HL Deb 21 December 1925 vol 62 cc1676-9

LORD DYNEVOR had given notice to ask His Majesty's Government whether their attention has been called to the effect of Section 1, subsection (1) (v) of the Settled Land Act, 1925, on persons who have purchased land subject to a rentcharge for life, and who now find that their titles will be complicated after the 1st January, 1926, by the creation of a settlement; whether they are aware that this will involve consequential formalities and expenses on these purchasers, and whether the Government proposes to introduce immediately legislation to allay the anxiety and confusion which has arisen thereunder.

The noble Lord said: My Lords, I am afraid that this Question is a very technical one and could be more clearly explained by a lawyer than by a layman like myself. The position is as follows. Where, prior to January 1, 1926, land has been sold subject to a rentcharge for life or other family charge and such charge is still subsisting on January 1, 1926, it would appear that as from that (lay the land will, by virtue of Section 1, subsection (1) (v) and Section 2 of the Settled Land Act, 1925, be settled land, the subject of a compound settlement of which there will be no trustees for the purposes of the Act. If so the purchaser will cease to be an absolute owner subject to a charge and will become a person having the powers of a tenant for life under the compound settlement. He will not be able to deal with his property until the necessary vesting deed has been executed, which cannot be done until trustees of the compound settlement have been appointed. This will involve an application to the Court. Moreover, on a resale by the purchaser the purchase money will not be payable to him, but to the trustees of the compound settlement, who will not be able to part with it so long as the charge subsists, even though the original vendor has given an amply sufficient indemnity against it. A release by the person entitled to the charge will not be practicable in every case and it is not clear that a release executed after December 31, 1925, will he effective to remove the objection and in any case such a purchaser will be put to inconvenience and expense.

I therefore ask His Majesty's Government whether it is proposed to introduce an amending Act immediately to remedy the position in which such purchasers will find themselves. What is really necessary is a short Bill saying that paragraph (v) of subsection (1) of Section 1 shall not apply to conveyances completed before December 31, 1925.

It was only quite lately brought to my notice that this subsection of Section 1 of the Settled Land Act, 1925, which comes into force on January 1, 1926, is causing anxiety and confusion among past purchasers and those who are negotiating the purchase of land and houses. I am told that solicitors are receiving thousands of letters each day and some of their staffs are not large enough to deal with those letters on this question. These letters often come from past purchasers who are not their clients, and as the vendor is the client I wonder who is to pay the cost of the replies. Many purchasers are quite poor people and they will be put to great inconvenience and expense unless the Act is altered. One estate may have sold thousands of plots of land to different purchasers, all of whom are affected by this question. If these difficulties can he put right by means of documents then, with all respect. I would ask who is to pay for them?


My Lords, the Question that my noble friend has put is a difficult one even for lawyers to deal with: but so far as I have followed my noble friend, he has undoubtedly pointed to what I think is a very serious defect in the new law which comes into, operation on January 1 next. The object of this legislation, as I understood, was to simplify and cheapen the transfer of land. From what my noble friend has said it would appear that in the cases to which he has referred the result would be, greatly to complicate the transfer and to add very considerably to its expense. I trust, therefore, that His Majesty's Government will cause an investigation to be made as soon as possible into the cases raised to-day, and that if it is found necessary, as I think it will be, to introduce legislation, they will introduce whatever legislation is necessary. New legislation always leads to some difficulties, but in this case it leads not only to difficulties but to an additional cost in the transfer of land which we are all most wishful to avoid.


My Lords, in answering the Question of the noble Lord I should like to point, out that the position to which he has called attention arises under an Act passed in the year 1922. The provisions of the present Act simply consolidate and repeat the provisions of the Act of 1922. It is perhaps rather strange that nobody during the last there and a half years has thought it necessary to call attention to this matter and that the point is raised only a little more than a week before the Act comes into operation. I think the position has been quite accurately stated by the noble Lord, and it is this: In the case of some estates the life tenant has sold parts of the land to purchasers. The estate was subject to some rentcharge which had priority over the estate of the vendor and in order to avoid getting a release or appointing trustees of the settlement (which might generally have been done at little cost), the vendor has sold to the purchaser subject to the annuity and has himself given an indemnity against the annuity. That is not very good conveyancing, but it saves a certain amount of trouble and expense, and I have no doubt that a good many sales have taken place on these terms.

Now, the position is this. The purchaser holds, as between himself and the annuitant, subject to the rentcharge, and I believe it is true that under the recent Act incorporating the provisions of the Act of 1922 technically a settlement will be created—that is to say, if nothing is done before January 1, 1926. But it is quite easy to get rid of the difficulty if those who are concerned will only take the necessary steps. All that is needed is that, there shall be before January 1, a short deed poll executed by the annuitant releasing all the plots sold subject to his annuity from the charge. The annuitant is in nearly all these cases amply secured on other property comprised in the settlement. He will run no real risk. If he does the life tenant is entitled under the Acts to give him a substituted security on other land.

All this is a matter of arrangement. It would not require more than a single deed of a page or so, and solicitors who are wide awake will get it executed before January 1 next. I have heard today of a large estate in which this has been done, and there has been no difficulty about it. It is impossible for the Government to pass legislation on this matter this Session, and therefore if nothing is done the Act must take effect.. Even so, I do not think that much trouble Will ensue in any case, and if it does we arc quite willing to consider the matter and see whether by legislation or in some other way a remedy can be found. I add one observation. It could hardly have been expected that in this complicated series of Statutes no flaws should be found to exist, and I fully expect that before much time has elapsed we may have to ask Parliament to pass an amending Bill dealing; with small points like this. I hope I have said enough to demonstrate to the noble Lord and to the House that the point raised to-day can be met if those concerned will only act as others have acted, and endeavour to obtain a release. If they will do that, I do not think they will have any further trouble.


My Lords, I rise to add to the reassurance which the Lord Chancellor has given to the House. Those who raise this point appear to forget that this Statute, which contains Section 1, subsection (1) (v), is one of a series of Statutes which originated in 1912, and since that day have been under the close consideration of the most eminent body of conveyancers in the country. The purpose of the Acts is to clear titles and make land easy of transfer. It will in the end be much easier to transfer land than it is to-day. I have not even the amount of apprehension which the Lord Chancellor has. By appointing trustees of the settlement the vendor of land with a rent-charge of this description imposed upon it can get rid of the encumbrances very quickly and very cheaply. I hope great use will be made of this machinery for cleansing titles, and I should regret very much if we even suggested doing anything which went back on the principle, which is to make land as between vendor and purchaser as saleable as are stocks and securities. That is the purpose of the Acts. Of course some explanation is required in the sections of the Statutes which bring, this change about. But the changes are not difficult to understand, and for my part I think the advantages which the new system confers enormously outweigh any mere technical difficulties such as that to which the noble Lord has drawn attention.