Leasehold Reform (Amendment) Bill

Debate between Brandon Lewis and Peter Bottomley

Friday 24th January 2014 Commons Chamber

[Sir Peter Bottomley]

The Minister rightly refers to the CentreForum report, which I think is one of the best reports produced in the past few years. Although the Minister uses its estimate, I think it would now accept that the census data mean that there are twice as many people involved. It may be possible for us to come to an agreement on what the numbers are—though not necessarily today—but we should try to use a figure that is more likely to be right.

[Brandon Lewis]

My hon. Friend makes a fair point. The reality is that, with every day that passes—certainly with every month that passes—the number of people accessing the market is likely to grow. That highlights the importance of the Bill. It appears, on the face of it, to be short and simple, but it is actually an example of the way in which Parliament sometimes has the ability to make a beneficial difference to people’s lives.

Leaseholds can be complex and problematic—hence the Bill. That is primarily because this is a sector in which a wide range of different interests—financial and otherwise—exist in the same property, which inevitably creates scope for conflict. Ultimately, this relates to people’s homes, an issue towards which we naturally have strong feelings of protection. I assure the House that I am aware of the range of issues that can arise, and the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Keighley (Kris Hopkins), who has responsibility for housing, will be listening carefully to any concerns.

I thank members of the Committee who considered the Bill in December. In particular, I thank the hon. Member for Angus (Mr Weir) for chairing the Committee and presiding over a short but good-natured and constructive debate. Given the speed with which the Bill has progressed, it is important, as my hon. Friend the Member for Bury North has said, to put on record the intent, purpose and detail behind it so that, as my hon. Friend the Member for Worthing West has said, we do our bit to ensure that in future there are no further issues of interpretation with which a court might struggle.

It is a particular pleasure at this Friday morning sitting to welcome the cross-party support provided by the shadow Minister, the hon. Member for Corby (Andy Sawford), for which I thank him. I am pleased that, on the day of the Committee sitting, the hon. Member for City of Durham (Roberta Blackman-Woods)—who, as I understand it, stepped in at short notice—also gave cross-party support. I thank her for helping the Bill progress.

I endorse the tribute given by my hon. Friend the Member for Bury North to the late right hon. Member for Wythenshawe and Sale East, who was a member of the Bill Committee, which sat shortly before the Christmas recess. He is sorely missed by the House.

I am pleased to say that the Government fully support the Bill and will continue to do so as it goes to the other place, where I hope it will get a fair wind. As my hon. Friend has said, responsibility for it will pass into the hands of my noble Friend Baroness Williams of Trafford. I am confident that she will win wide support and sympathy for the Bill and steer it safely through the other place.

My hon. Friends the Members for Bury North and for Kettering are also to be congratulated on ensuring that the Bill can effectively achieve its worthwhile aim and that its extent is appropriate, thanks to some brief and well-targeted amendments that they, along with my hon. Friend the Minister for Housing, tabled in Committee.

By amending section 99(5) of the Leasehold Reform, Housing and Urban Development Act 1993, the Bill removes current restrictions on who can sign the legal notices required when leaseholders exercise certain statutory rights. The 1993 Act gave leaseholders of flats a range of very important rights. It is a valuable and effective piece of legislation, but it also includes a particular restriction, as we have heard, on signatories of notices. Removing that restriction is the focus of this Bill.

At present, the leaseholder of a flat who wants to extend their lease or take part in acquiring the freehold of their block must personally sign the legal notices required. No one else is allowed—even acting under a power of attorney—to sign on behalf of a leaseholder who is physically unable to do so. Case law confirms that the legislation that this Bill seeks to amend can be interpreted only as to require personal signature by the leaseholder, and that it does not permit signature on behalf of a leaseholder by anyone else, whether they be an ordinary agent or attorney. That includes when a leaseholder has become the subject of mental incapacity and the Court of Protection has issued a direction.

