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`After section 24 of the 1980 Act there shall be inserted the following sections—
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Secretary of State's power to give directions as to covenants and conditions
24A.—(1) Where it appears to the Secretary of State that, if covenants or conditions of any kind were included in conveyances or grants of dwelling-houses of any description, the conveyances or grants would not conform with Parts I and II or, as the case may be, Parts I and III of Schedule 2 to this Act, he may direct landlords generally, landlords of a particular description or particular landlords not to include covenants or conditions of that kind in conveyances or grants of dwelling-houses of that description which are executed on or after a date specified in the direction.
(2) A direction given under this section may be varied or withdrawn by a subsequent direction so given.
(3) In this section and section 24B below any reference to conveyances or grants is a reference to conveyances or grants executed in pursuance of this Chapter.
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Effect of directions on existing covenants and conditions
24B.—(1) If a direction under section 24A above so provides, the provisions of this section shall apply in relation to any covenant or condition which—
(2) The covenant or condition shall be discharged or (if the direction so provides) modified, as from the specified date, to such extent or in such manner as may be provided by the direction; and the discharge or modification shall be binding on all persons entitled or capable of becoming entitled to the benefit of the covenant or condition.
(3) The landlord by whom the conveyance or grant was executed shall within such period as may be specified in the direction—
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modification to be entered in the register;and for the purposes of enabling the landlord to comply with the requirements of this subsection, the Chief Land Registrar shall (notwithstanding section 112 of the Land Registration Act 1925) allow any person authorised by the landlord to inspect and make copies of and extracts from any register or document which is in the custody of the Chief Land Registrar and relates to the dwelling-house.
(4) Notwithstanding anything in section 64 of the Land Registration Act 1925, notice of the discharge or modification may be entered in the register without the production of any land certificate outstanding in respect of the dwelling-house, but without prejudice to the power of the Chief Land Registrar to compel production of the certificate for the purposes mentioned in that section." '.—[Mr. Stanley.]
§ Brought up, and read the First time.
§ Mr. Deputy Speaker Mr. Ernest Armstrong)With this it will be for the convenience of the House to take new clause 9—Secretary of State's power to obtain information etc.—and Government amendments Nos. 45 to 49 and 50 and 51.
§ Mr. StanleyI beg to move, That the clause be read a Second time.
This group of amendments and clauses introduces a new power which will enable the Secretary of State to direct landlords not to include certain covenants or conditions in conveyances or leases executed in pursuance of the right to buy, if it appears to him that conveyances or leases containing such covenants or conditions would not conform with schedule 2 to the 1980 Act. The purpose of this group of amendments is not to change tenants' rights under the law as it now stands but to ensure that tenants get their legal rights in conformity with the legislation. New clause 8 introduces the new power of direction. New clause 9 and amendments Nos. 45–51 are simply consequential amendments to new clause 8 and to provisions already contained in the Bill.
The Department has received a very considerable number of complaints from tenants hoping to exercise their right to buy but objecting to covenants or conditions of sale proposed by their landlords. These have included a number of covenants and conditions which are in our view clearly unreasonable in a lease or conveyance under the right to buy and contrary to the entitlement that tenants have under paragraph 5 of schedule 2 to reasonable terms. Some landlords have sought to impose conditions on tenant purchasers under the right to buy which, for instance, would put them in a worse position as home owners than if they had remained tenants with their rights under the tenants' charter. For example, a council has required that houses being sold should be used only as single private dwelling-houses for the exclusive use of the purchaser and members of his family. This is far more restrictive than the tenants' charter, under which any secure tenant may, for example, take in lodgers or, with the consent of his landlord, arrange to sublet a part of his house.
Some landlords have sought to impose positive covenants requiring the purchaser to contribute to the costs of maintaining facilities, for example a launderette and drying room, some distance from his home, which the purchaser has argued that he has never used and, indeed, was quite unaware that the facility even existed and in respect of which he is given no user rights and from which he derives no benefit other than as a member of the public.
