§ Supplementary
§ 6.—(1) For the purposes of paragraphs 2, 3 and 5 of this Schedule the relevant date, in the case of an application to the Tribunal on which they issue a certificate under paragraph 1 of this Schedule as respects a premium paid in respect of the grant, continuance or renewal of any term, shall be ascertained as follows.
§ (2) Where the term is a term of years certain current when the application to the Tribunal is made, being a term exceeding seven years, or the continuance or renewal was for such a term of years certain, the relevant date shall be the date of the expiration of that term of years certain.
1138§ (3) In any case not falling within the last foregoing sub-paragraph, the relevant date shall be the date of the expiration of seven years from the commencement of the term, or of the continuance or renewal of a term, in respect of which the premium was paid.
§ (4) For the purposes of the two last foregoing sub-paragraphs a term of years shall be deemed to be certain notwithstanding that it is liable to determination by re-entry or on the happening of any event other than the giving of notice by the landlord to determine the term; and a term of years determinable by the giving of such a notice as aforesaid by the landlord shall be deemed to be a term of years certain expiring on the earliest date on which such a notice given after the issuing of the certificate of the Tribunal would be capable of taking effect.
§ 7. For the purposes of sub-paragraph (2) of paragraph 5 of this Schedule the relevant date, in relation to an assignment taking effect where no such application has been made to the Tribunal as is mentioned in the last foregoing paragraph, shall be the date which would be the relevant date under the last foregoing paragraph in the case of such an application made at the date when the assignment takes effect.
§
8. In this Schedule the following expressions have the meanings hereby assigned to them respectively, that is to say:
reasonable rent" means the reasonable rent determined by the Tribunal under subsection (1) of section one of this Act;
rent-period" means the period (whether weekly, monthly, annual or other) for which payments of rent are made;
rental equivalent" means, in relation to any premium, the amount of the premium, or so much thereof as at the time of the issue of a certificate of the Tribunal under paragraph 1 of this Schedule has not been repaid or recovered, divided by the number of rent-periods between the commencement of the term, or of the continuance or renewal of a term, in respect of which the premium was paid and the relevant date;
reversion", in relation to the grant, continuance or renewal of a tenancy of a dwelling-house, means the estate or interest in the dwelling-house which, immediately after the grant, continuance or renewal of the tenancy, was expectant upon the determination of the term granted, continued or renewed.
§ 9. Where, on an application to the Tribunal on which they issue a certificate under paragraph 1 of this Schedule, the rental equivalent of the premium exceeds the reasonable rent,—
- (a) there shall be determined the date, being a date coinciding with the end of a rent-period, such that if that date were the relevant date the rental equivalent of the premium would be reduced so as to be as nearly as may be equal to, but not greater than, the reasonable rent; and
- (b) the foregoing provisions of this Schedule shall have effect, in relation to that application, as if the date determined under the last foregoing sub-paragraph were
1139 the relevant date and the rental equivalent of the premium were reduced accordingly.
§ 10.—(1) It shall be the duty of the Tribunal, on any application to them on which they issue a certificate under paragraph 1 of this Schedule, to determine such of the following matters as are required to be determined for the purposes of the application, that is to say—
- (a) the rental equivalent of a premium;
- (b) the relevant date; and
- (c) the date referred to in sub-paragraph (a) of the last foregoing paragraph;
§ (2) The matters required to be contained in the register kept under section seven of this Act shall include, in relation to any dwelling-house as respects which a certificate has been issued under paragraph 1 of this Schedule,—
- (a) that certificate and any other certificate issued under this Schedule as respects that dwelling-house;
- (b) any determination of the Tribunal made as respects that dwelling-house under any of the provisions of this Schedule."
§
Amendment moved—
Page 17, line 34, leave out paragraphs 4 to 6 and insert the said new words.—(Lord Pakenham.)
