The Law of landlord and Tenant. TO THE EDITOR.

Otago Witness, Issue 2249, 8 April 1897, Page 11

The Law of landlord and Tenant. TO THE EDITOR.

Sic, — In altering the existing relations between landlord and tenant it is necessary that extreme caution be exercised. Almost every session s< es some attempt at disturbing these relations, and frequently with very unsatisfactory results, involving a feeling of insecurity, blunting the spirit of enterprise and blocking progress. Legislation afftcHng land tenure is too often resorted to for other purposes than the gocd of the State, and it never has any i finality about it. j Personally I believe the trend of modern thought is entirely wrong in reference to land tenure. The functions of the State are primarily protective, then the encouragement and stimulating of industrial and cmmercial enterprise. I foresee much benefit in the State parting with every inch of land, other than such reserves as ] are necessary for public convenience and pleasure, recreation, health, and general good of the community, always reserving the right, on equitable terms, to break up and resume such portions of large holdings as may bo required for settlement purposes — not to lease, but to re-sell outright on such terms as may be found suitable tor the encouragement of settlement and thß acquisition of the freehold. The State nsver parts with the power to levy such taxes upon land as it may deem necessary and essential for the due discharge of State functions. I am a thorough believer in freehold tenure, and think it would be much bstter if every adulb member in the community had a direct stake aud interest in the land of his birth or adoption. To gradually ensure this end as far as practicable, such legislation should bs introduced as would offer every facility and encouragement fc> that end. Even householders should be encouraged as far as possible to acquire tho freehold of tho tenements they occupy. I am aware thai: this cannot be universally enforced, but every effort should be made, and every legal facility offered, for its consummation. I would even go the length of making the measure morally coercive by the introduction of certain disabling clauses sufficiently restrictive in their operations to make one and all feel that the State and corporate bodies recognise in a freeholder a more desirable colonist and a better citizan, and one to be entrusted with wider privileges. The present system of leasehold tenure as between the individual I would at once abolish, and substitute therefor such a system as would give encouragement and fall scope to the foregoing tenets. I think it possible to devise such.

a scheme — one that would be simple in its I operation and jusb in its effect. Its provisions should ba such that neither party could take exception thereto, unless prompted by a spirit of j greed, selfishness, or injustice — attributes the State would do well to discourage. How rarely do we find sympathy expressed for a landlord ! What prospect has be of receiving sympathy from a selfish lessee whose lea«e wan entered into in abnormally depressed times, and the " unearned inorement" suddenly raises its value to, say, 200 or more per cenb. ? The quiescent and meek landlord rarely dreams of calling upon his tenant to submit to a rise commensurate with the increased value of his holding. Ho aeems to know intuitively that the bare suggestion would be scoffed at. lam inclined to think that this ! silent interpretation of the selfishness of human j nature is tho correct one. The myßtery is tho j landlord has never yet been known to personally move in his own interest. He leaves all action to the tenant alone, and he is not slaw to take advantage of hie opportunities. The principle that permits a tenant to continue holding land , at 5s per foot that may have risen iv value to 60s ia wrong, and should ba at once abolished. ; So far neither the practice nor the prospect of such an injustice has been known to move him. It is time someone arose with sufficient charity to attempt his rescue from the inevitable effect of his own inertness. The tenant is loud and con- ■ stant in his agitation, and so long as selfishness ' is inherent in human nature so long will man ' try to overreach his fellow man. The power to do this should be kept from him so far as pos- . sible, and aucb. laws as are known to continu- j ously operate inequitably should be remedied or abolished. The constant change in the value of land, more especially in a young and progressive country, can never be justly and equitably dealt with under the present system of land tenure. The law relating to land tenure should be so framed as to equitably provide for the constant fluctuation ia the value of land, without the necessity oE resorting to fresh legislation to meet . every changing case. The present system of land tenure is productive of coastant friction | between landlord and tenant. No sooner is one class of grievance provided for than others arise calling for redress, and no legislation j which has not for its final goal a freehold tenure can posnbly prov6 remedial. , The Fair Rent Bill recently before Parliament is no more final than is the present law ; it is merely furbher tinkering. To finally overcome the constant friction between landlord and ' tenant, and to stimulate the individual to acquire the freehold of the premises he may hold for business, residential, or other par- > poses, every legislative facility should be pro- I vided for its consummation. ! I submit the following as an attempt to meet I the case : — At any time during the currency of | any lease of lands should any party thereto | feel aggrieved at the insufficiency or otherwiso j of the ground rent payable thereunder the aggrieved party shall require in writing a readjustment of such ground rent. Should the parties to such lease be then unable to mutually agree as to the future ground rent payable thereunder they shall at once proceed to arbitration in the usual way — flrat, to ascertain the then fair market value of the land held under lease, free or apart from all buildings and improvements erected thereon, and, j sacondly, the then full value of all such buildings and improvements. The aggrieved party shall then require the other party to exercise his optional privilege. "Optional privilege" shall mean— first (in the case of the tenant), he shall be compelled to either purchase tho freehold of the land he holds under lease or sell the buildings and improvements erected thereon at the vfilue as ascertained by arbitration ; secondly (iv the case of the landlord), ho shall be compelled to either sell the freehold of the i land under lease or purchase tho buildings and f improvements thereon at the value as a3cer- | tamed by arbitration. ! When was it since the tide of time that anyone saw in a landlord a fitting subject to be invesbed with optional privileges ? His lot has been a sad and disturbed one, for I remember nothing but eternal agitation against his vested rights and interests. There is a very cunning clause in many leases in this city to the following effect :— On the expiry of the lease provision is made for two separate valuations, one of the building and improvements and the other of the fair annual ground rent for the future term. For what do you think ? Not that thn fair annual ground rent is to be aocepted, but that such rent is to bs submitted to auction, with the fair annual ground rent fixed as the up3et reserve ! There is another form of lease— a 60 years' lease— with provision for a readjustment of ground rent every 10 years, and the building become the property of the gronnd landlord at the end of the term. All leases of land that I have eesn are more or less one-sided and inequitable. It matters not whether the parties thereto be the State, the church, the corporation, or the individual. They all stink of selfishness and overreaching, with no loophole of final relief for either party to fall back upon. The following are a few instances of the evil effects of leasehold tenure under the present system (they might be multiplied bj r the dozen) : — The lease of the Wardell Bros.', grocers, George street, contained a clause similar to the first one noted, with tie result that when their lease expirtd sorce short time ago and the ground rent was submitted to auction, it was run up to about -twice its annual fair value as ascertained by 'arbitration, and the Wardells were compelled to purchase to protect their business. The capitalised value at 6 percent, of the exce.s of rent over the fair annual value j these people were constrained to pay, if compounded for tho currency of the. new lessoi just