The 1980 Act does not give landlords an unfettered right to impose whatever covenants and conditions they 882 think fit. Schedule 2 to the Act sets out certain parameters within which terms and conditions of sale must fall. In particular, paragraph 5 of that schedule provides that, subject to certain provisions elsewhere in the schedule, a conveyance or grant may include such covenants and conditions as are reasonable in the circumstances. We do not believe that some of the covenants and conditions which have come to our attention, to which I have briefly referred, are reasonable in the circumstances.
What can the right-to-buy purchaser do about that situation? If he believes that the covenants and conditions proposed by his landlord do not conform with the requirements of the legislation, he may, in theory, challenge those covenants and, if necessary, pursue his dispute with his landlord through the courts. But this is not a course which other than a tiny minority of right-to-buy purchasers would choose to pursue. Court action is an expensive and uncertain option. It is likely to delay the date of completion considerably and the complexity of the issues is in itself likely to daunt most right-to-buy purchasers, as it would daunt most people in a lay capacity as opposed to solicitors. In practice, therefore, most purchasers opt to accept the covenants and conditions proposed by their landlords, even where they believe that these offer them far less than their legal entitlement to reasonable terms.
I do not consider this situation satisfactory. We feel that it is imperative to give tenants greater protection. A secure tenant has a right to buy his home free from unreasonable conditions and covenants. It is important to him shat he buys his home free from unreasonable conditions. He will probably, in the fullness of time, have to resell his home. If he accepts unreasonable covenants now, it could prejudice the value and the marketability of his home when he comes to sell.
It is not right that large numbers of tenants should be faced with protracted and costly legal disputes simply in order to take advantage of their rights. We have proposed two additions to the provisions in the 1980 Act to overcome this problem. The first is the proposed new power for the Secretary of State to give assistance in legal disputes. It is already included in clause 10 of the Bill as amended in Committee. We have it in mind that the Secretary of State should use this power to assist right-to-buy purchasers in cases where difficult legal issues arise in relation to covenants or, indeed, to other matters arising under the right to buy; for example, where there is genuine doubt as to the interpretation of the legislation and where other special factors justify that financial assistance.
It is right that there should be a proposed new power of direction, which is the second of the new provisions we are proposing to tackle the problem of unreasonable covenants and conditions. Under the new clause now being discussed, the Secretary of State will have a power to direct that certain covenants and conditions be discharged or modified if it appears to them that conveyances or leases containing such covenants or conditions would not conform with schedule 2 of the Act. In contrast to the proposed power of assistance, I should emphasise that the power of direction will come into play only in relation to covenants and conditions that are clearly and manifestly at odds with the provisions of the existing legislation. In those circumstances only, it will provide a speedy remedy to tenants, without the need for protracted court proceedings.
883 I should emphasise that the Secretary of State's use of this power will, as always, be subject to judicial review. Any direction made by the Secretary of State relating to a covenant or condition will be open to challenge in the courts. The only local authorities who need worry about the implications of this new clause are those who may have been imposing covenants and conditions in the past, or may choose to do so in the future, which do not conform with the existing legislation.
New clause 8, in effect, inserts two new sections into the 1980 Act. The first, section 24A, provides for the basic new power of direction. The Secretary of State will have power to direct that certain covenants and conditions are not to be included in particular right-to-buy sales if it appears to him that a conveyance or lease containing the covenant or condition would not conform with schedule 2 to the Act. A direction need not necessarily apply to all right-to-buy landlords or to all right-to-buy sales of a particular landlord. Covenants that are reasonable in a lease, for example, may not be reasonable in a freehold conveyance. Equally, covenants that may reasonably be applied to property in, say, a conservation area may not be reasonable elsewhere.
A direction, once given, may be varied or withdrawn by a subsequent direction, as specified in subsection (2). It is to have no effect, of course, other than in relation to right-to-buy sales, hence subsection (3).
