Town Tenants Bill, 1931—Committee Stage.
The Dáil went into Committee.
Debate resumed on the following amendment:—
SECTION 41.
To delete sub-section (2) and substitute the following:—
"In this part of this Act the expression Proprietary Lease or Proprietary Agreement, means a lease complying with all the following conditions, that is to say:—
(a) such lease is a sub-lease (whether mediate or immediate) under a building lease, and
(b) the land demised by such lease is the whole or part of the land comprised in such building lease, and
(c) such lease is made for a term expiring at the same time as, or not more than one year before the expiration of such building lease.— (William E. Thrift.)
I do not want to repeat in any way what I said yesterday, but, thinking over what occurred yesterday, I would like to take advantage of what, perhaps, was dropped by the Minister as a hint and say that, perhaps, a good deal of the difficulty could be met by diminishing the numbers that are used in the definition clause of the term "proprietary lease." In two of the sub-sections in the Bill a period of 31 years is mentioned as a term for which the lease must have been held, and the figure of 25 times the reserved rent is mentioned as the figure which must have been paid for that rent. I would like to suggest to the Minister that a good deal of the difficulty could be met if those numbers were substantially reduced. I do not think it would go far enough, but I think it would be a reasonable compromise that we might ask him to accept on the section. If he would undertake to consider alterations on these lines I, for my part, would be prepared to withdraw the amendment.
The two points would be to reduce the 31 year period to a smaller period, say 20 years, and secondly to reduce the amount payable from 25 times to, say, 15 times. I have got here a form of words which will bring out a point which was made yesterday of considerable importance namely, that money expended in improving the premises should be taken on a par with money actually paid to the lessor for the sub-lease. I will read the words suggested. These words should be introduced into the sub-section "Such lease was made partly in consideration of a payment, other than rent, by the lessee to the lessor at or immediately before the grant of such lease or in consideration of an expenditure by the lessee on the lands demised or both such considerations and (e) such payment or expenditure or both together amounted to not less than fifteen times the yearly rent or the greatest rent reserved by such lease." I do not ask the Minister to accept that or anything like these words at the moment, but if he will consider the introduction of the points which are covered by these amendments before Report Stage I am prepared for my part to withdraw this amendment.
As I intimated yesterday, it is quite possible that a term of 31 years is too long, and possibly also the number of years' purchase, so to speak, is perhaps too high. I expressed the general principle that I wanted to see established, that is that the person who had really the most beneficial interest in the premises was the person to whom a renewal of the lease should be made. Deputy Thrift's amendment as it stood, is an amendment I could not possibly accept because it would mean that a person who had a lease perhaps for three or five years would be in possession of a house at the time at which his immediate landlord's lease expires. He might never have spent a single penny on the house. He might be perfectly willing to keep paying his old rent and would suddenly discover from nowhere, a gift from the goods reducing his rent in an enormous fashion. Remember, a person may have only a three years' lease of a house for which he was paying £60 a year and was satisfied to keep on paying and suddenly, because a lease to which he was not a party expired, he might discover his immediate landlord, the person who had built the house, was cut out and that he was getting his premises for something like possibly £10 or £15 a year. That certainly would not appear to me to be equitable, but as I say, I will consider how far, in fairness, these two things can be reduced, and I will bring the matter up on Report Stage.
That being so, if leave be given, I will withdraw the amendment.
I rise to express a slight measure of regret that Deputy Thrift should have in any way receded from an amendment of his which to my mind is a second best solution of this problem. The solution at which I would aim is expressed in a later amendment which would seek to give the benefit of the increment to the possession of bricks and mortar to which the Minister has referred directly to the community in the shape of the local authority. But failing that, I would strongly support the amendment tabled by Deputy Thrift, subject to some trifling emendations to which, I think, Deputy Thrift may not take exception. They are so trifling as to be hardly worth mentioning. The Minister states that his desire is to give the lease to the person who has the greatest beneficial interest in the hereditament and the Minister dwells on the want of equity and justice in giving that renewal to a tenant who might, perhaps, have been in possession merely for two or three years. Let us consider what we are dealing with. The bricks and mortar have been there during the entire term of the lease. Under the law as it stands at the present time the bricks and mortar the instant that the lease expires belong to the ground landlord. The middleman certainly has no legal claim. He could not advance anything in the nature of a legal claim to the ownership of the bricks and mortar or anything therein. The ground landlord has at least his legal right but the general sense of the community seems to be that that legal right should be eaten in upon in the interests of the public at large. What benefit does the public at large derive from the perpetuation of the middleman system. I can see none. If the middleman gets the lease he may be resident in Brighton, he may be resident in the South of France. The community may drive no benefit at all from his ownership of a middle interest. Give it to the occupying tenant, as Deputy Thrift's amendment would in substance do, and you have at least a person owning the leasehold who would be dealing with the local baker, the local butcher, the local grocer, the local draper, and consulting the local doctor and the local solicitor. A strong case can be made in favour of eating in upon what is perhaps the legal right of the ground landlord in favour of such a person. But when you come to think of it what can you say about the middleman?
The Minister mentioned the case of the occupying tenant who is merely in for two or three years. Does the Minister forget or overlook that many of the middlemen have, in fact, been there for perhaps only three, four, five or six years? It is fallacious to assume that the person entitled to this middle interest is the original building lessee. Of course he hardly ever is, and he rarely is the person who takes by descent from the original lessee. In many cases this middle interest changes hands. We see it advertised day after day in the "Irish Times". A person buying that middle interest knowing that he has only four, five or six years to run, and knowing at most that he has merely a chance of getting a new lease from the ground landlord has no right up to the present. The effect of the Bill as it stands, and to a lesser extent the effect of the Bill if the compromise suggested by Deputy Thrift is enacted, is that some speculator who within the past six or seven years bought for little or nothing a sub-interest, but not a possessory interest, in a house on the chance that one of the great ground landlords in the vicinity of this city, or any other city, would give him a renewal, is now to be clothed with a legal right to become the owner for a long term of years of the bricks and mortar to which the Minister refers.
[An Leas-Cheann Comhairle took the Chair.]
I would ask the House to consider whether every word which has fallen from the Minister against the three year occupying tenant, does not apply with equal force to the large number of middlemen who have recently, or comparatively recently, acquired leases and I would ask the House also to consider that in cutting up this melon that legally belongs to the ground landlord—I do not think anyone suggests that he should be allowed once this Bill is passed to have this building—the person who can advance the least possible claim to it is the middleman who, as I said before, may be an absentee. I would ask the Minister if he is considering the rewording and revision of this clause to go much further in the direction of Deputy Thrift's amendment than Deputy Thrift has himself suggested.
Of course I think I dealt yesterday with every argument Deputy Geoghegan has put forward. They were all put yesterday and I do not think it is necessary for me to go through them again.
Did you deal with them in the Dáil?
I was not here yesterday. If I had been aware of that I would not have gone over the ground again.
The Deputy put them very forcibly. My answer to them is that the actual person who owns the building lease is there by descent. It may not be so in the majority of cases. I think it would be absolutely impossible to get any statistics.
But if a person has paid a considerable sum of money for the bricks and mortar to the person who built them he stands in the shoes of that person. That houses have been sold very cheaply lately because the reversionary interest might be short is against every single thing that I have heard happening. If one or two individual houses have been sold cheaply, that cannot affect the general question, which is that the person who built the house should have the value of the improvements which he put upon the land and that no one else should have it.
Deputy Geoghegan would have been a most valuable ally yesterday. I urge the Minister to go as far as he possibly can in the direction of the compromise I have suggested. If you try to meet various types of cases by a single section there will be hard cases. My conviction is that the hard cases will be more numerous the longer you make the term and the higher you make this figure. The wider you can make the extent of ground covered by your definition of proprietary lease the less you will have these hard cases arising. I ask the leave of the House to withdraw the amendment because I think it better to compromise than to be defeated, but I think the further the Minister can yield in the matter the more good he will be doing to those who have these sub-leases and who are tenants in occupation.
Amendment, by leave, withdrawn.
I move amendment 88:
In sub-section (2) (c), to delete all from the word "of" in line 42 to the word "expiring" in line 43 and substitute the words "which equals or exceeds whichever of the following periods is the lesser, that is to say, thirty-one years or two-thirds of the term of such building lease, and which in any case expires".
The reason for that is that sometimes building leases may have been for a comparatively short time and the subletting could not have been for thirty-one years. That goes a certain distance already towards what Deputy Thrift urges.
The amendment which the Minister has set down here is one which I do not oppose. If the section, in its present form or in a revised form, is to go through, I do not see that much is to be gained by opposing it. But, subject to that, I desire to avail myself of this opportunity, as the Minister is dealing with sub-section (2) (c), to suggest that whatever form this sub-section eventually takes the period of two years there is too short. When the Minister is recasting this section I would suggest his extending that period of two years possibly to five years. In ordinary clean-cut cases the period of two years which is in the sub-section would seem ample because the nominal reversion that is reserved by a sub-lessee is usually between one and three years and probably two years would cover most of them. But, in one country town which I have particularly in mind, and in the city of Dublin, there is not merely a sub-lease, but out of that sub-lease there is again carved a further sub-lease, and even a further carving of a sub-lease, each sub-lessor reserving what to him is more or less a nominal reversion of, say, one year. Consequently, you may have, and will have, in many instances, a person who, within the real intendment of this Bill, is the owner of a proprietary lease, with a period of more than two years between him and the head lessor. For that reason I suggest to the House that two years is too short. If the House does not see its way to extend that period, and there may be objections to an extension of that period to some other arbitrary period that I do not foresee, some elasticity ought to be given. There ought to be some power given to a judge in the special circumstances of a case to extend the period so as to cover the combined nominal reversions where there are different sub-leases carved one out of the other.
