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Dáil Éireann debate -
Wednesday, 8 Mar 1978

Vol. 304 No. 7

Landlord and Tenant (Ground Rents) (No. 2) Bill, 1977: Committee Stage.

Section 1 agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."

I note that the Minister has provided for the legislation to come into operation on 1 June 1978. I am wondering why there is a specific date. Why not let the Bill come into operation immediately on its being passed? I raise the question merely on the basis that the Bill may go through quickly in which case there would be a delay before the legislation comes into operation.

I welcome the Deputy's remark about the Bill going through quickly so far as this House is concerned and I trust it will have a speedy passage in the other House also. However, even the Deputy will accept that there is only another week or so left this session and that we will be well into the next session before any real progress is made on the Committee Stage of the Bill. I expect it will be very late in the next session before the Bill goes through the Seanad. That is the practicality of the operation of the Oireachtas. I understand that the date has to be fixed for the purpose of allowing time for the preparation and promulgation of the necessary fees order in compliance with section 23, subsection (2), and the prescribing of the necessary forms for the operation of Part III. This was the reason for giving ourselves time before the coming into operation of the legislation.

Is the reason, then, in order to allow time to organise fees—additional fees under section 23 (2)?

I understand from the Deputy's question that the matter of fees is causing concern.

That is the impression I got from the Minister's reply.

A definite date is considered very desirable.

I am not making a major point of this but I take it from the Minister's comments that it will be around the time specified that the Bill will be passed.

The fixing of the date is for the purpose of giving a definite time.

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

There are a few points on this section that I should like the Minister to clarify. The first relates to the definition of "dwelling" which does not include a separate and self-contained flat. I merely wish to inquire into the Minister's thinking as to why self-contained flats should not come within the provisions of this Bill. As he must know, the tendency nowadays is for more people to purchase flats as opposed to living in flats on a tenancy basis. It would appear right and proper that owners of self-contained flats have the same protection as the owners of houses.

The word "dwelling" is defined so as to exclude self-contained flats in premises divided into two or more such flats. However, such dwellings are not being excluded from the right to acquire fee simple. They are excluded only from the application of the special scheme in Part III which is designed specifically for dwelling-houses.

There is a parallel provision in the Bill to prevent the creation of future ground rents and future leases of self-contained flats are not being prohibited in the Bill. In recent years such flats have on occasion been bought and sold by way of leases which in everyday language would be called ground leases or leases where the fine for the grant represents effectively the purchase price of the leases granted for a long term at rents less than the rateable valuation of the flats. It is a moot point whether any such leases could carry with them the right to purchase fee simple under the 1967 Ground Rents Act, that is to say, whether such leases can be properly called ground leases. There is a widely-held view that there can be no such situation as four flats built over one another and all being held in fee simple in relation to one area of ground. Since this Bill is being confined to ordinary dwelling-houses it is not intended to interfere with transactions involving such flats whatever may be the position regarding the right to purchase fee simple. Accordingly, they are being excluded specifically. I accept that the flat phenomenon is becoming more common but there are fairly big difficulties in regard to fee simple in this area.

There is a good deal of sympathy for flat dwellers. Perhaps the question is much broader than that of their entitlement under this legislation. Would the Minister be prepared to accept that the whole question of flats in relation to the specific point of the owners entitlement to buy out and also the whole broad question of flat dwellers needs to be looked at? Would the Minister be prepared to look into the question of safeguards for flat dwellers? If he is prepared to give these assurances the point need not necessarily be covered in this Bill.

I accept the validity of the case put forward by the Deputy and would be prepared to see to it that the point raised by him is examined by, perhaps, the Law Reform Commission or the Landlord and Tenant Commission. It is a very wide area and requires the utmost consideration.

I am glad that there appears to be general agreement on this important point because the position is that with the growth of cities there is a growing situation of there being a substantial number of flats as distinct from dwelling-houses. This may be very marked in this city having regard to the hoped-for building up of the inner city area. What Deputy O'Keeffe is asking for will be necessary to make it possible for flat dwellers to obtain fee simple.

The average working-class person is finding the cost of housing in Dublin prohibitive and is unable to acquire the deposit and the necessary loans from local authorities or building societies to enable him to purchase a house. Because of this it is important that there be a situation in which people are encouraged to purchase the fee simple of their flats. This is of the utmost importance. We have an idea of weekly tenancy in regard to flats, but with the growth of cities in the future we will have a situation where flats will be owned outright. It should be possible to buy the fee simple for flats and this would encourage people to live in inner city areas. I am glad that the Minister recognises that this aspect must be examined. It has a lot of merit in the long term.

I want to query the definition of "immediate lessor" from a legalistic viewpoint. It is stated that "immediate lessor" means the person for the time being entitled to the next superior interest in the premises. It is the word "premises" that I am anxious to have investigated from the point of view of making sure that the Bill is correctly phrased. I notice that in the rest of the Bill the word "land" is used. This arises in section 8 and in other parts of the Bill. Why is the word "land" not used in relation to this definition as opposed to the word "premises"?

With regard to the definition of "immediate lessor", this is being defined so as to include the immediate landlord in the case of a non-leasehold tenancy as well as the immediate owner in a case where the occupier or the person in possession has only a statutory tenancy. I am advised that this is a drafting device to cater for the fact that under the proposals in Part II of the Bill non-leasehold yearly tenants, including statutory tenants, are in certain circumstances to have the right to purchase the fee simple.

That would be the point of other contracts of tenancy. I am querying the use of the word "premises" in this definition as opposed to the word "land" throughout the rest of the Bill. Why is the word "land" not used instead of "premises" in this definition?

I am advised that there is not a specific reason why "land" is not used in this case.

Perhaps the Minister will note the point; it is not a contingent one.

I accept that and I will examine the point raised by the Deputy. If it is necessary to do anything about it on Report Stage I would be prepared to do so.

I should like to refer to the definition of the word "notice".

"notice", in relation to the acquisition of the fee simple, means, where notices are required to be served under section 4 of the Act of 1967 on more than one person, the first served of those notices;

What is the purpose of that definition? I fail to comprehend fully what the Minister has in mind by that definition and the words "the first served of those notices". It possibly relates to the fact that under the 1967 Act one served on one's immediate lessor and there was an obligation to serve on superior interests and on mortgages. Is the explanation that it relates solely to the first notice on the immediate lessor to the exclusion of other parties? It is not very clear.

Notice is defined to mean the first served of the notices required under section 4 of the 1967 Act. Section 4 provides that a person who intends to purchase the fee simple under that Act must serve a notice in the prescribed form of his intention to purchase on all persons holding a superior interest in the land or owning an incumbrance thereon. This is a drafting device to get over the difficulty for the purposes of sections 10, 15 and 17 of determining the date of that notice when more than one notice is served.

Would not it be clearer if we had a definition confining it to serving notice on the immediate lessor as opposed to other interested parties?

Possibly, but we are satisfied that this is the proper way to do it.

I do not want to press the point unduly.

We will have a look at it, but we are satisfied.

We envisage that people who may not be lawyers will be using the Act and it should be as simple as possible while at the same time covering all points.

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

I oppose this section because I believe that the Bill should bind any Minister of State or any Government Department affected. I believe it is wrong that this Bill binds private individuals and companies but prevents any Government Department or Minister from being included. It is stated in the explanatory memorandum that section 4 provides that the proposed Act will not bind the State and I should like to outline why I feel this is wrong.

The Board of Works own many houses throughout the country and many people who work for them live in these houses and pay weekly, monthly or yearly rents. Because these people are employees of the State they are specifically excluded from the provisions of this Bill. A garda could move into a Board of Works house and live there all his life and after his death his widow could find herself unable to buy out the fee simple and in the long term she may not be able to remain in the house. The Land Commission are similarly excluded. The Land Commission are a body who lease or grant land to farmers. Why can they do this with land and why is a farm dwelling house excluded? Perhaps I am reading something into the Bill that is not in it and I should like the Minister to clarify the matter. When a farmer obtains an allotment of land from the Land Commission, he pays it off over a number of years and eventually he buys it out rent free and he has his own fee simple in the land. However, it is curious that the house is excluded in such a case and this is not logical. The same situation applies with regard to the Department of Health. In many instances doctors live in houses provided by the State, they pay rent and rates but suddenly they discover they cannot buy out the ground rent and the fee simple. The Minister should give serious consideration to this matter.

The reaction of one of my constituents who may own a few houses from which he obtains a small yearly income will be that the Dáil has gone after the person who has a few private houses whilst specifically excluding every Minister and Government Department. The Minister should delete the section.

In support of Deputy Enright there are some additional points I should like to make. It appears that this section could operate as a hardship in certain circumstances. Let us take a situation where a State body acquires property subject to the lessee's right of the householder. We would have the situation that the lessee prior to the acquisition by the State would have had a right under the Bill but as a result of the purchase by the State he would have lost his right to buy out the freehold. It appears wrong that somebody who enjoyed the protection of the legislation could have lost it as a result of the acquisition of the freehold by the State. It also appears unjust in a situation where the State itself granted a building lease either before or after the passing of this measure but because of this section the householder is not entitled to buy out the freehold.

