Source: https://api.parliament.uk/historic-hansard/lords/1923/jul/24/rent-and-mortgage-interest-restrictions
Timestamp: 2019-04-19 00:32:58+00:00

Document:
§ LORD DYNEVOR had given Notice to move, after subsection (2), to insert the following new subsection:— (3) Where before the passing of this Act, the landlord of a dwelling-house to 1270 which the principal Act applies has granted to the tenant a valid lease of the dwelling-house for a term ending at some date after the twenty-fourth day of June, nineteen hundred and twenty-three, or has entered into a valid agreement with the tenant for a tenancy for such a term, and the rent thereby reserved is reserved at a rate which after but not before such last mentioned date exceeds the standard rent and the increases permitted under the principal Act or this Act, the landlord may by three months' notice in writing expiring not earlier than the twenty-first day of December, nineteen hundred and twenty-three, and not later than the thirty-first day of March, nineteen hundred and twenty-four, determine the said lease or tenancy, provided that if within one month of the receipt of such notice the lessee or tenant shall give to the landlord notice in writing that he elects to abide by the said lease or agreement and the terms thereof, then the said lease or agreement shall remain in full force and effect in every respect including the amount of the rent thereby expressed to be reserved unaffected by the principal Act or this Act.
§ The noble Lord said: I move this new subsection in order to meet the point I raised on the Second Reading, when I said that I should like to see certain cases dealt with by the Bill. Supposing a lessor granted a lease on January 1, 1923, for five years until January 1, 1928, at a rent of £70 until June 30, 1923, when he expected the principal Act to expire, and a rent of £90 thereafter. Under Clause 1 of the Bill as it now stands the effect would be that the rent of £90 would be cut down to £70 until June 24, 1925. There seems to be a hardship in such a case. Under my Amendment a lease or agreement which was entered into before the passing of this Bill must be for a term which ends after June 24, 1923, and the rent, before June 24, must not exceed the standard rent, but after that date it can do so. Both parties knew what they were doing. Tenants, for their own protection, desired leases to go beyond June 24, 1923. Without my Amendment the lessee would, under the Bill, get the security of the longer term and other stipulated benefits, while the landlord would lose part of his rent. To make it fair all round the landlord must, under my Amendment, exercise his option to determine by a fixed time, that is to say, March 31, 1924, and the tenant ought to have the option of electing to stand by the lease at the agreed rent. The arrangement can be ended or confirmed by mutual arrangement. It has been suggested to me that it would be better 1271 if I moved this Amendment in the form of a new clause, rather than as a new subsection, with the marginal note "Determination of certain leases and tenancies." I hope the noble Earl in charge of the Bill will see his way to accept the Amendment.
Perhaps my noble friend will tell me exactly what he has moved.
I move this Amendment as a new clause after Clause 2.
After Clause 2, or instead of Clause 2?
It has been suggested that it should be an Amendment to Clause 2, but it might be settled afterwards exactly where it is to come in.
No, I am afraid it must be settled now where it is to come in.
I should prefer to move it as a subsection, but if the noble Earl in charge of the Bill will be good enough to say where he would like it to come in, I am quite ready to fall in with his view.
If my noble friend will put it in after Clause 2, it can be put right on Report if it is found to be misplaced.
I will put the Question, then, that Clause 2 stand part.
§ On Question, Clause 2 agreed to.
Perhaps my noble friend Lord Dynevor will now move that the words as printed on the Paper be inserted after Clause 2 as a new clause.
I am very glad to accept this clause in the form in which my noble friend has moved it, that is to 1272 say, with the addition suggested by the learned Government draftsman. There may be some drafting Amendments to make, but that, of course, can be done on Report.
§ Restriction on right to possession.
§ (e) in paragraph (ii) the words "or with whom, conditional on housing accommodation being provided, a contract for employment on such work has been entered into" shall be inserted after the word "holding."
§ (f) the following paragraph shall be substituted for paragraph (iv):— (iv) where the dwelling-house is reasonably required by the landlord for occupation as a residence for himself or for any son or daughter of his over eighteen years of age and where the landlord or the husband or wife of the landlord, did not become the landlord before the thirtieth day of June, nineteen hundred and twenty-two, the court is satisfied that greater hardship would he caused by refusing to grant an order or judgment for possession than by granting it.
(b) so as to authorise the court, in addition to making an order for payment of compensation by the landlord to the former tenant, to direct that the dwelling-house shall not be excluded from the principal Act by reason of the landlord having come into possession thereof under the said order or judgment, and if such a direction is given the principal Act shall apply and be deemed to have applied to the dwelling-house as from the date mentioned in such direction.
and, in any such case as aforesaid, the court considers it reasonable to make such an order or give such judgment.
"'(v) where the landlord or the husband or wife of the landlord did not become the landlord before the thirtieth day of June, nineteen hundred and twenty-two, and the dwelling-house is reasonably required by him for occupation as a residence for himself or for any son or daughter of his over eighteen years of age, and the court is satisfied that greater hardship would be caused by refusing to grant an order or judgment for possession than by granting it.
§ "'(2) At the time of the application for or the making or giving of any order or judgment for the recovery of possession of any such dwelling-house, or for the ejectment of a tenant therefrom, or in the case of any such order or judgment which has been made or given, whether before or after 1277 the passing of this Act, and not executed at any subsequent time, the court may adjourn the application, or stay or suspend execution on any such order or judgment, or postpone the date of possession for such period or periods as it thinks fit, and subject to such conditions (if any) in regard to payment by the tenant of arrears of rent, rent, or mesne profits and otherwise as the court thinks fit, and, if such conditions are complied with, the court may, if it thinks fit, discharge or rescind any such order or judgment.
§ "'(3) Where any order or judgment has been made or given before the passing of this Act but not executed, and, in the opinion of the court, the order or judgment would not have been made or given if this Act had been in force at the time when such order or judgment was made or given, the court may, on application by the tenant, rescind or vary such order or judgment in such manner as the court may think fit for the purpose of giving effect to this Act.
§ "'(4) Notwithstanding anything in Section one hundred and forty-three of the County Courts Act, 1888, or in Section one of the Small Tenements Recovery Act. 1838, every warrant for delivery of possession of, or to enter and give possession of, any dwelling-house to which this Act applies, shall remain in force for three months from the day next after the last day named in the judgment or order for delivery of possession or ejectment, or, in the case of a warrant under the Small Tenements Recovery Act, 1838, from the date of the issue of the warrant, and in either case for such further period or periods, if any, as the court shall from time to time, whether before or after the expiration of such three months, direct.
§ "'(5) An order or judgment against a tenant for the recovery of possession of any dwelling-house or ejectment therefrom under this section shall not affect the right of any sub-tenant to whom the premises or any part thereof have been lawfully sublet before proceedings for recovery of possession or ejectment were commenced, to retain possession under this section, or be in any way operative against any such subtenants.
§ "'(6) Where a landlord has obtained an order or judgment for possession or ejectment under this section on the ground that he requires a dwelling-house for his own occupation, and it is subsequently made to appear to the court that the order or judgment was obtained by misrepresentation or the concealment of material facts, the court may order the landlord to pay to the former tenant such sum as appears sufficient as compensation for damage or loss sustained by that tenant as the result of the order or judgment.
§ "'(7) The provisions of the last preceding subsection shall apply in any case where the landlord has after the thirty-first day of July, nineteen hundred and twenty-three, obtained an order or judgment for possession or ejectment on any of the grounds specified in paragraph (d) of 1278 subsection (1) of this section, and it is subsequently made to appear to the court that the order or judgment was obtained by misrepresentation or concealment of material facts, and in any such case the court may, if it thinks fit, in addition to making an order for payment of compensation by the landlord to the former tenant, direct that the dwelling-house shall not be excluded from this Act by reason of the landlord having come into possession thereof under the said order or judgment, and if such a direction is given, this Act shall apply and be deemed to have applied to the dwelling-house as from the date mentioned in such direction.'"
§ The noble Earl said: Your Lordships will remember that during the debate on the Second Reading of this Bill the noble and learned Lord opposite, Lord Buckmaster, commented on Clause 3 in somewhat caustic terms. I think he said that it reminded him of the Roman Emperor who, in order to raise revenue, had his Acts of Parliament written in small type at the top of a high pillar, and then fined people for not obeying them. We have attempted to meet that criticism by amalgamating the remaining provisions of Clause 5 of the principal Act with Clause 3 of the Bill which is under consideration. This involves one or two Amendments to the Bill as it stands. The principal one, as your Lordships will see, is to be found on page 5 of the Marshalled List of Amendments. As the Bill was drafted the meaning was obscure, and my noble friend Lord Dynevor called attention to the point. Accordingly we have put in two paragraphs in Roman figures, paragraphs (iv) and (v). I think the intention is perfectly clear, for there is no alteration in substance, and this really amount" to nothing more than an alteration in drafting.
