asked the Minister for Local Government if he will arrange to dispense with ground rents in respect of all new local authority housing schemes.
Ceisteanna—Questions. Oral Answers. - Ground Rents.
79.
Ground rents of new tenant purchase houses are usually purely nominal sums—in many cases as little as 5p per annum—charged by local authorities to retain a lessor's interest and to ensure that any future development of the land is in the best interests of the community.
There are, however, tenant purchase schemes where rents of up to £18 per annum are charged as a method of reducing the amount of the deposit which the purchaser would otherwise be obliged to pay. I would see no objection to the local authorities concerned accepting higher deposits in order to reduce such ground rents to nominal sums, if the purchasers could afford such payments.
Is the Minister satisfied that it is necessary to charge a ground rent in order that the terms of the lease are complied with?
There is a nominal ground rent, usually of 5p per annum, and this must be charged. If there is no charge and if tenants purchase their houses two or three might come together and sell to a supermarket. If the 5p is charged the local authority have a right to decide what use it can be put to.
I am sure my colleague, Deputy Colley, could clear up this matter for us. I would have thought leases could be designed by a local authority that would protect the situation from the point of view of the local authority without charging ground rent.
That may be so but it is not my information. I am told it is necessary to have a sum paid in order to give the local authority the right to retain an interest.
A peppercorn would do.
Is there much difference between a peppercorn and 5p?
Is it possible for a local authority tenant to buy out the ground rent?
Does the Deputy mean to redeem it?
Yes.
In most cases the local authority impose it themselves. We are talking about ground rents imposed by the local authority and there should not be any difficulty in the authority making their own arrangement about something they imposed themselves.
Would the Minister agree it would be a proper thing to encourage local authorities to allow tenants to purchase out ground rents at a reasonable figure?
Not the nominal ground rent if there was a danger that the houses after purchase would be converted to something——
If the Minister is correct we will agree for the sake of his point that 5p per annum at least must be charged. Could they buy out the amount in excess of 5p per annum?
I am not aware of any case except where the other payment is made for the purpose of reducing the amount of the deposit. We are talking about two different things. The 5p per annum is a nominal sum for the purpose of keeping control by the local authority and I do not know of any case in which a greater sum is required to be charged. If the person has the money and is able to pay the deposit, the question does not arise.
Does the Minister consider that it is a good principle that tenants purchasing houses should be obliged to continue to pay ground rents to the local authorities——
I consider that 5p per annum——
I am referring to £5, £10, and £15 per annum.
If Deputy Molloy wants to know my opinion of ground rents, I think they are an abomination.
Then the Minister should not create any more.
I am informed that where they allow somebody to pay a sum per year which prevents people from paying a higher deposit——
That is unreal.
First of all, the Minister has said that the houses must be kept under local authority control. The Minister has said that the reason the nominal ground rent of 5p is there is that the local authority must have a say in the resale. The local authority are also the planning authority and no such supermarket in houses could emerge.
I could point out to the Deputy where things like that happened in almost similar cases.