'In section 13 of the Leasehold Reform, Housing and Urban Development Act 1993 (notice by qualifying tenants of claim to exercise right to collective enfranchisement) subsection (6) (tenants to obtain professional valuation of interests proposed to be acquired before giving notice) shall cease to have effect.'.—[Mr. Clappison.]
§ Brought up, and read the First time
3.58 pm§ The Parliamentary Under-Secretary of State for the Environment (Mr. James Clappison)I beg to move, That the clause be read a Second time.
§ Madam SpeakerWith this, it will be convenient to discuss Government amendments Nos. 21 to 25.
§ Mr. ClappisonThese amendments arise from considerations in Committee, when the Government undertook to give further consideration to the position in respect of the current statutory requirement that leaseholders in blocks of flats who want to exercise their right to collective enfranchisement must first obtain a professional valuation of the interest that they want to acquire.
The original purpose of the provision was as a safeguard for leaseholders. The process for collective enfranchisement can often be complicated, and that is especially so when a large number of leaseholders are involved. Normally, they will be required to enter together into some form of participation agreement, in order for negotiations with the freeholder to proceed. From the outset, it seems sensible that they should be informed of their likely financial commitments arising out of potential enfranchisement.
However, the Government have considered carefully the arguments that were put forward during deliberations in Committee, and we have accepted that they carry some weight. In most cases, it would still seem prudent for leaseholders to take professional advice at an early stage. However, we accept that not every case will be as complicated as others and that there should be more flexibility in the avenues open to leaseholders. For example, they may be able to take advantage of advice offered by the Leasehold Enfranchisement Advisory Service. In addition, several leasehold valuation tribunal decisions are now available and a number of groups representing leaseholders have gained substantial experience and can often help in that area.
I accept that a statutory requirement to seek an initial valuation does not apply to the enfranchisement of houses and to lease extensions. Although collective enfranchisement for blocks of flats can be more complicated, there is an anomaly in that respect. I also understand that the removal of that requirement is 914 supported by a number of leaseholder groups, which believe that it involves them in unnecessary expense. Therefore, the Government accept that there is a danger that the provision is over-prescriptive.
New clause 10, together with the related consequential amendments, will remove that requirement from the collective enfranchisement procedures set out in the Leasehold Reform, Housing and Urban Development Act 1993
Mr.NickRaynsford (Greenwich)As the Minister has made clear, new clause 10 removes the requirement of a leaseholder to obtain a valuation before he can proceed with an enfranchisement claim. This new clause is in response to a new clause that the Labour party moved in Committee, which had a similar effect. In Committee, the Minister said that he was unconvinced by the need for it, but he agreed to reflect on the issue.
We are delighted that the Government, on mature reflection, have concluded that our proposals were appropriate and that they have now come forward with this reform. We welcome it, like many other leasehold reform measures that we moved in Committee. We know that they are worth while, that they will assist leaseholders and that they will help to make a reality of leasehold enfranchisement. We shall be delighted to see this new clause added to the Bill.
§ Question put and agreed to
§ Clause read a Second time, and added to the Bill