The Deputy knows that the question of sub-leases is provided for. There may be several proprietary leases on the same premises, but provision is made as to who is to get it. It is the person who is in the nearest actual occupation.
I have not followed that, but I accept the Minister's assurance. If there were a succession of sub-leases to the same hereditament each reserving a nominal reversion, and that the sum of the successive nominal reversions exceeds two years, I do not see how this Bill operates to give the person who has what one might call the lowest proprietary lease the right to a renewal, but I accept the Minister's assurance if he states to the House that the Bill does so operate. If between the expiration of the head lease and the expiration of the lowest proprietary lease the combined term is more than two years, and the operation of the Bill as drawn will give the lowest proprietary lease-holder a right to a building lease, I am content with that.
I will be content with that too.
Amendment put and agreed to.
Section, as amended, agreed to.
SECTION 42.
I move amendment 89:
Before Section 42 to insert a new section as follows:—
"(1) On the expiration of a building lease, the council of the county or other borough or of the county in which the land demised by such lease is situate shall be entitled to obtain from the person in receipt (otherwise than as agent for another) of the rent reserved by such building lease, a reversionary lease on the terms fixed by this section of the said land.
(2) The duration of such reversionary lease shall be a term of ninety-nine years from the expiration of the building lease to which it is reversionary.
(3) The rent reserved by such reversionary lease shall be the rent reserved by such building lease.
(4) The council of a county or other borough or of a county to which a reversionary lease is to be granted under this section shall, notwithstanding anything to the contrary in any enactment in force at the date of the passing of this Act, be empowered to accept such reversionary lease."
This is an amendment which, in my opinion, embodies the ideal solution of the question that we have been discussing for the past two days. Deputies will remember that from different places in the House various Deputies rose and clearly demonstrated that whoever had a right to a reversionary lease of a building lease it was not the landlord, or the middleman, or the occupying tenant. That was clearly demonstrated in respect of each of these in turn. The discussion that followed was considerably confused by the fact that nobody could point clearly to a right in a reversionary lease reposing in any of the parties named because no such right existed. I take it that all Parties are agreed that an amendment of the present law is necessary. The present law, as Deputies are aware, is that on the expiration of a building lease the ground landlord resumes ownership of the land and the buildings thereon. He has originally given a building lease to a builder and that builder constructed houses which he either let or sold. When he was taking the lease and expending the money upon the building of the houses he knew quite clearly and definitely that at the expiration of his lease the ownership of these houses was going to revert to the ground landlord. He may have had expectation of a reversionary lease but, as Deputy Geoghegan has pointed out, he had no legal right to it. It seems to me that the builder or his successor gets under the existing law exactly what he pays for. In the majority of cases, as was explained, the builder has sold out to a middleman who has purchased what is for him an annuity for a number of years. He takes the obligation of paying the rent to the ground landlord, gets the privilege of collecting a greater rent from the occupiers of the houses, pays the former rent out of the latter, and pockets the difference. That is his profit rent.
In the majority of cases the middleman is the person who purchased for a definite sum that profit rent for a fixed number of years. Is it seriously contended that he has in justice a right to a continuation of that profit rent for another period of 99 years? Some Deputies think so, but the view of a number of Deputies in all Parties in this House was that he had not. The Minister has been arguing against giving the right of a reversionary lease to the occupying tenant unless that occupying tenant has purchased the middleman's interest. He has apparently satisfied himself, and to some extent Deputy Thrift, that the occupying tenant who has not paid a substantial fine for the lease—a very substantial fine which in effect would purchase the middleman's interest—has no right to the reversionary lease. It was, as I pointed out, clearly demonstrated by Deputies in various parts of the House that none of the three persons or any of these parties has a right to share in what Deputy Geoghegan called this particular melon. Who has the right to it? The proposal we make is that at the expiration of a building lease the community, the local authority for the area, should become the owner of the land concerned. The proposal that we would make is, that at the expiration of the building lease the local authority would become the owner of the land, and would pay to the ground landlord an interest-bearing security of sufficient value to provide him the same income he previously enjoyed from the land. That is not the amendment I am moving, because such an amendment would probably be out of order, and certainly would be impossible for Deputies in our position to draft. We are presenting here an amendment to provide that at the expiration of a building lease the reversionary lease, which under the Bill goes to the middleman, should go instead to the local authority, which will pay to the ground landlord the same rent which the ground landlord hitherto received. The local authority in consequence steps into the shoes of the middleman, takes the profit rent, and puts it to community purposes. Now the Minister for Justice, in an aside yesterday, said something about the Pope's Encyclical. I have been thinking the matter out since, and I cannot discover any particular Encyclical relating to this amendment.
The recent one on Socialism.
There is nothing contained in this amendment which has not been enacted in respect of land. The community has taken to itself the right of acquiring land compulsorily at its own valuation from the owners when that land was used for agricultural purposes. Why should it be right for the community to do that in respect of agricultural land and not right to do it in respect of building land?
In respect of land so many years' purchase was given.
In this case we are proposing——
We are proposing that the original owner of the land, the ground landlord, who is probably the descendant of some pirate or robber, will get in the future what he was getting in the past. Only in future he gets it from the local authority instead of in rent.
You do not give him anything for his admitted legal right which you are taking from him.
A legal right given to him by a Parliament composed of persons of his own class and which we are now proposing to take from him. He is going to lose that right at any rate. His day is done; his number is up; his right is gone, and on the 31st of March this year he lost the right to give a voluntary reversionary lease.
My point is that you should not compel the landlord.
Because you give nothing in the one case, and you give so many years' purchase in the other.
In this case we propose to give him the same rent as he received before.
But you give him nothing for his legal right.
He is getting nothing under this Bill. Of course, there are provisions here which might result in his getting an increase of rent in the future. We will oppose these because we at any rate think that he should be quite satisfied if he gets what he got before from the person in occupation, who paid him rent.
The profits that went into the pockets of the middlemen will go to meet the expenses of the community either in the form of a reduction of rates or to pay for increased community services. That is the proposal here. It is the commonsense solution of this problem, and it is the solution that should commend itself to this Dáil. Because it is the commonsense solution and the just solution the Minister for Justice runs away from it and shies at it like a spirited horse at a railway engine.
I have not spoken yet on the matter.
I took it from the Minister's reference to the Encyclical that he intended to hide behind it.
I am very glad and I shall be glad to give the Minister an opportunity of speaking now. He must admit that the community has a greater claim to this increment than any of the parties whose interests are advocated here, and certainly have a very much stronger claim than the middleman. He has no claim whatever. He is in the nature of a social pest to a large extent, and if we eliminate him it will be a decided benefit. The ground landlord has some claim. As Deputy Thrift pointed out, he has not merely a claim but a legal right, which we propose to take from him and give him nothing in exchange. The occupying tenant could advocate some claim and I am sure if Deputy Byrne were here he could advance an eloquent claim for him, but the strongest claim of all is that which could be advanced on behalf of the community, and that is the claim which this amendment advocates.
I would like to ask a question. Are there not cases where people have become landlords by acquiring other landlords' rights? The Deputy's case is that the existing landlords got their heritage by robbery.
Some of them, present company excepted.
The House has had some difficulty in deciding, and undoubtedly different views have been advanced as to who should be entitled to the reversionary lease when the original building lease expires. Some persons would hold that the ground landlord is entitled to the full value of the premises, that that was the contract he entered into, and that when the lease has expired he is entitled to get back the land plus the buildings on it. Some people put forward the view, which I think is a fair and just view, that the person who has improved the land, and placed a house upon that land, and to whom the value of that improvement of the bare bit of ground has gone, is the person who is entitled to the major interest in the premises. Other persons have put forward the view that it is the occupier, where he has been there for a very long time, but this much is clear, that between the three of them somebody—the person who owned the land, the person who built the house, and the person who lives in the house—has the entire right to the house. But because there is a difficulty in deciding which of the three persons is to have the major interest Deputy Lemass says, "Do not give it to any one of them; give it right away to the community." I did mention the Pope's Encyclical, but I am not going to go into it now. I think this is the most socialistic proposition that I have ever heard put forward, because no matter whose property you are confiscating, you are obviously confiscating somebody's property. You are giving to the State, or to some town council or corporation, rights in property which they did nothing for. It is not due to them that there is a house there. It is due to the person who built it, and because views differ in deciding as to where the major interest lies, we are asked to take away that major interest and to give it to somebody who has no claim to it; to give it to the general community.
When I heard Deputy Lemass speaking I was reminded very much of an old judge. Deputy Lemass was trying to decide in a judicial capacity as to where the right lay. The very old judge I refer to is Solomon. When a baby was brought before Solomon and he was asked to decide which of the two ladies owned the living baby he directed that the baby should be cut in two. If the real mother had not claimed the baby the result of that decision would be that neither would have enjoyed the baby. Here, because there is some difficulty in deciding which of these persons is entitled to the rights of ownership or semi-ownership in these premises, Deputy Lemass says: "Cut it in two and give it to neither; make it worthless for either of them and take it clean away." That is an astonishing proposition, that the occupying tenants are to pay the full value to some corporation or to some urban council. The person who has built the house is to be completely swept away and the urban council or the corporation who did nothing are suddenly to confiscate other people's property. It seems to me to be a terrible proposition.
