Housing: Commonhold

Lord Faulks Excerpts

Monday 10th February 2014 Lords Chamber

[Baroness Gardner of Parkes]

Oh! I beg leave to ask the Question standing in my name on the Order Paper.

[The Minister of State, Ministry of Justice (Lord Faulks) (Con)]

My Lords, the Government have no plans to review the 100% rule for conversion from leasehold to commonhold.

[Baroness Gardner of Parkes]

My Lords, is the Minister aware that I have asked this Question repeatedly over the years and I have always had the Answer that it is totally impossible? That is on record in Hansard many times. Does the Minister think that, as we now have so many different Acts covering the same issues, even for the skilled property lawyer it has become quite a nightmare, and is impossible for ordinary people? Even today I am wandering too. Does the Minister think that it is time that the Government asked the Law Commission to review this legislation with a view to bringing in a consolidation Act?

[Lord Faulks]

My Lords, my noble friend Lady Gardner has been a doughty champion of commonhold and has indeed recorded her interest and Questions on a number of occasions, in the past decade in particular. Of course, commonhold is successful and well established in other parts of the world, particularly Australia. Unfortunately it has failed to attract much enthusiasm in this country. It was originally the creation of the Law Commission in the 1980s. Whether review of commonhold legislation might be suitable for the commission’s further consideration is a question for the Government ultimately to decide. They have to decide priorities in accordance with the protocol but will bear in mind what the noble Baroness has said.

[Lord Clement-Jones (LD)]

My Lords, as my noble friend the Minister has pointed out, my noble friend Lady Gardner has on many occasions very effectively brought to the attention of the House the defects in domestic leasehold law. He gave a rather dusty reply as far as the Law Commission was concerned but it has been engaged in consultation about its 12th programme. The decision is in the hands of the Lord Chancellor. Is it not high time that the whole question of commonhold enfranchisement and leasehold law was considered by the Law Commission?

[Lord Faulks]

My Lords, the 100% rule, which is the subject of the Question from the noble Baroness, was in fact discussed in some considerable detail during the passage of this Bill through Parliament—the original Bill having been introduced by the party opposite. For reasons that we suggest are substantial, it was decided not to make the 100% rule a part of the law. Unfortunately, commonhold has not proved to be popular and there has been a very limited take-up. There is no obvious reason why this should be, particularly with new developments, although I accept it is much more complicated when converting leasehold to commonhold.

[Lord Best (CB)]

My Lords, I declare my interest as chair of the council of the Property Ombudsman, which receives complaints from leaseholders. I fear that no one in your Lordships’ House will recall my maiden speech, during the passage of the Bill to which the Minister has referred. In that, I expressed considerable hope that commonhold would solve a lot of the problems that leaseholders face. That has proved utterly unfounded and this piece of legislation must be one of the least successful on the statute book. However, it works in other countries and this approach to leasehold in the future would bear scrutiny from perhaps—if the Minister’s own department or the Law Commission will not take up the cudgels—a group of parliamentarians. Does the Minister support the idea of a group of parliamentarians having their own inquiry to see whether we can break out of the logjam that seems to leave leaseholders in a very adverse position?

[Lord Faulks]

The noble Lord is right about the degree of success. The House might like to know that only 16 commonholds have been registered in England and Wales, and the legislation came into force in 2004. None of them is particularly large. The largest, which has 30 units, is apparently a caravan site and only one with four units seems to be a conversion from leasehold.

During the passage of the Bill to which the noble Lord referred a number of increased rights were given to leaseholders, in particular of flats, to allow them to take over management of the building; to make it easier for leaseholders of flats to buy, collectively, the freehold of their building; and to allow unreasonable service charges to be reviewed by leasehold valuation tribunals. Part of the reason for the lack of take-up may be because other advantages accrued to leaseholders as a result of that legislation.

I am afraid that I am not in a position to give any of the assurances that the noble Lord required from me, but of course this is a matter that goes across different government departments and all his observations will be taken back to the Secretary of State.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, this group of leaseholders is very lucky that it has the noble Baroness, Lady Gardner of Parkes, speaking on its behalf. But does the Minister accept that there is absolutely nothing in the Consumer Rights Bill currently going through Parliament to help this group or any other group of consumers in any meaningful way on a group issue such as this? Will he agree to try to work with BIS to strengthen that Bill to help these and other issues where a group of consumers is not getting the requirements that it wants?

[Lord Faulks]

The noble Baroness is no doubt right, although I cannot confirm that there is nothing in that Bill that adds to the rights of potential commonholders. The position is that, although it has been available, it simply has not been taken up by professionals who might be considered to be aware of it—solicitors or surveyors. It has not been the subject of articles in journals. There simply does not seem to be genuine enthusiasm for it. That is regrettable, but it is a fact and the Government do not believe that people should be forced to go into these arrangements if they do not want to.

[Lord Campbell-Savours (Lab)]

Having listened to the question of the noble Lord, Lord Best, will the Minister join me in suggesting to him that he applies to the Liaison Committee for an ad hoc committee to consider the matter?

[Lord Faulks]

The noble Lord is very experienced in parliamentary matters. No doubt that is a matter for the noble Lord, Lord Best, and he will have listened to what the noble Lord, Lord Campbell-Savours, suggested.