It has been suggested that if, as a matter of public policy, the Minister considers that the State should be exempt from the provisions of this Bill the exceptions should be specified and equitable and just reasons given. I put it to the Minister that there seems to be a change of heart on his part in relation to the section because on 23 February 1977 the Minister had a few comments to make about a similar provision in an earlier Bill. At column 165 of the Official Report of that date he stated:

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 the same protection to its own tenants. It protects itself as a tenant, but its tenants are not being 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.

It appears to me that the Minister had the same view a year ago which we are now putting forward. Deputy Enright has made cogent points in favour of tenants of the State which I have been anxious to support.

Similarly, I would urge the Minister to give serious consideration to amending this section. He may consider there are specific cases where this should not operate—if somebody was a tenant in a military barracks, I could envisage some reason on the grounds of security—but as a broad exclusion it does not seem to be justified. If we are to give protection to the tenants of private landlords, is there any reason on a broad basis for not extending similar protection to the tenants of the State?

Heretofore it was generally accepted that the State was not bound by statutes whether passed before or after the Constitution of 1937 unless so provided by the statute in question expressly or by necessary implication. On this basis no express provision was made in the Ground Rents Act, 1967. As the House knows, recently this view has been called into question and, accordingly, it has been decided that an express provision should be included in the Bill that the State, the Commissioners of public Works or the Irish Land Commission will not be bound by its provisions.

As is the present position under the Acts relating to landlord and tenant matters and under this Bill, the State will continue to be entitled as tenant to the benefits of the legislation. The effect of the provision is that a ground rent tenant whose landlord is the State, the Commissioners of Public Works or the Irish Land Commission will not be enabled as of right to acquire the fee simple. Tenants of the Commissioners of Irish Lights and of harbour authorities are put in the same position under section 16 (2) of this Bill.

The main reason for exempting the State from the obligation to transfer the fee simple is that the State is not involved in the business of leasing land and is a lessor only as an incidental aspect of holding land for public purposes. To enable the tenant to acquire the fee simple in such land would give him freedom to engage in developments that would be basically undesirable in relation to the public purpose for which the land is held. Whenever the State can divest itself of land it does so and this is particularly true where the land is to be used for dwellings. The trouble is that in pursuance of this policy the State has allowed some lands to be developed that are associated with other activities of the State and the public interest requires that some control be exercised over the use of these lands. These include Defence lands and airport lands. Sometimes the parties have entered into such arrangements on the clear undertaking that the State may repossess the lands if required for national purposes.

I want to make it very clear that I accept that the State should not be given any privilege in this regard which cannot be fully justified in the public interest. Accordingly, I am having a detailed study made of all leases given by the State as lessor to see whether in the case of dwellings the State should be bound. I hoped it would be completed in time to put down an amendment on Committee Stage if warranted. This examination is taking longer to complete in some Departments than was envisaged. If it discloses that the exemption of the State can be dispensed with, suitable amendments will be moved in the Seanad. I am sure Deputy Enright will be glad to hear that, and Deputy O'Keeffe will not be unduly worried that I am having a change of heart.

I should like to point out that what the Deputy attributed to me as saying as reported at column 165 of the Official Report of 23 February was in relation to a similar clause in the Bill which my predecessor representing his party in Government had hoped to introduce. If it can be done without. I will introduce an amendment to meet the point. I understand some of those who have been consulted about this detailed survey I am having carried out are favourably disposed to what I have in mind. As soon as the study is completed, when we get to the Seanad some time next session I will be quite prepared to table an amendment.

I am glad to hear from the Minister that he is sympathetic——

I am sorry to interrupt but I do not think this Committee Stage will be finished this session. Perhaps we could table an amendment on Report Stage in this House. I give notice to the Chair now as we must do. Notice must be given of an amendment on Report Stage during Committee Stage.

On a point of order, I was under the impression that, once a matter was discussed on Committee Stage, a further amendment could be put down on Report Stage dealing with the same specific point. Is that not correct?

A ministerial amendment, yes, or any amendment arising out of Committee proceedings. If something is discussed at length on Committee Stage it is in order then to put down a further amendment.

Perhaps I was wrong in my understanding of it. If something new is to be considered for amendment one must give notice to the Chair.

It must have been discussed on Committee Stage to be in order on Report Stage.

I know people living in property owned by the Office of Public Works. The Bill refers to the Commissioners of Public Works in Ireland. The Minister is a countryman involved in rural politics and he knows the situation. The number of dwelling houses owned by the Office of Public Works is quite enormous. The Minister dealt with land. I am not referring to land but ordinary dwelling-houses The Office of Public Works grant leases to people for different periods. When people have been living in these dwelling-houses for a continuous period and paying rent to whatever Government Department they are attached to, they are entitled to the same rights, privileges and legal benefits as are attached to other property. They are as much entitled to buy out their fee simple as a person living in a house built by the builder to whom he is paying ground rent.

The Minister said there may be some constitutional difficulty. I do not care what constitutional difficulties are preventing the Minister from doing this. I would say he could have an equal constitutional difficulty if he does not do what I suggest. That is my humble opinion. It is a matter of eeny, meeny, miney, mo.

I would remind the Deputy that the Constitution is a rather important document.

The Minister said we may face constitutional difficulties. I accept that, but if people have lived in a house for two generations and a Bill goes through this House which entitles everybody else to obtain the fee simple to their property they would have a lot of merit in bringing a constitutional case as well. I appreciate the difficulty involved, but it would be very wrong if a family who lived in a house for a generation were unable to obtain the fee simple to their houses. In the event of the death of the breadwinner, the widow may be excluded from obtaining the fee simple or, if she wishes to sell her dwelling-house, she may be prevented from doing so. This is wrong and it should be changed. If people are living in a house and have an interest and a right in the house, they have the right to buy out a fee simple if an ordinary builder owns it, but if a Minister acting on behalf of the State buys a dwelling-house the tenant is prevented from purchasing his fee simple. There is something seriously wrong with the Bill if that can occur.

As the Bill is framed, it would appear to me to exclude this person. For a Bill to be fair, it must be fair to everybody irrespective of who he is. It must be seen to be fair to the person to whom we want to grant the benefit, and it must also be seen that we in this House are not acting to safeguard the State while we are seen to be against private individuals. This could come across to many people who might try to read something which is not there into the Bill for their own reasons. There is something wrong in a Bill which appears to be compelling a private individual to sell his fee simple and, at the same time, excluding a Department of State. It will have to be amended and I am glad the Minister said he will look into the matter on Report Stage or in the Seanad.

The Minister has told us about the examination being carried out and said it is hoped that the results will be to hand shortly. It would be of considerable help to us in coming to a final decision on this section if we had the results of that examination. I am sure it would help the Minister as well. May we take it that this point can be brought up on Report Stage in the light of the results of the examination being to hand?

So long as it is completely relevant on Report Stage. It is a pity Deputy Enright did not put down an amendment on Committee Stage.

I considered that. I know the Chair is not putting words in my mouth. My amendment would have covered about three pages.

In fairness to Deputy Enright I am glad he did not do what the Leas-Cheann Comhairle suggested.

It would be in the hands of the Minister.

It would have been terribly wide-ranging.

I am quite prepared to consider it on Report Stage if we are in order. As Deputy O'Keeffe said, if I have the results of the survey to hand I will certainly put my cards on the table. Then the Deputy will know what I know and if I have difficulties I will have to spell them out.

Question put and agreed to.
Section 5 agreed to.
SECTION 6.
Question proposed: "That section 6 stand part of the Bill."

This section states that the expenses incurred by the Minister in the administration of this Bill shall, to such extent as may be sanctioned by the Minister for Finance, be paid out of moneys provided by the Oireachtas. I should like to know what the situation might be if the Minister for Finance did not sanction such expenses. I accept that that is a legalistic point. What is the necessity for such a provision?

I am sure the Deputy is aware that this is in all legislation. If the Minister for Finance decided to cut off the finance to any Department there would be serious difficulties but I can assure the House that I do not envisage that in this regard.

Question put and agreed to.
SECTION 7.
Question proposed: "That section 7 stand part of the Bill."

In subsection (2) there is a reference to a certificate of the Commissioner of Valuation. I should like to know who will have to pay for such a certificate and what the cost of it is likely to be?

If it is required by the arbitrator I understand that he must pay for it.

Is it the Registrar of Title?

When acting as arbitrator, I presume?

Yes. If it is required by one of the other parties I presume they pay for it.

In the normal way a tenant would be going to the Valuation Office to prove his entitlement to purchase under the Act and on that basis would it be up to the tenant to pay? The question of cost is also relevant. My understanding of the cost is that one must pay the Valuation Office £6.63 for the certificate. Is this an additional expense that will have to be borne by the tenant?

Not if the certificate is sought by the Registrar of Title. He cannot pass it on because the £5 covers that.

In order to avoid paying this sum would the tenant be entitled to ask the registrar to obtain this certificate from him?

I would think so.

The alternative would be that the tenant seeking such a certificate would obtain it at no cost.

