I propose the select committee continues until it has completed its consideration of the Bill. Is that agreed? Agreed.
The committee will resume its consideration on section 46. Amendments Nos. 46 and 47 are related and will be discussed together.
NEW SECTION.
I move amendment No. 46:
In page 35, before section 46, but in Chapter 4, to insert the following new section:
46.—-In this Chapter, unless the context otherwise requires—
"developer" means the person who creates a scheme of development and that person's successors in title;
"dominant land" means freehold land with the benefit of a covenant to which other freehold land is subject; and "dominant owner" shall be read accordingly and includes persons deriving title from or under that owner;
"freehold covenant" means a covenant attaching to dominant land and servient land which has been entered into after the commencement of this Chapter;
"persons deriving title" include—
(a) a person who has acquired title to the land by possession under the Act of 1957;
(b) a mortgagee, or receiver appointed by a mortgagee, in possession of the land;
"scheme of development" means a development of land under which—
(a) the land is, or is intended to be, subdivided into 2 or more parts for conveyance in fee simple to each owner of a part;
(b) there is an intention as between the developer and the owners of parts to create reciprocity of covenants in accordance with section 47(3),
(c) that intention is expressed in each conveyance to the owners of parts or implied from the covenants in question as they relate to the parts and the proximity of the relationship between their owners;
"servient land" means freehold land which is subject to a covenant benefiting other freehold land; and "servient owner" shall be read accordingly and includes—
(a) persons deriving title from or under that owner, but not a tenant for a period less than 5 years,
(b) in the case of a covenant which is restrictive in substance, a licensee or other person in occupation of the land with or without the consent of that owner.”.
This amendment substitutes revised texts for sections 46 and 47 which deal with the enforceability of freehold covenants. At present, the common law is deficient in so far as it permits enforcement of negative covenants, for instance, the "lessee must not" but not positive comments, such as the "lessee must". Sections 46 and 47 will solve this problem by putting the enforcement of both positive and negative covenants on the same footing.
Since the Bill was published, questions have been asked about the enforceability of covenants in situations where the land, which is subject to a covenant benefitting other land, has been subdivided for the purposes of a housing development scheme or otherwise. These issues have been discussed by the drafting group which has continued to meet under the aegis of the Law Reform Commission. The outcome of these deliberations is the revised texts for sections 46 and 47 as set out in the amendments.
According to the experts, it is necessary to ensure specific statutory provision is made for cases in which the land to which covenants apply is subdivided. This is the purpose of the revised texts.
The revised text for section 47 contains new subsections, (3) to (5) inclusive, which deal with the situation that may arise where the land subject to covenants is subdivided under a scheme of development into two or more parts.
Amendment agreed to.
Section 46 deleted.
NEW SECTION.
I move amendment No. 47:
In page 36, before section 47, to insert the following new section:
47.—-(1) Subject to subsection (6), the rules of common law and equity (including the rule known as the rule in Tulk v Moxhay) are abolished to the extent that they relate to the enforceability of a freehold covenant.
(2) Subject to subsections (3) to (6), any freehold covenant which imposes in respect of servient land an obligation to do or to refrain from doing any act or thing is enforceable—
(a) by—
(i) the dominant owner for the time being, or
(ii) a person who has ceased to be that owner but only in respect of any breach of covenant occurring during the period when that person was such owner,
(b) against—
(i) the servient owner for the time being in respect of any breach of covenant by that owner or which occurred before and continued unremedied after that person became the servient owner, or
(ii) a person who has ceased to be that owner, but only in respect of a breach of covenant which occurred during the period when that person was such owner.
(3) Where there is a scheme of development subsection (2) applies so as to render covenants which are capable of reciprocally benefiting and burdening the parts of land within the scheme enforceable by and against the owners for the time being of such parts or persons referred to in subsection (2)(a)(ii) and (2)(b)(ii).
(4) Where the servient land has been subdivided any obligations, whether to do or to refrain from doing any act or thing, relating to that land—
(a) are apportioned, as appropriate to the subdivided parts of the land, between those parts,
(b) are enforceable accordingly by or against the persons in whom the subdivided parts are vested,
as if those obligations had originally been entered into separately in respect only of each such part.
(5) Any dispute as to the application of subsection (4) to a particular case may be referred to the court for determination and, on such application, the court may order such apportionment as it thinks fit.
(6) This section—
(a) does not affect—
(i) the enforceability of a covenant under the doctrine of privity of contract or a covenant for title under section 77, or
(ii) the application to a freehold covenant of the Act of 1957,
(b) takes effect subject to the terms of the covenant or the instrument containing it.”.
Amendment agreed to.
Section 47 deleted.
SECTION 48.
I move amendment No. 48:
In page 36, subsection (1), line 38, after "covenant" to insert the following:
"(whether created before or after the commencement of this Chapter)".
This amendment makes it clear that a person may apply for a court order in respect of freehold covenants entered into before as well as after commencement of the legislation.
Would it not be prudent to have a provision similar to that contained in the Judicial Separation and Family Law Reform Act 1989 and repeated in the Family Law (Divorce) Act 1996 to require the registrar of the court to forward the order to the Property Registration Authority?
That is provided for in amendment No. 50.
Will it cover an order made under this section?
Yes.
All of this stuff on freehold covenants is very welcome and will help us in the reform of management companies. There are many freehold titles with covenants that would not be enforceable without this legislation. I was referred to this section before when I spoke about the division of leasehold titles. Has it been covered anywhere? Can a leasehold title be divided? If it can, to whom do the covenants run? This may be an academic question and I do not know whether the Law Reform Commission has ever tackled it. It may never have arisen as a practical problem, but it is an issue discussed in my office.
The covenants would be transferred to a sublease.
If we physically divide the property and have a one head lease title——
That is what we are providing for in these sections.
That is freehold.
It is leasehold also.
It is an academic point that has been raised before but perhaps it has caused no problems.
I can come back to the Deputy on Report Stage about where this is catered for, be it in the Bill or elsewhere. My understanding is that it is normal practice to transfer the covenants to the sublease and that the sublease would be subject to the covenants and the one head lease.
Amendment agreed to.
I move amendment No. 49:
In page 37, subsection (2), line 3, after "regard" to insert "as appropriate".
This is a drafting amendment. The court is required to take into account only those matters listed in subsection (2) appropriate in the circumstances of the case before it.
Amendment agreed to.
I move amendment No. 50:
In page 37, between lines 32 and 33, to insert the following subsection:
"(4) An order under subsection (1) shall be registered in the Registry of Deeds or Land Registry, as appropriate.”.
The purpose of this new subsection is to provide that any orders made by the court under the section to discharge or modify a freehold covenant shall be registered in the Land Registry or Registry of Deeds as appropriate. This will ensure any intending purchasers of land will be aware of any charges made under such an order to covenants affecting the land.
That was the issue we raised prematurely. I thank the Minister.
Amendment agreed to.
Section 48, as amended, agreed to.
Sections 49 to 53, inclusive, agreed to.
SECTION 54.
Amendments Nos. 51 to 53, inclusive, are related and may be discussed together.
I move amendment No. 51:
In page 38, subsection (1), line 39, to delete "20" and substitute "15".
The Bill, as it stands, reduces the period in respect of which a purchaser may require proof of the root of title from 40 years, under the Vendor and Purchaser Act 1874, to 20 years. The purpose of the amendments which have the agreement of the Law Society is to reduce the root of title period further to 15 years. This change will help to simplify and streamline conveyancing formalities. An additional benefit may be that, in the case of unregistered land, solicitors will be able to certify the title to the land, thereby avoiding any need to have it examined in detail, prior to registration with the Land Registry. Changing the section requires a consequential amendment in section 55 and facilitates a corresponding change in section 57.
I acknowledge what the Minister has said and agree with him. This will ease matters somewhat and give rise to a situation where matters will be dealt with in a more practical way. I am pleased the Minister has reduced the number of years involved.
What is the point of subsection (3)? It seems to allow someone to opt out of this provision, subject to contract, which is very welcome. A pernickety purchaser's solicitor could ask for a period of 30 years. What is the point of including it in a statute if subsection (3) seems to indicate a person can amend the terms of the contract?
It gives people an option. It would be possible to do it, but more often than not people would prefer to reduce rather than increase the period involved. Ultimately, flexibility must be given to solicitors for the purchaser who might consider that it may require a little longer than 15 years. The 40 year period was included for a good reason.
I welcome Deputy Flanagan's comments. Since I entered the Department, I have been trying to see if there is way in which I can facilitate better regulation. What better place to provide for better regulation than this Bill in order to allow conveyancing to be more simple and cost effective? We cannot cut corners completely, but I think 15 years is a reasonable period. In the scale of things, it is not that long; therefore, we must provide for the option outlined in subsection (3). If the parties agree, there can be a longer period.
I do not want to delay proceedings, but I agree with the Minister. At a recent clinic I was presented with a Land Registry query about certain aspects of a lease dating from 1763, in respect of which registration had not been completed on documentation lodged ten years previously owing to an ambiguity in the 1763 lease. That is an example of where the system does not reflect the situation on the ground and where undue hardship can occur. As legislators, we should in so far as is possible and practical ensure we can render matters a little more consumer-friendly.
This section deals with what is referred to as "good root of title". Was it thought there was a need to in any way expand on definitions in the Bill with regard to what is a good root of title? Would that be a complex area to deal with?
No. This section seeks to indicate, as is the case particularly for registration in the Land Registry, that there has to be a starting point. As Deputy Flanagan said, we have all discovered practical cases where practitioners have to go through the issues with a fine tooth comb in order to get registered with the Land Registry because, ultimately, when one is registered with the Land Registry, there is a State guarantee and no one can go behind that. In other words, the State must pony up if an error has been made previously.
The Land Registry under the existing legislation has a role in curing titles, which will continue with the passing of this legislation, which will take care of some of the issues. This will take a huge workload off the Land Registry and will, in effect, pass it on to solicitors, who will certify title. This will then mean that much of what is called unregistered title, particularly in cities and main towns, will now be more easily registered, which in turn should lead to reduced prices for the consumer when they go to transfer property, although legislators need to be vigilant in this regard.
Deputy Flanagan referred to very old leases. There has been much hassle in cases where the fee farm grant or the original lease from, say, a couple of hundred years ago is not available. One would normally include a condition of sale stating the original was not available and that a certified copy was acceptable, but other solicitors can cause a lot of trouble by writing further letters on this issue. I presume they have to test whether the person is telling the truth, although I am not sure what they are thinking. Should provision be made in legislation so there would be a statutory basis for stating that if the original is not available, one would have to make do with a certified copy certified by the vendor's solicitor?
This section will obviate the necessity for going back to fee farm grants. I do not think there have been any fee farm grants or any——
A fee farm grant is one's root of title or one's lease in a leasehold or fee farm grant title. The purchaser could traditionally under this section call for the original, which is fair enough. However, if the original is not available, perhaps there should be provision in law stating that if it is not available, one would have to make do with a certified copy. It can cause delays in conveyancing.
We can consider it.
It could be done with a simple declaration that it has not been pledged or lodged in a bank, and that the person does not know of its whereabouts.
We need a statute stating this.
I agree.
Amendment agreed to.
Section 54, as amended, agreed to.
SECTION 55.
I move amendment No. 52:
In page 39, subsection (2), line 25, to delete "20" and substitute "15".
Amendment agreed to.
Section 55, as amended, agreed to.
Section 56 agreed to.
SECTION 57.
I move amendment No. 53:
In page 41, subsection (1), line 28, to delete "20" and substitute "15".
Amendment agreed to.
Section 57, as amended, agreed to.
Sections 58 and 59 agreed to.
SECTION 60.
Question proposed: "That section 60 stand part of the Bill."