LORD MESTONSubsection (4) of Clause 3 has been brought into paragraph 5 of Part II of the First Schedule and raises a point to which I attach great importance, though I am not sure that the Government take the same view of the matter. Under the Bill as at present drafted, the position is that if I take a grant of a tenancy from my landlord and pay my landlord a premium, and if I subsequently assign my tenancy, I am entitled to recover part of that premium from my assignee. So far, so good; and I think that indicates a great desire on the part of the Government to deal fairly with this difficult matter—and, having said that, I hope that I have used the right key to unlock the stony heart of the Government. On the other hand, if I take an assignment of a lease from a lessee to whom I pay a premium, and if subsequently I come to assign that lease, I am unable to recover any part of that premium from my assignee. That appears to me to be a remarkable distinction, and one which is liable to cause a good deal of hardship. I have, in fact, had a number of letters from people on this subject, and I hope the 1140 Government will consider the matter between now and the Report stage. I can see no reason whatever for drawing a distinction between a case where, in the first instance, I pay a premium to my landlord, and where I pay a premium to a lessee. I think the distinction is quite unjustified, and I hope the Government will express their views on the subject.
LORD PAKENHAMI realise that the noble Lord has given a great deal of thought to this matter, but I wonder whether he has appreciated the reason why the Government make a distinction. Under the Bill, a tenant assigning his tenancy can pass on to an assignee an appropriate part of any premium which was paid to the landlord, and the assignee can recover what he has paid by withholding from his rent to the landlord the rental equivalent of the premium—in the case of first lettings since 1939. Where, before the Act, a tenant paid a premium for the assignment to him of the tenancy where no premium was paid to the landlord when the tenancy was first granted, that tenant cannot pass on any part of that premium paid by him for assigning. That is what the noble Lord is complaining about.
The main reason for it is this. The assignee will, of course, pay his rent to the original landlord. The assignor has gone from the scene, and it would be unreasonable for the Bill to allow the assignee to deduct any rental equivalent from his rent to the landlord, because the landlord, in the case the noble Lord is criticising, has received no premium. Where the landlord has received no premium, it is unfair to "stick" this burden on the assignee, because the assignee cannot get it back from the landlord. The noble Lord shakes his head, but that is the position—that it would be unreasonable to allow the assignee to deduct any rental equivalent from his rent to the landlord and, therefore, if an assignee were to pay a premium for assignment merely because the assignor had paid such a premium, the assignee would be paying more than he ought for the premises, and would not be able to get anything back from the landlord. I would ask the noble Lord to recognise that there is a distinction of fact which does form a basis for a distinction in law. Noble Lords must forgive me for putting 1141 it rather crudely and colloquially, but sometimes these things are better understood in that way. I hope the noble Lord will think over what I have said, and that perhaps he will be satisfied.
LORD MESTONSurely, the position is this. If I take a tenancy from my landlord, and pay my landlord a premium, then, if I subsequently assign my tenancy, I am entitled to recover part of that premium from the assignee. On the other hand, if in the first instance I take an assignment of a lease from a lessee, and pay that lessee a premium, then if I subsequently assign my tenancy I am not entitled to charge any premium whatsoever as against the incoming tenant who is my assignee. The difficulty which the noble Lord has envisaged—and which certainly is a rather complicated difficulty—could surely be overcome by inserting a provision to the effect that where, in an assignment of a lease from a lessee, that lessee is paid a premium, then if I assign my lease I am entitled to charge my assignee with a proportionate part of the premium, and no question of determining the rental equivalent can arise in any way. I feel that there is some way out of this difficulty, although it is not easy to think of it for the moment. Perhaps when my mind is clearer on the subject I may be able to put down another and a better Amendment.
LORD PAKENHAMHaving asked the noble Lord to think over what I have said to him, it is only right to say that I will think over what he has said to me. I am not quite sure whether he is now assuming a case where a premium was originally paid to the landlord.
LORD PAKENHAMI was dealing with the case where no premium was paid to the landlord. I would like to look more closely into the noble Lord's case, and I shall be pleased to discuss it further with him. The basis for the distinction is the one that I have indicated already.
§ On Question, Amendment agreed to.
§ First Schedule, as amended, agreed to.
