Landlord and Tenant Bill, 1977: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Minister for Justice (Mr. Cooney)

When we adjourned the last day I was dealing with the compulsory purchase of fee simple and the constitutional aspects of it. There are other aspects, of course, concerning this which I would like to develop now.

It is frequently stated that the right to purchase the fee simple which was introduced in the 1967 Act has not been availed of to any great extent. There is a genuine difficulty in evaluating such statements. In the first place it is in the nature of things that a high proportion of transactions under the Act will never come to official notice. They are private transactions. Only those which have been the subject of some difficulty which needed solution by reference to the arbitration procedures provided for in the 1967 Act have come to attention. It is also true of course that even if the right to purchase the fee simple given in the Act were not availed of by people generally, this would not prove the Act a dead letter. The existence of a right can serve a useful purpose even if the right is not exercised. This may be particularly true in the case of ground rents where the existence of the right to purchase the fee simple may alleviate many people's dissatisfaction with the leasehold system itself. The tenant knows that he may exercise this right at any time in the future. The occasion might for instance be when he wishes to transfer the property to borrow money on it, to carry out a total reconstruction or at the stage when the lease is coming towards its end. In the latter case the tenant may be faced with a choice of buying the fee simple or renewing the lease at a higher rent.

We may speculate as to why the right to purchase the fee simple has not been availed of more fully. One of the reasons which has actually been adduced is that the legal expenses of purchasing were prohibitive. In some cases it appears that, on making inquiries concerning the matter from their landlords, tenants learned that the legal expenses of the transaction would be prohibitive and so were discouraged from exercising their rights.

I accept that there can in fact be cases where an intending purchaser can be prohibited or discouraged from purchasing his fee simple because of difficulties of this kind. It is for this reason that the Bill proposes a new procedure for the purchase of the fee simple. Under this procedure the tenant may apply to the county registrar who will, as arbitrator, carry out the full transaction. He will satisfy himself that the tenant is entitled to purchase. He will determine the purchase price and on receipt of the purchase money and whatever expenses are payable will give the fee simple to the tenant by way of a statutory vesting certificate. The purchase money will be lodged in court and the claims of the ground landlord and any other interests can be made against the money and the county registrar will pay it out of those interests as appropriate.

I think that this provision will meet the needs of people who genuinely want to buy the fee simple but who have been discouraged from doing so either by reason of title difficulties or by reason of vague fears of such difficulties and the likelihood of heavy legal costs.

Whether or not the provision will lead to a spate of purchases is another matter. I hardly think so, largely because there is room to believe that not that many tenants are really interested in buying out at all. Indeed I have been informed that one landlord who some time ago offered his tenants the fee simple for seven years' purchase plus £25 for legal expenses had only a negligible response. I am nevertheless convinced that the availability of this service will be fully justified even if it is availed of only by tenants with difficulties out of the ordinary.

I should like to say at this point that the intention is to confine the use of the new statutory vesting procedure to the fee simple of dwellinghouses. This is of course logical. I propose to introduce an amendment on Committee Stage to make this clear.

As I have mentioned, the Bill provides for arbitration by a county registrar as the method for the settlement of questions or disputes, with a right to appeal to the Circuit Court against any arbitration decision. This arbitration procedure is being extended to all the matters with which the Bill deals apart from certain specified exceptions as, for example, where the question of the award of damages arises under section 23 (4) of the Bill. In that type of case the determination of the matter is being reserved to the Circuit Court. This means that the simple and inexpensive procedure for the determination of disputes under the system of arbitration that has been operating satisfactorily under the 1967 Ground Rents Act will now be extended to all the landlord and tenant matters that are covered by this Bill.

The question of principle involved in solving disputes of the kind in question by arbitration rather than by court proceedings—including the constitutional aspect of the matter—was adverted to in the debates on the 1967 ground rents legislation. The general feeling then was that matters of this kind are in fact appropriate for arbitration and for arbitration by county registrars in particular. Nevertheless, in extending the use of arbitration into other areas of landlord and tenant, I have been careful to keep this question of principle in mind and it is for that reason that the Bill reserves to the courts the particular matters I have mentioned.

The remaining class of change which I mentioned initially as coming within the objectives of this Bill consist mostly of extensions or clarifications of the rights already available to tenants. These are based on recommendations of the Landlord and Tenant Commission contained in their two reports. There is quite a number of these changes and they are indicated in the explanatory memorandum which accompanies the Bill. They are essentially changes which we can discuss more fully on Committee Stage. I hope Deputies will not mind if I confine myself to the most important of them at this stage. If any of the changes which I do not touch upon now happen to be of particular concern to Deputies I shall of course try to deal with them in my reply to the debate on this Stage.

The Bill proposes a number of important changes of this kind which will affect the rights of occupational tenants, that is, those who do not own the "bricks and mortar". A tenant of this class is being given the right to a new tenancy of a dwelling after 20 years' continuous occupation by himself or by his predecessors in title. At present, there must be 30 years' continuous occupation without any sale of the tenants' interest during that period.

Another change is that where the arbitrator awards a new tenancy it will be for a 35-year term, unless the tenant opts for a shorter term, instead of the 21-year term which is usually granted by the court under the existing law. This change is related to the proposal that the rent on renewal will be subject to review at the instance of either the landlord or the tenant at intervals of seven years instead of remaining unaltered throughout the term of the new tenancy.

The commission recommended the introduction of such reviews to cater for the inflationary situation and the longer terms now proposed.

