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Second, the payment of Government rent; and
Third, the charging by the Tong of fees for giving its agreement to modifications and land exchanges affecting its lease. This issue arises when a sub-lessee wishes to redevelop the sub-leased property in a way which affects the Tong's interest as head lessee.
The Bill which I will introduce into this Council in April this year will deal with these issues in the following ways.
First, all sub-leases registered in the Land Registry at any time prior to the coming into effect of the legislation will be renewed from the date they would otherwise have expired until 27 June 2047, with the exception of sub-leases which have already been extended beyond 8 November 1994 - the date on which the majority of sub-leases expired - by agreement between the parties.
Second, the Bill will provide that Government rent will be payable directly by the sub-lessees to Government. The Tong will only be entitled to collect from the sub- lessees the amount of rent specified in the sub-lease.
Third, the Tong will be deemed to have agreed to modifications and exchanges unless it has reasonable grounds for objecting to them. The Tong will be allowed to charge sub-lessees no more than an amount equivalent to 10% of the premium charged by Government for such modifications and exchanges. This is in recognition of the Tong being the owner of the land and the fact that, but for the legislation, the Tong would not be obliged to agree to enter into any modifications or exchanges of the sub- leased land.
The effect of these proposals will be that, after the legislation has been enacted, the sub-lessees will have certainty as to their interests in their property through to 2047. They will pay Government rent direct to Government. They will be able to continue to occupy and enjoy all the benefits of their properties as they have done in the past. It will be possible to buy and sell properties on the land sub-leased from the Tong in the normal way, just as it was until the current disputes created uncertainty in the minds of prospective purchasers and the banks who were asked to lend money in the form of mortgages. Those sub-lessees who wish to redevelop, in a way that requires some modification of the Tong's lease or a land exchange affecting that lease, will be able to do so in the knowledge that the Tong will not be able unreasonably to frustrate their proposals and with certainty as to the level of fees which the Tong can charge for giving its consent.