With regard to the amendments, from the angle of the Chair I still dislike all these amendments to Section 2, but as Amendment 1 is an agreed amendment I will allow it in all the circumstances. Does it require an amendment of the title?
Financial Motions. - Town Tenants Bill, 1930—Fourth and Fifth Stages.
I think it will be better if the words "in urban areas" were taken out of the Long Title. They occur twice in the Long Title. I beg to move:
In page 3 to delete lines 24, 25 and 26 and substitute therefor the words—
"(a) it either—
(i) is situate in an urban area and consists either of land covered wholly or partly by buildings or of a defined portion of a building, or
(ii) is situate elsewhere than in an urban area and consists of land not exceeding one statute acre in area and having a house thereon, and"
I move amendment 5:—
In page 23, line 42, Section 46 (1) (c) to delete all words after the word " be " to the end of line 43 and substitute the words "one quarter of the gross rent as hereinafter defined " and to delete paragraph (e), lines 59 to 61 inclusive.
I told Deputy Thrift that I would consider the amendment carefully, because I see it has great advantages in doing away with litigation among parties, and I accept it.
I move amendment 6:—
In page 28, before Section 56, 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."
The object of this amendment is to make it possible for the lessees of property to insure the property with whatever firm they think is best. Under the present arrangement very often head landlords who are only interested in ground rents insert in their leases a clause obliging the lessee to insure with some particular insurance company. That is purely a matter of personal interest. Very often it happens that the particular agent or solicitor is the agent for some insurance company and in order to forward their own interests they are placing a restriction on trade. They are preventing the other ordinary first-class business firms from getting that insurance business. It is an absurd and out-of-date arrangement altogether because in the case of the ground landlord he is perfectly secure. There is no question in that case of his losing anything by the particular company that he is insured with. The lessor in that case is entirely liable. No matter what happens to the premises he is bound to pay that rent and persons who pay head rent like that are always persons who would not be so foolish as to victimise themselves by insuring with a company which would go bankrupt or could not pay the insurance money, so that is one of these fossils which we ought to get rid of, something which is simply in itself a restraint on trade.
There is a great deal more in this than has come out in what Deputy Little has said. This is really in my mind a very great protection to the lessor. For instance, I could give cases where it has meant a great deal of money to the lessor. It is not so much that one company is a better company than another, but that the lessor has more intimate dealings with one company than another. A case I have in mind is one where the lessee was bound to insure with a certain company in accordance with a lease and did so. He afterwards withdrew from that company and insured with another. Instead of insuring in his own name alone he insured in two names leaving out the name he was pledged by the terms of his lease to put in, that of the actual lessor. The insurance was effected leaving out the lessor's name altogether and the names of a bank and of the lessee were put in so that the lessor's interest in the premises was not secured at all. If the terms of the original contract had been adhered to information in that respect of the change of names would have been supplied to the lessor and his interest would have continued to be protected. It is really to avoid cases which do arise of unfair dealings with the lessor that this contract with a special company is insisted on. It is not because of interest in one company more than another or because one company is safer or it is not to interfere with business. It is to protect the lessor's interest and I hope that the Minister will not agree with this amendment. It is not only bad because it is retrospective, but it is bad in principle because of the damage to the lessor's interest in the premises.
I think Deputy Thrift is mixing up two things. It would not interfere with covenants obliging the lessee to insure in some company in his own and the lessor's name which is the case in the mind of Deputy Thrift. It is that where the lessee is obliged to insure in his own name that in that case he shall be able to insure not in a specific company.
The terms of the amendment are quite general.
Certainly. I do not represent it as applying to a case where the lessee is bound to include the name of the lessor as well as himself in the insurance policy.
The amendment says: " Requiring the lessee to insure the tenement with a specified insurance company." That is all.
It does not specify the insurance company or oblige the lessee to insure, but if it obliges the lessee to insure in his own name and the name of the lessor that is quite a different covenant.
It does not say so.
If it did say so then your argument would apply to the case. It does not say so and then it does not apply.
I cannot accept this amendment. Deputy Little says that in the case of a ground landlord the ground landlord would not be interested whether the premises would be insured or not. I cannot follow that argument. In the first place I would like to point out, however, that I have seen it confined to the case of a ground landlord and tenant. It is put in single lease whether it is between the ground landlord or the building tenant or between the owner of a house and the tenant who is only there for a couple of years. The clause is, according to this amendment, to be exactly the same, and if I take it even in the case of a ground landlord the ground landlord insists on insurance because if he gets his insurance his rent is secured. He has got valuable premises which are there as security for his rent.
