Limerick East): The special ground rents purchase scheme provided in Part III of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978 was given a life of five years and that life was extended for a period of 12 months, that is to 31 July next, by the Landlord and Tenant (Ground Rents) (Amendment) Act, 1983, subject to an increase in the fees payable under the scheme. The main purpose of this Bill is to extend the purchase scheme for a further period of three years, subject to a further increase in the fees.
Since 1967 ground rent tenants have had the right to purchase their ground rents under the Landlord and Tenant (Ground Rents) Act, 1967. The 1978 No. 2 Act introduced a special simplified scheme of purchase under which the Land Registry do the legal work at less cost to the applicant than would be involved in buying out under the 1967 Act. The scheme applies to dwellinghouses. In all, 44,465 dwellinghouse owners had applied under the scheme up to the end of May. Of these over 20,000, or 45 per cent had lodged their applications since 1 January 1983. The arrears on hands on 31 May 1984 amounted to 16,968. These comprised 13,083 applications made with the consent of the landlords and 3,885 applications for arbitration.
Members of the House may recall that one reason for last year's extension of the scheme by one year was the large number of applications that were received by the Land Registry as the original five-year period drew to a close and the fact that, were the scheme not to be extended, many intending purchasers might have been unable to lodge completed applications in time. Moreover, the rate at which applications were being made was creating a situation where the Land Registry staff concerned would in any event have to continue their work under the scheme until well after the original termination date. The experience since is that the Land Registry have continued to receive fresh applications at a rate of about 400 per month. The Land Registry staff must therefore continue to be employed for some time — a time stretching to years rather than to months only — in processing the applications in hand, details of which I have given. Moreover, it is clear that there are still numbers of ground rent tenants who are anxious to avail themselves of the scheme and in all the circumstances the Government have decided to propose a further extension of the scheme.
The extension of the scheme raises the question of the cost of its operation. The fees that were originally payable by applicants under the scheme were little more than nominal, and were fixed so as to encourage the abolition by purchase of ground rents on dwellinghouses. However, those fees were substantially increased last year on the basis that, if the life of the scheme were to be extended beyond the original five-year period, the scheme must begin to pay its way. The 1983 Act sets out the fees that are at present payable by a purchaser who is in occupation of the relevant dwellinghouse. In the case of a dwelling where the person entitled to acquire the ground rent is not in occupation, the fees to be taken by the Land Registry are fixed by regulations made under the 1978 No. 2 Act. Although last years' extension of the scheme was, as I have said, accompanied by an increase in the fees payable, public funds have continued to bear a significant part of the cost of the scheme mainly because of the large number of applications that were made at the old fees and that are still being processed. It is difficult to estimate what level of fees would actually cover costs if arrears did not come into the reckoning, but the best estimate that can be made is that an increase of 75 per cent in the level of fees is the minimum that is needed to cover costs in respect of new applications. Provision for an increase of that order is made in section 3 of the Bill so far as concerns applications from purchasers who are in occupation of their dwellinghouses. Corresponding increases in the remaining fees will be promulgated by way of a fees order, following enactment into law of this Bill. Since costs could change in the course of the proposed three-year extension of the scheme and since the increase of 75 per cent is very much a minimum estimate, it is necessary to make provision for further changes in the level of the fees so as to keep them in line with costs, and that is what is proposed in subsection (2) of section 3 of the Bill. It provides that the existing power to change fees by order will in future extend to all fees — up to the present some fees have been fixed by the statute and could not be changed by order.
Section 4 proposes certain changes in relation to the fee payable under the section 26 of the 1978 No. 2 Act. Section 26 of that Act gives ground rent tenants of housing authorities the right to buy out the fee simple, subject to certain conditions. The fee simple is vested in the purchasing lessee by way of a transfer order under section 90 of the Housing Act, 1966, and section 26 of the 1978 No. 2 Act fixes a fee of £5 for the issue of that transfer order. This fee has so far remained unchanged, despite last year's increase in the fees payable under the Land Registry scheme. It may perhaps be accepted that the considerations that apply in the case of the section 26 fee are not those that apply in the case of the Land Registry fees. Nevertheless the lowest fee payable under the Land Registry scheme was also £5 in 1978, was increased to £15 last year and is now to become £26. In the circumstances it is only reasonable that the section 26 fee should now be increased to £20, and that it should be open to variation in the future by way of a fees order in the same way as fees generally may be so varied. Section 4 provides for these changes. Any fees order under section 26 of the 1978 No. 2 Act will, it is proposed, be made by the Minister for the Environment, since the section 26 fee is payable to a housing authority.
I commend the Bill to the House.