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Dáil Éireann debate -
Wednesday, 24 Jun 1987

Vol. 373 No. 13

Landlord and Tenant (Ground Rents) (Amendment) Bill, 1987: Second and Subsequent Stages.

I move: "That the Bill be now read a Second time".

The purpose of this very short Bill is to extend the operation of the special ground rents purchase scheme that is administered by the Land Registry under Part III of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978.

As Minister for Justice I had the pleasure of initiating the Act of 1978 which provided a new method for the purchase of ground rents on dwellinghouses. It had become apparent that the main reason people did not avail themselves to a greater extent of their right to purchase the fee simple under the Ground Rents Act of 1967 was the legal cost of doing so. Under the scheme provided by that Act the purchase is a matter for the parties themselves to arrange, although any dispute or difficulty may be referred to arbitration by the county registrar whose award may be appealed to the Circuit Court. The purchaser is liable for the ground landlord's costs of the transaction and that liability is limited to such costs as are necessary and reasonable. The approach adopted in the 1978 Act is that for a fixed fee the Land Registry undertake the legal work involved in the acquisition of the fee simple. That procedure provides a ready means by which ground rent tenants of dwellinghouses can free themselves of ground rent and I am glad to say that a considerable number of people have availed themselves of that opportunity. The total number of applications received between 1 August, 1978 and 31 May this year is 52,742.

The special purchase scheme originally had a life of five years to 31 July, 1983 and was extended by legislation in 1983 for another year and again in 1984 for a further three years to 31 July, 1987. On both occasions the extension was subject to an increase in the fees and the increases were calculated to cover the cost of administering the scheme.

Following the 1984 legislation all fees may be revised by ministerial order. The scheme is self-financing on the basis of current fees and, accordingly, no increase in fees is called for at present. The vast majority of applications received into the Land Registry are made by persons in occupation of their dwelling house, who have the consent of the ground landlord to the purchase of the fee simple. The current fee in these "consent" cases is £26.

I am proposing in the Bill to extend the life of the scheme indefinitely — a course which I think will be welcomed by Deputies and by those ground rent tenants who will continue to have an optional purchase procedure that is as simple and as inexpensive as possible.

It may be that some aspects of the operation of the special purchase scheme under the existing legislation are capable of being improved. What I have in mind is that since the Land Registry scheme would, by virtue of this legislation, be placed on a permanent footing the scheme should, perhaps, be assimilated more to the ordinary registration functions of the Land Registry. I propose to have this matter examined further.

I would like briefly to mention ground rents payable by local authority tenants. The No. 2 Ground Rents Act of 1978 extended the right to purchase the fee simple to those tenants for the first time. It may be that public sector landlords, such as local authorities, can and should be better enabled to make special arrangements to bring an end to ground rents payable to them, many of which are for nominal amounts payable if demanded, which are not and were never intended to be collected. I am having this question examined to see what can be done and any proposals I may develop to deal with the matter will be announced in the ordinary way in due course.

The scope of the Bill is, as it must be — if we are to get the legislation through before the present scheme expires on 31 July next — confined to repealing the provision of the No. 2 Act of 1978 which limits the period within which applications may be made under Part III of that Act. The Bill therefore is, essentially, a one section Bill. Section 1 proposes the repeal of section 18 (as amended by an Act of 1984) of the No. 2 Act of 1978 and its effect will be to ensure that the Land Registry scheme of ground rents purchase will extend without limitation beyond the date I have mentioned. Section 2 is a standard provision in relation to short title, construction and collective citation.

I commend the Bill to the House.

We welcome the repeal of section 18 of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978 which has the effect of extending indefinitely the special ground rents purchase scheme introduced in 1978. Clearly there are still a large number of ground rent tenants who are anxious to avail themselves of this scheme and who see it as a relatively simple and inexpensive way of buying out the fee simple of their properties. The Minister, when replying might tell the House the numbers who have availed of the scheme to date and give an estimate of the number of residential ground rents in the country. Repeated requests have been made for the complete abolition of ground rents. One can well understand the resentment of the ordinary house-holder at having to pay ground rent, particularly when he or she may be struggling to pay a large mortgage out of a heavily taxed income.

