Commonhold and Leasehold Reform Bill [H.L.] (Hansard, 15 April 2002)

§ The Parliamentary Secretary, Lord Chancellor's Department (Baroness Scotland of Asthal)

My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 1 to 4. For the convenience of the House, I should like to move Amendments Nos. 1 to 4 en bloc and speak also to Amendments Nos. 14 to 22. All 12 amendments are designed to bring the Bill into line with the Land Registration Act 2002 which, as noble Lords know, received Royal Assent on 26th February last.

Registration by the Land Registry is an essential part of the process of setting up a commonhold and the Bill makes certain provisions to allow that process to be carried through effectively. At the time of drafting, the operative legislation was the Land Registration Act 1925. By the time that this Bill comes to be implemented, the operative legislation will be the 2002 Act and so, as we signalled before the Bill left this House to go to the other place, we brought forward the necessary amendments there.

I turn to Amendment No. 1. Although an amendment was necessary to Clause 3(1)(d) to bring the Bill into line with the 2002 Act, Amendment No. 1 goes further than is required simply for that purpose. Clause 3(1)(d) provides that one of the consents required before land can be registered as commonhold is that of a person who is registered as a cautioner of the whole or part of the land. We signalled before the Bill left your Lordships' House that we would be tabling an amendment to remove mention of cautioners from the list of persons who must consent to registration of land as commonhold. Amendment No. 1 does this by removing from the Bill sub-paragraph (d) from subsection (1) of Clause 3.

There are two reasons for doing this. First, it would simplify the consent required on the face of the Bill because a class of interests would be removed from the blanket protection of the consent requirement and, so far as may be necessary, would be dealt with under Clause 3(1)(e).

Secondly, it will give room to manoeuvre to take the provisions of the new scheme in the Land Registration Act 2002 into consideration. The Land Registration Act makes changes to the scheme of protection of interests on the register which makes the reference to "a cautioner" in Clause 3(1)(d) of the Commonhold and Leasehold Reform Bill no longer effective or appropriate. Under the Land Registration Act 2002 it is still possible to enter cautions against first registration and transitional arrangements so that existing entries on the register are retained. However, it will no longer be possible to enter cautions against dealings on the register.

Instead, under the Land Registration Act, cautions against dealings will, for the most part, be replaced by "unilateral notices". Some types of interest that are presently protected by a caution in future will be protected by a restriction. Some interests may he able to be protected both by a notice and a restriction under the new regime: the notice to protect the priority of the interest and the restriction to ensure that certain procedural requirements of the interest are complied with.

685 The policy behind the inclusion of cautioners, as opposed to any other interest holder, in Clause 3(1)(d) was not based on a need for additional protection for cautioners, but rather on the fact that a caution is regarded as being a "hostile" entry on the register, and is subject to the warning-off procedure. Including a requirement for the consent of cautioners in Clause 3 effectively brought forward to the pre-application stage any dispute under the warning-off procedure that might otherwise delay the registration of the land. Bringing potential disputes to the fore at an early stage was felt to contribute to streamlining, which we considered sufficiently necessary so as to include it on the face of the Bill.

We want to continue with this policy of early discovery of potential disputes. We shall also need to consider whether provision for consent by holders of interests which were protected by entering a caution is necessary. Further consideration will need to be given as to whether, and if so what, consent provisions are required for beneficiaries of notices and restrictions as defined in the Land Registration Act 2002 who would not previously have been cautioners under the Land Registration Act 1925. Further work needs to be done on this area in conjunction with the implementation of the Land Registration Act 2002. Therefore, in order to deal with this range of interests, the Government would rely on the power as it stands in Clause 3(1)(e) to prescribe other classes of persons whose consent should be required.

As to Amendments Nos. 2 to 4, each amendment seeks to amend Clause 6 of the Bill, which deals with registration in error. Clause 6(2) refers to Section 82(1) of the Land Registration Act 1925, which deals with rectification. It does so in order to exclude the possibility of the register being rectified under Section 82(1) in the specific circumstance of errors in the process leading up to a commonhold registration and to create a specific procedure in respect of commonhold matters.

The Land Registration Act 2002 provides for a more limited scheme of rectification in Section 65 and Schedule 4 than was the case under Section 82(2) of the 1925 Act. However, although rectification is still possible under the new Act, the term "rectification" is more limited in scope in the new scheme than it had been in the 1925 Act. The process of "alteration" in the 2002 Act more nearly approximates to the 1925 Act's use of "rectification", and this amendment is simply necessary to correct the reference in Clause 6(2) so that it refers to "alteration" rather than to "rectification".

