As a former solicitor for eight years, until the general election relieved me of my duties, I practised a large amount of conveyancing and I am glad to see the reforms that are being introduced in the Bill before the House. The legislation is a comprehensive reform of the land and conveyancing law with which solicitors and purchasers must deal when buying houses, mortgaging properties or conducting any transactions relating to land and property. I pay tribute to all the people who have been involved in this process. The theory is that enacting legislation is a matter for Members but in areas such as this, we are completely reliant on the experts. The Department of Justice, Equality and Law Reform, the Law Reform Commission, other interested bodies and Professor Wiley, about whom and from whom we learned so much, have played a huge part in this Bill.
The system of land law which has existed in this country since the foundation of the State has been in some ways an insult to the idea of a republic where we still have vestiges of the feudal system of tenure in the law of the land and where property, in some cases, can be held under a feudal system which really does not apply to a republic. I am glad to see that being repealed.
I would make one general criticism of the Bill but it should not be taken personally by anyone and should really be seen as constructive. Much of the Bill is very theoretical and I do not see the input of solicitors who deal with property law on a daily basis. A number of welcome measures have been introduced. I refer, in particular, to section 62 relating to seals on deeds. Although a minor one, it is an issue which has annoyed me. Section 62 states: "(1) Any rule of law which requires — (a) a seal for the valid execution of a deed by an individual, or (b) authority to deliver a deed to be given by deed, is abolished." I would go a lot further than the drafters of this legislation have gone and would ban the use of seals because the ordinary purchaser or mortgager does not have seals. The use of seals on any kind of deed is an anachronism. A section such as this in the Bill will not prevent the use of seals which will continue because solicitors and lawyers are generally loath to end traditional ways of their craft even where it is not necessary. This section permits the use of seals.
The Land Registry rules have a similar provision in them where the use of a seal is not required but we still see solicitors and, in some cases, the Land Registry insisting that seals are used on deeds. That is wrong because it is a complete anachronism dating from a time when the local lord or whoever conveyed his property and used his seal as a symbol of power and importance. That has no relevance to modern day life.
An important provision in this Bill which will have huge practical effect for many purchasers, people who own freehold land and people who live in housing estates that have been completed in the past few years is the issue of the enforceability of freehold covenants. That has long been an out of date provision of law where freehold covenants cannot be enforced in certain circumstances. This has caused problems because many of the drafters of conveyances of houses did not seem to be aware of it. In creating management companies in housing estates using freehold conveyances and imposing obligations and conditions on covenants, the issue of the subsequent enforceability of those covenants in regard to the second or subsequent purchasers of a property has never been addressed. I do not think it has been addressed by this Bill either because I do not believe it applies retrospectively in regard to housing estates which already have these covenants in them, although I can be corrected on that.
I can think of one particular estate in which my wife owned a house before we got married. The management company fees were simply not enforceable and the estate did not operate in a satisfactory manner because the local authority did not want to take over common areas. The first purchasers had covenants with the management company but these were not enforceable by subsequent purchasers of the properties who could get away scot free without paying their management fees. This is a welcome change but perhaps we will have to look at it on Committee Stage to see how enforceable it is and what this change means in respect of covenants already in deeds.
I am disappointed by the abolition of the rule of lost modern grant in section 32 and the requirement for a court order in respect of this. What this meant was that if an easement — for example, a right of way — had been in use for 20 years, a vendor of a property could certify that by signing the appropriate statutory declaration. Perhaps two or three owners of a property might swear an affidavit that such a right of way or whatever was in use for 20 years. That removed a lot of uncertainty from property transactions in which there might have been issues of right of way. This will have a negative effect in that we will have to wait for a court order to have such a right of way recognised. That will add costs, hassle and time and perhaps it should be looked at again. I know there are good reasons for it because an affidavit is open to abuse. However, swearing a false affidavit is a criminal offence and solicitors do not condone it.
In a way I am glad to see the fee tail and fee farm grant being abolished. The legal practice in which I worked drafted fee farm grants until relatively recently but that is not required now with the freehold covenants now being enforceable. That is an old system and it worked in some cases in some housing estates and industrial lands where leases many not have been appropriate or not allowed as in the case of houses. It is probably right to abolish the fee tail, although there are properties which are affected by it. A client of mine owned a property in fee tail female. That property can only pass down to female members of the family as things stands.