§ We have had to make one or two other drafting alterations in order to amalgamate the two clauses, and I may perhaps run through them. In paragraph (d) of subsection (1) of the proposed new clause the words "this Act" are substituted for the words "the principal Act." Your Lordships will see that the explanation of this is to be found at the beginning of the Amendment—"The following section shall be substituted for section five of the principal Act." This clause is accordingly substituted for the clause in the principal Act, and we say "this Act," meaning the principal Act, rather than give the "principal Act" as a reference. Again, in sub- 1279 section (6) the words "or judgment" have been inserted. Their omission from the principal Act was, it appears, inadvertent. Then your Lordships will remember that subsection (1) (a) of Clause 3 of the Bill referred to the question of misrepresentation and extended the provision in regard thereto. Subsection (7) of the clause now proposed reproduces the effect of that subsection.
I recognise that the noble Earl has been at pains to meet the criticisms which I directed against this clause as it originally stood, and although this Amendment looks rather lengthy and is perhaps a little difficult to follow upon the Paper, I think that he has met my objections very fully and fairly. I hope that your Lordships will agree that this clause as it stands is a very great improvement upon the Bill as originally drafted and will offer no objection to its passage.
I rise only to thank my noble friend for having amalgamated these two clauses. The adoption of the principle of legislation by reference would have led to a very great deal of confusion, and many noble Lords on this side of the House felt that it was most desirable in the interests of everybody that these two clauses should be amalgamated so that the whole purport of them should be clear. I think we are all indebted to the Government for having taken this course.
I also should like to express my gratitude to my noble friend for having drafted this Amendment. On the Second Reading I expressed the hope that he would see his way to do so. I must say that I was not at all confident that he would do so, and therefore it is extremely agreeable to me to find that he has fallen in with that suggestion.
Is the new clause numbered aright on the Marshalled List of Amendments? Ought not the figure to be "3" instead of "5"?
The figure "5" is that of the section of the principal Act.
I noticed that point, but if you introduce it into this Bill should it not be introduced as Clause 3?
I think it is all right as it stands, but I will enquire into the point before we reach the next stage.
§ Suspension of increase of rent on ground of disrepair.
§ (2) When, after the issue of any such certificate, the landlord has executed to the satisfaction of the sanitary authority the repairs which require to be executed in order to put the dwelling-house into a reasonable state of repair, the authority may, on the application of the landlord and upon payment of a fee of one shilling, issue a report to that effect.
§ LORD DYNEVOR moved, in subsection 2, to substitute "shall" for "may." The noble Lord said: Clause 4 of this Bill is an amplification of Clause 2, subsection (2) of the principal Act and covers very much the same ground. It makes the certificate of a sanitary authority evidence in ordinary proceedings for the recovery of rent or for ejectment for non-payment thereof. As that certificate that a house is not in a reasonable state of repair is, under Clause 4, made evidence (until the contrary is proved) of want of repair, it is only right that the local authorities should be bound to give a subsequent certificate" to the effect that the requisite repairs have been made when such is, in fact, the case. I think that it should be mandatory and should not be left to the option of the sanitary authority.
I believe, though I am not quite sure, that "may" does here mean "shall," but I shall be very glad to accept my noble friend's Amendment.
§ Notice of increase of rent.
§ 5.—(1) The county court shall have power to amend a notice of intention to increase rent, whether served before or after the 1281 passing of this Act, by correcting any errors and supplying any omissions therein, on such terms and conditions as respects arrears of rent or otherwise as appear to the court to be just and reasonable, and if the court so directs, the notice as so amended shall have effect and be deemed to have had effect as a valid notice.
§ THE EARL OF ONSLOW moved, in subsection (1), after "therein" to insert "which, if not corrected or supplied, would render the notice invalid." The noble Earl said: The object of this Amendment is to attempt to meet the criticism that a landlord, who, in order to avoid carrying out repairs, has not asked for increase of rent, may now be entitled to go to the court and claim increase on the ground that the failure to demand it in the original notice was an omission. We desire to make plain the intention of the clause, which is that small and perhaps accidental omissions or corrections should not invalidate the notice. It is not intended that this amended form of procedure should afford the landlord an opportunity of exacting more than his due from the tenant, but even under the original clause it was really unlikely that any court would consider a claim such as this as a reasonable one. I hope that the Amendment will secure that all corrections which may he made by a court shall be confined simply to those which are necessary to make the notice valid by correcting errors and supplying omissions of an ordinary character.
moved to leave out subsection (1). The noble and learned Lord said: In the course of the debate on the Second Reading I called attention to the provisions of this clause. It is a clause which is designed to remedy defects that may occur in notices served by landlords as a condition precedent to the increase of rent. I do recognise, and I said that I recognised, that very often a notice may be defeated by mere technical inaccuracy, and it is rather hard upon the landlord; but, on the other hand, I think it must be remembered that the tenants with whom this Bill chiefly deals will be very largely illiterate 1282 and uneducated people, and if you permit notices to be served containing any demand which the landlord likes to introduce, reserving to the county courts the right to alter and put it right at a later date, I think you are putting into the hands of the landlords the opportunity for making exactions against the tenants which it is not desirable they should make.
In both these cases it seems to me the parties ought to be protected. The landlord should be protected against technical mistakes, and the tenant certainly should be protected against any attempt to misuse the powers which this Bill give" the landlord, in order to obtain rent to which he is not entitled. I think the only way in which to remedy the matter is by-omitting the subsection altogether. If that does not meet the views of the Government, then I think the right to amend should be strictly confined to technical matters, and not to the substance of the notice. But my own feeling is that the law ought to remain as it is now. I therefore move that the subsection be omitted.
Perhaps I may be allowed to explain this matter at some little length. The noble and learned Lord commented on this clause in the debate on the Second Reading, and he said, and I think he repeated the statement just now, that if the landlord is allowed to make any demand he pleases on a tenant he will be encouraged to do this, knowing, of course, that if the tenant objects he can go to the county court and get it corrected. This will induce people to try to make demands upon the tenants which are not legal. The landlord can do this at the present moment if he takes the risk, and if he does so in the future he will also have to take the risk, because the county court is a judicial authority.
The whole business of the county court is to do justice and prevent that sort of thing occurring, and so, if the landlord has made an attempt to extract more from the tenant than he is entitled to get, and notice is given to the court for correction, surely the court will refuse to validate the notice by correcting 1283 errors and supplying omissions, except "on such terms and conditions"—I am now quoting the Bill—" as respects arrears of rent or otherwise as appear to the court to be just and reasonable." I think we may depend upon the county court, if it should validate the notice, to see that the tenant receives justice and is not imposed upon, and that the notice is only validated by correcting errors and omissions in the manner in which the noble and learned Lord mentions that the landlord should have an opportunity of doing.
It seems hard that a landlord should be debarred from receiving his due owing to a technical or clerical error in this very complicated notice, and perhaps you will allow me to give an example in which the landlord, acting perfectly genuinely, was debarred by an error of this kind from enjoying the rights to which he was fully entitled under the Act. If you will turn to Clause 2 (1) (c) of the original Act, you will observe that the fifteen per cent. increase in rent is, in certain circumstances, limited to five per cent-increase during one year. The proviso which lays this down is somewhat complicated and difficult to understand. A landlord genuinely made a claim for fifteen per cent. increase in the rent, and some time afterwards—I believe entirely on his own initiative and without the matter being raised by the tenant—said to the tenant: " I gave you notice to charge you fifteen per cent. increase, and I find I ought to charge you only five per cent. increase." The tenant did not know of the error, and did not complain even of the fifteen per cent., but when he found that the fifteen per cent. was illegal he refused to pay even the five per cent. He went to the court, and it was found that as the notice was invalid, although the fact of its being so was discovered entirely owing to the landlord's honesty, the landlord was unable to claim the five per cent. which was his due from the tenant.
Then there is another case at Erith. The notice was invalidated through a technical error in this way. The rate was made about April 21, and then a week's notice was required to the tenant before the increase in the rent consequent on the increased rate could be collected. In view of the delay of about four weeks or so, the landlord divided the total amount by 1284 48 instead of by 52. The landlord acted on a decision of the High Court that the increase could be legally enacted for the whole twelve months, even though it overlapped into another year. But landlords thought that they had to claim the increase so as to secure the amount within the financial year, before the overlap took place and the new rates were made. The matter went into court and the action of the landlords in doing this was held to invalidate the whole of their notices, and of their increases, and they were unable to claim from the tenants at all in regard to these rates. This clause is directed to prevent occurrences of this kind taking place in the future. It is not intended to give opportunity to unscrupulous landlords to exact more than is due, or co impose upon the tenants, and I think we can safely leave it to the county courts to see that justice is done. I hope your Lordships will not agree to this Amendment.
The noble Earl has repeated one side of the case again. I always understood that that side existed. That to which I do not think he has given sufficient attention is the fact that these tenants really do not know what their real rights are, and if you enable a landlord to serve at random notices which may be bad, and which may be amended hereafter, you offer a temptation to exact what is not due. If the noble Earl is determined to stand by the clause, may I suggest words to the following effect, which would give full value to his contention and certainly modify the operation of the clause, namely—"The county court shall, it satisfied that any error in the notice is due to genuine mistake on the part of the landlord, have power to amend."