Such reviews are, of course, now common in tenancies negotiated between tenants and landlords. Another change relates to the time when a new tenancy may be obtained. Under the 1931 Act the right to a new tenancy can arise only in or about the time of termination of the previous tenancy. The Bill proposes that a new tenancy may be claimed and granted as soon as the necessary conditions are satisfied, although the new tenancy is not to commence until the existing tenancy has terminated.

A further change concerns compensation for improvements. At present an occupational tenant is not entitled to such compensation where he has failed to serve the appropriate advance notice on his landlord. The Bill proposes that compensation be allowed even where the notice has not been served, provided the landlord has not been prejudiced by non-service.

In addition to these changes the conditions for the grant of a new tenancy are being relaxed. It is proposed, in particular, that the right to the new 35-year tenancy should be given to business tenants even where there has been a break in the required period of use for business, if it would be reasonable to disregard the break.

These are the main changes proposed in relation to occupational tenants. As regards ground rent tenants the right to purchase the fee simple given by the 1967 Act is being extended to new classes of lessees and yearly tenants. Those include, in certain cases, persons holding under leases for 50 years or more, instead of 99 years or more as at present. Moreover, the right to purchase the fee simple and the right to a reversionary lease are generally being made alternative to one another. One effect of this will be to extend the right to a renewed lease to certain classes of lessees and yearly tenants who, under the 1967 Act, have only the right to buy the fee simple. The provision will not enable tenants who are given the right to a sporting lease under the 1971 Act the right to buy the fee simple.

Also in relation to ground rent tenants a change is proposed whereby improvements carried out by the tenant will be taken into account in determining the new ground rent on the grant of a reversionary lease. At present such improvements count only in the case of occupational tenancies. Perhaps I should mention at this stage that while the creation of new ground rents on dwellinghouses is being prohibited under the Bill, this prohibition will not extend to ground rents under reversionary leases. Such an extension of the prohibition would amount to forcing tenants to buy out their ground rents rather than exercising the alternative right to get a renewed lease.

One of the changes proposed is exceptional in that it is not in relief of tenants but is in the public interest in the broader sense. This proposes to enable a landlord, in certain circumstances, to have an occupational tenancy in obsolete buildings terminated before the lease expires. The Landlord and Tenant Commission in their first report describe the situation which sometimes arises when a sitting tenant will not give up possession except for exorbitant compensation or cannot be induced to move at all. In this way he can hold up redevelopment or reconstruction schemes for whole areas. The Bill proposes to allow the arbitrator to make an order terminating a tenancy in a case like this but goes on to provide very stringent safeguards for the tenant. First, it must be reasonable to make the order terminating the tenancy. In addition the relevant tenancy must have not less than three years and not more than 25 years to run. Compensation must be paid for loss of the tenancy and for any further hardship to the tenant. The tenant is to be paid a share of the financial benefit that accrues to the landlord from obtaining possession of the property. At least six months' notice of termination must be given to the tenant and every termination order would be subject to a stay of one year. In every case the landlord will be required to have a development scheme that includes the property and for which planning permission has been granted and either the buildings themselves must be obsolete or they must be in an obsolete area as defined in the 1963 Planning Act.

There is one other change which I feel I should mention. The Bill proposes to rectify what one might describe as technical anomalies which have arisen under the present law. These are essentially of two kinds. First, tenants using premises for charitable and sporting purposes do not at present qualify for the right to a renewed tenancy because use for such purposes does not amount to use for business. The Bill proposes to amend the definition of "business" so as to include such purposes so far as concerns occupational tenancies. The second kind concerns particularly the Office of Public Works who, under the present law, are not entitled to renewal of their tenancies because they are not themselves actually in occupation of the premises. The Bill also proposes to rectify this defect.

These then are the main changes proposed. As I have indicated already the Bill provides for a number of lesser changes. Because of the technical and detailed character of these I feel that it would not be appropriate to comment on them at this stage.

To summarise, this is what the Bill proposes to do. It would give us a comprehensive modern statute containing the bulk of landlord and tenant law. It would up-date that law in a number of very important respects. It would put an end to future ground rents on dwellinghouses. It would effectively give the right to the perpetual renewal of long leases, with the alternative right of outright purchase of the fee simple, to ground tenants of every known kind. It would extend to landlord and tenant matters generally the simple and inexpensive system of arbitration by county registrars that at present operates only under the 1967 Ground Rents Act. It would enable tenancies in obsolete buildings to be terminated so that development can proceed.

Before I conclude I should like to pay tribute to the Landlord and Tenant Commission whose work laid the foundations for the proposals for change contained in the Bill. I think it is only fitting that an acknowledgement of their work should go on the record of this House and that, in particular, recognition should be extended to the work of Mr. Justice Conroy, the chairman of the commission. Judge Conroy has during the past quarter-of-a-century acted most ably as chairman of a series of commissions dealing with various landlord and tenant matters. No one could be better fitted to guide to a successful conclusion the work of the present commission. The commission are currently concerned with a review of the only remaining law of landlord and tenant which falls outside the scope of this Bill. That consists of the non-statutory and statutory provisions dating from before the inception of the State. Should legislation be needed to implement the commission's recommendations in this area, it will complete the task of which this Bill is the major element. We would then have a full, modern and thoroughly researched code of landlord and tenant law.

I trust that the Bill meets with the approval of the House and ask that it be given a Second Reading.