Section 60(3) states: "In the case of a voluntary conveyance executed after the commencement of this Chapter, a resulting use for the grantor is not implied merely because the land is not expressed to be conveyed for the use or benefit of the grantee." The Minister might express a view on the matter of current applications in this regard, and whether a direction might issue that current applications which have been lodged and are in the course of being dealt with might be treated in the same way as those lodged after the Act are treated.
I can consider this before Report Stage but I do not think it will be possible because it would probably infringe on contractual rights. I hazard a guess we cannot make it retrospective.
Question put and agreed to.
Section 61 agreed to.
SECTION 62.
Amendments Nos. 54 to 56, inclusive, are related and will be discussed together.
I move amendment No. 54:
In page 43, subsection (2)(b)(i), line 41, to delete “signature, and” and in page 44 to delete lines 1 to 3 and substitute “signature;”.
The purpose of amendments Nos. 54 to 56, inclusive, is to respond to an issue raised on Second Stage and to clarify new provisions relating to the formalities of deeds. These amendments delete the final subparagraph in subsection (2)(b)(i) and insert a new subsection which provides that a deed executed under this section has an effect as if it were a document under seal. A suggestion to prohibit the use of seals was made on Second Stage but that would be going too far and would require the repeal of various existing statutory provisions. The amendment gets around this difficulty by providing that any deed executed under this section without a seal has effect as if it were under a document executed under seal. Amendment No. 41 provides that any deed that is executed under this section has the same effect as a deed executed under seal.
That is fair enough.
If I recall, I raised this issue on Second Stage for the following reason. This rule has applied in the Land Registry since it was introduced in the 1960s, yet when one goes to close a sale, if there is no seal on the Land Registry transfer, the solicitor will not close the sale. We are inserting the exact same provision here. This is the thinking behind my desire to make this mandatory. There will be hold-ups and delays and, as with barristers still wearing wigs, solicitors still insist on seals. This will hold up closings but there is no need for it in this day and age.
It was the Deputy who raised this on Second Stage. Every good solicitor up to now should have had a box of seals in his or her pocket when he or she was going to close a sale.
Amendment agreed to.
I move amendment No. 55:
In page 44, subsection (2), between lines 15 and 16, to insert "and".
Amendment agreed to.
I move amendment No. 56:
In page 44, between lines 17 and 18, to insert the following subsection:
"(3) Any deed executed under this section has effect as if it were a document executed under seal.".
Amendment agreed to.
Section 62, as amended, agreed to.
Sections 63 and 64 agreed to.
SECTION 65.
I move amendment No. 57:
In page 44, subsection (1), line 42, after "land" to insert "with or".
The purpose of this amendment is to avoid any misunderstanding arising from the interpretation of subsection (1). The purpose of this subsection is to abolish the words of limitation in the case of unregistered land. This already applies in the case of registered land under section 123 of the Registration of Title Act 1964. The amendment makes it clear that a conveyance of unregistered land, with or without words of limitation, passes the grantor's entire estate or interest, unless a contrary intention is apparent in the conveyance.
I welcome the amendment but the same applies to seals. Even in Land Registry transfers, one will find words of limitations which are not required. The Law Society should draw its members' attention to the legislation and advise them to adopt the new practices.
Amendment agreed to.
Section 65, as amended, agreed to.
SECTION 66.
I move amendment No. 58:
In page 45, subsection (1), lines 35 and 36, to delete "conveyance, or any regrant," and substitute "conveyance or of any regrant".
Amendments Nos. 58 and 59 are drafting amendments.
Amendment agreed to.
I move amendment No. 59:
In page 45, subsection (1)(a), line 38, after “made,” to insert “and”.
Amendment agreed to.
Section 66, as amended, agreed to.
Sections 67 to 73, inclusive, agreed to.
SECTION 74.
I move amendment No. 60: In page 48, subsection (3), to delete lines 26 to 29, and substitute the following:
"(3) Where a solicitor produces a deed which—
(a) has in its body a receipt for consideration, and
(b) has been executed by the person entitled to give a receipt for the consideration,”.
This is a drafting amendment to improve the presentation of subsection (3).
Amendment agreed to.
Section 74, as amended, agreed to.
Sections 75 and 76 agreed to.
SECTION 77.
Amendments Nos. 61 and 62 are related and may be discussed together. Is that agreed? Agreed.
I move amendment No. 61:
In page 50, lines 9 to 16, to delete subsection (5) and substitute the following:
"(5) The benefit of a covenant implied under this section—
(a) is annexed to and passes with the estate or interest of the implied covenantee,
(b) is enforceable by every person, including a tenant, mortgagee and any other person deriving title from or under the implied covenantee, in whom that estate or interest, or any part of it, or an estate or interest derived out of it, is vested from time to time.”.
Amendments Nos. 61 and 62 are drafting amendments to improve the presentation of sections 77 and 78, respectively, and ensure the provisions are consistent with each other.
Amendment agreed to.
Section 77, as amended, agreed to.
SECTION 78.
I move amendment No. 62:
In page 51, lines 27 to 34, to delete subsection (4) and substitute the following:
"(4) The benefit of a covenant implied under this section—
(a) is annexed to and passes with the estate or interest of the implied covenantee,
(b) is enforceable by every person, including a tenant, mortgagee and any other person deriving title from or under the implied covenantee, in whom that estate or interest, or any part of it, or an estate or interest derived out of it, is vested from time to time.”.
Amendment agreed to.
Section 78, as amended, agreed to.
SECTION 79.
I move amendment No. 63:
In page 52, subsection (2)(a), line 9, after “them,” to insert “or”.
Amendment agreed to.
Section 79, as amended, agreed to.
Sections 80 to 85, inclusive, agreed to.
SECTION 86.
I move amendment No. 64:
In page 55, lines 9 to 15, to delete subsection (2) and substitute the following:
"(2) Subject to subsection (3), from the commencement of this Chapter—
(a) any instrument which would, but for the provisions of this section, convey a legal estate or interest in land by way of mortgage, or
(b) any other transaction which under any instrument would operate, but for the provisions of this section, as a mortgage by conveyance of a legal estate or interest in land,
does not create a legal mortgage.
(3) From the commencement of this Chapter, any transaction which under any statutory provision would, but for the provisions of this section, operate as a mortgage by conveyance of a legal estate or interest in land operates as if it were a mortgage under this Part.".
Subsection (1) stipulates that in future any charge by deed will be the only method of mortgaging land, including unregistered land. This is already the law in regard to registered land. Subsection (2) goes on to provide that any attempt to mortgage land by any other method will operate as a mortgage created by a charge by deed. The change proposed in the amendment reverses the approach set out in subsection (2). Rather than converting any such instrument or any other transaction into a charge by deed, the amendment provides that such an instrument or transaction shall not create a legal mortgage. The advantage of this approach is that it will greatly simplify the law by requiring a charge by deed for all legal mortgages. An exception to this rule is made in the new subsection (3) for transactions under a statutory provision.
This important amendment ensures a mortgage is, in effect, made by a deed and cannot be made in any other way. We will come to this issue again in dealing with amendment No. 69.
Amendment agreed to.
Section 86, as amended, agreed to.
SECTION 87.
I move amendment No. 65:
In page 56, subsection (3), line 4, to delete "A" and substitute the following:
"Notwithstanding any stipulation to the contrary, a".
The purpose of this amendment is to improve consumer protection by ensuring financial institutions and other lenders cannot contract out of an obligation imposed on them by this section to keep any title deeds in possession in safe custody.
Amendment agreed to.
Section 87, as amended, agreed to.
SECTION 88.
I move amendment No. 66:
In page 56, lines 15 to 18, to delete subsection (2) and substitute the following:
"(2) Rights under subsection (1) are exercisable—
(a) on the request of the mortgagor, and
(b) on payment by the mortgagor of the mortgagee’s reasonable costs and expenses in relation to the exercise.”.
This is a drafting amendment which streamlines the content of paragraphs (a) and (b) of subsection (2).
Amendment agreed to.
Section 88, as amended, agreed to.
NEW SECTION.
I move amendment No. 67:
In page 56, before section 89, to insert the following new section:
89.—-Notwithstanding any stipulation to the contrary, a mortgagor is entitled to redeem any housing loan mortgage without having to pay any money due under any other mortgage with the same mortgagee, whether that other mortgage is of the same or other property.".
This amendment proposes a new text for section 89. It provides that any person with a housing loan mortgage is entitled to redeem that mortgage without having to pay money due on any other mortgage with the same lending institution. It replaces the provisions in section 17 of the Conveyancing Act 1881 which permits a lending institution to insist that the borrower pays off all mortgages or none at all. This restriction on consolidation is limited to housing loan mortgages and will not apply to commercial borrowing and lending where large amounts may be involved or where the parties are normally operating with the benefit of financial and legal advice.
This is an interesting amendment. What prompted the Minister to introduce it? I am aware of cases where banks engage in transactions that allow for the consolidation or crossing of mortgages. I understand the Minister is attempting in this amendment to separate a housing loan mortgage from other mortgages, perhaps with the assumption that this pertains to the family home and that no other moneys might be secured against it. The reality, however, is that the banks will, in the small print, obviate the advantage that appears to be expressed in this amendment. In other words, what we are trying to say is that moneys under a home loan, on discharge, shall involve the entire discharge of the mortgage on the family home without reference to other mortgages. This sounds good but I am not certain it will achieve the Minister's intention. That is why I am interested in what prompted it. It is not included in the original legislation. It seems to be a good idea but I am not convinced it will provide any net practical advantage.
It is included in the original proposed legislation, in section 89, which deals with the abolition of a right to consolidate. This amendment was prompted by our intention to rule out the right to consolidation which has, to some extent, crucified home loan owners who have several mortgages with the same lending agency for different homes.
Under existing legislation, were people to redeem one such loan, the lending agency would be able to force them to pay off all other loans, even though the borrower might not wish to redeem one or two of the other mortgages. Obviously, I was obliged to make an exception in respect of large commercial transactions, which are different. This is directed towards providing some advantage to people in respect of residential, rather than commercial, property.
Should the amendment not read, "Notwithstanding any submission to the contrary, a mortgagor is entitled to redeem any housing loan mortgage without having to pay any other moneys due under any other loans with the same mortgagee"? In other words, it should refer to "any other loans" because people could have a credit card loan, which is not a mortgage. This should apply regardless of whether such other loans are related to other property. What if people have a credit card loan or an overdraft under what is known as an "all sums due" mortgage?
The amendment states, "without having to pay any money due under any other mortgage".
What about car loans, overdrafts or credit card loans? Under an "all sums due" loan——
Such a loan would not be under a mortgage.
It would if it was an "all sums due" loan. It can be stipulated in the terms and conditions that if one redeems such a loan, one is obliged to repay all of one's obligations to that particular bank.
It is because it is registered. The difference probably is that it will be a registered charge or mortgage.
I can consider it. While I take the Deputy's point, the intention is not against real property. Conceivably, however, it could be, were the mortgage to be phrased in such a way——
They usually are phrased as "all sums due", which I understand to mean any sum one owes to the bank for whatever loan one might have with that bank.
I will check that and will revert to members on Report Stage.
That scenario might be more common than that of people owning other properties.
Amendment agreed to.
Section 89 deleted.
Section 90 agreed to.
SECTION 91.
Amendments Nos. 68 and 72 are related and may be discussed together.
I move amendment No. 68:
In page 57, between lines 30 and 31, to insert the following subsection:
"(4) In the case of the sale of a mortgaged property which is a family home, the court—
(a) shall have regard to the needs of the family and their capacity to secure alternative reasonable accommodation suitable for the family
(b) may direct that the Housing Authority be made a notice party to the proceedings
(c) may make such order as the court sees fit to direct the Housing Authority to make all reasonable efforts to secure alternative accommodation for the family
(d) shall not make any order for possession unless it can be shown by the mortgagor that the loan is in arrears by at least 12 months
(e) shall, in any case under paragraph (d), require the mortgagor to show that the mortgage was in all respects fair and equitable and that the implications were fully explained to the mortgaee at the time of approval of the mortgage application by the mortgagor.”.