I am very glad that the noble and learned Lord approaches this subject, as he does all others, in a great spirit of fairness. I think he realises there is a difficulty. May I say this? He speaks of the tenant as a poor and ignorant man, which he very often is, but may I say that in the case of these small properties the landlord very often is equally poor and equally ignorant? It is not the sort of idea which some people have of a landlord. They are apt to think of the rich landowner—perhaps with a seat in your 1285 Lordships' House—who is pressing the small tenant (a thing which none of your Lordships would think of doing); but in reality it is a case very often of two poor men who are both in difficulty. The noble and learned Lord most fairly recognised that there may be such a case. He has suggested words which we certainly think are well worth consideration. We are sure he will not ask us to accept them, on the spur of the moment, but if the noble and learned Lord will put them down on the Report stage we shall be very glad to consider them.
§ Permitted increases of rent of sub-tenancies.
§ 6.—(1) Where part of a dwelling-house to which the principal Act applies is lawfully sub-let, and the part so sub-let is also a dwelling-house to which the principal Act applies then in addition to any increases permitted by paragraphs (a) to (e) of subsection (1) of Section two of the principal Act, an amount not exceeding ten per cent. of the net rent of the dwelling-house comprised in the sub-tenancy shall be deemed to be a permitted increase in the case of that dwelling-house, and an amount equivalent to five per cent. of the net rent of the dwelling-house comprised in the sub-tenancy shall be deemed to be a permitted increase in the case of the dwelling-house comprised in the tenancy.
§ (2) The tenant who has so sub-let part of any such dwelling-house shall, on being so requested in writing by the landlord of the dwelling-house, supply him, within fourteen days thereafter, with a statement in writing of any sub-letting, giving particulars of occupancy, including the rent charged, and should he without reasonable excuse fail to do so or supply a statement which is false in any material particulars he shall be liable on summary conviction to a fine not exceeding two pounds.
§ LORD BUCKMASTER moved to leave out subsection (1). The noble and learned Lord said: This is a clause which, I think, needs some further consideration. As I understand it, the clause provides that where a tenant is in lawful occupation of premises, and, if he were in direct relationship with the landlord, would not be liable to an increase of rent, his rent may be increased if there be a sub-tenancy; it may be increased 10 per cent., of which the 1286 landlord will receive half. I find myself unable to understand why that should be so. I am not sure that I agree with what was said by the noble Marquess on the Second Reading, that the sole object of this Bill was to protect the sitting tenant. That may be, the object of the Bill, but I do not think that is fair, because in many cases, where workmen are compelled to change their residence for the purpose of seeking work, they are in exactly the same difficulty with regard to finding new accommodation and paying the rent for it as they would be if they had stopped where they were. It is obviously very undesirable at a moment like this to render labour and its movements less fluid than they otherwise would be.
§ But, supposing that the principle be accepted, even then you have this extraordinary position, as I consider it to be, that in the events provided for by Clause 6 (1), if the property is sub-let, the rent can be increased, and it cannot be increased unless it is sub-let. Has that absolutely nothing whatever to do with the tenant? I cannot see why the mere fact that he is the tenant of a house that is sub-let should render him liable to an increase of rent to which he would not otherwise be liable. It may be that I have misunderstood the operation of the clause, but, if I have understood it rightly, I cannot help thinking that the clause is not a desirable one, and ought not to be contained in the Bill.
I think that, perhaps, owing to the lateness of the hour on the Second Beading I did not devote enough attention to explaining this clause, which, I admit, is somewhat complicated. Perhaps your Lordships will allow me to remedy that omission now. The clause says that if a man is a tenant of a landlord, and sub-lets a portion of the house, he may charge the sub-tenant an increase of ten per cent. on the rent apportioned to the sub-tenancy. Of that ten per cent. he may retain five per cent. for himself, and five per cent. may be claimed by the landlord. I would like to explain the reasons for that proposal. The landlord in England, as a rule, does not include in his lease any prohibition against the creation of a sub-tenancy. 1287 Some landlords do, but I think the majority of them do not. In Scotland, I believe, every lease contains a provision that a sub-tenant shall not be admitted without the consent of the landlord. That is not the case in England, consequently the creation of a sub-tenancy is a perfectly legal act on the part of the tenant.
Before the war the landlord had his remedy. If a tenant sub-let, and created a sub-tenancy, the landlord would go to the tenant and say: "I object to a subtenant. Unless you get rid of him I shall give you notice, and get another tenant, who will not admit sub-tenants." He could carry that out and get rid of that sub-tenant, and deal with his property as he chose, before the Kent Restrictions Acts came into force. But now, under the Rent Restrictions Acts, the landlord cannot do that. He cannot say to his tenant: "You must get rid of that man, and you must have a clause in your lease, if I renew it, forbidding sub-tenancies." He has to accept the sub-tenant, and that sub-tenant has his rights under the Act, in the same way as the tenant has. If your Lordships consult the evidence taken before the Departmental Committee you will see that there was considerable testimony that much damage was done to landlords' property by the creation of sub-tenancies—which, of course, cannot be stopped in any way under the Acts. Therefore, it was thought to be fair that the landlord should have a very slight increase in respect of those portions of the premises which were let to a sub-tenant. That is the explanation of the five per cent. which it is proposed to allow to the landlord on the apportioned rent of the part sub-let to the sub-tenant.
But that is not really the principal object of the clause. I think your Lordships will have been told—and I have heard of many cases—that tenants charge rents to their sub-tenants considerably above the apportionment of the rent charged by the landlord. I understand it is open to any sub-tenant to go and get his rent apportioned, but that is a difficult proceeding. Perhaps sub-tenants are not sufficiently conversant with the law, and altogether there may be difficulties in doing this—even the difficulty of an unpleasantness created with the landlord, because in many cases the sub-tenant shares with the landlord certain offices and conveniences in the house. Therefore, he may put up with the illegal rent 1288 and may not go to the court in order to get redress. This clause, by which the tenant is entitled to receive 5 per cent., and not more than 5 per cent., on the apportioned rent, will protect the subtenant against such extortions, because, owing to the fact that the landlord is entitled to 5 per cent. on the apportioned rent, and owing to the obligation which is placed upon the tenant to inform the landlord of all the sub-lettings, the landlord will know exactly what part of his house is sub-let, and what rent is charged. If the tenant charges an improper rent it is not likely that the landlord will fail to take notice of it, and he will take such steps as may be open to him to inform the sub-tenant, who will then, no doubt, refuse to pay more than the tenant, who is his immediate landlord, is entitled to receive.
It may be asked why the tenant should be entitled to receive five per cent. himself, even if you allow that the landlord should receive five per cent. on the apportioned rent. The answer to that is that very often, in these houses where sub-tenancies are created, there are services, such as a common front door, or a drying ground, or the use of a copper, or the use of a common staircase, or of other offices, which it is very difficult to apportion, and it is said that from evidence which is heard in the county courts it is very difficult indeed to say what is a fair rent for such services. If you gave five per cent., which is a very small sum, on the net apportioned rent it would cover the tenant's charges in that respect. And perhaps I may be allowed to say that if a tenant sub-lets he ought to have some interest in doing so. He ought not to have an undue interest under which he can charge extortionate rents; but a small interest of five per cent. seems a fair sum to induce him to put his superfluous accommodation at the disposal of one who wishes to obtain lodgings. For the rest, the main part of the intention and the operation of the clause will be, I think, to prevent extortionate rents being exacted from sub-tenants.
My Lords, I must say that I still find it extremely difficult to understand what it is that the ultimate tenant has done to console him for the fact that the mere fact that he has taken over the sub-tenancy renders 1289 him liable to a ten per cent. increase which he would otherwise not have to pay. I can understand what the noble Earl says about dividing it when you have got it, but why is the tenant to pay it? If this Bill is designed for the protection of tenants, why is it that a particular class of tenant, who is probably one of the most helpless of them all, who has taken a tenancy from the tenant of a house, is to be liable to ten per cent. more rent than he otherwise would have to pay? I find myself unable to understand that, even after the noble Earl's most kind and courteous explanation.
My Lords, I hope that the noble and learned Lord will not press this Amendment. I gather that he does not challenge that part of my noble friend's statement under which the landlord is entitled to a slight increase on account of the fact of the sub-tenancy. I think that most of your Lordships who are familiar with this class of property will realise that there is extra wear and tear thrown upon the premises by the fact of a sub-tenancy, and that the landlord is entitled to some increase of rent on account of the sub-tenancy. What the noble and learned Lord challenged was that the sub-tenant ought to pay a little more. The sub-tenant ought certainly to pay a little more in respect of the amount which the tenant has to pay under the argument which I have already submitted. It is proposed that the subtenant should pay a little more.
Let me say, in the first instance, that it is a positive benefit to the sub-tenant to limit the amount and to mention it as five per cent. At the present time, what goes on is a system of profiteering in a certain number of cases as between the tenant and the sub-tenant, and it is a positive benefit to the latter to limit the figure and to say exactly what it is to be. Besides that, I think it is important that the tenant should be allowed to charge a very small increase of rent upon the sub-tenant, otherwise it will not be to his interest to sub-let at all. There is a good deal to be said, of course, against allowing a tenant to sub-let. In my cottage property I never allow it so far as my covenants are concerned, and none of this will apply to me because if sub-letting took place it would be a breach of covenant.