Mr. G. Collins

This Bill is an extremely important piece of legislation from a social and legal viewpoint because unlike a lot of legislation it affects a great number of people from all parts of society. It is important that both sides of this House have an opportunity to discuss the contents of this Bill in full Committee of the House so that when it is finally passed it will truly reflect a modern social approach to the law of the landlord and tenant from the point of view of both the landlord and the tenant. This legislation can be truly described as one of the most important and difficult pieces of legislation ever to come before this House. It is desirable legislation because with the changes in modern times legislation dealing with the very vexatious relationship which in the past always existed between landlord and tenant should be reviewed in the light of modern circumstances and updated where possible.

Many problems in the earlier part of this century between landlord and tenant gave rise to the welcome introduction of the 1931 Landlord and Tenant Act. This Act clearly set out the rights of the tenants as far as buildings were concerned. In fairness to it and to those who were responsible for the Act at the time, it worked well. It regulated two situations. In many cases at that time the position was unsure in relation to buildings and lands which were leased, and people were not protected when the lease expired. The 1931 Act secured the position for the tenant, and the landlord had to give a new lease if the premises were occupied for business purposes. If residences were involved only certain categories were protected because most of the residential tenants at that time had the protection of the Rent Restriction Acts. In that Act provision was made for the man who owned buildings but only leased the land on which they were erected. It gave him rights to a new lease on expiry of the tenancy. In both cases which I have mentioned under the 1931 Act whether the lease of a building or land, in the absence of an agreement, the court was authorised to fix the terms. The situation dealt with under the 1931 Act existed until the 1958 Act was introduced. This was an extension of part of the original 1931 Act as far as leases and ground rents were concerned.

The 1958 Act was a step forward keeping up with the times. It broadened the scope of the term "building" and "lease" and thereby extended protection to a greater number of people. It also reduced the proportion of the market rent to be reserved in the lease. The 1931 and the 1958 Acts in their day were desirable but with the passing of time changes became necessary. A movement grew in the early sixties for the abolition of ground rents and Fianna Fáil as a political party seeking to represent as many people as possible, set up the Ground Rents Commission. As a result of a report by this commission the Government introduced the 1967 Landlord and Tenant Bill. Many people held the view, and I share it, that this Bill was a great step forward. Its principal provision gave the tenant in most cases the right to buy out his ground rent at a fair price, which in the absence of agreement could be determined by the county registrar. The 1967 Bill could be described as a major breakthrough, but again with the passage of time certain shortcomings became apparent, which could not have been catered for when the Bill was introduced. At that time and even now we are convinced that this type of legislation must be constantly reviewed because of the changes in economic circumstances and so on. Naturally, certain new problems would arise as a result of the administration of existing legislation. Conscious of the problems that came to light as a result of the passage of time, as a result of flaws and loopholes in the Bill the Fianna Fáil Government at the time under the then Minister for Justice, Senator Brian Lenihan, set up the Landlord and Tenant Commission under, as the Minister has just said, the chairmanship of Judge Charles Conroy.

Like the Minister, I want to pay a those who served with him on the public tribute to Judge Conroy and Landlord and Tenant Commission for their tremendous work in this very delicate and sometimes emotional area. Their contribution is appreciated by everybody. The terms of reference of that commission at the time were to inquire into the working of the law relating to landlord and tenant other than the Rent Restrictions Act, 1960, and to recommend such amendments in the law as the commission thought proper, and they were to furnish an interim report on the provisions relating to the grant of new tenancies under Part III of the Landlord and Tenant Act 1931, and on any other aspects of the law which in the opinion of the commission should be given priority.

A third heading was subsequently added to the terms of reference, namely they were to investigate and report on the following questions: (a) whether any leaseholders other than those given the right of reversion of the lease by the Landlord and Tenant (Reversionary Leases) Act, 1958, should be given such rights; (b) whether any leaseholders other than those given the right to purchase the fee simple by the Landlord and Tenant (Ground Rents) Act, 1957, should be given such rights.

The commission, after much work and great effort on a voluntary basis, reported to the Minister for Justice, Deputy O'Malley at that time, and certain amendments such as the creation of a new type of lease were introduced. That gave rise to the Landlord and Tenant (Amendment) Act, 1971, which extended relief to certain categories not covered at the time in the legislation which existed and had particular relevance to the people involved in the Sandycove Proby Estate. The commission reported in full and subsequently Deputy Desmond O'Malley, as Minister for Justice, had legislation drafted which was in itself extremely complex. He did not get the opportunity of introducing it into the House. Since the present Minister for Justice has had his portfolio and in particular since I became spokesman for my party in this area, the Minister will be aware that on any occasion that I would have the opportunity I would call for the introduction of the legislation which we have before us. I am glad it is here now for what is in it, and there is a lot in it. I hope by the time we are finished with it and in particular on Committee Stage that this Bill will be much improved as a result of the many amendments, which I believe are reasonable and reasoned. I know how reasonable the Minister can be sometimes. I am sure he will see the validity of the case which I am going to make for the amendments which I have no doubt he will accept.

One of the principal provisions of the Bill as it stands at present is an extension of the role of the county registrar in the operation of the Act. We see in it the elimination of certain impediments in former legislation and a widening of the scope of the categories who would benefit. It aims, as the Minister says, at reducing legal costs. I hope that it will achieve that aim. The Bill codifies and consolidates existing legislation and repeals the 1931 and the 1968 Acts, the 1971 Landlord and Tenant Act plus section 4 of the Rent Restrictions Act, 1960, and section 13 of the Rent Restrictions (Amendment) Act, 1967.

