Landlord and Tenant (Hansard, 25 February 1987)

§ Mr. Peter Thurnham (Bolton, North-East)

I beg to move, That leave he given to bring in a Bill to extend the existing right to buy to tenants in properties where the landlord's title to ownership is defective; to enable landlords to obtain fair market value for properties which are compulsorily purchased; and for connected purposes. I believe that such a Bill will not be considered contentious. It is my objective to cut red tape and to be helpful to both house owners and tenants in certain housing matters where an element of injustice has arisen. The injustices are not inherent in the conception of the original housing legislation. However, they have arisen in the margin in some special cases.

Members on both sides of the House have, I believe, now accepted the right of home ownership—admittedly with varying degrees of enthusiasm from the Opposition Benches. The Housing Act 1980 gave secure council tenants a clear right to obtain the ownership of their homes. However, in Bolton many applications have been refused on the grounds of technical defects or uncertainty in the title.

Last year, the responsible Minister singled out Bolton as the worst council which still persistently denied the right to buy on the pretext of defective title. The defective title usually arises from compulsory purchase orders on long leasehold land of which Lancashire has more than most counties. Because of the difficulty in tracking down all those with reversionary interests, the council does not always have complete title. Although the council has powers to perfect the title, it has made a political decision to use this flimsy pretext to prevent a sale. The reason given by the council is a shortage of funds or personnel available to investigate the history of the title to its ultimate. Another excuse is that the Greater Manchester Council residuary body still has an interest, despite the fact that the council has the power to purchase that interest.

That obstruction is against the spirit of current housing policy where maximum incentives to home ownership are being provided. If such a situation arose in the private sector, a form of indemnity would be worked out to cover the vendor against action from people coming forward subsequently with claims to a legal interest in the site or property. I understand that that can be covered by an insurance policy.

I have been involved in mountainous correspondence with Ministers for many months on behalf of numerous unhappy constituents caught in this sad web of circumstances, not of their own making. I have suggested that a provision should be available whereby a purchaser could indemnify the vendor against such claims. However, on political grounds, that was not accepted by Bolton's Labour-controlled council. I have now been told that Wigan council has used this system and in Norwich, where there used to be a similar problem, the council is now cooperating with its tenants. Why is Bolton council not doing that? Must tenants consider bringing a court action to get justice?

Last year, with the guidance of a distinguished former Solicitor-General, I tabled amendments to the Housing and Planning Bill. I was informed by the Government that those amendments raised possible legal complexities which needed thorough examination. However, I believe that 288 Government legislation could be successfully introduced so that the landlord is deemed to have sufficient interest to sell. Anyone with interest in the land could then claim compensation from the landlord. Such a requirement would no doubt involve amendments to right-to-buy, land registration and compulsory purchase legislation. That would cause much work for the parliamentary draftsmen in the Department of the Environment where I believe that there is already a shortage of draftsmen.

I believe that the matter can wait no longer and that the nettle must now be grasped. I am therefore including these provisions in my proposed Bill which sets out in tablets of stone that council tenants who qualify under normal circumstances shall have the inalienable right to exercise their right to buy. Councils will be deemed to have sufficient interest to sell and will be given full compulsory powers against claimants. It is understood that if claimants have a proven case, they should be compensated fairly.

The other injustice which I wish to tackle in the second part of my Bill is the unhappy situation that arises where property is compulsorily purchased, but is classified as unfit or otherwise does not qualify for fair market value compensation, including cases where the property is empty or not owner-occupied. The effect is to reduce from market value to site value the compensation payable. In Bolton, that could mean the difference between £15,000 and a mere £1,200.

Definitions of fitness for the purpose of slum clearance are set out in section 604 of the Housing Act 1985. Experts in housing law explain that, despite attempts to set out guidelines for assessing unfitness, the definitions are still variable and imprecise.

There is an additional unfairness in this form of virtual confiscation because properties in a clearance area are scheduled for demolition in any case. Therefore, owners are less inclined to maintain them fully or occupy those houses. Not to pay a fair price is a combination of institutionalised meanness and bullyboy bureaucracy. The problem was well recognised in the Government Green Paper, "Home Improvements, a New Approach."

To return to my original theme, the first part of my Bill is a humble attempt to help those who think that they have the opportunity to join the property owning democracy, but find that that opportunity is removed at the last moment. Their hopes are dashed and their spirits crushed. With very little effort, we can bring them the happiness that they deserve.

In the second part of my Bill, I show how we can provide justice for the house owner whose property may have become classified as not being owner-occupied or as being technically unfit because he could not afford to maintain it.

I understand that the Government are sympathetic to the objectives of my Bill even if they have had some reservations about what are believed to be legislative complexities. I believe that those can be overcome and that it would be a fine achievement in one Bill to bring relief to both tenant and house owner in this way.