The second new section—section 24B—provides that a direction may apply to completed as well as to prospective sales. In most situations, it would clearly be unsatisfactory if different covenants applied in respect of neighbouring properties simply because the sale of one property was completed before a direction was issued and the other completed after it. If the direction so provides, therefore, any relevant covenant or condition in a completed conveyance or lease will be discharged or modified as appropriate from the date specified in the direction.
The mechanics following discharge or modification are also provided for in section 24B. The landlord, or former landlord, is to be under a duty to serve a written notice on the current owner of the dwelling-house, and any chargee, informing him of the discharge or modification and to apply to the chief land registrar for the change to be noted on the register.
As I have already stated, the remainder of this group of amendments is largely consequential. New clause 9 containing the Secretary of State's power to obtain information is essentially a repeat of the existing clause 9 in the Bill, which is removed by virtue of amendment No. 45. The only difference between the existing clause 9 and the new clause 9 is that the latter provides that the Secretary of State's power to obtain information shall also be exercisable for the purpose of determining whether or not he may exercise his power in this new clause to give directions as to covenants and conditions.
Amendments Nos. 46 to 49 are consequential amendments that re-order the numbers of two new clauses already agreed in Committee and that are to be inserted into the 1980 Act by the Bill. These are the Secretary of State's power to give assistance under clause 10 and the power of local authorities to contribute towards certain mortgage costs under clause 11.
884 Amendments Nos. 50 and 51 are again consequential amendments to clause 19 of the Bill, which applies certain provisions of the 1980 Act to the shared ownership scheme.
I believe that the new clause and the attendant consequential amendments are necessary to serve one simple objective, which I hope can be agreed by the House. However, judging by the manner in which the hon. Member for Bolton, West (Mrs. Taylor) responded previously, I am not confident that there will be unanimity, even on this basic point. We are concerned to see that individual tenants, in respect of the exercising of the right to buy, whether this relates to a house or a flat, manage to secure the legal rights that Parliament has given under the 1980 Act and is considering under this legislation. That is the simple objective of the new clause. I hope that it will be regarded as unexceptionable. I am certain, however, that judging by the way that certain authorities have behaved in imposing highly onerous covenants on some tenants and, in the process, probably jeopardising the marketability of the properties of those tenants, this power of direction is essential. I commend the new clause to the House.
§ Mrs. Ann TaylorThe Minister has said that the purpose behind the two new clauses is to give tenants greater protection, but the real purpose is to give the Minister even greater power. It is yet another example of an extension of that power and we on the Opposition Benches therefore oppose it.
New clause 8 gives the Secretary of State more power to give directions about the covenants and conditions that can be contained in any sale agreement. Our first objection to that is that it is another example of the Secretary of State saying that he knows best. Yet again he wants to be judge and jury about what is reasonable or not reasonable. The Minister said earlier that any dispute about covenants could be settled in the courts and explained that elsewhere in the Bill he is giving assistance to tenants or purchasers who want to take local authorities to court. Yet he obviously does not trust the courts because he wants to be able to say what is reasonable rather than leaving it to them to decide. The Minister ought to explain why he thinks he knows better than they do. As he said, what is reasonable in one set of circumstances may not be reasonable in another, yet he believes that it is he, not the local authority or the Government, who ought to decide in all circumstances.
Our second objection to the clause is shared by members of the Minister's party. Even the Association of Metropolitan Authorities' Conservative housing spokesman does not like parts of it. I understand that he takes exception to its retrospection, which also concerns us. Subsection (2) of Section 24B affects all those covenants and conditions already agreed to as part of contracts that have gone ahead in the past few years. The Minister has not made it clear what will happen to those agreements and charges that have been agreed to by both sides in the past. He is now saying that he knows today what should happen in the future to contracts that were agreed without interference from him.
If the Minister is to interfere with past contracts, what account will he take of the important fact that the price agreed for a particular purchase in the past would have taken account of any covenants and conditions laid down 885 at that time. If he is now to wipe out any previous covenants and conditions, it means that the previously agreed purchase price will be rendered artificially low.
