§ Ms KeebleI beg to move amendment No. 46, in page 73, line 40, at end insert—
'required to be supplied under this section.'.
§ Madam Deputy SpeakerWith this it will be convenient to take Government amendments Nos. 47, 49, 51 and 59.
§ Ms KeebleThis is a minor consequential amendment made in light of new clause 11, which provides for leaseholders to be sent a summary of their rights and obligations in relation to service charges whenever they are sent a service charge demand. New clause 11 also gives the Secretary of State power to prescribe the form and content of such summaries. Clause 151 requires leaseholders to be sent a summary of their rights and obligations in relation to service charges, but these summaries are to be sent out with leaseholders' annual accounting statements, and the Secretary of State would also have power to prescribe their form and content. The amendment makes it clear that the power granted by clause 151 applies only to documents that landlords are required by the clause to supply.
Government amendments Nos. 47 and 51 could be termed the Daejan amendments. Last July, the case of Daejan Properties Ltd. v. London leasehold valuation tribunal was brought before the Court of Appeal. Subsequently, the court ruled that LVTs only have the jurisdiction to decide the reasonableness of disputed service charges that are still unpaid except in certain very limited circumstances. We consider that decision to be most unfortunate from the viewpoint of both leaseholders and landlords. As leaseholders become aware of its effect, they may be inclined to withhold service charges until they are certain that those charges are reasonable, because it may otherwise prove very difficult for them to launch any challenge. In turn, that will create problems for managers of leasehold property, who may find it increasingly difficult to obtain payments in advance and be reluctant to commence work without them.
We have already taken steps to ensure that under clause 151, LVTs will have a clear power to rule on service charges that have already been paid. However, last month we were informed that the London LVT had been refused leave to appeal against the Court of Appeal decision on the Daejan case. In light of that development, we decided to take another look at clause 151 to see whether there was any possibility, however remote, that it might be construed as giving LVTs the jurisdiction to rule only on unpaid service charges. We decided that it might be advisable to table a further amendment to put the matter beyond any possible doubt. Government amendment No. 47 would achieve that end.
The Bill also gives LVTs a new jurisdiction to rule on administration charges. Again, we consider it important to make it clear that LVTs are to have the jurisdiction to rule 953 on administration charges that have already been paid as well as those that are still outstanding. Government amendment No. 51 achieves that aim.
Government amendment No. 49 is a drafting amendment. Schedule 11 currently contains a definition of a fixed administration charge, but the only place where the term "fixed administration charge" is used in the Bill is in the definition of "variable administration charge". Therefore, the amendment replaces those definitions with a new definition of variable service charge, thus simplifying the provision. Government amendment No. 59 corrects an error in the drafting of schedule 14.
I commend the amendments to the House.
§ Amendment agreed to.