The Bill also makes provision for a periodic review of rent during the term of the lease. This is a big step forward. We have a seven-year term now instead of 21 years. The suggestion has been made to me and possibly to the Minister that even seven years might be too long. This could be looked at again and perhaps a five-year term considered. We will put this to the Minister during the course of the debate. Presently when the courts are fixing rents for 21 years they are surcharging by as much as 50 per cent in recognition of inflation. Perhaps that percentage increase surcharge will be increased as things are going because if you are trying to strike a rent for 21 years allowances must be made for that. With the periodical review the courts will fix more moderate rents in the knowledge that the rents will be coming up for review after a short period.

With regard to the section of our community who have a special interest in ground rents the position is now, as a result of this legislation, that more people can buy out their ground rents than heretofore and the county registrar is given wider powers to facilitate easier and cheaper purchase. This is what the Bill sets out to do and I hope it can do it. I want the Minister to understand that I am not knocking the Bill in any way, but I have doubts and reservations as to whether what the Minister hopes or aims to achieve in the Bill will be realised.

The Bill provides that no new ground rents can be created. That is a big step forward and one with which this party are in full agreement. We have been committed to it for a considerable time. There is disappointment that the acceptance of the principle of the abolition of existing ground rents is not in the Bill. It is fair to say that those involved in this area had great hopes that this would be catered for in the Bill, particularly having due regard to the statements made in recent times by certain members of the Government. Deputy Richie Ryan, T.D., now Minister for Finance, in his time described the payment of ground rents as a medieval anachronism and a private tax by the wealthy on the poor. The present Minister for Local Government, Deputy Tully, has described the system of payment of existing ground rents as an abomination. Having heard such definite statements from two prominent members of the Government when they were not in Government, those who are very closely interested in this legislation believed that when given the opportunity these two important men in their own political parties, Labour and Fine Gael, would come up with some scheme or system to help get rid of ground rents as they are, together with the prevention of the creation of further ground rents.

The whole question of the success or failure of the ground rents part of the Bill depends entirely on whether or not the county registrar's office, which is going to have a greater job of work than heretofore, can handle the additional work. Legislation enacted into law can work only if it is able to work. I am not setting out to point-score but in recent times we have had legislalation from the Minister for Justice on behalf of this Government which was enacted but has not been put into operation. I am thinking of the Criminal Law Jurisdiction Act, one Bill which was nine months here. I am making a comparison——

Mr. Cooney

There is not any comparison.

Mr. G. Collins

There is. I will make my point now and the Minister might agree with me. I am talking about the implementation of legislation once it is enacted. There is no point in having legislation here like the Landlord and Tenant Act enacted if the implementation of it hinges on the county registrar's office and cannot be implemented or put into operation if the county registrar's office is not geared to do the work. That is the point I am trying to make. I am sorry if I made it in a confusing way. I did not mean to do that.

At this stage the Minister and the Government should spell out clearly what is to be done for each county registrar in this regard. This Bill protects the State. I wholeheartedly support anything the Minister or the Government can do to protect the State. In the past, the State failed to get a new lease within the terms of the Landlord and Tenant Act, 1931. The Minister is protecting the State as a tenant. Whereas on the one hand the State is being protected as a tenant, on the other hand the State is not giving the same protection to its own tenants. It protects itself as a tenant, but its tenants are not protected. If I am wrong perhaps the Minister will correct me, but if I am right perhaps he will say why the State's tenants should be excluded from the protection of the Bill. From my reading of the Bill there is no compensation from the State to its tenants if the lease is not being renewed.

On Second Stage it is possible to deal with this Bill in a very general way only. In his speech this morning and three or four weeks ago when he started to introduce the Bill, the Minister dealt with it very generally. He was wise to do that because, from the very nature of the Bill, unless one dealt with it very generally it would be very easy to become bogged down in specifics. We do not want to do that at this stage. This is an extremely complex Bill. Part I deals with preliminary matters, as all Bills do, such as interpretations, and provisions for making regulations, and so on.

Part II deals with the jurisdiction of the county registrars. This is a most important part of the Bill. When one reads it in conjunction with the rest of the Bill one realises that the county registrars are given wide-ranging powers they did not have heretofore. At the moment they have to arbitrate on matters such as whether people have the right to purchase their ground rents and what price they should pay for it. These powers are now very much widened and they now have the power, which is dealt with in another part of the Bill, to issue vesting certificates when they are satisfied a person has the right to the freehold. They have the power to decide the sum of money he will pay for it and the costs and other peripheral matters.

Under another part of the Bill they also have the power to decide whether a person has the right to a new lease and what rent he should pay for it. This is a new departure because, heretofore, it was a power held only by the courts. One can see therefore that the county registrars will have a much greater workload imposed on them. Under section 73 the registrar has power to issue the vesting certificate vesting the fee simple in the lessee free from encumbrances. That sounds simple enough but it is not that simple because the county registrar will have to be satisfied that the notices served by the lessee on his immediate lessor and the notices served upon the superior lessor are being served on the proper people. He will have to identify the owner of the freehold and subsequently pay that money to him, or portion of it, to the intermediate lessors.

