I hope that I will be able to answer my hon. Friends’ questions in a moment when I run quickly through our amendments. We are banning the sale of leasehold houses in all but unusual circumstances, but for those that are out there at the moment, there must be an ability to ensure that they can buy the freehold and move from the leasehold challenges to a freehold. Let me deal with some specifics that I hope will answer some of the questions that have been raised.
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New clause 42 bans the grant of new long leases of houses. It will cover both newly built houses and existing freehold houses where the owner attempts to grant a new long lease. This new clause also closes a potential loophole by preventing the latest sale of a lease where circumstances have changed between the date the lease is granted and the date it is assigned. For example, this will thwart a developer from granting a lease of vacant land to a sister company, building a house on the land and then selling what is now a leasehold house.
New clause 43 sets out the broad conditions for what properties will be captured by the ban. Each of these broad conditions is then defined in the subsequent four clauses. New clauses 44 and 45 specify what constitutes a long leasehold interest for the ban. It adopts the established definitions in law, which are familiar to developers and home owners alike. New clause 46 sets a definition in law of a house for the purpose of this legislation. This is a broad definition that should reflect what prospective buyers would rightly consider to be a house. The definition will also capture attempts to create minor interdependencies between two properties, which developers might create to get around the ban. New clause 47 confirms what a residential lease is. It provides that a long lease of a property will be a residential lease if the lease does not prevent use as a separate dwelling. Again, this is a broad definition designed to prevent the mis-selling of leasehold houses and capturing only leases of properties used as a house.
We recognise that in a limited number of cases the use of leases can still be justified. For the purposes of this Bill we are calling them permitted leases. We have consulted widely on what should and should not be exempt from the ban, and even on the question of what is and is not a house for these purposes. The result is the collection of definitions now detailed in new schedule 2 to the Bill. These exemptions will allow vendors to continue to sell long leases on houses where the use of a lease can be justified. This includes land where properties cannot be sold on a freehold basis, such as inalienable National Trust land, or where the product relies on a lease connected to an active third party, such as shared ownership houses or community land trusts. We are able to—and we will, if need be—revisit these definitions and exemptions if innovation in the housing market requires it, or if we see evidence of poor behaviour.
New clause 49 would create an additional layer of protection for consumers and clarify which leases are permitted, usually when a developer intends to sell a number of new leases of houses on the same site. Those who intend to grant or sell leases that fall into one of
the categories set out in part 1 of the schedule will be required to make an application to the appropriate tribunal for determination on whether the proposed lease is permitted. This includes houses sold on land leased before the Government announced their intention to ban leasehold houses in December 2017, and leases such as retirement house leases or those on inalienable National Trust land.
To add further clarity for consumers and subsequent buyers, the tribunal will grant a certificate confirming that the lease is permitted and under which category. Critically, this must happen before the lease is marketed, so that the potential buyer can proceed with the purchase with confidence, knowing that the house is exempt from the ban. This relates to the point made by the right hon. Member for Alyn and Deeside (Mark Tami). Not many developments will need to go through this process, but those operating where it is not always clear whether a lease is permitted or required will have to do so.
To ensure that consumers have access to the material information they need and that they have the confidence to make a decision when purchasing a new house, new clause 50 requires those proposing to sell a new lease of a house to make this clear when marketing the property. To ensure that vendors comply with the new marketing requirements, this measure will rely on new clause 59 to implement a new penalty regime. This includes a fine for failing to provide the required marketing information at the right time. We know that not all home buyers will read the detail of all the marketing information and that not all leases will be advertised, so new clause 51 introduces warning notices so that all vendors will have to alert purchasers in writing that they are entering into the lease of the house, or an agreement for the lease of the house, and informing them on what grounds that lease is permitted.