I move: "That the Bill be now read a Second Time."
This Bill arises from recommendations that have been made by the Landlord and Tenant Commission. In fact, it is only the first instalment of the legislation which will result from the work of the commission. The commission were appointed in January, 1966, and their terms of reference cover the whole law of landlord and tenant with the exception of the rent restrictions code. All the recommendations that have been made by the commission in the two reports which they have furnished to-date have been accepted by the Government subject only to relatively minor amendments. This acceptance involves the promotion of legislation to make considerable changes in the Landlord and Tenant Acts of 1931, 1958 and 1967. A comprehensive Bill dealing with these changes is being prepared. This Bill —the Landlord and Tenant Bill, 1970 —was introduced in Dáil Éireann last December by way of long and short titles. It will be a substantial and complicated piece of legislation involving the repeal and the re-enactment, with amendments, of the Acts of 1931, 1958 and 1967. This present Bill will also be absorbed in the comprehensive Bill. The text of the comprehensive Bill has yet to be finally settled. Meanwhile, because a certain urgency attaches to some of the changes in the law recommended by the commission, the Government decided to introduce this present Bill.
As was indicated in the explanatory memorandum which was circulated to Deputies when the Bill was introduced in Seanad Éireann last August, the Bill deals with three matters. These are— first, the grant of sporting leases, secondly, the grant of renewal rights and of the right to purchase the fee simple to tenants holding under a certain type of pre-1931 lease and thirdly, a necessary amendment of section 10 of the Rent Restrictions (Amendment) Act, 1967. The proposed amendment of section 10 of the 1967 Act does not stem from the recommendations of the Landlord and Tenant Commission. The section is, however, defective as it stands and it is desirable to amend it as soon as possible.
The proposals that concern sports clubs are, of course, the most important. What is being proposed is that outdoor sports clubs should in certain circumstances have the right to a 99-year lease. This proposal is based on a recommendation of the Landlord and Tenant Commission and it is designed to deal with a problem of considerable urgency. Lands used for sporting purposes, such as golf courses and football grounds, are usually situated close to cities or towns. The demand for land for development of one kind or another means that in many cases these lands have acquired a greatly enhanced value in recent years. As a consequence, it is only natural that landlords should, in cases where the tenancy of a club has expired or is about to expire, be increasingly tempted to refuse to grant a new tenancy to the club and to hand over the land for purposes of development. Under existing law, a sports club normally has no right to obtain a new tenancy from its landlord. Unless the law is changed, therefore, it is likely that many clubs will simply disappear. The Government recognise, just as the commission do in their report, that facilities for outdoor sports confer important benefits on the community. We recognise also that any loss of these facilities could well be irretrievable since clubs, once dispossessed, are most unlikely to be able to provide themselves with fresh sportsgrounds, at least where the larger centers of population are concerned. We believe that action must be taken now if these facilities are, as far as possible, to be preserved. The Government have therefore decided to promote this legislation.
The solution proposed by the commission, and which the Government have accepted with certain amendments, is that where a club uses land for outdoor sport or recreation and where it satisfies certain conditions it should be given a right approximating to the right to a reversionary lease under the Landlord and Tenant (Reversionary Leases) Act, 1958. The conditions to be satisfied are designed to ensure that only clubs that have a genuine claim will stand to benefit. Broadly speaking, the proposals in the Bill are that the validity of a club's claim should be tested in two ways. The first relates to the term of its lease, or, if it does not hold under a lease, the lenth of time it has held the land. The second relates to the club's investment in the land. The club must have expended a reasonable sum in developing or adapting the land so as to render it more suitable for the purpose of the sport—for instance, on club buildings, drainage, the levelling of the land and so on.
