This measure, which was originally sponsored by my predecessor, proposes to give effect to the recommendations in the Conroy Report on Reversionary Leases. Accordingly, it repeals and re-enacts, with amendments suggested in the report, all the provisions of Part V of the Landlord and Tenant Act, 1931, so that the Bill when enacted will contain within its compass all that the law has to say about reversionary leases. This, I feel sure, will commend itself to practitioners.
Although the Bill is expressed in highly technical language many of its provisions are merely a re-enactment of the present law and the main changes which it proposes to make can be stated fairly simply. But first it is necessary to indicate briefly what the present law is on these matters and how it came to be what it is.
Before 1931, when Part V of the Landlord and Tenant Act came into operation, the ground landlord was entitled, when a building lease expired, to get possession of the property, including the buildings erected by the original building lesses, in accordance with the terms of the lease. He was then free to retain the property for his own use, to sell it or to let it at the highest rent obtainable either to the lessee or to a stranger to the title. the practice followed by the better-managed estates when one of these old leases expired was, however, to grant a reversionary or renewal lease for a long term at a rent which usually was only a fraction of the rent that could be obtained for the property. The policy of these estates was to give the new lease to the person who appeared to them to have acquired the beneficial or proprietary interest in the property, that is, either to the person who held the building lessee's interest or to a person who had "bought" the property by taking a long sub-lease of it at a low rent and by paying a large capital sum there and then. Part V of the 1931 Act adopted these principles when providing that leaseholders should be given a statutory right to renewal of building leases on terms to be fixed by the court in default of agreement.
The Bill proposes to make three main changes. Perhaps the most important of these is the recommendation that the maximum rent which may be fixed under a reversionary lease should be one-sixth of the open-market letting value instead of the present fraction of one-fourth. The commission thought that the present fraction was too high and that no reasonable lessor could complain if it were reduced to one-sixth.
The Bill also proposes to extend the benefits of Part V to certain leaseholders who, for technical reasons, are outside its scope. The leaseholders who will benefit from this extension are, in the main, those who hold under leases which are not building leases but merely renewals of leases which expired before the 1931 Act came into operation and which would have been building leases or proprietary leases if the 1931 Act had then been in force.
Lastly, provision is being made in the Bill for the payment of compensation to a lessee who is declared not to be entitled to a reversionary lease because his ground landlord wishes to rebuild or develop the property or because he requires it as a matter of good estate management. It appeared to the commission that compensation for disturbance should be paid to the lessee, who would suffer financial loss even though no business was being carried on in the premises.
Apart from these main changes of substance, the Bill contains a number of minor amendments to the present law with which I do not think it necessary to burden the House. All of them have been made in pursuance of recommendations made in the report or suggestions made before and during the passage of the Bill through the Dáil. Some of these suggestions are still under consideration and it may be that I shall move amendments to give effect to them on Committee Stage.
I should not like to conclude these remarks on what is essentially a Committee Stage Bill without paying a tribute to the chairman and other members of the Conroy Commission for producing such a clear and comprehensive report on this difficult subject. It has lightened considerably the task of everyone connected with the preparation and examination of the Bill.
I commend the Bill to the House and ask that it be given a Second Reading.
