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Discretion Of Court In Cases Relating To Instalment Purchase Agreements

Volume 990: debated on Thursday 7 August 1980

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Lords amendment: No. 65, after clause 71, in page 53, line 10, at end insert—

"C.—(1) Where, under the terms of an instalment purchase agreement, a person has been let into possession of a dwelling-house and, on the termination of the agreement or of his right to possession under it, proceedings are brought for possession of the dwelling-house, the court may—
  • (a) adjourn the proceedings; or
  • (b) on making an order for possession of the dwelling-house, supersede extract or postpone the date of possession;
  • for such period or periods as the court thinks fit.
    (2) On any such adjournment, superseding of extract, or postponement the court may impose such conditions with regard to the payment by the person in possession of the spect of his continued occupation of the dwelling-house and such other conditions as the court thinks fit.
    (3)The court may revoke or from time to time vary any condition imposed by virtue of this section.
    (4)In this section "instalment purchase agreement" means an agreement for the purchase of a dwelling-house under which the whole or part of the purchase price is to be paid in 3 or more instalments and the completion of the purchase is deferred until the whole or a specified part of the purchase price his been paid."

    I beg to move, That this House doth agree with the Lords in the said amendment.

    This is an important new clause, which gives people buying their homes by instalment purchase protection comparable with that available to people buying their homes with the aid of a morgage where default in making payments leads to possession proceedings. It gives the courts discretion to allow the purchaser time to remedy the financial situation. The law at present gives the courts discretion to allow mortgage defaulters time to remedy such a problem but it does not give them similar powers where an instalment purchaser defaults. This is clearly undesirable. For example, it might mean that an instalment purchaser who had paid most of the instalments towards the ownership of a house and defaulted at a late stage would find that he had virtually no rights left in the property in consequence of that one default. Therefore, it is thought appropriate that he should be put in the same position as a mortgage defaulter. The problem has not arisen often, but it seems reasonable that such a change should be made. I am sure that it will commend itself to the House.

    I welcome the new clause. I should like to get rid of instalment purchase agreements altogether. This is a difficult area, but I hope that, having made this useful provision, the Government will consider whether we need in- stalment purchase agreements at all. Basically, they are extremely undesirable. It would be useful it we could find a way of making it impossible for a landlord to persuade—sometimes even to coerce—a tenant to enter into an instalment purchase agreement in circumstances where most of the cards are in the hands of the landlord, the seller, and very few are in the hands of the buyer. The new clause provides some protection.

    The Minister said that there were not many of these cases. Where difficulties arise the landlord—it is a landlord-tenant relationship basically—is usually able to get his way without going to court or going through any legal proceedings, because the weight not only of the law but of the relationship is on his side.

    I am not criticising the Government. They have introduced an improvement, which I welcome. It is a criticism of successive Governments that we have not tackled this problem in a wider way. There is much abuse in this area. It has been prevalent at times in certain parts of Glasgow, for example, but it applies elsewhere. I hope that in the continuing examination of the law on these matters the Government will keep this matter under review and will introduce even more radical proposals at an appropriate opportunity. However, that in no way detracts from my thanks to the Government for introducing this provision.

    The Government certainly share the right hon. Gentleman's distinct lack of enthusiasm for this form of property purchase. We are not certain that it would be appropriate to make it illegal, but it is appropriate that people purchasing properties in this way should have the same protection as mortgage holders. I am glad that the right hon. Gentleman felt able to welcome this provision. We shall certainly bear his comments in mind in considering whether further changes would be appropriate.

    Question put and agreed to.