LOCAL LAND CHARGES BILL [H.L.] (Hansard, 24 June 1975)

§ The LORD CHANCELLOR

My Lords, this is a technical Bill designed to improve one part of our conveyancing machinery, itself a technical field. I apologise to noble Lords for inflicting such a monstrous technicality on the House at this hour. The Bill implements the recommendations of the Law Commission's Report on Local Land Charges (Law Corn. No. 62) and reproduces, with minor changes, the draft Bill annexed to that Report. The Report gives a clear account of the history and nature of local land charges and the need for reform and the Bill annexed to it is accompanied by detailed explanations.

The law relating to local land charges has become complicated, but their fundamental nature is simple. In the later years of the last century, local authorities started obtaining statutory powers which were liable to lead to the imposition of encumbrances on land in private ownership. The Public Health Act 1875, for instance, authorised local authorities to take what was apparently at the time the unpopular step of requiring undrained houses to be properly drained, and in default of compliance by the owners of the houses, they were further authorised to carry out the work themselves. In that event the authority's expenses were recoverable from the owners and until recovery they constituted a charge on the premises in respect of which they were incurred.

The prototype of a local land charge is a statutory financial charge on land, enforceable by a local authority against successive owners and registrable in a register kept by a local authority officer and open to public inspection. Registration of a charge constitutes notice of it; and in broad terms a purchaser of land takes the land burdened with any charge which is registered and free of any charge which is not.

There is a resemblance between this kind of charge and the ordinary private 1375 land charge, such as a restrictive covenant or contracts and options for the purchase of land. Indeed the Land Charges Act 1925 dealt with both types of charge. Nevertheless, even in 1925 there were considerable differences, for example: local land charges could only be imposed by local authorities, land charges by anyone; local land charges were registrable locally, land charges by the Land Registry; local land charges were registrable against land, land charges (in so far as they affected unregistered land) against names.

Since 1925 further differences have arisen, notably in the use of the local registers for purposes beyond their original scope. Many statutory burdens on land—not merely financial ones—imposed by local or central authorities have been made registrable in the local registers. Many of these matters are not true local land charges at all, for they bind the purchaser whether or not they are registered.

There have also been changes in the law relating to ordinary land charges, which was consolidated by the Land Charges Act 1972. That Act consigned to a Schedule the remnant of the Land Charges Act 1925, which now relates solely to local land charges. Thus land charges and local land charges were always different creatures and have grown further apart over the years. While much has been done to remedy defects in the land charges system, local land charges have always been treated as an undeserving relation. Although they received the attention of the Stainton Committee, it is a sad thought that the Report of that Committee was published as far back as 1952—so that it has indeed been pigeon-holed for a very long time.

I turn now to the main features of the Bill. First, Clauses 1 and 2 redefine the classes of things which are to be local land charges. The clauses make many technical improvements designed to resolve doubts and to simplify the drafting of future legislation. I particularly draw attention to Clause 2(e), which puts it beyond doubt that planning conditions—matters which are already recorded in the planning registers—are not local land charges. Clause 3 imposes upon local authorities the responsibility for registra- 1376 tion and in so doing relieves the officers of local authorities from their present personal responsibility for this important statutory function. Clause 3(3) enables the index to the register to be kept by means of a device, such as a computer. I hope that this will be helpful to local authorities; but I must make it clear that the Bill does not provide for computerising the registers themselves.

Clause 10 entitles a purchaser to compensation if he suffers loss through a failure to register a charge or a failure to disclose a registered charge in response to a request for an official search. This clause makes a radical innovation. I have already explained that where a true local land charge is unregistered the purchaser takes the property free of it, but that other registrable matters bind the purchaser whether they are registered or not. In these latter cases a purchaser affected by a charge of which he knew nothing before the purchase may find it difficult or impossible to obtain redress. The arguments against the existing law are detailed in paragraphs 46 to 51 of the Report.

My Lords, failures of registration or disclosure are comparatively rare, and the potential liability for compensation by Clause 10 is likely to make them even rarer. The clause, however, radically improves the law by creating a fair balance between public and private interests and by replacing a chaotic jumble by cohesion and uniformity.

The remaining provisions of the Bill either re-enact the existing law or are concerned with minor points. I only want to mention one final matter. The Report refers to "supplementary inquiries ". These inquiries are extra-statutory and are settled by agreement between the Law Society and the local authority associations. The Bill does not deal with them and I am satisfied that it should not do so. I commend the Bill to the House as a most useful contribution to the continuing reform of our law. I beg to move that the Bill be now read a second time.