As the Minister has called to his aid the Pope's Encyclical he will not, I am sure, object to my quoting one little sentence from it that has a bearing on this matter. It reads:
For it is rightly contended that certain forms of property must be reserved to the State, since they carry with them an opportunity of domination too great to be left to private individuals without injury to the community at large. Just demands and desires of this kind contain nothing opposed to Christian truth, nor are they in any sense peculiar to Socialism.
I would ask the Minister to think that over.
May I inform Deputy O'Connell that there is nothing in it which prevents an unlimited number of houses being built, and that there is nothing in it which prevents the individual whom Deputy Lemass described as a social pest— that is, a person who builds houses— from acquiring land and building houses on it.
Until I heard the Minister's reference to Solomon and his paraphrase of the text I really never quite grasped the meaning of the phrase that a landlord can quote Scripture for his purpose. The Minister seems to think that Solomon, in proposing to cut up the baby, took a very wise fine, as, indeed, is generally accepted. I do not quite follow what the baby is in this case. Is the baby in this case the unearned increment? If it is, then I think the House has already gone far enough in this Bill to make it perfectly clear that it has taken the baby away from its mother. The unearned increment at the present moment belongs to the ground landlord. Everybody is agreed that the ground landlord has to lose it.
I stand corrected. I should have said in whole or in part. I think everybody is convinced that the House will go far enough to deprive the landlord of part of his property, of something that belongs absolutely to him at the present time in the eyes of the law. Therefore, it is not a matter of confiscation. It is now a matter of donating this. This House has now taken to itself this unearned increment. To whom is it to give it? Is it suggested by the Minister that the middleman has some extraordinary right to it? What right has he to it? The State is now grasping it. Why should the State imitate the kings of the Stuart regime and grant away these things to some favoured class? That is what it amounts to. Why is the middleman to get out, except possibly that he has either by reason of the numbers of middlemen or by reason of the depths of the purse of middlemen considerable political power? What other reasons can be advanced for donating this thing to the middleman?
If this House is taking possession of this unearned increment, and is giving it away, why should they not give it to the public at large? What greater claim has any one member of the community in this State, or any favoured class such as the middleman class, to this something that the House is giving away, than any other citizen in the State? I ask the House, now that they have divested the ground landlord of his right, to be logical and give it to the community. I put it also on the other ground, that hitherto this ground landlord has had a power which it is right to say was sometimes exercised as a benevolent despot exercises his power. It was not exercised always in favour of the middleman.
Now you are conferring a right on the middleman. If you are to take away what was sometimes the benevolent despotism of the ground landlord who in practice will frequently give a new lease or a reversionary lease to an occupying tenant—we all know that happens—then I suggest that the next best thing you can do for the occupying tenant when you are not giving him an improvement right is to give this property in the form of this increment to the local authority who will deal justly and probably with a certain amount of benevolence as between the various parties who have claims to it.
I agree with the Minister that the pea in this case is under one of the three thimbles or is somewhere distributed amongst them, but I find fault with Deputy Lemass's argument to an extent. He dealt very satisfactorily with two of the thimbles but I think he was very weak in reference to the first one. He seemed to me to base his case on a comparatively small number of instances. He cited cases of the ground landlord as if he were some one who had invariably come by hereditary possession into large estates and who had nothing whatever to do with them himself. That occasionally is true. But there are many other types of cases. There are cases where people have bought estates with their accepted legal rights attached, and paid cash down for those rights. The State itself—this is very important—has profited by those legal rights in many instances, because if the owner of an estate of that type dies his successor to the estate has to pay death duties on the value of the estate, including the cash value of the reversionary rights attached to the estate. The State has received large sums of money from the estimated value of these reversionary rights. Now the State proposes to come in and say: "These reversionary rights are nil; we took the estate duty on them and profited by them when they were there; they are now, so to speak, in the air, and we say they are worth nothing. We profited by them when it was to the interest of the State to say that they existed." Now when the matter comes before the House, the House as representative of the State says there is no such right. That is definitely the argument of Deputy Lemass.
I think the fair thing is not to say that the estate owner is always some one who possesses it by hereditary possession, is by no means always a bad landlord—though there are such—by no means always a mere person who stands by and sees his property grow in value of itself, but in many cases he spends large sums of money in improving the property, and having done that in the expectation that by so doing it he would in the end profit by the increased rents which he would be able to get when the lease fell in. That seems to me most unfair, and is the first time that anything of the kind has ever been done by this State, at any rate, to step in and say to the ground landlord "You are to lose your hitherto vested legal rights and get nothing for them." The only equitable way in which to proceed is to estimate, by providing that the increased value should be distributed between the people who are really interested in the property. I contend that it is neither fair nor reasonable to assume, as Deputy Lemass did, that because of certain cases that the ground landlord is not entitled to any profit at all when a lease happens to fall in.
Of course the failure of Deputy Geoghegan's argument is that he talked of unearned increment. We are not dealing with unearned increment. We are dealing with an increment earned by the man who erected the house.
Landlords can be divided into good landlords and bad landlords. I will deal first with the good landlords. The middleman who bought the interest has improved the estate on the basis that he had a certain lease. His investment was made after keeping his eye closely on the fact that the lease would end at a certain period, and he calculated accordingly what his profits would be. In most cases he knew, until this Bill came before the House, that he would probably not get a reversionary lease on the termination of the present lease. He would get no new lease on the termination of his investment, or might get it. Most sensible men did not start improving the property until they were perfectly certain they were going to get that. In most cases an investment, generally for 99 years, has already paid back interest and capital, and that person has really no grievance in the matter.
As to the ground landlord, he has a fixed rent and a fixed security of an extremely valuable kind. He has a rent which must be always paid. No matter whether the middleman is able to pay it or not, the ground landlord is certain of getting his rent in some shape or form, unless the property is assigned to a man of straw. Ultimately it must fall into the hands of the ground landlord. The ground landlord is in a privileged position and he should be well satisfied if he gets out of the property after the passing of this Bill what he was getting out of it before.
As a matter of fact, in a great many of the estates in the City of Dublin and around it—and I take it the same is probably the case in other parts of the country—the root of the title of the landlord is perhaps one of the most discreditable things in history. Most of them got titles to large estates in the city over a "drunk" of members of the old Dublin Corporation, many of whom went into the Corporation especially to get property worth thousands of pounds for a few hundred pounds. These men and their descendants having got the property at that low price have been coining money ever since out of the high rents of the city. I say that we are not going to end a considerable number of the evils that exist in the City of Dublin, and in the slums, until we have put upon a proper basis the rents those ground landlords are to get out of the property. To my mind this amendment is an extremely moderate amendment, because according to the strict application of human justice those people only paid a few hundred pounds for property because they were the mistresses of the kings of England. They should be dispossessed because the property originally belonged to the community by right. The robbery that took place at that time is a continuing evil which is largely responsible for the slums of Dublin to-day. It is also responsible for the high price of goods in certain areas, where gambling has been done, and where the increased value of property has been put on to the price of goods in certain streets. If we are to get any sort of stability and fairness we must apply some rigid principle in the case of landlords who originally got public property for a price which was so cheap, as to be a mere trifle, and which has been making a profit for them ever since.
What we propose in this amendment to do is not to do severe justice to these landlords, having regard to the landlords who have purchased that property on the basis of the ground rents which were taken out of that property. In some cases, of course, these ground rents have been sold over. The basis on which they were bought is on a fixed number of years' purchase and provided that they continue to get the rent which they were getting when they purchased that property you are doing no injustice to that property. You are treating them very fairly because you are securing for them the same rent which they were getting when they purchased the property.
What about the properties with reversionary rights, on which the death duties have been paid?
The question of these death duties paid upon the reversionary rights might be a question which could be dealt with in some other way, but it certainly cannot be dealt with in a Town Tenants Bill. There may be incidental evils arising out of a case which could be remedied possibly by a Finance Bill. If there are real grievances in the matter I do not see why they should not be remedied. That question raises many ramifications which I am afraid one could not discuss on a Town Tenants Bill because it really belongs to a Finance Act and we are forced to leave that matter there. We have an opportunity—the first opportunity that we have had in this country—of undoing some grave injustice to the community who suffered through the robbing of those lands, of establishing some sort of stability which will spread from this question of landlord and tenant. It will spread to the question of price, and I believe if the community were to become middlemen it would have a considerable effect in preventing an undue increase in the value of property and stabilise prices generally. I hope the Minister will look at this question in a very large way and consider the problem and come round to our point of view, to this extent of admitting that the principle which we are attempting to establish in this amendment is a valuable one.
I was inclined to support Deputy Lemass until he came to the point where he suggested that the property would be handed over to the local authority, and that the ground landlord is to be continued in possession. I think our big trouble in this country is the ground landlord. To my mind, the housing problem will never be solved until we get rid of the ground landlords. There are two parties, and, as the Minister pointed out, there are three parties involved in this particular case—the ground landlord, the man who built, and the tenant in possession to-day. If the man who put up the bricks and mortar is in possession, surely he is the proper person to get the renewal of the lease when the old lease expires. If he has sold that lease to the person in possession, the person in possession has a right to something. You may argue that he has paid the price for the unexpired term of the lease. At any rate, he paid a lump sum of money, and surely he is entitled at the end of the term to a new lease. Not only is he entitled to a new lease, but he is entitled to the right of fee-simple, which we are not giving him. I say unfortunately that we are not giving this right to him, but he is entitled to it. Deputy Lemass suggests that at the end of the lease the property goes to the local authority. In other words, that the ground landlord is to continue indirectly to fleece the community.
