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Dáil Éireann debate -
Wednesday, 7 Dec 1977

Vol. 302 No. 6

Landlord and Tenant (Ground Rents) Bill, 1977: Committee and Final Stages.

Question proposed: "That section I stand part of the Bill."

I wish to make a few points in relation to section 1, though I have not put down an amendment. I wonder whether the Minister would look at possible loopholes from the point of view of tightening up the Bill. It seems there may be loopholes which could be used to evade the spirit and the intention of this Bill which, as the Minister is aware, is accepted on both sides of this House.

It was suggested to me that there were some aspects of this Bill which might provide loopholes. There is no definition of the word "lease". I presume on that basis we go back to the definition of a lease in the 1958 Act, which is reasonably comprehensive, but there are a couple of items which possibly would not come under that definition. Reference has been made to me regarding fee farm grants. These are specifically referred to in the 1958 Act but there is a further reference in the 1967 Act which might give rise to some question on the point. I wonder whether the Minister is totally satisfied that fee farm grants will be covered by this Bill.

The Minister might also consider the possibility of a lease with a terminable annuity. This would be an unusual legal animal but I can see unusual documentation being produced in an effort to evade the terms of the Bill. This possibility should be borne in mind, that is, a lease with a terminable annuity which would not be rent. Another possible loophole which should be closed off if the Minister considers it necessary is in regard to a long lease with a large fine payable by instalments. This would not be a rent or an annuity but in effect it would amount to the same thing. There is also the possibility of a lease with what is known as mesne rates as opposed to a rent.

These are a number of points which the Minister might care to consider. I appreciate that the definition in the 1958 Act refers to rent or other return but the Minister might consider on Report Stage a tighter definition of the word "lease" in order to close off possible loopholes.

I want to refer to another definition in relation to flats. As the House is aware "dwelling" does not include a separate and self-contained flat but there appears to be no definition of "flat". Would the Minister consider it might be necessary? These are my only points on section 1.

I rise mainly to support Deputy O'Keeffe in his remarks in regard to flats. In the definition section dwelling is defined as not including separate and self-contained flats in premises divided into two or more such flats. I think it was Deputy Fitzpatrick who raised this on the Second Stage and I think the Minister undertook to reconsider it between then and the Committee Stage. It seems to me that there is some inequity in excluding flats from the provisions of the Bill. I am not so concerned about what are generally regarded as very exclusive flats but there is a movement towards the sale or buying of flats by retired people for various reasons. For health reasons they may want the services or amenities provided with such flats. It seems inequitable not to provide for the inclusion of flats in the Bill. I should like to hear the Minister on that point.

I thank the Deputies for their comments on the section. I am very conscious of the fears they have in regard to loopholes that might interfere with the spirit of the Bill. That would be undesirable in the extreme. The Bill has been given very careful consideration and detailed examination to try to block any possible loopholes and prevent any arising. Irrespective, however, of the examination or the work put into the preparation of legislation experience has shown that loopholes do appear. Sometimes they are quite serious, unfortunately. In recent weeks we have had notice in another area of a loophole that is causing much concern and about which we shall hear more shortly.

All possible consideration was given to the preparation of the Bill to prevent loopholes as far as possible. As regards the definition of dwelling, it is so defined as to provide for the specific exclusion of multiple dwelling buildings from the scope of the proposed prohibition on the creation of future ground rents, the exclusion, that is, of separate and self-contained flats in premises divided into two or more such flats. In recent years such flats have occasionally been bought and sold by way of leases that in everyday language would be called ground leases, leases where the fine for the grant of the lease effectively represents the purchase price and the lease is granted for a long term at a rent less than the rateable valuation or some other leasing arrangement with substantially the same effect. It is a moot point whether such leases or any of them could carry the right to purchase the fee simple under the 1967 Ground Rents Act, that is to say whether such leases can properly be called ground leases. Since the proposed prohibition on the creation of future ground rents is being confined to ordinary dwelling houses, it is not intended to interfere with transactions involving such flats. Whatever the position may be regarding the right to purchase the fee simple where such flats are concerned they are being specifically excluded in this Bill.

Regarding the definition of the word "lease" mentioned by Deputy O'Keeffe and Deputy Mrs. Desmond this is very clearly spelt out in the 1958 Act and section 5 of this Bill ties it up and makes it fairly tight. I am satisfied on the advice available to me that the Bill prohibits the giving of fee farm grants and this is as it should be.

There are a couple of other matters such as the types of possible loopholes. Obviously, this would require a little research and I would ask the Minister just to check and see that the items I mentioned are covered by the definition in the 1958 Act or if not, that a new definition be inserted.