The Deputy mentioned that the cost of a certificate is £6.63 but I am not sure that that is correct.

I have not that in writing from the Valuation Office but I was told that that was the figure when I contacted the office this morning.

I have nothing in writing but I understand the figure is much lower than that mentioned by the Deputy.

This morning the Valuation Office told me that the figure was £6.63.

I gather that anybody can go in and check out their valuation for pennies, 6p or something in that region. I accept that it would cost more for a certificate but I do not think it would be anything near £6.63. I am not saying the Deputy is wrong but I am advised that he has quoted a surprisingly high figure.

Now that the Minister is aware that the figure could be as high as £6.63 and bearing in mind that this may be an additional expense to be borne by the tenant, would he be prepared to accept one of the possibilities I suggested, either have the certificates issued for nothing or give an entitlement to the householder to apply to the registrar to obtain one for him at no cost?

If it has to do with the arbitration, the tenant does not have to pay anything. If it does not have to do with arbitration a tenant can see his valuation for a fee amounting to pennies. If there was agreement between the landlord and the tenant this would not arise.

When a case goes to the arbitrator does the £12 fee cover the cost of the certificate.

There is no question of any additional charge where a case goes to an arbitrator.

A certificate of valuation is a necessary proof in such cases, in my opinion.

I would ask the Minister to investigate this point carefully. This question is covered in the 1967 Act in section 3 (5). There is a reference to the fact that the inclusion of a certificate signed for and on behalf of the Commissioner of Valuation is prima facie evidence of the valuation and a further provision that every such fee shall be determined, accounted for and applied in the same manner as fees charged by the commissioner pursuant to section 9 of that Act. Under section 9 the liability would be on the tenant. If the same provision applies and the Minister accepts that the tenant should not be paying this fee, I do not believe the position is clear. The chances are that as things stand the tenant would have to pay. I feel it should be made clearer.

An amendment could be included at a later stage to ensure that.

I am definitely assured that the position is quite clear and that a valuation certificate would not be required in up to 95 per cent or 97 per cent of the cases. If there is doubt on the opposite side, as there seemingly is, about what is meant to be here, I am quite prepared to examine it and have it tightened up should it need to be. I will come back on it again.

I am sure that Deputy O'Keeffe has been involved in discharging equities in the Land Registry, and one of the requisites that frequently arise in this is the certificate of valuation dealing with the actual valuation of the property. The certificate of valuation deals not alone with the valuation of the property but shows the owners of the property going back as far as about 1922.

As far as this Bill is concerned I am satisfied that the tenant trying to buy out his ground rent will not have to bear any costs. I accept what Deputy Enright and Deputy O'Keeffe have said and I am prepared to examine the situation in detail.

Question put and agreed to.
SECTION 8.
Question proposed: "That section 8 stand part of the Bill."

Section 8 deals with the general right to acquire the fee simple and the Minister has included in the Bill that subject to the provisions of this Part a person to whom this Part applies shall have a right as incident to his existing interest to acquire by purchase, the fee simple in the land. Does the Minister envisage in any case, the entitlement to acquire the fee simple other than by purchase?

Section 8 replaces section 3, subsection (1) of the 1967 Ground Rents Act and it provides for the right to purchase by fee simple for the classes of persons set out in Part II of the Bill and for the application in connection with that right in the provisions of the 1967 Act. Part II of the Bill is intended to be a fully comprehensive statement of the classes which are to have this right. It consolidates the provisions in this area at present contained in the Landlord and Tenant Act, 1958, in the Landlord and Tenant Act 1967, and in the Landlord and Tenant (Amendment) Act, 1971. In addition it provides for new classes of leases and tenancies which are to attract the right to acquire the fee simple in future.

Is section 8 agreed?

Assuming there is no possibility of acquiring property other than by purchase. I take it that this is what the Minister intends.

Question put and agreed to.
SECTION 9.

I move amendment No. 1:

In page 5, between lines 38 and 39, to insert the following sub-section:

"(6) In subsection 1 (a) and section 14 ‘subsidiary and ancillary' means land which is or has been wholly in the occupation of the lessee thereof and is used by the lessee substantially for amenity purposes in conjunction with permanent buildings which are situate thereon and in respect of which the rateable valuation of the land does not exceed one-half of the buildings.".

This amendment relates to the expression "subsidiary and ancillary". The Bill does not apply unless there are permanent buildings on the land, and the portion of the land not covered by those buildings is subsidiary and ancillary to those buildings. I have seen considerable difficulties arise in relation to the definition of the term "subsidiary and ancillary". I have had an amount of correspondence indicating that there is a widespread problem. I understand that, at the very least, it affects a number of people in the Borough of Dún Laoghaire, in Dun-drum and also a number of people in Tullamore. There may be others of which I am not aware.

The problem arises because in the old days land was not as valuable as it is now. Anyone buying a house now is restricted to about a quarter of an acre for a garden. In the old days on the outskirts of towns and cities it was common enough to have a considerably larger amount of land—perhaps three, four, five, six or eight acres. Many people who hold land under leases granted in the old days now find themselves in a very difficult situation. I appreciate that there is a provision in the Bill covering what are referred to as partly built leases and allowing for a division, but this does not entirely solve the problem.

Under the definition of "subsidiary and ancillary" where a man has an old lease which gives him, say, five acres, it will be very difficult to consider more than perhaps half an acre or an acre as being subsidiary and ancillary to the dwelling. A person in this situation will have the balance of a holding in which he has been living for many years unprotected by this Bill. If it were a large area, it would probably be protected under the Land Acts as an agricultural tenancy; and if it were a very small area, it would be totally protected by this Bill. The difficulty is the case where it falls between two stools. I am sure the Minister is aware of the people in this situation. For these reasons I put down this amendment.

The Minister's views are the same as the former Minister's view in dealing with the question of ground rents: that all known types of ground rent leases should be covered by the Bill. We can specifically identify here a section of people who have leases on which they have put up buildings but who are not clearly entitled to buy out the freehold of the entire of such leases. My understanding is that these leases can vary in the term granted and in the rents. There are leases ranging from 90 to 150 years of which I have been given particulars and there are rents varying from £50 to £100. I have also been told of people in this category who have made offers of up to 50 years' purchase and have been turned down flat.

The definition of subsidiary and ancillary that I have suggested would meet some of the problem. I suggest that the Minister might even go further to meet what may be a more widespread problem than we all think. Perhaps the problem could be dealt with in other ways, but I have tried to tackle it in this way. After I put down this amendment I found that there was a number of other cases which would not even be covered under the amendment. On Second Stage the Minister reiterated that he was anxious to cover all known classes of ground rent leases. There-fore, I would ask him, now that he knows of the existence of this kind of problem, to put his mind to finding a solution to it.

One of the other difficulties that has arisen in relation to such leases is that some landlords have attempted to impose very restrictive covenants which were on the original leases. Those lands, having originally been granted at a time when amenity lands would have a broader definition by way of gardens, paddocks and so forth and land was a lot cheaper, are perhaps now being used for other purposes. The leaseholders are in a very exposed situation. Details have been communicated to me of a situation where an absentee landlord who is living on the Continent is taking proceedings to forfeit the entire lease because of breaches of the covenant. This is not a political point but one where I feel the Minister might consider trying to find a solution to meet a very difinite problem. I do not suggest that my amendment by the extension of "ancillary and subsidiary" fully meets the problem. I do not push it to the extent of saying to the Minister: "Accept this amendment and no other." I really push that he would, in the light of what I have said, see this problem and try to find a way around this to meet this difficulty.

I support what Deputy O'Keeffe has said on that point. I believe what he is getting across is that a good substantial dwelling-house exists on land and there may be quite a sizeable garden or field attached to the property. The land in this case would not be deemed to be ancillary to the house because of the size of the land portion in conjunction with the dwelling-house. This would appear to exclude the person from buying out the fee simple in that dwelling-house because of the land attached to the property.

It is true that throughout Ireland there are very substantial gardens attached to many premises. The problem Deputy O'Keeffe spoke about arises because of the extent of those gardens. I know of quite a few cases where there is a garden of one acre or one-and-a-half acres at the rear of a dwelling-house. There might be no other way in to that land except by the side entrance to the house. There are many situations where a house is built along the roadside and at one side of the house there is an entrance to a very large garden. If there is no alternative entrance to that land the only person it is of any benefit to is the owner of the land. Subsection (1) of the section states: "if the following conditions are not complied with." Paragraph (a) of that subsection states:

that there are permanent buildings on the land and that the portion of the land not covered by those buildings is subsidiary and ancillary to them;

The way it appears to me is that unless the land is subsidiary and ancillary to the house referred to in the section we are preventing the person buying out his fee simple. This would be a hardship on the people involved. The Minister should try and meet the situation.

The expression "ancillary and subsidiary" is used in sections 9 and 14 in relation to land on which there are permanent buildings and which, when certain other conditions are fulfilled, attracts the right to acquire the fee simple. The expression is also used in the existing law and its effect is to deny lessees whose unbuilt-on land is not "ancillary and subsidiary" to the buildings the right to acquire the fee simple. These leases are called partly-built leases. The only remedy available to the lessee is to await the termination of the lease and then get an apportionment of the land into the buildings plus the ancillary and subsidiary land, and the unbuilt-on land. The lessee is then entitled to get a renewed lease of the first portion, that is the buildings plus the ancillary and subsidiary land, and consequently can also get the fee simple of that portion. I refer the Deputies to section 6 of the 1958 Act.

