HL Deb 16 July 1925 vol 62 cc173-6

Order of the Day for the Second Reading read.


My Lords, this is a very short measure, which has passed through all its stages in another place without any controversy. I hope your Lordships will consider it of sufficient importance to give it a Second Reading and pass it here. The Bill, as it stands, is somewhat difficult to construe, but the meaning of the only executive clause is this. It is desired to remove certain doubts as to the power of land improvement companies to advance money to limited owners of settled estates for the purpose of rebuilding or improving the mansion house. During the course of the last century there were a considerable number of Bills dealing with settled land, all tending in somewhat the same direction, for the purpose of freeing owners—that is, limited owners—from the very strict terms of settlement and enabling them to borrow money on the security of settled estates for the purpose of carrying out certain specified estate improvements. Under the Act of 1864, the Improvement of Land Act, the improvements for which money might be borrowed are laid down. That did not include any power to borrow money for improving or altering the mansion house, but a demand for that power came later, that is after 1864, and in 1870 an Act called the Limited Owners Residencies Act was passed, authorising the improvement of mansions to be placed in the same category as other estate improvements, with two important restrictions or limitations.

Whereas, under the Settled Lands Act, ordinary estate improvements could be carried out with money borrowed for the purpose on the settled land, that loan becomes a charge prior to all other land encumbrances, and further there is no limitation as to the amount of money which the owner may spend on his property, except., of course, the authority of a certificate of the Minister of Agriculture. While that Act enabled owners to borrow from private individuals, it gave no power to the statutory land improvement companies to advance the money. That state of things continued until the year 1890. The Act of that year is, for this purpose, an important one to consider, because that Act, as we believed, freed the loans raised for the purpose of rebuilding mansion houses from the restrictions which had previously been placed upon them both as to priority of loan and also, to some extent, as to limitation of cost.

Limitation of cost is there laid down so that the amount charged shall not exceed more than one half of one year's rental, but there is some doubt as to whether loans for those purposes were, under that Act, given priority or not, and that is the main reason why at this moment we are interfering with, and trying to amend, the law in that matter. Up to that time land improvement companies were not empowered to grant loans for that purpose. That came in the year 1899, when this power was given to them; but it is quite certain that under the Improvement of Land Act of that year the restrictions which were contained in the Act of 1870, both as to the power of borrowing money and as to the priority of the loans, were imposed upon the improvement companies. They were imposed by the proviso which we desire to repeal, and which reaffirms all the restrictions that were found in the Act of 1870.

When the Law of Property Act, 1922, which one may call the final Act, was passed, it dealt with certain constructional improvements to mansion houses, and, in the opinion of many authorities, it does give loans for that purpose priority over other loans. It does not, so far as I am aware, deal with the actual rebuilding of the mansion house, and I wish to impress upon your Lordships that there is some importance, at all events, in clearing up this matter and in allowing the improvement companies to deal with these loans in the same way as private individuals.

It is a real advantage to the limited owner, if he is authorised by the certificate of the Ministry to improve his house in the way that he desires, that he should be able to borrow money for the purpose under the better terms which the improvement company is able to give him. I beg to move the Second Reading of this Bill.

Moved, That the Bill be now read 2a.— (Lord Clinton.)


My Lords, speaking for the Ministry of Agriculture we make no objection to the passage of this Bill. I might say that, in all these eases where loans are given under the Improvement of Land Act to a land improvement company, the adequacy of the security is always taken into account before any prior charge is approved. That is, of course, the custom and most eases—indeed, almost invariably—the prior encumbrancers are notified with a view to their intimating any objection that they may feel about this prior charge being given. I can assure your Lordships that, in cases arising under this Bill when it is passed into law, we shall take care always to acquaint the prior encumbrancers in order to see that the security is adequate before such prior charge is approved.

On Question, Bill read 2a, and committed to a Committee of the Whole House.

House adjourned at five minutes before seven o'clock.