ABOLITION OF CHIEF RENTS BILL (Hansard, 17 July 1974)

§ Mr. Fred Silvester (Manchester, Withington)

I beg to move, That leave be given to bring in a Bill to abolish chief rents at the transfer of title, and for connected purposes This Bill has a history in that at one time or another a number of hon. Members have tried to tackle this problem. I refer in particular to the hon. Member for Bristol, South (Mr. Cocks), who has sought twice to introduce a Bill for this purpose. Because of their efforts, I think, it is also a Bill which will have a future, because even if this particular measure does not manage to go through all its stages this Session, the Law Commission is currently investigating this matter and has prepared a draft Bill which it hopes to lay by the end of the year.

This is a matter which has concerned particularly the Members who represent Manchester and Bristol constituencies, and it is a matter which other people in other parts of the country find somewhat difficult to understand. A letter was printed in the Manchester Evening News from a person who was suffering from a chief rent in the Manchester area. It read: I had never heard of such a thing. I lived in Devon, Essex and Kent, and when I tell my friends still living there about it, they think I am pulling their legs. The chief rent is a charge made upon a person who believes himself to be the owner of a freehold. That comes as a great surprise to many people who have bought a freehold. It is something which even those who have lived with it still find difficult to understand. Worse still, the rent is chargeable against any part of a piece of land, so that if a piece of land is eventually sold for redevelopment and is carved up among different freeholds, that rent can be charged against any one of the freeholders and he will then be liable for all the rent on all the properties. Some of these people have been required to make the collection from the other freeholders.

This is the area which has led to some of the greatest difficulties and the most heart searching. Chief rents first came to my notice in the surgery that I run. In 470 one case a gentleman who was 80 came in and said that he was very much troubled by having to collect the chief rents of 10 of his neighbours. It is all right if one is young and healthy. It so happened that this gentleman had reasonable neighbours. Some people have not, and many people are forced to collect rents from neighbours who are extremely unwilling to part with them. Some people have been, thereby, forced to pay out of their own pocket the money which they have feared to collect from others.

This situation is capable of remedy by a procedure which was established in 1925, but it does not always work—for two reasons. First, the procedure is complicated and sometimes expensive to perform. Second, even when the procedure is completed and the rent is apportioned between the properties, there sometimes still remains a covenant upon a person to continue the collection.

We are, therefore, faced with a considerable social problem, although it affects only part of this kingdom. The Law Commission has been concerned about this matter for some time and has now put forward two working papers. It has come up with some suggestions which I understand are about to be published. and a draft Bill will be laid by November. I shall say something about that shortly.

The purpose of my Bill is to achieve four things. I wish, first, to stop the creation of new rent charges. This was the purpose of the Bill of the hon. Member for Bristol, South. The working papers have sought to find reasons why such rents should be continued. The Law Commission has listened to many representations. The reasons it set out in its paper are very esoteric, except in two cases. One is that the Commission says that such rents give rise to a lower capital sum for the purchase of the house. There has, however, been no evidence that this is true. Despite all the Law Commission's efforts, it has not been able to produce one shred of evidence, nor have those who have sought to make this point.

Secondly—the Law Commission has a case here—it says that such rents are useful in the enforcement of positive covenants—for example, where there is a group of houses and it is wished to 471 make some provision for maintenance. I think that that will be overcome by another change in the law which the Law Commission is proposing. For the moment I have included in the Bill an exception to cover that point.

The fact remains that the Law Commission has been unable to find a good reason for retaining the introduction of new rent charges. First the Commission was against it. Its second paper was for it. I am delighted to tell the House that the Commission has now come out against it again and the new Bill will, I understand, seek to extinguish that right, and such a provision is certainly part of my proposed Bill.

The second part of the Bill would seek to extinguish those chief rents which are already existing. Obviously I do not intend to do that in a way which relieves people, without compensation, of a right which they have. That is not likely to be part of the point of view of any Conservative Member.

I would seek to achieve this in two ways. One would be at the transfer of title. When a person buys a house and the legal formalities are in any case going on, that seems to me to be a proper occasion to seek to extinguish and to use the procedures which are available. I make provision in the Bill that the local council may give assistance in those cases where the rent is in excess of £10 and the redemption figure may be rather a burden on those involved.

Secondly, I adopt within my Bill the Law Commission's suggestion that after 60 years existing rent charges should be automatically extinguished. According to the Law Commission's calculations, that procedure would impose no hardship on existing rent owners.

Thirdly—in view of the time I will not go into this—I am seeking to reduce the complications and to simplify the procedure people need follow in order to get 472 rid of these burdens, and in particular to transfer the operation from the Secretary of State to the town halls, thus making Manchester and Bristol town halls, in particular, busy with these matters rather than leaving them in London.

Fourthly, I seek to introduce a simple system to end the collection of chief rents by one of the owners of the freeholds. I have proposed in the Bill a system which would enable that person to serve notice on the rent owner for the issue of a certificate stating that collection of rents was to end, and suggesting the terms on which it would be done. The rent for which the freeholder would be liable would be the rent which he had paid over the last three years. That would not suit every case, but it would make for a very simple procedure.

I make no pretence that this highly complicated matter would be overcome very quickly, but it is high time for us to make a start. I make no apology for seeking to introduce the Bill at this stage of the Session even knowing, as I do, that the Law Commission will have a Bill ready by the end of the year. My Bill contains things which the Law Commission's Bill will not contain. In any case, we all have many examples of good ideas drifting into the sand because they are not pursued. This is a limited but very important social change which we can remedy very simply if we put our minds to it.