Section 14 of the Bill introduces an important change in the law relating to partly-built leases. Instead of having to await the termination of the lease, the lessee will have the right to get his fee simple at once in that portion of land which is ancillary and subsidiary. Of course, he can hold on to the remainder of the land for the duration of the lease. The determination of what is "ancillary and subsidiary" is being left to arbitration rather than having a sort of "rule of thumb" approach such as, I think in fairness to the amendment, is what is proposed in it. This is because no two cases are alike and each case must be examined individually to see if in fact the land in question is or is not "ancillary and subsidiary". This, of course, can only be done by way of an ad hoc approach either by a court or by arbitration.

The real problem here is that any rule of thumb definition of "ancillary and subsidiary" can mean in effect a transfer from one party to another of what can be extremely valuable propery rights. There is, for example, at present something of a campaign being mounted by tenants whose lands consist of a large number of acres in County Dublin. The application of the rule of thumb proposed, that the valuation of the land would not exceed half the valuation of the buildings, would certainly mean a windfall of potential development of the lands in question to the tenants.

The existing situation has at least the merit of being obviously fair to all the parties. The change proposed in the Bill will ensure that redevelopment cannot be held up. It must be emphasised and clearly understood that what is really involved is the redevelopment of those lands. The Rents and Leaseholds Commission recommended in 1954 that a lease should qualify as a building lease, as a ground lease, if the rateable valuation of the land not covered by buildings did not exceed one-fourth of the rateable valuation of the site or sites including the buildings. That recommendation was not carried either into the 1958 or into the 1967 Landlord and Tenant Acts and was not repeated by the Landlord and Tenant Commission, when they reviewed the 1967 Act.

The Landlord and Tenant Commission have this matter under consideration again, but it is not possible to say right now if they have any recommendations that would be available in time to take into consideration before the proceedings on this Bill are completed. Again, if they have not completed their deliberations, then the matter could be considered at a later stage and I would be quite prepared to do that.

On a technical level, the formula proposed in the amendment is open to serious objection. First of all, it is not proposed that the valuation list for individual dwelling-houses will be kept after this year because of the abolition of rates. Secondly, the formula could not be used at all in cases where a separate valuation for land has not been entered on the list. There is no general rule as to whether land over a certain area will be separately valued. Thirdly, since the valuation of land is related only to its agricultural uses one rarely finds land valued at over £2 an acre, which is of course meaningless as a guide to the development potential of the land. Finally, from the point of view of syntax, the words "subsidiary and ancillary" as related to sections 9 (1) (a) and 14 may refer to land but it cannot mean land. It is a very complex matter. It is a very serious and grave matter. As I say, the commission have it but, if their deliberations are completed, I am quite prepared to have another look at it to see if I can do what is asked. It is something we cannot go into because there could be enormous development potential with very large sums involved and so one has to be very careful.

When these lands were originally leased they were leased for the purpose of building a dwelling-house and having amenity grounds attached thereto.

May I interrupt? There would be no problem with regard to land consisting of an acre or an acre-and-a-half but when we talk of lands, a very big area of extremely valuable land could be involved.

There is great difficulty, admittedly. I know one case where a person has a fairly big house with two to two-and-a-half acres at the back. He derives his living mainly from market gardening. There is only one entrance to the rear and that is at the right hand side of the dwelling-house. The only other entrance would be at the back of the garden where there is a field which goes down into a vast area of land. If the course suggested by the Minister is adopted the Registrar of Titles will decide to cut off the dwelling-house with a small portion of land and give that to the tenant who is buying out the fee simple and give the remainder of the land to the original landlord. In that case serious damage could be done to the value of the tenant's property.

I would like to be fair to both the landlord and the tenant but there could be a serious conflict of interests. I could understand the case of the ten acres of prime development land worth £1 million. One could not hand over vast sums like that to someone. One has to consider the rights of the person who owns the land. One must also consider the rights of a person with a garden or perhaps a field with stabling for ponies. It would not do to give a tenant with a big garden his dwelling-house plus one rood and deprive him of two acres of garden and give that back to the landlord. If that happened there might be interference with the tenant's privacy. There is difficulty here and I am glad the matter will be reconsidered before Report Stage.

I was making the point that when these lands were originally leased they were regarded as amenity lands. At the time they were leased 30 or 40 years ago they were virtually in the country but, because of certain developments, they might now be regarded as part of the city. There is considerable development potential in such lands. Those who leased them use them for market gardening. In one case they are used as a caravan park. These people will be in considerable difficulty even if they exercise their rights under section 14. They will have no difficulty in acquiring the freeholds of the dwelling-houses and a small area of land but then there will be a balance of two to five acres perhaps without any permanent buildings and therefore without any entitlement to the purchase of the freehold. There must be something we can do to help in these cases while at the same time ensuring that the rights of the landlord are not taken away. Numbers have written to me with this kind of problem. That is why I tabled this amendment designed to broaden the definition of subsidiary and ancillary. First of all, I would ask the Minister's sympathy for these people and, secondly, I would ask for a commitment to have the problems looked at sympathetically so that these people will not find themselves with a threat of forfeiture. That is the type of problem that is posed under this heading, I strongly urge the Minister, if he does not see his way to accept my amendment, to have this type of problem examined with a view to finding a solution.

I support the case Deputy O'Keeffe makes for this amendment. Unfortunately, I was unable to be here for all of the debate. It appears that the Minister has put forward some cogent reasons why the amendment cannot be accepted. If so, well and good; the reasons are there. But we have all had representations from people who certainly would not appear to come into the category to which the Minister's observations apply. Obviously, the spirit of the Bill is to ensure that every known case of ground rent should be capable of being redeemed and it is the Minister's intention that this should obtain as far as possible.

I understand the Minister has given what I take to be an undertaking that he will have a close look at this section of the Bill, this definition of "subsidiary and ancillary", to see if it is possible to include the type of person of whose circumstances we are all aware. I am sure that the Minister had representations such as we have had on this side of the House and that he knows the cases to which we are referring and that there are people who are victims of landlords who have no interest in co-operating with them in this regard. I therefore look forward on Report Stage to the Minister coming in with an amendment which, perhaps, would be acceptable to all.

In case there might be confusion in anybody's mind including my own, I would be reasonably sure that, say, a house and anything under one acre of ground would be deemed ancillary and subsidiary. What we are basically talking about here is bigger tracts of land. Deputy O'Keeffe will appreciate from what I said a short time ago that I cannot accept the amendment. With regard to his choice, an amendment or a commitment, I should like to repeat for the purpose of clarification and in an effort to help Deputy Desmond, the Landlord and Tenant Commission have this extremely important matter under consideration at present. I cannot say what their recommendations, if any, may be or if they will be available in time to be considered before this Bill is completed but if I have them, I am certainly quite prepared to consider the matter at that stage.

Deputy Enright spoke of particular cases such as somebody doing market gardening. To the best of my knowledge and belief on the advice available to me nobody is going to take that bit of land from these people or interfere with it. They may perhaps want to buy the fee simple solely for the purpose of redevelopment of that land. Because of the fact that they have the land and are using it for whatever purpose, a caravan park or a market garden, they will hold it as long as they hold the lease. If I were to accept Deputy O'Keeffe's amendment I believe it would result in a very unfair situation. I am strongly advised this would be so because, as the Bill stands if it were used by the tenant I am satisfied that he would get a fair share of the value of the property to be developed. If the amendment were incorporated in legislation the tenant, as it were, would get his hand on the honey jar but the landlord would not.

As was admitted by Deputy Enright, we are talking about properties worth well over £1 million or more. It is an extremely serious matter. Perhaps I have repeated myself for the purpose of showing the difficulty I am in and to which I am sure my predecessor was in. I want to be fair— as I know the Deputies opposite want to be fair and Deputy Enright said so—to the landlord and to the tenant. I believe that the Bill as it is gives a very fair deal to both parties. I am convinced that if we change from what we have we would not be giving fair play all round. If the Landlord and Tenant Commission have any recommendation on this I am prepared to consider it in the interests of fair play for everybody.

Is the amendment withdrawn?

Certainly; I have no option.

Amendment, by leave, withdrawn.
Question proposed: "That section 9 stand part of the Bill."

There are a number of matters I want to raise on the section. I shall run through them for the Minister. Section 9 (1) provides that the lease is to apply to a person who holds land under a lease provided he complies with a number of conditions. The first condition is that there must be permanent buildings on the land. In recent times there has been considerable development in providing homes for people by way of mobile homes. We may see much more of this in the future. I wonder if a mobile home on a property would be considered to be a permanent building. That is the first matter I should like to have looked into.