If the house is burned down security for his rent goes, and if the premises have been insured with an insolvent insurance company or an undesirable insurance company he may not get the value of the premises. But he is vitally interested in having the premises rebuilt in order that he may have security for his rent. Deputy Little says that the rent would continue to be payable after the premises had been burned down. I do not think that that is quite the case. I have not been dealing with real property for some few years now. My recollection of the subject is not as good as it was, but there is a section in Deasy's Act which voids leases when the premises have been burned down. That is certainly my recollection. I have not got the Statute here to refresh my memory. The real thing is that the lessor should be entitled to choose his company, that he should be able to be satisfied that he has a solvent company to deal with. Deputy Little says that some companies are smarter than others in getting business. Some go to the landlord's solicitors and manage to get them to give them their business. I do not see how we could give any assistance to non-energetic insurance companies at the expense of energetic insurance companies. I would advise the insurance companies that if other companies are getting at the soft side of landlords who are giving leases, they should go and exert themselves and look for business. That however, I submit, is completely alien to the question which we are debating now, because as to whether one insurance company is doing well or showing good business methods or not, has really nothing to do with the Town Tenants Bill. What we have got to consider is whether it is not right that the person who leases property should have security, the ordinary accepted security that his contract will be carried out.
The Minister's ignorance of this matter hurts me.
I am sorry to hurt the Deputy.
The idea of a landlord letting premises for a few years allowing anybody except himself to insure the premises is absolute nonsense. If he is giving a short lease he insures his own premises. I left that argument out entirely because I paid the tribute to the Minister that he knew it, but apparently he did not. I am really dealing with the other kind of case. In the other cases there is only one way of getting out of paying your head rent, that is by assigning the property to a man of straw. I am sure that is as well known to the Minister as it is to me. There is no other way of getting out of paying a head rent if premises become such a burden on your shoulders except assigning them to the first beggar you meet on the street. Otherwise your obligations are there all the time to pay your ground rent or your head rent. Everybody in the property market knows that the securest interest a man can have for investment is head rent. If a man wants to have substantial security he goes in for head rent. They do not pay such a high rate of interest because they are such absolute security. So from the point of view of the head landlord he is not directly concerned to any great extent in the matter of whether he is secured.
There is another aspect of it which I did not press. Most of these agreements unfortunately are to the injury of Irish companies as against British companies. From that point of view there is a serious national issue involved. It is always to the victimisation of Irish companies that these particular leases work and they are going to continue to work like that. All the valuable property in and around Dublin and other parts of Ireland are in the hands of people who hand a large amount of valuable insurance business to the companies. It means that money is pouring out of the country.
I think the Deputy has proved a great deal too much because the Deputy has really put forward an argument which if followed to its logical conclusion would mean that every covenant contained in a ground lease for insurance shall be null and void because he says it is no value to the head landlord. Why force a tenant to insure at all? That is the only logical conclusion to which you can drive Deputy Little's argument.
The difference between Irish insurance companies and non-Irish insurance companies I do not know nor do I know that the tenants would be more likely to go to Irish insurance companies than they would be to go to English insurance companies, or that the landlords are more anxious to go to English insurance companies than Irish insurance companies, but I am pretty sure of this, that the average tenant would go to the insurance companies which charged him the very smallest possible premium.
I move amendment 7:
In page 28, Part VII, before Section 56 to insert a new section as follows:—
The lessee or tenant in any lease made after the passing of this Act shall not (in the absence of any agreement in writing to the contrary) be liable for or called upon to pay the law costs or any part of the costs (other than stamp duties) of the lessor or landlord of or incidental to such lease.
I hope the Minister will accept this amendment. There is a considerable amount of abuse, especially amongst certain types of agents who sell property. Very often the layman does not understand these things. He knows that the price of a house is so much, but he does not know that he is being involved in the costs. It is the practice with a great many good firms of solicitors always to do exactly what is suggested in this amendment, so that the client may know exactly where he is and how much money he is being let in for. It often happens that the purchaser is very disgusted afterwards when he finds that he is being let in for a considerable amount more than he expected. This is a small matter and one that is very fair to the general public and does no injury to anybody. It really means that by doing something that is fair you add to the credit of the profession, because clear bargains make good friends, and this is really making a clear bargain in a matter of this kind.
I cannot accept this amendment. The law of vendor and purchaser has been very well settled through many generations as to what is right and proper. It is one of the principles of the ordinary law of vendor and purchaser that the lessee will pay the costs of the lease. That has been settled for generations. I agree with Deputy Little that in most cases before a lease is entered into there is an agreement for a lease. The agreement for the lease sets out the terms for the contract and invariably it is that the lease will be executed at the expense of the lessee, not at the expense of the lessor. That has been invariably the custom whenever there is a written document and is the ordinary custom where there is no written document. I do not think that we ought to accept an alteration of such a long established implied custom. There are similar implied customs. Of course the Deputy knows that the law of vendor and purchaser is such that the mortgagor pays the cost of the mortgage.
Of course a mortgagor is in a different position. In any case I am sure the Minister realises that this will not mean a change of practice. It will make those agreements to be put in a slightly different form because in every case what it really does is to insist that it should be expressly set out in his agreement that the purchaser will pay, so that he has full knowledge of what he is going to pay for.
That would mean there would always have to be an agreement. The vendor's solicitor would always have to insist on an agreement for a lease. Possibly that would mean added expense. The drawing up, the drafting of the agreement would mean extra expense to the lessee.
It would be very small. As the Minister knows, there nearly always is an agreement where any considerable sum is involved, and it is only in such cases that this would apply.