This proposed subsection deals with the sale of property by mortgagees. I suggest to the Minister that in this time of economic recession, in the case of such transactions and those pertaining to the family home in particular, the court might be specifically directed to have regards to the needs of the family and, in particular, the capability of that family to secure alternative accommodation in the form of a family home. I suggest the court should be given the power to make the local authority or housing authority a notice party. Moreover, it might be empowered to direct the housing authority to provide accommodation for the family. I also suggest that courts might be restricted from making orders for possession in cases in which payments have been overdue for less than 12 months. It is important to place an onus on the lender, bank or building society to show the loan was fair at the outset and that the details and specifics were explained fully to the borrower at the time of loan approval and not when the mortgage deed was signed.
These proposals now are particularly relevant in the context of repossessions and insecurity. Having regard to the recent nationalisation of the bank, it is important for the State to have an interest registered that housing authorities at all stages are notice parties. All members will have encountered the most extraordinary cases in their clinics recently . For example, without wishing to delay the meeting, I recently came across a case in which a mortgage in excess of €100,000 had been granted on a family home premises, the self-employed owner of which never had a PPS number. Although he never had been in the system, a bank was so grossly reckless as to provide a mortgage in excess of €100,000 to this person when there was not a hope of it being paid back. All that was needed was the first puff of recessionary wind and this person was one of the first to fall from the back of the truck. Banks have been reckless and the law as currently structured favours the banks in repossessions. The import of this amendment would be that courts would have specific regards to the family circumstances and needs, albeit only in cases in which the roof over people's heads was at stake.
I find myself in general agreement with the sentiments outlined by Deputy Flanagan. I refer to one cause for concern about the entire system of orders for possession. I have had cases myself in which repossession has been held off for two years, simply through adjournments, delays, ill-health and all the excuses that people in debt generally will have due to the circumstances in which they find themselves. However, other lenders, and one in particular is often named, appear to be able to act and, after a few months, the court deems it necessary to give an order for possession, thereby putting the family out of their home. There appears to be considerable inconsistency nationwide among both judges and county registrars, who have a great deal of power in respect of the timing of such cases, and perhaps elements of Deputy Flanagan's proposals should be included in the Bill.
If a court is considering a reasonable period, perhaps it should be forced to take into account the economic climate of the time and the likelihood of employment being achieved. Perhaps those whose economic situation is such that a job might be possible to obtain within weeks or months should not be given a second chance, if they have been completely reckless. However, those families that a making a serious effort but who will find it difficult to find a job within a few months should not be thrown out of their houses. Not alone would this be difficult for them but were mass repossessions to take place, it would constitute an economic disaster for the country. Repossessions on such a scale do not happen here at present, when compared with the United Kingdom, California or certain other American states. However, were this to happen here, it would be an economic and social disaster. Making the relevant housing authority a notice party would worry me because it would begin to incur all kinds of costs. Nevertheless, I can see the reasoning behind the proposal and this factor should be taken into account when granting possession orders.
There is a great deal of inconsistency. Some people are able to play the system by being sick or by being absent and can delay the process repeatedly. I say more power to them, because those who are looking after their family homes should do everything they can. Other banks, however, appear to be a great deal more ruthless in this respect. I recently had a case involving a girl who had been out of work since November and who was paying two thirds of her monthly payment through social welfare. Despite that, she was being threatened with court proceedings. This was completely crazy for the building society concerned to do that. Having negotiated with it, I have made it see some sense. However, more statutory provision should be made in this regard. This should be a major issue this year, if more and more people are likely to fall into mortgage arrears.
Deputy Thomas Byrne referred to the issue of repossessions and on the Order of Business this morning, the Taoiseach gave a figure of 127 repossessions last year, which, in the general scheme of things is not a huge number. However, as the Taoiseach noted this morning, the Government is highly conscious of the potential for an increase in that number. To be fair to the mainstream banks, which have been the subject of significant general criticism on other issues, a code of practice has operated for some time in respect of mortgage arrears, which has led to a position in which very few mortgages that have got into difficulty have been the subject of possession orders. That said, one matter has greatly exercised me in dealing with my officials, about which I also have spoken to the Minister of State with responsibility for housing, Deputy Finneran, namely, the issue of sub-prime lenders and the manner in which they have operated in respect of repossessions. I will refer to this matter when addressing a number of further amendments. I hope to table an amendment on Report Stage that will cure some of the ills that I perceive.
Regarding amendment No. 68, Deputy Charles Flanagan referred to a case in which someone without a PPS number got a loan. Clearly he does not suffer from the same problem in County Offaly as I do in the Border area. Historically, some people got loans in the Republic with numbers that originated from across the Border or with no numbers at all. I will give an example that has come to light recently of a married or unmarried couple living in the South, one partner is from the North and the other partner is from the South. The male partner, who works in the construction industry, does not produce many details when getting a mortgage, but the female partner, who is from the South, produces her PPS number. When the mortgage gets into difficulty, the information tendered on behalf of the male from the North is not particularly accurate or so on. There are many such cases. While I am thankful that they have not manifested as much as previously, only time will tell whether that situation remains the same.
There is a difficulty with amendments Nos. 68 and 72 because they confuse the terms "mortgagor" and "mortgagee". The former is the borrower and the latter is the lender, but the Deputy's amendments are based on the opposite being the case. Section 91 deals with the powers and rights of borrowers, not lenders. It puts into statutory form a right that appears to have existed for some time in equity, that is, the right of a borrower who may be facing financial difficulty to sell the property in order to reduce increasing debts.
Regarding the substance of the Deputy's amendments, namely, requiring the court to have regard to various additional factors where the mortgaged property is a family home, sections 7 and 8 of the Family Home Protection Act 1976 already contain provisions dealing with this matter. Section 7 provides that where a financial institution brings an action against a spouse for the possession or sale of a family home and it appears to the court that there is some capacity to pay arrears within a reasonable time, the court may adjourn proceedings where it would, in all circumstances having regard to the interests of all parties, be just and equitable to do so. Therefore, the Deputy's amendments would be more appropriate to the 1976 Act.
I have several concerns regarding the substance of the amendments. The Deputy's proposal would have the effect of unduly interfering with and restricting the more flexible and discretionary equitable jurisdiction that has already been given to the courts to deal with family homes under section 7 of the 1976 Act, which states that, "it would in all circumstances, having regard to the terms of the mortgage or lease, the interests of the mortgagee or lessor and the respective interests of the spouses, be just and equitable to do so". The scope of the proposal is confined to family homes, thereby excluding single borrowers or young couples who have taken out a mortgage in advance of getting married. Restricting court action until at least 12 months' arrears have accumulated is also questionable.
Regarding amendment No. 72, I do not know how the Deputy expects a lending institution to demonstrate to a court that an approved mortgage was fair and equitable and that the implications were fully explained to the borrower prior to approval. While I accept that applications for repossession have become more frequent, I am confident that the courts are adopting a fair and reasonable approach to them. They appear to be well disposed to granting adjournments where there is any prospect of addressing arrears within reasonable periods. Even where possession orders are granted, the lending institutions are not proceeding to the sale of the property where the borrower makes an effort to deal with the arrears. In these circumstances, I cannot accept the amendment.
On an unrelated issue, it was recently suggested to my Department that the scope of section 91 might have unintended consequences unless it is limited to housing loan mortgages. This matter will be examined further on Report Stage.
Regarding the general points on repossession, the Irish Banking Federation oversees a voluntary code of practice in respect of mortgage arrears. When the Government introduced the bank guarantee scheme on 30 September, it made it clear that compliance with the existing code would apply to any bank availing of the scheme. There are six such banks. Arising from the Government's announcement on 21 December of the recapitalisation of certain banks, the banks concerned confirmed that they would wait at least six months from the time at which the mortgage arrears arise before an enforcement of any legal action seeking possession of a customer's primary residence.
The Government and the Financial Regulator have decided that a statutory code of conduct to cover all mortgage lenders not covered by the guarantee or recapitalisation schemes, including some private lenders, should be introduced. This work is under way. It is envisaged that the code will provide that lenders must adopt flexible procedures for the handling of arrears cases and assist the borrowers as far as possible.
When discussing other amendments, I will indicate my decision to table a further amendment, if possible, to make lenders start the repossession process in the Circuit Court rather than in the High Court. I have noticed that some sub-prime lenders are bypassing the Circuit Court and going straight to the High Court, which increases costs and the possibility of the person to whom the money was lent ignoring the court in fear of needing to go to Dublin. I know of several cases in which people were subjected to this situation. If I can legally, I will table an amendment that will, in effect, force lenders to commence in the Circuit Court rather than in the High Court. Issues of equity jurisdiction and so forth might complicate the matter, but there is no reason for lenders to go straight to the High Court, thereby increasing costs and the possibility of the person who defaults ignoring proceedings and taking fright at the thought of going to the High Court and not giving people an opportunity to appeal, if there is such a thing. In these cases, one is either in arrears or one is not. If people get into difficulty, going to the lower court would be more preferable for many reasons.
I agree with the Minister's comments in the latter part of his reply. I take it that the amendment will be tabled on Report Stage and that he views this Bill as the appropriate legislation in which to insert such an amendment. I welcome this.
It is important that the Government, on behalf of the taxpayer as shareholder in at least one major lending institution and perhaps more by the time we have completed the Bill, take a more proactive and pro-consumer approach. I will not divide the committee on my amendment. Rather, I will consider the Minister's comments before Report Stage. I ask him to accept the fact that the principle of what I am trying to do has merit, with particular reference to the family home. While I take on board his comments about the family unit, will he consider the merits of my amendments with a view towards dealing with their point, having regard to the facts that people are having this problem and that it is a product of the economic times in which we live? If we are to protect families, notwithstanding their obligations and liabilities, we should do so in a way that comprises best practice.
Amendment, by leave, withdrawn.
Question proposed: "That section 91 stand part of the Bill."
The Minister made referred to a matter unrelated to the amendment. Perhaps he has received correspondence from a leading firm of lawyers in this city, which expressed concern that section 91 in its current form would be detrimental to the Irish banking and financial services industry. I will not quote extensively from the correspondence if the Minister will reassure me that he has received it. I ask him to reflect on the contents between now and Report Stage. Perhaps he will be in a position to address the matter on Report Stage, if not now. A good case has been made for potentially adverse consequences for the financial services industry. I hope that any such consequences can be minimised. I ask the Minister to consider the content of the submission.
I received the correspondence and we are looking at it. We intended that section 91 should be limited to housing and mortgages, so we will be returning to the matter on Report Stage.
Question put and agreed to.
Section 92 agreed to.
NEW SECTION.
Amendments Nos. 69 to 71, inclusive, 73, 76 and 77 are related and may be discussed together.
I move amendment No. 69:
In page 58, before section 93, but in Chapter 3, to insert the following new section:
93.—-(1) Subject to this Part, the powers and rights of a mortgagee under sections 94 to 107—
(a) apply to any mortgage created by deed after the commencement of this Chapter,
(b) vest, subject to section 62 of the Act of 1964, as soon as the mortgage is created,
(c) do not become exercisable unless their exercise is for the purpose of protecting the mortgaged property or realising the mortgagee’s security,
(d) in relation to the mortgaged property, apply to any part of it.
(2) A mortgagee's right of foreclosure is abolished.
(3) The provisions relating to the powers and rights conferred by this Chapter apply to any housing loan mortgage notwithstanding any stipulation to the contrary and notwithstanding any powers and rights expressly conferred under such a mortgage, but otherwise, except where this Part provides to the contrary, take effect subject to the terms of the mortgage.".
