Private Members' Business. - Ground Rents: Motion. – Dáil Éireann (20th Dáil) – Tuesday, 9 Dec 1975

Private Members' Business. - Ground Rents: Motion.

Mr. G. Collins

I move:

"That Dáil Éireann deplores the Government's inaction in relation to ground rents."

The system of ground rents is something that we inherited from the past and it has been for many years the source of very great complaint by property owners who are obliged to pay it. The attitude of householders—quite rightly —is that if they buy their houses they should own them and should not be obliged to make annual payments to persons who confer no benefit on them and who quite often are faceless men residing outside the country.

My party's stand on ground rents was set out clearly before the local government elections a couple of years ago and was published, and it stated that Fianna Fáil would introduce legislation to stop the creation of future ground rents. Existing ground rents can already be bought out at a reasonable price through legislation introduced by Fianna Fáil when in office. Experience with the present legislation has shown a number of loopholes and we propose to amend the law so that these defects are immediately remedied and that the right to buy out the ground rent would apply to all.

Mr. Cooney

Could I have the date of that document?

Mr. G. Collins

Prior to the last local government elections in 1973. In recent times the pattern of ground rents has changed somewhat in that large housing estates were built throughout the country and a large ground rent income created and subsequently sold to investors such as insurance companies. Prior to that, ground rents were generally owned by big landlords, some of whom were resident outside the country. In the thirties and forties it was quite popular for husbands to create pensions for their widows by buying ground rents as an investment for them. The question of ground rents has been a thorn in the side of successive Governments but the real breakthrough was made by Fianna Fáil when, as a Government, they put on the Statute Book the Landlord and Tenant (Ground Rents) Act, 1967. It was acknowledged then and is now that this enactment did not go the whole way in curing the problem, but it was a very important step in the process of evolution which would eventually lead to the complete abolition of ground rents.

This piece of legislation basically allowed various categories of leaseholders to purchase compulsorily their ground rents. This had the desired effect because since then ground rents have become more and more unpopular and it is now accepted both by the landlords who own the ground rents and most certainly by the lesses who pay them that they should be abolished and that they are a social injustice. It is part of the Fianna Fáil package in relation to the ordinary householder that not only should he be relieved of the burden of rates but also of ground rents. Fianna Fáil now urge that legislation be introduced immediately to stop the creation of further ground rents. We also urge that the Landlord and Tenant (Ground Rents) Act, 1967, be extended to remove the restrictions on tenants who are precluded by that Act from purchasing their ground rents. This enactment should abolish the 25-year period below which a tenant cannot purchase his ground rent. It should further abolish the restriction on buying out ground rents where the lease is not a building lease.

The present Government have stated that this is part of their policy and the Minister for Justice said over a year ago that such legislation was in the pipeline. But nothing has been done about it. Most likely, his answer will be that he envisages more comprehensive legislation which will deal with all facets of landlord and tenant law and that it will take some time to prepare. The time has now well gone for that and we cannot accept this excuse. If the Government were serious in the promises they made they can easily and quite quickly bring in the type of legislation I have outlined. I believe it would be welcome in this House and would get a speedy passage through Dáil Éireann.

There is another aspect of ground rents which is more difficult and that is the abolition of ground rents altogether. This aspect can be dealt with after the new legislation is enacted because it causes certain constitutional problems. We are absolutely in favour of the total abolition of ground rents but we are acutely aware that this could cause constitutional problems and that by doing away with one injustice you might be creating another. The Constitution, in Article 43, guarantees the individual the right to private property and any attempt to abolish ground rents without compensation is, to my mind, likely to be unconstitutional. It could be argued that it is not in accordance with the common good or the principles of social justice that ground rents should be imposed on tenants and the constitutional problems might be got over in this way. However, this is a matter for further argument and it will obviously take a long time before it is remedied.