I recognise of course that we are talking about houses built prior to 1978 because one cannot impose a ground rent on houses since the passing of the 1978 Act. We have been told repeatedly it is not possible on constitutional grounds to abolish existing ground rents without payment of compensation. People have a right to private property under the Constitution. The right to an annuity under ground rent legislation is a form of private property. We have the conflicting interests of two people with a right to private property — the landlord as a result of the original contract and the person who owns the house.

I am told that the level of compensation that would have to be paid if legislation is introduced to abolish existing ground rents would amount to between £40 million and £70 million. This leads one to ask the question, where would the money come from. From the taxpayer. Who is the taxpayer? He is the person paying PAYE, the person whom we are trying to relieve of paying ground rent. That would mean another of the transfer payments which have bedevilled the country in recent years. A person would be paying extra tax in order to get an extra benefit from the State. It would have the effect also that the compensation would be up to the full multiple of 7.2 or 7.3, whereas individual residents associations can at present negotiate with the landlord for a much lower rate. The alternative course is to introduce a Constitutional amendment but from past experience I have serious reservations as to whether appropriate wording could be found which would be acceptable to the majority of the Irish people and which would not have a broader effect on the overall rights to private property.

Despite all of this, we have the continuing spectacle at election time of some political parties represented in this House giving commitments they know they cannot stand over with regard to the abolition of ground rents. At the last election a member of the Minister's party who is now a Minister of State in the Government sent a letter to ACRA indicating quite clearly that Fianna Fáil were committed to introduce a scheme to abolish ground rents and that the finishing touches were being put to a 37 page draft document. He stated that the proposal would bring in termination dates for ground rents on local authority and private houses.

I would like the Minister when he is replying to tell us if it is the Government's intention to live up to the commitment given by that Deputy and, if so, will he please explain will this be by way of legislation resulting in compensation being paid or is there a proposal to introduce a constitutional amendment? I do not want to see a situation continue whereby the public are misled into thinking that by holding out and not paying their ground rents it would be possible to force legislation to be introduced which would wipe the slate clean. These unfortunate people are finding themselves ending up in court and facing the consequences of the court's decision. I am proud that my own party, despite the possible loss of votes at election time, have behaved responsibly on this issue and have told the truth each time we were asked our views on the abolition of ground rents.

The last time this issue was debated in the House was when the Landlord and Tenant (Ground Rents) (Amendment) Bill, 1984, was introduced. It had the effect of extending the special ground rents purchase scheme for a further period of three years and there was a provision to allow for an increase in the level of fees charged. It also gave the Minister power in the future to alter fees by way of order. There was tremendous opposition from the Fianna Fáil Party at that time to the proposed increases. It was stated they would result in a slowing down in the number of applications which would be received in the future under the scheme. I would like to ask the Minister if that was the case and, if so, does he propose to use his powers under the Act to reduce the fees in order to increase the flow of applications once again.

On Committee Stage of the 1984 Bill the Fianna Fáil Party, through its spokesman, Deputy Michael Woods, introduced an amendment to insert a new section as follows:

The Minister for the Environment may, with the consent of the Minister for Finance, by order fix the termination for ground rents on dwelling houses, where these come under his control or under the control of the local authorities.

Deputy Woods argued that in cases where ground rents were under Government control through the local authorities, the Minister should provide a scheme for the termination of these ground rents to demonstrate the State's commitment to the abolition of ground rents. Perhaps the Minister when he is replying will tell us why this Bill does not do as his party requested in 1984 or have they had a change of heart since then?

It is a pity that State bodies like the Land Registry do not resort to a little publicity at times when they are trying to promote particular schemes such as the scheme operating under this legislation. The existence of the scheme should be publicised and the Minister should take steps to see to it that the Land Registry have adequate resources to eliminate delays in dealing with applications under this scheme.

I want to indicate on behalf of the Progressive Democrats that we accept and welcome the Minister's initiative in making the Landlord and Tenant Ground Rents Purchase Scheme open-ended rather than limping from extension to extension. It is a worthwhile change in the law and one which will be of benefit to the community generally and not merely the people who avail of the scheme. There are a number of deficiencies in this Bill and I want to point them out, not on the basis that we intend to oppose the Bill, but in order to encourage the Minister perhaps at an early future date to bring forward another Bill, if we are all still in the same positions at that stage, to improve the law and make it more certain and more amenable to more people.