1290 But that is not always the case, and in many instances it is not desirable, I may say, at this particular moment. With this tremendous shortage of houses, to make it difficult to sub-let or to prevent there being any incentive whatever to sub-let would be against a proper solution of the problem, and if you do not allow the tenant to charge anything extra at all for the sub-letting, why should he sub-let? He will not sub-let, and the congestion in housing will be still worse. I admit that it ought to be a very small figure, and five per cent. is a very small figure. That is all that the tenant will be allowed to retain. The other five per cent. will go to the landlord for the reason I have already stated. I think that the noble and learned Lord will see that this matter has been very gravely thought out. It is not an accidental matter. It is not a case of something having slipped in without proper care. It is a carefully drawn and prepared clause with the object of meeting a real difficulty, and I would suggest to the noble and learned Lord that he should not press his Amendment.
§ THE EARL OF ONSLOW moved, at the end of subsection (1), to insert: "Subsection (2) of Section three of the principal Act shall not apply as respects any increase permitted under this subsection." The noble Earl said: This clause defines a new permitted increase in the case of sub-letting. Under subsection (2) of Section 3 of the principal Act no permitted increases are due or recoverable until the landlord has served notice of increase on the tenant. This, of course, must be in the form which is in the schedule to which we have already referred. But there is nothing in this schedule which takes account of this new permitted increase. It would seem to involve a cumbrous addition to the schedule, and it seems to be quite unnecessary to provide a special form of notice in this particular case and to cause a special notice to be given to the subtenant in regard to this new permitted increase. Therefore, it is proposed that it shall not apply to increases permitted under this clause. I beg to move.
The next four Amendments on the Paper are practically drafting Amendments to subsection (2). The clause is meant to apply to all cases of sub-letting, but as it is at present drafted it would apply only to the case of a tenant who himself sub-lets part of a dwelling-house and not to the tenant who took over from another tenant of the house. These Amendments are put in to cover all sub-tenants. They all go together and, therefore, I move them together.
§ LORD BUCKMASTER moved to leave out subsection (2). The noble and learned Lord said: I am bound to say that subsection (2) is a severe one, upon the hypothesis, as I pointed out on Second Reading, that the tenant is entitled to sub-let. It is perfectly true, as the noble Marquess has pointed out, that the remedies that might have been open to the landlord before the passing of this Bill to prevent sub-letting may be open to him no more. None the less, the act that the tenant does in sub-letting is a perfectly lawful one. It is not in breach of any covenant whatever in the lease or the tenancy agreement that he holds. In these circumstances, to call upon him to give notice of his sub-tenancies to his landlord with the possibility, if he neglects to do so, that ho may be haled before a court and fined a sum not exceeding £2 appears to me to be an extreme and excessive provision. I agree that when you pass subsection (1) of Clause 6 you feel yourselves in need of something to protect the rights that have been there conferred, and it might be possible that you should protect those rights by giving the landlord, it might be, power to evict or something of that kind; but to enable a man to be haled before a police court and fined a sum not exceeding £2 in order to compel him to give notice of a perfectly lawful transaction into which he has entered, is a thing which I regard not only with apprehension but with 1292 aversion, and I sincerely hope that the noble Earl will see his way to omit it.
§ Amendment moved— Page 6, line 37, to page 7, line 4, leave out subsection (2).—(Lord Buckmaster.
I must say I heard with a little surprise the noble and learned Lord say he thought that perhaps some provision in regard to eviction might be placed here instead of the fine of £2. It seems to me that to evict a tenant because he does not comply with the provisions of this clause would be a far more severe penalty than a maximum fine of £2. In addition to that, if a tenant is to be evicted he still would have to come before the court, because only by going before a court can a landlord in any circumstances evict a tenant.
There are two reasons, I think, which make this a desirable clause. The principal object of making a tenant give notice to the landlord of his sub-tenant is to protect the sub-tenant, because then the landlord acts as a guardian of the subtenant's interest, and prevents the subtenant, or is in a position to prevent the sub-tenant, from being charged an exorbitant and profiteering rent. Again, it seems to me that it is really very desirable that all landlords should know the state of their properties. In discussions outside your Lordships' House in regard to the Housing Bill it came to my notice that in the case of certain slum properties there were a number of landlords with many tenants and sub-tenants. In one case there was a landlord with fourteen tenants and sub-tenants. In consequence, we put in a clause, which had your Lordships' full concurrence, that gave facilities to landlords to know what was being done with their property.
I think it is very important that landlords should know what is being done with their property, to whom it is let, and what is going on in it. In the interest of the landlord and of the property, and for the protection of the tenant, I think that this subsection is a desirable one. I do not know whether your Lordships would suggest making eviction possible under the clause instead of a fine, but in the view of the Government the maximum fine of £2 would be sufficient to ensure the provision being carried out. I hope, therefore, your Lordships will agree with the clause as it is.
The noble Earl assumed that my alternative remedy was one that would be summarily and instantly enforced. That, of course, is not what I meant. What I meant was that the landlord should be at liberty to serve upon a sub-tenant a notice requiring particulars of the sub-tenancies, and that then a reasonable time should elapse, and that if he did not supply the information he should be liable to a notice of eviction. The notice to evict would probably be also subject to the expiration of further periods of time, as it is under the Conveyancing Acts. It appeared to me that it would be a far less drastic and summary procedure than the procedure under which you haled a man before the magistrates, and fined him £2 for not having given this information. I recognise that you are dealing with a certain class of property on certain special torms. That, of course, is a dominant and a powerful consideration, because if it were not so it is not conceivable that anybody would consent to any such provision as this being introduced into a clause regulating the right of a man to deal with the property, even though it be a humble property, in the shape of a sub-tenancy of a house let under the terms of this Bill. But I will not press the matter any further. The Government say that they have considered it, and that this is the best they can do. I thought it my duty to protest against it, and to call your Lordships' attention to it, and I do not now press it further.
§ As to sub-tenancies of premises licensed for the sale of intoxicating liquor.
§ ".Notwithstanding anything contained in subsection (5) of Section five or in subsection (3) of Section fifteen of the principal Act, where the interest of a tenant of a dwelling-house to which the principal Act applies and which consists of or includes premises licensed for the sale of intoxicating liquor is determined, either as a result of an order or judgment for possession or ejectment, or for any other reason, the interest of any sub-tenant to whom the premises or any part thereof have been sublet, and who is by the terms of the sub-letting under an obligation to purchase intoxicating liquor exclusively from the tenant shall be determined also."
§ The noble Lord said: The new clause which stands in my name is designed, in 1294 part, to give reasonable protection in certain eventualities to the owner of public house property when such owner is not a brewery company, and, in part, to give reasonable protection to the interests of the community at large. In so far as it touches the latter purpose, it concerns an important matter of principle, and I trust that your Lordships will regard it as an important matter. There are up and down the country, as you know, a very large number of public houses which are the actual property of brewery companies. These houses are mostly let to licensed victuallers who are the direct tenants of the brewery companies, and their position is covered by the principal Act, and also by the Bill before your Lordships' House. There is no intention in this new clause of interfering with any provisions which have been inserted in both the principal Act and this Bill to protect the interests alike of the brewery companies and of the licensed victuallers who are in the occupation of public houses. But there are also in the country a very large number—perhaps the larger number—of public houses which do not belong to the brewery companies at all, but which belong to estate owners, and which are let on leases to brewery companies, the brewery companies hiring them for the purpose of making them into tied houses, and renting them to licensed victuallers who then become the sub-tenants of the owners of the houses. It is only those sub-tenants of the owners of the house with whom my new clause proposes to deal.
§ The subject divides itself clearly into two parts. One is the convenience of the landlords in the matter of rent, and the other is the convenience of the public in a matter to which I shall refer in greater detail in a moment or two. Take the question of rent first. The brewery company's lease expires. The brewery company surrenders the lease without endeavouring to take advantage of the provisions of the principal Act. I believe it is a fact that brewery companies could, in such circumstances, take advantage of the principal Act, but in no case that, has come to my notice has any brewery company thought it a dignified or a proper thing to do to take that advantage. The lease terminates, and the owner of the house is anxious to improve the amenities of the house; possibly, he is anxious to make it into 1295 a free house. He, therefore, does not continue his lease to the brewery company, and the brewery company retires. The owner of the house is debarred from dealing with that public house because the licensed victualler in occupation has rights under this Bill which makes it impossible for the owner to eject that licensed victualler.
§ The brewery company undoubtedly—this is so in most cases—has let to the licensed victualler this house at a rent which has very little relation to the actual value of the house. The brewery company attaches little importance to rent. What it attaches importance to is the sale of its products in that particular house, and the profits derived from that sale. Nevertheless, when the licensed victualler becomes statutory tenant (the brewery company being eliminated), the rent which the owner is to derive from the statutory tenant is the same rent, subject to certain very minor increases, which the same licensed victualler paid to the brewery company. The brewery company has two means of making money out of a public house—the one, rent; and the other, profit out of the sale of the company's products. The owner of the house has but one means of making money out of it, and that is by way of rent. Therefore it does not seem to be fair that the owner of the house should be bound to accept approximately the same rent from the statutory tenant who is inflicted upon him as would be fair for the brewery company to accept from that tenant.
