, Limerick East): I move: “That the Bill be now read a Second Time.”
The main purpose of this Bill is to provide for an extension of the period of operation of the special ground rents purchase scheme that is administered by the Land Registry, subject to an increase in the fees payable under the scheme.
This purchase scheme supplements the scheme of ground rent purchase that is provided by the Landlord and Tenant (Ground Rents) Act, 1967. It was introduced by the No. 2 Ground Rents Act of 1978; it applies to dwellinghouses and it was originally given a life of five years to 31 July 1983. However, its life was extended for a period of 12 months, that is, to 31 July next, by the Landlord and Tenant (Ground Rents) (Amendment) Act, 1983, subject to an increase in fees.
As I explained to this House in the course of debate on the Bill that became law as the 1983 Act, there were two main reasons for providing last year's extension of the life of the scheme. One was the large number of purchase applications that began to pour into the Land Registry as the original five-year period drew to a close. It became clear that, were the scheme not to be extended, many intending purchasers might be unable to lodge completed applications in time. The other main reason was that, because of mounting arrears of work arising from these belated applications, the Land Registry staff concerned would in any event have to continue their work under the scheme until well after the original termination date. That being the case there might have been little enough actual saving if the scheme had been allowed to end last year, as against providing some extension.
In the event, however, last year's rush of applications continued at such a pace that any idea of disposing of arrears within the following 12 months became impracticable. In the second place, it became clear that fresh applications made under the scheme during the period of its extension were by no means confined to applications from those who might have been unable to lodge completed applications before the original expiry date for the scheme. The fact is that, for quite some time past, the Land Registry have continued to receive fresh applications at a remarkably steady rate of about 400 per month.
Clearly, there are still numbers of ground rent tenants who are anxious to avail themselves of the scheme and who see it as a relatively simple and inexpensive way of buying out the fee simple of their properties. Given the problem posed by the arrears from last year, however, the Land Registry are yet some considerable time away from being able to deal on a current basis with even this moderate flow of applications.
It is in these circumstances that the Government have decided to propose a further extension of the scheme, this time for a period of three years. The extension is being accompanied by a further increase in fees. The fees that were fixed when the scheme was introduced in 1978 did not by any means cover the cost of administering it. This was understood and accepted at the time. It was recognised that the fees were little more than nominal and the idea was to encourage ground rent purchase.
However, last year's extension of the scheme was accompanied by an increase in the fees payable, although public funds have in fact continued to bear a significant part of the cost of the scheme even following the introduction of last year's increase in fees. The main reason for this is the large number of applications that were made at the old fees and that are still being processed. This makes it difficult to estimate what level of fees would actually cover costs if arrears did not come into the reckoning. The best estimate that can be made is that an increase of 75 per cent in the level of fees is the minimum that is needed to cover costs in respect of new applications. Provision for that increase is made in section 3 of the Bill so far as concerns applications from purchasers who are in occupation of their dwellinghouses. Corresponding increases in the remaining fees will be promulgated by way of a fees order, following enactment into law of this Bill.
Since the scheme is being extended for a further period of three years, since costs could change in the course of that period and since the increase of 75 per cent is very much a minimum estimate, it is necessary to make provision for further changes in the level of the fees so as to keep them in line with costs, and that is what is proposed in subsection (2) of section 3 of the Bill. It provides that the existing power to change fees by order will in future extend to all fees — up to the present some fees have been fixed by the statute and could not be changed by order.
Section 4 of the Bill proposes certain changes in relation to the fee payable under section 26 of the 1978 No. 2 Act. Section 26 of that Act gives ground rent tenants of housing authorities the right to buy out the fee simple, subject to certain conditions. The fee simple is vested in the purchasing lessee by way of a transfer order under section 90 of the Housing Act, 1966, and section 26 of the 1978 No. 2 Act fixes a fee of £5 for the issue of that transfer order. This fee has so far remained unchanged, despite last year's increase in the fees payable under the Land Registry scheme.
It may, perhaps, be accepted that the considerations that apply in the case of the section 26 fee are not those that apply in the case of the Land Registry fees. Nevertheless, the lowest fee payable under the Land Registry scheme was also £5 in 1978, was increased to £15 last year and is now to become £26. In the circumstances it is, I think, only reasonable that the section 26 fee should now be increased to £20, and that it should be open to variation in the future by way of a fees order in the same way as fees generally may be so varied. Section 4 of the Bill provides for these changes. Any fees order under section 26 of the 1978 No. 2 Act, it is proposed, will be made by the Minister for the Environment since the section 26 fee is payable to a housing authority. I commend the Bill to the House.