The question of ground rents is surrounded by a good deal of mystification and a considerable amount of misunderstanding. Ground rents as a phenomenon are complicating the law relating to real property. They make it inaccessible and unworkable for the average person. They make it more and more unlikely, for instance, that the work of conveyancing can be taken away from solicitors as a monopoly and given to licensed conveyancers as might be thought reasonable in the context of the examination of restrictive practices which is now in train.

Irish real property law is immensely complicated and very little has been done to address many of the issues which complicate it so much. Since 1881 and 1882 there has been no major statutory reform of the law of conveyancing and that not-withstanding the fact that in 1925 Lord Birkenhead's law of real property in England hugely changed the law there, rationalised it and brought many practices into conformity with commercial reality. That is more than 50 years ago and many of the principles then enshrined in English law of real property, which has many similarities to ours and a common source in many respects, still stand unenacted in this country. As a Parliament we have a bit of explaining to do to ourselves and to the electorate at large to excuse the fact that Irish conveyancing law is in such a shambles to excuse the fact that Irish conveyancing costs are so high and that because of all these complicated features Irish conveyancing law remains a jungle so far as the layman is concerned and one which cannot be simplified or made more competitive as a consequence.

In many respects ground rents were introduced in order to permit the developers of large-scale developments to impose restrictive covenants and orderly development in areas the subject matter of ground rents. Long leases of 800,900 or 1,500 years and fee farm grants were introduced for the general purpose of orderly control and retention of rights such as easements and covenants affecting the control of development of real property. We could have the same protections for the community at large, for the developer and for people who have an interest in property without the necessity of ground rents and long leases of that kind. The law could be developed to make restrictive covenants enforceable even entirely divorced from leases. The restrictive covenants could be made to have force apart from leases and thereby uncomplicate title, something that is most desirable.

At present the recovery of ground rents has been changed so that no right of re-entry on the part of a ground landlord is now enforcable to recover his rent. In many cases where nominal amounts of £5, £10 or £20 per annum are paid the ground landlord has found himself in the position that he cannot recover outstanding arrears of rent from tenants or lessees under a ground rent lease on the basis that it costs more to write one letter than is involved in the amount of the rent. In a sense sums of money, by a process of inflation and by depriving people of any adequate remedy, have been effectively eroded out of commercial reality. The property right which goes with them has in fact disintegrated. If somebody owes another person £5 per annum ground rent and refuses to pay it, there is literally nothing that can be done to recover that money. The property right associated with the long lease has effectively terminated because there has been no right of re-entry since 1978. There is no real right to recover the moneys in question. Since the 1967 Act the restrictive covenants as to user have been watered down because where planning permission is given these covenants are in many cases unenforceable at the behest of the ground landlord.

The whole property rights system connected with ground rents and long leases have been eroded to the point of non-existence in many cases. This brings me to the question of the extent to which the Constitution forms an insuperable barrier to the progressive abolition of ground rents. In my view the Constitution does not stand as insuperable a barrier as had been thought heretofore. It seems to me that there are certain forms of property right which can be extinguished simply by virtue of their minor significance and the ill-effects which their maintenance have on the general good of society and on commercial and social good order and growth.

The Constitution is sometimes interpreted very restrictively as effectively putting in aspic all property rights as they are now and saying that they cannot be saved. There is a huge volume of rights which can be altered this way and that by legislation. For example, intellectual property rights which give people rights in copyright for the lifetime of the author of a book and for 50 years afterwards. They are a form of property right under the Constitution. I have no doubt that it would be open to the Minister for Justice to come into the House tomorrow morning and say he is changing the copyright law, to say that henceforth, it will be for the life of the author plus 25 years, or for the life of the author simpliciter and nothing to his relatives.

Property rights do not necessarily carry with them constitutional immunity for change or abrogation or conversion to something else. This House has been ill served by the advice it has received over many years on the implications of the property rights clauses in the Constitution. They are there subject to various caveats about the common good. If it can be shown and demonstrated that the common good is served by the extinction of certain property rights in certain circumstances then that can be done. All the case law, which anybody can see well surveyed in Deputy Kelly's book on the Constitution, could lead no one to the belief that every single copyright must be conserved no matter what the social consequences are and without regard to the ill-effects it has on society in general.

The Progressive Democrats take the view that the time has now come to look at the conveyancing law, at estates, at the complexity of estates and at the pyramid titles which obtain in this country especially in areas where land is unregistered. If we say that in relation to the residual titles of those towards the top of the pyramid who have a very exiguous and theoretical interest in land that the common good may well be served by extinguishing their rights the question arises as to whether compensation should be payable. I do not think there is an automatic right to compensation. The Constitution does not say that. The Constitution — to use the analogy I used earlier in relation to copyright — does not mean that a property right cannot be extinguished or varied without compensation to any person who may be affected by it.