§ There is an even more important feature of this matter than that, and it is this. Where a brewery company's lease is about to terminate it is often the fact—particularly where a monopoly is in existence—that the community has been anxiously looking forward to the termination of the lease in order, partly, that the house may be improved in its amenities and made more convenient for the purposes of the community and, partly, that they may be able to have a free house in that particular place. It is true that their ambition is to some extent attained when the brewery company surrenders its lease. That is true, and up to a certain point their case is met. But it is quite impossible that the original tenant of the public house should be in a position to deal with the house as the landlord would be able to deal with it in letting it to a company 1296 not interested in the sale of a particular beer or spirit. The tenant is not able to spend money on improvements, and the effect of this Bill, together with the principal Act, is that you are condemning every public house owned not by a brewery company but by an estate owner to remain in its present condition until the Rent Restrictions Act expires.
§ You are making it impossible for any landlord to free any public house on his property; making it practically a necessity to retain the tied-house system and making it certain that no house will be improved in a way that so many public houses in this country need improving. I will not weary your Lordships with further details, but I hope I have said enough to show that this is an important matter. While it is true that there will be some advantage to a few sub-tenants, the interests of the general community must come first in a matter of this kind, and it is not in the interests of the community as a whole that the sub-tenant of a public house should enjoy the protection which this Bill proposes to give.
The noble Lord has explained clearly the object of his new clause. It is to give power to the landlord to obtain possession of licensed premises from a sub-tenant when the immediate tenant, the brewery company, has given up the lease. I should say that, probably, such cases were not very numerous, and I am somewhat surprised to hear that brewery companies have not taken advantage of the provisions of the principal Act. Under the provisions of Clause 2 of the present Bill they will be able to renew leases on free terms.
Let me deal first with the question of rent. The noble Lord has told us that very often a brewery company leases the tied house at a less rent that the actual market value and recoups itself by the sale of its own beer; that when the lease falls in the brewery company goes out and the sub-tenant becomes the direct tenant of the landlord, and that the landlord is unable to charge what may be a sufficient rent for the house. I should like to point out that the standard rent on which the landlord is permitted to base his rent 1297 does not depend on the actual rent charged. The standard rent may be taken to be the rateable value. It is provided in Section 12 of the principal Act that: where at the date by reference to which the standard rent is calculated, the rent was less than the rateable value the rateable value at that date shall be the standard rent. In cases where a brewery company has charged a smaller rent than the rateable value, then the rateable value may be taken as the standard rent and the basis of the new rent which the landlord may charge to the sub-tenant. In addition to that, the landlord is able to make certain increases. In all, he is able to make additional charges on the net rent up to 40 per cent.; that is, on the rateable value which may be taken as the standard rent. So that he may charge a considerably larger rent than the rent charged by the brewery company. If a house has been let by a brewery company for £30 a year and its rateable value is £50 the landlord may take £50 as the standard rent, and on this he may make certain increases, up to 40 per cent., raising the rent to £70.
I have had some conversations with my noble friend on this matter. He told me that he was acquainted with cases in rural districts where the rateable value was fixed at the rental charged by the brewery company. I am much obliged to him for that information. But I have also made inquiries, and I find that in many cases the rateable value is considerably higher than the rent charged by the brewery company. There was a case in which a house was let at a rent of £20 a year by the brewery company. The rateable value was £30, a difference of 50 per cent. In that case the landlord was able to take the rateable value as the standard rent, and charge on that certain increases and the difference in the rates. The noble Lord, however, based his argument less on the question of rent than on the social advantages which, will ensue if a landlord is able to recover possession of a house and make those improvements which he thinks are necessary.
May I, with great respect, say that that is an argument directed to show that licensed premises should not be included in the Bill at all rather than to prove the 1298 desirability of the particular provision which he seeks to introduce? I say quite frankly that I was one of those who recommended that licensed premises should be excluded, and in the original Bill they were excluded. But after considerable debate and some negotiations in another place, it was decided by agreement between the wholesale traders and the retail traders that licensed premises should be included, and in Clause 3, which your Lordships have approved, every landlord has the right to re-enter his premises if those premises have not been properly conducted.
If then it be accepted that licensed premises are to remain in the Bill, the adoption of my noble friend's Amendment would mean that a sub-tenant of licensed premises is to be put in an entirely different position from any other kind of sub-tenant. Consequently, although there may be a case for the exclusion of licensed premises altogether, I venture to submit that there is scarcely a case for admitting that, while licensed premises are subject to the operation of the Act, sub-tenants of such premises are to be treated in a totally different manner from any other sub-tenant who enjoys the protection of the Act, in this connection I would venture to read to your Lordships an extract from a letter which I have received from the National Consultative Council of the Retail Liquor Trade. They say:— The policy of the principal Act, as you are aware, is that on the determination of an intermediate tenancy the actual occupier shall become direct tenant under the Act of the head lessor, and it is impossible to see any legitimate reason why licensee occupiers, alone of all classes of the community, should be deprived of their statutory protection as contemplated by the Amendment. That is the argument which I venture to put before your Lordships as expressed by the retail liquor trade.
I think it has been mentioned—I do not know whether my noble friend referred to this point—that licensed premises are the sole survivors of busy ness premises, which were protected for a short time under the Act of 1920. I admit that there is some truth in this contention, but I do not think that it is a good argument. The licensed premises to which my noble friend refers—he will correct me if I am wrong—are mainly those situated in rural districts.
They are not urban, but they are not rural.
The distinction is a little fine, but, anyhow, they tend to be rural because they are not urban. Let us take the case of premises in a rural district such as will be familiar to many of your Lordships. They are not really hotels, or even public-houses, such as one sees around the suburbs of London, or in those so-called rural districts where I live for the most part, but cottages which have a beer licence and are situated in country districts. Those cottages are not very different from that of the village grocer, for example, who sells sugar, tea, pepper and salt, and that sort of thing while the publican sells beer. It seems to me that in such a case as that—I admit that there may be others—it will be very hard upon a sub-tenant if, because he happen to be a licence holder, he is treated in a different manner from the man who is living by selling groceries. I venture to think that those tenants ought to be treated in the same manner as others, and that you would be creating hardship if you made a difference between them.
I might also apply the same argument to the case of the sub-tenant in larger licensed premises. I think that if you are going to admit that licensed premises shall be protected by this Bill, you ought to give the sub-tenants of those premises the same protection as you give to all sub-tenants who enjoy protection. Perhaps this matter is not one of first rate importance. It does not involve a fundamental change in the policy of the Acts. But to exclude such sub-tenants would, I think, create an injustice and consequently it would involve a not unimportant change in one of the principles underlying this Bill if the Amendment were accepted. I hope, therefore, that since the matter, as I may assure my noble friend, has received most earnest consideration, he will be content to withdraw his Amendment after such explanation as I have been able to give, and that in any case your Lordships may not think it necessary to insist upon it.
If the noble Earl will forgive me, I do not think his argument 1300 regarding this provision was a very good one, because apparently the Government after the most careful consideration, including, of course, consideration of the Report of his Committee, decided when they introduced this Bill that this protection for licensed victuallers was not desirable. Then, by one of those deals which I do not think are very desirable, the Government reversed this decision in another place and reintroduced the clause into the Bill. I cannot help thinking that it would be very much better to put the Bill back into the form in which it was originally introduced in another place by the Government after very full consideration. I should also like to take exception to the noble Earl's remarks regarding the custom of assessment committees, because I can wholly confirm what was said by the noble Lord. The same procedure is adopted in the West of England as appears to be adopted in East Anglia.
I did not deny it. I said that I accepted it entirely, since my noble friend told me that it was the case. I accepted the eases which have occurred to his knowledge, but I said that there were other cases where nothing of the kind had occurred.
Quite so; I do not desire for a moment to question what the noble Earl said, but I merely draw his attention to the fact that it is not only in East Anglia but also in other parts of the country that these things happen. The cases of which the noble Earl speaks are, no doubt, quite exceptional.
No, I do not think they are an exception.
If such is the general practice of assessment committees, I think it strongly supports the case for my noble friend's Amendment. He says that such is the case in East Anglia, and I hope that the noble Earl will accept my statement that it is the same in the West of England. You have instances, therefore, of two very large areas. I think that the unfortunate landlord will not be much better off, because he will have to accept this very low rent at which, as the noble Earl in charge of the Bill has said, it is to the interest of the brewery companies to let, because they have other means of making a profit. I admit that in the old days 1301 the assessment committee very often took notice of this point, but the general practice, nowadays, is to take no notice. Speaking as an Income Tax Commissioner, I find that the general tendency is not to assess for Income Tax at a higher rate than the rent at which the premises are Let to the licensed victualler.