There are many places here in the Saorstát that I know where the ground landlord has been bleeding the leaseholders, the people in possession of the building, white for the last half a century. On the moment the lease expires these rents are raised 500 per cent. I have a knowledge myself of three urban areas, two in the South and one here. Deputy Thrift has some sympathy with those ground landlords. They are entitled, he said, to certain rights. In a few cases there might be sympathy with them, but in the big bulk of the cases there should be no sympathy with them, and I think that class of case is the predominant one. These ground landlords continue to get good prices for a certain number of years for their ground, and at the end of the lease period they coolly come to the man in possession, who has already paid a big fine—I have seen these cases occurring—and they point out to the man in possession that he must expend £500 on his house, according to the plans of their architects. The moment a man does that his rent goes up 500 per cent. That fleecing and that public robbery has been going on in this way for a number of years. The suggestion now in Deputy Lemass's proposal—and possibly he does not see it—is this: that instead of the ground landlord robbing directly and fleecing the unfortunate man in possession, he is in future to do so through the local authority. The amendment is making the local authority the medium of doing this.
Because I see that that is the case I cannot possibly support this amendment. I want to get rid of the ground landlord holus-bolus.
It seems to me there are four people involved in this matter, not three. These are the ground landlord, the middleman, the occupier, and last of all the community. I am trying to see that the existence of the fourth party is recognised. In recognising the fourth party that does not say exactly who is to get the benefit that has accrued. I think you will have frankly to recognise that there are four parties. I do not see why the rent should go to one of these. The Minister for Justice has told you that that is socialistic. Frankly I am not a bit frightened on being told that it is socialistic. My hairs are grey and I am looking towards the sunset, but I am long enough hearing about things being socialistic. We have heard that factory legislation was socialistic, that old age pensions were socialistic, that income tax, free education, unemployment pay, and home assistance were socialistic. Everyone of these things have been called socialistic. But we have swallowed them all. In fact the slogan years ago was, "We are all socialists now."
The Tory Party to-day have as their minimum programme what was the maximum programme of those accused of being socialistic in previous generations, so that we need not be at all worried on that ground. Deputy Thrift has difficulties in taking away from somebody something on which the State has already collected taxes. He says that in collecting taxes you apparently have admitted the right to the property which you have taxed. The State does not admit anything of the kind. In America the State is collecting income tax from gangsters. In doing so are they acknowledging the right of gangsterdom to continue in existence? They are collecting income tax from bootleggers, and will collect property taxes from them when they die. They collect income tax, reversionary tax, and inheritance tax from high-jackers. Are they admitting the right of the bootlegger, the highjacker, and gangsterdom to continued existence simply because they tax them? Personally, I think it is an absurd argument to put forward.
It is a perfectly sound proposition, which I think Deputy Thrift will admit, that a man can pass on no better title to another than he has himself. No man can pass on a better title against the community in relation to rent than the title of the man from whom he took the property. If you are going to be absolute in the matter you cannot make up a good title out of a bad title. Deputy Little says that a good deal of the people who are enjoying these increased rents and ground rents in Dublin are largely the heirs of corruption. In a great many more cases the people who are obtaining these rents are the heirs of confiscation. Neither confiscation nor corruption gives against the community the title to the land. The land of Ireland belongs to the people of Ireland. Except in so far as a man has, by the expenditure of effort or brains, made property much more valuable to the community, he has not in any way improved his title as against the community.
I come now to the fourth person involved, the community. You already have had the ground landlord who lets land for a certain period at a certain rate. Then you have the occupier of the land who takes it at a certain rate. He has to take it, because the ground landlord is in a position to impose that rate. He is not a free agent in the contract, and he takes the land under the conditions imposed upon him by the fact that people are in possession of the land which they obtained by corruption, inheritance or confiscation. He has got what in law he is entitled to get under a contract which he was bound to enter, and certain conditions were imposed upon him. The third man gets a reversionary interest and takes up part of the lease. He gets what he contracted for and, according to Deputy Little, he is not going to spend any money over and above the amount he thinks he can get enjoyment out of during the unexpired portion of the lease. All the time things are developing around, and people who are neither ground landlords, middlemen, nor occupiers are deciding the value of the reversion of the lease. Why should that belong to any one of the three?
I suppose there is no man in the House who is less of a Socialist than I am. I have not the faintest tendency towards Socialism, though I am not afraid of the word. I do not think it is Socialism, in the sense that anyone might be ashamed of, to say that the property which belongs to the community shall inure to the community. If we can find the means by which that portion of the added value in the renewal of a lease could go to the community, then I am in favour of the community getting it. I had two or three examples recently. I was in England and I visited two towns which I had not seen for a period of five or six years. Going up certain streets I came across marked changes by way of development of buildings. Those changes were obvious. What struck me most was that the side streets, with which I was very familiar, were changed considerably. We are all familiar with the frontage of the principal streets in a town. In these places I visited new streets had been opened up, and there was an amazing improvement in the value of the side streets. The houses had improved in appearance and there was a distinct improvement in the class of goods being sold. The suggestion that the increased value in that instance belonged by natural right to any of the three people I have referred to, as against the community, is a ridiculous suggestion. You could possibly give the credit to the man who improved his property quite separately. There was an obvious and blatant increase in value due to efforts which had no connection with the occupier, the middleman, or the ground landlord. In these cases there is no question of Socialism. It is not a matter which in any way impinges on our rights as individuals if we say that those values which were created by the community should inure to the community and not to the individual.
It is perfectly obvious that Deputy Flinn has not the remotest idea what the amendment is about. We are simply dealing with who is to have an interest in a house which is being built by an individual on a particular bit of ground.
The Minister will not be able to get away from that. He says that I do not know anything about this amendment. I know as much about it as that old bachelor knows about babies.
I would have had something to add to what I said previously if Deputy Thrift had alluded in his speech to a matter that he mentioned afterwards by way of interpolation. That is this matter of the community already having to some extent raided the ground landlord's property by way of death duties. That interpolation of Deputy Thrift's might prove exceedingly variable both in regard to this amendment and in regard to later amendments as to the fixing of the rent under this lease that is to be granted. I wonder would Deputy Thrift, and other Deputies who think with him, support an amendment on the Report Stage, if admitted, to the effect that the Commissioners of Valuation, under Section 44, or the judge, if it has to go to the judge, would be entitled to call for and have regard to death duty accounts furnished by a ground landlord within a period of years prior to the passing of this Bill, a period which this House would consider reasonable? We could say a period of five or ten years. I wonder would Deputy Thrift support such an amendment, if brought forward? If so, the amendment might receive a measure of support from quarters that perhaps Deputy Thrift would not expect.
Death duty accounts and the working out of them form a very intricate subject, and perhaps they cannot be put accurately with great brevity. Let us take the simple case of a 99 years' lease that has only five years to run at the time the ground landlord dies. Death duties have to be returned in respect of the property. The place might be let at a rent of £10 a year, but it might have a potential letting value, if there was vacant possession, of £80 a year. The Revenue Commissioners, instead of allowing the landowner's representatives to pay death duty on the basis of £10 a year rent, might say: "Oh, no; that £10 will only continue for five years. After that time you can exact a much higher rent." Is Deputy Thrift prepared to support an amendment that will have the effect of entitling the Judge or Commissioners of Valuation to call for these returns, including the reply made by the ground landlord to that claim as to the value of the reversions? What value does Deputy Thrift think ground landlords have placed on these reversions as distinct from the value of the rent itself? I hate to make predictions but I venture to think that whoever may be entitled to the reversionary lease here— be it the community or the middleman or the occupying tenant—would be very glad to get that reversionary lease on the basis of the value that the landowner's heirs-at-law or executors attributed to that reversion as distinct from the rent.
I imagine that when death duty accounts were being passed, the custom on the estate was paraded of giving rents on a certain basis that had not regard to competition, and Deputy Thrift might, perhaps, find that it would work out another way. However it works out, if such an amendment is brought forward, there will be a lot to be said for it. If the landlord has, in fact, returned the value of these reversionary interests as substantial, I can see that there is a lot to be said for it. But I can also see that it is a two-edged weapon, and that it may work out greatly in favour of the person getting the reversionary lease.
By way of explanation to the House, I should say that when I said in my previous speech that the Dáil was in the position of giving something away, what I really meant was that a building lease is to be given to somebody at a rent to be fixed in a way which will be determined by this Bill. I did not attach, perhaps, sufficient force to clause 3 of this amendment that I am now supporting—that the rent should be that reserved by the building lease. Suppose the rent is to be the rent reserved on the new reversionary lease, will Deputy Thrift or any other Deputy who has opposed the grant of this lease to the community persist in the objection, because if the community gets it at the rent under the reversionary lease as distinct from the rent under the expiring building lease, I cannot see in what way this amendment can prejudicially affect the ground landlord, whomsoever else it may prejudicially affect.
Without committing myself, I may say that I am predisposed in favour of the amendment that Deputy Geoghegan has suggested. In cases where estates have been in the habit of granting reversionary leases—new leases—on reasonable terms, they have had very considerable difficulty in proving to the Estates Commissioners for the purpose of death duties that such was their practice. The matter would need inquiry.
I should be interested to see an amendment tabled to that effect.
Will Deputy Thrift table that amendment or, if Deputy Geoghegan tables it, will Deputy Thrift support it?
I shall certainly make inquiry about it.
Amendment put.
The Committee divided: Tá, 29; Níl, 59.
Tá
- Boland, Patrick.