I hesitate to interrupt the Deputy but it seems to the Chair that he is straying very far from the subject matter of this rather short and limited Bill which is to extend the operation of the special ground rents purchase scheme as is administered by the Land Registry.

I appreciate that.

It is a confined subject matter.

With respect, a Cheann Comhairle, I am dealing with the necessity for this Bill. This Bill is here because, as has been pointed out by Deputy Barrett and the newspapers generally, there seems to be a difficulty in abrogating ground rents completely, though this has been promised to the electorate on many occasions. This Bill would not be necessary, and this is a Second Stage debate——

I am sure the Deputy will bear in mind what I have said.

I am well aware that the time of this House is limited but equally the Chair is well aware that the circumstances in which this time came to be limited are not of my making.

In my view the necessity for this legislation and the requirement for a scheme of this kind comes about from an unduly cautious view of the constitutional implications — the real property provisions of the Constitution as they affect ground rents. I make no apology to the House for saying that or for pointing out that if a more courageous interpretation were put by this House generally and by the Government on the property provisions of the Constitution we would not have Bills such as this before us. We would not have had a Bill such as the Local Government (Planning and Development) (Trees and Woodlands) Bill put before us. We would have a different approach to the question of regulating property rights especially in relation to real property in the common interest.

I believe also that the object of this Bill would be better served if it contained amendments to the 1984 Act in relation to the number of years within which a person can buy out, at a reduced rate of compensation to his ground landlord. At present ground rent can only be bought out at the reduced rate of the 7.2 multiple, to which Deputy Barrett referred. One can only buy out at that rate if one is clear of the date of ending of the tenancy in question by 15 years. If you miss the 15 year deadline, thereafter during the 15 years immediately prior to the expiry of the tenancy, the situation turns into one in which the amount of compensation payable by the tenant to the ground landlord increases very dramatically towards a much more substantial capital sum. Recently I had an example of a woman in my constituency who lives alone and who by the time she realised that the ground landlord's lease to her was coming to an end had missed the time limit by about ten years. She will have to pay £3,000 or so to purchase her house, whereas someone who was well advised by a solicitor some ten years earlier bought out for a nominal sum of £60 to £70. It seems to me that the 15 year limit is unfair. I know it is there to try to give flesh to the protection of property rights in the Constitution and to prevent ground landlords who are within a short distance of recovering their property outright from feeling that they are being expropriated by their tenant. I feel it is a very crude instrument and does not really reflect commercial or social justice. The ground landlord who is within 15 years of the expiry of the lease in question is not somebody who is gravely disappointed, or feels expropriated, if 15 rather than ten or five years before the end of the ground lease his tenant opts to purchase out. I do not see why he should be given a different order of magnitude by way of compensation simply by the lapse of those few years. That seems to be fundamentally unfair.

This Bill leaves aside an opportunity to amend The Landlord and Tenant (Ground Rents) Act, 1978, in another material respect. That Act is directed towards the prevention of the creation of further ground rents in respect of certain classes of property. At present it is restricted to houses principally used as a dwelling. I think that the arguments I addressed earlier to the general question of ground rents and their control and extinction would seem to support the proposition that section 2 of that Act should be amended to extend the prohibition of the creation of ground rents to other classes of property, not simply dwellinghouses. I see a good deal of force for such an amendment. I can see that there would be some commercial objections — some people involved in building blocks of flats or shopping centres might feel that a ground rent system in that context is the only way to ensure the adequate enforcement of covenants and the orderly regulation of the development in question. That brings us back to the point that begs the question: is there not a better way of ensuring orderly control and restrictive covenants and the like separate from ground rents and long leases?

We welcome this Bill because it extends the right to purchase out ground rents, but we raise several question marks. First, have we done sufficient fundamental thinking in this House as to how we can really tackle the problem that this Bill is only partly designed to confront. Second, have we done all we could to achieve justice as between varying classes of ground rent purchasers? Third, is it the case that the Constitution requires a scheme of the kind that this Bill is designed to extend, or could we not have a much more far-reaching reform of the law of real property? Fourth, should we not, as a Parliament, address ourselves to the general issues of conveyancing law and not merely to the small issue which is at stake here today? The introduction of this Bill represents a lost opportunity to do certain things which, as I pointed out, could have been done in relation to the 1978 and 1984 legislation and which would have resulted in a greater degree of social justice.