This entails an investigation of title and the county registrars are not very well equipped for this increased volume of work. That is why I say the Minister has an obligation, during the course of the debate on this Bill, to tell the House what proposals he has for restructuring the county registrars' offices so that the Bill will work as smoothly as we would all wish. There is no point in introducing a Bill with such far-reaching effects on landlords and tenants unless the machinery for carrying its provisions into effect has been properly set up. It should be set up in advance and not afterwards. I hope I am not labouring this point but it is the key to the success or failure of the Bill. This is something which strikes one on reading the Bill and it must be dealt with at an early stage.

The Bill does something else very important. It repeals the 1931 Act, the 1958 Act, the 1967 Act, the Landlord and Tenant (Amendment) Act, 1971, and the Rent Restrictions (Amendment) Act which I mentioned. As one goes through the Bill, one sees how the repealed Acts are incorporated in this Bill. In all fairness to the Bill as a whole, one's reaction to it is that it is a good thing that it consolidates all the landlord and tenant laws and makes provisions in relation to ground rents.

Part III of the Bill deals with the right to a new tenancy and incorporates a lot of the old law with various changes. We can have more discussion on these changes on Committee Stage. Part IV deals with reversionary leases and incorporates the old law under the Landlord and Tenant (Reversionary Leases) Act, 1958, with various extensions. Part V deals with sporting leases and incorporates the provisions of the Landlord and Tenant (Amendment) Act, 1971, again with various changes.

Part VI is a very important part of the Bill. It deals with the right of a person to purchase the fee simple of his or her property. It incorporates the Landlord and Tenant (Ground Rents) Act, 1967, and extends it considerably and deals with the county registrars' right to issue a vesting certificate vesting the fee simple in the tenant and the cost of acquiring the fee simple. The Minister said the cost of acquiring the fee simple will now be cut down. I hope that is true. I should like the Minister to say how the cost will be cut down under the present procedures. Is he saying the State will bear the cost of the research which the county registrar may have to do, or appoint somebody to do it for him? Is he saying that in the case of arbitration it will not now be necessary for persons seeking arbitration to engage legal advisers? I should like to know how the Minister hopes to keep costs down. I put forward these questions for comment by him.

Part VII deals with apportionment of rent in the case of intermediate lessors and superior lessors and incorporates, again with extensions, part of the Landlord and Tenant (Ground Rents) Act, 1967. Part VIII deals with covenants. This, too, is a very important part of the Bill because, under its provisions, all covenants, with the exception of certain covenants dealing with amenities and such things as rights of way, and so on, will cease. Part IX deals with compensation. This, too, is an important section. There is compensation for "improvement" and it incorporates part of the repealed legislation with extensions and modifications.

It is fair to say that the most important part of this area of the Bill is section 108, which prevents the creation of future ground rents in the case of ordinary dwellinghouses. This is a big step forward and something we have been pressing for. It meets a growing demand from lessees over the years. When this Bill was circulated it was popularly, but incorrectly, described in the press as the "Ground Rents Bill". It is not a "Ground Rents Bill" because the part of the Bill dealing with ground rents is a small section of the entire Bill. It is wrong to describe it as such. Certainly, the main volume of interest as far as the public are concerned deals with the ground rents section and for their benefit it is no harm that it is spelled out clearly what is in it for them. We should also spell out what is not in it for them, particularly with regard to ground rents.

The Minister stated that the Bill, as far as ground rents are concerned, brings about the prohibition of the creation of new ground rents, and that is fair enough. He also told us that it brings about the consolidation of statutes in relation to landlord and tenant, the increased arbitration powers for county registrars, the extension of the right to purchase ground rents and the hope for a reduction in the legal costs. They are all welcome features of the Bill, but as welcome as they are they can only be effective if they are going to work. What will happen to a lessee who is entitled to and wishes to buy out his ground rent? Must he pay the costs of the arbitration, as suggested in section 15 (1)? Will he be liable for the landlord's costs in arbitration proceedings under the same section? Is he also liable for the costs and other expenses of the landlord? Over and above all these costs is he not also liable for his own costs? Under the Bill will the person who wants to buy out the lease be caught for four sets of costs and expenses? If the Bill is meant to reduce costs and make it possible for people to buy out their ground rents there is a doubt, and the Minister can readily see that, if the person involved must pay four sets of costs.

It is nice to say in the introduction of a Bill that it is hoped to make it cheaper for people to buy out their ground rents but in practice this might not necessarily be true. Another part of the Bill which causes concern is the exclusion of State and local authorities from it. That was an undesirable exclusion and this aspect was completely ignored by the Minister in his opening address. That is an important matter because thousands of people are involved. The Minister should consider dealing with householders who have the State or local authorities as landlords under the Bill. Why are they excluded? If the ordinary householder is to enjoy the benefits which the Minister says will be conferred on him on the passing of the Bill, then the question must be asked why those benefits are not being conferred on all householders. Is it the intention of the Minister to allow the State and local authorities to retain freehold title on houses erected in the past and on houses to be erected in the future? Is it the Minister's intention to assist local authorities by avoiding future complications in relation to land title? If that is so this is discriminatory against one section of the community. The Minister is aware that local authorities have great powers in their own right and are well equipped to look after their own interests. That was a serious omission from the Bill and I should like the Minister to refer to it when replying. He can be assured that I will introduce an amendment for Committee Stage to rectify this matter.

