Lobbyists furious over blocked property bill

LOBBYISTS for property law reform have reacted angrily to the blocking of a private members' bill that would have changed legislation on the transfer of commercial leases.

The Landlord and Tenant (Covenants) Bill, introduced by Peter Thurnham, Conservative MP for Bolton North East, was blocked in an almost empty House of Commons by Vivian Bendall, a Conservative backbencher, a week ago. The Property Market Reform Group predicts that the Government will now undertake a full-scale reform of the commercial property market.

Under the existing law of privity of contract, leases can be transferred from one tenant to another relatively easily. If a tenant defaults on rent payments, the landlord is able to demand the arrears from any previous tenant in the chain. Keith Miles, the PMRG's chairman, said: 'This medieval law has brought misery to thousands of families and small businesses. Its reform is decades overdue.'

Mr Thurnham's bill would have limited the liability to the previous tenant only.

The scale of bad debts passed to previous tenants has risen sharply with the number of bankruptcies during the recession. James May, director-general of the British Retail Consortium, says the cost could be pounds 50m a year for retailers alone. Boots said privity of contract had cost it pounds 2m in the year to 31 March.

The British Property Federation, which had opposed the private members' bill, agreed there was a problem but would prefer a voluntary code of conduct or limited legislation. William McKee, director- general, said: 'The Government should not interfere in contracts that are freely entered into.'