My Lords, I will try to be brief. I will just pick up on the last point made by the noble Baroness, Lady Pinnock, who has been a doughty campaigner on all this. We have the problem that this Bill creates a bureaucratic and quite complex situation. That can only weigh in favour of those who hold the real money here, which are the developers. We must try to focus on rebalancing that so that the leaseholders are on some sort of even playing field.
I noted very carefully what the noble Lord, Lord Young of Cookham, said on the detail of the accounting process. I very much support what he said. There is an element of discrimination, which was brought out by the noble Lord, Lord Naseby. Why do we discriminate between different categories of person and what does anybody think that will result in in terms of some class action further down the road? This whole thing has to be robust against applications to some international court, to the High Court or for judicial review. There absolutely has to be proof against serial activity. I know into whose hands that will play, and it will not be to the leaseholders’ benefit. There are an awful lot of exclusions here. The noble Lord, Leigh of Hurley, made a potent point about those who have already paid up. What about them? A point has also been made about proportionality and risk.
I will cut my other comments really quite short and just pose a few questions. As I see it—I was in dialogue with the British Property Federation about this—only in the case where you have a non-cladding effect, where the developer does not exist or cannot be found, does that trigger the freeholder responsibility to make a contribution for remediation, and only after the cap liability of the leaseholder. The Minister does not need to reply to me now, but I would like to be absolutely clear that that is the scenario—one of several—that applies here.
Moving on to Amendment 67, I would like to make a comment. As drafted, does the amendment cover limited partnerships? They are not corporate entities and are different from limited liability partnerships, which are covered by the amendment. For instance, the effective owner of Waterside Park, where a lot of issues have arisen, is just such a limited partnership. Is it the Government’s intention that limited partnerships should be included in the definition of “associated persons”? If not, why not? Because that would create a gaping hole.
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On Amendment 69 and the remediation orders, I do wonder why leaseholders cannot themselves apply if their landlord is not undertaking remediation work. Why are we painting out of the picture their ability to have collective action in that respect? It does not seem to me to be proper or fair.
With regard to the remediation contribution organisers, there are obviously some very wealthy investors who sit behind some of these things. On the other hand, there are an awful lot of occasions when the freeholders, the landlords, simply do not have the value let alone any other private resources—and what about the pension funds that may own these things? So I would like to know what assessment the Government have undertaken
of the resources available to landlords to cover these remediation costs. Are we simply creating another cadre of men of straw of one sort or another?
On the question of the provision for the courts and their jurisdiction here, do the Government really envisage that the courts will find it “just and equitable”, to use the term, to require landlords who themselves played no part in the construction of the buildings to fund the remediation costs? It seems to me a matter of basic equity. How will the courts operate that in practice? I suggest that there is a great lack of certainty on that.
Amendment 71 is on meeting remediation costs where there is an insolvent landlord, but would it give the courts discretion to override the hierarchy of creditors and provide remediation funding out of funds that would otherwise have gone to secured creditors, such as HMRC and mortgage lenders? If so, I think we ought to know. Also, what about the potential for disclaimer of negative-value assets in the hands of both liquidators and on behalf of the Crown and the taxpayer by an outfit called the Bona Vacantia department, which I believe is part of HMRC, and the resultant uncertainty and potential for litigation that that creates? There are many questions here.
Another query came to me from the British Property Federation, on Amendment 72. Can we be clear whether it is intended to catch commercial developers? If not, it would be helpful if that were made absolutely clear because the federation is not clear, and I am not clear, about that provision.
On Amendment 92, relating to remediation costs under qualifying leases, do the Government accept that, given the criteria proposed, many leaseholders will end up paying amounts, even though they are capped, for defects for which they were not responsible, and that this runs counter to the previous comments of Ministers in both Houses? What is their assessment of the overall quantum of this? I should just explain that the cap applies
“in respect of a relevant measure relating to any relevant defect”.
That “defect” is singular, so is this per defect or per agglomeration of defects—in other words, does the cap relate to the sum of all remediation works or do different caps apply to individual works? It is this whole process of clarity that needs to be sorted out. I would certainly be happy to sit down with the Minister and other noble Lords to try to work out some of these things and get them straight.