The Minister has often told us that the public sector should, where possible, imitate the private sector. When someone agrees to purchase a house on a private estate or from a private builder, conditions will often be written into the agreement about what can be done with that property. Yet the Minister is ignoring all that in the private sector. He is simply saying that local authorities or public landlords must be subject to new powers, that he must decide what is reasonable in any given circumstances, how they must behave and what conditions they can put into sales agreements. We are, therefore, opposed to the Minister's proposals, especially with regard to new clause 8.
We have discussed new clause 9 in Committee, albeit briefly. The Minister knows that we are not happy with the intention behind it. Here again he is extending his power to intervene: we have Big Brother breathing down the necks of the local authorities once more. The Minister is taking on himself power to demand any papers that the local authority may have on any matters relating to sales. We are not talking merely about those authorities that may be in conflict with the Minister or about local authorities against which the Minister is taking action. As new clause 9 reads, the Minister can now demand any papers from any authority at any time in any circumstances on the basis that he may be considering intervention at some later stage. That is a blank cheque for the Minister to interfere and to call for any information from any local authority officer, just as the fancy takes him.
The Minister may be putting many local government officials in a difficult position. They will have to decide whether they are to obey an instruction from the Secretary of State or an instruction from their employers. We do not think that the Minister should put individual local authority employees in this position. If the Minister believes that there is a case to be answered by a local authority, then he should take action against it rather than intimidate officials into giving him information on an individual basis by directing them to provide him with papers.
Neither new clause 8 nor new clause 9 is justifiable. They are another example of the Minister interfering in the affairs of local authorities. We are very unhappy with the progress that the Minister is suggesting on these particular clauses.
§ Mr. Peter Bottomley (Woolwich, West)The hon. Lady's comments on new clause 9 are quite the wrong way round. If a local authority believes that a covenant is reasonable, I should expect it to volunteer the information. The only reason for hiding it is if a covenant is unreasonable. She says that local authorities may complain about too much interference from central Government. As this pair of clauses is part of what I might call the Greenwich parts of the Housing and Building Control Bill, I should like her to know that the greatest complaints in Greenwich at the moment are about too little Government interference, now that all ratepayers —domestic, industrial and commercial — are having to suffer a 30 per cent. increase. There is a ratepayers', residents' and tenants' revolt in Greenwich, and I believe these new clauses will help to calm especially council tenants who want to buy and those who have bought.
886 On new clause 8, two major complaints brought to me —besides general interference with the right to buy—have been about amenity charges for launderettes and for greens. Many would-be purchasers and some who have bought after reluctantly accepting covenants, but putting their trust in my hon. Friend the Minister for Housing and Construction, have said that they do not even know where their launderettes are, and they are certainly not always within useable distance. If found, they do not always work, and there is no reason to believe that they are for the exclusive use of council tenants or residents of a particular estate or area.
It is unreasonable for this to be put on the housing revenue account and for people who have bought the freehold or long leasehold of their home to have to pay for a share in municipal enterprises which appear to run at a loss.
As regards greens, until people started buying their homes from the local authority no one knew that greens were paid for out of the housing revenue account. I do not believe that even the council knew. The assumption was that they were paid for out of rates. They ought to be paid for out of rates. Not only do I believe it to be wrong to allow covenants to be maintained that will require people who have bought their homes to continue to pay for what are often dogs' lavatories, but I believe that existing tenants should not be required to pay for them out of rents. The burden should be put on the rates instead. If they are part of amenity land, they are available to people whether they own their homes or not. It is wrong that a restrictive covenant, requiring people to pay an uncertain amount that may increase with the rate of inflation, or any different amount, should continue.
There are also covenants requiring people in houses that they could externally decorate themselves to have them redecorated by the council. When the council has been asked to give an estimate before a right to buy has gone through, it has made one estimate and then has made another which may be more than double the first. When asked to justify the difference, it has not done so. It has picked a figure out of the sky. I hope that my hon. Friend will consider that kind of uncertain covenant as this new clause goes through.