There are many widows in the country at present who depend for their livelihood on the ground rents they receive and it could well be a grave injustice if they were deprived of that livelihood. The organisations that constantly call for the immediate abolition of ground rents should see those possible injustices and realise that there is a problem in regard to complete abolition. I think there is no problem, however, in bringing in immediate legislation to stop the creation of further ground rents and to amend the Landlord and Tenant (Ground Rents) Act, 1967, by removing the restrictions which at present prevent private owners from purchasing their ground rents if they wish to do so.

In the past 18 months or so there has been quite a lot of speculation as to what action will be taken by the Government. In a letter dated 19th December, 1974, to one of his Cabinet colleagues, the Minister for Industry and Commerce, the Minister said:

We, as a Government, decided last summer that legislation should be introduced to prohibit the creation of future ground rents on dwellinghouses. I am enclosing a copy of a public announcement that was made at the time. It may be taken that a provision to abolish existing ground rents without compensation would be set aside on Constitutional grounds. On the other hand, any question of a State compensation scheme would raise not only the immediate problem of finding the money but the equally important question whether, if the money were to be had, it would be right to use it to subsidise private owners irrespective of means, in preference to improving the lot of poorer people. However, as the public announcement indicated, we are seeking to include in the new legislation proposals to lessen the difficulties regarding title and legal costs that are being experienced by persons wishing to buy out their ground rents under the existing legislation.

I expect that the proposed legislation (which will have to "mesh in with" comprehensive legislation that will deal with a large number of other landlords and tenant matters and that is at a very advanced stage of preparation) will be ready in the course of the next Session.

There was, of course, quite a lot of publicity given to this. On the 18th May, 1975, one of the political reporters of the Irish Independent wrote an article on it.

A plan to enable many thousands of house holders to buy out their ground rents, without having to face huge legal fees, has been worked out by Government legal experts and agreed to by the Cabinet.

I did not hear that but, perhaps, it is just as well. The delay in introducing legislation to reform the present position about ground rents is a cause of great frustration to many people who have to meet this annual bill. At this point I would refer to the amendment to my motion by the Minister whereby the Minister wants us to accept that Dáil Éireann—which of course we cannot——

... approves the Government's decision to prevent the creation of further ground rents.

The Government made a decision and have done nothing about it. They have left the whole thing hang, and this failure to introduce legislation is another example of the total lack of initiative in legal reform which this Government have displayed in almost three years of office. I understand that there is a fair amount of consent between landlord and tenant alike that this rent should be abolished as soon as possible. I believe the old arguments which landlords made in support of this rent have largely disappeared. They were usually based on the principle that the ground rent system assisted good estate management, the maintenance of amenities, cheaper buildings' costs and so on. This might have been true to some extent a long time ago, but in recent time the situation has completely changed. Property values have soared in recent years, so that the ground on which housing estates are being built today are possibly more valuable than the house built on them. Therefore, the whole principle behind the ground rent system has altered.

Furthermore, there have been some abuses by landlords in the exercise of the ground rent system. It is well known that the purposes of some landlords are better served by allowing a property, especially an old property, to deteriorate to a point of almost complete dilapidation. Then an attempt is made to buy out the leaseholders of that property and apply for planning permission for far more profitable development. This obtaining of planning permission significantly increases the value of the property held. Further abuse on the part of the landlord, which must be giving cause for concern, is the failure of the landlord to meet the obligation contained in most leases to maintain the property.

Mr. Cooney

Such a covenant would never be inserted in a lease creating a ground rent. Invariably in a ground rent lease the obligation to pay would be on the tenant because he would be the person providing the house.

Mr. G. Collins

One of the most significant developments in planning in Ireland in recent years has been the emphasis of planners and the responsibility laid on builders in regard to the provision of suitable amenities of landscaping in estates which were developed by them. While undoubtedly this responsibility is accepted by everyone as essential to environmental control and proper standards in urban and rural areas nevertheless it is very easy for a builder, once he has completed a development, to collect the annual ground rent but to do nothing for the tenants in return, so that inevitably the obligation to maintain the environment of building estates has to be undertaken by the tenants themselves. This responsibility might very well be transferred to the local authorities who should be able to maintain a uniform standard of amenities a planning standards for the environment of any building estate.