I take the Deputy's point and the others which he mentioned including one which I think was described as a most unusual legalistic animal. I am quite prepared to check these out and if there is a loophole I shall do something about it in the Seanad. That applies to other matters raised also.

Question put and agreed to.

Amendment No. 1 is in the name of Deputy O'Keeffe. Amendments Nos. 2, 3 and 4 are consequential and we shall discuss Nos. 1, 2, 3 and 4 together.

I move amendment No. 1.

In page 2, subsection (1), line 19, to delete "a lease of land" and substitute "any provision in a lease of land reserving a rent".

The other amendments are consequential, as the Chair said, although there are some other points in relation to the other subsections to which we might return later. Perhaps I could deal with this particular point first as a separate issue. If I may say so, it is the main issue which I take with this Bill. I have put down these amendments and I am speaking to them but I am in no way critical of the present Minister because I accept that this Bill as drafted is taken mainly from section 108 of the Landlord and Tenant Bill——

Not really.

——as produced by the former Government with the addition of four amendments put down to that Bill by the former Minister. I mention that merely as background. I take issue with the idea as to how the job should be done. Section 2 provides—and this is the basic provision —that a lease of land made after the passing of the Act would be void if the lessee had these rights. It is the use of the word "void" and the consequences of this that I worry about.

If we try to achieve the desired results in the form of the present Bill it seems to me that there is considerable danger that the tenant or the lessee, the house purchaser, is the person who would suffer. I say this from my practical experience as a lawyer dealing with house purchase over quite a number of years. The normal procedure is that somebody buying a house enters a contract of purchase whether for lease or fee simple, but very often in the past a contract for a lease, plus a building contract. This contract usually takes at least six months or longer to complete.

The purchaser normally obtains sanction for a loan from a building society, county council or corporation. He does not actually get the loan until the house is finished and he gets his title usually by way of lease. Meantime, he is paying bridging finance. My worry and the reason I put down the amendment is that if we let the subsection stand and we declare that lease to be void, initially at any rate it is the house purchaser, the tenant who would suffer. It is all very well to say that the house purchaser has the right to acquire the fee simple under subsection (4). He can acquire the fee simple under the 1967 Act at the expense of the lessor. As the Minister is aware there is, as things presently stand, a very considerable delay in practice from the time the first notice to acquire under the 1967 Act is served to the day the lessee actually gets freehold title. My concern is that in the meantime the house purchaser, the tenant, would be paying bridging interest perhaps over a very long period, a year or so. In the meantime I am quite certain any lending institution would not give him his mortgage because the section actually declares that the title he got is void. A lending institution would, therefore, be made to give him a mortgage. It could be taken as a matter of practicality that that would not arise.

I appreciate that under the terms of this Bill the normal procedures will change and that it would be unusual rather than usual that this situation would arise. It could arise in the instance of a father who has property transferred to his son. It probably will not arise in the case of large-scale building developments but it could arise in many isolated cases. I would like to hear the Minister's views on this. I am not suggesting this amendment as a procedural point. I am suggesting it because I feel there is a grave, practical danger that house owners could be seriously inconvenienced and put to very considerable expense if this section stands making void the lease he would get.

I would be quite happy if the Minister would accept my point in principle and to have the matter go back to his draftsman to tighten it up, because I do not consider myself an expert at drafting. My proposal is that, instead of making the lease void, the provision in relation to rent would be rendered void. That would mean that the house purchaser would still get a valid title on which he could complete his purchase and his mortgage and, in addition, could also complete in due time the purchase of the free-hold. He would not be held up with the completion of his purchase and his mortgage in the meantime.

I have done some investigation into the background of this. There is a precedent for my suggestion. In the last century there was a regular procedure for granting leases for life at the end of which in many cases a fine would be reserved on renewal of that lease. In 1849 the Renewable Leasehold Conversion Act was passed, which was similar to the Bill we are now debating. That Act prohibited the payment of any fine on the conversion of a lease for life on its termination. The Minister might check the provisions of that Act to see if the precedents that are there might be useful in dealing with this particular problem. The basic point is the question of the principle as to whether the title the lessee should get would be void. I feel, as the section now stands, there is a danger of the baby being thrown out with the bath water. I ask the Minister to consider very carefully the invidious position a house purchaser might find himself in if this section stands as it is drafted.

The purpose of the amendments in the name of Deputy O'Keeffe is to delete the proposal in section 2 that would make void any attempted creation of a new ground lease of a dwelling house and to replace it with a provision that would simply make void the reservation of a ground rent in such a lease. This would mean that ground leases of dwelling houses could continue to be created as heretofore and ground rents, however, could not. During the course of the Second Reading of this Bill I made it clear that the purpose of the Bill is to put an end to the leasehold system so far as new houses are concerned and to ensure that in future owner occupiers of such houses will hold the fee simple, that is that they will be the full owners of their property.