The High Court case of St Ermin’s Property Company Ltd v. Tingay in 2002 concluded that the signature of someone holding a power of attorney would not comply with the existing requirements of the 1993 Act. Put briefly, that particular appeal case concerned the validity of a notice given to the landlord by the relatives of an elderly leaseholder who had to move to accommodation where she could be better attended to. The relatives were acting under an enduring power of attorney that had been executed, giving them general authority to act on the elderly leaseholder’s behalf. The intention was to extend the lease of the flat using the statutory rights to ensure that the elderly leaseholder’s interests were protected. However, the High Court concluded that the legislation requires personal signature by the leaseholder and does not permit a signature on the leaseholder’s behalf by anyone else, whether they be an ordinary agent or an attorney.

That case is so important to the genesis of the Bill that I want to set out briefly a particular aspect of the judge’s summing up. He said:

“I find it difficult to understand quite why personal signature should be required in relation to a Section 42 notice by an individual tenant. However, the words of the Section are very clear.”

That backs up the point made by my hon. Friends the Members for Bury North and for Worthing West. The judge also said:

“One might think it curious that the notice has to be given by the tenant, personally, in a situation in which the tenant has already decided that dealings in connection with the claim are to be with some other person, whether an attorney, a solicitor, valuer or whoever it may be, but the distinction is clear and it is, of course, even clearer in the context of section 99(5) itself.”

The judge could not have set out the nature of the problem more strongly. He could find in the law—as it still stands—no scope for ambiguity and no opportunity to take a flexible approach. Hon. Members will be clear about the very serious hurdle that the current legislation presents to certain leaseholders. It is a problem that this House today has an opportunity to help remove.

As the judge explained, we unfortunately do not know Parliament’s intention in framing section 99 as it did, because there was little or no debate about the issues. That highlights the Bill’s importance and I thank my hon. Friend the Member for Bury North for taking his time to go through exactly why it matters. The Government believe it is important to put clearly on the record why this Bill matters and the beneficial impact it could have. Should the judiciary come to look at the provision in future, I hope they will be able to see a clear outline of Parliament’s intent in framing it. As my hon. Friend the Member for Worthing West has said, it will allow the courts to consider the general intent of Parliament with regard to personal issues.

[Sir Peter Bottomley]

May I emphasise the point—although I do not think that judges need it to be over-emphasised—that most people give power of attorney or ask somebody else to sign for them when they are incapable of signing themselves? Broadly speaking, they tend to be the most vulnerable, such as the old, the infirm and people who have a condition that makes it impossible for them to write, even though they may have all their senses. For example, I have a constituent who has lost both his hands. How would he sign, except perhaps with a mouth brush? One way or another, the judiciary have to accept, or Parliament should enact, that unless a court believes there is a specific reason why signatures should be made personally, a signature should be allowed to be made on someone’s behalf if they are incapable or unwilling to do it themselves but wish the act to take place.

[Brandon Lewis]

My hon. Friend makes a good point. To reinforce his comments and because it is important to make clear the Bill’s intent in relation to giving people the ability to act sensibly and reasonably through a power of attorney and agents, I want to quote the judge again. Of the 1993 Act, he said:

“It seems to me that the words are clear and that whether there be good reasons, bad reasons or no reasons, the provision is clear. It is clearly deliberate, and the only way in which one could avoid giving the Section its literal effect is by finding that it produces some anomaly so serious that it cannot have been intended.”

He went on that counsel for the landlord

“submits that the reading, which does not permit a signature by an agent, does produce situations that cannot have been intended. The tenant in the present case is not, in fact, incapable, but what if she were?”

My hon. Friend outlined the case of someone who is vulnerable or incapable. The judge continued:

“Or what if the tenant were mentally capable but paralysed so as to be unable, physically, to impose anything by way of a signature on a document?”

All those issues need to be dealt with. The judge also said that

“whatever anomalies this provision may produce, or however much of a trap it may be for tenants and their advisers, I agree with His Honour Judge Cowell that the distinction drawn in the construction…of sub-section (5), between the method of signature of notices under section 13 or section 42 on the one hand, and other notices on the other hand, is so clear and so plainly deliberate that I cannot give section 99(5)(a) the meaning that it would have in isolation, and I must interpret it as”

—this is the important part of the quotation—

“requiring personal signature by the tenant, and not permitting signature on her behalf by anyone else, whether an ordinary agent or an attorney.”

The Bill will rectify that problem.