about confiscates tho buildings aud improvements, the value of which vras (ixed by the same valuers. In this caie it must be patent to all who give the subject the slightest consideration that it was not the mere ground rent that elicited competition, but purely and gimplythe Werdeli Bros.' business — built up to sucoess by years of struggling prudence and industry. As a convincing proof of this, the lease of the site of the European Hotel close by fell in about the same time, and was subject to the sarno provisiouß as wa«the W»rdell»', with the rennlb that when submitted to auction there was not a single bid. The business of holelkeeping was then too risky and uncertain. The site of the Oddfellows' Hall, Stuart street, is also a leasehold, the terra being for 21 yearn, and the ground rant £120 per annum. Even a partial valuer with the widest stretch of liberality for his principal would not vuluo tho freehold cf these few poles of land a<. £400. I am safe in assuming that for fully 18 years of the present term these struggling, prudent Oddfellows will be called upon to pay £100 per annum in excess of the fair annual ground rent. This, capitalised by compounding an 6 per cent, for the term amounts to the modest sum of £5090— i c., the ground owner will rooeive thia sum in excess of the fair annual gronnd rent. I know many buildings in the city — some of them very expensive ones — nbaolately abandoned to the ground landlord, under different forms of lease, through sheer inability to meet the ground rent. The Grand Hotel lease was disastrous in its effect upon the tenants. It is not long since we saw tubmitted to auction a very valuable building in lower Rattray street built on a Harbour Board lease, with the result that some £10,000 worth of property w»u praotically abandoned, no one being willing to take over the enormous liability of the ground rent on other terms. There are other Harbour Board leases equally oppressive, but the immense stake the lessees have npon the land and their business position compels them to bend under the legal burden. lam not finding fault with anyone for taking advantage of such wrongs as the law permits, but I take strong exception to the law that permits it. Moreover, this constant struggle for something unreasonable has » very warping effect upon a man's judgment 5 for instance, I know of several leases about to fall through with the usual provisions for arbitration and payment of part valuation. The rentals of some of these have been excessively high, inasmuch as business has long since left that locality, and as a consequence the ground has very much receded in value. To my astonishment this was urged to me as a reason why the comiDg valuations should be fixed at a low figure, building in that position being o2 little or no use or value. The excessive ground rent legally exacted from the lessee for a long term of yoars ie to be ultimately used ks an argument against him for confircsthig hia building. Ido not like the word " confiscate," but I cannot find a more suit»ble expression to meet the case. I could quite understand it being used as an argument in the opposite direction. While the remedy I have proposed to meet all cases of oppression under a leasehold tenure and give immediate relief to the oppressed ia given for no other motive than a yinocre desire to open up the avenues of equity and jeestico to all equally, I am quite prepared to find some carping at it. Sa-oalled vested interests may even go the length of denouncing ib r.i a sinister atbempt to compel people to sell thai; which they deiire to retain, or to purchase that which they do not waut to buy. My reply is that sophistry has not yet barn found wanting in the arguments of tha selfUh. Oihers may carp that while I net out in favour of the ground lord I end by citing nothing but cases , in favour of the tenant. My reply here is that I have made careful aud diligent eearch for oases of oppression to cito ia favour of the grouud lord, but I have jjignslly failed to discover any. The " unearned increment" seems to eternally start at the wrong end of tho tenant's lease ; i his ODly struggle seems to be with the "unearned deccement." I am sufficiently aware that it must of necessity sometimes fall to the lot of the landlord to suffer oppression. The remedy I propose gives him equal relief with the tenants, and it points to a time when the oppressed must b9 fewer in number. It offers no unreasonable advantage for either party to apply for redress, for the option is not left with tho aggrieved, bub relief is immediate »nd available at all times. Ib has finality about it, as it encourages the acquisition of the freehold. I invite every lover of equity and justice to divest himself of prejudios and apply my remedy to the cases cited or any other case that may occur to him. lam not so built as to suppose the scheme complete or even partially co. It will please me to have its defects exposed and improving amendments offered. Ib will please me better still to have a more perfect measure submitted. All I ask is that every critic free himself from prejudice ; let nobbing actuate him but » pure spirit of equity and jnstice. — I am, &c, Dunedin, March 8. Landlord.

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