Commonhold and Leasehold Reform Act 2002

Lord Faulks Excerpts

Wednesday 7th May 2014 Lords Chamber

[Baroness Gardner of Parkes (Con)]

My Lords, I beg leave to ask the Question standing in my name and declare that my interest is on the register.

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

My Lords, the Commonhold and Leasehold Reform Act 2002 introduced commonhold ownership and made numerous reforms to long leasehold law. Although the Government monitor the take-up of commonhold and continue to respond to concerns about the working of leasehold legislation, they have no current plans to carry out a formal review of the Act.

[Baroness Gardner of Parkes]

I thank the noble Lord, but it is 12 years since this law was passed and 11 sections are still listed as not in force, which seems rather a lot. Tenants and leaseholders, on the whole, are most interested in Sections 152 and 154, which provide for transparency and the protection of their deposits. However, we have had answers to Oral Questions in both Houses saying that the DCLG has a “watching brief” on this matter. Will he tell me how you move from a watching brief to a review, and which department would do that?

[Lord Faulks]

My noble friend is right that Sections 152 and, I think, 156 of the Commonhold and Leasehold Reform Act have not been brought into force. These deal with service charge information and the right to hold service charges in designated accounts. The Government consider actively whatever form of words is used, regardless of whether it is necessary to intervene by legislation. However, they are concerned with not overburdening either freeholders or leaseholders with unnecessarily elaborate provisions. They are also satisfied that, for the most part, the rights of leaseholders are protected by a number of provisions, some of which were brought in by the 2002 Act, particularly in relation to service charges, enfranchisement and protecting leaseholders from landlords in certain circumstances.

[Lord Elystan-Morgan (CB)]

My Lords, does the Minister agree that—despite the attractiveness of the provisions that have been brought into force in the 2002 Act for many joint users of amenity premises, and indeed the popularity of such a system in many other common-law jurisdictions—it seems to have been almost totally ignored, both by practitioners and the general public? Is it possible that the rather ponderous procedures of registration at the Land Registry may be responsible? Have the Government held consultations with the Law Society and other appropriate bodies with a view to simplifying these systems and possibly making them cheaper?

[Lord Faulks]

I hope I understand the noble Lord to be referring to commonhold as one of the options that was made available by the 2002 Act. It is true that it was thought by all those involved with the legislation that there would be much greater take-up than there has in fact been in commonhold, which is popular in other parts of the world. However, the Government do not feel that it is appropriate to force people to go into commonhold arrangements. We welcome any attempt to bring it to people’s attention as an option. It is interesting that it is not taken up by any of those who write about the subject or by practitioners who should be advising their clients on whether it is appropriate. The Government stand ready to encourage it, in so far as it is appropriate for the Government to intervene in private arrangements.

[Baroness Hayter of Kentish Town (Lab)]

The noble Lord the Minister must surely know that there are delays occurring between an application for a hearing relating to a right to manage and the First-tier Tribunal hearing the case. There is then another delay in getting an outcome. However, when I asked a Written Question on that, the noble Lord, Lord Newby, replied that such information on timings was not available. Surely the Government need to know things like that, to know how this Act is working. Will the Minister put the research in hand so that we can have such information?

[Lord Faulks]

As the noble Baroness will know, the question goes across departments—that for housing and the Ministry of Justice. I do not have the details available but I will certainly ask for inquiries to be made along the lines of the question.

[Lord Swinfen (Con)]

My Lords, do the Government have any plans to control residential rents?

[Lord Faulks]

My Lords, the Government have no plans whatever to control rents. It appears that the party opposite is unsure as to whether this is a good idea. In fact, rental increases are below the rate of inflation. Last time, a rent freeze, which is partially proposed by the party opposite, caused the sector to shrink from over half to just 8%. Our intention is to improve the rental housing market, not to destroy it.

[Lord Best (CB)]

My Lords, I return to commonhold and leasehold and pay tribute to the noble Baroness, Lady Gardner of Parkes, for her tenacity in raising this issue on many occasions. Would the Minister be willing to meet some of the Members of your Lordships’ House who recently got together to look at these issues? We discovered that there are quite a number of relatively modest reforms which would make a difference to leaseholders’ lives but which at the moment are not receiving attention. Would he and perhaps some of his officials be willing to meet a group of us to discuss that?

--- Later in debate ---

[Lord Faulks]

I join the noble Lord in paying tribute to my noble friend for her tenacity, and indeed I pay tribute to the noble Lord himself for his consistent interest in this subject. I would be happy to arrange a meeting, probably involving the housing department as well as the Ministry of Justice. I will try to organise that in the nearish future.

[Baroness Maddock (LD)]

My Lords—

--- Later in debate ---

[Baroness Maddock]

My Lords, as a member of the group that has met to consider these issues, I thank the Minister for saying that he will meet us. I will return to commonhold. It is quite incredible that many of us spent hours scrutinising the Bill well over 10 years ago. Since that 2002 Bill, there have been only 15 commonhold new developments and 152 units within blocks. That is not necessarily due to a lack of interest: there are significant obstacles for both old and new properties. Given the time that has been spent on this matter, I really think it is time that we as a Government looked at post-legislative scrutiny much more seriously, particularly in cases such as this.

[Lord Faulks]

My noble friend knows about post-legislative scrutiny. This Government and, I am sure, the Opposition are anxious to have such scrutiny in appropriate circumstances. The Act will take its place along with other legislation where scrutiny is appropriate.