Ground rent is an important component of the leasehold system that is being ended but it is not the only component. The house purchaser could still be bound by covenants imposed by the lessor and by holding for a term of years rather than forever would still be denied full ownership of his house if ground leases of new houses could continue to be created. Moreover, the simpler and less expensive system of legal titles to dwelling houses based on ownership in fee simple that the Bill as it stands would help to create would not be brought about.

I know the spokesman for the Fine Gael Party indicated in his opening remarks that he was speaking on the amendments rather than for them, that he wants to open discussion on the matter to see that we do not create more difficulties by the fact that we have new legislation. I should point out that those amendments would represent a policy that is at variance with the policy of his party, when in Government up to recently, in regard to the legislation which was then before the House. In section 108 of the Landlord and Tenant Bill, 1977, which lapsed with the dissolution of the last Dáil, the Government proposed, as my Bill does, to make void any future ground lease of a dwelling house and not merely the rent reserved in any such lease.

I feel, for the sake of putting the record straight, that I should say, arising out of one of the earlier remarks of Deputy O'Keeffe, that the Bill we are now debating is not exactly what his party were doing or what they proposed to do in the Bill which lapsed. There are three basic fundamental differences which, in fairness to all concerned, Deputy O'Keeffe must admit are in existence. While I am always ready and willing to give credit for achievement to members of any political party for whatever work they might do, I believe that is a two-way thing and the differences which I have in the Bill we are debating show clearly that my Bill—I am not trying to score any political points whatsoever on it—is a better Bill because it includes local authority housing. I am sure Deputy O'Keeffe will readily admit that the Bill which lapsed did not include local authority housing.

I am sure he will also agree with me that there is another fundamental difference in this Bill which was not in the Bill his party proposed to bring in. There is an extension in the type of leases which are to be prevented. As well as that, the Deputy will be aware that I have dropped a provision which would have avoided a lease of a non-dwelling which was converted to a dwelling for the simple reason that it would have led to many practical difficulties. I say that for the sake of the record without any political malice whatsoever, as I am sure Deputy O'Keeffe readily understands. Every person is allowed now and again to light up one's own candle particularly when there is every good reason why one should.

For the sake of the record I might mention that during the Second Reading debate practically all speakers from the Opposition benches went to great pains to tell me that I inherited this legislation. I inherited a good share of it but the Bill before us contains basic fundamental differences which give me a claim on it too. I am now making that claim as strongly as I can.

The amendments in the name of Deputy O'Keeffe to this section strike at the basic philosophy of the Bill in which the Government are giving full ownership to people of their dwellings and are not merely removing the financial consequences of the leasehold system. I am satisfied that this is what is intended. Perhaps, having heard me now, Deputy O'Keeffe will be prepared to concede and will realise that acceptance of his amendments would amount to a basic fundamental policy difference from that which his party had in mind when they brought what we shall call the mother Bill before the House in February or March last.

I accept what the Minister has to say regarding the parentage of the Bill. One might say that the "father" of the Bill was Senator Cooney but that the Minister has made a further addition to it.

I want to say genuinely that I am trying merely to make a positive contribution to the Bill and to ensure that it is as good as possible.

I accept that.

The basic point is in connection with the use of the word "void". The Minister says it is the policy of the Government to try to ensure that house owners are freehold owners of their property. I subscribe totally to that view but, on the one hand, what is proposed here—I accept that the Minister's predecessor was the author of the relevant phraseology but presumably he, too, was advised by the people who are advising this Minister—is that what the householder would be getting is a void lease with a right to acquire freehold. On the other hand, I am suggesting that the householder would get a valid lease with no entitlement on the landlord to enforce the rent and, in addition, the same right, to acquire the freehold. In accordance with the section as drafted the householder would be getting a bad title initially but with a statutory right to freehold whereas under the system I am suggesting he would get a good title initially with the additional bonus that he would not have to pay any rent and would have the same entitlement to acquire the freehold at the expense of the lessor.

If one compares the two systems he will realise that both achieve the same result. I am suggesting that the house purchaser under the system I propose, by avoiding the use of the word "void" in relation to title, would be far better off while the fundamental principle of the Bill would not be affected in any way. The purchaser has the same right under subsection (4) to get the freehold at the expense of the lessor. That would apply in both cases.

I urge the Minister to give serious consideration to what I am saying in the interest of house purchasers. I am speaking as a practical lawyer, aware of the difficulties that can exist for someone trying to buy a house and paying for bridging finance for possibly an extended period. Under the system proposed in the Bill there could be much more serious financial obligations for a house purchaser during the period when he has a bad title and is awaiting freehold.