The Bill modifies the recommendation of the commission in a number of ways. As regards the length of time, the qualifying period recommended by the commission has been reduced from 25 to 21 years. The Bill proposes that a club should qualify in this respect if it has been in continuous occupation or possession for the purpose of the sport for 21 years prior to its application for the lease or if it holds the land for that purpose under a lease the term of which is not less than 21 years. Furthermore, the Bill proposes that continuous possession for the purpose of sport for the necessary period will suffice. That is to say, a club is not necessarily being required to show that it had a formal tenancy or series of tenancies during the qualifying period. Provision is also being made to clarify the position where the land is not used solely by the sports club—for instance, where the landlord has retained grazing rights. In such a case, it is being provided that user of the land for the purposes of sport must be the primary user, if the club is to benefit. The Bill again modifies the commission's recommendation in relation to the minimum sum that has to be spent on development of the land or on buildings. The commission recommended that the club's expenditure in this regard should be not less than 15 times the amount of the yearly rent. The Bill follows this recommendation as far as it goes but it proposes also that the amount must be at least £1,000. On the other hand, the Bill does not include a condition which was recommended by the commission, namely, that there should be permanent buildings on the land which are used in connection with the land for the purpose of the sport although the Bill does allow the expenditure requirement to be met in whole or in part by expenditure by the club on permanent buildings provided those buildings are used in connection with the sport. In section 2 (3) of the Bill, special provision is being made for a situation where a subsidiary portion of the land used for sport does not fulfil all the conditions required to attract the right to a new tenancy but the major portion does or is freehold. In order to preserve the club as a going concern in such a case, the Bill proposes to ease the conditions to enable the club to obtain a lease of the subsidiary land. The proposed conditions require the club either to have a lease of the subsidiary land for a term of not less than 12 years or to show that it has been in continuous occupation or possession of that land for at least 12 years. A further condition is that the subsidiary land does not amount to more than one-fourth of the total area of land which the club uses for sport.
The Bill also modifies the recommendations of the commission in relation to the terms on which the new lease—which is called a "sporting lease" in the Bill—is to be granted. The commission recommended that the new lease should approximate to a reversionary lease granted under the Landlord and Tenant (Reversionary Leases) Act, 1958, that is, a lease for a 99-year term at a ground rent. The most important modification of the 1958 Act provisions that they recommended was that the rent should be subject to review at 33-year intervals at the option of the lessor. This modification was reflected in the Bill as introduced in Seanad Éireann. However, I accepted the general view of the Seanad that 33 years was too great an interval between reviews of the rent and section 5 (3) (a) of the Bill now provides for reviews of the rent at 25-year intervals. That means that the lessor can now procure reviews of the rent on three occasions during the term of the lease, instead of two as the commission recommended. While the Bill gives effect to the other variations of the 1958 Act provisions that the commission recommended, it does not follow the recommendations of the commission in regard to the method of fixing the rent in a sporting lease. If the Act of 1958, as amended by the Landlord and Tenant (Ground Rents) Act, 1967, were to be applied to sporting leases, as the commission recommended, the rent would be fixed at one-eighth of the "gross rent", that is, one-eighth of the national open-market rent. This is the formula which has evolved over the years for determining the ground rent of built-on land, but I think it is clear that it is a formula that reflects the fact that much the greater part of the value derives from the buildings rather than from the land itself. It would, in my view, be inappropriate to apply this formula in the case of a sports club where the land itself rather than the clubhouse or other building normally constitutes by far the more valuable element. Accordingly, the Bill proposes that the club should be required to pay a fair rent, just as they would have had to pay if there had been no danger of clubs being refused new tenancies because of encroaching urban development and no need for this Bill at all. Accordingly, section 6 provides that, where the rent in a sporting lease has to be determined by the court—because the parties concerned have failed to agree—the court shall fix a fair rent. This section also provides guidelines for the court in the determination of a fair rent.
While on the subject of sporting leases, I think I should mention also the provision relating to compensation for disturbance. Subsection (3) of section 4 provides that the compensation provisions of the 1958 Act shall apply in a case where a sports club that is otherwise entitled to a sporting lease fails to obtain one because the landlord or any superior landlord is able to satisfy the court on a number of specific points. One of these points is that he requires the land for development and has obtained planing permission, and another is that it is reasonable that a sporting lease should be refused. The application of the compensation provisions of the 1958 Act means that compensation will be measured in accordance with the court's opinion of the extent of the loss suffered by the sports club as a direct consequence of the refusal of the sporting lease.
