Clause 14.—(OBLIGATION TO GRANT EXTENDED LEASE.) (Hansard, 20 June 1967)

§ Mr. Skeffington

I beg to move Amendment No. 43, in page 22, line 31, at the end to insert: Provided that, where the existing tenancy is granted after the commencement of this Part of this Act (whether or not it is, by virtue of section 3(3) above, to be treated for other purposes as forming a single tenancy with a previous tenancy) and, the grant being subsequent to the creation of the charge on the landlord's estate, the existing tenancy is not binding on the persons interested in the charge, a lease executed to give effect to this section shall not by virtue of this subsection he binding on those persons: (4A) Where a lease is executed to give effect to this section, and any person having a charge on the landlord's estate is by reason thereof entitled to possession of the documents of title relating to that estate, the landlord shall within one month after execution of the lease deliver to that person a counterpart of it duly executed by the tenant, and the instrument creating or evidencing the charge shall apply in the event of his failing to deliver a counterpart in accordance with this subsection as if the obligation to do so were included in the terms of the charge as set out in that instrument. (5) A landlord granting a lease under this section shall be bound to take such steps as may be necessary to secure that it is not liable in accordance with the proviso to subsection (4) above to be defeated by persons interested in a charge on his estate; but This is the same point in relation to an extension of a lease as that raised by Amendment No. 40 in connection with enfranchisement. It would he possible for a long lease to be created without notification to the mortgagee, with the effect that, after, perhaps, the freeholder's friend or relative had been in occupation for five years, he could then seek an even longer lease, say, 20–50 years longer in total, and then be free of the obligations due under the outstanding debt. This matter has been brought to our notice by the building societies. We are taking the opportunity to insert this provision and also the further provisions in the other two paragraphs.