I appreciate that I have taken a reasonable amount of time on this matter. I would prefer to put down more amendments. I would have preferred to call for votes on the amendment but I might be accused by some people of filibustering had I done so. I wish to establish a marker that this legislation is not considered to be adequate. It is considered to be necessary and desirable but inadequate. We will let it through on the basis that it is necessary but we will not accept that it is an adequate response to the commitment given by the Minister's party to the public on the reform of the ground rents law.

As the Minister has said the role of this Bill is limited to removing the time limit under which residential occupiers can apply to redeem their ground rents under existing legislation. I think that most people who intended to redeem their ground rents under the existing legislation in all probability have done so by now. I know that in my constitutency, which consists largely of housing estates built over the past 15 years, an appreciable number have availed of this legislation to buy out their ground rents. However by no means have they all done so and it is appropriate to retain this legislation in force until more extensive legislation is introduced to extend the redemption or the possibility for redemption and termination of ground rents on a broader basis. I believe that even without amending the Constitution it should be possible to devise a termination arrangement over a period of years. I agree with the comments made by the previous speaker, Deputy McDowell and I believe much could be done to resolve this issue once and for all without the necessity of a referendum on a constitutional amendment. Many members of the Government led ACRA and many residents' associations to believe before the election that such a scheme was possible. I believe that such a scheme is possible and the Government should apply their minds to preparing legislation to that end and bringing it forward to the House for discussion. The present situation is unsatisfactory in a number of respects. Reference has been made to the question of the use of the creation of ground rents to enforce covenants to secure orderly development of estates and areas. I believe that was always entirely inappropriate. There should never have been a role for ground landlords to be involved in orderly development; that is a matter for the local authorities. In my view the planning departments of local authorities are the appropriate agencies to undertake the responsibility to secure the development and maintenance of areas in a proper manner in accordance with the planning laws. Private individuals, or companies, be they resident or foreign, ought to have no role in this.

It is strange that in the State we had a very marked degree of neglect of urban land, particularly when one contrasts it with what applied to rural and agricultural land. Perhaps the reason is that the entire energy of the State going back to the twenties and thirties was devoted to rectifying the situation of rural land. After the State was formed much attention was given to the vesting and breaking up of the large farm estates. The system of land purchase annuities and so on was devised and worked very well. A great deal of energy was put into that scheme. That contrasts very markedly with the attention given to urban land, so much so that the landlord and tenant situation both as regards ground rents and ordinary business and residential rents was pretty much neglected in comparison. Indeed the whole area was virtually untouched between the Landlord and Tenant Act, 1931, and the amending legislation of 1958. Since then the progress has been at best sporadic and limited. The failure to tackle the issue over the years has left a ludicrous situation of these nominal rents referred to by the Minister which are as low as 3p or 5p per year, or perhaps £5 per year or of that ilk and many of these are vested in local authorities. The local authorities in some type of halfhearted manner purport to apply the covenants retained under those leases reserving 5p a year in connection with covenants. There is no need for that. The way to deal with the covenant position is through the planning laws and by-laws, not under leases.

Regarding the local authority as ground landlord, a much simpler situation applies. There is no reason why the Government, through the Minister for Justice or the Minister for the Environment, should not issue a directive to arrange a simple efficient termination scheme for local authority rents. There is no earthly reason local authorities should waste their time and energies collecting or trying to collect in many cases, these trifling amounts to the nuisance and annoyance of house occupants who feel they own their houses. The time, trouble and expense expended by employees of many of those local authorities cost far more than the amounts recovered under these old ground rents, most of which are either nominal sums or trifling sums.

The previous speaker said that in the private sector many of these rents owned by private ground landlords are not recovered. The are abandoned because of the expense that would be involved in seeking to recover them. That is true and it gives rise to great complications on conveyancing. In many cases when one goes to sell a house one finds that the ground rent has been either abandoned or has not been paid for very many years and when people try to find the ground landlord — they must do so before they can sell their house — there is great difficulty in finding out who that ground landlord is. There is the spectacle of house owners who have a house in the course of sale running around trying to find out where the ground landlord is. Often he cannot be found and this can give rise to considerable difficulties for solicitors and house owners on the conveyancing side.