The second provision under section 9 is that the permanent buildings in question must not be an improvement within the meaning of subsection (2) which defines an improvement. I realise these words have been used in other landlord and tenant statutes in the past but in looking carefully at this Bill it occurred to me to ask: What is the real need for such restriction? What difference does it make whether the permanent buildings are an improvement or not? Even if this restriction is left in, it occurred to me that you might have a situation where a householder might fall between two stools. If somebody builds an extra room to his house that is clearly an improvement. If somebody demolishes his house and builds an entirely new one that is obviously not an improvement. What would be the situation where somebody had a relatively small house, three or four rooms, and built on a considerable extension of, say, seven or eight rooms? Would that be an improvement? How would he stand under the definition of "improvement"? It would be hard to see how putting eight rooms on to three could be considered to be ancillary or subsidiary to the original building. At the same time there is reference here to the building losing its original identity. It is still a house but it will lose its identity. There is an intermediate stage which should be covered, because obviously if a man puts on one room or ten rooms that should not affect the situation one iota. That is a point in relation to the improvement. I ask the Minister to look at this and to consider why there is a need for this restriction.

The third point I want to raise is in relation to subsection (3) (a), and this arises where permanent buildings were erected in pursuance of an agreement for the grant of a lease but there is no expressed evidence of the agreement available. In that event, the subsection says:

(a) if it is proved that the buildings were erected by the person to whom the lease was subsequently made, it shall be presumed, until the contrary is proved, that the agreement was in fact made and that the buildings were erected in accordance with it;

Would that subsection be improved by the addition of the words "or his successor in title" after the words "was subsequently made"? In other words should the provision of that subsection be extended through the person who originally got the lease to his successor in title. There could be a loophole here. I imagine that this relief, as it were, would not be available to somebody who acquired the house, for instance a son of the original lessee. It is a rather legalistic point, but I ask the Minister to check whether this provision should be extended to the successors in title of the person to whom the lease was originally made.

The fourth and the last point I want to question is in relation to subsection (5). Is the arbitrator the county registrar or the Land Registry? However, that is not the point I am making here. The subsection says:

(5) The arbitrator may declare a person to be a person to whom this Part applies notwithstanding that the buildings were, in whole or in part, erected in contravention of a covenant, if he is of opinion that it would be unreasonable to order otherwise.

That is very general. On what basis does the arbitrator decide whether it is unreasonable or not? There seems to be no statutory guidance of any description. This seems to be a recipe for litigation. I imagine that any such point arising before an arbitrator would be fought bitterly before him and afterwards on appeal to the courts. If we are all of the outlook that this legislation should be made very simple and as inexpensive as possible for householders, would the Minister consider being more specific as to what is reasonable or unreasonable in the context of this subsection?

With regard to section 9, on the question of the right of the lessee in subsection (1), the Bill sets out the conditions which have to be satisfied by lessees. These conditions are spelled out in paragraphs (a) to (c) of the subsection and they correspond to section 4 (2) (b), (c) and (d) of the Landlord and Tenant (Reversionary Leases) Act, 1958. The lease must be a lease of land which is built on—that means built on in the sense of original building work and not merely by way of additional alteration to other buildings—while any land under the lease that is not built on must be subsidiary and ancillary to the buildings. Finally the buildings should not have been erected in contravention of the lease. There is a distinction in the 1958 Act between rural and urban land which is being dropped. The changes that are being made are proposed in paragraph (d) of the subsection.

Subsection (2) represents the re-enactment of the 1958 Act, with drafting changes only and the definition of "improvement" in section 2 of the Act. The effect is to preserve unchanged the provision of the 1958 Act in accordance with which the permanent buildings must not be simply an improvement. With regard to sub-section (3), this proposes a provision under the lines of section 4 of the 1958 Act with drafting changes only. Its effect is to ensure that the types of building lease recognised by section 4 of the 1958 Act will attract the right to purchase the fee simple under Part II of the Bill. Subsection (4) makes a provision similar to that in section 4 (5) of the 1958 Act and its effect is to apply the same conditions in regard to the right to purchase the fee simple. Again this provision with regard to the right to obtain the reversionary lease applies under the 1958 Act.

Subsection (5) makes provision on the lines of section 4 (6) again of the 1958 Act with drafting changes only. In the 1958 Act it is the Circuit Court which has the discretion to declare a person to be entitled to a reversionary lease, despite the fact that the buildings were erected in contravention of a covenant. Here it is the arbitrator, whether it be the country registrar or the Registrar of Titles, who has the discretion in the context of the purchase of the fee simple. I am satisfied, having regard to the provisions of the Constitution for the jurisdiction of the courts, that it is appropriate for the arbitrator to exercise this jurisdiction in the case of the acquisition of the fee simple.

With regard to the definition of a permanent building, this is quite a serious one and I cannot say whether or not a mobile home would qualify for that. The definition of permanent buildings is an appropriate matter for the courts, because what might be a permanent building now might not necessarily be——

It could be taken up overnight.

You never know.

By house rustlers.

It could happen but I hope not. It is probably best left in the hands of the court to define what is a permanent building. The facts would be put before the court and they would consider them.

I appreciate the Minister's running down through the various sections, but I would like to come back to the question of permanent buildings. I suggest that in preparing legislation we should not really be preparing for court cases. We should as far as possible be clarifying the situation to the extent that we are not providing a recipe for litigation. That appeared to be what the Minister was saying when he said that it could be left to the courts. He will accept that we are not really trying to prepare a lot of extra work for the courts by getting this Bill through. I would like the Minister to look at the broad question of people living in mobile homes and similar accommodation, because I have seen considerable and growing evidence of this in recent times and I feel that this trend is going to continue.

Very often people living in mobile homes are from the weaker and more underprivileged sections of the community and could not afford to be litigating their case before the courts. If the Minister feels there is a good case to extend the benefits of this legislation to people living in such accommodation I would very strongly suggest it should be spelled out clearly that this is the intention. On the other hand, if it is his intention that such householders should not benefit from this legislation he should say so and make it clear in the Bill. We have the worst of all worlds by leaving the matter up in the air, encouraging litigation by people who can least afford it. Ultimately they will find they will lose such litigation and are not covered. I strongly suggest that these people should be allowed to buy out. In other words, mobile homes should be classified as permanent buildings for the purposes of this section and this point should be clarified. A person in a mobile home is entitled to have it classified as a permanent building.

Another point which needs to be clarified is the definition of the word "improvement". The Minister went through the section but there is this problem, whether we call it a loophole or a lacuna, of somebody who built on to a small house a very large extension which could not be regarded as subsidiary and ancillary and at the same time the completed structure could not be regarded as losing its original identity. Where exactly does that fall? Is such a building an improvement under this legislation?

My second point is rather legalistic and perhaps the Minister might care to have it looked into. In my view people living in mobile homes should know where they stand. Apart from any constitutional implications of sub-section (5), the arbitrator has the power to say what is reasonable or unreasonable without giving the slightest guideline. That is another recipe for litigation. I would like the Minister to come back on the question of the permanent buildings and say whether they include mobile homes and if it would be wise and desirable to specify what would be reasonable or unreasonable in deciding under subsection (5).

I will leave the definition of permanent building to the courts. I understand this has been so since early thirties and has worked very well. There has not been any difficulty with regard to it in that form. Its record of operation has been very successful and we have every hope it will be as successful in the future. I do not want to give any opinion that might mislead owners of mobile homes. I propose to leave this as it is. I would not like to anticipate what the courts might decide with regard to the position of a mobile home. I am prepared to leave it to them. There is no doubt that is quite a good debating point and we could put it backwards and forwards for many hours. As I said, I am satisfied to leave this as it is because it has been working well for many years. I assure the Deputy that there have been no complaints about it.

Would the Minister consider specifying the situation in regard to subsection (5), because the owners of mobile homes seem to be left up in the air? I strongly feel that point should be clarified one way or the other. But if the Minister feels like that, there is nothing more I can do. I urge him to look into it further before the Bill is finalised, either on Report Stage or in the Seanad. Would it not be better and reduce the prospect of litigation by specifying more clearly what would be reasonable or unreasonable in making a decision under sub-section (5)?

Part of the problem here is that there are different types of mobile homes. Particularly in seaside counties we have mobile homes permanently parked. In other cases they are parked only for certain periods perhaps the summer months. That is why I say definitely that it is wiser to leave it to the courts to decide the position. Between now and Report Stage I am prepared to discuss the matter further with my advisers, but there are difficulties. If the Deputy can convince me—and this matter will probably be raised again—that there is room for change, I am prepared to accept that.

I accept that the Minister will look into this matter further. That is as far as we can go at this stage. I appreciate that there will be difficulties about an exact definition.

What does the Minister think about subsection (5) and the very broad powers given to the arbitrator without any statutory direction as to how these powers are being exercised? There is no indication as to how the householder would stand. It appears that this will involve further court proceedings. As a politician, or somebody involved in legislation, this is something I think we should not be encouraging.

As the Deputy knows, under the 1958 Act the Circuit Court had discretion to declare whether a person was entitled to a reverse on the lease. In this Bill the arbitrator has that power. It is only right that I should be very slow— indeed, I should resist the temptation —of telling an arbitrator what to do. He has discretion and we should leave him that discretion. I am satisfied the arbitrator will do what is expected of him.