The Minister said that there are aspects of leaseholds other than the aspect of ground rent. There is, for instance, the question of covenants, but here again covenants may attach to a freehold conveyance. In some cases house owners would probably wish this to be the case because if there are covenants restricting a householder in an estate, for example, from doing something, he will be aware that all the other householders in that estate are restricted similarly and to that extent he will regard himself as being protected. I have known house purchasers to inquire whether there was some restriction that would prevent, say, a betting shop, from being set up next door. In other words, people try to ensure that there will be some protection for their investment. However, in a freehold conveyance it is possible to put in covenants. There are fine differences between what one might call positive covenants and negative covenants. It is my recollection that in a freehold conveyance, negative covenants were always considered to be enforceable but perhaps that is something the Minister might check.

I do not consider it correct that covenants would be possible. There-fore, on both counts I suggest strongly to the Minister that it is more in the interest of a house purchaser to adopt my suggestion. The same result would be achieved because there is entitlement in subsection (4) to acquire free-hold for nothing. It is the delay I am concerned with. On that point, there was a good section in the former Minister's Bill which would have allowed for an easier system of acquisition. This provision is not included here but hopefully, it will be included either in the new Landlord and Tenant Bill or in some other measure. As of now the procedure for purchasing freehold can be a very long drawn out and complicated affair. Not only is there the problem of tracing the title owners or of tracing all the intermediate titles but of tracing all the mortgages on those interests.

I urge the Minister strongly, not in any political sense but having regard to the practicalities I have enunciated and in the interest of house purchasers, to consider the system I propose.

It is difficult to say to someone who is making a case for an amendment which one knows one cannot accept that his arguments are good but that is the situation in this case. I am saying that very sincerely. The Deputy's arguments are good but in fairness if the amendments were accepted they would have very grave consequences so far as the Bill is concerned.

If the Deputy is anxious about the effect of a voiding on a tenant who receives a void lease, he might have a look at subsection (4) of section 2 where the person in question is given a right to a fee simple. I have all the assurances that it is possible to have that in regard to the way I am approaching the problem the tenant is protected fully.

Deputy O'Keeffe's arguments against voiding the lease centre around the problems arising if a person chooses to ignore the law. Unfortunately his solution to that problem would do severe harm to the Bill and would probably destroy the Bill. My solution is to give the tenant rights to safeguard his position under section 2 (4). I readily admit that there will be conveyancing difficulties, but all those involved in this type of work should as quickly as possible take whatever practical steps are necessary, to avoid giving leases which are void. The Deputy will probably agree with me, when I am not prepared to sacrifice the principles of the Bill by accepting his amendment.

I am not pushing it, but I would ask the Minister to give some further consideration to the question of a void title with a right to acquire the fee simple on the one hand and a good title to the householder with the same right to acquire a fee simple.

I am satisfied with it, but I am quite prepared to concede to the Deputy because of the way he made his case and the arguments used that the matter will be fine-combed as it were, and if I believe a change is necessary I am prepared to initiate that change in the Upper House.

Amendment, by leave, withdrawn.
Amendments Nos. 2, 3 and 4 not moved.

I move amendment No. 5:

In page 2, subsection (4), line 37, after "lease" to add "but such right to acquire shall not apply where permanent buildings have been erected in breach of covenant".

This is an addition that I am proposing. It is purely a procedural point that I am not unduly worried about. It occurred to me that a problem could arise in relation to subsection (4). It is merely not giving the lessee the right to acquire the freehold at the expense of the lessor, where he puts up permanent buildings in breach of a covenant. I can envisage a situation where a lease could be given for a specific purpose, maybe for an industrial purpose, and there could be a provision that a dwelling-house would not be erected at all. It would seem to be wrong that if the dwelling-house in question is put up in breach of covenant, that the provisions of section 4 should apply to the title in that case.

The part of this Bill that we are talking about is extremely complicated. It could be regarded as one of the most complex pieces of legislation that could come before the House in any Bill. I am afraid this amendment is unacceptable for valid reasons. The first reason relates to the case where the building lease has been given before this Bill has become law and that lease contains a covenant against the erection of any further buildings on the land. The lessee under the building lease in breach of that covenant erects a further dwelling-house—for instance, on the land—and after the Bill has become law he sells that new house and site by way of a sublease. Section 2 (4) of the Bill is designed to protect the purchaser of that new house. If this amendment were accepted the purchaser of that house in the case described would be deprived of that protection.

The case that the amendment appears to be designed to cater for is the case where a lease of vacant land is made and the lessee in breach of a covenant in the lease erects a dwelling-house on the land. This case is catered for by section 2 (3) of the Bill which, quite properly, gives no relief to the lessee in such a case. It is very easy to misread this section but perhaps the Deputy would agree that the case he is trying to cater for is already catered for in subsection (3). I believe that Deputy O'Keeffe's amendment would leave a gap where a genuine tenant would be unprotected although the buildings were put up in breach of covenant not by him but by an intermediate landlord. The reasons why the amendment is unacceptable are weighty in that we would be creating extra difficulties.