The Government and my party have gained the reputation of being on the side of ordinary people who want the chance to buy their homes without restrictions that will continue into the future. The local and national Labour parties are making a big mistake in even suggesting that, for reasons of mobility and so on, they want to hinder people owning their own homes. I look forward to the time when people can own their homes without restriction. We can then concentrate on increasing the number of homes available to people under forms of tenure that they will choose.
§ Mr. John Cartwright (Woolwich, East)Like the hon. Member for Woolwich, West (Mr. Bottomley), I want to relate my brief comments on new clause 8 to the experience of our constituents at the hands of the London borough of Greenwich. In the past, I have wearied both the Standing Committee and the House with details of some of the service charges that are applied by the London borough of Greenwich. I do not propose to repeat them, but I endorse the comments that were made by the hon. Member for Woolwich, West.
887 The oddest service charge that has come to my notice recently is one that is being levied on a number of people buying council houses—£90 a year for the upkeep of a tenants' meeting room. I do not know why people who become owner-occupiers should be required to maintain a tenants' meeting room.
This very small room was at the bottom of a block of flats, next to the laundry, and in no sense could it be termed a meeting room. It would not hold many people, there was not one chair in it, and it was in a bad state of decoration. Yet my constituents who are buying their homes are apparently expected to pay for the upkeep of a room which no one can remember having been used for a meeting.
I wish to concentrate on the restrictive covenant element of the new clause. I should like to quote from the transfer document produced by the London borough of Greenwich, which runs to 11 pages of restrictions and conditions on those who purchase their homes. For example, the transferors—the council—
shall have power at all times without obtaining any consent from or making any compensation to the Transferee"—the purchaser—to deal as the Transferors may think fit with any lands or buildings adjoining opposite or near to the property hereby transferred and to erect or suffer to be erected on any adjoining opposite or neighbouring land any buildings whatsoever whether such buildings shall or shall not affect or diminish the light or air which may now or at any time hereafter be enjoyed by the Transferee".That is an extraordinary way for a local council to operate in relation to any of its citizens, whether or not they are buying their council houses. The council is saying that it has a total and absolute right to build whatever it likes, whatever the effects may be on one of its citizens who has purchased his own home.In addition, the purchaser must agree:
Not to make any alterations or additions to the existing dwellinghouse garage …or fences nor erect or construct any additional buildingwithout first gaining permission of the local authority and paying the reasonable fees of the local authority.Particularly annoying is the fact that the purchaser must agree:
Not to keep or allow to be kept any animal other than one cat and/or small bird or (in the case of a dwelling with a garden attached) one dog, cat and/or a small bird".Apparently, Greenwich tenants are allowed to keep a marvellous combination of animals. That is an intrusive and offensive condition when applied to council tenants, but I simply cannot understand why it should apply to people who have bought the freehold of their own homes. I could quote other examples, the restrictive nature of which is similar.I endorse what the Minister has said. Solicitors in my area have clearly said that if a purchaser tries to sell his property later such covenants will make it difficult because of the restrictions that they impose on the way in which anyone can live in the property. As a result, the retail value will be affected.
I understand the case made by the hon. Member for Bolton, West (Mrs. Taylor). I do not like Government interference in local authority affairs. As a general principle, I am opposed to it. However, when she says that 888 those who have a complaint against their local authority can go to the courts, I begin to wonder whether she lives in the same world as the rest of us.
We are talking about council tenants—people who have never bought a house before, and most of whom have never before been across the threshold of a solicitor's office. They are completely at sea about all this. When they tell us that the council has been most unfair and we say, "Terribly sorry, but you must go to court", we know only too well what their reaction will be. There is no way in which they can take such legal redress. Anxious though I am about increased Government interference in the affairs of local authorities, I believe that people who have used their rights under the law and bought their council houses are entitled to some protection when their rights are undermined by local authorities. On those grounds, I support new clause 8.
§ Mr. StanleyI shall not reply now as I believe that an early vote is expected and the Opposition wish to press on.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.