I do not know what is expected of him. The section leaves the matter wide open and will encourage a lot of litigation. I am not sure what the Minister has in mind. House-holders would be anxious to know what would be considered to be sufficient to satisfy the arbitrator.

I have not got a full note on the point raised by the Deputy. As he has pointed out, there are difficulties of interpretation in regard to what the arbitrator is supposed to do. I will get a note on it and we can discuss it on Report Stage.

Question put and agreed to.
SECTION 10.

Amendments Nos. 2 and 3 are related and may be discussed together.

Amendment No. 3 is consequential. I move amendment No. 2:

In page 6, line 46, to delete "fifteen" and substitute "five".

The section sets out various conditions, one of which must be complied with in addition to the permanent conditions set out in section 9. There are six other conditions any one of which will qualify when coupled with the provisions in section 9. Subsection (7) provides for a situation where a lease is for a period of not less than 50 years:

(a) partly in consideration of the payment of a sum of money (other than rent) by the lessee to the lessor at or immediately before the grant of the lease and, for this purpose, any money paid in redemption of any part of the rent reserved by the lease (whether the money was paid in pursuance of a covenant in the lease or in pursuance of an agreement made between the lessee and the lessor during the currency of the lease) shall be deemed to be part of the consideration, or

(b) partly in consideration of the expenditure (otherwise than on decoration) of a sum of money by the lessee on the premises demised by the lease, or

(c) partly in consideration of both that payment and that expenditure, where the sum so paid or expended or the total of those sums was not less than fifteen times the yearly amount of the rent or the greatest rent reserved by the lease, whichever is the less.

Fifteen times is mentioned in the Bill and Deputy Desmond and I propose that that multiplier be reduced to five. This amendment is along the lines of a suggestion by ACRA. Having regard to the overall spirit and intention of the Bill, this provision should be modified to make it easier for householders to qualify. The multiplier of 15 seems to be arbitrary. A strong case can be made for the lower figure which would bring many more people within the terms of the Bill. We therefore ask the Minister to accept the amendment.

Deputy O'Keeffe has indicated that this is along the lines of a submission by ACRA and having listened to the Minister's Second Reading speech and knowing his attitude to this problem I cannot see how he can fail to agree with the amendment. The purpose is to make it as simple as possible to apply the terms of the Bill. Reducing the multiplier to five would facilitate many more people.

The figure here refers to the amount of money a tenant must spend on the property or give to the landlord as capital sum so as to qualify for the lease. If this amount is at least 15 times the amount of the rent, one of the conditions is fulfilled and the lessee may qualify for the right to acquire the fee simple. The other conditions are set out in section 9. The whole point of the multiplier is to establish that the tenant has spent so much on the house as will give him the right to claim owner-ship of the bricks and mortar, and clearly five times would not do that.

The multiplier of 15 was first provided for in section 46 of the 1931 Act. It is repeated in the 1958 Act and has not been questioned seriously. Inflation may be considered, but it can be claimed that inflation has affected building costs more than ground rents and indeed that inflation would justify increasing the multiplier. The Landlord and Tenant Commission considered the multiplier in their Second Report and recommended that new classes of lessees and tenants should be recognised as ground tenants, but instead of recommending any change the House should be aware that they endorsed the multiplier of 15. As well as that there is no record of any case of hardship being brought to notice as a result of the existence of this multiplier during 40 years or more. It is fair to say that expenditure of 15 times the ground rent as a lump sum payment is very low. I am sure both Deputy Desmond and Deputy O'Keeffe will acknowledge that again this is something that has worked in the past. It was reviewed a very short time ago by the Landlord and Tenant Commission and instead of recommending any change they were prepared to endorse it as it was.

Amendment, by leave, withdrawn.
Question proposed: "That section 10 stand part of the Bill."

A point was raised regarding an additional category of persons who should be entitled possibly to buy out provided they complied with the other sections. The question relates to lessees who hold under a long lease with an unexpired residue of perhaps 50 or 100 years. The point is that if somebody has a long lease with a long time to run it may be possible that he does not comply with the provision regarding permanent buildings or improvements. Many people might not comply with the covenant provision. But, allowing for the necessity to be arbitrary regarding the length of the lease and the residue, surely it would be sensible to extend the provisions of this Bill to such cases.

One can take it to the utmost extent and say that a person might have a lease for 999 years of which, say, 700 years have still to run. It is possible that for one reason or another the lessee under such a lease would not be entitled to the benefit of this legislation. In such circumstances it seems to me that nobody would suffer if such a category were given entitlement to buy out. In effect this would be good for everybody. I shall not go so far as to bring in a landlord who wished to sell, but at any rate it would be good for the lessee that in such circumstances he would be able to acquire freehold, the old definition of which was to own property from the centre of the earth to the top of the sky.

Will the Minister consider such an addition? I do not expect him to give an off-the-cuff answer to that, but I would ask him to view the situation sympathetically and to incorporate it on Report Stage should he consider it worthy of commendation.

Subsection (1) is understandable, but subsection (2) provides that:

the lease is for a term of not less than fifty years and the yearly amount of the rent reserved there-under (whether redeemed at any time or not) is of an amount that is less than the amount of the rateable valuation....

For a rent to be less than the rateable valuation of a property it would need to be very small.

That is the point.

The provision would appear to be logical if everything was all right in regard to the conditions set out in subsection (1) but in order for subsection (2) to be logical it would really need to be following on subsection (1).

In the normal case of a man buying a plot of land on which he intended to erect a substantial dwelling-house I can understand that the rent would be less than the rateable valuation. However, the section sets out alternative conditions, one of which must also be complied with. The yearly rent on a property would need to be very low to be less than a rateable valuation of, say, £10.

I accept what the Deputy says, but of the seven conditions specified it is sufficient that any one be complied with.

I have asked the Minister to consider the suggestion in relation to the holders of long leases who would not otherwise comply with the terms of section 9.

There is another situation on which I should like clarification. Let us take the case of someone who is living in a very old house and is paying his rent. Because of the very bad condition of the house the county medical officer condemns it and the man decides to knock it down. Although he is not very wealthy, he builds a new house from his own resources. Can such a man come within the terms of section 10?

One would need to examine the lease very carefully.

In the event of a very old lease, going back perhaps 200 years, there would be no problem so far as the requirement of 50 years is concerned. But in circumstances such as I have outlined, in which the rent would be very low and the landlord would have no intention of supplying the lessee with a new house, could the lessee buy out the fee simple of a house he decided to build from his own resources? I appreciate that this is a difficult question and that the Minister may not be able to answer it now.

I am being asked for advice from a member of the legal profession. As I see it, one would have to examine carefully what was in the lease in relation to the kind of case the Deputy is citing. However it is not possible for me to give an off-the-cuff answer to the question.

Perhaps it will be covered in subsection (4) of section 9, which provides that in the event of the destruction of buildings by fire or otherwise they shall be deemed to have been erected by the person who erected the original building. Perhaps that would solve the problem unless the buildings had been erected in breach of a covenant.

Deputy Enright is giving an example of where a house is knocked down.

The words "or otherwise" would probably cover the situation.

I can visualise a situation where someone has a valuable premises of, say, one rood in a prominent position in the centre of Dublin but the building is very old. The landlord could be avaricious and decide that the best way to get rid of the lessee was to freeze him out. The steps he takes to that end include neglecting to repair the doors of the house; the windows are damp and falling down and if there are slates loose he helps to get rid of them instead of replacing them. He generally makes the place uninhabitable. The person living in the house is poor and paying a small rent and his house is uninhabitable. He goes to the bank and they recognise that he has a valuable premises which would be worth quite an amount but because of the bad condition he knocks it down and builds a new house. Is such a person protected by this Bill? He is in a weak position and the landlord is in a strong position. Is the person living in a tenement who knocks it down and rebuilds protected under the terms of this Bill?

I am advised so.

The Minister thinks that the person who rebuilds would be entitled to buy out the fee simple. Is the section tight enough to protect the person living in the tenement? There are valuable old houses in this city which can only be classed as tenements and I have known landlords who have gone out of their way to make conditions uninhabitable for people living in such houses and I have great sympathy for those who are forced to live in such conditions. If from their own resources they are able to build a house we should ensure that they are protected under this Bill.

I would refer the Deputy to the part that the lease plays in this business. If a person was not in breach of covenant of the lease I am sure he would be safe. I will not comment on methods employed by individuals to make life miserable for their tenants. It is not unknown, to say the least. I should like to assure the Deputy that I am advised that the lease has an extremely important bearing on the type of case he mentions.

Question put and agreed to.
Section 11 agreed to.
Amendment No. 3 not moved.
Section 12 agreed to.
SECTION 13.

I move amendment No. 4:

In page 7, line 25, to delete "twelve months" and substitute "five years".