I am not pushing it.

Amendment, by leave, withdrawn.

Amendment No. 6 in the name of the Minister. Amendments Nos. 7, 8 and 9 are related, so they may be discussed together.

I move amendment No. 6:

In page 3, to delete subsection (5), lines 1 to 12, and to substitute:

"(5) (a) Where, immediately before the passing of this Act—

(i) a person holds land under a lease for a term of not less than ninety-nine years, of which at least fifty years are unexpired, and

(ii) permission exists under Part IV of the Local Government (Planning and Development) Act, 1963 (including permission granted on an outline application under regulations made under section 25 of that Act) for the development of the land, wholly or mainly by the construction of dwellings,

that person shall, during the period of one year after such passing, have the right to acquire under the Act of 1967 the fee simple in the land and any intermediate interests therein, except in a case in which he has entered into an enforceable agreement with another person for the assignment to that person of his interest under the lease or for the grant of a lease for a term of not less than ninety-nine years, in which case the latter person shall during that period of one year have such right.

(b) Section 18 (1) (b) of the Act of 1967 (which refers to the maximum purchase price) shall not apply in any such case.".

This amendment involves a substitution of a new subsection for the present subsection. The requirement in the present provision to hold under a lease for a 99-year term is being modified to provide that the lease must have at least 50 years to run. In addition to a developer or builder who holds land under a lease benefiting from the provision, such a person will also benefit if he has an enforceable agreement for a lease without actually having obtained the lease itself at the time the Bill becomes law. The sub-section in the form proposed in this amendment makes it clear that the required planning permission must exist at the time the Bill becomes law. The subsection in the new form proposed makes it clear that outline planning permission will satisfy the planning permission requirement.

As regards the modification of the requirement to hold under a lease for a 99-year term to provide that that lease must have at least 50 years to run, the Parliamentary Committee of the Incorporated Law Society have argued that, while a leasehold term for a full 99 years may not be necessary to secure finance for private housing, a term of at least 50 years is necessary. It follows that the relief that the sub-section proposes for house builders and developers should be confined to cases where the relevant lease has at least 50 years to run, and that the right to acquire the fee simple should not be given in cases where there is no reasonable possibility that the dwelling-houses could be built on the lands. The Parliamentary Committee of the Incorporated Law Society also argued that such a developer or builder up to the present has quite often proceeded with his development on the basis of an agreement for a lease before he has obtained the lease of the lands. To deny the right to acquire the fee simple in such a case would be as unfair, and could have the same dislocating effect, as to deny that right to a developer who has already been granted a lease at the date on which the Bill becomes law.

A change of a minor nature is that the subsection as proposed to be amended now makes it clearer than does the subsection in the Bill as intiated that the planning permission that is required must exist at the time the Bill becomes law, that is that this requirement would not be satisfied if planning permission were obtained only during the period of one year after the Bill has become law. A further change of a minor nature proposed is to allay certain doubts that have been expressed. The subsection now makes it clear that the requirement to have obtained planning permission will be satisfied if outline planning permission has been obtained.

It is only right that the Parliamentary Committee of the Incorporated Law Society should be thanked for their careful examination of the Bill at such short notice. It is again only right and fair that it should be said that a practical outcome of discussions with them has resulted in this amendment being put down by me.

In relation to the amendment by the Minister, which is rightly the substitution of a new sub-section, I accept entirely that it is a tighter and better subsection as amended by the Minister, and I accept it in principle. I would like to deal with a few points in relation to it.

Under amendment No. 7 I want to add the words "or housing authority" after the word "person". It may be that this situation is covered under the Interpretation Act. I do not know whether the word "person" would cover a housing authority under that Act. If it does not, I suggest that the power under this subsection should be extended to the housing authority. We have two situations that would have to be faced by the housing authority. The first is that they are being given power under this Bill—in fact they will be obliged in future—when making a transfer order to convey a free-hold title as opposed to a leasehold title, and a possibility might be that they would not have the freehold title. I want to be sure that the housing authority would be in the same situation as a private individual.

The second and more important matter is the sale of serviced sites by housing authorities. Here again, I want to ensure that the housing authority would have the same power as a private individual. The Minister is aware that it is common practice nowadays for a housing authority or local authority to acquire land, lay on services and sell those serviced sites at reasonable cost. This is a very worthy type of development, but there might be complications in relation to the filling of a freehold title by that local authority or housing authority because under the 1967 Act the right to acquire the fee simple does not arise until the property is built on. This may be a groundless fear on my part because the housing authority would probably have certain compulsory powers under other sections, but I raise this matter so that the Minister can have a look into it to ensure that the local authority would first of all be able to give free-hold title on sale to tenants; and secondly, and more importantly, would be able to give freehold title in the sale of serviced sites. That point relates to amendments Nos. 7 and 8.

