Standing Committee D
Tuesday 11 December 2001
[Mr. Eric Illsley in the Chair]
The Parliamentary Secretary, Lord Chancellor's Department (Mr. Michael Wills): I beg to move,
That, during proceedings on the Land Registration Bill [Lords], the Committee do meet on Tuesdays at half-past Ten o'clock and at half-past Four o'clock and on Thursdays at half-past Nine o'clock and at half-past Two o'clock.
I start by welcoming you to the Chair, Mr. Illsley. We had a relatively brisk and good-natured discussion on Second Reading and I am sure that our Committee proceedings will be similarly good-natured and informative. We look forward to conducting them under your sagacious chairmanship.
Question put and agreed to.
The Chairman: Copies of the financial resolution connected to the Bill are available in the Room. I remind Members that adequate notice should be given of amendments. As a general rule, I do not intend to call starred amendments.
Register of title
Question proposed, That the clause stand part of the Bill.
Mr. Adrian Sanders (Torbay): Is this the point at which I move the amendment tabled in my name?
The Chairman: No. No amendments to clause 1 have been selected. This is a clause stand part debate.
Question put and agreed to.
Clause 1 ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
When title may be registered
Mr. William Cash (Stone): I beg to move amendment No. 1, in page 2, line 22, at end insert—
''and if the final period of right to possession expires more than fourteen years after the date of the application under subsection (2)''.
The Chairman: With this it will be convenient to take the following amendments: No. 6, in clause 4, page 3, line 32, at end insert—
''( ) For the purposes of subsection (1)(c), a lease granting a right of possession which is discontinuous creates a term of years absolute of more than fourteen years from the date of the grant if the final right to possession expires more than fourteen years after that date.''.
No. 19, in clause 15, page 9, line 9, at end insert—
''( ) For the purposes of subsection (3)(a), a lease granting a right of possession which is discontinuous creates a leasehold estate in land granted for a term of which more than fourteen years are unexpired if the final right to possession expires in more than fourteen years time.''.
No. 28, in clause 27, page 12, line 13, at end insert—
''if the final period of right to possession expires more than fourteen years after the date of the disposition.''.
No. 63, in clause 80, page 29, line 8, at end add—
''( ) For the purposes of subsection (1)(b)(i), a lease granting a right of possession which is discontinuous creates a term of years absolute of more than fourteen years from the date of the grant if the final right to possession expires more than fourteen years after that date.''
Mr. Cash: First, I welcome you to the chair, Mr. Illsley. As the Parliamentary Secretary has already said, we had a perfectly congenial Second Reading. This is a very technical Bill, and I pay tribute to those in the Law Society and the Chancery Bar who have helped us to formulate our views on the subject.
I also pay tribute to the other House, where most of these matters have been exhaustively discussed and canvassed in Committee and on Report, with great expertise. Because of that, and because this is a Law Commission and Land Registry Bill backed up by enormous expertise and the assistance that I have mentioned, it will be unnecessary for us to prolong the proceedings unduly. That would be to engage, in effect, in repetition of what has already been discussed—with several important exceptions. I shall treat the Committee stage in that light.
The amendments relate to non-continuous leases and situations in which title may be registered. Their object is to achieve consistency and avoid making the register over-saturated. We believe that non-continuous leases should be registrable only if they are to last for at least 14 years. I should add that a discontinuous lease is one that is granted for, say, a fortnight each year. Several timeshare developments have been documented in that way, but the system could conceivably be used in other ways. I discovered the example of the letting of a site to a regularly visiting fair, and in a VAT case it was held that the letting of a lease for one week a year for 80 years constituted a lease for 80 weeks.
The Bill provides that all discontinuous leases be registered, but the regrettable truth is that that could clog up the register to no obvious advantage. On the other hand, to apply the general time qualification, even if it were as low as seven years, would exclude almost all such leases from registration. Our suggestion is that one should consider how distant is the final date—the beginning of the last week or fortnight—on which the tenant would be entitled to take possession. If that date were as distant as the normal period of qualification for registration, the non-continuous lease would be registrable.
There is a further reason for accepting the amendment. Under the Bill as drafted, if the parties to the lease wanted to register a lease for less than 14 years or less than seven years, they could do so by creating a lease with a short break of, for example, one day. That would make it non-continuous and, according to current proposals, registrable. Again, that would result in the register's being unnecessarily and unjustifiably saturated.
It has been common practice to let grazing tenancies for less than a year to avoid the effects of the Agricultural Holdings Act 1984. Theoretically, a tenant is not entitled to occupy the gap between two tenancies, but none the less, animals often remain on the field continuously. Who could say that mid-tenancy breaks inserted to make a lease registrable would not be treated with the same disregard?
