Co-ownership of Flats (Hansard, 20 May 1986)

§ Sir Brandon Rhys Williams (Kensington)

I beg to move, That leave be given to bring in a Bill to enable residents in flats in privately-owned mansion blocks and substantial conversions to form companies with powers in stated circumstances to acquire and manage the properties in common ownership; to make provision for the residents in such a property in stated circumstances to apply to the courts for the appointment of a receiver and manager for it; to confer other rights on residents and to make further provision as to the management of such properties; and for related purposes. In 1978 with support from both sides of the House I first sought leave, successfully I may say, to introduce a Bill on the co-ownership of flats. Since the last time I introduced such a Bill in June last year, we have received the report of the committee of inquiry on the management of privately owned blocks of flats. That was welcomed in all parts of the House. I should like to quote briefly from the press notice that was issued by the Nugee committee in November 1985, because it is an excellent summary of the position. Clear evidence of widespread dissatisfaction with the management of privately owned blocks of flats is described in a Report published today. The Report produced by a Committee chaired by Mr. Edward Nugee QC, says that the criticisms are not confined to particular locations or types or age of block; and that there are serious problems, which call for action. The Committee, set up to examine the problems of management in privately owned blocks of flats, proposes measures to redress the balance for tenants who find that their landlord or managing agent is persistently unresponsive or unhelpful. This matter affects not only many thousands of my constituents in Kensington but many other people living in privately owned mansion blocks or substantial conversions in inner London and in many other parts of the country. I should like to repeat the main features of my earlier Bills and also to adopt the main Nugee recommendations. However, in some respects I should like to go further than the Nugee recommendations and to explore the possibility that in certain circumstances tenants may have the right not only to apply to the courts for the appointment of a receiver, but also, in stated circumstances, should have the right to acquire the full ownership rights in the property.

The right of pre-emption when the block is on the market is not very controversial, but great care must be taken if the owner is not a willing seller. The circumstances must be clearly defined and the procedure for valuation must be clearly laid down. All the signatories to my Bill insist that the valuation must be fair and that there must be no element of confiscation.

It is relatively easy to legislate for properties that are held entirely on long leases, but it is more difficult to deal with mixed regimes or with properties that are wholly occupied by residents with short tenancies. I should like to try to find a formula which overcomes these difficulties for consideration by the House.

The House should also consider the risk that residents who acquire their properties may not always have the funds or the management know-how to run them properly and to maintain them in good order. My recommendation is that, in order to qualify for the court's approval, the residents should be required to form themselves into a 205 company with an appropriate memorandum and articles. I aim to provide a model form as a schedule to the Bill as I have done on previous occasions.

I believe it would be useful for the House to look at concrete proposals on this matter in the form of a parliamentary Bill. I hope that such a Bill will attract the attention of proprietors and residents and their advisers, and I hope that the fact that I once again have all-party support will prove that the House has welcomed the Nugee report, is determined to act on it, and in some respects will be willing to go further than its recommendations. I therefore trust that the House will permit me once again to introduce my Bill.