HC Deb 13 March 2002 vol 381 cc973-8

'.—(1) This section shall apply to any lease granted for a term of years certain exceeding 21 years, whether or not it is terminable before the end of the term by notice given by or to the tenant or by re-entry, forfeiture or otherwise and whether made before or after the coming into force of this section, where the rent reserved for the time being is less than £1,000 per annum.

(2) In this section a right of forfeiture shall mean a provision in a lease whereby the landlord under a lease has a right to re-enter the premises demised (or part thereof) upon the happening of specified events, whether the right to re-enter is expressed as a condition or as a proviso on breach of covenant or otherwise howsoever.

(3) No landlord may re-enter the premises demised (nor any part thereof) pursuant to a right of forfeiture, insofar as the exercise of the right of forfeiture is based on the non-payment of money.

(4) Where a tenant fails to pay monies payable under the terms of the lease, the person entitled to payment of the said monies shall be entitled to a first legal charge (herein referred to as a "landlord's charge") over the lease for the monies payable and for his reasonable costs and expenses of and in connection with the landlord's charge and the enforcement thereof, such costs and expenses to be payable on the indemnity basis.

(5) Subject to the next subsection, a landlord's charge shall have priority to all charges, underleases and other encumbrances estates easements estoppels and rights of whatever description created by or deriving title from or through the tenant, whether at law or in equity and whether created or existing before or after the coming into force of this Act (hereinafter referred to as "subsidiary interests").

(6) Notwithstanding the previous subsection, no local land charge within the meaning of the Local Land Charges Act 1975 shall be a subsidiary interest.

(7) Subject to the next subsection, a landlord's charge may be enforced in any manner in which a first legal charge may be enforced.

(8) The landlord's charge may only be enforced by sale with leave of the High Court or the County Court.

(9) On such a sale, the purchaser shall purchase free from all subsidiary interests.

(10) Where a landlord's charge has no reasonably realisable commercial value, the landlord may apply to the High Court or the County Court for an order terminating the lease, but such an order shall not release the tenant from any pre-existing obligation under the lease.

(11) Any person holding any subsidiary interest shall be entitled to have subrogated to him the landlord's charge on payment of the sums secured by the landlord's charge and shall be entitled to add his reasonable costs and expenses of and in connection the said exercise of the right of subrogation to the landlord's charge, such costs and expenses to be assessed on the indemnity basis.

(12) Where more than one person holding a subsidiary interest wishes to have subrogated to him the landlord's charge, the priority as between such persons shall be determined in accordance with the rules of equity.

(13) Where on a sale of the lease pursuant to subsection (8) hereof, there is a surplus after payment of all the monies secured by the landlord's charge, the distribution of the said surplus shall be made in accordance with the rules of equity.

(14) Rules of Court shall provide for service on the tenant and on persons holding subsidiary interests of any application made pursuant to subsection (8) hereof for leave to enforce the landlord's charge by sale and for the circumstances in which such service may be dispensed with.

(15) Notwithstanding the provisions in subsections (4) and (11) hereof permitting the adding of costs and expenses to the landlord's charge, the High Court and the County Court shall have the power to make in substitution for the said provisions some different order as to incidence, basis and amount of the costs and expenses of the holder of the landlord's charge and of the lessee and of any other person where such different order would be just.

(16) The figure for the annual rental specified in subsection (1) hereof may be varied from time to time by regulations made by the Secretary of State.

(17) Nothing herein shall affect the validity or effect of a forfeiture of a lease, whether by re-entry on or service of originating process seeking to re-enter the premises demised (or part thereof) or otherwise, effected before the coming into effect of this section.

(18) "Lease" in this section shall include underleases and "landlord" and "tenant" shall be construed accordingly.

(19) The existence or potential existence of a landlord's charge shall not prevent any person who is restricted or prohibited whether by statute or otherwise from lending money save on the security of a first legal charge from lending money on the security of a charge which, but for the existence or potential existence of the landlord's charge, would have been a first legal charge.'.—[Mr. Cash.]

Brought up, and read the First and Second time.

Motion made, and Question put, That the clause be added to the Bill:—

The House divided: Ayes 151, Noes 286.