Another argument advanced quite often in favour of the retention of the ground rent system has been that it enables builders to provide cheaper houses. With inflation as it is and with soaring prices in this important area, that argument does not hold up any longer. Nowadays we should provide as many incentives as possible for householders to maintain their property, even the gardens of the house itself, in as good a condition as possible. One reason why existing tenants may not be anxious to indulge in that sort of expense is the ground rent system. The possibility of property reverting to the ground landlord because of a failure to pay ground rent is no incentive for people to lavish expense on their property. There are significant restrictions on the right of tenants to purchase the fee simple of their properties. Such restrictions would have to be removed in any new legislation if the tenant were to get a fair deal. Many tenants, too, experience great difficulty in establishing title and meeting high legal costs. We would all like to see positive efforts being made towards simplifying the procedure and, consequently, reducing costs. I am told that cases can be cited in which the cost is prohibitive in terms of the property involved.

If we accept that the continuation or the future creation of ground rents is a social evil and should be abolished, it follows that there should be set up some form of compensation fund which would not involve great cost to the Government but which would help to meet the hard cases of those who cannot meet legal costs. Likewise, the landlord can experience difficulties in connection with his own interests. There is a constitutional difficulty in this regard but when consent exists between landlord and tenant the question of the landlord selling his interest on the grounds of suitable compensation should be easy.

It would be possible to undertake immediate reforms in existing legislation. The Landlord and Tenants Acts 1958, 1967 and 1971 could be amended easily in order to enable them to apply to all long-term leases irrespective of whether such leases are building, proprietary or others. The time limit of 25 years within which the ground rents can be purchased should be abolished. This provision would apply, too, in cases where leases had expired or where a contract was not being signed by the landlord or tenant for the renewal of a lease.

In Britain many of the technical difficulties encountered by a tenant when purchasing a ground rent were overcome many years ago in reforming legislation. Similar legislation is needed urgently here. The case for the tenant has been made today in the strongest possible terms but we are to a large extent in the hands of the Minister in this regard.

Mr. Cooney

In very good hands.

Mr. G. Collins

It is accepted widely nowadays that anyone who purchases a house has a right to own that house as fully as is possible under our existing law and under our Constitution. The continuance of the anachronistic type of legislation which prevents that sort of ownership is a social evil. Therefore, there is an obligation on each of us to hasten the progress of reform legislation in this area. The responsibility of ownership bestows the responsibility of care and of upkeep which originally was the responsibility of the landlord. Given full ownership or a fee simple, as lawyers would say, house purchasers would be very happy to maintain their premises to the best of their ability. This is an important factor in terms of the emphasis on environmental planning and so on.

The Minister promised more than 12 months ago to introduce this legislation but something must have occurred since then to have caused this delay, a delay which is causing much frustration among those involved in the ground rents struggle, as it is known. In correspondence with his colleague, the Minister for Industry and Commerce, the Minister said that the legislation would be ready 12 months ago. This promise was made known publicly. The failure to bring it forward is resulting in people coming in conflict with the law. For example, in the Sutton area there are 70 people who have been issued with decrees for the non-payment of ground rents. It has been said that an irresponsible person, for personal and political purposes has guided those people this far. This person does not purport to represent any political party but to represent a community effort at corporation level. He has no solution now to offer those people except to tell them that he hopes to involve them in an expensive High Court action, an action which would not affect their liability for ground rents in any way.

I am not being political in any way when I say that I have a certain sympathy for those people who are living in the hope that new legislation will get them out of their difficulties. They have been living on hopes such as those expressed in The Irish Independent of May, 18 last. They have allowed themselves to be guided into this situation by this corporation alderman who, apparently, is motivated by the question of personal publicity. This is an extremely unfortunate situation. Perhaps if the Minister had brought the legislation forward 12 months ago as promised, this situation would not have arisen.