It may well be inappropriate to have the necessity at all in the present state of the legislation to produce a last receipt for ground rent on a sale, but the practicality of it is that solicitors acting on behalf of mortgagees, building societies, banks and whatever are insisting on their production and this is causing a considerable degree of difficulty in many ways. It highlights the obsolescent nature of the whole institution. We really must apply our minds now to phasing this out completely. Progress has been made. There is no doubt that the scheme has made progress and an appreciable number of people have availed of it, but many thousands are still left who have not availed of the scheme and probably will not do so, and that position too will have to be tackled.

The kind of proposal suggested by ACRA merits examination. It involves a kind of termination procedure, a phase out procedure on a basis such as a fixed number of years, or whatever, applying.

Such a procedure would be welcomed by the residents' associations, by house owners and, I believe, by most ground landlords who, as has been indicated, find the present arrangement a nuisance and an irrelevance. Ideally the house owner should be the freeholder and his position should be enfranchised. There should be nobody over his head on the covenant position or otherwise. That is the kind of scenario which was promised by the present Government and their Ministers on the run up to the election. I believe it can be achieved without the necessity for a constitutional amendment. I look forward to the Minister indicating when he replies that he will have this examined and that his intention is to bring before the House new, more comprehensive legislation that will lead towards what we all agree would be that desirable result.

I want to make a brief contribution on the Second Stage of this Bill and in opening I would like to quote from a document of 1965 in relation to the issue of ground rents:

Taken in extremis, the idea of a modern community which does not entirely own the land on which it exists is faintly ridiculous. The fact that the rental is paid into the pocket of some obscure lord whose only claim to fame was that his ancestors won the land by conquest only aggravates the situation. The sooner ground rents are completely abolished, the quicker we will have a rational land structure. Anachronisms of this nature have no place in the Ireland of today.

That very far-reaching condemnation of ground rents was carried in an editorial in Business and Finance of 15 October 1965. That is a journal of, I suppose, the business community of this State. Since that time there has been little real progress in seeking the abolition and the ending of the faintly ridiculous arrangement that they commented on then.

The point must be underlined that there are upwards of 400,000 people in this State who are subject to and can be called upon at any time to pay ground rent. That figure has been highlighted and underlined time and time again by ACRA, the association who have spearheaded the campaign to seek the abolition entirely of ground rents. The number the Minister has indicated of people who have taken up this scheme of purchase represents a little over 10 per cent. Therefore, the issue of ground rents as a fundamental injustice will not go away and no scheme, however open-ended, introduced by the Minister will ever meet the widespread demands of residents throughout the country for their abolition.

The Workers' Party welcome the Bill here today nevertheless. It is directly in response to the demands of ACRA and a demand that was articulated in this House as far back as 27 June 1984 when the last extension Bill was introduced. Deputy De Rossa then rose on our behalf and argued that the Minister of the day should introduce an open-ended scheme and should not limit it from time to time. However, the limiting from time to time, previously as today, affords us all the opportunity to condemn Fianna Fáil roundly and pinpoint the fact that Fianna Fáil, in or out of Government, will not go to the electorate in the future and suggest that they have in mind, in train, or whatever, at the bottom of a file, on a shelf in an office, or at the back of their head a scheme to abolish ground rents. That is the spectacle that we as an electorate have been subjected to since 1977 at each election, time in and time out. The present Minister was involved, in the famous wording of a letter, in a scheme leading to the abolition of ground rents.

I will give the Deputy an autographed copy of it if he wants it. It is one of the best I ever gave.

We must acknowledge genius when we are faced with it. However, a more important letter enamated from the ranks of this Government in the run up to the last election. It is dated 15 February 1987, written by Deputy Michael Woods, TD, the then spokesperson on Justice and the expected incoming Minister for Justice at the time. Consequent on a public meeting in the Donaghmede area he wrote to the secretary of the Donaghmede Community Association, and I quote in part from the letter:

As I stated at your Public Meeting we are fully committed to the immediate introduction of legislation to terminate ground rents which come under the control of local authorities.