I think it is due to your Lordships that I should say a few words in reply to my noble friend. Lord Strachie has dealt with the question of rateable value and there is no need to touch upon that point again, but my noble friend will remember that, when a sub-tenant becomes the statutory tenant of the landlord, the compensation charged becomes chargeable against that landlord and not against the brewery company. In many cases that constitutes a very heavy charge. One important point made by my noble friend was that it was not proper to treat subtenants of this character differently from any other kind of sub-tenant. He also quite fairly referred to the fact that they were the only traders still in the Bill, and that their kind of business premises was the only kind that remains.
I said that this was only partly true.
But you have to remember that the case of every other sub-tenant brought in under this Bill affects himself and the landlord alone. The case of a sub-tenant such as is referred to in my Amendment affects the community as a whole most intimately. Consequently, I think that there is a case for dealing with this class of sub-tenant differently from every other kind of sub tenant. It is well known that the occupation of a public-house is an important matter from the point of view of the community living in the neighbourhood of that house, and I cannot agree therefore that this is an argument against treating this sub-tenant differently from all other sub-tenants. There is, to my mind, every reason why he should be treated differently from other sub-tenants.
My noble friend referred to the email public-house which is found in rural districts. That was not really the kind of public-house I had in mind. That sort of house is of very little profit either to the 1302 publican, or the brewer, or the landowner, or anybody else. The kind of house that I had in mind was that which exists in industrial centres of rising importance where, of course, a public-house is a very valuable property indeed, and where landowner, brewer and publican may take a very deep and vital interest in what is happening to it. It was of that class of public-house property that I was thinking rather than of the rural public-house. Of course, my Amendment would affect all kinds of sub-tenant in the small rural areas as well as in the industrial centres. This Amendment, I am given to understand, is very greatly desired by a considerable section of the community, and with the greatest regret I must decline to withdraw the Amendment.
My Lords, I should like to clear up this little ambiguity about business premises. Lord Hastings seems to think that in the Bill as it stands we are protecting licensed premises quite differently from all other business premises—that we are treating them as a special case. That is not so. It is quite true that business premises where no one lives have disappeared from these Rent Restrictions Acts. They were put in very much against my own personal wish at the time, and they only lasted for about a couple of years, and then disappeared. But the business premises where the occupier actually resided have always been included in the Rent Restrictions Acts, for the very obvious reason that you could not distinguish one place where a man lived, provided it came within the rental limits, from another place where a man lived. The fact that he also carried on his business as a grocer or a draper in the house in which he lived ought not to deprive him of the benefit of the Rent Restrictions Acts, and he always has been included.
This is a similar case. Here is a dealer in beer. He resides in his house, and the fact that he resides in the house, if the house comes within the rental limits, brings it logically under the Rent Restrictions Acts as they have always been before your Lordships' House and before Parliament. Therefore, no exception is made. It is absolutely the normal case. We are dealing with the case of a trader who lives in the house where he carries on his trade. My noble friend has 1303 said that he was contemplating a house in a rising industrial district, but he said, with the candour which always characterises him, that he was quite aware that the Amendment also covered the case of the small rural public house to which Lord Onslow has referred. That is the strength of the Government's case. That is the difficulty, because your Lordships must remember what is the whole genesis of the Rent Restrictions Acts. The point is the famine of houses, and the power which the famine of houses gives to certain landlords to exact a rent which is usurious. That is the whole point why the Rent Restrictions Acts were established originally. It does not apply to the compassionate landlord, but the law had to be made because all landlords are not compassionate.
§ tioned, how can you justify it? How can such a man go into the house market and get a house when none is to be had except at a high rent? I ask your Lord ships not to agree to this Amendment.
I think there is one distinction which may be drawn between the cases just mentioned by the noble Marquess—namely, between the man in a house in which he is selling beer and the man in a house in which he is selling groceries. The one has a monopoly value, and the other is living in a house where he is subject to competition at any moment, should anybody choose to come along to sell his particular kind of goods.
Neither is particularly well off.
There is the distinction I have mentioned, which may be drawn between the two in so far as you can compare one with another. Surely there is something which one might call almost monopoly value attached to the house of a man who is living in a house in which he is selling beer, which does not attach to the house in which a man is living and selling groceries. In so far as those instances apply to which the noble Marquess alluded, namely, of the man selling beer in an isolated place some way from any other house, there is surely this distinction, that supposing he was turned out the same arguments do not apply with regard to re-housing. If he is turned out there is not the same housing difficulty. In those circumstances, if the noble Lord goes to a Division, I certainly shall support him, and I hope he may win in the Division Lobby.
§ Their Lordships divided: Contents, 19; Not-Contents, 49.
Beauchamp, E. Cawley, L. Pentland, L.
Chesterfield, E. Denman, L. Raglan, L.
Northbrook, E. Forres, L. Rathcreedan, L.
Plymouth, E. Gorell, L. Shandon, L.
Westmeath, E. Hastings, L. [Teller.] Stanmore, L.
Salisbury, M. (L. President.) Morton, E. Grenfell, L.
Devonshire, D. Onslow, E. Hylton, L.
Bath, M. Chaplin, V. Lamington, L.
Curzon of Kedleston, M. Hutchinson, V. (E. Donoughmore.) Lawrence, L.
Shaftesbury, E. (L. Steward.) Novar, V. Newton, L.
Ancaster, E. Cheylesmore, L. Ritchie of Dundee, L.
Bradford, E. Cullen of Ashbourne, L. Saltoun, L.
Eldon, E. Dynevor, L. Stuart of Wortley, L.
Lucan, E. Erskine, L. Sumner, L.
Malmesbury, E. Fairfax of Cameron, L. Wharton, L.
Midleron, E. Gisborough, L. Wyfold, L.
§ Limitation on recovery of over-payments or arrears.
§ ".—(1) No increase of rent which becomes payable by reason of an amendment of a notice of increase made by order of the county court under this Act shall be recoverable in respect of any rental period which ended more than six months before the date of the order.
§ (2) Any sum paid by a tenant or mortgagor which, under subsection (1) of Section fourteen of the principal Act is recoverable by the tenant or mortgagor shall be recoverable at any time within six months from the date of payment but not afterwards, or in the ease of a payment made before the passing of this Act, at any time within six months from the passing of this Act but not afterwards.
§ (3) Nothing in this section shall affect the operation of the Rent Restriction (Notices of Increase) Act, 1923."
§ The noble Earl said: The object of this new clause is to revert to the principle which obtained in the Rent Restrictions Acts prior to 1920. The provision was not included in the Rent Restrictions Acts, but in the Courts (Emergency Powers) Act. Under the 1920 Act a tenant or mortgagor may recover from the landlord or the mortgagee, at any time after the date of payment, any sum paid in excess of the permitted increase. The evidence before the Departmental Committee showed that there was often hardship in this, and we propose in this Bill to insert some provision to place a limit upon the 1306 time during which excess payments may be recovered, and so to revert to the original practice which obtained before the Act of 1920. The cases where limitation is placed upon the time of recovery are two. The first relates to Clause 5, which deals with the power of the county court to amend and correct errors in the notices. Objection has been taken to Clause 5 on the ground that it is retrospective, and that there is no limit to the retrospective action other than the limit which the court can impose in its discretion. This subsection, therefore, provides for a maximum retrospective period of six months. But, although it imposes this maximum period, it does not preclude the court from making the retrospective action less than six months, in particular cases.
§ Subsection (2) applies to an overpayment by a tenant. A provision of this kind is necessary in view of the probable operation of Clause 6. As I said before, the main object of that clause is to prevent profiteering by tenants at the expense of sub-tenants But it would probably cause some hardship if some limit were not imposed upon the time during which sub-tenants can claim recovery of payments made to the tenant. Subsection (3) provides that this limitation shall not interfere with the Rent Restriction (Notices of Increase) Act, which your Lordships passed a short time ago.
§ Excessive charges for furniture, etc., taken over in connection with tenancies.
§ 7.—(1) Where the purchase of any furniture or other articles is required as a condition of the grant, renewal, or continuance of a tenancy or sub-tenancy of a dwelling-house to which the principal Act applies, the price demanded shall be stated in writing, and if such price exceeds the reasonable price of the articles, the excess shall be treated as if it were a fine or premium required to be paid as a condition of the grant, renewal, or continuance, and the provisions of Section eight of the principal Act, including penal provisions, shall apply accordingly.
§ (2) Where a tenant who by virtue of the principal Act retains possession of a dwelling-house to which that Act applies requires that furniture or other articles shall be purchased as a condition of giving up possession, the price demanded shall be stated in writing, and if such price exceeds the reasonable price of the articles the excess shall be treated as a sum asked to be paid as a condition of giving up possession, and the provisions of subsection (2) of Section 15 of the principal Act (including penal provisions) shall apply accordingly.
§ THE EARL OF ONSLOW moved, in subsection (1), after "shall," where that word first occurs, to insert "at the request of the person on whom the demand is made," and to leave out "such" and insert "the." The noble Earl said: This is really a drafting Amendment. As the clause stands there is no machinery to provide that the landlord shall be requested to make a statement in writing of the price of furniture. It would probably lead to difficulties, and perhaps to litigation, if, without any limitation of this sort, a statutory obligation to put down the price of the furniture in writing were placed on every landlord who is negotiating for letting a house and the sale of the furniture at the same time. We think it is sufficient to provide the he should do that at the request of the tenant.