Amendment No. 28 deals with the issue of very short leases. Under the Bill, a cottage rented for a week at Easter half term will have to be registered—a situation that I would not have thought was intended.
Mr. Wills: I understand the hon. Gentleman's concerns, but the Bill's general approach is based on the principle that it is desirable to register timeshare leases of whatever length. They impose a significant burden, and unless registered they can be difficult to discover. People inspecting the affected land may not become aware of such leases if they inspect during a non-timeshare week or any other such period. Registration will also benefit owners of timeshare leases by giving them the protection of the state guarantee, and by making it easier and cheaper to deal with their land. The Bill therefore provides that a timeshare lease of any length granted out of unregistered land may be registered, and that one granted out of registered land must be registered.
In the case of timeshare leases granted out of unregistered land, including leases by the Crown out of demesne land, compulsory registration of such leases, or of relevant assignments, applies when there is more than seven years to run. That exception to the general approach is made because the same provisions that apply to the vast majority of unregistered leases ought to apply to such timeshare leases. That approach retains simplicity, which should assist legal practitioners and citizens.
I fully understand the hon. Gentleman's desire not to clog up the registers of titles with many entries for discontinuous leases. I hope, however, that I can reassure the Committee that there is little prospect of that. First, registration will fulfil a fundamental objective of the Bill by making available as much information as possible about a title through inspection of the register. Secondly, timeshare leases are comparatively rare. Thirdly, and most importantly, the length of a discontinuous lease is calculated by totalling the number of periods of occupation to which it entitles the leaseholder. For example, a three-year lease which gives the right to occupy the property for one month in 12 will cover a period of 36 years. Finally, a timeshare lease for seven years or less when the discontinuous periods are added together can be protected by a caution against first registration.
One effect of amendment No. 19 would that where there was such a lease and the discontinuous periods were to end after more than 14 years, the lease could not be so protected. We believe that the balance struck by the Bill as it stands is better, as the same provision applies to all unregistered leases.
I hope that that explanation provides some comfort to the hon. Gentleman and that he will feel able to withdraw the amendment.
Mr. Cash: Having listened to the Minister's arguments, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr. Cash: I beg to move amendment No. 2, in page 2, line 27, after 'is', insert 'only'.
This is a short and self-explanatory amendment. A person who contracts to buy and pays without taking a transfer, whom the owner would hold as a bare trustee, should be entitled to apply to register. A person who contracts and pays for the property should be the person who registers and not merely the bare trustee. I hope that that makes the position clear and I look forward to hearing what the Minister has to say.
Mr. Wills: I am grateful to the hon. Gentleman for making his intentions clear. I must resist his amendment, but I shall take a little time to explain why.
On Report in another place, Baroness Buscombe described the effect of a similar amendment and said that the Law Society felt that subsection (6) was unclear and that the purpose of the amendment was to clarify the situation. The Law Society seems to have been trying to achieve a situation in which, although someone entitled by contract alone could not apply for first registration, someone who is entitled by contract and in some other capacity could. In reply, my noble Friend Baroness Scotland explained at length why the amendment was unacceptable. I presume from its re-emergence that the Law Society is still unsatisfied, so I shall explain why the alleged clarification is still unacceptable.
Subsection (2) provides that a person who is entitled to require an unregistered but registrable estate to be vested in him or her can apply for first registration as proprietor. Subsection (6) states that such a person cannot apply if his or her entitlement is as a person who has contracted to buy under a contract. Let us suppose that a Mr. Smith has contracted to buy a piece of unregistered land—let us call it Swindon fields—from a Mrs. Jones, and that Mr. Smith has paid the full purchase price. Mrs. Jones holds Swindon fields as bare trustee for Mr. Smith. If, as in the normal course of events, Mrs. Jones executes a conveyance to Mr. Smith, that conveyance will trigger first registration. If there is no conveyance, the bare trust continues.
The purpose of the amendment is to allow the buyer, Mr. Smith, to apply for first registration because he is also entitled as the beneficiary under the bare trust that arose when he paid the full purchase price. If the amendment were accepted, Mr. Smith could then apply for registration at his own convenience. That is not acceptable, because the policy of the Bill is to encourage registration and to get as much land as possible on the register. That is why the Bill does not allow Mr. Smith the option, but encourages him to take a conveyance, trigger the first registration and have the land registered. I believe that everyone agrees with the general desirability of registration, and I hope that the hon. Gentleman will withdraw the amendment.