With regard to the Title, I do not think it can be amended. The amendment that I was foolish enough to accept to-day destroys both the Long and Short Title.
As regards the Long Title the words "urban areas" where they occur twice, might be taken out. It then would run——
It would run very peculiarly.
I do not think so. The Long Title runs:
An Act to make provision for the further improvement and amelioration of the position of tenants in urban areas and for that purpose to amend the law relating to compensation for improvements made by such tenants—
Leave out the word "such."
The Long Title goes on to say:
—and to disturbance of such tenants, to facilitate the granting of building leases, and to make other provisions in relation to landlords and tenants in urban areas.
We would have to leave out the words "such" and "urban areas" where they occur twice.
I think it would be better to have the Title amended in the other House.
I am not frightened about the words "town tenants," because those words are largely used in contra-distinction to "agricultural tenants."
I think it is better for the moment to let the Title stand and let it be amended after due consideration.
The Bill as it now stands is a considerable improvement upon the measure introduced into this House. In so far as improvement has been effected, we are glad. We are particularly glad that the amendment which has caused the Ceann Comhairle so much difficulty has been inserted. That amendment will confer benefits upon the tenants of shops and houses in rural areas as well as in urban areas. Unfortunately, however, the main defect in the measure is unchanged. I refer to the conditions to be complied with by the tenants of residential houses desiring statutory right to a new tenancy. The ridiculous provision that these tenants must have had forty years occupation either by themselves or their predecessors in Title has not been deleted. To a very large extent the efficacy of the Bill and its benefit to town tenants have been destroyed.
It was thought when the Town Tenants' Commission Report was published and when it was known that the Dáil was at long last going to tackle this problem that a new Magna Charta for tenants would be forthcoming. Some attempt to improve that Magna Charta has been made, but the attempt has been largely nullified by the Minister's insistence on the retention of this provision. I do not know that it is possible that anything I say now would influence the Minister or soften his heart so that he might be induced to consider an amendment of that particular section before the Bill goes to the Seanad. If he re-examines the whole thing he will find that no dangers will arise from a substantial reduction in the term of years and that considerable advantage will be conferred upon a large number of people who are expecting that this measure will give them the security which at present they have not got.
The desire on the part of the average householder to feel that he cannot be disturbed except he refuses to pay his rent or breaks his contract has not been met. There are very few householders who can comply with the extraordinary conditions in the Bill. They are being denied security and I think they will feel that undue influences were placed upon the Executive by those representing the landlord's interests in order to deny them that security.
The case the Minister made against the amendment of that section was very weak. I am sure he will realise that if he re-examines the matter in the interval between this debate and the introduction of the Bill in the Seanad. I have very little hope, however, that the Seanad will of its own initiative endeavour to force the Minister to amend that section. If he takes the initiative he will no doubt have his way. It rests with him, therefore, whether or not these tenants will be protected. In the interests of the people who are most likely to welcome the Bill if it meets their requirements, I asked him to reconsider the matter and see whether it is possible to reduce the period of 40 years.
I suggest that before the Bill finally passes the Minister should read his own speech in defence of the section to which Deputy Lemass refers. I think that speech is the strongest justification for altering the section. The Minister said there that one reason for giving a new tenancy was that the tenant had got into the habit of regarding his residence as his home; that it took forty years to establish that feeling; and that it would be ridiculous to say that that feeling would arise after five years. Apparently the Minister forgot that as the section stands he gives this privilege to a person who may be only one year in the house. That confusion arises through the Minister and other Deputies who spoke on the section forgetting all about the phrase "predecessors in title."
In my opinion "predecessors in title" should have been left out of the section. Why should any one benefit by reason of the fact that he goes into a house that has been inhabited for years by predecessors in title, whatever that phrase means? I doubt if any two Deputies are in agreement as to what it means.
Assuming there were a general meaning for it, why should it be that if I go into a house inhabited by my predecessors in title for 39 years, I am entitled after one year to certain privileges denied my neighbour who has been in continuous tenancy of his house for, say, 35 years? That is ridiculous legislation. I am sure more will be heard of it in the Seanad. It is certainly a most curious principle of legislation to give people an advantage in law through a circumstance that they have had nothing to do with bringing about. If a person is lucky enough to enter a house inhabited by those vague people known as predecessors in title for say 39 years, at the end of one year he becomes entitled to certain privileges. His neighbour who has not been lucky enough to get possession of such a house, but who may have been a continuous tenant for even 37 years, cannot enjoy such advantages if he is given notice to quit.
I have really nothing to add to what I have already said on the Bill. This question now raised by the Deputy was very fully threshed out. It was one of the very few points upon which we divided in the course of this Bill. Deputy Lemass has said that the Bill has been very considerably improved. The Bill has been improved on the Committee Stage. The main principles have remained, but some of the Bill has been improved. If I may say so, I would venture to say that that was because this Bill was tackled in Committee in a very much better spirit than the ordinary Bill which comes before the House is tackled. I think the House gave of its best to the improvement of this Bill. We debated the matter without any heat and that is true of everybody who spoke on the Bill.
Question agreed to.
[An Leas-Cheann Comhairle took the Chair.]