- Briscoe, Robert.
- Broderick, Henry.
- Carty, Frank.
- Davin, William.
- De Valera, Eamon.
- Fahy, Frank.
- Flinn, Hugo.
- Fogarty, Andrew.
- Geoghegan, James.
- Gorry, Patrick J.
- Hayes, Seán.
- Houlihan, Patrick.
- Jordan, Stephen.
- Kent, William R.
- Killilea, Mark.
- Kilroy, Michael.
- Lemass, Seán F.
- Little, Patrick John.
- MacEntee, Seán.
- Mullins, Thomas.
- Murphy, Timothy Joseph.
- O'Connell, Thomas J.
- O'Kelly, Seán T.
- O'Reilly, Matthew.
- Sexton, Martin.
- Sheehy, Timothy (Tipp.).
- Tubridy, John.
- Ward, Francis C.
Níl
- Aird, William P.
- Beckett, James Walter.
- Bennett, George Cecil.
- Blythe, Ernest.
- Bourke, Séamus A.
- Connolly, Michael P.
- Cosgrave, William T.
- Craig, Sir James.
- Davis, Michael.
- Doherty, Eugene.
- Doyle, Peadar Seán.
- Duggan, Edmund John.
- Dwyer, James.
- Egan, Barry M.
- Esmonde, Osmond Thos. Grattan.
- Fitzgerald, Desmond.
- Fitzgerald-Kenney, James.
- Gorey, Denis J.
- Hassett, John J.
- Heffernan, Michael R.
- Hennessy, Michael Joseph.
- Hennessy, Thomas.
- Hennigan, John.
- Henry, Mark.
- Hogan, Patrick (Galway).
- Jordan, Michael.
- Leonard, Patrick.
- Lynch, Finian.
- Mathews, Arthur Patrick.
- McDonogh, Martin.
- Brodrick, Seán.
- Byrne, John Joseph.
- Carey, Edmund.
- Collins-O'Driscoll, Mrs. Margt.
- Conlon, Martin.
- McFadden, Michael Og.
- McGilligan, Patrick.
- Mongan, Joseph W.
- Mulcahy, Richard.
- Murphy, James E.
- Murphy, Joseph Xavier.
- Myles, James Sproule.
- Nolan, John Thomas.
- O'Connell, Richard.
- O'Connor, Bartholomew.
- O'Higgins, Thomas.
- O'Leary, Daniel.
- O'Mahony, The.
- O'Reilly, John J.
- O'Sullivan, John Marcus.
- Rice, Vincent.
- Roddy, Martin.
- Sheehy, Timothy (West Cork).
- Thrift, William Edward.
- Tierney, Michael.
- White, John.
- White, Vincent Joseph.
- Wolfe, George.
- Wolfe, Jasper Travers.
Tellers: Tá, Deputies S. Jordan and Killilea; Níl, Deputies Duggan and Doyle.
Amendment declared lost.
Section 42 agreed to.
SECTION 43.
The following provisions shall have effect in relation to the terms on which a reversionary lease shall be granted under this Part of this Act, that is to say:—
(a) the duration of such reversionary lease shall be in a term of ninety-nine years from the expiration of the building lease to which it is reversionary;
(b) the rent reserved by such reversionary lease shall not in any case be less than the rent reserved by the said building lease or, where the land comprised in such reversionary lease is part only of the land comprised in the said building lease, such proportion of the said rent reserved by the said building lease as is fairly apportionable to the said land comprised in the said reversionary lease;
(c) subject to the foregoing paragraph of this sub-section the rent reserved by the said reversionary lease shall be the difference between the gross rent and the allowance as hereinafter respectively defined;
(d) the gross rent shall be the rent which in the opinion of the Court a willing lessee not already in occupation would give and a willing lessor would take for the land comprised in such reversionary lease in each case on the basis of vacant possession being given, and in circumstances of normal competition, and having regard to the other terms of such reversionary lease and to the letting values in circumstances of normal competition of land of a similar character to and situate in the vicinity of the said land comprised in the said reversionary lease but without having regard to any goodwill which may exist in respect of the said land comprised in the said reversionary lease;
(e) the allowance shall be such proportion of the gross rent as is, in the opinion of the court, fairly attributable to buildings erected or improvements made on or amenities provided for such land other than buildings, improvements, and amenities erected, made or provided by or at the expense (whether by way of reduction of rent, payment of compensation, or otherwise) of the person granting such reversionary lease or any of his predecessors in title.
(f) such reversionary lease shall contain all usual covenants, conditions, and agreements.
I move amendment 90:—
"At the commencement of this section to insert the following words, `Unless the parties otherwise agree.' "
I do not think there is any point of substance in this amendment. I am sure the Minister will say that it is already carried in the words of the section. Even if it is, I think it is desirable that it should be made clear that agreement between the various parties concerned may come about and thus avoid going into the courts. I suggest in this amendment that "unless the parties otherwise agree" should be put at the commencement of the section.
I will introduce an amendment to that effect.
I ask the leave of the House to withdraw the amendment for the present.
Amendment, by leave, withdrawn.
I move amendment 91:
To delete paragraph (b).
This section deals with the terms of the reversionary lease, and this particular paragraph is designed to provide that the rent reserved by the reversionary lease shall not be less than the rent reserved under the building lease. It seems to me that is an extraordinary provision, and I propose that it should be deleted. It is proposed here that if the rent, as calculated in accordance with paragraphs (d) and (e)—in other words, a rent which a willing lessee not already in occupation would be willing to give and a willing lessor would be willing to accept for these lands, less whatever deductions should be made in respect of improvements and amenities not provided at the expense of the landlord—is less than the rent reserved under the building lease which has expired, the landlord is to be secured the old rent, despite the fact that if he was seeking a market for the reversionary lease in circumstances of normal competition he could not get it.
I cannot understand why this particular paragraph is inserted in this section when no similar paragraph was inserted in Section 27 which is almost identical in character except that it relates to tenements whereas this relates to land. Why was it not inserted there? Why should this safeguard be put in to secure that whatever arises, however the value of the land may have deteriorated, whatever the circumstances may be, the landlord will nevertheless secure a rent not less than the rent reserved under the building lease? It seems an extraordinary provision and I do not know how the Minister can justify it.
I ask the House to reject the amendment. As the law stands, of course, the ground landlord at the expiration of a lease is entitled to the entire premises with the buildings which are upon them. We are taking away that right from him and I do not think we ought to cut down the income which he is receiving now from it.
Why not? Presumably the Minister is taking away that right because he thinks the landlord should not have it. Why is he compromising on it, or creating the possibility that he will get back part of it? If the ground landlord has no claim in justice to what he now has a claim to in law and we propose to take that reversionary right from him, why should not the rent to be reserved under the reversionary lease be that which would be calculated in accordance with the other paragraph of this section without this over-riding provision to the effect that it shall not be less than the old rent?
I have already explained that. I do not think it would be fair to take away from the ground landlord what he is receiving. You are preventing him receiving what he could have under the existing law. I do not think the alteration of the law should be such that you would cut down his income. That appears, at any rate to me, to be just.
Question—"That the words proposed to be deleted stand"—put and declared carried.
I move amendment 92:—
In paragraph (c) to delete all words after the words "shall be" to the end of paragraph (e) and substitute the words "one-half of the Poor Law Valuation of the lands comprised in the building lease".
I attach a great deal of importance to the idea underlying this amendment, and very little, indeed, to the actual form in which the amendment appears. I say that largely because I accept to a very considerable extent what the Minister himself stated when we were discussing this section on the Second Reading of the Bill. That was that poor law valuation is very fluctuating in various parts of the country. I think the important idea which I am trying to get accepted is that there should be some attempt at a standard by means of which the new rent shall be fixed. That would avoid the double calculation which is specified in the section of the Bill, a calculation which in its second part is going to be extremely difficult to make, and which I believe will very often lead to most protracted and expensive litigation, which I wish to be avoided.
Once the gross rent has been determined, that ought to be able to give us some kind of an idea of what the new rent on which the new lease is to be given should be fixed at. I suggest some fraction of the poor law valuation. I know that will vary from place to place in the country. Possibly, other standards might be substituted for that. I think if some fraction, perhaps, of the gross rent were taken it would meet a lot of my difficulties. It would be a fraction which, in my opinion, ought to allow some reasonable increase to the ground landlord in many cases because, take this one point only, many of these building leases were made 100 or 150 years ago, and a rent, perhaps, of £5 was fixed at a time when £5 meant something entirely different from what it would mean within the last 30 or 40 years. I think the standard which ought to be aimed at should, at any rate, pay some attention to that fact. If you do not have some plan of this kind there will be a great deal of difficulty in determining an estimate of the allowances that are to be made, moneys acceptable by the different parties. What is meant, for instance, by the phrase "amenities provided"? What is meant, and to what extent is value to be attached, to work which the landlord or the lessee has done, or work which has been done, perhaps, by neither?
You cannot attempt in a general section of this kind, as I have repeatedly been trying to stress, to get an absolutely fixed kind of rule to apply fairly and equitably in all cases. You can make some attempt to deal reasonably with the majority of cases. The plan I suggest in the actual amendment, namely, to take one-half of the poor law valuation of the lands comprised in the building lease, would work out. I have been making inquiries, generally well in certain parts of the country, and I do not think this would be objectionable in those parts, but it would not work out quite so well in other parts of the country. If a fraction or a quarter of the gross letting value were taken I think on the whole it would prove to be a very fair and equitable way of deciding what was to be the ground landlord's share of the new letting value, and would work out in many cases at probably giving little or nothing more than what would be the increased value of money as compared with what it was 100 or 150 years ago.