The purpose of this set of amendments is to strengthen the protection of borrowers with housing loan mortgages. Under the current law, the rights of borrowers are subject to the express terms of the mortgage. If a mortgage deed contains express provisions with enhanced powers for the lending institution, protection for the borrower is reduced and the impact of statutory provisions is weakened. The revised text of section 93 makes it clear that the statutory powers and rights of lending institutions set out in Chapter 3 of Part IX will apply in full to housing loan mortgages, irrespective of any other powers and rights included in the mortgage by the lending institution.
In cases other than housing loan mortgages, such as commercial developments where very large sums of money are involved, it will remain possible to include express provisions that override statutory provisions. In such cases it is usual to have professional support and advisers to ensure that the mortgage deed reflects the intentions of the parties. The inclusion of the words "notwithstanding any stipulation to the contrary" in section 93(3) facilities the deletion of the term in section 94 through amendment No. 70.
Amendment No. 73, which deletes sections 94(3) to 94(6), and amendments Nos. 96 and 97 will replace the text of section 97 and insert a new section, section 98, containing related changes. The most significant change is section 97, under amendment No. 76, which states that the power of sale will in future be subject to obtaining a court order. It is a curious anomaly of current law that a court order is required in order to obtain possession of property, for example, with a view to selling it, but that the power to sell can be exercised without such an order. In practice, a lending institution will find it difficult to sell residential dwellings without vacant possession. This means that a court order for possession is generally sought in advance of the sale.
Amendment No. 73 deletes subsections 94(3) to 94(6), which give the court a wide margin of discretion to adjourn proceedings where a lending institution is seeking an order for possession of mortgaged property and these reappear in a new section 98 where the scope of these subsections is extended to cases in which the lending institution is seeking an order for the sale of property. The new section gives the court discretion to adjourn proceedings or attach conditions to any order it may make, where an order for possession is sought under section 93 or an order for sale under section 97. The purpose of all these amendments is to strengthen consumer protection in the case of housing loans. It will no longer be possible to override the statutory provisions by including express provisions in the mortgage. A court order will be required in future, irrespective of whether the lending institution wishes to obtain possession or sell the property.
Regarding amendment No. 71, I do not see that Deputy Tuffy's proposal would prove effective. If the lending institution indicates its intention to seek a court order under section 94, the borrower has the opportunity to consent without recourse to the court. If not, the matter will proceed to court. That is a significant change. It ensures that the statutory provisions are sacrosanct and that lenders of housing loans cannot insist that the borrower signs away his or her rights under the mortgage deed, which could happen until now. This is one of the efforts of the Government to assist borrowers and to make sure that the lender must obtain a court order.
Jurisdiction for the grant of repossession orders and orders for sale lies concurrently with the High Court and Circuit Court. I share the concern that some lending institutions seem to be making applications for such orders on a routine basis to the High Court, thus causing inconvenience for borrowers residing outside Dublin and increasing court costs that arise. I am aware that the Financial Regulator has advised lending institutions that they should consider the choice of court in which to take an action on a case-by-case basis, taking account of the circumstances of each case and bearing in mind the impact of the decision on the borrower. This approach has statutory support in section 17 of the Courts Act 1981, which limits the amount of costs and applicant is entitled to recover in certain cases, even if it is taken in the High Court, to those which the applicant would be entitled to if these proceedings were taken in the Circuit Court.
I have asked my Department to consult with the Courts Service and the Financial Regulator with a view to addressing this issue in a Report Stage amendment if necessary. The matter is not straightforward, since any statutory provisions requiring that certain repossession actions be commenced in the Circuit Court might have the unintended consequence of depriving borrowers of the protections afforded by the extensive equitable jurisdiction of the High Court. I will consider this matter further in advance of the debate on Report Stage. We should make a move on this because I have seen this happening with one lender, which keeps applying to the High Court as the court of first instance.
I refer to amendment No. 71. This was tabled in the Seanad and is designed to make it clear that the bank or building society cannot take possession without a court order merely because the homeowner signed a consent document when taking out the mortgage. In order for the consent to be valid, it must be in contemplation of the specific taking of possession. Otherwise, this protection is meaningless. The other amendments to which the Minister refers do not deal with the issue we have raised. Our concern is valid because it is quite possible that the mortgage documents would contain consent to taking possession of the mortgaged property without a court order. That is permitted under the current wording. People do not think that far down the line when they sign mortgages and do not think that they will be the subject of efforts by the mortgagee to take possession of the property. Through our amendments or otherwise, there must be some way to make it clear that the consent of the mortgagor cannot be part of the mortgage deed.
We are on the same ground on this issue, or we want to be. Deputy Tuffy stated she felt that under our proposed amendments a repossession could take place without a court order. The intention of the amendments is the opposite. Will Deputy Tuffy point out where she feels we allow for this so we can examine it prior to Report Stage? I do not see it.
Section 94(1) is not changed by the Minister's amendments. This states:
Subject to section 95 and notwithstanding any stipulation to the contrary, a mortgagee shall not take possession of the mortgaged property without a court order granted under this section, unless the mortgagor consents in writing to such taking.
Our amendment seeks to cover the possibility that a mortgagor might consent in writing to the taking possession without a court order in the mortgage deed itself. It would not be like consenting when somebody is taking back the property.
Our intention is that it is not in the mortgage deed but that it is consent, in other words, that there is no formal court order because many people do not want a court order for possession——
Yes, they just give back the house.
——so they will come to an agreement. We are trying to allow this flexibility so that people can agree on the steps of the court.
I know this is the intention but banks and building societies may see an opportunity to include it in the mortgage deed itself. It is worth examining.
We will examine it.
I want to deal with amendment No. 76 which proposes a new section 97. The proposed section 97(1)(a) deals with the service of notice on the mortgagor, or on one of two or more mortgagors. I presume this means all mortgagors. There may be circumstances, however limited, in which there might be more than two. Obviously any suggestion or provision which would not allow for notice to be served on all parties would be deficient. I assume the Minister means all parties and that irrespective of the number of parties, notice must be served on all parties. It would be a substantive breach if any right of action could be taken without notice to all mortgagors. In view of what the Minister stated on family arrangements and the family unit, not all mortgagors live together, so we should be certain that we are dealing with the matter of notice on all parties.
The proposed section 97(1)(b) deals with arrears unpaid for two months. Where did the Minister get the period of two months? I would have suggested a longer period but perhaps the Minister will advise us as to what inspired the period of two months.
The proposed section 97(5) states:
A mortgagee is not answerable for any involuntary loss resulting from the exercise or execution of the power of sale under this Chapter, of any trust connected with it or of any power or provision contained in the mortgage.
Will the Minister clarify the duties of the mortgagee? I often feel the duty of the mortgagee extends no more than to provide the money. Where a power of sale is exercised there should be a statutory responsibility to ensure that the best price is achieved in the ultimate circumstances where houses are sold and an obligation on the mortgagee to ensure the best price.
On Report Stage, will the Minister examine the duty of care on the part of the mortgagee to the mortgagor to obtain the best price? The mortgagor should be furnished with full details. Once the power of sale is being processed, the mortgagor is not kept in the picture. To my mind there is a fundamental duty on the mortgagee, being the lender, to furnish full details of the sale, marketing, advertising and efforts being made. Not only would the mortgagor be served but the Financial Regulator might also have responsibility.
More and more premises are being sold under powers of sale exercisable. Family homes are being sold. It can be stated with some justification that banks and building societies might be less than careful to consider anything further than the redemption of the mortgage and the acquisition of their money. As legislators we should ensure that we can build into our statutes an obligation on the banks and building societies to obtain the best possible price and to engage in the fullest form of information, dialogue and duty of care towards the owners of the property which is being sold.
Deputy Flanagan makes a good point on the service of notice and we will examine it. It is a drafting matter which we can cure on Report Stage. We are merely reproducing the existing legislation, albeit from 1881. This point goes for arrears unpaid for two months after becoming due which would have been the standard over the years. Ultimately the courts have a discretion and not many courts would give an order for possession after only two months of arrears.
Information on the obligations on selling is contained in section 99. Section 99(1) provides that the mortgagee must ensure as far as is reasonably practicable that the mortgaged property is sold at the best price reasonably obtainable. Other subsections cover the provision of information to the mortgagor in the prescribed form. I was involved in a number of judgment sales in my day and I know that generally they are done through the court which makes an order and the county or court registrar will employ an auctioneer whose obligation under the court order is to obtain the best price possible at the particular time. Obviously he or she must make returns to the court.
I will digress by telling a proud story — we all have proud stories from our days in practice — about how, approximately 20 years ago, an elderly couple in my constituency were badly beaten up by their next door neighbours and took them to court. For whatever reason the Garda Síochána would not prosecute, perhaps it did not have enough evidence. We won a civil action where we got £5,000 and £2,500 which was a great deal of money in those days. As we were leaving court the person who assaulted the elderly couple shouted at them that they would get it in dribs and drabs or would never get it. I decided, out of annoyance at the remark, that I would register a judgment mortgage against the man's property. I forget I had done so and approximately 15 years later I was telephoned out of the blue by a solicitor in Dundalk who stated he was selling the property and closing the sale and had found a judgment mortgage on it for £7,500 plus interest. I discovered then that the people who had been assaulted had emigrated 11 years earlier to Canada. I tracked them down in Canada and was able to tell them that they were due £7,500 plus interest. It was a sweet experience. We could have moved for a judgment sale in the case. The duty is laid down in section 99, which deals with the obligations on selling.
Amendment agreed to.
Section 93 deleted.
SECTION 94.
I move amendment No. 70:
In page 58, subsection (1), lines 28 and 29, to delete "and notwithstanding any stipulation to the contrary".
Amendment agreed to.
Amendments Nos. 71 and 72 not moved.
I move amendment No. 73:
In page 58, lines 36 to 43 and in page 59, lines 1 to 17, to delete subsections (3) to (6).
Amendment agreed to.
Section 94, as amended, agreed to.
SECTION 95.
I move amendment No. 74:
In page 59, subsection (3)(b)(ii), line 41, to delete “or”.
Amendment agreed to.
Section 95, as amended, agreed to.
SECTION 96.
I move amendment No. 75:
In page 60, subsection (1), line 8, after "possession" to insert the following:
"(or after the mortgagee has appointed a receiver and so long as the receiver acts, the receiver)".
This amendment makes clear that the obligation to take steps to sell or let the property which a mortgagee has taken over applies not only to the mortgagee, but also to any receiver appointed by the mortgagee.
Amendment agreed to.
Section 96, as amended, agreed to.
NEW SECTION.
I move amendment No. 76:
In page 60, before section 97, to insert the following new section:
97.—-(1) Subject to subsection (3) and sections 98 to 103, a mortgagee or any other person for the time being entitled to receive, and give a discharge for, the mortgage debt may sell or concur with any other person in selling the mortgaged property provided—
(a) following service of notice on the mortgagor, or on one of 2 or more mortgagors, requiring payment of the mortgage debt, default has been made in payment of that debt, or part of it, for 3 months after such service, or
(b) some interest under the mortgage or, in the case of a mortgage debt payable by instalments, some instalment representing interest or part interest and part capital is in arrears and unpaid for 2 months after becoming due, or
(c) there has been a breach by the mortgagor, or some person concurring in the mortgage, of some other provision contained in the mortgage or any statutory provision, including this Act, other than a covenant for payment of the mortgage debt or interest,
and provided in each such case 28 days' notice in the prescribed form has been served on the mortgagor warning of the possibility of such sale.
(2) The power of sale shall not become exercisable without a court order granted under subsection (3), unless the mortgagor consents in writing to such exercise.