The Minister spoke at length at the meeting about a remarkable document that he had drafted in Opposition. It is 57 pages long, not 37 as the previous speaker said. He represented the letter at that meeting as a document which would lead to the abolition and termination of ground rents. He went on to say that at least in the area of local authority owned or State owned ground rents the Government would take firm and definite action. It is particularly relevant to the Donaghmede area. There are 720 ground rents in that area which are owned by Dublin Corporation. They yield, not a paltry sum, but in excess of £12,000 per annum. They have yielded, or should have yielded, if paid — because upwards of 600 of the residents there are not paying them and have not been doing so for some time — over £200,000 to Dublin Corporation. The Minister, Deputy Woods, indicated in his letter that legislation would be introduced immediately to terminate ground rents owned by local authorities. Subsequent to that meeting and having had the good fortune to be in a position to write as a Deputy to the Minister, I wrote to him asking what had become of that 57 page document. I had already written to Deputy Woods and he told me he had forwarded it to the Department of Justice for the Minister's attention. It has been represented as a scheme which will lead to the abolition of ground rents. In particular, it was to lead to the immediate introduction of legislation to terminate ground rents owned by local authorities.

I want the Minister to tell us where that document is and what he has done with Deputy Woods' great scheme for the abolition of ground rents. Promises were made time and again during the election that Fianna Fáil in Government would take action to terminate and abolish ground rents but they were not kept. I take the point that has been made here today that the constitutional bar that is constantly being represented to us prohibiting progress in that direction is not as forceful as it has been made out to be.

This Government could and should take up the issue firmly. They should present the Bill we are told they have in draft form, that is comprehensive and that has addressed in very serious form the whole question of the abolition of ground rents. I challenge the Minister to tell us whether he has any intention, serious or otherwise, of bringing forward legislation at any level in regard to ground rents. By implication, the Bill before the House indicates firmly that Fianna Fáil have no interest in bringing on the scheme further. If they had a scheme in mind to abolish or to terminate ground rents, there would not be a need for this open-ended timetable that is built into this amending legislation.

Previously in the House I raised at Question Time the whole issue of this amending legislation. The Minister advised the House that there would be an announcement in the ordinary way in due course. In a supplementary question on 13 May 1987 I raised two specific issues. One has been referred to, the non-entitlement of a ground lessee to purchase on the same basis the ground lease within the last 15 years of the life of the lease. The other issue I raised was whether the Government would consider an amendment of section 28 of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978, to prohibit the entitlement of a ground landlord to apply to court for the committal to prison of a defaulting ground lessee. The Minister stated on 13 May that he would investigate both of these matters and would refer back to the House. I am particularly disappointed that the Minister, in his speech today, did not refer to that matter. It appears that was a response of convenience and one that carries as much weight and commitment as all the other representations the Minister and the Government have made on this issue in the past.

If this Government have any serious interest in meeting the very widespread demands of people for the phasing out or the abolition of ground rents, and if there are the constitutional problems which the Government so often talk about, why not at least move in a direction that would render it difficult for a ground landlord to collect ground rents? Previous Governments moved in that direction with the abolition of the right to re-enter and the abolition of the right to create new ground rents. What would be wrong if this Government were to move a step further and abolish the right of a ground landlord to seek to commit to prison a defaulting ground lessee? There are examples, and they occur on a daily basis throughout the country, where people are being presented with orders of court for committal to prison of two, three and four weeks. This, in turn, never seeks to effect a payment but it costs the taxpayers approximately £500 per week to help a landlord to collect money to which we all agree he is not justly entitled, whatever the strict legal position.

While none of us can stand in the way of progress whatever way it is presented to this House, nonetheless it must be underscored that we as a party are disappointed with the Minister's response on this occasion not only to demands from ACRA and other political interests in this House but also in the light of the commitments of members of his own party when in Government and in Opposition to the ground rent lobby during the years.

I and my party welcome this Bill as I consider it is unsatisfactory to bring a Bill into the House every number of years to extend the period of time in regard to ground rents. However, there are a couple of problems which I wish to put to the Minister. The first one arises in regard to——

I hesitate to interrupt the Deputy but I should like him and the House to be aware that I shall have to put the Question at 12 o'clock in accordance with the Order of Business of yesterday. If Deputies want the Minister to reply they should afford him the opportunity to do so.