The Bill also proposes that a reversionary lease will be denied to a lessee where the local authority intends to develop the land in question, according to section 45. That is a serious omission. The Minister should consider allowing such a reversionary lease which would allow the prospective lessee to realise the full commercial value of his property. If the lease is not given the property would only have a minimal market value. This is a denial of such a person's rights and safeguards under the Constitution. I should like the Minister to refer to this when replying. The Minister for Posts and Telegraphs—since the Minister for Justice mentioned the question of the abolition of ground rents and compensation—according to a speech reported in a daily newspaper said that there was a call for the termination of the landlords' interest in ground rents without compensation. That is not correct. I met representatives of ACRA on a number of occasions and discussed the question of ground rents in full with them, but at no time was it ever represented to me that they wanted the abolition of existing ground rents without compensation. There is a general and widespread desire on the part of householders to own the land on which their houses stand and this can be done by the abolition or the purchase of the ground rent. It is important that the Minister should deal with this matter.

The Minister has told us that the right to purchase a ground rent by a householder has not been availed of to any great extent and that there is difficulty in evaluating the demand that will be created. I disagree with the Minister because I believe there will be a big demand. It is because I believe the demand will be great that I say the county registrars' offices might not be able to handle the demands made on them.

The Minister is in a very strong position to find out from the clerks of the various courts the number of householders who have been prepared to face court proceedings in order to register their protest in opposition to the ground rent system. I am told by some of these people that they underwent great strain and anxiety during the course of these proceedings in an effort to highlight their dissatisfaction with the legislation as it stands. Naturally they used the opportunity to awaken the interests of the Minister and the Government to the problem and hoped by doing this that they would speed up the introduction of this long awaited legislation. I believe there are thousands of these people and if they went to the county registrar's office there would be an immediate bottleneck.

In the past there were a number of reasons why under existing legislation those who wanted to buy their ground rents did not do so. One of them was the excessive legal costs. We all hope these costs will be minimised as a result of this legislation, but we have yet to be convinced. A number of people who wanted to buy their ground rents did not avail of existing legislation because as a result of their agitation and organisation they were able to secure better terms for themselves by direct negotiations. Another very important reason the Minister might have been wrongly advised in this area is that a large number of householders in Dublin, Limerick, Cork, Galway, and recently in Castlebar, were supporting the campaign for the abolition of the ground rent system. They were holding back in the hope that by working together they would achieve more for their members. Now that the floodgates will be opened it is of vital importance that the county registrar's office will be able to deal with them.

I find one part of this Bill extremely objectionable and unnecessary, particularly in the year 1977. One of the features of the present leasehold system is a covenant in the average lease permitting the lessor to take eviction proceedings for arrears of ground rent. With the present value of houses and the importance of the house to the householder, physically, socially and emotionally, I am strongly of the view that it is a most draconian law that permits a lessor to evict a lessee for the sake of a few pounds due in ground rent. In case there is any misunderstanding on this point I want to make it clear that I have no objection to the lessor taking ordinary civil proceedings for the recovery of the debt but, in my view, it is wrong that, in the Republic of Ireland in 1977, this should happen. The Minister should have another look at this. The right to evict should not be given to the lessor. I would like him to comment on this defect in his reply. We hope to table an amendment on Committee Stage prohibiting such an eviction.

Section 75 is very important. It outlines the factors to be taken into account by the arbitrator in determining the purchase price of the fee simple. There are some significant omissions in this section which should be looked at very carefully in the hope that by the time this Bill is enacted into law we will have a good and desirable Bill which will be welcomed by all.

Firstly, there is no reference to the price being paid by the lessor in purchasing the land and the amount of the site fine paid by the lessee as well as the number of years for which rent had already been paid by the lessee. Secondly, there is no reference to the cost and expenses which may have been incurred by the lessee due to the failure of the lessor to maintain any local amenities, such as gardens, footpaths, playing spaces, which he had covenanted to do under the terms of the lease. Thirdly, there is no reference to the failure of the lessor to make any demand for payment of rent over a period of years.

This last factor is most significant. To my knowledge in a considerable number of places no demands have been made for ground rents for a number of years. I have been told that in one provincial city demands for payment of ground rents are issued in less than 50 per cent of the cases. The omission of any provision in the Bill to cover this type of case renders the Bill defective.

I have already referred to other obvious defects such as the burden of the cost falling on the lessee who wished to acquire the fee simple and the exclusion of State and local authorities from the Bill. Another defect is revealed in section 75 (g). The purpose of this section is that over and above other factors to be taken into account in determining the purchase price of the fee simple the arbitrator shall also take into account the costs and expenses which will be incurred by the lessor in investing the proceeds of the arbitration. Who suggested that this should be included? I fail to see the argument for it. It is wide open to abuse. Off the top of my head I could list a number of cases which would make it look very silly. If, for instance, the Minister was my landlord and we had come to a settlement for £500, and if he wanted to invest that money in South America, under this Bill I would appear to be responsible for his expenses to South America to invest that money. If that is so it could be a sure way of getting a nice holiday. As I said, I do not know why it is in the Bill because it is very wrong and I hope the Minister will deal with it in his reply. We will put down an amendment on Committee Stage.

There is no fundamental difference between the Fianna Fáil Party and the Government about the need for amending legislation on this very vexed question of ground rents, but there is a difference between us in relation to means. I believe this could be and will be a good Bill if the Minister accepts the many reasoned amendments we will put down on Committee Stage.

