The Government’s statement of 7th January 2021 (and subsequent reporting in the media) has understandably brought about confusion and uncertainty amongst leaseholders.
The Government stated that it would introduce certain reforms relating to lease length, ground rents and valuation proposed by the Law Commission “by bringing forward legislation at the next parliamentary session.”
That was a very presumptive turn of phrase to use as legislation only comes into being as a result of agreement between both the House of Commons (“the Commons”) and the House of Lords (“the Lords”) and naturally induces a sense of cynicism as to the guarantee of the Government’s claim.
Therefore, it is very important for all leaseholders to understand the legislative process.
The first step is to produce a Draft Bill.
The Government might then choose to issue a paper regarding the Draft Bill to the public for discussion and response in the form of a White Paper.
The Law Commission proposals have already gone through a lengthy consultation process and so it is imperative that the Government’s Draft Bill is an accurate reflection of those proposals.
Once the consultation process were completed, the Bill would be introduced to Parliament.
At this point the Bill would be examined in turn by the Commons and the Lords who would debate and vote on amendments to the Bill through a number of stages (First Reading, Second Reading, Committee Stage, Report Stage and Third Reading).
In the Commons, at Committee Stage, the committee would be able to take evidence from experts and interest groups from outside Parliament.
This stage would be an opportunity for industry practitioners and interested parties to voice their opinions on the Bill and influence its content.
Once the Committee Stage were completed, the Bill returns to the floor of the Commons for Report Stage, where the amended Bill could be debated and further amendments proposed. For lengthy or complex Bills the debates are spread over several days. If then approved at the Third Reading, the Bill would be sent to the Lords.
In the Lords, at Committee Stage, there is no restriction on the issues a member wishes to discuss or for how long those discussions last. The Government cannot influence the nature or length of discussion unlike in the Commons.
At this stage, the landowner members of the Lords might voice their views on the proposed reforms and the potential impact they would have on the larger estates around the country.
The Commons and the Lords would have to agree on the final Bill before it could gain Royal Assent and become law.
If they were not able to agree, the Bill would travel back and forth as each House considered the other’s amendments.
If one House were to insist on an amendment and the other House insist on its disagreement with that amendment, the Bill would be “lost”.
In this event, the Government could use the Parliament Acts 1911 and 1949 to pass the Bill in the following session but this would delay legislation and so the Government often works with the Lords to reach a compromise over disagreements.
However misguided the Government’s press release might have been, it clearly demonstrated a move to implement reforms to the leasehold system. Nonetheless, it is very likely that any change in the law would be an extremely tumultuous and protracted saga which could inevitably result in compromise and bear little resemblance to the golden elixir which Government is currently promising leaseholders.