I think the whole strength of the argument that can be put forward is to try to get rid of the litigation that would follow from this appeal to court in order to estimate the value of these allowances. I hope the Minister will feel favourably disposed towards considering some automatic way of proceeding.
I could not accept the amendment which has been put forward because, as Deputy Thrift himself says, the poor law valuation would not be a fair guide to the letting value of the premises. We know that certain premises are valued on quite a different basis from other premises. There would be, of course, a great deal to be said from the point of view of simplicity if it were possible to take a fraction of the gross rent and say that in all cases a certain fraction of the gross rent shall be payable as a ground rent and only that particular portion. That would have the very great merit of simplicity. But the real difficulty I would find about that would be to discover what the fraction ought to be.
I certainly would not be prepared at the moment to put forward any view as to a fraction which would work out evenly between the landlord and tenant. It would have to be an overwhelming majority of cases. Therefore, though I can see everything that can be said in favour of having a standard of that nature, that it would save so many appeals to Court and so many disputes as to improvements, the difficulty of actually hitting upon a fraction would be very great.
Would the Minister consider the possibility of arriving at some fraction?
I am afraid it would be very difficult.
The Minister really admitted the strength of the case I made. If the Minister would arrive at some fraction that would meet a reasonable majority of cases I would withdraw my amendment. If he fails to do it I cannot help it.
I will consider the matter, but the Deputy must not think that I am giving him any undertaking or anything of that kind.
I do say the Minister has admitted the justice of the plea.
I think if it were possible to hit upon a fraction everybody would be agreed that it would be very valuable. It would save a considerable amount of proceedings in Court, and it would save the Court from some very difficult inquiries, as to who made improvements that were made, say, one hundred or a hundred and fifty years ago. I cannot undertake that I will be able to hit on a figure that would be satisfactory.
If the Deputy wants to get a simple method all he has got to do is to move the deletion of paragraphs (c), (d) and (e).
It is quite simple to rob.
It is merely a matter of whom you would rob. I have no more interest in the ground landlord than I have in the middleman. It is a question of which of them is going to get it.
Amendment, by leave, withdrawn.
Amendment 93 not moved.
I move amendment 94:—
In paragraph (d), lines 45 and 46, to delete the words "in circumstances of normal competition."
It is a verbal alteration. Those words should not have come in.
If the Minister is considering the revision of that term, "in circumstances of normal competition" in respect of Section 27, I think he should consider it in connection with this section.
If I expand the word "normal" in one instance, I would expand it in the other.
Amendment agreed to.
I move amendment 95:—
In paragraph (e) to delete all words from and including the word "or", line 53, where it secondly occurs to the end of the paragraph and substitute the following words "such land by the lessee or his predecessors in title".
I am rather inclined to think that this amendment was involved in a previous amendment, to a certain extent. I think in those cases where a lessor is going to be deprived of his reversionary lease he should be permitted to obtain the benefit attributable to the lessee or his predecessors in title. That is the purport of this amendment.
I am willing to accept this amendment. I have considered the matter with some care and I have come to the conclusion that it would be almost a matter of impossibility for the ground landlords, in cases where they had done a tremendous amount to improve property, to prove that they had actually done that work, whereas in the case of the improvement which the tenant has personally made it will always be very easy to see whether the tenant has made the improvements or not. For instance, you will see if he has built the house. You will be able, by seeing the original lease to know whether he had built it or not. Similarly whether he was taking possession or not. I know that there are cases where the expenditure of sums of money by landlords has improved the value of the property out of all recognition. For instance, there is a very large block, as possibly Deputies know, in the city of Dublin which runs from Capel Street to the Custom House. At one time that was merely a strand. The Corporation leased it, and it was leased at the time at £2 8s. a year. That lease falls in in about 30 or 40 years, and, of course, that would be an enormous bit of property. It is familiar to Deputy Lemass. I think it will have an enormously increased value. In that particular instance no doubt you will be able to show that the Corporation banked on the Liffey. I think there will be very little doubt about that, but in cases where individuals improved their estates by building sea walls, and things of that kind, it will be almost impossible to prove it. You cannot prove what was done 100 years ago in such cases except by tradition. Any improvement which the tenant does is improvement to the individual structure which would be much easier to prove.
Might I draw the Minister's attention to the next amendment which gives the benefit to the person who gets the reversionary lease rather than the ground landlord. Deputy Thrift gives the benefit to the ground landlord. My amendment restricts the allowance for improvement to 25 years and gives the benefit of the doubt to the person receiving the reversionary lease. It seems to me that the benefit of the doubt should be given to that person. As I have already said, I am not much concerned between the ground landlord and the middleman. Socially they are equally objectionable, but in a matter of this kind I would be prepared to weigh the balance against the ground landlord in principle.
Amendment put and declared carried.
Amendment 96 not moved.
I move amendment 97.
To add at the end of the section a new paragraph as follows:—
I do not think this is a very contentious amendment. It is put down for the purpose of ensuring that repairs should be carried out which are very often most necessary in everybody's interest.
Would it be possible to do it?
If the Court considers it is right and proper when granting a lease that a sum of money should be spent on the repairs to the premises I do not see why it should not have such power. Subject to redrafting I accept the principle.
Will it not be necessary to provide that the person receiving the reversionary lease will have the power to effect improvements if he is a middleman, as he will be in the majority of cases? He may not have the right of entry or the right to carry out the improvements.
The amendment only proposes to leave it to the court.
If he is not the person in actual occupation the other lease will expire before his lease. The sub-tenant's lease will have to expire before his lease, and such improvements as have to be made will be made. He and his sub-tenant, of course, will get the benefit only and pay him the amount by way of rent. I do not think there will be any difficulty.
Amendment, by leave, withdrawn.
I move amendment 98:
To add at the end of the section a new sub-section, as follows:—"(2) A reversionary lease granted under this Part of this Act shall be deemed to be a graft on the building lease or the proprietary lease (as the case may be) under which the person to whom such reversionary lease is granted previously held the land comprised in such reversionary lease, and the lessee's interest under such reversionary lease shall be subject to any rights or equities arising from such reversionary lease being such graft."
This simply makes, as we had before, a reversionary lease a graft upon the existing interest of the person who receives the reversionary lease. That is, as I explained before, that if anybody has an equitable claim upon the interest of the lessee that equitable claim will be carried on.
Amendment put and agreed to.
Section 43, as amended, agreed to.
Section 44 agreed to.
SECTION 45.
(2) Where—
(a) a person obtains a lease (in this sub-section referred to as the statutory lease) under this Part of this Act; and
(b) a lease (in this sub-section referred to as the voluntary lease) is made by way of reversionary lease to the building lease to which the statutory lease is reversionary; and
(c) the voluntary lease includes any land which is included in the statutory lease; and
(d) the voluntary lease is made on or after the 31st day of March, 1931, unless it is so made in pursuance of an enforceable agreement entered into before the 31st day of March, 1931;
the voluntary lease (whether made before or after the statutory lease) shall be void and of no effect.
(3) No person shall be entitled to obtain a reversionary lease under this Part of this Act of the land or any part of the land comprised in a building lease where the person in receipt of the rent reserved by such building lease objects, on one or more of the following grounds, to make such reversionary lease, that is to say:—
(a) that he bona fide intends, desires, or has agreed to pull down and rebuilt or to reconstruct the whole or a substantial portion of the building on the land comprised in such building lease; or
(b) that he requires vacant possession of such land for the purpose of carrying out a scheme of development of property which includes such land: or
(c) that for any reason the grant of such reversionary lease would not be consistent with good estate management.
I move amendment 99:—
In sub-section (2) (b), line 43, after the word "reversionary" to insert the words "to any person other than a person entitled to a reversionary lease under the provisions of the Act."
This section deals with voluntary leases being voided. I contend that the only way a voluntary lease should be void is where it has not been made with the proper party, and that is, I believe, the effect of the words I am proposing to insert. If the lease has been made with a wrong person, it must be void. If the lease has been made voluntarily it should not be.
Amendment put and agreed to.
I move amendment 100:
To delete sub-section (3) and substitute two new sub-sections as follows:—
"(3) Where it appears to the court that—
(a) the person in receipt of the rent reserved by a building lease bona fide intends or has agreed to pull down and rebuild or to reconstruct the whole or a substantial portion of the buildings on the land comprised in such building lease and to commence such pulling down and rebuilding or reconstructing within six months of the date of the order of the court; or
(b) that such person requires vacant possession of such land for the purpose of carrying out a scheme of development of property which includes such land and bona fide intends to commence the carrying out of such scheme within six months of the date of the order of the court; or
(c) for any reason the grant of such reversionary lease would not be consistent with good estate management,
no person shall be entitled to obtain a reversionary lease under this part of this Act of the land or any part of the land comprised in a building lease.
(4) Where the court decides under paragraph (a) or (b) of the foregoing sub-section that a person who would otherwise be entitled to a reversionary lease under this part of this Act shall not be so entitled, such person shall again become entitled to such reversionary lease if the person in receipt of the rent reserved by the building lease fails to commence the pulling down and rebuilding or reconstruction of the buildings or the carrying out of the schemes of development within six months of the date of the order of the court."