This party deplore the Government's inaction in relation to the ground rent situation. We cannot accept the Minister's amendment even in the spirit in which it is meant. Instead of a Government decision of last June 12 months we want concrete proposals before the House, proposals which we can discuss fully. All we should be concerned with in this House is legislation and I trust that this legislation will be before us as soon as possible. I can assure him the House would welcome that legislation and he would have the best wishes of all sides in getting the measure through both Houses of the Oireachtas.

The fact that the Minister has delayed for so long has caused uncertainty as well as frustration. The uncertainty is most harmful. If the Minister had not been as definite as he was in his letter of 19th December, 1974, if he had not been as definite in the statement issued by the Government Information Services on behalf of the Government with regard to the decision, or if others who seemingly are in a position to receive well-informed leaks from members of the Government were not as definite in saying legislation was just around the corner and that it would be introduced shortly, things might have been different.

Recently I met one or two individuals who are involved in an organisation that is concerned with ground rents and one of the gentlemen told me quite sincerely that he understood that the reasons the legislation was not introduced was that Fianna Fáil would not allow it to be introduced, that they were going to oppose it and that there was so much legislation waiting in the wings that the Minister had to take his turn. If the Minister has the legislation ready and if he brings it before the House, we would be only too glad to facilitate him.

Minister for Justice (Mr. Cooney)

I welcome this debate because it enables us to clear the air with regard to certain misconceptions concerning ground rents. I do not know who Deputy Collins met who gave him the impression that he was informed, presumably from this side of the House, that the legislation would be introduced but for the unwillingness of Fianna Fáil to receive it and assist its passage. I have met various people with regard to ground rents and never has the Opposition's attitude been discussed because I assumed, from the history of ground rents, that the Opposition and ourselves would be of the same mind with regard to the problem generally. I want to deny that and if a person made such a statement to the Deputy it was an attempt to sow trouble between the Deputy and myself. I never put forward any such reason as being the reason for the delay in introducing the legislation.

I am glad to have this opportunity of clearing the air because a number of misconceptions have grown up and a number of misunderstandings appear to have arisen. Deputy Collins is critical of what he describes as a failure to introduce reforming legal measures but if he examines various statutes that have been introduced he will see that criticism is unjustified because it begs the question why so much reform is necessary. The answer to that is that the necessary reforming legislation did not appear in the last decade and a half when it might have appeared.

We come to a very pertinent example in the area of ground rents with regard to the prevention of the creation of ground rents. When the Ground Rents Commission reported to my predecessor in 1964 they recommended that the creation of future ground rents in the case of residences and combined residences and businesses was undesirable. If that recommendation had been accepted in 1964 and implemented in the Ground Rent Act, 1967, we would not now be debating the prevention of future ground rents. However, my predecessors for reasons with which I do not agree—reasons which have to do with the question of the cost of providing houses because they had the mistaken idea that if they prevented the creation of ground rents at that time the cost of houses would rise—did not accept the recommendation.

The failure of the then Government to accept what I think was the unanimous recommendation—I am subject to correction on this—of a committee of experts considering the question of ground rents left me with a mess. If that recommendation had been accepted in 1967, there would be eight years less ground rents created. The recommendation was not accepted for reasons which I think were bad. They could be advanced today as strongly as they were adduced then; in fact, they were advanced but I rejected them and, on my advice, the Government took the decision to prevent the creation of future ground rents. In 1967 the then Government partially implemented the report of the commission by introducing the Ground Rent Act, 1967, giving rather limited rights of compulsory purchase to ground tenants. However, the decision has now been taken and it will be implemented in legislation.

I have always been of the opinion that it is not enough just to give the right unless the exercise of that right is going to be reasonably feasible. The working of the rather limited measure introduced by my predecessor gave a right that, in many cases, is not reasonably feasible to exercise. In many cases—I speak from personal experience—ground tenants were inhibited from purchasing their ground rents because of the legal costs and the complexities of title that were often involved. While the right was given, albeit in a limited sense, it was further limited by the practical difficulty relating to the conveyancing aspect of the purchase. The Government accepted my advice that in the legislation to prevent the creation of future ground rents there should be a provision easing the burden of purchase on the tenant both as regards title and cost. One will follow the other; if the title question is simplified, the question of costs will also be simplified.