Division No. 196] [9.14 pm
Ainsworth, Peter (E Surrey) Hammond, Philip
Allan, Richard Hancock, Mike
Amess, David Harris, Dr Evan (Oxford W)
Ancram, Rt Hon Michael Hawkins, Nick
Arbuthnot, Rt Hon James Hayes, John
Atkinson, David (Bour'mth E) Heald, Oliver
Bacon, Richard Heath, David
Barker, Gregory Heathcoat-Amory, Rt Hon David
Baron, John Hendry, Charles
Barrett, John Hoban, Mark
Beith, Rt Hon A J Holmes, Paul
Bercow, John Howard, Rt Hon Michael
Blunt, Crispin Howarth, Gerald (Aldershot)
Boswell, Tim Jackson, Robert (Wantage)
Brooke, Mrs Annette L Jenkin, Bernard
Browning, Mrs Angela Johnson, Boris (Henley)
Burnett, John Keetch, Paul
Bums, Simon Key, Robert
Burstow, Paul Kirkbride, Miss Julie
Burt, Alistair Kirkwood, Archy
Calton, Mrs Patsy Knight, Rt Hon Greg (E Yorkshire)
Cameron, David Lait, Mrs Jacqui
Carmichael, Alistair Lamb, Norman
Cash, William Lansley, Andrew
Chope, Christopher Laws, David
Clappison, James Leigh, Edward
Clifton-Brown, Geoffrey Letwin, Oliver
Collins, Tim Lewis, Dr Julian (New Forest E)
Cotter, Brian Liddell-Grainger, Ian
Cran, James Lidington, David
Davies, Quentin (Grantham) Lilley, Rt Hon Peter
Davis, Rt Hon David (Haltemprice) Llwyd, Elfyn
Djanogly, Jonathan Loughton, Tim
Dorrell, Rt Hon Stephen McIntosh, Miss Anne
Doughty, Sue MacKay, Rt Hon Andrew
Evans, Nigel Maclean, Rt Hon David
Fabricant, Michael Malins, Humfrey
Fallon, Michael Marsden, Paul (Shrewsbury)
Field, Mark (Cities of London) Maude, Rt Hon Francis
Rook, Adrian May, Mrs Theresa
Forth, Rt Hon Eric Mercer, Patrick
Foster, Don (Bath) Mitchell, Andrew (Sutton Coldfield)
Fox, Dr Liam Moore, Michael
Francois, Mark Moss, Malcolm
Gale, Roger Murrison, Dr Andrew
Gamier, Edward Norman, Archie
George, Andrew (St Ives) O'Brien, Stephen (Eddisbury)
Gibb, Nick Osborne, George (Tatton)
Goodman, Paul Paterson, Owen
Gray, James Price, Adam
Green, Damian (Ashford) Prisk, Mark
Grieve, Dominic Pugh, Dr John
Gummer, Rt Hon John Randall, John
Hague, Rt Hon William Reid, Alan (Argyll & Bute)
Rendel, David Taylor, Matthew (Truro)
Rosindell, Andrew Taylor, Sir Teddy
Ruffley, David Thomas, Simon (Ceredigion)
Russell, Bob (Colchester) Thurso, John
Sanders, Adrian Tonge, Dr Jenny
Sayeed, Jonathan Tredinnick, David
Selous, Andrew Trend, Michael
Shephard, Rt Hon Mrs Gillian Turner, Andrew (Isle of Wight)
Shepherd, Richard Tyler, Paul
Simmonds, Mark Walter, Robert
Smith, Sir Robert (W Ab'd'ns) Waterson, Nigel
Spelman, Mrs Caroline Watkinson, Angela
Spicer, Sir Michael Whittingdale, John
Spink, Bob Wiggin, Bill
Stanley, Rt Hon Sir John Wilkinson, John
Steen, Anthony Willetts, David
Streeter, Gary Williams, Roger (Brecon)
Stunell, Andrew Willis, Phil
Swayne, Desmond Winterton, Mrs Ann (Congleton)
Swire, Hugo Younger-Ross, Richard
Syms, Robert Tellers for the Ayes:
Tapsell, Sir Peter Mr. Julian Brazier and
