I am grateful to my hon. Friend for that intervention and I know that he has a specific and long-standing interest in leasehold reform. He is right to draw the House’s attention to the fact that this area of law is complex by any measure. Many outside the House also feel that it would benefit from simplification, whether by the Law Commission or by the Government of the day pulling together the different pieces of legislation that govern the leasehold tenure provisions. There is plenty of scope for improvement, and I think he would agree with me on that.
As I said, I fear that those outside the House who have an interest in this area of law had rather ambitious hopes for the Bill when they saw its title appear on the Order Paper. However, as my hon. Friend will know, it is not really appropriate for a private Member’s Bill to try to deal with all the matters that he may have in mind and would like to see resolved in future; it would run into all sorts of problems in the House if it did.
Hon. Members will appreciate that private Members’ Bills are fairly narrow; they have to be, if they are to make progress. It is not usual for them to make whole-scale changes to a particular area of law. I should add at this point that unusually for a private Member’s Bill that has reached this stage—Third Reading, the final stage in its legislative process through the House—this is a genuine private Member’s Bill. I say that not in any way to belittle private Members’ Bills that contain legislative proposals suggested by the Government of the day, because invariably—indeed, as we have seen in every Session of this Parliament—those Bills contain sensible measures, which are welcomed by those affected. However, this legislation demonstrates that it is entirely possible for a Bill to make progress through the House even though it was not originally conceived within Government.
I have referred to the Bill as a genuine private Member’s Bill. However, I must pay tribute to the work of the Association of Leasehold Enfranchisement Practitioners, which brings together both solicitors and valuers who act on behalf of landlords and tenants in respect of collective enfranchisement and lease extension matters. It seeks to promote best practice and has been campaigning for improvements to the legislation dealing with leasehold tenure, which, as I said, is a particularly complicated area of law. In particular, I wish to place on the record my thanks to Mr John Midgley, the property enfranchisement partner at Seddons solicitors and a member of the advisory committee of ALEP, for his sage advice and assistance.
There are traditionally two types of tenure of land in this country: freehold and leasehold. An owner of the freehold interest in land may either retain the right to occupy that land themselves or choose to allow someone else to occupy the land for a fixed period. The terms and conditions that govern the relationship between the freeholder and the holder of the lesser interest in the land—the leaseholder—are set out in a document that we all know as a lease.
Initially, owners of long leases of dwelling houses were given the right to buy the freehold interest in the land on which the dwelling house was built by virtue of the Leasehold Reform Act 1967. However, that Act applied only to houses; people who lived in flats were excluded. Some 26 years later, long leaseholders living in blocks of flats gained what was called a collective right to buy the freehold of the blocks they lived in under the terms of the Leasehold Reform, Housing and Urban Development Act 1993. That Act also provided for a leaseholder to acquire a new lease to extend the period of years for which they held the property.
To commence the process by which the right of collective enfranchisement can begin it is necessary for a tenant to serve on their landlord a notice pursuant to section 13 of the 1993 Act. A similar notice is required under section 42 of the Act to trigger the statutory
procedure to enable a leaseholder to acquire a new lease. Currently, where a leaseholder wishes to give notice under either section 13 or section 42 of the 1993 Act, section 99(5)(a) provides that any notice served pursuant to either section 13 or section 42 must be—and this is the crucial part of the Act that we are hoping to remedy—
“signed by each of the tenants, or (as the case may be) by the tenant, by whom it is given”.
As I will explain, that statutory provision has been interpreted by the courts to mean that the notice must be signed personally by the tenant. Normally, solicitors can, and frequently do, sign legal documents for and on behalf of their clients. It is also normally possible for any person who chooses to do so to execute a power of attorney to appoint someone else to act on their behalf and sign legal documents on behalf of the donor of the power.
Unusually, in my experience, this is one area of law where even a person holding a valid power of attorney would be prohibited from signing the notice on behalf of the donor. As the House can doubtless immediately imagine, that could have potentially devastating consequences for the affected person. Incidentally, the same problem would arise where someone was appointed by the Court of Protection to manage the affairs of someone else who, by reason of mental incapacity, was unable to manage their own affairs. That would happen if an individual became mentally incapable of managing their own affairs but had not previously entered into an enduring power of attorney, or what is now called a lasting power of attorney; the difference between the two terms is of little relevance.
Before I proceed further, it may assist the House if I refer to St. Ermin’s Property Company Ltd. v. Tingay, the leading case on this issue. It concerned the validity of a notice given under section 42 of the 1993 Act. I will refer to the facts of the case, as set out in the judgment of Lord Justice Lloyd, sitting in the chancery division of the High Court of Justice, on appeal from the decision of His Honour Judge Morgan, sitting at Staines county court.
In this case, the tenant of a first floor flat situated at 10 Hill Court on Wimbledon Hill Road in London SW19 held her property under a lease dated 14 May 1976, which granted her and her husband a lease of 60 years less a few days. She maintained that the flat was occupied by her as her only or principal home for almost the whole of the 10-year period up to the date on which the notice was given, which was 11 October 2000. The tenant was elderly. By the time the High Court judgment was given on 19 July 2002, she was less than a month short of her 90th birthday.
In March 2000, the tenant moved out of the flat into accommodation in which her needs could be better attended to. In anticipation of her deteriorating health, this elderly lady had done what we would think of as the right thing to do: executed an enduring power of attorney that gave general authority to her son and daughter to act—jointly and separately—on her behalf.
The elderly lady’s lease was one to which the provisions of the 1993 Act applied, thus allowing her to claim the grant of a new lease. Accordingly a notice was given under the terms of section 42 and, pursuant to the
power of attorney, it was signed by her son. The landlord served a counter-notice that made four points, one of which was that the notice did not appear to be in the correct form. The landlord then commenced legal proceedings to seek a declaration that the tenant had no right to acquire a new lease and that the notice was invalid or defective.
At the county court hearing, the judge followed a 1998 decision of His Honour Judge Cowell in the West London county court and held that the notice was not valid. However, the judge gave permission to appeal because the point was not covered by any authority higher than the county court.
I shall quote directly from the High Court judgment of Mr Justice Lloyd, as he set out the problem succinctly. He said:
“It is a short point, but a somewhat puzzling one…As a general proposition things that can be done by an individual may be done either personally or by a duly authorised agent. That is true under the common law generally, and under statute. There are, however, exceptions. In some cases the provision which allows for, or requires, the thing to be done also prescribes that it must be done personally and not by an agent. In other cases, the nature of the thing is such that it requires personal skill or discretion, and cannot be delegated.”
Counsel for the tenant argued that to construe section 99(5)(a) would produce unintended anomalies, but the judge held:
“However, whatever anomalies this provision may produce, or however much of a trap it may be for tenants and their advisers, I agree with His Honour Judge Cowell that the distinction drawn in the construction (in the sense of putting together, as opposed to reading) of sub-s (5), between the method of signature of notices under s 13 or s 42 on the one hand, and other notices on the other hand, is so clear and so plainly deliberate that I cannot give s 99(5)(a) the meaning that it would have in isolation, and I must interpret it as requiring personal signature by the tenant, and not permitting signature on her behalf by anyone else, whether an ordinary agent or an attorney.”