As to Amendment No. 3, in listing various courses of action which a court may take when making an order under Clause 6, the Bill, at Clause 6(6)(b), currently provides that the court may order the rectification of the register. For the reasons that I have already given, Amendment No. 3 seeks to substitute the word "alteration" for "rectification".

As to Amendment No. 4, Clause 6(6)(g) refers to Sections 83 and 84 of the Land Registration Act 1925, concerning provisions in respect of indemnity. This indemnity scheme is to be replaced by an amended 686 scheme contained in Section 102 of and Schedule 8 to the Land Registration Act 2002. As Clause 6(6)(g) confers a power to apply, disapply or modify, in a specific commonhold context, a provision of the indemnity scheme, the amendment simply seeks to correct the reference so that it refers to Schedule 8 to the Land Registration Act 2002.

Each of Amendments Nos. 14 to 19 seeks to amend Clause 63 of the Bill, which makes provisions in regard to registration procedure. Clause 63 empowers the Lord Chancellor to make rules about registration specifically in relation to commonhold land. In making provision about how these rules are to be made, what they may cover and how they are to have effect, Clause 63(2) relies on references to Section 144 of the Land Registration Act 1925. The appropriate reference is now to the "land registration rules" within the meaning of the Land Registration Act 2002, as Section 130(1) of the Land Registration Act defines "land registration rules" as any rules to be made under the 2002 Act. Amendments Nos. 15 and 16 simply reflect, in their respective places, the change brought about by Amendment No. 14.

Clause 63(3)(b) provides that commonhold registration rules may make provision for disapplying Section 64 of the Land Registration Act 1925 in certain circumstances, and Section 64 dealt with the production of certificates. It is not directly replaced on the face of the 2002 Act; rather paragraph 4 of Schedule 10 to the 2002 Act provides a power to make provision about the production of certificates. The disapplication of general rules for certain circumstances can be done under that power without the need for specific provision to that effect on the flee of the Bill as Section 128(1) of the Land Registration Act allows "different provision for different cases" to be made by land registration rules. Therefore, Clause 63(3)(b) is no longer necessary and Amendment No. 17 seeks to remove it.

Amendment No. 18 simply seeks to change the reference to the power to charge registration fees in the Bill from Section 145 of the 1925 Act to Section 102 of the 2002 Act. Clause 63(5) of the Bill requires a commonhold registration document to be accompanied by such fee as specified by order under Section 145 of the Land Registration Act 1925. Section 145 is replaced by Section 102 of the 2002 Act for all relevant purposes. Therefore Amendment No. 18 seeks to replace the reference to Section 145 of the 1925 Act with one to Section 102 of the 2002 Act.

As regards Amendment No. 19, Clause 63(6) of the Bill currently defines "commonhold registration document" and "general registration document", and does so for the latter by referring to a document sent to the registrar under a provision of the Land Registration Act 1925. Amendment No. 19 seeks to correct this to a reference to a document sent to the registrar under the Land Registration Act 2002.

Amendment No. 20 seeks simply to replace the definition of the term "register" in Clause 65 with the appropriate reference to the 2002 Act. Amendment No. 21 seeks to remove Clause 65(6). The clause 687 provides for an insertion in the 1925 Act after Section 126(4). That subsection made provision for the expenses of the registrar, principally salaries of staff, to be provided out of money given by Parliament. Clause 65(6) as it stands extends the scope of that provision so that expenses relating to commonhold registration functions can be similarly provided. Provision of the registrar's expenses out of money given by Parliament is no longer appropriate given the Land Registry's trading fund status and the Land Registration Act 2002 does not reproduce Section 126 or make provision in the same way. Land Registry expenses will be met in a different way and the provision to be inserted by subsection (6) is therefore no longer required.

As to Amendment No. 22, Clause 67(3) provides for any provision of the 1925 Act which defines an expression within that Act to apply to the use of that expression in Part 1 of the Bill unless the contrary intention appears. That reference to the 1925 Act should now to be to the Land Registration Act 2002 and Amendment No. 22 seeks to achieve this.

Moved, That the House do agree with the Commons in their Amendments Nos. 1 to 4.—(Baroness Scotland of Asthal)