The issue of conveyancing costs is being addressed and this will help. However, when we move towards e-conveyancing, it will help even more. A major issue which is not addressed by the Bill, and probably should not be, is the higher charges in the Land Registry versus the lower charges in the Registry of Deeds. There is a reason for that in that the Land Registry is like an insurance policy and gives a State guarantee over the title to one's property. On the higher scale of Land Registry fees, it can cost €625 to register the ownership or transfer of a property plus €125 to register the mortgage deed whereas in the Registry of Deeds, one can register the deed for €44 and the mortgage deed for another €44. There is a reason for that in that the Land Registry does a different job from the Registry of Deeds but clients do not understand that. It is an issue which should be looked at possibly in the context of this Bill in an effort to bring down conveyancing fees and perhaps level the playing pitch.
That leads on to the other issue of compulsory registration of property. Some 85% of property is registered in the Land Registry. It is mainly rural as opposed to city property. I would like the system of compulsory registration broadened to other counties and to new housing estates. There are new housing estates in which houses are being sold where purchasers' solicitors are being provided with boxes of title deeds. There should be an obligation on builders' solicitors to register the property in the Land Registry as part of preparing booklets of title for purchasers. It is only fair to purchasers and it would mean more efficiency in the system and in solicitors' offices because they would not have to read through boxes of title deeds. In the case of apartments in Dublin, in particular, there are literally three boxes of title deeds and the solicitor must go through all of them if he or she is to comply with his or her obligations.
I am glad the issue of mortgage enforcement is dealt with in section 94. As it happens, I spent a lot of time during the general election campaign in and out of court in respect of a couple of clients who were in difficulty with their mortgages and on whom court orders were threatened. One certainly could not abandon someone who was going to lose his or her house or property just because there was a general election coming up. Section 94(3) codifies in law what actually happens in court where the judge or, in some cases, the county registrar uses his or her discretion. It states "where it appears to the court that the mortgagor is likely to be able within a reasonable period to pay any arrears, including interest, due under the mortgage or to remedy any other breach of obligation arising under it", the judge can adjourn the proceedings, can stay the enforcement of a court order by a bank or can postpone the bank taking possession. We need to look carefully at this issue of banks taking possession of properties. There is an increasing number of repossessions. I am particularly worried by the sub-prime market in which we see what I would call the sharks. I got a leaflet in my door today offering me a fantastic mortgage at a rate of 8%, which is significantly higher than normal.
In regard to banks taking possession of properties and the court's discretion to delay orders or adjourn proceedings, the court should be able to take into account the fact the borrower has been obligated to pay a super normal rate of interest. Such a provision would take some of the wind out of the sails of the sub-prime lenders, which tend to go to court quickly when borrowers miss a payment or two. Some of the more traditional banks take a more reasonable approach, as long as borrowers are honest and open with them. That is not happening in all cases, however. This is not just an issue of financial services regulation, it is a conveyancing issue too.
I would like to comment on the final section of the Bill, section 122, which contains an obscure provision. I am delighted that this section, which states "the power of the sheriff, or of other persons entitled to exercise the sheriff's powers, to seize a tenancy under a writ of fieri facias or other process of execution is abolished” has been included in the legislation. This measure will mean that when purchasers are buying leasehold property, their solicitors will no longer be obliged to conduct searches in the sheriff’s office and the revenue sheriff’s office. Given that such searches currently add up to €200 to the cost of a leasehold property transaction, this proposal represents a positive step for purchasers.
While I like the Bill's co-ownership provisions, they could go a lot further. When practising solicitors deal with co-ownership, they often deal with the division of property after people have fallen out. This issue relates to the issue of civil unions as well. It is also a question of family law, although there are separate rules in relation to divorce and separation. The law is very vague on what should happen when unmarried parties, such as couples or brothers and sisters, decide to sell jointly owned properties. I am not sure that this legislation adds very much to the existing provisions in this area. As solicitors, we often sit in our offices going through electricity bills, gas bills and other utility bills, trying to work out who owns what. Perhaps it is something we should look at. These cases have been arising much more regularly in my practice and I am sure the same is the case in other practices.
I am glad that this new law has been introduced. The sooner it is enacted, the better. The next issue we will have to deal with is e-conveyancing. This Bill does not deal with the issue of solicitors' undertakings, which I raised on the Adjournment. More work has to be done on this matter, which is the subject of some public disquiet. Solicitors have to instil confidence in the public that they are doing a good job. I am reminded of the old adage that "most people think that most solicitors are crooks, but that their own solicitor is fantastic" because it applies in this instance and is what people generally think. It is important for the legal profession that legislators deal with the loss of confidence in solicitors. As I do not have any more to say on the issue, I will not use the rest of my time.