In this section we are dealing with the rights of a lessee under an expired lease. Where the lessee has a lease which expired within eight years before the commencement of the Act he can, in certain circumstances, have the right to acquire the fee simple, but this right is restricted to a period of 12 months. It seems to me that the spirit behind the section is excellent but why confine such right to 12 months? I can envisage householders taking quite a while to familiarise themselves with the sections of this Bill. In the past when time limits were put on certain rights many people have been disappointed because they have not been able to exercise their rights within such time limit. I am suggesting, and would strongly urge the Minister to accept, that the time limit in question, the period during which the lessee can apply and take advantage of this section, should be extended to five years. This would permit the lessee an adequate time. Despite all the brouhaha about ground rents I am quite certain there are many people who hardly know what is going on. I should not like to see such people penalised because of a restriction of 12 months.

I had intended to give notice under section 10 of the possibility of having an amendment on Report Stage which would widen the classes to cover a group of people who came to me only yesterday. I believed they were covered under section 10 and I find that they are not covered. I am considering the possibility of widening it a little more to let in another group of people. That is under section 10. I apologise. We got from section 10 to here very quickly.

If the House is agreeable we will accept that, otherwise we would have to recommit section 10.

We are putting the House on notice.

We are now dealing with section 13, amendment No. 4.

On amendment No. 4, I want to say that the section is very welcome and has met many of the cases with which we have all been familiar. We appreciate that the intention behind the section is excellent and it is because we want to make it more effective that we believe the time given to those whose leases have expired within eight years should be longer than 12 months. This is a very short period. A number of people to whom the Act will apply when it becomes law are not aware of the provisions it will contain. It is extremely complicated, even for those of us without legal expertise who are trying to address ourselves to it now. The case was made during the Second Reading that it was such a complicated measure that it would be desirable to have some form of documentation or leaflet giving advice to people who would be in a position to buy out their ground rents and that this should be done when this becomes law. This would explain to people what their rights are. I hope that the Minister sees the virtue of something like that. If this were to happen additional time would be needed to make the documentation or leaflet available to people and several months could elapse. In view of the good intention behind the section, I feel it would be perfected if a period such as five years were allowed and I would appeal to the Minister to accept the amendment.

I would encourage the Minister to substitute a period of five years instead of 12 months. If the lease had expired the person would be entitled to a yearly lease and the tenant would be in a weak position with regard to the price at which the rent would be fixed. The rent could be increased on a yearly basis or they might reach agreement to have a rent review every three years. Where the original rent might have been £100 or £200, the tenant could find the rent increased by £300 in the first year, then by £500 and so on. The situation could be most unsatisfactory.

I am convinced if one made an inquiry in any building estate containing 100 houses probably 90 people would not know when their lease was due to expire. Many people do not know their lease has expired until they receive formal notice. The vast majority of people will not be aware of the provisions of this section. The amendment is fair and reasonable and it should have the approval of the House.

This section enables persons whose leases have expired during a period of eight years before the commencement to acquire the fee simple within 12 months after the commencement. I am strongly of the view that a case cannot be made for giving the tenants concerned a longer period within which to exercise their right. I should like the House to understand that all these people have to do is to serve notice under sections 20 or 21. It would be wrong in principle to give such tenants too long a period within which to avail of this important right.

Clearly it is intended as a means of clearing up as speedily as possible a no-man's land situation which I am afraid has been allowed to develop. The right given in the section repeats a somewhat similar right given in the 1958, 1967 and the 1971 Acts. While in the 1958 and 1967 Acts provisions were more limited in their application principally in that they dealt with leases that expired within five years and not eight years, they too provided that the right must be exercised within 12 months. The 1971 Act provided for leases that had expired up to eight years previously. Under that Act the right had to be exercised within 12 months. I am assured that no complaints have been received or recorded in the Department of Justice that the period is inadequate.

I should think that anybody who had a problem with regard to a lease for the past eight years would be much alive to the present situation. In an effort to protect their interests I should imagine such people would be very much on the ball and would take the steps now open to them. For the reasons I have given and as we want to clear up as speedily as possible the no-man's land situation that exists with regard to the question of title, I am satisfied this is the best way to do it. We do not envisage any complaints. We have not had any up to now and we consider the measure is quite workable as it is.

Perhaps we might do a bit of horse-trading? Would the Minister go some way to meet the situation? As a result of the publicity that may arise because of this discussion, there is a good chance that more people will become aware of their rights. However, I am convinced many people will lose out because they are unaware of the situation. I see the point the Minister has in mind, to put a time limit for the purpose of encouraging people to get in quickly, but he will also have to bear in mind that as a result of putting a time limit people will lose out. Would he meet the situation half-way by putting in a period of three years? At least it would be an improvement on the present situation.

I always like to meet a reasonable request. Before I say to the House what I am going to do with regard to what has been described as a reasonable request, I should like to point out that I find it extremely difficult to understand or accept that a person whose lease is running out would not be aware of that situation. If I were satisfied with what Deputy O'Keeffe has said with regard to people not knowing about the situation I would certainly worry. I would have to do something about the situation and ensure that they were given more time. However, the Deputy will appreciate it is difficult to accept that people with problems with regard to their leases would not know it. I should have thought they would be well aware of that fact. I see Deputy Enright shaking his head in disagreement. I am prepared to have another look at this and, if necessary, we will come forward with something on Report Stage.

If a person has his deeds with a building society, they are quite quick about writing to say that the lease is about to expire and that measures should be taken to have it renewed. However, when deeds are deposited in a bank for safe keeping——

Are we not talking about a period of time going back eight years as and from the date of commencement? I am sorry for interrupting the Deputy. Is he saying that people whose leases have run out during the past eight years are not aware of the fact?

I know of one case where the lease had expired for about two-and-a-half or three years.

There are quite a number of people who know that their leases have run out but what is worrying me is that they may not be aware of their entitlements under this section. If one investigates landlord and tenant matters one finds the most amazing situations, where rents have not been collected, where landlords have gone away, where leases have run out and where people have not been able to do anything about it. You will find old people possibly who do not understand what is involved but who are in this difficult situation. A good benefit is conveyed under the section and I want to ensure that people will have the option of taking advantage of it. It is not so much a problem that people will not know their leases have run out. The major problem will be that they will not know they have an entitlement under this section.

I accept that there is a problem. It could very well happen that they would miss out on that. I share a certain amount of the Deputy's concern. If I could be convinced—and I am still not convinced; I want to be honest with the Deputy—that people whose leases had run out for seven or eight years would not be aware of that: Deputy Enright mentioned a short period of time; I cannot think of the exact time——

Two-and-a-half to three years.

Deputy O'Keeffe mentioned two-and-a-half years as well. They would be covered by the eight year back period, would they not?

Provided they knew about the section.

I accept that, but would they not have some legal advisers or solicitors looking after their interest?

Provided they brought the matter to the attention of their legal advisers. For one reason or another they may not have occasion to do so. I know a number of elderly people who would not be fully aware of the problem and of the benefit they could have under this section. They would not understand it and, if they did not go to their legal adviser and ask him about it, what would happen? They would have no occasion to do so unless they were selling the place.

Would they not become aware of it when they were paying their rent?

The rent situation is very different from what it was in the past—the Gale Rent—when people went to the landlord's house or the agent's house and put down the money. It is the exception rather than the rule now that rents are paid promptly. There are very many areas where people hardly bother sending out the demands for four or five years.

I said to the Deputy that I share a great part of his concern. I wonder would the House be willing to leave it to me and, if I can come up with a compromise which might help, I will certainly do so. It is easy to say people should know, but we all know that a lot of our parliamentary time and our work as Deputies is taken up helping people who do not know what they are entitled to. I am quite prepared to have a look at it.

Would it be possible to devise some way whereby they could be acquainted of their rights?

I would like to do that.

I know it is not easy.

We can try to do something about this because, if it is to work properly, everyone should know about it. If I can, I will come up with something on Report Stage and, if that does not satisfy the proposers of the amendment, we can have a second bite of the cherry in the Seanad. Is that fair?

Amendment, by leave, withdrawn.
Question proposed: "That section 13 stand part of the Bill."

I want to ask the Minister one interesting question which occurs to me. What is the position where a lease has expired inside the eight year period and a person is negotiating or has entered into some agreement probably detrimental to the interests of the tenant? What will be the position of a tenant whose tenancy expired two years ago?

If that person has an agreement with the landlord, would that not mean he has a contract?

The basic difficulty as I see it is that somebody who might have been looking after his business very well and who might have been a shrewd, careful type of man who realised his lease was expiring and took the precaution of getting it renewed might be in some difficulty. There is no way out.

It appears to me to be of benefit to householders whose leases have expired to be able to take advantage of this section. I wonder where did the Minister get the period of eight years? If we accept it as a benefit, why do we confine it to situations where the leases expired within the past eight years? Why not 18 years? Is there any reason why it should be so confined, or is it an arbitrary number picked out of the air? If so, if we are intent on extending the benefits of ground rents legislation to as broad a category as possible, why not extend the period of eight years?

There is a precedent for that figure of eight years in the 1971 Act. I assure the Deputy that, if I were convinced a number of people had a problem nine years ago naturally that figure would not be binding on them. If people are in difficulty, we will have to meet their case and help them.

I thought the 1971 Act related to sporting leases or recreational leases.

