number of footprints and houses sell as though there is no tomorrow; when times are bad, they do not. When times are bad, you produce more information and you make more effort. You find in general that the people who hold things up are the professional classessolicitors and lawyers. They cannot talk to each other.
In general, as the cost of these matters goes up, you do not talk to the professionals. You do not appoint them until 24 hours before you wish to complete so that you cannot pay more than 24 hours worth of fees, you do things direct and you break the circuit. As the Internet comes into the matter the younger brigade who are quick with their fingers gather a most amazing collection of information. They know about house prices and they have schedules of 29 houses of the same type. They have aerial photographs that they can download and blow up. An amazing amount of information is available.
I am probably closer to the noble Lord, Lord Borrie, in my views on this matter than are most noble Lords. I believe in fairness. I agree with the Scottish or the French systems of having a promis de vente; namely,
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that when you have said that you will buy a property, that is the case unless some information is proved wrong.
I do not believe that this is a question for forced legislation. In the old days it would constitute a form of code of practice. I move closer to the views of the noble Lord, Lord Hunt of Wirral, in this regard. If there is so much objection to the measure as a piece of legislation, perhaps some formula can be provided that tells people what information they should in good faith provide, how they source that information and how they check its reliability. In general we have such old housing stock that it is impossible to prove what goes on below the ground. Even in my experience of not selling houses very often, I have had dry rot emerge. That can happen even though you have had the most expensive surveys in the world, you have had heave and hump, you have had solicitors with trainees from some strange part of the world who have been over and disappeared, and everything goes wrong.
As we used to say in my family, Murphy's law operated on the basis that if anything could go wrong it did, but that Macdonald's law made Murphy's law look optimistic. The Government should try to see whether there is some non-legislative way to approach this matter. However, they have done a good job in raising this whole issue. All we are talking about is two people who wish to buy and sell something or deal together having proper information.
Lord Donaldson of Lymington: My Lords, the noble Lord, Lord Borrie, categorised various parts of the House as reasonable or inherently unreasonable but made an exception in one case. However, he said nothing about the Cross Benches. Therefore, I imagine that we are on probation, or that I am.
I make it perfectly clear, lest anyone should have any doubt about itnone of my fellow lawyers will have any doubt about itthat professionally I know nothing whatever about the subject matter of this Bill. I have had a solicitor for a long time, but for reasons that are not to his discreditthey are largely due to my geographical location and hisI have just changed solicitors and asked them to deal with the sale of a flat that I own. I made it quite clear to them they must not assume that I knew anything because on that basis they would be right. However, if they treated me as one of my own clients, they would have a fool for a client.
I am interested in this matter in a remote way as my wife had a policy, with which I agree, that when our family needs changed, we ought to buy a different house unless it was very financially disadvantageous to do so. As a result I believe that the flat I am selling is the eighteenth property that I have owned. Therefore, I can confess to a good deal of experience in this matter. I am interested in this matter on the basis of that experience but I had not intended to contribute to the debate because obviously I cannot make the contribution that the professionals, and others who have gone into the matter in greater depth, can.
However, I changed my mind about contributing to this discussion when I received an e-mail this morning from the Consumers' Association which said that it
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was afraid that Clause 141 might be deleted. The association wanted to enlist my assistance to ensure that did not happen. I rang the staff at the association and explained that I needed to know a great deal more about the arguments for and against their claim. The staff were very helpful, but I believe that they showed an extraordinary lack of judgment in sending me the e-mail. However, that must be a matter for them.
I entirely accept that there is a great deal to be said for sellers providing much of the information which this part of the Bill requires them to give. The Consumers' Association lists that information as the evidence of titlethat is obviousany planning approvals and building regulations consentI agreeany warranties and guarantees for new propertiesI agreea draft contract for the sale of the propertythat is probably necessaryand leasehold charges. My flat is subject to a service charge and that must be revealed at some stage and there is no reason why it should not be revealed in advance. A few days ago I was slightly taken aback to receive a note from my solicitor to say that he had been in contact with the freeholder with regard to obtaining unspecified information that he needed and that the freehold owner was charging £125 and would I please forward a cheque. I did but I wondered what I was getting for my money. However, that was by the way.