Taylor, John (Solihull) Mr. David Wilshire.
Ainsworth, Bob (Cov'try NE) Darting, Rt Hon Alistair
Allen, Graham Davey, Valerie (Bristol W)
Anderson, Janet (Rossendale) David, Wayne
Armstrong, Rt Hon Ms Hilary Davidson, Ian
Atherton, Ms Candy Davies, Rt Hon Denzil (Llanelli)
Atkins, Charlotte Davis, Rt Hon Terry (B'ham Hodge H)
Barron, Kevin
Beard, Nigel Dawson, Hilton
Begg, Miss Anne Dean, Mrs Janet
Benton, Joe Denham, Rt Hon John
Berry, Roger Dobbin, Jim
Betts, Clive Dobson, Rt Hon Frank
Blackman, Liz Doran, Frank
Blears, Ms Hazel Dowd, Jim
Blizzard, Bob Eagle, Angela (Wallasey)
Bradley, Rt Hon Keith (Withington) Eagle, Maria (L'pool Garston)
Bradley, Peter (The Wrekin) Edwards, Huw
Bradshaw, Ben Efford, Clive
Brennan, Kevin Ellman, Mrs Louise
Brown, Rt Hon Nicholas (Newcastle E & Wallsend) Ennis, Jeff
Etherington, Bill
Brown, Russell (Dumfries) Fisher, Mark
Bryant, Chris Fitzpatrick, Jim
Burgon, Colin Fitzsimons, Mrs Lorna
Burnham, Andy Flint, Caroline
Campbell, Alan (Tynemouth) Flynn, Paul
Campbell, Mrs Anne (C'bridge) Foster, Michael (Worcester)
Campbell, Ronnie (Blyth V) Foster, Michael Jabez (Hastings)
Caplin, Ivor Foulkes, George
Casale, Roger Francis, Dr Hywel
Cawsey, Ian Galloway, George
Challen, Colin Gapes, Mike
Chapman, Ben (Wirral S) George, Rt Hon Bruce (Walsall S)
Chaytor, David Gerrard, Neil
Clapham, Michael Gibson, Dr Ian
Clark, Mrs Helen (Peterborough) Gilroy, Linda
Clark, Paul (Gillingham) Godsiff, Roger
Clarke, Rt Hon Tom (Coatbridge) Goggins, Paul
Clelland, David Griffiths, Jane (Reading E)
Coffey, Ms Ann Grogan, John
Cohen, Harry Hain, Rt Hon Peter
Corbyn, Jeremy Hall, Patrick (Bedford)
Cousins, Jim Hamilton, David (Midlothian)
Cranston, Ross Hanson, David
Crausby, David Harris, Tom (Glasgow Cathcart)
Cryer, Mrs Ann (Keighley) Havard, Dai
Cummings, John Healey, John
Cunningham, Jim (Cov'try S) Hendrick, Mark
Cunningham, Tony (Workington) Heppell, John
Curtis-Thomas, Mrs Claire Hermon, Lady
Heyes, David Marshall, David (Shettleston)
Hill, Keith Marshall, Jim (Leicester S)
Hinchliffe, David Martlew, Eric
Hodge, Margaret Meacher, Rt Hon Michael
Hoey, Kate Meale, Alan
Hood, Jimmy Merron, Gillian
Hope, Phil Michael, Rt Hon Alun
Hopkins, Kelvin Milburn, Rt Hon Alan
Howarth, Rt Hon Alan (Newport E) Miliband, David
Howells, Dr Kim Miller, Andrew
Hoyle, Lindsay Moffatt, Laura
Hughes, Beverley (Stretford) Mole, Chris
Hughes, Kevin (Doncaster N) Moran, Margaret
Humble, Mrs Joan Morgan, Julie
Hutton, Rt Hon John Mudie, George
Iddon, Dr Brian Mullin, Chris
Ingram, Rt Hon Adam Munn, Ms Meg
Irranca-Davies, Huw Murphy, Jim (Eastwood)
Jackson, Helen (Hillsborough) Murphy, Rt Hon Paul (Torfaen)
Jenkins, Brian Naysmith, Dr Doug
Johnson, Alan (Hull W & Hessle) O'Brien, Mike (N Warks)
Jones, Helen (Warrington N) O'Hara, Edward
Jones, Jon Owen (Cardiff C) Olner, Bill
Jones, Kevan (N Durham) O'Neill, Martin
