This problem of ground rents has been the subject of agitation, not merely in the country but in this House, at various times during the past 20 years.
There were some times during that period when the flame of agitation on the subject burned whiter than at other times. But, no matter what the colour of the flame was, I think it will be acknowledged by all that there was always a flame there representative of the desire on the part of leaseholders to secure an amelioration of the conditions to which they were subject under our ground rent legislation. I do not think anybody who is conversant with the problem will deny that all during that period there was a strong demand on the part of the leaseholders that there should be equitable treatment in respect of the leases which they held. The very fact that over a long period of years that agitation has been sustained is evidence that leaseholders generally recognise that they have a sense of grievance to which they have called the attention of the community from time to time and from which they have sought relief in this House. The agitation for remedial legislation to ease the lot of leaseholders culminated in 1931 in the enactment of the Landlord and Tenant Act. That Act was offered to the Legislature and to the country as a piece of legislation calculated to ease the burden of the town tenants and to give urban dwellers a greater measure of security against landlords than they had before.
Prior to the introduction of the Landlord and Tenant Act, 1931, it was a very common experience—and numerous instances in support of that can be quoted—to find ground landlords increasing ground rents on the expiration of lease from £10 to £50. Prior to 1931, is was a fairly general experience to find ground rents increased by 200, 300, 400 and 500 per cent. It was urged that under the 1931 Act that state of affairs would be brought to an end, especially by the enactment of Section 48 of that Act. But the unfortunate leaseholders were not long in realising that the 1931 Act had many imperfections and that it was a distinctly unsatisfactory Act in many respects so far as they were concerned. In particular, Section 48 of the Act, which was thought to hold out a promise of relief so far as leaseholders were concerned, in fact put the shackles of exploitation probably more firmly on leaseholders than they were before and gave statutory authority to the exploitation which was possible under the Act.
Let us take an example of what Section 48 permitted. If we go back to the original leases, we find that in many cases the site, which had no more than a prairie or agricultural value, was let to a leaseholder without any asset thereon. In many cases there were no roads, no sewerage, no water, probably no lights, and very frequently no transport. It was against a background of that kind that the site was let to the leaseholder in many instances. Having secured the site, the leaseholder then proceeded to erect a house upon it, possibly to erect a garage, possibly to erect out-offices, and generally to beautify the site in order to make his home as attractive as possible. The social authority provided roads, sewerage and water, transport companies provided transport and the State, through the Electricity Supply Board, provided light, with the result that what was originally a prairie site, or what could be described as an agricultural site, was, by the energy of the tenant and his capital on the one hand and the co-operation of the local authority, the transport company and the electricity undertaking on the other hand, transformed into an urbanised site.
A situation was created, therefore, in which that original site had been modernised and enormously improved by the erection thereon of assets and the provision of amenities at the public and State expense. The original ground landlord, having let a prairie or agricultural site, finally discovered that, through the energy of others and the expenditure of the capital of individuals and the community generally, he was now the ground landlord, not of a piece of prairie land, but of an urbanised site containing assets which he had never dreamed of when the site was originally let. Now, having let a piece of barren land to a tenant, the exercise of the tenant's energies and the utilisation of his capital, the use of the powers of local authorities and the State, has resulted in a very valuable piece of property being built up on that site, the lease of which will, in due course, expire.
When the lease expired, the landlord had his rights under the 1931 Act and the tenant was supposed to have protection under the 1931 Act. But what rights had the tenant got? This can best be seen by contrasting the tenant's position with the rights the landlord got under that Act. Section 48 provided that the landlord could go into court on the expiration of a lease —if he could not drive a harder bargain privately with the tenant — and could get, as a new lease, as the new rent for the site, 25 per cent. of the highest competitive price for the land, for the house, for the premises and for the amenities. Because of the assets which the tenant, the State, and the local authority had provided, the landlord could ask the court to give him a rent which was 25 per cent. of the highest competitive rent appropriate to that land and to all the assets on it. Those were the rights which the ground landlord got under Section 48 of the 1931 Act. What the State did in 1931 was to say to the ground landlord: "You may let this piece of prairie or agricultural land at a low rent, if you like, but when the lease expires you can go into court and get 25 per cent. of the highest competitive rent, not of your original land but of all the capital, all the energy, and all the creative work put into the erection of assets on that land by the individual leaseholder, by the State and by the local authority." In other words, the landlord was permitted to levy a tribute on the capital and energy of the leaseholder, on the money expended by the local authority in providing public services, on the activities of the State through the Electricity Supply Board in providing light, and also on the amenities provided by transport undertakings.
Not only was the landlord empowered to get 25 per cent. of that enhanced rent of the site, but in addition he was empowered to compel the leaseholder to reconstruct or to improve the premises to the extent of any sum determined by the court. That is to say, not satisfied with getting that 25 per cent. of the substantially enhanced value of the site, he could also require the tenant to expend a few hundred pounds in improving the dwelling, as if the dwelling were in the ownership of the ground landlord instead of being the result of the expenditure of capital and energy by the tenant. If the Minister goes to the trouble to look this matter up—I do not wish to detain the House unduly by going into it now—he will find, and I have found, that numerous instances can be quoted to show that these unjust levies, in the form of higher ground rents and in the form of expenditure on the repair and renovation of houses, were shamefacedly demanded by landlords as a condition of the renewal of leases.
Our 1931 legislation, therefore, gave the ground landlord, who contributed nothing whatever to the improved value of the site, the protection of the law and permitted him to go into court to rake off, in the form of a substantially higher rent and the prospect of a still substantially higher rent by compelling the tenant to expend an additional sum in improving the dwellinghouse, a tribute to which he was in no way entitled, a tribute which was not based on any expenditure of energy or money by him, but was due to the capital and energy of the tenant and the creative activities of the State and the local authorities.
I would like somebody in this House to say on what grounds we can justify giving a site landlord, who lets a bare, bald, undeveloped site a rent related, not to the value of the site when he let it but to the expenditure on it by the tenant and others. If there has been any increase in the value of that land between the time it was let originally as a site for a building and the time at which the lease was due for renewal, surely nobody will contend that the landlord was in any way responsible for that increased value. It has been created by agencies entirely apart from the original ground landlord. The landlord least of all has any claim whatever to a portion of the increased letting value of that property. Whilst he is ever eager to secure a substantial increase in ground rents, on the expiration of leases, we find that he still continues to pay rates at an agricultural rate on the original agricultural land, though he collects his ground rent on the site as enhanced through the activities of the tenant and others, which have transformed it into an urbanised site, commanding urban valuations for ground rent purposes and commanding, in many cases, city valuations for ground rent purposes.
It is because excesses of that kind have been in existence and have continued so long with varying degrees of hardship, but always degrees of hardship on leaseholders, that there has been a demand in the country, and among various Parties in this House, for legislation to deal with this evil. I think Deputy Corry, with that freedom which, I think, is charming for a person in the Fianna Fáil Party to be allowed to exercise, voiced the real feeling of the ordinary members of the Fianna Fáil Party on this matter the other night.
