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10.51 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. Raymond S. Robertson): I first congratulate the hon. Member for Clydesdale (Mr. Hood) on securing this Adjournment debate. I thank him for raising again the issue of leasehold casualty payments which, as we have heard in his speech, are causing grave difficulties for some of his constituents.
I understand and appreciate the concerns that the hon. Gentleman has expressed about some of the demands that are being made on his constituents. This matter was touched on briefly in the House last week when, hon. Members will recall, the hon. Member for Banff and Buchan (Mr. Salmond) secured a debate on land tenure and land ownership in Scotland. On that occasion, I expressed my deep concern for owners of leasehold properties, such as those in Boghead in Lanarkshire, who were being confronted by demands for casualty payments.
However, as I told the House then, although the Government are concerned about the severe distress being caused to some tenants, neither Ministers nor their officials have any powers to intervene in individual cases of dispute. Perhaps it would be helpful if I explained some of the background to the problem.
The problem of casualty payments relates specifically to leasehold property. As hon. Members will be aware, very little land in Scotland is held on leasehold tenure. What there is is concentrated in particular geographical areas, reflecting the practice of a few earlier landlords leasing to private householders instead of feuing. Consequently, a preponderance of titles in a small village may be leasehold whereas few if any residential titles in a large town or city will be. Even in areas where leasehold is common, no new long residential leases can now be created following the passing of the Land Tenure Reform (Scotland) Act 1974.
The incidence of casualty clauses in leasehold titles is a further imponderable, but again they appear to be concentrated in individual estates. A casualty is a payment falling due to a superior or landlord on the happening of events of uncertain date or occurrence. They are usually based on one year's net rental value of the property. Casualties relating to properties held on feudal tenure were progressively abolished by the Feudal Casualties
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The landlord continues, however, to have the right to collect casualties that were imposed on a long lease before that date. Therefore, the problem of casualty payments is restricted to a relatively small number of people with existing leasehold casualty clauses in leasehold titles in specific parts of Scotland.
Clearly, solicitors should advise their clients of the existence of such casualties when acting on their behalf in the purchase of a property that is held under a leasehold, as opposed to a feudal title. As leaseholds, and therefore leasehold casualties, are uncommon except in certain geographical areas such as Lanarkshire and are couched in unfamiliar terms, they can easily be overlooked by solicitors.
Until recently, many if not most landlords did not bother to collect casualty payments. Now, however, some new landlords have acquired leasehold interests with the specific intention of collecting long-neglected payments. Tenants may therefore be confronted by an unexpected demand for a payment. In addition, it is possible that landlords may succeed in an attempt to show that incoming tenants are liable for past unclaimed casualties.
Although we all sympathise with the tenants who have been placed in such a position, and I should like to record my own personal distaste for the methods being employed to extract payment, I must reiterate that leasehold casualty payments remain lawful, legitimate burdens on leasehold property.
The duty falls on solicitors acting for clients intending to purchase leasehold property to identify provisions for leasehold casualties in the title deeds and to warn their clients of the possible consequences. If the solicitor fails in that duty, he lays himself open to a claim for negligence against his professional indemnity insurance.
I understand that the landlord of the properties in Boghead is encouraging tenants to make such negligence claims against solicitors who acted for them in the purchase of their properties as a means of making the casualty payments.
The hon. Gentleman asked for legislation in order to alleviate the problem. It would be ideal if we could wave some legislative wand to solve the problems of the tenants in Boghead and elsewhere. Regrettably, in the real world, there is no easy solution.
Existing leasehold casualties cannot simply be abolished without making provision for compensation for the landlords for loss of future income. To do so would be to contravene the principles of the European Convention on Human Rights. Casualty payments that are already due would be unaffected and would remain payable by the tenant. Therefore, nothing can be done to change the present position of the hon. Gentleman's constituents. Their recourse has to be to their solicitors.
I am aware that others have suggested two possible solutions.
Mr. Hood:
Many of my constituents in Boghead will be depressed to hear the Minister's response. It is a tragedy that we are giving in to such people as Hamilton.
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Mr. Robertson:
I did not intend to be offensive. I was merely setting out the position and pointing out to the hon. Gentleman why the action that he has requested is, in part, impossible.
Part 1 of the Long Leases (Scotland) Act 1954 allowed tenants to convert leases into feus for a payment in compensation to the landlord. The Act provided that this could be done only during a period of five years after the passing of the Act.
It has been suggested that that legislation should be resurrected. This would not, however, remove the need to provide for compensation to landlords, nor would it do anything to help tenants where casualty payments are already due.
The other possible solution involves the Feudal Casualties (Scotland) Act 1914, which banned the creation of any new feudal casualties after the commencement of the Act, as has since happened for leasehold casualties in the Land Tenure (Scotland) Act 1974. It also set up a system for redemption of old ones within 15 years, either by agreement or upon payment of compensation by the proprietor to the superior to a scale contained in the Act. Redemption other than by agreement did not apply to any casualties that were already due. That meant that if the feudal superior did not agree, the owner had to compensate him for the loss of income.
Section 23 of the 1914 Act states that the Court of Session may provide by Act of Sederunt for the redemption and extinction of
I understand that the possibility of an Act of Sederunt under section 23 to provide for the compulsory redemption and extinction of leasehold as opposed to feudal casualties has been considered. There were, however, concerns both about the vires of the action
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A real solution to the problem of leasehold casualties can come only with reform of the law on long leases in general and as part of a package that involves compensation. The Scottish Law Commission is to look at the law on long residential leases as part of the major review of property law that it is at present undertaking. The commission cannot take matters forward until it has completed its present work on the law of the tenement and feudal system.
No one who was present at the Adjournment debate last week can doubt the strength of feeling of honourable Members from both sides of the House over the need to abolish the remaining aspects of the feudal system. As I made clear at that time, the Government are fully committed to doing so as soon as possible once we have received the commission's report.
Reform of the law of the tenement is also very important and will affect many people in Scotland. It has to be right that the commission tackles work in those vital areas first. I understand that the commission hopes to issue its report on the law of the tenement during 1997 and on abolition of the feudal system thereafter. It will, however, require to devote all its property law resources to achieving that: feudalism has survived for nearly 1,000 years and is deeply embedded in the private law of Scotland. It is an immensely complicated area of law. The abolition of one system of land tenure and its replacement with a new system of absolute ownership requires a great deal of consideration and public consultation. Many conflicting points have already been raised and will have to be taken fully into account.
"any rights of the nature substantially of casualties which are not comprised within the scope of this Act"
on terms seeming to the court to be just and equitable on the analogy of the provisions of the Act.
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