The only remaining matter that I believe I should mention at this stage in connection with sporting leases concerns the proposals contained in subsection (7) of section 2. This subsection proposes that the provisions relating to sports clubs shall operate from 3rd March, 1970. This was the date of a public announcement of the Government's decision, which had been taken that day, to frame legislation in relation to sports clubs on the general lines of the recommendations contained in the Second Report of the Landlord and Tenant Commission. The official statement of that day, which was released through the Government information Bureau, stated that it was proposed that the benefits accruing under the legislation would operate from the same day. The statement was published at the time so that all those who might be affected would be aware of what was intended and thus enabled to negotiate in the knowledge of the proposed changes in the law.
The second matter with which the Bill is concerned is dealt with in sections 8 and 9. This matter is of particular concern to certain tenants in Sandycove, County Dublin, and to others holding in similar circumstances. Section 8 is a replacement for section 10 of the Reversionary Leases Act of 1958. It extends the right to a reversionary lease under the 1958 Act, and consequentially the right to acquire the fee simple under the Ground Rents Act of 1967, to a new class of tenants who hold under a certain type of pre-1931 lease. These tenants did not qualify for such rights under the Acts of 1958 and 1967 because their houses, although built by the original lessees under what would nowadays be called building leases, reverted to the landlord when the original leases came to an end. The landlord subsequently granted new leases to persons who had no entitlement to the lessee's interest under the old lease. Consequently, when these new leases in turn began to run out the tenants who held them, since they were not the successors of the original lessees, had no right to a renewal under the 1958 Act. The Landlord and Tenant Commission in their Second Report have recommended that the right to a reversionary lease under the Act of 1958, together with the right to acquire the fee simple under the Act of 1967, should be extended to the tenants in question. They also recommended that, in line with similar provisions in the 1958 and 1967 Acts, these rights should be available for a limited period to those lessees whose leases expired up to five years prior to the amending legislation provided the lessee under the expired lease was still in possession of the property, that he had not entered into a new arrangement with the landlord and that no other person was entitled to a reversionary lease of the property. The proposals in section 9, which concern lessees whose leases have already expired and which, as I have said follow similar provisions in the 1958 and 1967 Acts, concern particularly certain tenants in Sandycove. The situation of the Sandycove tenants whose leases have expired is what gives urgency to these proposals and it is the reason for their inclusion in the present Bill.
Apart from provisions based on the recommendations of the Landlord and Tenant Commission the Bill deals with one final matter, that is, an amendment of section 10 of the Rent Restrictions Act of 1967 to remedy a defect in that section. In accordance with section 10 of that Act the tenant of a rent-controlled dwelling must, generally speaking, have the landlord's written consent to an assignment of the dwelling. This provision has had an in advertent result in the case of those dwellings that technically come under the Rent Acts but are held on long leases. The application of the Rent Restrictions Acts—which involves the control of rents together with protection of possession—was extended by section 2 of the 1967 Rent Act to owner-occupier dwellings. These are dwellings whose occupiers hold under leases for terms of more than 21 years. The extension in 1967 of the application of the Rent Acts to owner-occupied dwellings was necessary for the protection of lessees, mainly certain owner-occupiers in Sandycove— the same people with which sections 8 and 9 of the Bill are concerned— who had no protection in regard either to security of possession or the level of rent once their existing leases expired. One of the consequences of the application of the Rent Acts was, however, as I have mentioned, that the tenant's right to assign his interest is restricted. This means that the owner-occupier of a dwelling held on a long lease and coming under the Rent Acts cannot make a valid assignment of his property without the landlord's consent. There are certain circumstances where this restriction does not apply, namely, where the dwelling is used in part for business purposes, where the lease expressly authorises assignment without consent or where the assignment is to a bona fide resident member of the tenant's family. An assignment made without the landlord's consent, where such consent is required, is void. Section 10 of the Bill is designed to rectify the matter, with effect from the passing of the 1967 Rent Act, and to validate any assignments that may be void solely by reason of section 10 of that Act.
I trust that the Bill will meet with the approval of the House. It is, as I have said, only the first instalment of a considerable body of legislation that arises from recommendations made by the Landlord and Tenant Commission. Before I conclude, I should like to take this opportunity to express on my own behalf and on behalf of the Government our thanks for the very valuable work which the members of the commission have done and continue to do.