The only other point on subsection (5) which concerns me is the right given during one year to acquire under the 1967 Act. I am not concerned so much with the right, with which I totally agree, as with defining exactly when that right would expire in effect. If during the term of one year after the passing of the Act the leasehold owner serves a notice of intention to acquire the fee simple as opposed to going through the whole procedure of acquiring fee simple, will he come within the terms of this subsection? It is to clarify that point that I put down this amendment because, as I mentioned when discussing an earlier subsection, the procedure for acquisition under the 1967 Act is cumbersome and slow. If this subsection were interpreted as meaning that all that procedure had to be gone through and the conveyance completed within that year, then this subsection would be worthless. Apart from anything else, these procedures can be slowed up and delayed in many cases. In many cases there are searches for people, notices have to be served, some cases have to go to arbitration, and so on. I would like to be sure that the right given would be fully satisfied if the person took the first step only during the year, that is served the notice of intention to acquire. If that is the case possibly some slight change should be made to cover that point.

Going back to definitions, what would be the situation if the person in question held the property under a fee farm grant? Would this qualify as being a lease of not less than 99 years? It should but I am wondering whether it should be made clearer.

Another question that occurs to me is this. What would happen in the future at the expiry of this year? Suppose somebody has development plans in respect of which he has a leasehold title and he has not got planning permission at this stage. He may have applied for it or he may not apply for it until some time in the future. If he gets his planning permission, would the Minister give some consideration as to how he could be helped? Under the 1967 Act if in the future he got planning permission he would not have the entitlement to acquire until the houses were built. On the other hand, he could not give leases to prospective purchasers because such leases would be void. In addition he could not give the freehold because he would not have it. It is a vicious circle.

This is an aspect that should be considered. As I see it, the danger is that a certain amount of land that might be available for future development could, in a sense, be sterilised, that it could not be sold. Perhaps the Minister would bear those points in mind before the matter is considered on Report Stage.

I welcome the inclusion of subsection (5). The new section tightens up considerably on the existing one. The insistence on planning permission being in existence at the time of the passing of the legislation is a good one. I welcome also the provision in relation to outline planning permission.

Amendment No. 9 refers to the serving of notice within one year. This Bill is a highly technical one and those of us who have no legal training may find it difficult to comprehend fully. Public representatives know of the many difficulties that come to light when trying to trace ground rent landlords. ACRA are very concerned about this matter and have put forward a solution. It is that, where the whereabouts of the ground rent landlord are not known and where the matter cannot be proceeded with, it should be sufficient to put a public notice in the newspapers stating that the tenant has the intention of buying the ground rent and that any owner or any person having title should make a claim within a period of a year. Perhaps the Minister would have some comment on that? In view of the difficulty that exists in tracing landlords and also taking account of the long and protracted legal proceedings, it should be sufficient to serve notice of intention to purchase. I would ask the Minister to accept amendment No.9.

A number of queries have been raised on amendments Nos. 7 and 8 and I shall try to answer them. With regard to the amendments themselves, I am satisfied they are not necessary. It is only in very exceptional circumstances that local authorities acquire or hold land on a leasehold basis. In that event, if the authority want to do so and if it is necessary, they can acquire the fee simple by means of a compulsory purchase order. Deputy O'Keeffe made this point.

The Minister for the Environment and officials in his Department are quite happy with the safeguards available under existing legislation. Also I am advised that the definition of "person" includes "housing authority".

With regard to the sale of housing sites by local authorities sold under section 38 of the Housing Act, I understand there is no problem in giving the fee simple. With regard to fee farm grants coming under section 2 (5), if the land is built on the grantee has the right to purchase the fee simple under the 1967 Act. If it is not built on, he is covered by section 2 (5). Such a lease is defined as including a fee farm grant in the 1958 Act.

Deputy O'Keeffe spoke about a vicious circle being created and we are still trying to unravel that one. I gather it is catered for in the 1967 Act——

How does that happen? The right to acquire would not arise until the buildings had been put up. I do not see how it could be catered for in the 1967 Act.

If the building is there it is catered for in the 1967 Act. If the building is not on it, it is catered for under this legislation.