Mr. Briscoe

I would like to deal with the question of flatdwellers. This is something with which I understand the Minister is familiar because he met representatives of the Dublin Flatdwellers' Association. Recently our spokesman on Justice also met them, as did a number of other Deputies. The Minister is aware of what they are looking for. They expressed a certain disappointment that parts of this Bill did not contain matters which would be relevant to them. In all honesty I must say that I have not had a chance to study this Bill in detail. It is a very technical Bill and not being a lawyer I find it difficult to define what some of the sections mean. I should like to list for the Minister some of the problems of the flatdwellers. The Minister is no doubt aware of these problems but I feel that they should be listed for the record. First there is the question of security of tenure for law-abiding tenants. There is at the moment a feeling of great insecurity among many tenants of flats.

Mr. Cooney

I think it might be helpful to Deputy Briscoe if I were to indicate that the points which he is about to raise come more properly within the ambit of rent restriction law rather than within the context of this Bill.

Mr. Briscoe

That may well be, but it is after all a landlord and tenant Bill which we are discussing and surely this must affect the rights of flatdwellers. Let me list the points anyway and possibly they will be in-included in legislation on rent restriction.

They ask that a tribunal be set up to adjudicate on such matters as rents, repairs, and grievances generally of tenants and also of landlords. There is no doubt that there is a problem about unruly tenants and we are not making the case that the tenants are the only people who have rights. Flatdwellers are in the main people who are unable to buy their own houses and they have really no rights at all to protect them. We recognise that if the control over flats is too rigorous this may tend to cause a shortage of flats because people may not be inclined to put too many restrictions on their own properties. This could be the case where a landlord is resident. He could decide against offering accommodation which he might have offered in the ordinary way. The housing shortage could be aggravated to a great extent. However I feel that there are certain minimum standards which are required and which flatdwellers themselves would look for.

There should be a compulsory register of landlords. We have in the Dublin City Council a register of landlords and we have encouraged people to register their accommodation so that it can be inspected by Dublin Corporation to ensure that it is fit for human habitation. A large number of landlords have registered but there are others who have not bothered, including some of the biggest landlords in Dublin who own vast amounts of property. I think there should definitely be a compulsory register of landlords. There should also be compulsory provision of rent books. The feeling is that many people who are renting property are doing so unknown to the tax authorities. Very often flatdwellers can be disenfranchised. When the electoral register is being compiled a landlord may get his hands on the application forms.

Mr. Cooney

On a point of order, the Bill is to reform, consolidate and amend the law relating to landlord and tenant as contained in the Landlord and Tenant Acts, 1931 to 1971. Deputy Briscoe is referring to matters which come within the ambit of the rent restrictions code, referring principally to furnished premises.

I see. Will there be any opportunity at some future stage to introduce amendments in relation to the rights of tenants which might come within the ambit of the Minister's Department?

Mr. Cooney

The Deputy can put down amendments relating to this matter.

Mr. Briscoe

This is confusing. I am free to put down amendments about what I am discussing but I cannot discuss the matter at this stage. This is a very big Bill and I feel the plight of flatdwellers should have been dealt with in it.

Mr. F. O'Brien

I welcome the introduction of this Bill. There has been a lot of talk and there has been emotive agitation in recent years for this Bill, especially from private residents. Now that the Bill has been introduced I do not think it has the emotive appeal it had in the past. In some areas leaseholders were practically giving away ground rents but they would not be accepted.

The creation of new ground rents is very important. Both sides of the House should try and get this Bill through as quickly as possible. This will save quite a lot of money in relation to the creation of new ground rents.

The legal cost in relation to the purchase of existing ground rents has been a very big inhibiting factor for people not going ahead to purchase. Will the county registrars be able to deal with this matter now? Will there be new offices to deal with it or will it operate in the existing offices? Will there be delays in the purchase of ground rents? If more staff are required it is important that the county registrars have them because when this Bill is enacted there will be a big demand to purchase ground rents. I believe that additional staff will be required to deal with this.

The purchase of existing ground rents and the abolition of new ground rents is a very big step. Other sections of the Bill deal with sporting leases and reversionary leases. There have been some anomalies in this field. When the leases of business premises run out the owners are required to pay very large rents and this very often forces them out of business. This Bill will go a long way towards getting rid of the fears of people whose leases are about to run out. Those sections of the Bill to which I have referred are as important as the sections dealing with the elimination of ground rents. We are now getting to the stage where this Bill is meeting most of the fears people had in relation to the expiry of leases.

I am sympathetic to Deputy Briscoe's concern for the people in rented accommodation. We are all aware of the plight of some of those people in Dublin. I am glad the Minister indicated that a review is taking place. We will have to update legislation in relation to those people to ensure that justice is not alone done but is seen to be done for everybody.

This is a very technical Bill. One would need to be the proverbial Philadelphia lawyer to understand the provisions in it. The Minister's statement however sets out the Bill's purpose quite clearly. We have legislation going through the House which is bogging us down at the moment while this Bill has been sitting here waiting. During that time quite a number of ground rents are being created which impose a great penalty on people. There is consensus on this Bill. I ask Deputies on all sides to ensure that this Bill moves through all Stages as quickly as possible and that it becomes law in weeks rather than months.

Mr. R. Burke

The previous speaker asked in his concluding remarks for the speedy passage of this Bill. We all accept that legislation should be dealt with as speedily as possible in this House and the Seanad. This Bill is a very important element of social legislation because it affects every householder, builder and tenant. There are few sections of the community it will not affect. We have been entrusted by the electorate to look after their affairs so we should ensure that such a comprehensive Bill as this gets a very thorough examination, that every section is gone through line by line, word by word and that those of us in Opposition try to improve the Bill as it is introduced. Our spokesman on Justice, Deputy Collins, indicated that this party will introduce various amendments designed to improve this detailed Bill. We hope the Minister will accept these amendments.