The home condition report is a wholly different matter. I asked the Consumers' Association what was proposed in that regard. I asked whether the home condition report would in any way measure up to a full structural survey. I was told that it would not. I asked what it would amount to and I was told that it was still the subject of negotiation between all the parties involved. I asked what insurance would be provided by those who provided this unspecified form of condition report. I was told that it was very important that there should be insurance to which those who relied upon it should have access. I said that I agreed with that but asked what happened if problems arose. I was toldthis may be news to the Minister"Oh well, we shall have to have the Government as an insurer of last resort". The Consumers' Association showed itself to be an optimist.
The question arises of whether anyone would accept the home condition report as being sufficient. In that regard I was depressed and enlightened by the Consumers' Association. It told meI assume that it is rightthat the average purchaser does not consider getting a full structural survey but is content that the building society or other lender has accepted that the property is worth lending money on. That is a wholly different proposition. Of course, the greater the difference between the amount that the lender is lending and the actual purchase price of the property, the greater the foolishness in relying on the measure. There is a real case for mounting an education programme, illustrated with the bad cases that I am sure would be produced, in order that the average purchaser realises the importance of having a full structural survey and is able to make an informed judgment about whether he wants one.
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I shall not relay all the questions that I asked the Consumers' Association or all the answers that I was given. The lady in the campaign departmentI believe that is what it is calledof the Consumers' Association said, "Of course, you have got to have faith. It will be an act of faith". I am not sure about that. It is not the basis on which I have previously voted for legislation, and I do not really think that I shall start now. There is a lot of common sense here, but the matter ought to be approached on the voluntary basis.
Baroness Hamwee: My Lords, I used an earlier opportunity to make a Second Reading speech, so I shall try to confine my remarks to only a few. We recognise that there are consumer interests. I have not heard from the Consumers' Association on the matter for some time. Our approach is one that many noble Lords perhaps implicitly supported with their remarks. We have detailed amendments later on the Marshalled List that reflect our use not of a hatchet, but of a small filleting knife. In particular, we have concerns about the compulsory nature of what the Government propose. We have amendments about voluntarism, the use of a pilot scheme, and the exclusion of the home condition report, about which we share concerns of the type that have just been expressed.
I will not attempt to respond to the whole critique that we have heard in the past hour and 17 minutes, but I want to say in particular how much I agree with the noble Lord, Lord Hunt of Wirral, about the relationship between the state and citizen. Previously on the Bill, I characterised it in a slightly different way, saying that the Government had taken nannying to a great extreme. Whether it is nannying or the inappropriate intervention of the state, I cannot help but observe that the Government have said that they will not alter the caveat emptor provision with which we are all familiar. I have not managed to gather enough expertise in Latin to translate "Caveat emptor the state"at least, not with sufficient confidence to see it repeated in Hansardbut it is a case of "Beware of the state", which is not really what relationships between buyer and seller should be about.
The consumer interests appear on both sides of the deal. During previous debates, there seems to have been a tendency to approach the matter as though there were a single, small consumer against large producer interests. We have tabled amendments about enforcement, which I will use to make that point a little more later.
We are concerned about costs on the consumer. I say to the noble Lord, Lord Hanningfield, that they are nothing like a tax. However, there is certainly a problem about the cost, which is not one invariably incurred in transactions now. Not every purchaser by any means undertakes a survey. As we have heard, lenders seem not to be the remotest bit inclined to accept the home condition report as the basis of their
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own valuation, so there is a cost that, however much we think that it might be important for a purchaser to undertake a survey, does not currently occur.
It is a pity that some of those who deal with consumer interests have alleged that the concerns are because of self-interest on the part of professionals. In a way, it is perhaps a pity that so many professionals have taken part in our debates, although some of us have tried very hard to disclaim any professional expertise in the area.
I hope that the Government will tell usI invite them to do so nowwhy a voluntary scheme that we wholeheartedly support needs legislation. Perhaps now is the point for them to spell that out. It is better to encourage acceptance than to impose it. For that reason, my noble friends and I agree with my honourable friend the Member for Kingston and Surbiton that we are talking about wholly unnecessary regulation. That is why we support a voluntary scheme, but not the wholesale destruction of the ideas that the Government have brought forward.
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