It would be if the planning permission and the 50 years were there at the time of the passing of this legislation. My question referred to a situation where the planning permission is not in existence on the passing of this legislation. The Minister may not be getting the point. What about a case of somebody who had not planning permission at this stage but who got it in the future? If he wanted to develop the property he would not have the right to acquire under the 1967 Act because it was not built on, and he would not have the right to acquire under section 2 (5) because planning permission did not exist at the time of passing of the legislation. The property could not be developed. The person had only a lease to give but under this legislation he could not give a lease and would not be able to get the freehold.

The Deputy is quite right, but that is a situation that must be examined. It is one that we might want to avoid.

Of course we want to avoid the creation of further ground rents, but surely the Minister is not suggesting that we want to take from potential development land the possibility of development? Surely he is not suggesting we should sterilise it from a legal point of view? Surely the Minister will agree that if such land gets planning permission—for instance, for building houses—that it should not be taken out of circulation? This point might be considered. I do not see a ready answer. The only answer in the future may be to extend the right to the acquisition of the freehold.

In a genuine case right now that person has the right to get planning permission because this Bill is not law yet. He could move now and apply for planning permission.

He could go helter-skelter and he might not have his planning permission for the next three months.

I accept that that could quite well happen. Despite the fact that this Bill, in this particular form, appeared only in recent times it is also fair to say that the mother or father Bill, as we might call it, is out since February and there was ample warning given at that time. The Deputy will remember that in the mother Bill, if I might call it such, there was a time limit of 12 months. Is that not correct?

It might have been under the ministerial amendment which was put down.

There was a time limit then; I am reasonably sure there was. But, in view of the complexity of the matter, I am quite prepared to have another look at it and if needs be, seeing that there is no great difference between us, if I can I will do something about it in the other House.

The last point on this subsection relates to my amendment No. 9. It is a question of the words "the right to acquire". I make the point that this could give rise to doubt in the future. Is a person entitled to exercise this right by serving the purchase notice under the 1967 Act, or would he have to go through all the formalities and get his conveyance within the year? If that were the situation this subsection would end up being worthless.

Under amendment No. 9 Deputy Desmond raised this point also. The amendment, if accepted, could be misleading. It is a question of statutory interpretation here. The amendment is unnecessary because it is already the case that, under the proposal as it stands in section 2 (5) (a) —a proposal that will not be affected by the amendments of section 2 (5) (a) I am moving—the period of one year after the Bill becomes law, a person seeking to acquire the fee simple under the 1967 Act serves notice under section 4 of that Act of his intention to do so. Clearly the actual conveyance of the fee simple might not be completed within the period of one year; but there are ample precedents, even under the Landlord and Tenant Acts themselves, where such a time limit requires not that the proceedings should be completed within the time limit but that they should formally have commenced within the time limit —not necessarily be completed but have commenced. There is the example of section 9 of the Landlord and Tenant (Amendment) Act of 1971 and section 3 (6) of the 1967 Ground Rents Act itself. One might also say section 41 of the Landlord and Tenant Bill of 1977, as proposed by my predecessor, that lapsed.

Apart from being unnecessary, the amendment could be misleading, since by distinguishing the service of notice of the intention to acquire the fee simple from the acquisition itself, it would if accepted imply that not only would a person have to serve that notice within the period of one year but would also have to complete the acquisition within the year. Apart from being impractical this is not what is intended.

Again this was a point raised by the Parliamentary Committee of the Incorporated Law Society who discussed the matter, and I am satisfied that the law as it stands caters for the position the Deputy is trying to bring about.

If the Minister is satisfied that the person conforms to the subsection merely by serving the purchase notice, I am happy. Obviously this is what the Minister intended.

My only purpose in putting down this amendment was to put this in explicit terms. My amendment was to ensure that it included "provided he had served notice of intention to purchase the fee simple under the Act of 1967 within the said period". It appears to me that the words "right to acquire" might give rise to some difficulty. If the Minister is totally satisfied on this point and is advised to that effect, I will be quite happy to withdraw the amendment.

I am satisfied beyond any doubt that the position is as I outlined. It is not always easy to write things in the explicit fashion one would desire because, by so doing in this way, one might very well be drawing attention to other sections that might not be explicitly drafted. But I should like to assure the House that the position is as I have stated.

Amendment agreed to.
Amendments Nos. 7, 8 and 9, inclusive, not moved.

I move amendment No. 10:

In page 3, between lines 17 and 18, to insert the following sub-section:

"(7) Where a lease is rendered void under subsection (3)—

(a) a sublease of any portion of the land shall not be terminated thereby, if the buildings referred to in subsection (3) are not constructed, either wholly or in part, on that portion,

(b) the person who would, but for this subsection become entitled by virtue of the voidance to the possession of the land comprised in the sublease shall become entitled to the reversion on the sublease and to the benefit of the rent reserved by and the covenants and conditions contained in the sublease, and

(c) the sublessee shall, from the date of the voidance, hold the land demised to him at whichever of the following rents is the greater—

(i) the rent reserved by the sublease, or

(ii) such portion of the rent reserved by the avoided lease as is fairly attributable to the land comprised in the sublease.".