The whole question of landlord and tenant relationship is a very difficult one and consequently it is necessary to have it constantly under review. This has been done since 1931 right up to the introduction of this Bill which is really a consolidating and codifying measure. There are many sections in the Bill dealing with every aspect of the relationship between landlord and tenant but it has been tagged in the newspapers and by commentators as being a Ground Rents Bill and it is on that specific matter of ground rents that I wish to speak. I think it is wrongly so tagged because there are many other very important sections in the Bill which will affect everybody in the community at some time in their lives.

There are two elements of the ground rent situation in the Bill. One deals with new ground rents. When the Government were seeking election four years ago one of their main promises to the electorate was that they would introduce legislation to ban the creation of future ground rents. On many occasions in the past four years we on this side of the House asked for the introduction of a simple Bill banning the creation of future ground rents. We introduced a Private Members' motion asking, among other things, for the introduction of such a Bill. The Minister consistently in the past four years said he would not introduce a separate Bill pending the introduction of the legislation now before us, the Landlord and Tenant Bill, 1977.

The effect of the delay in introducing a short, simple Bill banning the creation of new ground rents has been this. Taking the figures of the Minister for Local Government and his claim to have constructed over 25,000 houses per annum over the last four years, if we accept the Minister's figures—and I must say that I have distinct reservations about them—we end up with approximately 100,000 houses built.

Mr. Cooney

A fine record.

Mr. R. Burke

I said I did not accept the figures. I am just using them for the purpose of the argument. Assuming that about 25,000 of those were local authority houses not involving ground rents, it means that in the past four years while the Government delayed introducing a simple Bill banning the introduction of new ground rents, a Bill they were committed to introduce, approximately 75,000 new ground rents were created in their term of office. Surely that is not something to be proud of. The Minister should have accepted the advice of Fianna Fáil and introduced a short Bill on the lines we suggested. We would not then have the appalling situation of that number of new ground rents having been created.

Mr. Cooney

It is a pity the problem was left for us to deal with.

Mr. R. Burke

The second element in the ground rents question is the whole vexed question of existing ground rents and how to handle them. Proposals have been introduced in this Bill giving powers to the county registrars but I suggest that the Bill does not meet the legitimate demands made for the abolition of existing ground rents. The Bill has many weaknesses including the appalling weakness that there is still the right to take eviction proceedings by a lessor against a lessee. In a recent article I saw this described as a mediaeval barbarity and the language is not too strong to describe this right. Surely it is appalling for a man to buy a house with a lease at a ground rent of, perhaps, 5p a year, and if he refuses as a point of principle to pay the 5p per year under existing legislation, and under the legislation now introduced, the owner of the ground rent can take him to court and legally get an eviction order because the householder refuses to pay the ground rent. Surely this mediaeval barbarity requires to be dealt with. I hope when we introduce an amendment to remove this right from the lessor the Minister will accept it.

A more just and fairer system would be to give the right to the lessor to take civil proceedings for the recovery of debt. One could have the ludicrous situation even at the moment—because ground rents are still being created—of a man buying a house for £20,000 at £1 per year ground rent: he refuses to pay the ground rent and if the lessor takes him to court he could be evicted from his house because he refuses to pay £1 a year after purchasing a £20,000 house. Surely this is completely unfair, and I trust the Minister will accept our amendment on it on Committee Stage.

A campaign for the abolition of ground rents has been waged for many years, particularly by ACRA, on the principle that when a man buys a house he should also own the bit of land on which it is built. Ireland has had a long history of campaigning against penal land legislation introduced by a foreign power which unfortunately still remains in part of our country. Irishmen have always valued not only the bricks and mortar but the land on which the house stands.

This legislation does not go far enough to assist house owners to remove this mediaeval yoke of ground rents from around our people's necks. It was announced that the Bill would reduce considerably legal and other costs involved in buying out ground rents but section 15 imposes on house-owners the cost of the arbitrator, the landlord's costs, the landlord's expenses and their own expenses—four sets of expenses. The Minister blandly told us the purpose of the Bill is to minimise the costs of lessees. This cries out for clarification, which the Minister has dramatically failed to provide to date.

Another area in respect of which the Bill fails is in the matter of local authority housing. In my constituency of North Dublin two major estates have been developed by the Corporation. One is Donaghmede, an estate of 800 houses erected by one builder and sold to people nominated by the local authority. The Priorswood estate was developed by the corporation in the county area and the sites were sold off to builders who in turn sold the houses to people anxious to buy homes. On both estates there are ground rents. Under the 1967 Act it was not possible to buy out those ground rents because the ground landlord was Dublin Corporation. This legislation suffers from the same disability.

Mr. Enright

Does the Deputy think it would be a good thing to allow local authority houses to be purchased by speculators, millionaires? The reason for the retention of ground rents in those cases is to prevent local authority houses falling into the hands of speculators.

Mr. R. Burke

The people living in these two estates would be highly amused to hear themselves described as speculators and millionaires at a time when they are crippled by mortgage interest rates.

Mr. Enright

The Deputy missed the point.

Mr. Cooney

Deputy Burke is deliberately and grossly misrepresenting.

Mr. R. Burke

These people would be tickled pink. I want to see them have the right to buy out their ground rents.

Debate adjourned.

Business suspended at 1.30 p.m. and resumed at 2.30 p.m.

Dáil Éireann debate - Wednesday, 23 Feb 1977