Plus the Sandycove tenants. There is a precedent.

I accept that wherever you draw a boundary you will find someone——

The Deputy knows that when you have to fix on a definite period of time a case can be made for going above or below it.

If we are all agreed, as we are, on extending the benefits of the Bill to as broad a section of householders as possible, the impetus should be towards lengthening the time which would permit people to qualify for the benefits under the Bill.

We are satisfied this period of time more than adequately covers the situation. I assure the Deputy that, if it ever came to notice that this would not do, I would hope the Minister for Justice of the day, whoever he might be, including the Deputy's good self——

Wish me well.

I wish the Deputy well—a very short amendment could be dealt with very speedily by the House. In an area like this there is no disagreement. We all have the same motivation. We all want to try to help.

Question put and agreed to.
SECTION 14.
Question proposed: "That section 14 stand part of the Bill."

I did not put down an amendment to section 14 but I am a bit concerned about the position of the householder who is left with two leases, one a partly-built lease and the other the lease on the residue. We discussed this earlier in relation to the definition of "subsidiary and ancillary". While everything will be in order in relation to the household and the area of land which will be considered subsidiary and ancillary, and he will be able to buy out, he is left high and dry in relation to the balance of the property. There would not be any permanent buildings on the residue and he would appear not to be entitled to any relief. He would not be entitled to relief even by way of a reversionary lease under the 1958 Act. I am not quite certain about that.

It is an aspect of the matter we discussed earlier. I should like the Minister to consider the situation of such a person who might find himself able to buy out his house and the bit of ground around it under the Bill but, having done so, he would be left high and dry at the expiry of his lease in relation to the balance of the land.

Question put and agreed to.
SECTION 15.
Question proposed: "That section 15 stand part of the Bill."

It has been pointed out to me that this section, which deals with the rights of yearly tenants, has an anomaly arising as a result of the combination of it and the section which deals with leases. It has been suggested to me that section 15 should be extended to cover lessees where the lease is for a term of less than 50 years. The position under section 15 is that. subject to other conditions, the entitlement is extended where the land has been continuously held for a period of not less than 25 years, provided the other conditions are complied with. It has been suggested to me that there is a serious anomaly that a person holding under a lease granted for a term of between 25 and 50 years and meeting all the other conditions in the section would not be entitled to purchase whereas a yearly tenant is entitled to purchase provided he has held it for 25 years. It has been suggested that the yearly tenant benefits under the Bill but there is discrimination against a lessee for a term of between 25 and 50 years. I would be obliged if the Minister would look into this situation.

That point was brought to my notice by the Incorporated Law Society. We discussed the matter in depth and the society was satisfied that the anomaly mentioned by the Deputy did not exist.

Is the Minister happy with the section?

I am and, what is more important, the society is.

Question put and agreed to.
SECTION 16.

I move amendment No. 5:

In page 9, between lines 37 and 38, to insert the following subsection:

"(3) Where a lessor of land which is held subject to a lease tenancy or interest to which this Part of the Act applies intends to dispose of his interest in said land for valuable consideration such disposal shall be void unless such lessor can show—

(a) that he has given at least one month's notice in writing of the intention to dispose of his interest to the person entitled under this Part of the Act to purchase same, and

(b) such latter person has within said period of one month failed to serve notice of intention to purchase under this Act or the Act of 1967."

I consider this to be one of the major amendments to the Bill. It comes in rather inappropriately under section 16. I cannot vouch for the phraseology but I am anxious to put strongly to the Minister the principle I am seeking to incorporate. I am trying to ensure that a freehold owner of ground rent, a landlord, cannot sell out over the head of the householder. It appears to me that one of the major complaints about the ground rent problem is the feeling of frustration on the part of householders who find that the freehold has been sold out without them having been given an opportunity to buy it out. It occurs to me that if we put in this provision making it necessary to give notice to householders and the option to purchase at the time of sale it would be a distinct encouragement to landlords to sell their interests direct to householders rather than to somebody else.

It is quite a common practice for landlords to sell their interests to persons other than the householders. I have seen evidence of this and representations have been made to me about this matter. If the Minister accepts my amendment we must consider some system to take advantage of it to the benefit of the householder. I do not say we should stop it because to stop it would probably be unconstitutional. I am not asking the Minister to accept my amendment word for word but I suggest that where a landlord intends to dispose of his interest for valuable consideration such disposal be void unless he can show that he has given one month's notice in writing of his intention to dispose to the person entitled to purchase under the Bill. It may be put to me that this is a restriction on the right of a landlord and, therefore, it is unconstitutional but I suggest it is not. In the public interest restrictions can be imposed provided the person involved does not suffer in a monetary sense. There are restrictions in various matters in public interest, in the Land Commission, compulsory acquisitions and under the Family Home Protection Act.

Such a restriction on the sale by a landlord would stand up constitutionally in my opinion. If we get over that hurdle and get to the more positive side I feel the effect of such a provision would be to encourage quite a number of purchases under the Bill because landlords would not have anyhere to turn to except to the house-holders. Obviously, householders will have to purchase under the terms of the Bill but at least they would be given notice. Any intention to sell would be brought to the notice of the householder and he would probably be inspired to investigate his rights. A lot of ground rents are now owned by major institutional investors and it would probably be easy for them if they wished to dispose of them to get rid of them to an individual purchaser but it is in the public interest that there should be an obligation on such people to sell direct to the householders.

I want to assure Deputy O'Keeffe that this amendment was given very serious consideration because of the implications contained in it and not because of any particular way it might be drafted. I fully accept what Deputy O'Keeffe said that the draftsman is the professional for drafting matters such as this in the most correct fashion. The principle involved has been looked at in its own right.

The purpose of the amendment is to prohibit landlords from selling their interest in ground rent type leases except to the tenants or with the consent of the tenants. I am satisfied that this is objectionable because it would bring no advantage to the tenant and at the same time it would be an unwarranted interference with the fundamental freedom to dispose of property. The fact that a ground landlord transfers his interest in land to another landlord does not harm the tenant in any way, because the tenant can exercise his rights against a new landlord as easily as he could against the old landlord. Perhaps such a transfer could very well be to the tenant's advantage.

It would almost certainly need an up-to-date investigation of the landlord's title and make it easier for a subsequent acquisition by the tenants under the Act. The price paid nowadays on such a sale would almost certainly be well below the maximum price provided for in the Bill. The tenant who exercise his right of acquisition afterwards could get advantage from such a low price, because this is one of the factors to be taken into account on arbitration under section 17 (2) (e) of the Bill.

Perhaps the only possible way in which a sale might be to the disadvantage of the tenant would be if landlords were to engage in artificial transfers at above market prices. This would clearly be shown up afterwards at arbitration. I feel that perhaps Deputy Enright, having heard my case against the amendment, might like to comment on that.

It is a very fluid situation. I can see the difficulties involved on all sides. Basically, this does not deal with businesses. I would like to explain the difficulties of somebody in business. This is an example of a person I met this afternoon. A landlord owns a property. He grants a business lease to somebody and that person takes possession of the property. That person does not use the property and grants a further lease to somebody else. In the original case the person obtained the property from the landlord and paid a substantial sum as consideration. The subtenant was in possession and was granted a further lease. The present tenant of the property has bought out the landlord.

Perhaps I could explain it another way. A owns the property and sells it to B, reserving a rent. B sublets the property to C who in fact takes possession of a shop. C buys out the original landlord, A, so that C has acquired A's interest. A, who is in fact the owner of the property and paid a very substantial sum for it and also paid a substantial sum to repair the property, now finds himself in a very weak position because the original fee simple has now passed to this tenant.

Let us take the case of somebody who obtains a lease of property from a builder who is a landlord. That person pays perhaps £10,000 to have a house built on the property. He then sublets that property and somebody is in possession of it for a great number of years. A situation could arise where the present occupant of the house might buy out the fee simple. I do not know if Deputy O'Keeffe is in agreement with me on this. I want to try to protect the person who has built the house and paid the expenses of doing this. I would like to see him properly protected.

I believe that Deputy O'Keeffe's amendent is reasonable. He is not trying to inpinge in any way on the rights of the landlord. He is trying to ensure that when a landlord is selling his interest in property the sitting tenant should have the first right to obtain the fee simple in the property. We want to ensure that the sitting tenant should have the first right of purchasing the fee simple. I presume the Minister will state the position is that the second tenant will now be entitled one way or another to buy out his interest. I am not very happy with the situation and I should like some further explanation on it.

I would like to come back to the Minister's comments on this amendment. I accept that they are made in good faith. However, it appears to me that the Minister may not be grasping what we want to ensure in the amendment. I do not believe this amendment can be questioned on the basis of its constitutionality. It is not a prohibition on the sale by a landlord. I accept that if such a prohibition were there it would be entirely unconstitutional.

This amendment seeks to ensure that if a landlord is selling his property for valuable consideration he must give notice to the tenant. That is the only restriction on him. There is not even an obligation on him to sell to the tenant for the same money he is receiving. There is not any restriction on the landlord other than the fact that he must give notice.

Progress reported; Committee to sit again.
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