§ THE EARL OF ONSLOW moved, in subsection (2), after "shall," where that word secondly occurs, to insert "at the request of the person on whom the demand is made," and leave out "such" and insert "the." The noble Earl said: 1308 This Amendment is really the same as the last. It might be held that these words meant that "such price" was the price demanded in writing, and so, if the demand were not made in writing, the transaction would not be covered by the clause. This Amendment makes it clear that the clause must apply to the transaction, whether the statement is in writing or not.
§ LORD DYNEVOR moved, after Clause 9, to insert the following new clause:— .Notwithstanding anything in this Act or the principal Act when in any action by a landlord for the recovery of possession of a dwelling-house to which this Act or the principal Act applies, the court is satisfied that it is essential to the letting or sale on reasonable terms of other property of the landlord that vacant possession of the dwelling-house should be given to the lessee or purchaser, and that the same has been used at some time by persons or a person in the employ of the landlord or a former landlord in connection with the use of such other property, and is also satisfied as respects alternative accommodation provided for elsewhere in this Act, the court shall have power to make an order or give judgment for possession of the dwelling-house on such terms as it may consider reasonable.
§ The noble Lord said: There are cases in which persons have obtained possession of cottages and gate lodges and have retained possession of them under the Rent Restrictions Act. When the principal house is vacant and the owner wants to sell or to let it there is no provision in the Act which enables possession of these lodges and gatehouses to be obtained. Paragraph (d) of the new Clause 3 (1) does not apply because the vendor or the would be lessor does not require possession for his own servants. I submit that if he can give alternative accommodation he should at least have a locus standi to apply to the courts for possession of such cottages or gate lodges, and under my Amendment the court will try the question as to whether, and the terms under which, they shall be given up. I beg to move.
I think the main case on which the noble Lord bases his Amendment is that of a lodge or some similar building attached to a house which the, owner wants to sell or lease, and the would be tenant or purchaser says: "No, I will not buy or lease that house because the lodge is occupied by a tenant, and I want to put my own lodge-keeper into it. I cannot, therefore, take the house or buy it." It depends, of course, to whom it is proposed to sell or to lease the house. If it is proposed to sell or to lease it for use as a school, or a hospital, or some public institution, I think the substituted paragraph (e) of Clause 3 (1) would apply. It says that where the dwelling-house is reasonably required for the purpose of the execution of the statutory duties or powers of a local authority, or statutory undertaking, or for any purpose which, in the opinion of the court, is in the public interest"— possession may be regained. That would be the case if it was for a hospital, or a school, or a public institution.
Again, I think it would be the case if it was desired to pull down the lodge or gate-house and clear it away and lay out the estate for building. I think that probably would be held to be in the public interest, and the owner would be able to obtain possession and to re-enter upon the small house. But my noble friend mentioned the case of a man who wants to buy the house as a private dwelling-house and wants the lodge as well. Perhaps it would not cover the sale to a private person, but under Clause 3, if the house or lodge was reasonably required by the landlord for some person in his whole-time employment or in the whole-time employment of his tenant, possession could be obtained by giving alternative accommodation. I think, if it was proposed to lease a house and the tenant wanted the lodge for somebody in his whole-time employment, he would be able to obtain possession.
Therefore we narrow the question down to one of sale. If the purchaser were to buy a house and thus to become the owner and wanted the lodge for somebody in his employment, he would be able to gain possession, I think. If, indeed, 1310 he wanted it for an agricultural labourer he could obtain it under a certificate from the county agricultural committee as provided in the Act without offering alternative accommodation at all; so really we arrive at this point, that only in a case where a vendor could not get the purchaser to buy without vacant possession of the lodge would that clause become operative. If he were to sell with a person in occupation of the lodge, as soon as the purchaser got possession he would be able to set the machinery of the Act in motion in order to obtain possession of the lodge for his whole-time employee, whether a non-agricultural employee, such as a lodge keeper, or an agricultural employee. In the one case he would have to offer alternative accommodation, and in the other, he would not.
If I may venture to suggest it, I think the difficulties which have obtained in the past in obtaining possession of this kind of building have really arisen because of the very rigid definition of alternative accommodation under the original Act. We have now altered that considerably. We have made alternative accommodation more fluid, if I may say so, and I trust that in the future it will be possible to obtain alternative accommodation much more easily. Probably the reason why it was anything but easy to set the Act in motion before was the difficulty of finding alternative accommodation which the courts would accept. If your Lordships accept this Amendment I am afraid it would be impossible to confine it to those eases which my noble friend has in mind.
May I take an illustration from a town? Supposing an owner wishes to sell a block of flats, and supposing the lowest flat near the door is occupied by a sub-tenant, the new owner may say: "I will not buy that block of flats unless I can get possession of that particular flat, because I want it for the concierge, or the caretaker, or the porter." There might be several sub-tenancies as to which he might say: "I wish to obtain those for somebody else in my employment or for somebody whom I think it necessary to place there." That would really mean that if a person were to say he wanted to buy the whole house with the cottages adjacent or a whole building containing all the flats, he might 1311 then be able to eject any sub-tenant. I do not think it would be possible to accept the Amendment, or to admit this principle. I think that my noble friend will find that anybody who is placed in the position he describes will really have his remedy and that it will not be "impossible for him to regain possession under the Act as it stands. I hope, therefore, that my noble friend will not think it necessary to press his Amendment.
May I point out as a matter of fact—and I think every noble Lord present is aware of it—that under the Act as it stands it is almost impossible to get possession of property of this character, because alternative accommodation must be provided? In most cases alternative accommodation cannot be provided, and when the case comes before a bench of magistrates they are naturally very loth to turn people on to the roadside. I rather support the view put forward by the mover of the Amendment.
May I venture to point out that the provisions as to alternative accommodation have been considerably changed by the Bill from those existing under the Act which is in force?
I thought that my request was a moderate and reasonable one, and I wanted to give the vendor a locus standi in the courts which he does not possess at the present moment. But after what my noble friend has said. I will not press my Amendment.
§ Restriction on right to possession in certain cases after the expiry of the principal Act.
§ (5) In order to assist the court in the determination of questions arising under this part of this Act in relation to the rent, character or condition of dwelling-houses, the Minister of Health may establish reference committees to whom such questions may be referred by the court for consideration and report, as the court thinks proper.
§ LORD BLEDISLOE had on the Paper an Amendment to move in subsection (5), after "may," to insert "subject in the case of rural districts to prior consultation with the Minister of Agriculture and Fisheries."
My noble friend, Lord Bledisloe, is unable to be present in your Lordships' House to move his Amendment, and has asked me to do it for him. The object of the Amendment is to ensure the consideration of cases in the rural districts by the Minister of Agriculture and Fisheries rather than to leave them entirely in the hands of the Ministry of Health. It is not, I think, an unreasonable Amendment, and I am hopeful that the Government will so regard it. There is very little that I need say in advocacy of the Amendment. It speaks entirely for itself, and it is a matter of principle whether the Government see their way to agree to it or not.
§ LORD STRACHIE moved to amend the Amendment by leaving out "consultation with" and inserting "concurrence of." The noble Lord said: I had not the opportunity of consulting my noble friend Lord Bledisloe, because he was not in the House yesterday, nor is he here to-day. I was rather surprised, I must say, to see the form which his Amendment had taken. I thought he, like other agricultural Peers, was very anxious that we should adhere to the precedent set us so long as eight years ago in another place under the Milk and Dairies Bill. This Bill provides only for consultation. Not only in the other House but in this House, I thought we had established the precedent of always having not only consultation with the Minister, but what is more important, that the Minister of Agriculture should have the right of veto if he thought fit over the Ministry of Health in matters affecting agriculture.
§ The Minister of Health is a very important and very powerful Minister, and under present conditions the Minister of Agriculture would have nothing to say. The Minister of Health might say, " The Minister of Agriculture can consult me," but we know well that the Minister of Health would simply go his own way, and that the Minister of Agriculture would be brushed aside. That is the danger. I think the Government, if they are to accept any Amendment, will be ready to accept my Amendment, which, I understand, the noble Lord, Lord Hastings, is ready himself 1313 to accept in order that we may not destroy this valuable precedent by which the Ministry of Agriculture, on questions of agriculture, has the right of veto. I think agricultural interests should be protected, and not left to the tender mercies of the: Ministry of Health. I beg to move.
I hope my noble friends will not insist upon this Amendment, because it emphasises a principle which, I think, is really an undesirable one. Decisions of this kind are not taken by the Ministry of Health, but are taken by the Government as a whole. If it is decided to establish these committees it will be a decision of the Government, and not of any particular Department with another Department having, or not having, a veto over it. Machinery of that kind, I submit, is not desirable. We ought not to lay down a principle as to the form in which the Government, as a whole, shall take its decisions. My noble friend Lord Strachie seemed to think that at the Ministry of Health little attention was paid to representations or points of view which were placed before it by the Ministry of Agriculture. I venture to say that that is really not the case. I no longer have the honour to be employed in the Ministry of Health, but I was there for over two years, and I remember very many occasions—my noble friend Lord Ancaster would corroborate me in this if he were present—when representations from the, Ministry of Agriculture were weighed and considered with the greatest care.