A number of problems arise in that when a person obtains a loan from a building society to purchase a house and when there is a ground rent attached, the building society's solicitors are reluctant to take the vesting certificate, especially where the ground landlord cannot be found. They seek registration in the Land Registry and this causes long periods of delay for people who take out loans. This is the one serious problem which I see in regard to this Bill and I ask the Minister to address himself to it and to see how it can be resolved. Perhaps the Land Registry could arrange for a specific section to deal with cases such as the one I mentioned and which would deal with the matter expeditiously. Quite a number of problems arise continually in tracing the landlord. I understand the arbitration system is working reasonably well but the Minister should extend this legislation in order to deal with situations where the original ground landlord cannot be traced.

I thank the Deputies for their contributions to this very short but important Bill. As I said in my opening speech, this Bill is necessary because the special scheme of purchase of ground rents on dwelling houses operated by the Land Registry expires on 31 July and I am proposing an extension of the scheme indefinitely after that date.

The Bill does not purport to deal with substantive issues. These include the question of assimilating the scheme more to the ordinary registration functions of the Land Registry as well as examining what further changes can and should be made in relation to ground rents paid by local authority tenants. Any proposals I may bring forward in these matters will be announced in due course. Tens of thousands of tenants have availed of the opportunity to buy out their ground rents and I am sure others would wish to avail of the scheme at some time. The Bill, when enacted, will give that option.

In regard to a query raised by Deputy Barrett, the number of ground rents bought out to date is 52,742 and a very rough estimate of ground rents remaining is 200,000 and not 400,000 as was mentioned by Deputy McCartan. Many of the local authority ground rents are of nominal amounts and are payable only if demanded. For that reason and because we are talking about public sector landlords, it is only right that the Government should examine the position to see if such public sector landlords can make special arrangements to bring these ground rents to an end.

Deputy McDowell mentioned the area of conveyancing and I should like to tell him that the Law Reform Commission are at present examining the law on conveyancing with a view to seeing what changes could beneficially be made, particularly changes which might lead to reduced conveyancing costs.

Up to 31 May 1987, 52,742 purchase applications were received at the Land Registry and 47,587 vesting certificates had issued. Arrears on hand amount to about 5,155 cases. These comprise almost 1,990 consent cases and 3,165 arbitration cases. The Land Registry are required to deal with applications in order of receipt except where serious inconvenience or substantial loss would arise if an application were so dealt with. In general there is a delay in issuing vesting certificates of about two months in consent cases and one year in the case of applications for arbitration.

Deputy McDowell referred to the case of leases that have only a short period to run. There is a possibility that a much higher purchase price will be payable if purchase is not effected more than 15 years from the date of termination of the lease. That is why successive Governments have encouraged people to buy out their ground rents well before the lease has expired. Again I should like to appeal to those who have not yet purchased their ground rents under the special scheme to seriously consider doing so now.

With regard to the question of termination dates, mentioned by Deputy Taylor, the position is that any scheme for the abolition of ground rents would be confiscatory if and to whatever degree it did not provide for fair compensation for ground landlords. Various schemes for the abolition of ground rents have been suggested by ACRA and others with a termination date for payment of ground rent which seemed to avoid the difficulty but which turned out on examination to involve either confiscation or payment of compensation.

The termination of the liability to pay ground rent at some future date without any obligation to compensate the landlord is, in reality, a demand in another form for confiscation. It differs from the other forms merely in that it would operate from a future date, but despite this there are some who continue to seek a date for the termination of ground rents. The belief that ground rents can be ended in this way is misleading and misguided. It would appear that the total abolition of ground rents would raise important constitutional issues and would certainly involve some form of compensation to the ground landlord.

In relation to ground rents on domestic dwellings held by local authorities and other public bodies I should like to state that the ground rents are in effect held by the State. As I mentioned in my speech I am examining such ground rents, how they may be terminated and the detailed implications of such a move. This Bill had to be introduced to extend the existing special ground rents purchase scheme because it was due to terminate on 31 July. There was not sufficient time to finalise the necessary examination of the question of terminating ground rents held by local authorities. This I intend to do in the coming months.

Another broken promise.

I am pleased with the generous welcome given to the Bill by Members who contributed to the debate. I also welcome the late conversion of The Workers' Party to ensuring that the Bill will be allowed to operate. Those outside the House who were encouraged by certain sectors in the House to sabotage the Bill have now seen the light and will allow these provisions to continue.

The time has come to put the following question: "That the Bill is hereby read a Second Time, the Bill is hereby agreed to in Committee and is reported to the House, without amendment, and Fourth Stage is hereby completed and the Bill is hereby passed."

Question put and agreed to.
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