Michael Joe Cosgrave
Question:57 Mr. Cosgrave asked the Minister for Justice if he will outline the constitutional amendment, if any, he plans to introduce in order to abolish ground rents; and if he will make a statement on the matter.
Written Answers. - Ground Rents.
Michael Joe Cosgrave
Question:58 Mr. Cosgrave asked the Minister for Justice if his attention has been drawn to the exorbitant prices which are being quoted to people who wish to buy out their ground rents; if he will have the matter investigated; and if he will make a statement on the matter.
Michael Joe Cosgrave
Question:59 Mr. Cosgrave asked the Minister for Justice if he will outline (a) the present procedures for purchasing ground rents and (b) the procedures which the arbitrators involved are using; and if he will make a statement on the matter.
I propose to take Questions Nos. 57, 58 and 59 — which I take it relate to ground rents on dwellinghouses — together.
The Government have no plans for legislation to enable a referendum to take place on the abolition of ground rents. However, as I informed the House in reply to Question No. 119 of 19 November 1991, the Government are committed to introducing legislation which will abolish domestic ground rents as and from 1 January 1997. Under these proposals such rents will be deemed no longer to exist and the fee simple of the property will become the exclusive ownership of the householder. The legislation will shift the onus of completing the purchase of outstanding ground rents from the householder to the ground rent landlord. Payment of compensation to the ground rent landlord will continue to apply on a similar basis as at present. Work has commenced in my Department with a view to the preparation of the necessary legislation and when proposals are finalised they will be announced in the usual way.
In relation to procedures for purchasing ground rents, and arbitration arising in that context, I would refer the Deputy to the provisions of the Landlord and Tenant Acts, 1967 to 1989. In particular I would draw his attention to the provisions of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978, which introduced a low cost purchase scheme by virtue of which any person can abolish the ground rent payable on his dwellinghouse. The Landlord and Tenant (Ground Rents) (Amendment) Act, 1987, extended indefinitely the operation of that scheme. The scheme is operated by the Land Registry and I have arranged for a copy of an explanatory leaflet in relation to the scheme to be forwarded to the Deputy.
As regards prices which are being quoted to people who wish to buy out their ground rents the Deputy will appreciate that these are matters which arise between individual landlords and tenants on which detailed information would not be available to me. I can inform the Deputy, however, that under the provisions of section 7 of the Landlord and Tenant Act, 1984, the purchase price payable under arbitration in default of agreement between the landlord and the tenant is, in the great majority of cases — i.e. generally cases of domestic dwellings where the lease is not due to expire within 15 years — subject to a maximum that is related to the current yield on the most recent long term national loan. That maximum is at present about 11 times the annual amount of the ground rent and this is clearly a factor which those householders in whose cases the maximum applies should have regard to in assessing the reasonableness or otherwise of purchase prices quoted by landlords.