Jones, Lynne (Selly Oak) Osborne, Sandra (Ayr)
Jowell, Rt Hon Tessa Owen, Albert
Joyce, Eric Palmer, Dr Nick
Kaufman, Rt Hon Gerald Pearson, Ian
Keeble, Ms Sally Perham, Linda
Keen, Alan (Feltham & Heston) Picking, Anne
Keen, Ann (Brentford & Isleworth) Pickthall, Colin
Kemp, Fraser Pike, Peter
Kennedy, Jane (Wavertree) Plaskitt, James
Khabra, Piara S Pollard, Kerry
Kidney, David Pond, Chris
Kilfoyle, Peter Prentice, Gordon (Pendle)
King, Andy (Rugby & Kenilworth) Primarolo, Dawn
King, Ms Oona (Bethnal Green) Prosser, Gwyn
Knight, Jim (S Dorset) Purchase, Ken
Kumar, Dr Ashok Purnell, James
Ladyman, Dr Stephen Quin, Rt Hon Joyce
Lammy, David Rammell, Bill
Lawrence, Mrs Jackie Rapson, Syd
Lazarowicz, Mark Reed, Andy (Loughborough)
Lepper, David Robertson, John (Glasgow Anniesland)
Levitt, Tom
Lewis, Ivan (Bury S) Robinson, Geoffrey (Cov'try NW)
Lewis, Terry (Worsley) Roche, Mrs Barbara
Liddell, Rt Hon Mrs Helen Rooney, Terry
Lloyd, Tony Roy, Frank
Love, Andrew Ruane, Chris
Lucas, Ian Salter, Martin
Lyons, John Sarwar, Mohammad
McAvoy, Thomas Savidge, Malcolm
McCafferty, Chris Sawford, Phil
McDonagh, Siobhain Sedgemore, Brian
MacDonald, Calum Shaw, Jonathan
McDonnell, John Sheridan, Jim
MacDougall, John Simpson, Alan (Nottingham S)
McGuire, Mrs Anne Singh, Marsha
McIsaac, Shona Skinner, Dennis
McKechin, Ann Smith, Rt Hon Andrew (Oxford E)
McKenna, Rosemary Smith, Angela (Basildon)
Mackinlay, Andrew Smith, Geraldine (Morecambe)
McNamara, Kevin Smith, Jacqui (Redditch)
McNulty, Tony Smith, John (Glamorgan)
MacShane, Denis Smith, Llew (Blaenau Gwent)
Mactaggart, Fiona Soley, Clive
McWalter, Tony Southworth, Helen
McWilliam, John Spellar, Rt Hon John
Mahmood, Khalid Squire, Rachel
Mahon, Mrs Alice Starkey, Dr Phyllis
Mallaber, Judy Steinberg, Gerry
Mann, John Stewart, Ian (Eccles)
Marris, Rob Stinchcombe, Paul
Marsden, Gordon (Blackpool S) Stoate, Dr Howard
Strang, Rt Hon Dr Gavin Watts, David
Stringer, Graham White, Brian
Sutcliffe, Gerry Whitehead, Dr Alan
Taylor, Rt Hon Ann (Dewsbury) Wicks, Malcolm
Taylor, Ms Dari (Stockton S) Williams, Rt Hon Alan (Swansea W)
Taylor, David (NW Leics)
Taylor, Dr Richard (Wyre F) Williams, Mrs Betty (Conwy)
Thomas, Gareth (Clwyd W) Wills, Michael
Thomas, Gareth R (Harrow W) Winnick, David
Timms, Stephen Winterton, Ms Rosie (Doncaster C)
Trickett, Jon Wood, Mike
Turner, Dennis (Wolverh'ton SE) Woolas, Phil
Turner, Dr Desmond (Kemptown) Wray, James
Turner, Neil (Wigan) Wright, Anthony D (Gt Yarmouth)
Twigg, Derek (Halton) Wright, David (Telford)
Twigg, Stephen (Enfield) Wright, Tony (Cannock)
Vis, Dr Rudi Wyatt Derek
Walley, Ms Joan
Ward, Ms Claire Tellers for the Noes:
Wareing, Robert N Mr. Nick Ainger and
Watson, Tom Dan Norris.

Question accordingly negatived.

Remaining Government amendments agreed to.

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