Skip to main content

New Clause—(Special Provisions As To Premiums Paid To A Predecessor Of The Landlord)

Volume 462: debated on Monday 7 March 1949

The text on this page has been created from Hansard archive content, it may contain typographical errors.

(1) Where under Section two of this Act the Tribunal determine the rental equivalent of a premium paid in respect of the grant, continuance or renewal of a tenancy of a dwelling-house, and the Tribunal are satisfied that since the premium was paid and before the twenty-fifth day of March, nineteen hundred and forty-nine, the reversion had been conveyed or assigned for a consideration in money or money's worth, the Tribunal shall certify that this section applies.

(2) Where the Tribunal so certify, subsection (3) of the said Section two shall not have effect but the provisions of the Schedule (Provisions as to premiums paid to a predecessor of the landlord) to this Act shall have effect in lieu thereof; and subsection (7) of that Section and subsection (4) of Section three of this Act shall have effect subject to the provisions of that Schedule.

(3) In this Section the expression "reversion," in relation to the grant continuance or renewal of a tenancy of a dwelling-house, means the estate or interest in the dwelling-house which, immediately after the grant, continuance or renewal of the tenancy, was expectant upon the determination of the term granted, continued or renewed. — [Mr. Blenkinsop.]

Brought up, and read the First time.

3.31 p.m.

I beg to move, "That the Clause be read a Second time."

It may be for the convenience of the House if we discuss at the same time the new Schedule, which we shall move later entitled, "Provisions as to Premiums paid to a Predecessor of the Landlord." This new Clause and the new Schedule relate entirely to each other. We are trying to provide for the case which was raised in the Committee stage where there has been a change of the landlord since the premium was paid. It is clear that it would be quite wrong to allow the tenant to recover a premium from a landlord who, in fact, never received a premium in the first place. This new Clause, therefore, makes special provision to enable the tenant first to go to the tribunal to establish the fact that there has been such a change of landlord and the amount which he can recover, and the Schedule sets out the precise amount which the tenant can in fact, recover.

It will be seen that the provision is for recovery of lump sums. Obviously it would be impossible to recover from the initial landlord, the landlord who had originally received the premium, rent equivalent as is provided in the Bill for the generality of cases. This Clause, therefore, together with the Schedule, makes provision for the recovery of lump sums both in the case where the existing rent is in excess of the reasonable rent, and therefore the recovery of premium can be the full proportion of the premium which remains outstanding for the remaining period of the tenancy, and in the case for which subsection 2 (2) of the Schedule makes provision, where the reasonable rent may be higher than the standard and, therefore, only the excess part of the premium shall be allowed to be recovered.

There is also provision in paragraph 4 of the new Schedule that where an assignment takes place after a tenant has recovered such a lump sum from the original landlord, the assignor shall not be allowed to charge to the assignee the part of the premium which he has already recovered from the original landlord. Both the Schedule and the Clause are rather complex, but very briefly those are the provisions, and I think the House will agree that in this way, together with certain consequential Amendments which we shall meet later in the proceedings, we have met a proper point which was raised in Committee by hon. Members on all sides.

I was not on the Committee, but I have a certain amount of interest in these things, so perhaps I may ask the hon. Member a question before he sits down. There is a great difficulty sometimes in finding the first landlord; it is not at all easy to trace him or to know where he has gone. What kind of procedure will be possible? Will the rent tribunal be able to help in any way?

The Committee stage of this Bill was taken on the Floor of the House and every hon. Member was a member of the Committee. With regard to the second point raised by the hon. and gallant Member it was because of the difficulty which sometimes might occur in finding the landlord that I did not put this proposal in the original Bill. It was, however, represented to me from all sides of the Committee that there ought to be power to proceed against a landlord where he could be found. That is why we have introduced the proposal into the Bill.

The Minister has done his best to meet what is admittedly a very complex situation. I do not deny that this is the sort of legislation where, in attempting to correct anomalies, one is reminded of the ancient legend of the Hydra and Hercules' attempts to deal with it; when one of its heads was cut off it immediately grew two in its place. It is true that as one attempts to correct an anomaly in this legislation there is a danger of creating other and greater anomalies. In fact, we drew attention to that in our Amendment on the Second Reading.

Nevertheless, I think the Minister has attempted to deal with this point. We must, I think, trust the skill of the Ministry and the Ministry's draftsmen in introducing the most satisfactory solution to this very difficult point. As the Minister himself said, he has not attempted to pursue the matter too far. It may be said that this could go on almost indefinitely, but again I think that would give rise to a far greater crop of anomalies than any which could possibly be remedied by it. We do not, therefore, raise any objection to the new Clause; we welcome it as a concession to meet a point of view put forward by us.

My right hon. Friend said this was a concession to meet a point raised on all sides of the Committee. I take the liberty of reminding him that when this was being discussed in Committee I expressed my own doubts of the wisdom of conceding it. I said at the time that if on consideration of the matter my right hon. Friend still thought the point ought to be made, I should not make any difficulties at this stage, and, therefore, I am not proposing to ask the House to reject it at all, but I hope my right hon. Friend, nevertheless, will not mind if I take the opportunity to put on record my own opinion that this is a mistake.

When a man buys a house he buys it subject to tenancies. He knows about the tenancies. He can inform himself about the tenancies. He can raise whatever requisitions he thinks it right to raise before completing the sale. He can inquire if any premium has been paid in respect of the tenancy. He can inquire how much it is. He can form his opinion whether it is a reasonable or unreasonable premium. If on all that knowledge he completes the purchase, I should think that the proper assumption would be that he decided to take it with such risks as there might be.

But suppose that he is given the information that no premium was paid even though it was? That could often be the case.

I do not think it would very often be the case. Requisitions are raised by purchasers through their solicitors and answered by the vendors through their solicitors. It is not a new thing, but a thing which takes place on every transaction in land that happens. It is not in the least true that requisitions are often answered untruthfully or fraudulently. Of course, if a vendor did answer such a requisition untruthfully or fraudulently, the purchaser would have the remedy which this new Clause is proposing to give to the tenant.

Therefore, I make the point that it would have been—and was as the Bill was originally drawn—perfectly easy for the purchaser of property of this kind to protect himself against the possibility of having to repay a premium, and that there is nothing unfair or inequitable about it. If, on the other hand, we relieve him of that obligation it means he can buy without making any inquiries about premiums at all, and, obviously, the door is open to one very easy means of evading the provisions of the Bill; because it means that wherever a premium has been accepted in respect of a tenancy the man who has received the premium, if he sells at once, will, at any rate, make it to that extent more difficult for the tenant to pursue him or recover the premium he has paid when he ought not to have paid it.

Therefore, we shall be putting an additional burden on the tenant, in a matter where the whole purpose of the legislation is to relieve him, in order to protect the purchasing landlord from a risk which he could perfectly well protect himself against. In other words, we are putting an additional obstacle on the tenant without conferring any advantage on the owner which he could not have conferred on himself without putting that burden on the tenant at all. Therefore, I think it worth while to put it on record that, for my part, I think this is a mistake. and that it ought not to be done.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.