But in any case I think these decisions should be regarded as decisions of the Government and not of any particular Ministry. It is, of course, necessary to put in the Bill the Department which shall be the agent and shall be responsible for the issue of regulations and machinery. I trust therefore that your Lordships will be content to leave the Bill as it stands. Even if your Lordships should disagree with my point of view, I should like to say that in this particular case it would be quite unnecessary to put in any such provision or safeguard as Lord Strachie suggests, because these proposals when made by the Government will be laid 1314 before your Lordships' House, and before another place, and they can only come into operation by means of direct affirmative Resolutions of your Lordships' House and of another place. My noble friend Lord Strachie will then be able to raise any questions upon them, and to persuade your Lordships, with his usual persuasive eloquence, to disagree with my right hon. friend. The provision which it is suggested should be laid down with regard to this would be very undesirable, and I hope my noble friends will not press the Amendment.
My noble friend has given an explanation and a reason which I feel Lord Bledisloe would have accepted if he were here, and therefore I feel justified in withdrawing the Amendment.
I beg to move to omit from subsection (5) "as the court thinks proper."
§ Reduction of rent pending the execution of repairs.
§ 11.— (1) If the county court on the application of a sitting tenant is satisfied by the production of a certificate of the sanitary authority and such further evidence (if any) as may be adduced that the dwelling-house is not in a reasonable state of repair and that the condition of the dwelling-house is not due to the tenant's neglect or default or breach of agreement, the court may order that the rent shall be reduced until the court is satisfied on the report of the sanitary authority or otherwise that the necessary repairs (other than any repairs for which the tenant is liable) have been executed, and subject to the terms of the order the rent shall be payable at such reduced rate as may be specified therein until the court is so satisfied.
§ Clause, 11, as amended, agreed to.
§ Restriction on calling in of mortgages.
§ (".—(1) Where a dwelling-house in the occupation of a sitting tenant is subject to a mortgage to which the principal Act applied, the county court may, on the application of the landlord, make an order restraining the mortgagee from calling in his mortgage or taking steps for enforcing his security or for recovering the principal money thereby secured, if it is satisfied that such calling in, enforcement or recovery would cause exceptional hardship to the landlord. The county court may, on the application of the mortgagee or landlord rescind or vary any order so made if satisfied that by reason of any material change in circumstances, rescission or variation is necessary or proper.
(d) the sitting tenant ceases to be tenant of the dwelling-house.
§ (3) This section shall not apply to a mortgage where the principal money secured thereby is repayable by means of periodical instalments extending over a term of not less than ten years from the creation of the mortgage."
§ The noble Earl said: This clause is submitted to fulfil a promise which was given by my right hon. friend on Report stage in another place. The original proposals of the Government were that certain restrictions should be removed from mortgages, but all the restrictions which are contained in the principal Act are retained under the present Bill until the year 1925. When Part II comes into operation those restrictions will all fall away, and no restrictions upon mortgages would be retained under the Bill, as it stands. It was felt that the sudden removal of all restrictions in regard to mortgages in 1925, while certain restrictions were being maintained as to rent, would possibly be a sort of hardship. This clause, therefore, has been 1316 designed to continue the modified protection to the landlord in the case of mortgages so long as the sitting tenant remains in the house. The other provisions which are contained in the clause are those which are in the principal Act. They are re-enacted here because, after 1925, all the Rent Restrictions Acts will lapse, and only such provisions as are retained or enacted in Part II will be enforced. I beg to move.
I do not wish to oppose this clause, but has the noble Earl fully considered the question of people being able in the future to obtain money on mortgage? Will not this clause make it extremely difficult for people to raise money? There are a great many people who do want to raise money on mortgage, and I am afraid this clause will make people hesitate before, they lend money on mortgage.
If your Lordships will turn to Part II you will see in Clause 10 (1) the description of a sitting tenant. It is only when a sitting tenant is in possession that this provision in regard to mortgages will apply. This is to balance the protection which is given to the tenant in regard to rent. It will not exist under Part II unless some provision of this kind is inserted in regard to the mortgages. I do not think the clause will have the effect my noble friend fears.
§ Regulations as to reference committees.
§ 12.—(1) The constitution and procedure of reference committees established under this Part of this Act shall be such as may be prescribed by regulations made by the Minister of Health.
§ (2) In addition to any questions that may be referred to a reference committee by the county court tinder this Part of this Act, provision may be made by the regulations for the reference to and determination by a reference committee of any questions in relation to the rent payable or to be paid by a sitting tenant which may be submitted to them by the tenant and landlord.
§ (3) Every regulation so made shall be laid before both Houses of Parliament as soon as may be after it is made, and if an Address is presented to His Majesty by each of those 1317 Houses within twenty-one clays on which that House has sat next after any such regulation is laid before it, praying that the regulation may be confirmed, His Majesty in Council may confirm the regulation, and it shall thenceforth have the force of law.
§ THE EARL OF ONSLOW moved to leave out subsection (3) and insert:— (3) Before any regulation under this section is made, it shall be laid in draft before both Houses of Parliament, and such regulation shall not be made unless both Houses by resolution approve the draft, either without modification or addition or with modifications or additions to which both Houses agree, but upon such approval being given the Minister of Health may make the regulation in the form in which it has been approved, and the regulation on being so made shall be of full force and effect.
§ The noble Earl said: This is really a drafting Amendment. I understand that when Regulations of this kind are to be submitted to both Houses of Parliament this form is usually adopted in the Bill, and not the one we had in the Bill as it came to your Lordships' House.
§ Amendment moved— Page 10, lines 23 to 30, leave out subsection (3) and insert the said new subsection.—(The Earl of Onslow).
§ Causes 13 and 14 agreed to.
§ Certificates of sanitary authorities and definition of repairs.
§ (2) On any application to a county agricultural committee for a certificate for the purpose of paragraph (ii) of subsection (1) of Section five of the principal Act, a fee shall be payable by the applicant to the county agricultural committee of such amount as the Minister of Agriculture and Fisheries shall by regulation determine.
§ LORD DYNEVOR moved to add to subsection (2)— and when such an application is granted the issue of the certificate shall be deemed to be conclusive evidence that possession of the dwelling-house referred to in the certificate is reasonably required by the landlord, and that it is reasonable that an order or judgment for possession of the same should be made or given.
§ The noble Lord said: This refers to agricultural cottages, and the reason I move it is because in some cases, 1318 notwithstanding certificates of the agricultural committee, the courts have decided to make no order on the ground that there was not sufficient evidence that the landlord was "reasonable" in making the application. The agricultural committee, presumably, considered the whole question carefully and they would not have issued such a certificate without investigating the facts. Therefore, the certificate to my mind should be evidence of the reasonableness of the landlord as well as of the importance of the accommodation to agriculture or husbandry. I do not think the courts should be free to upset a certificate given by the agricultural committee. In fact, it means that two bodies are dealing with this question. First, you have a certificate from the agricultural committee, and the tenant can then take the owner into court and say that the certificate is not a reasonable one. My Amendment is to make the certificate to all intents and purposes final and conclusive, and I hope the noble Earl will be able to accept it.
I am most anxious to do anything t can to meet my noble friend, and other members of your Lordships' House, and while I will try to meet this request I am afraid I can only do so to a modified extent. If the whole of his Amendment were accepted it would make the agricultural committee's certificate the criterion of the opinion of the county court as to the reasonableness of the claim, and I think the court of law must be unfettered in its own judgment, subject, of course, to the usual machinery of appeal. That is as regards the last part of his Amendment. With regard to the first part I do not think it would be possible to accept the certificate as absolutely conclusive evidence without any further say on the part of anybody. Take this fact, for instance. You have a provision in subsection (2) of Clause 3 of the principal Act, whereby a person is penalised for misrepresentation. He may have to pay compensation to the person dispossessed, and the house is not freed from control. A landlord may make misrepresentations to a county agricultural committee as well as in the county court, and supposing he obtained a certificate by misrepresentation then 1319 that certificate, if the Amendment were accepted, would stand and the court would have no power to rescind it. I think the party who objects to the certificate should have an opportunity of giving rebutting evidence as to the facts of the case.
As I say, I am most anxious to meet my noble friend if I can, and I would suggest that a provision which would strengthen the value of the evidence afforded by the certificate might be inserted. I have not drafted any such proposal at the moment, but it might be on the same lines as the provision in Clause 4 with regard to the certificate of sanitary authorities; something of this kind—that the certificate shall be sufficient evidence that what is contained therein is true, unless the contrary is proved. If my noble friend will withdraw his Amendment now I will endeavour to frame a proposal on these lines and introduce it on Report stage.
I am much obliged to my noble friend. I cannot, of course, pledge myself beforehand as I have not seen the words he proposes to insert. I hope, however, he will go a long way to meet me. Perhaps he will let me discuss it with him before the Report stage.
I shall be very glad to confer with my noble friend as to the suggested provision.

References: § 5

§ 6
 V. 
 V. 
 V. 

§ 7

§ 11

§ 12