1142§ Second Schedule [Minor Amendments]:
§ LORD MORRISON moved in the Amendment to Section 2 of the Rent of Furnished Houses Control (Scotland) Act, 1943, to delete the word "and" ["and after subsection (3)"]. The noble Lord said: There are three Amendments to this Schedule, and as your Lordships have further business perhaps the House will allow me to explain all three together. In point of fact, the first and second Amendments are consequential on the third. The third Amendment is at page 19, line 18, and the three Amendments are designed to bring the Rent of Furnished Houses Control (Scotland) Act, 1943, into line, in this particular respect, with the Furnished Houses (Rent Control) Act, 1946, which is the corresponding Act for England and Wales. The purpose is to remove a difficulty experienced by Scottish Tribunals in dealing with applications involving lets in holiday resorts.
§ It is a common practice in Scotland—perhaps in England as well—for landladies in holiday resorts who depend on letting for their livelihood to let accommodation at low rents during the winter months. If a tenant enjoying such a low rent applies to a Tribunal, the Tribunal can only approve or reduce that rent, and the rent fixed then becomes the maximum rent which can be charged until the case is again reviewed by the Tribunal as a result of a fresh application. The result of the Tribunal's decision is, therefore, to bar the landlady from charging a higher rent for the accommodation during the summer months unless she applies to the Tribunal on the ground of change of circumstances to reconsider the rent previously fixed. This Amendment would remove the difficulty by enabling Scottish Tribunals to limit the period during which the low rent would operate. I beg to move.
§
Amendment moved—
Page 19, line 8, leave out ("and").—(Lord Morrison.)
§ LORD LLEWELLINWe have at last come to what I would call the common horse sense of the Scottish people, because although all through the Bill everybody has said that there can be no increase whatever in rent, in the third Amendment which the noble Lord is moving, we see the words: 1143
…under which a rent is payable that has been approved, reduced or increased under this section.I congratulate Scotland on its common sense.
§ On Question, Amendment agreed to.
§ LORD MORRISONThis also is a consequential Amendment. I beg to move.
§
Amendment moved—
Page 19, line 9, leave out ("subsection") and insert ("subsections").—(Lord Morrison.)
§ On Question, Amendment agreed to.
§ LORD MORRISONIn formally moving this Amendment, I should like to thank the noble Lord, Lord Llewellin, for his kind references to Scotland and to say that he may also be aware that Scotland found a solution several years before England in regard to the control of rents of furnished premises. Therefore, that on which he has complimented Scotland now is merely a continuation of their former perspicacity.
§ Amendment moved—
§
Page 19, line 18, at end insert—
(""(3B) An approval, reduction or increase under this section may be limited to rent payable in respect of a particular period"; and for subsection (4) there shall be substituted the following subsection:—
(4) The Tribunal shall keep a register and shall cause to be entered therein with regard to any contract under which a rent is payable that has been approved, reduced or increased under this section,—
The Tribunal shall make the register available for inspection in such place or places and in such manner as the Secretary of State may direct."").—(Lord Morrison.)
§ On Question, Amendment agreed to.
§ Second Schedule, as amended, agreed to.
§ The Title.
LORD PAKENHAMI beg to move the first Amendment in the Title standing in my name. The alteration of wording is made desirable by the introduction of Clause 3 on Committee stage in an- 1144 other place, which restricts the requiring of premiums and does not merely provide for Tribunals to adjust rents in their case. We are proposing in the Bill as it now stands to cover the position where a tenant may be held to lose the protection of the Rent Acts by subletting part of the house. I beg to move.
§
Amendment moved—
In the Title, line 4, leave out from ("1939") to ("to") in line 7 and insert ("further to restrict the requiring of premiums in connection with tenancies to which those Acts apply; to make further provision for the purposes of those Acts where the tenant shares part of his accommodation with his landlord or other persons or sublets part of his dwelling-house furnished").—(Lord Pakenham.)
§ LORD LLEWELLINSo far as I am concerned, I have no objection to this Amendment.
§ On Question, Amendment agreed to.
LORD PAKENHAMI beg to move the Second Amendment in the Title. The words which it is proposed to insert refer to Clause 13, which deals with the prohibition of premiums on grant or assignment of furnished lettings. This clause was introduced into the Bill on Report stage in another place. I beg to move.
§
Amendment moved—
Line 10, after ("tenure") insert ("and the requiring of premiums").—(Lord Pakenham.)
§ On Question, Amendment agreed to.
§ House resumed.