There are several points arising out of this amendment. It is proposed to re-draft sub-section (3) of this section. The first point arises as to the form of the amendment itself as compared with the form of the sub-section in the Bill. The sub-section is very similar in purport to sub-section (1) of Section 20, but it is different in form, and that difference in form has significance. If this sub-section had been drafted in the same manner as sub-section (1) of Section 20, or as I propose in the amendment, the onus of proof would be on the ground landlord to convince the Court of his intention to rebuild, reconstruct, or carry out a scheme of development, whereas in the form that it is in the Bill it appears that the onus is on the person claiming the reversionary lease to prove that the landlord does not intend to carry out this rebuilding, reconstruction or scheme of development of property. I am curious to know why the form was changed, and why the provisions of sub-section (1) of Section 20 were transposed in this manner when being drafted into this part of the Bill. That is one point. The second point is one which I take it the Minister will accept, and that is the elimination of the word "desires," an elimination which he agreed to in Section 20.
Yes.
[An Ceann Comhairle resumed the Chair.]
The third is to add something which the Minister agreed to consider in the other parts of the Bill, namely, the imposition of some sort of penalty in the event of the person voiding the application to give a lease failing to carry out the undertaking to rebuild or reconstruct.
As far as the latter two parts of the amendment are concerned, I shall proceed exactly here as I mentioned in the other instance. I do not agree with the Deputy that it is the person he suggests who will have the onus put on him. "No person shall be entitled to obtain a reversionary lease under this part of this Act of the land or any part of the land comprised in a building lease where the person in receipt of the rent reserved by such building lease objects ..." that is to say, the head landlord, because he is the person who has the interest of the rent reserved by the building lease. When he objects on one of the grounds following, that is to say——
That puts the onus of proof on the person claiming the lease.
No, it puts the onus of proof on the person refusing.
It puts the onus on the person who is to receive the rent, and that is the landlord.
That is not clear. A person claims a reversionary lease, and the ground landlord objects to giving it on the ground that he intends to rebuild or reconstruct, and that seems to put an end to the matter until the person claiming the lease can prove in court that the landlord does not intend to do anything of the sort, whereas in Section 20 the person refusing the lease must satisfy the court that he intends to do these things.
I shall look into the matter then.
Amendment, by leave, withdrawn.
I move amendment 101:
To add at the end of the section two new sub-sections as follows:—
"(4) Where the court is satisfied that—
(a) a person in possession of land under a building lease would, but for the previous sub-section of this section, be entitled under this part of this Act to a reversionary lease in such land, and
(b) such person was in occupation of the whole of such land and the buildings thereon, during the whole of a period of three years expiring at or within three months before the termination of such building lease wholly or partly for the purpose of carrying on therein a business,
such person shall, in lieu of a reversionary lease under this part of this Act, be entitled on quitting such land on the expiration of such building lease to be paid by the landlord thereof compensation for disturbance in accordance with Section 21 of this Act.
(5) The amount of compensation payable under the previous sub-section shall be a charge on the estate or interest of the landlord in the land in priority to all other charges, mortgages or encumbrances thereon."
This is an amendment of the necessity for which I am not quite clear. It is intended to provide that where a person has been in occupation of a building under a building lease, and has been using the building for business purposes, such person will get compensation for loss of goodwill and disturbance in the event of his lease not being renewed on any of the grounds specified in Section 45. It is possible that the person has a right to such compensation under the earlier sections, but I am not clear.
He has. I think this amendment is quite unnecessary. He can bring a claim for a new tenancy under Part 4 of the Bill, and the landlord can only refuse on one of the grounds mentioned in Section 20 (1).
The grounds are the same as in Section 45 (3).
Under Section 20 (2) he gets compensation for disturbance. I think he comes under the earlier part of the Bill, and I do not think it is necessary to have anything in this part.
There is this point. It is clear that he is not going to get his new tenancy, because if the landlord can deprive him of the reversionary lease on any of the grounds specified in Section 45 (3) he can deprive him of the new tenancy on the same grounds.
I shall look into the matter further, but I do not think this amendment is necessary.
Amendment, by leave, withdrawn.
Section 45, as amended, agreed to.
Section 46 agreed to.
SECTION 47.
I move amendment 102:
In line 11 to delete the word "building" and substitute the word "reversionary."
That is merely a slip in drafting. The word "building" appears where the word "reversionary" obviously should appear.
Amendment put and agreed to.
Section 47, as amended, agreed to.
Section 48 agreed to.
SECTION 49.
(b) no damages shall be recoverable for such breach if it is shown that, having regard to the age and condition of such tenement, the repairing thereof in accordance with such covenant or agreement is physically impossible or would involve expenditure which is excessive in proportion to the value of such tenement, or that, having regard to the character and situation of such tenement, such tenement could not when so repaired be profitably used or could not be profitably used unless it is rebuilt, reconstructed or structurally altered to a substantial extent.
I move amendment No. 103:
In paragraph (b), page 25, line 4, immediately before the word "no" to insert the words "save where the want of repair is shown to be due, wholly or substantially, to wilful damage or wilful waste committed by the lessee."
The object of this amendment is that if the tenant deliberately allows a premises to get into disrepair then he will not be safeguarded by this section. The sub-section safeguards him against the enforcing of the covenant if a building is really dying of old age, but if the tenant deliberately let it go to pieces and made no effort to keep it in repair it is only fair that he should not be protected. The real meaning behind this is that a tenant shall not be asked to do what is completely impossible. He will not be ordered to build a palace in a waste place or a handsome dwelling in a slum because there is a covenant in the lease, but if he deliberately allows the building to go to pieces he should pay for it.
Does the Minister not see the possibility of continuous litigation on the meaning of the words "wilful waste" and "wilful damage"?
My amendment No. 104 is to the same effect.
Amendment agreed to.
Amendment No. 104 not moved.
Section 49 as amended agreed to and added to the Bill.
SECTION 50.
(1) Every lease (whether made before or after the passing of this Act) of a tenement which contains a covenant, condition, or agreement absolutely prohibiting the assignment, sub-letting, changing, or otherwise parting with the possession of such tenement shall have effect as if such covenant, condition, or agreement were a covenant, condition, or agreement prohibiting the assignment, sub-letting, changing or otherwise parting with the possession of such tenement without the licence or consent of the lessor.
(2) In every lease (whether made before or after the passing of this Act) of a tenement in which there is contained or in which there is implied by virtue of the Act of the late United Kingdom Parliament passed on the 5th day of May, 1826, and entitled "an Act to amend the Law of Ireland respecting the Assignment and Sub-letting of Lands and Tenements", or by virtue of the foregoing sub-section of this section a covenant, condition, or agreement against assigning, sub-letting, changing, or otherwise parting with the possession of such tenement without the licence or consent of the lessor, such covenant, condition, or agreement shall, notwithstanding any express provision to the contrary, be deemed to be subject—
(a) to a proviso that such licence or consent shall not be unreasonably with held, but this proviso shall not preclude the lessor from requiring payment of a reasonable sum in respect of legal or other expenses incurred by him in connection with such licence or consent; and
(b) where such lease is made for a term of more than forty years and is made in consideration wholly or partially of the erection or the substantial addition to or improvement or alteration of buildings, to a proviso to the effect that, in the case of any assignment, sub-letting, changing, or otherwise parting with the possession of such tenement effected more than seven years before the end of such term, no such licence or consent shall be required if notice in writing of the transaction is given to the lessor within one month after the transaction is effected.
I move amendment 105:
To add at the end of sub-section (2) a new paragraph as follows:—
"to a proviso to the effect that where any such assignment, sub-letting, changing or otherwise parting with the possession of such tenement would cause a transfer or increase of any rates or taxes or other burden to or of the lessor, the lessor shall be entitled to recover from the lessee the amount of the rates and taxes so transferred or increased and to demand from the lessee an increase of rent commensurate with such other burden or increase of burden; and the lessor shall for the purpose of recovering the said rates and taxes and increase of rent, have the same remedies as under the lease are applicable to the recovery of the rent reserved thereby."
This is an amendment suggested to me in connection with cases that sometimes arise where the lessee of a premises assigns his interest in such premises to a government or other public department and the lessor immediately becomes liable for the payment of the rates calculated on half the rent reserved in the lease of the premises, and suffers a loss to that extent. The premises are let at a certain increased rent and then fresh rates fall. The new rent has to be added in order to meet the increased charge. This proviso is necessary in order to meet the situations that will arise. Such cases do not arise frequently but I think the Minister will agree that provision should be made to meet them when they do arise.
I have decided to accept the principle of this amendment. What it really meets is a case where the landlord is compelled to give his consent to a letting but suffers loss so far as the payment of rates is concerned by being forced to give his consent. As a general principle the tenant pays the poor rate on the premises but in certain cases the tenant has not to pay all the poor rate. Half the premises are exempt and the landlord pays the other half. For instance if you let to the Department of Posts and Telegraphs a post office only half the rates are payable out of the post office and they are payable by the landlord to the post office. Suppose the landlord had a tenant and that tenant made an assignment to the post office he would hit the landlord who ought not to be demnified by that. In the particular instance I mention there it is the Department of Posts and Telegraphs that would suffer, but I only took that as an example.
On the understanding that the amendment will be re-drafted and introduced by the Minister I ask leave to withdraw the present amendment.
Amendment, by leave, withdrawn.
Section 50 agreed to and added to the Bill.
SECTION 51.