(3) At any time after expiration of the 28 days' notice given under subsection (1), a mortgagee may apply to the court for an order authorising exercise of the power of sale and on such application the court may, if it thinks fit, grant such authorisation to the applicant on such terms and conditions, if any, as it thinks fit.
(4) An application under subsection (3) may be made with an application under section 94(2) and, in such case, both may be heard together.
(5) A mortgagee is not answerable for any involuntary loss resulting from the exercise or execution of the power of sale under this Chapter, of any trust connected with it or of any power or provision contained in the mortgage.
(6) Once the power of sale becomes exercisable, the person entitled to exercise it may demand and recover from any person, other than a person having in the mortgaged property an estate or interest in priority to the mortgage, all deeds and documents relating to the property, or its title, which a purchaser under the power of sale would be entitled to demand and recover.".
Amendment agreed to.
Section 97 deleted.
NEW SECTION.
I move amendment No. 77:
In page 60, before section 98, to insert the following new section:
98.—-(1) Upon an application for an order under, and without prejudice to the generality of, sections 94(2) and 97(3)*, 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 court may—
(a) adjourn the proceedings, or
(b) on making an order, or at any time before enforcement or implementation of such an order—
(i) stay the enforcement or implementation, or
(ii) postpone the date for delivery of possession to the mortgagee, or
(iii) suspend the order,
for such period or periods as it thinks reasonable and, if an order is suspended, the court may subsequently revive it.
(2) Any adjournment, stay, postponement or suspension under subsection (1) may be made subject to such terms and conditions with regard to payment by the mortgagor of any sum secured by the mortgage or remedying of any breach of obligation as the court thinks fit.
(3) The court may revoke or vary any term or condition imposed under subsection (2).
(4) Nothing in this section affects the jurisdiction of the court under sections 7 and 8 of the Act of 1976.".
Amendment agreed to.
Section 98 agreed to.
SECTION 99.
I move amendment No. 78:
In page 61, subsection (1), line 31, to delete "acting on behalf of" and substitute "appointed by".
This is a drafting amendment.
Amendment agreed to.
I move amendment No. 79:
In page 61, subsection (5), line 43, after "1989" to insert "or a receiver appointed under the Companies Acts".
This amendment will ensure that the provisions of this section will not cut across the obligations of a receiver under the Companies Acts.
Amendment agreed to.
Section 99, as amended, agreed to.
SECTION 100.
Amendments Nos. 80 and 81 are cognate and may be discussed together.
I move amendment No. 80:
In page 62, subsection (1), line 2, to delete "Part" and substitute "Chapter".
Amendment agreed to.
Section 100, as amended, agreed to.
SECTION 101.
I move amendment No. 81:
In page 62, subsection (1), line 27, to delete "Part" and substitute "Chapter".
These are drafting amendments.
Amendment agreed to.
Section 101, as amended, agreed to.
Sections 102 and 103 agreed to.
SECTION 104.
I move amendment No. 82:
In page 63, lines 36 to 45, to delete subsection (1) and substitute the following:
"(1) Where—
(a) following service of notice on the mortgagor, or on one of 2 or more mortgagors, requiring payment of the mortgage debt, default has been made in payment of that debt, or part of it, for 3 months after such service, or
(b) some interest under the mortgage or, in the case of a mortgage debt payable by instalments, some instalment representing interest or part interest and part capital is in arrears and unpaid for 2 months after becoming due, or
(c) there has been a breach by the mortgagor, or some person concurring in the mortgage, of some other provision contained in the mortgage or any statutory provision, including this Act, other than a covenant for payment of the mortgage debt or interest,
the mortgagee or any other person for the time being entitled to receive, and give a discharge for, the mortgage debt, may appoint, by writing, such person as the mortgagee or that other person thinks fit to be a receiver of—
(i) the income of the mortgaged property, or
(ii) if the mortgaged property comprises an interest in income, or a rentcharge or other annual or other periodical sum, that property.".
This is essentially a drafting amendment. The existing text of subsection (1) refers to the provisions of section 97 and this has caused confusion. The amended text of the subsection drops the cross-reference to section 97 and produces the relevant provisions instead.
The issue I raised earlier regarding notice parties in section 97 probably also applies in this instance. If the Minister is going to consider the issue, he might bear that in mind.
Section 104 does not appear to provide for a limit on costs for a mortgagee. We have discussed protecting borrowers and rigorous guidelines on the power of sale and its exercise, and the Minister probably intends to introduce an amendment to allow Circuit Court jurisdiction over the exercise of such powers of sale. I wonder how costs can be minimised. It is important to include a provision that limits costs for mortgagees. I am anxious to pursue further the issue of Circuit Court jurisdiction and look forward to discussing the proposed amendment.
I empathise with the Deputy in regard to the curtailment of costs and that is one of the reasons behind the proposed amendment on commencing proceedings in the Circuit Court. The way to get around this is by suggesting, as we intend to do, that in future all orders for repossession must commence in that court. The question of costs and their taxation obviously then becomes a question for the courts. As the Deputy will be aware, provision is already made in legislation generally to the effect that if somebody commences a case in the High Court, he or she would only be awarded the costs associated with the Circuit Court if the latter was the proper place to begin proceedings.
Does the Minister see that we have prescribed the costs for the receiver? We could apply that to commissions for banks and building societies so that costs are limited in respect of the mortgagee.
The Deputy is trying to hamstring the courts in determining the costs payable. I understand his intention but we are discussing the cost of the proceedings, which is already determined by the judge. The receiver is somewhat outside the process and I would have thought it necessary to include fairly stringent conditions in that regard. One would not put a receiver into a family home, for example.
Amendment agreed to.
Section 104, as amended, agreed to.
SECTION 105.
I move amendment No. 83:
In page 64, subsection (1), line 26, to delete "income" and substitute "money".
This is a drafting amendment.
Amendment agreed to.
Section 105, as amended, agreed to.
Section 106 agreed to.
SECTION 107.
I move amendment No. 84:
In page 65, subsection (2), line 28, to delete "charge" and substitute "mortgage".
This is a drafting amendment.
Amendment agreed to.
Section 107, as amended, agreed to.
SECTION 108.
I move amendment No. 85:
In page 66, subsection (2)(a), line 2, after “lease,” to insert “and”.
This is a drafting amendment.
Amendment agreed to.
I move amendment No. 86:
In page 66, lines 20 to 23, to delete subsection (5) and substitute the following:
"(5) The power of leasing conferred by this section applies only to mortgages created after the commencement of this Part.".
This is a drafting amendment. As paragraph (b) of subsection (5) is superfluous, the text is being recast.
Amendment agreed to.
Section 108, as amended, agreed to.
SECTION 109.
I move amendment No. 87:
In page 66, subsection (1)(a), line 27, after “circumstances,” to insert “and”.
This is a drafting amendment.
Amendment agreed to.
Section 109, as amended, agreed to.
SECTION 110.
I move amendment No. 88:
In page 67, lines 9 to 16, to delete subsections (1) and (2) and substitute the following:
"(1) Subject to subsection (2), a mortgagor or mortgagee in possession (or after the mortgagee has appointed a receiver and so long as the receiver acts, the receiver) may accept a surrender of a lease previously granted under section 108 or as authorised by the terms of the mortgage, whether the surrender relates to the whole or part only of the land leased.
(2) Subsection (1) applies only where the surrender of the previous lease is for the purpose of granting a new lease under section 108 or as authorised by the terms of the mortgage.”.
This amendment rearranges the contents of subsections (1) and (2) in order to clarify their meaning. In doing so, the reference to subsection (6) is dropped. Amendment No. 90 deletes subsection (6), which is superfluous.
Amendment agreed to.
I move amendment No. 89:
In page 67, subsection (3)(c)(i), line 29, after “accepted,” to insert “and”.
Amendment agreed to.
I move amendment No. 90:
In page 67, line 41, to delete subsection (6).
Amendment agreed to.
Section 110, as amended, agreed to.
Section 111 agreed to.
SECTION 112.
Question proposed: "That section 112 be deleted."
It is proposed to drop section 112, which had been intended to update the content of section 4 of the Judgment Mortgage (Ireland) Act 1850. On reflection, this provision is no longer required since Part 10 of the Bill updates the general law relating to judgment mortgages. The 1850 Act is repealed in its entirety in Schedule 2.
Question put and agreed to.
SECTION 113.
I move amendment No. 91:
In page 68, lines 19 to 21, to delete subsection (1) and substitute the following:
"(1) A creditor who has obtained a judgment against a person may apply to the Property Registration Authority to register a judgment mortgage against that person's estate or interest in land.".
This is a drafting amendment. In order to avoid any misunderstanding, the revised text of section 113(1) makes it clear that a creditor who has obtained a judgment against another person has to apply to the property registration authority to register a judgment mortgage against that person's estate or interest in the land. The existing wording could be misinterpreted to mean a registration could be affected without application to the authority.
I wonder about the automatic lapsing in the judgment mortgage.
Is the Deputy speaking on amendment No. 92?
We will deal with amendment No. 91 first.
Amendment agreed to.
I move amendment No. 92:
In page 68, between lines 23 and 24, to insert the following subsection:
"(3) A judgment mortgage shall lapse after the expiration of 6 years after it is registered in the Registry of Deeds.".
I wonder about the merits of having a provision for the automatic lapsing of a judgment mortgage and whether it would be consistent with the fact that a debt can itself become statute-barred. I am conscious of the comments made about interest accumulating over a number of years.
A purpose of this Bill is to facilitate the introduction of e-conveyancing, and there will be the matter of the clearing of titles. At present it can be really difficult to clear judgment mortgages as creditors may have disappeared or gone to Canada. I am not sure of the extent to which they can be tracked down. The Minister was fortunate in being able to make contact but had he not been in a position to make contact, a considerable amount of hardship may have been inflicted on the other side. This is notwithstanding what the Minister may say about knowledge of a registration or a lack of effort.
If a debt can become statute-barred, the same principle should apply in the matter of a judgment mortgage. I ask that consideration be given towards this. This will hamper the simplification of conveyancing or the introduction of electronic conveyancing. How will we address it?
I must rely on my own practical experience. I would not have wanted this one to have lapsed because it was a sweet victory, albeit after 11 years. In that case my clients did not even ask me to register the judgment mortgage and I did it of my own volition, perhaps out of badness, because I felt the man was getting away with it.
The Deputy is likening it to a debt becoming statute-barred. A debt would become statute-barred because of inaction by the person owed the money, as he or she did not act over the six years. A judgment mortgage is a result of a positive action after a debt is incurred. If a six-year lapsing provision was to be inserted for a judgment mortgage, we would in effect be forcing the mortgagor to act and sell the house. As we are interested in houses, by implementing the proposed amendment we could, in effect, force people on to the street for a debt.
I will consider what the Minister has said but there is a problem. The period could be 12 years or 15 years.
It could be approached in another way by leaving out a time period but putting in some provision whereby a court could perhaps be nominated as an ultimate receiver of the debt. If my Canadian couple could not be tracked down with reasonable effort and the person wanted to sell the property, perhaps the money could be lodged in court. Such an approach could be taken I suppose.
Amendment, by leave, withdrawn.
Section 113, as amended, agreed to.
NEW SECTION.
Amendments Nos. 93 and 94 are related and may be discussed together.
I move amendment No. 93:
In page 68, before section 114, to insert the following new section:
114.——(1) Registration of a judgment mortgage under section 113 operates to charge the judgment debtor’s estate or interest in the land with the judgment debt and entitles the judgment mortgagee to apply to the court for an order under this section.
(2) On such an application the court may make—
(a) an order for the taking of an account of other rights or incumbrances affecting the land, if any, and the making of inquiries as to the respective priorities of any such rights or incumbrances,
(b) an order for the sale of the judgment debtor’s estate or interest in the land, and where appropriate, the distribution of the proceeds of sale,
(c) such other order for enforcement of the judgment mortgage as the court thinks appropriate.
