I would remind the Minister that the Minister for Foreign Affairs, Deputy Barry, will be coming in at 6 o'clock to make his statement.
Landlord and Tenant (Amendment) Bill, 1983: Committee Stage.
Sections 1 and 2 agreed to.
SECTION 3.
Question proposed: "That section 3 stand part of the Bill."
I want to query the Minister on the fact that this section dealing with reviews is limited to cases which were settled by the court, where the terms of commencement of reversionary leases are settled by the court. Is it the intention, then, where the terms of the lease are settled, not by the court but by agreement between the parties, that in such cases the review provisions enacted would not apply? That is what the section appears to say and I am a little concerned about that because in all but about 5 per cent of cases agreement in these matters is reached between the parties without the necessity of going to court. If under this section, in order to achieve the benefits of the review provisions, it was necessary to go to court, the effect that that would have on the court lists would be catastrophic. I wonder if consideration has been given to that aspect of the matter?
, Limerick East): In so far as it concerns the grant of reversionary leases, the only changes being made relate to the introduction of rent reviews. The basis on which the rent which is payable under such leases is determined remains unafected. The procedure would be that if people can agree, they agree. If they do not agree, they go to arbitration and the arbitrator would be the county registrar. If one party does not agree with the decision of the arbitrator, then the case would go to court. There is no provision necessary for agreed cases.
Of course, I understand that if people agree, they agree. However, my point is that owing to the way the section is worded, to achieve the benefit of the review provision which is to be enacted here, a party would have to go to court. As the section says:
Where, after the commencement of this Act, the terms of a reversionary lease are settled by the Court . . .
then and only then do the review provisions come into claim. Quite clearly, any landlord who wants to secure his review provision — which, of course, he will want to do — will ensure that he goes into court. That will bring into the courts a great many cases which do not normally go there, for one party — whether landlord or tenant — to achieve the benefit of the review situation. I wonder why, to overcome that, it is not provided that where the terms either are settled by the court or agreement is reached between the parties out of court, the review provisions would apply.
(Limerick East): The necessity for the Bill arises out of the Supreme Court judgement in the Gilsenan case. It requires that provision be made for rent reviews as closely as possible in line with market practice. I am advised that rent reviews at intervals of five years would be consistent with market practice. I am therefore proposing in this section that the rent review period in the case of future reversionary leases should be five years wherever the terms of that lease are fixed by the court. This is the same rent review period as provided in Part II of the Act of 1980 in occupational tenancies. It is, of course, unnecessary for the legislation to prescribe rent reviews for reversionary leases whose terms are agreed by the parties. Section 15 proposes to change the law somewhat in regard to rent reviews in occupational tenancies.
The point that the Deputy is making here, I think, is that it is unnecessary for legislation to prescribe rent reviews for reversionary leases where the terms are agreed between the parties. This is to meet the difficulty of where terms are not agreed between the parties.
That was not the point that I was making. The point I was trying to make was that the section limits the right to a rent review to cases where the initial terms were fixed by the court. It would exclude the cases where the parties reached agreement on terms. The effect of that would be to induce every landlord to go into court, which would have a disastrous effect on court lists.
Progress reported; Committee to sit again.