This amendment is designed to cater for a situation the possibility of which was raised in the course of considering observations on the Bill, again furnished by the Parliamentary Committee of the Incorporated Law Society. It could happen that a long-term lease of land is made after this Bill has become law and that a sublease is made of part of the land held under that lease. After the land held under the sublease has been developed —say, by the construction thereon of industrial premises—the lessee under the original lease construct houses on the remainder of the Under section 2 (1) of the Bill this could render the entire lease void.

Sections 20 and 21 of the Landlord and Tenant (Reversionary Leases) Act of 1958 contain provisions to protect any sublessee whose lease is a building or proprietary lease in a case where his lessor's lease is terminated for non-payment of rent, breach of covenant and so on. In such a case these provisions of the 1958 Act have the effect of making the building lessee or proprietary lessee, as the case may be, a direct lessee, of the lessor who gave the terminated lease. The amendment now proposed would give the same protection to an innocent sublessee in a case where a lease was rendered void under section 2 (1) of this Bill.

I was concerned about this question of the possibility of subleases. The Minister's amendment seems to cover the point and I will be quite happy to accept it.

Amendment agreed to.

I move the following amendment to amendment No. 10:

In paragraph 7 (b) of the amendment, to insert a comma after the word "subsection".

Is it agreed to insert a comma?

Amendment, as amended, agreed to.
Question proposed: "That section 2, as amended, stand part of the Bill."

There was one point about which I was concerned and which did not arise in the course of discussion on amendments. It was section 2 (3). The Minister in his Second Reading speech referred to this section and said that if a long lease of land is made in the future, if that land has a house built on it subsequently, and the total area of the land is such that all of the land is subsidiary and ancillary to the house, then that lease will be rendered void by section 2 (3).

On a point of clarification, I do not see anything in the subsection which refers to the length of the lease or to the total area of the land and I am wondering if there appears to be some conflict between the wording of the subsection and the Minister's statement.

If land comprising or intended to comprise the site of a dwelling-house were disposed of by way of lease after this Bill becomes law, such disposal would be valid so long as no dwelling-house were actually erected on the land and this could give rise to attempted evasions of the intended prohibition. Moreover, apart from the question of attempted evasion, genuine doubt might be entertained as to the effect of the prohibition in subsection (1) in the case of land held under a lease made after the Bill becomes law where the erection of a dwelling-house was contemplated. Accordingly, both for the removal of doubts and to prevent evasions, subsection (3) makes it clear that the proposed prohibition does indeed extend to such cases. The lessee in such a case would have to acquire the fee simple in the lands before undertaking any construction of a dwelling-house.

There seems to be a simple way around the provision— instead of making a new lease assigning the interest. I think the point made by the Minister will meet the position.

Question put and agreed to.
Section 3 agreed to.
Question proposed: "That section 4 stand part of the Bill."

In the main, I would be quite happy with this section but ACRA have told me they were wondering whether the period of 25 years is too long and whether the Minister might consider reducing it. They appreciate the reasons for the restriction.

Basically, that would be a matter for the Minister for the Environment.

Accepted, but the 25 years appears in the section which states that special conditions shall apply for a period of 25 years. I am speaking about that period of 25 years.

I understand 25 years is an improvement on the existing practice in the Department of the Environment. I take the Deputy's point and I shall have another look at it.

It is a question of freeing the tenant purchaser at an earlier release date.

The Deputy is probably aware of the many difficulties that could arise in shortening the period, difficulties within the area of responsibility of the Minister for the Environment.

Question put and agreed to.
Section 5 agreed to.
Title agreed to.

I was hoping the Minister might give further consideration to a number of matters, particularly the point in regard to voiding the rent as opposed to giving the tenant purchaser a dud title. As a practising lawyer I am concerned about the possibility of house purchasers getting into serious difficulty over this and I understood the Minister was prepared to consider the suggestions I made. He promised to look into other matters as well—the vicious circle, for instance—and I cannot see how the Minister can consider these points if we take the remaining Stages now.

Where there is no basic difference between the spokesmen for the Opposition and the Minister, the practice is to make whatever amendments may be necessary or desirable in the Seanad.

I was not aware of that.

I accept that. Were I to accept the amendments proposed they would interfere basically with the principle of the Bill and cause extreme difficulty. None of us would condone a bad title, or anything like that. I gave my reasons for not accepting the amendments. The points raised will be given very careful consideration and, if I can meet them, I shall certainly introduce amendments dealing with them in the Seanad.

Bill received for final consideration and passed.