(3) The judgment mortgage is subject to any right or incumbrance affecting the judgment debtor's land, whether registered or not, at the time of its registration.
(4) For the purposes of this section, a right or incumbrance does not include a claim made in an action to a judgment debtor's estate or interest in land (including such an estate or interest which a person receives, whether in whole or in part, by an
order made in the action) whether by way of claim or counterclaim in the action, unless the claim seeks an order—
(a) under the Act of 1976, the Act of 1995 or the Act of 1996, or
(b) specifically against that estate or interest in land.
(5) Section 71 applies to a voluntary conveyance of land made by the judgment debtor before the creditor registers a judgment mortgage against that land under section 113 as if the creditor were a purchaser for the purposes of section 71.”.
Amendment No. 75 replaces the existing text of section 114. Although the substance remains largely unchanged, the revised text makes it clear that the effect of registering a judgment mortgage is to charge the judgment debtor's land with a judgment debt and, second, to entitle the judgment mortgagee to apply to the court for an appropriate order. Subsection (2), which has been redrafted following consultation with the Courts Service of Ireland, outlines the types of orders which the court may make in favour of a judgment mortgagee.
Subsection (4) has also been redrafted following consultation with the Courts Service. It makes clear that the rights and incumbences to which the judgment mortgage is subject include claims that have been lodged in court under the Family Home Protection Act, the Family Law Act 1995 and the Family Law (Divorce) Act at the time or registration of the judgment mortgage. Subsection (5), which created a link between judgment mortgages and the mortgages under Part 9, is being dropped because it is more likely to create confusion than clarify matters.
I am anxious to ensure that the protection given to defaulting mortgagors would also apply to judgment mortgagors. It is a question of ensuring that subsection (4) is clear that a judgment mortgage would not affect a family home unless the debt or the judgment has been incurred by both spouses. At the moment the Family Home Protection Act does not invalidate judgment mortgages. There could be an instance in which it would be unfair to enforce a judgment mortgage where it may have an adverse effect on the family home but where the original debt did not have anything to do with the family home. That exemption of the family home should be preserved.
The Deputy is referring to amendment No. 94 in his name, which we will come to later.
We are discussing the two together.
I am sorry. I will read out the note on amendment No. 94 so the Deputy will have it for Report Stage. I refer the Deputy to section 28 of the Bill, which provides that registration of a judgment mortgage against the estate or interest of a joint tenant does not sever the joint tenancy and if it remains unsevered, the judgment mortgage is extinguished upon the death of the judgment debtor. Section 29 provides that a judgment mortgagee may apply to court for an order under that section and the court may make such order relating to the land as appears to the court to be just and equitable in the circumstances of the case. I also draw the Deputy's attention to section 114(4), which protects any claims arising under the Family Home Protection Act, the Family Law Act and the Family Law (Divorce) Act. I would be concerned that an unintended consequence of Deputy Flanagan's amendment might be collusion between spouses to incur a debt in the name of one spouse in the knowledge that a judgment mortgage could not then be registered against them.
That is a fair point. I will consider what the Minister said.
I wish to mention a related point. The Nursing Homes Support Scheme Bill, also known as the fair deal Bill, contains a section which provides that if one spouse goes into a nursing home a charge can be put on the home for the 7% owing to the State for payment to the nursing home. Included is a provision to the effect that the joint tenancy is not severed. I am not sure whether the Bill mentions the family home. While I am referring here to other legislation, I am concerned about the constitutionality of this provision. One spouse could consent to the charge on the home and the other may not, yet the charge would go on the home. Is there any possibility this could be submitted to the Law Reform Commission to obtain an opinion in this regard? I am aware it is different legislation and it is being dealt with by another Department——
We are not discussing that now.
I thought I would mention it here because it is a related point.
The Government was castigated for not introducing that legislation sooner. The reality is that it was subjected to intense examination by the Attorney General for some of the reasons indicated by Deputy Tuffy. The Deputy might raise the issue when that legislation is going through the House.
Yes. Point taken.
Amendment agreed to.
Section 114 deleted.
Amendment No. 94 not moved.
Sections 115 and 116 agreed to.
NEW SECTIONS.
Amendments Nos. 95 to 101, inclusive, 108, 128 and 138 are related and may be discussed together by agreement.
I move amendment No. 95:
In page 69, before section 117, to insert the following new section:
"PART 11
LIS PENDENS
117.—In this Part—
"manner" includes form;
"prescribed" means prescribed by rules of court;
"register" means the register of lis pendens maintained under section 118.”.
While the existing section 121 makes provision for the protection of purchasers where registration of lis pendens has not taken place, it has become apparent since publication of the Bill that the general law in this area is confusing and needs to be codified. This is the purpose of this new part containing seven sections. Codification has an added advantage in that it facilitates the repeal of various provisions and statutes dating back as far as 1844, 1867 and 1871. Section 117 contains relevant definitions, while section 118 makes provision for keeping the register which is already maintained in the central office of the High Court. Section 119 allows cancellation of an entry in the register, while sections 120 and 121 permit the court to vacate an order under certain conditions. Section 122 contains the provision which is currently in section 121. The substance of Deputy Flanagan’s amendment is now dealt with in the new Part 11. The new section 119 contains provisions dealing with the cancellation of a lis pendens, while section 120 will permit the court to vacate a lis pendens in certain circumstances. The legal advice available to me indicates that this approach is preferable to providing for an automatic expiry of the lis pendens after a specified period of time.
I remind Deputy Flanagan that his amendment, No. 108, is part of this group.
I welcome what the Minister has said because he seems to have more or less dealt with the issue as raised, although in a different way. I welcome that.
Amendment agreed to.
I move amendment No. 96:
In page 69, before section 117, to insert the following new section:
118.—(1) A register of lis pendens affecting land shall be maintained in the prescribed manner in the Central Office of the High Court.
(2) The following may be registered as a lis pendens:
(a) any action in the Circuit Court or the High Court in which a claim is made to an estate or interest in land (including such an estate or interest which a person receives, whether in whole or in part, by an order made in the action) whether by way of claim or counterclaim in the action; and
(b) any proceedings to have a conveyance of an estate or interest in land declared void.
(3) Such particulars as may be prescribed shall be entered in the register.".
Amendment agreed to.
I move amendment No. 97:
In page 69, before section 117, to insert the following new section:
119.—An entry of a lis pendens in the register shall be cancelled—
(a) with the consent, given in the prescribed manner, of the person on whose application it was registered, or
(b) upon the lodgement in the Central Office of the High Court of a notice, given in the prescribed manner, of an order under section 120 vacating the lis pendens.”.
Amendment agreed to.
I move amendment No. 98:
In page 69, before section 117, to insert the following new section:
120.—Subject to section 121, a court may make an order to vacate a lis pendens on application by—
(a) the person on whose application it was registered, or
(b) any person affected by it, on notice to the person on whose application it was registered—
(i) where the action to which it relates has been discontinued or determined, or
(ii) where the court is satisfied that there has been an unreasonable delay in prosecuting the action or the action is not being prosecuted bona fide.".
Amendment agreed to.
I move amendment No. 99:
In page 69, before section 117, to insert the following new section:
121.—A court shall not under section 120 vacate a lis pendens, registered under section 10 of the Judgments (Ireland) Act 1844 before the repeal of that section, on a ground other than one on which the lis pendens could have been vacated immediately before that repeal.”.
Amendment agreed to.
I move amendment No. 100:
In page 69, before section 117, to insert the following new section:
122.—A lis pendens does not bind a purchaser of unregistered land without actual knowledge of it unless it has been registered in the Central Office of the High Court within 5 years before the making of the conveyance to the purchaser.”.
Amendment agreed to.
I move amendment No. 101:
In page 69, before section 117, to insert the following new section:
123.—The Courts and Court Officers Act 1995 is amended, in the Second Schedule, in paragraph 1, by substituting the following for subparagraph (xxiv):
"(xxiv) An order under section 120 of the Land and Conveyancing Law Reform Act 2009.”.”.
Amendment agreed to.
I move amendment No. 102:
In page 69, before section 117, but in Part 11, to insert the following new section:
117.—Section 3 (interpretation) of the Act of 1964 is amended in subsection (1)—
(a) by the insertion of the following definitions:
" ‘instrument' has the meaning given to it by section 3 of the Land and Conveyancing Law Reform Act 2009;
‘owner' includes "full owner;",
(b) by the substitution of “ ‘freehold land’ means land the ownership of which is an estate in fee simple in possession;” for the definition of “freehold land”,
(c) by the substitution of “ ‘judgment mortgage’ means a mortgage registered by a judgment creditor pursuant to section 113 of the Land and Conveyancing Law Reform Act 2009;” for the definition of “judgment mortgage”,
(d) by the substitution of “ ‘land’ has the meaning given to it by section 3 of the Land and Conveyancing Law Reform Act 2009;” for the definition of “land”,
(e) by the substitution of “estate” for “interest” where it first occurs in the definition of “leasehold interest”, and
(f) by the deletion of the definitions of “Bankruptcy Acts”, “Registry of Deeds”, “Settled Land Acts”, “settlement”, “settled land”, “tenant for life” and “trustees of the settlement”.”.
This new section contains important consequential amendments to various definitions set out in section 3 of the Registration of Title Act 1964. By "consequential" is meant those amendments to the 1964 Act which are now required as a result of various substantive land law and conveyancing reforms contained in the Bill.
Amendment agreed to.
Section 117 deleted.
NEW SECTION.
I move amendment No. 103:
In page 69, before section 118, to insert the following new section:
118.—The following section is substituted for section 25 (effect of failure to register where registration compulsory) of the Act of 1964:
"25.—A person shall not acquire an estate or interest in land in any case in which registration of ownership of the land is or becomes compulsory under section 23 or 24 unless the person is registered as owner of the estate or interest within 6 months after the purported acquisition or at such later time as the Authority (or, in case of refusal, the court) may sanction in any particular case, but on any such registration the person's title shall relate back to the date of the purported acquisition, and any dealings with the land before the registration shall have effect accordingly.".".
This is a technical amendment which proposes to remedy a shortcoming which has come to light in section 25 of the Registration of Title Act 1964. Sections 23 and 24 of the 1964 Act provide for compulsory registration of title, while section 25 of the same Act deals with the consequences of non-registration in cases where registration has become compulsory. Section 25 has already been amended in section 54 of the Registration of Deeds and Title Act, but unfortunately that change restricted the consequences of non-registration to section 24 registrations and overlooked section 23 registrations. The revised text will mean that the consequences of non-registration will apply equally to section 23 and section 24 registrations. The original text of section 118, which amends section 62 of the 1964 Act, has been transferred into Schedule 1.
Amendment agreed to.
Question, "That section 118 be deleted", put and agreed to.
Section 119 agreed to.
SECTION 120.
I move amendment No. 104:
In page 70, line 11, after "the", where it firstly occurs, to insert "estate or".
Amendment agreed to.
Amendments Nos. 105 to 107, inclusive, are drafting amendments only.
I move amendment No. 105:
In page 70, line 12, after "that" to insert "estate or".
Amendment agreed to.
I move amendment No. 106:
In page 70, line 14, after "that" to insert "estate or".
Amendment agreed to.
I move amendment No. 107:
In page 70, line 17, after "that" to insert "estate or".
Amendment agreed to.
Section 120, as amended, agreed to.
SECTION 121.
Amendment No. 108 not moved.
Question, "That section 121 be deleted", put and agreed to.
NEW SECTION.
I move amendment No. 109:
In page 70, after section 122, to insert the following new section:
122.—(1) 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 except in relation to a tenancy of land that is used wholly or partly for the purpose of carrying on a business.
