§ 6.39 p.m.
§ Mr. Michael Cocks (Bristol, South)
I beg to move,That leave be given to bring in a Bill to prohibit the creation of rentcharges on freehold land, and to extinguish existing rentcharges equitably.Last year the House was kind enough to give me leave to bring in a Bill on this matter and so I do not intend to deploy the case once more except to say that since I spoke on this matter a year ago the practice is still spreading to new estates in the areas affected, and also we have had some recognition from the Government that a problem does in fact here exist, because the Under-Secretary of State, whom I see in his place, was kind enough to grant me an interview when he heard representations I made on four points about the system which I think very undesirable and particularly the many instances where the phrase ground rent is used instead of rentcharge.
There is, first, very general confusion in the mind of the general public, and some people honestly believe that they do not own the land on which their house stands, and so feel they do not have the complete ownership which they in fact possess.
Secondly, there is a great deal of lack of knowledge about their rights of re- 522 demption under the Law of Property Act, 1925, and their rights are not told to them by the people who collect the rent-charges or even, in many cases, by the solicitors who deal with these matters when they are being handed over for sale.
Thirdly, there is a very undesirable anonimity about the collectors of the rent-charges, who do their very best to hide the identity of the person who actually receives the rentcharge.
Then there is exploitation.
The Minister for Local Government and Development, in a letter to me on 7th January, said that under compulsory redemption at present the consideration is about 10½ times the annual rent. I have cases, of which I have told the Minister, of 20, 25 and 30 times being asked for, and an hon. Friend of mine today has told me about 40 years of purchase being asked.
Another point which I did not raise at the time with the Minister but which has since come to my notice, is that whereas the Minister said that the legal charge asked to redeem a rentcharge was usually between £5 and £10 the Bristol Law Society, with which I have been in correspondence, has told me that the sum is fixed at £15. This creates gross anomolies, because there was an offer to somebody to purchase a rentcharge at £2.50p, but the price was £25, and legal costs of £15 were being asked. I would submit that in a transaction on a sum of £25 legal costs of £15 are really out of all proportion.
Therefore, I would ask the House to give me leave to bring in the Bill. The Minister, I am happy to say, was kind enough to say that his Department would look at ways in which local councils could be informed of people's rights in this matter and ways in which the general public could be made more aware of their rights to prevent this exploitation. In the meantime my hon. Friend for Manchester, Gorton (Mr. Marks) and I are writing to many local authorities concerned in this matter asking them to follow the example of Bristol Corporation so that when they dispose of land in their possession a direct transaction is made between the corporation and the house purchaser so that no profit is made on the land by a developer and he cannot 523 impose rentcharges, and also asking them, when considering planning permission with developers, to try to negotiate voluntary agreements so that developers will not impose the rentcharge system.
I recognise that these matters are only palliatives and that the real answer is in legislation. So I ask the House for leave to bring in the Bill.
§ Question put and agreed to.
§ Bill ordered to be brought in by Mr. Michael Cocks, Mr. Kenneth Marks, Mr. David Watkins, Mr. Arthur Palmer, Mr. Charles R. Morris, Mr. Alfred Morris, Mr. Arthur Davidson, Mr. R. C. Mitchell. Mr. Ernest G. Perry, and Mr. John Fraser.