23 After Clause 30, insert the following clause:
.—(1) Section 99 of the Law of Property Act 1925 (leasing powers of mortgagor and mortgagee in possession) shall be amended in accordance with subsections (2) and (3) below.
§ (2) At the beginning of subsection (13), there shall be inserted 'Subject to subsection (13A) below:.
(3) After that subsection, there shall be inserted—
'(13A) Subsection (13) of this section—
(13B) In subsection (13A) of this section—
agricultural holding" has the same meaning as in the Agricultural Holdings Act 1986; and
agricultural land" has the same meaning as in the Agriculture Act 1947.'
§ (4) Paragraph 12 of Schedule 14 to the Agricultural Holdings Act 1986 (which excludes the application of subsection (13) of section 99 of the Law of Property Act 1925 in relation to a mortgage of agricultural land and is superseded by the amendments made by subsections (1) to (3) above) shall cease to have effect.".
My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 23. This is a rather technical amendment, but the effect is quite simple. Since 1948 the agricultural holdings legislation has effectively prevented mortgage lenders from putting restrictions on the letting of agricultural land by landowners who have mortgaged the land. The banks have now suggested, and the main industry organisations have agreed, that there would he advantages in treating agricultural land like any other land or property which is mortgaged and enabling mortgage lenders to control lettings if they so wish. Subsection (4) of the new clause achieves that objective.
A substantive amendment to the Law of Property Act 1925 is also needed to avoid retrospection. As we made clear throughout the discussions on the tenancy law reform, the new legislation is not to be retrospective. The new clause adds a new subsection to Section 99 of the 1355 Law of Property Act 1925 to safeguard the interests of existing borrowers and people who are entitled to a new 1986 Act tenancy.
§ Moved, That the House do agree with the Commons in their Amendment No. 23.—(Earl Howe.)
§ Lord Carter
My Lords, this is a technical point. In order to be absolutely clear, I should be grateful for confirmation that this amendment applies to new tenancies under the 1986 Act and any tenancies which fall under this Bill but not to existing 1986 Act tenancies, so that there is no element of retrospection to protect the mortgagor of land which is presently let under the 1986 Act. Is that understanding correct?
My Lords, the essential point is certainly that there is no element of retrospection. The amendment will restore the right to contract out of Section 99 of the Law of Property Act in relation to agricultural land, but the new clause will retain the existing restriction on contracting out in the case of all loans made before the Bill comes into force and in the case of loans made subsequently which are secured on a mortgage of a tenanted holding which is still governed by the Agricultural Holdings Act of 1986.
I am now in a position to shed a little further light on the question posed by my noble friend Lord Stodart. The definition of fixed equipment is very similar to that used in the 1986 Act. Fences, dry stone walls, hedges and so on fall within the definition. In relation to the amendments which we have just approved, we did not favour the idea that improvements should be listed, as proposed by the Opposition. We have now dealt with the problem by another method, as my noble friend will appreciate.
§ On Question, Motion agreed to.