(2) In subsection (1), “business” has the meaning given to it by section 3 of the Landlord and Tenant (Amendment) Act 1980.”.
This amendment addresses concerns raised in the Seanad about the abolition of the sheriff's powers to seize a tenancy. Since the tenancy is so-called "chattel real" the writ of fieri facias which permits seizures of chattels is applicable. The Sheriffs Association has expressed concern with regard to the proposal to abolish the power of seizure. These concerns are shared by the Revenue Commissioners.
Officials of my Department have met with representatives of the Sheriffs Association and the Revenue to discuss the situation. It emerged from these discussions that the seizure powers are still used in the case of business tenancies where the objective is not to sell the leasehold itself but rather to occupy the premises for the purpose of selling stock. This means sheriffs do not have to move the stock to another premises for a salvage sale. The amendment therefore proposes to retain the seizure power in the case of business tenancies.
Does this refer to section 122?
We are discussing amendment No. 109 to section 122.
This is about the power of sheriffs to seize. I am looking at the Bill from the point of view of electronic conveyancing. The Minister spoke of the Sheriffs Association. I would say, subject to correction by the Minister, that the Sheriffs Association, or the sheriffs themselves or sheriffs' offices are probably a little behind time in terms of electronic conveyancing. What steps, if any, have been taken to encourage sheriffs' offices to become a little more computer-friendly and to have their offices equipped in such a way as to facilitate e-conveyancing? This may well be an encumbrance on e-conveyancing if sheriffs are not up to speed. I have not been in contact with the Sheriffs Association but perhaps it might be borne in mind that they must be encouraged to update their technological facilities in order to facilitate e-conveyancing.
I have a personal friendship with one sheriff who is the county registrar of my constituency. They are very well computerised there and up to speed with the latest technology. The Sheriffs Association, which is made up, in the main, by county registrars, is to some extent an under-utilised arm of the Courts Service in respect of these issues. If there are logjams or difficulties with regard to this we can look at them as they emerge but I am told this provision was pushed for by the Deputy's colleagues in the Seanad when the Bill was going through that House.
In his ministerial capacity, the Minister tends not to pass up an opportunity to visit refurbished courthouses and to open courthouses. He might just have a look at sheriffs' facilities and assist them if there is a deficiency.
Amendment agreed to.
Section 122 deleted.
NEW SECTION.
I move amendment No. 110:
In page 70, after line 28, to insert the following new section:
123.—The Landlord and Tenant (Ground Rents) (No. 2) Act 1978 is amended by the insertion of the following new sections after section 22:
"22A.—(1) Every vesting certificate issued under Section 22 shall, subject to subsection (2), for all purposes be conclusive evidence that every assurance, proceeding, consent and act whatsoever of all interested persons which ought to have been made, given or done previously to convey effectually the fee simple free from incumbrances and any intermediate interests in the dwelling house aforesaid has been made, given or done respectively by such persons.
(2) After the expiry of twenty years from the date of issue of a vesting certificate (unless at that time there should be proceedings in being disputing the validity thereof, in which case upon the pronouncement of a final order dismissing said proceedings):
(a) a purchaser may not require the person in whose favour the vesting certificate is issued also to produce the lease whereby he became entitled to acquire the fee simple in the dwellinghouse under Part II or to deduce his leasehold title therefrom; and
(b) such vesting certificate shall, without more, in favour of a purchaser, be conclusive evidence that the person in whose favour the vesting certificate is issued is entitled to the fee simple free from incumbrances in the dwellinghouse aforesaid.
(3) Nothing in subsections (1) or (2) shall interfere with the jurisdiction of any court of competent jurisdiction founded upon mistake or fraud, and upon the application of any person who claims to have been wrongfully divested of any interest thereby, the court may on such ground make an order for a vesting certificate to be set aside or declared void on such terms as it thinks just.
(4) Otherwise than by a claim of mistake or fraud as aforesaid, the fee simple title vested in a person by virtue of a vesting certificate shall be unimpeachable."
23A.—(1) For the avoidance of doubt, there exists and may be deemed always to have existed a doctrine of partial merger of estates, that is to say:
(a) where a greater estate and a lesser estate in the same lands or same part of lands meet in the same person in the same right, provided that no intermediate estate or interest should be outstanding, and subject to the intention of that person except as provided in subsection (2), the lesser estate is merged and extinguished in the greater estate in accordance with the common law rules heretofore; and
(b) a merger of estates as aforesaid occurs notwithstanding—
(i) that a person owns the lesser estate as one of several joint tenants, in which case the joint tenancy will be severed in proportion to his aliquot share and only his severed share of the lesser estate will be merged and extinguished in the greater estate leaving the interests of the other tenants otherwise intact; or
(ii) that a lessee holds a leasehold estate in part only of the lands demised by the original lease and comes into ownership of the lessor's estate in the same part of the lands, in which case the former estate will be merged and extinguished in the latter estate, whereas the original leasehold title and all incidents thereto shall subsist and remain in force with respect to the balance of the demised lands (in so far as such original lease has not already been surrendered, merged or avoided or has otherwise ceased in any other part of the demised lands) in like manner as if such lands with respect to which the leasehold title subsists had alone been demised by the original lease.
(2) From the date of commencement of this Section, upon the acquisition of the fee simple in leased lands pursuant to the provisions of the Landlord and Tenant (Ground Rents) Act 1967 or the Landlord and Tenant (Ground Rents) (No. 2) Act 1978, a lessee's leasehold estate shall immediately be merged and extinguished in the fee simple without reference to the intention of the lessee.
(3) Where prior to the date of commencement of this Section a lessee has acquired the fee simple in leased lands pursuant to the provisions of the Landlord and Tenant (Ground Rents) Act 1967 or the Landlord and Tenant (Ground Rents) (No. 2) Act 1978, after said date any transaction whatsoever which purports to transact on the lands as if the leasehold estate may not have been merged and extinguished in the fee simple shall to that extent be void. This subsection shall operate without prejudice to the validity of transactions completed before said date.
(4) Where the root of a vendor's fee simple title in a dwellinghouse is a vesting certificate issued under section 22 of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 and less than twenty years has expired since the date of issue of such certificate, nothing in subsections (2) or (3) shall prevent a purchaser from requiring the vendor to produce the lease whereby he or his predecessor in title became entitled to acquire the fee simple in the dwellinghouse under Part II of the 1978 Act or to deduce his leasehold title therefrom.".".
Perhaps the Minister will tell me that this amendment is not at all suitable for this section of legislation. However, it is a matter pertaining to landlord and tenant ground rents and to whether any legislation is envisaged. During a number of Dáilanna we have seen commitments to amend and deal with ground rents legislation. We have found in the past, on checking the record as far back as 1989, that as soon as Ministers indicate that amendment to the ground rents legislation is in the offing, an election is generally called. We have not been in a position to update the legislation since 1978. This amendment deals with the matter of the vesting certificate and the conclusive evidence of vesting certificates. It sets out the manner in which vesting certificates can be regarded as conclusive evidence of title. If the Minister is not minded to accept the amendment as worded I ask him to deal with the principle and examine how best this matter might be addressed.
What if another person had the lease in his or her possession? That person could then claim that was the title document. I have a concern that an opening might be left there. Perhaps Deputy Flanagan might comment on that.
I would err on the side of caution. I seem to do nothing but tell stories of my own experience. Many years ago a man came to see me and said he wanted to build on his father-in-law's site. I knew where he lived as it was a place I pass every day on the way in and out to Dundalk. His father-in-law lived in a lovely bungalow with a piece of ground to the side of it. I asked for the title deeds. The unregistered title showed that he owned the house but not the orchard, as it was called.
We made an application to the Land Registry for possessory title, a term Deputy Flanagan might recall from his own time. We subsequently got a mortgage but, to be extra sure, I decided I had better register the matter with the Land Registry. I went through all the examiner titles issue. It is not particularly applicable to the present issue. I went through all the rigours of the examiner of titles and went back through titles over 40 years, even though in reality I was not obliged to do so because the man had got his mortgage and we had gone through it. In those days the examination was not so intense. To be sure, and again at my own volition, I decided I better register with an absolute title and went through the rigours I have mentioned.
The site lay dormant for a while. Out of the blue the young couple came to see me and said they had dug the foundations and a man who owned land behind them, a big builder, told them they could not proceed. They came to me. I looked up the title and told them they were registered with the Land Registry, that it was their property and they should not worry about it.
I got a solicitor's letter on behalf of the man who owned the land behind who produced an absolutely perfect unregistered title for the same piece of property. My people were safe because I had gone to the bother of registering them for an absolute title. I was glad I had done so or they would have sued the bejaysus out of me. The builder was obliged to take an action against the State for damages on the basis that the State had given my clients a registered title. For that reason, I would err on the side of caution because vesting orders or certificates may not be, as Deputy Tuffy said, a good root of title.
However, I have some sympathy with what was said by Deputy Flanagan. As he anticipated, we do not think this is the Bill to deal with such an issue. The Law Reform Commission is already engaged in an extensive project to update and codify landlord and tenant law. In November 2007 it published an important report, The Law of Landlord and Tenant, which contained a draft landlord and tenant Bill. In that report, the commission largely ignored the complex area of ground rent legislation on the basis that it is an area of law in its own right and deserves separate study. It has, however, touched on the issue of the partial merger of leasehold interests in heading 59 of the draft Bill accompanying the report.
The complexity of the subject matter raised by Deputy Flanagan is amply demonstrated by the complexity of the amendment he has tabled. These are matters which require careful consideration and full consultation with the Law Society for future landlord and tenant legislation.
These are complex issues which could be not be contained in this Bill but they will be looked at on Report Stage to see if anything can be done.
I accept that.
Amendment, by leave, withdrawn.
I move amendment No. 111:
In page 70, after line 28, to insert the following new section:
123.—Section 54 of the Family Law Act 1995 is amended be the insertion of a new subsection (4) as follows:
"(4) Nothing in this section shall permit the institution of proceedings to challenge a conveyance after the expiration of 6 years from the date of the conveyance.".".
This amendment limits an entitlement to act. It introduces an element of certainty in the areas of statute of limitations and barring for a challenge to a deed of conveyance. Regarding electronic conveyancing, it is important that there would be no uncertainty or grey areas and this is an attempt to pull things together.
I find it difficult to understand the purpose of the amendment. Section 54 of the 1995 Act, which Deputy Flanagan proposes to amend, already contains three subsections. Subsection 1 contains extensive amendments to the Family Home Protection Act 1976, including the addition of a new subsection 8 in section 3 of that Act which deals with the issue of not declaring conveyances void in circumstances after the expiration of six years from the date of conveyance.
Subsection 2 disapplies subsection 1(a) regarding certain matters and subsection 3 disapplies the consent requirement where a court vests ownership in one spouse when granting a judicial separation. It is not, therefore, clear what this amendment is intended to achieve.
I have some difficulty with restricting people to a challenge of a conveyance for only six years. As Deputy Flanagan knows there may be circumstances within a relatively short space of time. A period of 12 years might be more logical because it is the statutory period. I am reluctant to accept the amendment.
I ask the Minister to send me a note on it and I will withdraw it in the meantime.
Amendment, by leave, withdrawn.
SCHEDULE 1.
I move amendment No. 112:
In page 72, between lines 12 and 13, to insert the following:
"
|
Courts (Supplemental Provisions) Act 1961 |
Third Schedule |
In column (2) at reference number 19, the insertion of the following after paragraph (c):“(d) under sections 91, 94 and 114 of the land and Conveyancing Law Reform Act 2009”.In column (2) at reference number 22, the insertion of “and under section 53 of the Land and Conveyancing Law Reform Act 2009” after “Proceedings for specific performance of contracts”.In column (2) at reference number 23, the substitution of “Proceedings under sections 29, 33, 48, 65, and 81 of the Land and Conveyancing Law Reform Act 2009” for “Proceedings for the partition or sale of land”.in column (2) at reference number 26, the insertion of “parts 4 and 5 of the land and conveyancing law reform act 2009 and” after “proceedings under”. |
".