(2) In every lease (whether made before or after the passing of this Act) of a tenement in which there is contained a covenant, condition, or agreement prohibiting, either expressly or by virtue of the foregoing sub-section of this section, the alteration of the user of such tenement without the licence or consent of the lessor, such covenant, condition, or agreement shall, notwithstanding any express provision to the contrary, be deemed to be subject:—
(a) to a proviso to the effect that such licence or consent shall not be unreasonably withheld, but this proviso shall not preclude the lessor from requiring payment of a reasonable sum in respect of legal or other expenses incurred by him in connection with such licence or consent nor, where such alteration would cause a transfer or increase of any rates, taxes, or other burden to or of the lessor, preclude the lessor from requiring an increase of rent commensurate with such burden or increase of burden; and
(b) if the alteration does not involve any structural alteration of the tenement, to a proviso that no fine or sum of money in the nature of a fine (other than such sum as aforesaid in respect of expenses) nor any increase of rent (other than such increase of rent as aforesaid) shall be payable for or in respect of such licence or consent.
I move amendment 106:—
In sub-section (2) (a), line 9, to delete all words after the word "from" to the end of the paragraph and substitute the words:—"recovering from the lessee the amount of the rates and taxes so transferred or increased and demanding from the lessee an increase of rent commensurate with such other burden and the lessor shall for the purpose of recovering the said rates and taxes and increase of rent have the same remedies as under the lease are applicable to the recovery of the rent reserved thereby."
I think this is only an equitable provision to meet the case where the rates and taxes are increased because of the increased rent. It is only intended to ensure that the new rent shall be satisfied by these increased rates and taxes.
I am afraid I cannot accept this amendment. I have gone as far as I can in the previous one.
Amendment, by leave, withdrawn.
Section 51 agreed to and added to the Bill.
Section 52 agreed to.
SECTION 53.
(1) Any person (in this section referred to as the applicant) who desires to obtain a building lease of land (hereinafter referred to as the building ground) situate in an urban area and either has obtained the consent hereinafter mentioned or is hereinafter exempted from obtaining any consent, may apply to the court for a building lease under this section of such land.
(5) Where on the hearing of an application under this section the court is satisfied, having regard to all the circumstances of the case, that it is reasonable and proper that a building lease should be made under this section of the building ground or any part thereof to the applicant, the court may direct such building lease to be made accordingly.
I move amendment No. 107:
SECTION 53.
Before Section 53, but in Part VI of the Bill to insert a new section as follows:—
Every lease (whether made before or after the passing of this Act) of a tenement which contains a covenant, condition, or agreement requiring the lessee to insure the tenement with a specified insurance company shall have effect as if such covenant, condition or agreement were a covenant, condition or agreement requiring the tenant to insure such tenement without reference to any specified insurance company.
This is an amendment which was suggested to me and the object of it is to provide that where a lease contains a covenant of condition that the lessee shall insure the premises with a particular insurance company that covenant in the lease should be deemed to be void. I understand it is the practice with a number of persons dealing with leases to insert a covenant requiring the lessee to insure with particular companies, and these generally foreign companies, for which they are agents. It is considered that the practice is undesirable and leads to a considerable annual loss of revenue to the country every year. The matter also relates to companies in this country. I have been informed of a case where a director in an Irish insurance company who bought a house and found that he was under an obligation in the lease to insure with a rival company. There seems to be no justification that such a covenant should be permitted and it seems desirable that it should be rendered void, as the amendment suggests.
Insurance is a guarantee to the landlord that if the premises are burnt or partially damaged by fire he will be paid full compensation for the damage caused.
I think the landlord is entitled to choose his own company. I do not think the amendment would help the Irish offices very much, because what the tenant will do is to go to the company that will insure him at the lowest possible figure. If you give the choice to the tenant he will not look for the solvent or insolvent company because he has no interest in the matter. He will simply go to the company, solvent or insolvent, and there is a good deal of difference in insurance companies, that will give him the cheapest premium. That is obvious common sense. I do not think it would help any company in this country or do them any good in any way. It would be the company irrespective of its merits that would charge the smallest premium that would do all the best business. There is a great difference between insurance companies. Some insurance companies meet their clients in a most fair and generous fashion. Others are very different, and it is really the person whose interest is insured, and that is the landlord, who ought to have the choice.
I suggest that covenants of that sort are tantamount to covenants in restraint of trade, because a number of these landlords are persons not interested in this country and have confidence only in English and Scotch companies and other companies of that sort. There are companies in this country which are perfectly safe and they are excluded by a large number of landlords. After all, we cannot ignore the fact that a number of property-owners in many cases are persons who have no interest in Irish companies in the public sense of the word.
While I admit that there should be some safeguard against a tenant insuring with a company that is in a bad condition. I think there should be some way of meeting this. The Minister should try and go as far as he can towards meeting the amendment in order to get rid of the objection that has been pointed out. There is undoubtedly a principle there at present that operates as a restraint on trade in the worse sense of the word.
A restraint on trade would be illegal.
I mean in the spirit of it.
I do not think that this amendment will have the slightest bit of effect on it.
Amendment, by leave, withdrawn.
I move amendment 108:—
In sub-section (1), line 43, after the word "may" to insert the words:—"in the absence of an agreement arrived at with the person or persons having an interest in such building ground sufficient to support the grant of a lease for one hundred and fifty years."
The object of the amendment is to save people from going to law, if possible. It provides that everything should be done to secure agreement before an appeal to the court is made. That is the sole purpose of the amendment.
There is nothing in Part 7 of the Bill which prevents private negotiations being entered into between the parties. I think the amendment is unnecessary.
The Minister does not think that it is well even to specify that an attempt should be made to have an agreement.
I think it is unnecessary.
Amendment, by leave, withdrawn.
I move amendment 109:
Before sub-section (4) to insert a new sub-section as follows:—
"The applicant shall serve upon the intended lessor an application in prescribed form, and with such application shall furnish the intended lessor with elevations, plans and specifications of the buildings which are proposed to be erected upon the building ground to be comprised in the lease, and an estimate by an architect or surveyor of the cost of such buildings."
I do not think that the Minister will say that this amendment is unnecessary. It is only fair that the landlord should be provided with information as regards plans, specifications, etc., of the buildings proposed to be erected so that he will be placed in a position to form a judgment as to whether the proposed buildings are suitable. He cannot do that unless he has the information referred to in the amendment.
I think it would be very unfair to a person looking for a building lease if, before he knows that he is going to get it he has to go to the cost of getting out plans and specifications. These would cost a very considerable sum of money, and after going to all that expense he might not get the lease. I would be prepared to go so far as to say, that the form of application for a lease should have in it a general indication of the nature of the buildings proposed to be erected. If all that is set out in the amendment had to be done it would cost a man a lot of money and then his application might be refused.
The question as to whether it would be refused or not would largely depend on the nature of the buildings proposed to be erected.
I am not prepared to go as far as the Deputy suggests in his amendment, but I think that the application form might give a general indication of the nature of the buildings proposed to be erected.
Amendment by leave withdrawn.
Amendment 110 not moved.
Section 53 agreed to.
SECTION 54.
Amendment 111 to this section in the name of Deputy Lemass seems to me to be outside the scope of the Bill.
The part of the Bill in which it is proposed to insert the amendment is entitled "Miscellaneous." It deals with the acquisition of land for building purposes. That part of the Bill is intended to increase the facilities that are available for the acquisition of land and that also is the purpose of the amendment. The object of the amendment is to give local authorities power to get land for building purposes more easily than they can get it at present. That seems to be the main purpose of the miscellaneous part of the Bill.
The fact that a part of the Bill is entitled "Miscellaneous" does not mean that the Chair could accept miscellaneous amendments. Apparently the purpose of the amendment is to deal with building ground exclusively. It does not deal with tenements or with tenancies at all, and it could not be inserted in a Bill of this nature.
The Ceann Comhairle has ruled the amendment out of order, but still I would ask the Minister to consider it and if necessary to bring before the House a special Bill embodying the proposal in the amendment.
That is a matter that might be considered in a Town Planning measure.
Before the section is put, I wish to put before the House the possible desirability of extending the powers of a tenant for life to grant any lease under this Act. It occurs to me that it might be necessary for the easy working of the part of the Bill relating to the renewal of tenancies that the powers of a tenant for life to settled land should be enlarged. I just wish to ask the Minister if he thinks it worth while considering the desirability of striking out the word "building" before leases, and to enlarge the section so that a limited owner would have the powers conferred by Section 54 in respect of any lease granted for the purpose of carrying out this Act.
Cases dealing with leases in the other parts of the Bill to which the Settled Land Acts would apply, always, I think, have to go to court. I would ask the Deputy to look at sub-section (1) in Section 32.
I am content once I have drawn the attention of the House and of the Minister to it. Provided the other parts of the Bill worked smoothly without unnecessary expense in the way of application to the courts, I am satisfied.
Question—"That Section 54 stand"—put and agreed to.
Section 55 agreed to.
THE TITLE
There is just one point with regard to the Title of the Bill that I would like to put before the Minister. All the individual houses that have been erected in country places are not really agricultural holdings, but in intent are really the same as town tenancies. In order to cope with them, and so that the Bill should apply to every tenancy which does not come under the Land Acts, I suggest to the Minister that it may be necessary for him to amend the Title.
That is a matter that I would consider. I may inform the Deputy, however, that I do not see any way by which the houses he refers to can be brought under this Bill. I am still looking up the matter, and possibly it can be considered on Report.
Title agreed to.
The Dáil went out of Committee.
Bill reported with amendments.
When is it proposed to take the Report Stage?
When does the Minister hope to circulate his amendments?
Very soon. If the Deputy has not an opportunity of looking into the amendments for two or three days, then the Report Stage will not be taken on Thursday next.
Report Stage ordered for Thursday, 2nd July.
