Eric J. Byrne
Question:11 Mr. E. Byrne asked the Minister for Justice the proposals, if any, the Government has to abolish ground rents as a lien on property; and if she will make a statement on the matter. [13518/95]
Ceisteanna—Questions. Oral Answers. - Abolition of Ground Rents.
The Government policy agreement contains a commitment to introduce legislation to abolish ground rents as a specific lien on residential property and convert them into normal commercial debt. I am examining the measures which would be necessary to give effect to this with a view to putting the matter before Government.
I am delighted to see the programme for Government is being pursued by the Minister. Does she join in my concern for the approximately 250,000 householders whose ground landlords, as the law stands, can claim one-eight of the value of the property when the lease expires? This leaves many people in an invidious position. Will she bring in the necessary legislation to give homeowners the simple freehold of their land on the expiry of the lease? As property values rise, she will be aware that one-eight of the value of a property may be substantial and hundreds of thousands of homeowners in Dublin, Limerick and Cork will be faced with bills of as much as £10,000.
Ground rent has given rise to concern in many areas, especially where it is hard to track down ground landlords. This commitment in the Programme for Government has been examined in the Department to see how it can be fulfilled. Complex legal and constitutional issues are bound up with ground rent so I cannot give any indication at this stage as to when the legislation will be ready to bring to Government. I have a comprehensive programme of law reform in areas mentioned earlier such as drugs, and am giving them top priority.
The nature of what is proposed in the Government programme is relatively limited. The obligation to pay ground rents would still remain although the legal nature of the debt would change. The Deputy will be aware that to go beyond that — to seek to abolish ground rents without compensation — would be unconstitutional and would have to be considered carefully.
On the positive side, the Deputy may know the Landlord and Tenant (Ground Rents) Act, 1978 prevents the creation of new ground rents on dwelling houses, so any difficulties which exist are diminishing. Also, 64,000 people have so far availed of the special purchase scheme introduced in the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978 and subsequently extended indefinitely by the Landlord and Tenant (Ground Rents) (Amendment) Act, 1987. The intention of that scheme was to provide a ready means by which any person can in effect abolish ground rent payable on a dwelling house. That is not available to everyone because of the occasional legal complexity in the ownership of ground rents and houses but the scheme exists and I urge the Deputy to assist his constituents if he thinks they can avail of it.
I am interested in Deputy Byrne's question because a number of my constituents are in this position. Could the Minister explain in more detail what she means by converting ground rents to a commercial debt? In her reply to Deputy Byrne's supplementary question, she said there were constitutional implications and an onus to compensate property owners. Deputy Byrne's party has vociferously articulated the opposition to ground rents for many years——
Why does the Deputy think I put down the question?
——and I support that. Does the Minister think the real objection of householders to the concept of ground rent cannot be addressed because the Minister is sidestepping the issue by calling it something else, while the principal objection remains? Has she or have her officials consulted ACRA and is that body satisfied with the alternative proposals being drafted?
As I said to Deputy Byrne, the matter is being examined in my Department, although it is not receiving the same priority as some of the other issues we discussed earlier. The Deputy will accept that in the same way as we all have to create priorities in our lives, the onus rests on me, as Minister, to create priorities in my Department. I know that submissions from ACRA have been received and examined in my Department and any requests to officials preparing this legislation will be accepted. I extend that invitation to the Deputy if he knows people in ACRA who want to talk to them.
As he knows, there is an ongoing campaign to abolish ground rents and the proposals in the Programme for Government are to change the lien on the property. At present, the landlord owed ground rent may seek to have a judgment mortgage registered against the property for the amount of the debt. One of the problems is that that puts a debt on the mortgage of the house, whereas if we changed the nature of the debt it would not prevent sales of houses and so on as it would be an ordinary debt.
However, as I say, the matter will receive further study and perhaps the Deputy can ask me what progress has been made in a few months' time when I am next listed for priority Question Time. In the meantime, I extend that invitation to discuss the matter with the officials.
That concludes questions for today.