The purpose of this amendment is to chart appropriate provisions to the Third Schedule of the Courts Supplemental Provisions Act 1961 which sets out the respective jurisdiction limits for the Circuit Court and the High Court.
Amendment agreed to.
Amendments Nos. 113 to 115, inclusive, will be discussed together.
I move amendment No. 113:
In page 72, to delete lines 19 to 32 and substitute the following:
"
|
Registration of Title Act 1964 |
Section 24 |
In subsection (1), the substitution of “on and after” for “on or after”. |
".
Amendment agreed to.
I move amendment No. 114:
In page 72, to delete lines 47 to 50 and substitute the following:
"
|
Section 51 |
In subsection (1), the substitution of “A” for “Subject, in the case of a limited owner, to the Settled Land Acts, a”.In subsection (2), the deletion of “or in such other form as may appear to the Authority to be sufficient to convey the land,”. |
".
Amendment agreed to.
I move amendment No. 115:
In page 73, to delete lines 6 to 14 and substitute the following:
"
|
Section 61 Section 62 Section 64 |
in subsection (3)(a), the deletion of—(a) “full or limited”,(b) “, as the case may be”.In subsection (4), the deletion of “full owner or limited”.In subsection (2), the deletion of “(or an instrument in such other form as may appear to the Authority to be sufficient to charge the land, provided that such instrument shall expressly charge or reserve out of the land the payment of the money secured)”.In subsection (6), the substitution of—(a) “legal mortgage under Part 9 of the Land and Conveyancing Law Reform Act 2009” for “mortgage by deed within the meaning of the Conveyancing Acts”, |
|
|
Section 100 Section 103 Section 123 |
(b) “under such a mortgage” for “under a mortgage by deed”.In subsection (2), the deletion of “or in such other form as may appear to the Authority to be sufficient to transfer the charge,”.In subsection (1), the substitution of “any” for “the person who ought to be registered under this Act, or as to any other”.In subsection (2), the deletion of “(including a limited owner exercising powers under the Settled Land Acts or this Act)”.In subsection (4), the deletion of “or, in the case of settled land, as assignees of the registered owner”.In subsection (6), the substitution of “instruments” for “those”. |
".
Amendment agreed to.
I move amendment No. 116:
In page 76, to delete lines 9 to 16 and substitute the following:
"
|
Registration of Deeds and Title Act 2006 |
Section 11 Section 12 Section 32 Section 55 |
In subsection (6), the insertion of “and are eligible for reappointment” after “appointment”. In subsection (3), the deletion of “for one further term”.In subsection (1), the substitution of—(a) “(g) an application to register a judgment mortgage under section 113 of the Land and Conveyancing Law Reform Act 2009;” for paragraph (g) of the definition of “deed”,(b) “ ‘land’ has the meaning given to it by section 3 of the Land and Conveyancing Law Reform Act 2009;” for the definition of “land”.The insertion of “of the Act of 1964” after “registration)”. |
".
The purpose of this amendment is to incorporate updated technical provisions and references in the Registry of Deeds Act 2006.
Amendment agreed to.
Schedule 1, as amended, agreed to.
SCHEDULE 2.
Amendments Nos. 117, 120, 123, 129, 134, 139 and 143 are related and will be discussed together.
I move amendment No. 117:
In page 76, line 21, to delete "or Subject".
This is a drafting amendment.
Amendment agreed to.
Amendments Nos. 118, 121, 122, 124 to 127, inclusive, 131 to 133, inclusive, 135, 136 and 140 are related and will be discussed together.
I move amendment No. 118:
In page 76, line 31, to delete "sess. 2".
All of these amendments are required to take account of provisions in the Statute Law Revision Act 2007, including the discovery of several more obsolete statutes which can now be repealed.
Amendment agreed to.
I move amendment No. 119:
In page 76, lines 36 to 40, to delete all words from and including "Section" in line 36, down to and including "land" and substitute the following:
"
|
In section 2, the words “or upon any contract or sale of lands, tenements, or hereditaments, or any interest in or concerning them,”. |
".
This is a drafting amendment to clarify the extent of the repeal of the Statute of Frauds Act 1695.
Amendment agreed to.
I move amendment No. 120:
In page 77, line 1, to delete "or Subject".
Amendment agreed to.
I move amendment No. 121:
In page 77, line 42, after "Edw. 1" to insert "Stat. Westm. sec.".
Amendment agreed to.
I move amendment No. 122:
In page 77, lines 44 and 45, to delete "cc 1-3" and substitute "Stat. d'ni R. de t'ris, & c.".
This is a drafting amendment which will bring the chapter reference of statutes quia emptores 1290 into line with the Statute Law Revision Act 2007.
Amendment agreed to.
I move amendment No. 123:
In page 78, line 8, to delete "or Subject".
Amendment agreed to.
I move amendment No. 124:
In page 78, between lines 23 and 24, to insert the following:
"
|
3 & 4 Will. 4 c. 106 |
Inheritance Act 1833 |
The whole Act so far as unrepealed |
".
The Inheritance Act 1833 was repealed by the Succession Act 1965 save insofar as it applied to be decent of an estate tail. With the abolition of the fee tail estate in this Bill the remainder of the 1833 Act can now be repealed.
Amendment agreed to.
I move amendment No. 125:
In page 78, line 26, after "Tithes" to insert "Act 1835".
This amendment gives the 1835 Act its correct Short Title.
Amendment agreed to.
I move amendment No. 126:
In page 78, between lines 27 and 28, to insert the following:
"
|
5 & 6 Will. 4 c. 75 |
Tithing of Turnips Act 1835 |
The whole Act so far as unrepealed |
|
6 & 7 Will. 4 c. 70 |
Sites for Schoolrooms Act 1836 |
The whole Act so far as unrepealed |
".
Amendment agreed to.
I move amendment No. 127:
In page 78, line 37, after "Copyhold" to insert "Act 1844".
Amendment agreed to.
I move amendment No. 128:
In page 78, between lines 37 and 38, to insert the following:
"
|
7 & 8 Vic. c. 90 |
Judgments (Ireland) Act 1844 |
Section 10 |
".
Amendment agreed to.
I move amendment No. 129:
In page 79, line 1, to delete "or Subject".
Amendment agreed to.
I move amendment No. 130:
In page 79, line 5, to delete "11 & 12" and substitute "10 & 11".
This is a drafting amendment.
Amendment agreed to.
I move amendment No. 131:
In page 79, line 39, to delete "in Ireland" and substitute "Act 1854".
Amendment agreed to.
I move amendment No. 132:
In page 79, lines 41 and 42, to delete "Act for Religious Purposes in Ireland" and substitute "for Religious Worship in Ireland Act".
Amendment agreed to.
I move amendment No. 133:
In page 79, between lines 44 and 45, to insert the following:
"
|
19 & 20 Vic. c. 9 |
Public Money Drainage Act 1856 |
The whole Act so far as unrepealed |
".
Amendment agreed to.
I move amendment No.134:
In page 80, line 1, to delete "or Subject".
Amendment agreed to.
I move amendment No. 135:
In page 80, between lines 28 and 29, to insert the following:
"
|
28 & 29 Vic. c. 53 |
Drainage and Improvement of Lands Supplemental Act (No. 2 Ireland) 1865 |
The whole Act |
|
28 & 29 Vic. c. 78 |
Mortgage Debenture Act 1865 |
The whole Act |
|
28 & 29 Vic. c. 101 |
Land Debentures (Ireland) Act 1865 |
The whole Act |
".
Amendment agreed to.
I move amendment No. 136:
In page 80, between lines 32 and 33, to insert the following:
"
|
29 & 30 Vic. c. 49 |
Drainage Maintenance Act 1866 |
The whole Act |
|
29 & 30 Vic. c. 61 |
Drainage and Improvement of Lands Supplemental Act (Ireland) 1866 |
The whole Act |
".
Amendment agreed to.
I move amendment No. 137:
In page 80, between lines 36 and 37, to insert the following:
"
|
30 & 31 Vic. c. 43 |
Drainage and Improvement of Lands Supplemental Act (Ireland) 1867 |
The whole Act |
|
30 & 31 Vic. c. 47 |
Lis Pendens Act 1867 |
The whole Act so far as unrepealed |
|
30 & 31 Vic. c. 139 |
Drainage and Improvement of Lands Supplemental Act (Ireland) (No. 2) 1867 |
The whole Act |
|
31 & 32 Vic. c. 3 |
Drainage and Improvement of Lands Supplemental Act (Ireland) (No. 3) 1867 |
The whole Act |
".
These Victorian statutes can also be repealed with the inclusion of the new part on lis pendens in the Bill. The Lis Pendens Act 1867 can also be repealed.
Amendment agreed to.
I move amendment No. 138:
In page 80, between lines 45 and 46, to insert the following:
"
|
34 & 35 Vic. c. 72 |
Judgments Registry (Ireland) Act 1871 |
Section 21 |
".
Amendment agreed to.
I move amendment No. 139:
In page 81, line 1, to delete "or Subject".
Amendment agreed to.
I move amendment No. 140:
In page 81, line 7, to delete "Act".
Amendment agreed to.
I move amendment No. 141:
In page 81, line 28, after "4," to insert "6,".
This amendment will add section 6 of the Conveyance Act 1882 to the list of provisions to be repealed. That section which deals with disclaimer of powers will be replaced by provisions set out in section 26 of this Bill.
Amendment agreed to.
I move amendment No. 142:
In page 81, line 58, after "The whole Act", to insert "so far as unrepealed".
Amendment agreed to.
I move amendment No. 143:
In page 82, line 1, to delete "or Subject".
Amendment agreed to.
I move amendment No. 144:
In page 82, line 19, after "62(3)," to insert "62(7),".
The purpose of this amendment is to include section 62(7) of the Registration of Title Act 1964 in the list of provisions to be repealed by the Bill as it will be overtaken by the provisions of part 9 dealing with mortgages.
Amendment agreed to.
I move amendment No. 145:
In page 82, line 20, to delete "72(1)(j),".
This amendment restores section 72(1)(j) of the 1964 Act.
Amendment agreed to.
Schedule 2, as amended, agreed to.
Schedule 3 agreed to.
TITLE.
I move amendment No. 146:
In page 13, lines 10 and 11, to delete "TO AMEND THE REGISTRATION OF TITLE ACT 1964" and substitute the following:
"TO PROVIDE FOR THE VARIATION OF TRUSTS, TO MODERNISE THE LAW RELATING TO LIS PENDENS, TO AMEND THE REGISTRATION OF DEEDS AND TITLE ACTS 1964 AND 2006 AND CERTAIN OTHER ENACTMENTS".
This amendment is necessary because the Bill now provides for the variation of trusts, registration of lis pendens including amendments to various enactments other than the Registration of Title Act 1964.
When we discussed the Title we suggested that the wording be restricted but the Minister has done the opposite.
We had to. This is the Long Title.
Amendment agreed to.
Title, as amended, agreed to.
I thank the Minister and his officials for attending the meeting and I thank my colleagues on the committee for their co-operation in passing this legislation.
I thank the Chairman and his officials for all the assistance they have given me and my officials. I thank my officials for their work. I also thank my colleagues, particularly Deputy Thomas Byrne and those from the other side of the House for expeditiously passing Committee Stage of this Bill. We have done the State some service in passing this legislation reasonably quickly. I hope it will pass Report Stage soon. It is good work to make the myriad laws a little clearer through this Bill. I hope that the members of my former profession, and that of Deputy Flanagan, will thank us for making life a little easier for them.
Bill reported with amendments.