§
(". After section 58 of the Leasehold Reform, Housing and Urban Development Act 1993 there shall be inserted—
§ "Priority of interests on grant of new lease.
§ 58A.—(1) Where a lease granted under section 56 takes effect subject to two or more interests to which the existing lease was subject immediately before its surrender, the interests shall have the same priority in relation to one another on the grant of the new lease as they had immediately before the surrender of the existing lease.
§ (2) Subsection (1) is subject to agreement to the contrary.
§ (3) Where a person who is entitled on the grant of a lease under section 56 to rights of occupation in relation to the flat comprised in that lease was entitled immediately before the surrender of the existing lease to rights of occupation in relation to the flat comprised in that lease, the rights to which he is entitled on the grant of the new lease shall be treated as a continuation of the rights to which he was entitled immediately before the surrender of the existing lease.
§
(4) In this section—
the existing lease", in relation to a lease granted under section 56, means the lease surrendered on the grant of the new lease, and
rights of occupation" has the same meaning as in the Matrimonial Homes Act 1983."").
§ The noble Lord said: This amendment deals with the treatment of third party interests binding a lease when a leaseholder is granted a new lease under the provisions of Chapter II of Part I of the Leasehold Reform, Housing and Urban Development Act 1993.
§ Section 58 of the 1993 Act already provides that if a lease is subject to a mortgage, then that mortgage shall take effect against the new extended lease in the same way as it applied to the old lease. Some uncertainty has arisen about the position where there is more than one third party interest to a lease.
§ New subsection 58A(1) of the 1993 Act inserted by this clause clarifies that when a new lease is granted under Part I of the 1993 Act, the interests which applied to the old lease shall apply to the new lease in the same priority as they applied to the old. New Section 58A(2) provides that this rule is subject to agreement to the contrary.
§ New Section 58A(3) provides that a spouse's rights of occupation under the Matrimonial Homes Act 1983 existing on the grant of the new lease is to be treated as a continuation of the rights to which he was entitled immediately before surrender of the old lease. That reverses the result that would otherwise follow under the Matrimonial Homes Act; namely, that the rights would be treated as created on the grant of the new lease. I beg to move.
§ On Question, amendment agreed to.
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Lord Lucas moved Amendment No. 255B:
After Clause 105, insert the following new clause—