As Deputy Collins pointed out, the question of cost has been an inhibiting factor but that is not my fault. It is because of the limited nature of the legislation that was introduced.

Very often the amount of cost involved exceeded the purchase price and was a disincentive to a ground tenant to acquire the fee simple. This has its origins in the complexity which can attend many titles, particularly the titles relating to ground landlords. They may be very old and complex titles, with a great many legal incidents attaching to them, all of which make the conveyancing a complex and difficult matter which, in turn, adds to the costs of the conveyancers.

The 1967 Act provided that the purchasing tenant would have to discharge the costs incurred by the ground landlord to his solicitor for making the title available. This was a recognition by the Government of the day that there was a constitutional aspect involved and that, if this provision were not present, an element of confiscation would be introduced into the compulsory purchase, in so far as the purchase money coming into the hands of the ground landlord was calculated on a formula designed to ensure that that money would be equivalent to the property he was being compelled to sell, and, if that money were in any way diminished by reason of costs having to be paid, an element of confiscation would be introduced and the constitutionality of the transaction would come in question. In recognition of that aspect, the Act of 1967 provided that the costs would have to be paid by the tenant.

That was fine in theory but, in practice, this has worked out as a real inhibition against tenants freely purchasing. That is why the Government took the desision, on my advise, that in the legislation to prevent future ground rents, there should also be provision to ease and simplify the purchase but, at the same time, avoid introducing any element of confiscation so as to preserve the constitutionality of the transaction. The reason for the delay is the difficulty of devising a mechanism which will meet both of those objectives. It would be a simple matter to direct that the landlord be not entitled to his costs, full stop. Then the position is eased but the constitutionality is immediately in question.

Deputy Collins stated that positive suggestions could be made as to how these title difficulties could be overcome. I would be very pleased to hear them in the course of this debate. It is a simple matter to say they should be overcome and suggestions can be made to have them overcome, but I can assure the Deputy and the House that a tremendous amount of thought has had to be given to this aspect which has been the reason for the delay in bringing forward legislation. The prevention of the creation of future ground rents per se is not a difficult legal or drafting exercise but when it is married to the other leg which is necessary to implement fully the spirit of that decision, it becomes an extremely, tricky and difficult drafting problem. Many minds have been brought to bear on it. Various formulae have been devised and teased out. They lead to practical or legal difficulties or constitutional implications and all these have to be got out of the way.

However, a formula has now been defined and its drafting is now at an advanced stage. I hope it will meet the two objectives without bringing in its train any of the objections I mentioned as being on the scene in this area. I am apprehensive about putting a date on these things, having been disappointed in the past, but I hope we will have, in the very near future, a comprehensive piece of landlord and tenant legislation which will do what the commission recommended in 1964 and which my predecessor refused to implement. It will prevent the creation of future ground rents. I agree that ground rents are obnoxious and should be abolished. This legislation will do that, but it will go forward the further important extra step. It will do it in such a way that it will be a real benefit to the tenant. He will be able to purchase without lumbering himself with a bill of costs and massive title deeds, a bill of costs that would far exceed the amount of the purchase price and a bundle of title deeds that would frighten any would-be conveyancer who might have to deal with that title in the future.

I hope to deal with two defects in the legislation up to now: first of all, the failure to provide a simple mechanism for purchase and, secondly, the more glaring and obvious defect of the failure to avail of the opportunity in 1967 to abolish ground rents for all time. Those two failures will be provided for in the forthcoming legislation. It will be an expensive measure because it will deal with the whole code of landlord and tenant right back to 1931. Those of us who helped to deal with that branch of the law will be aware of its size, complexity and technicality, both from the point of view of all the statutes dealing with that field, and also from the mass of judicial decisions which have been delivered from time to time on landlord and tenant questions. The question of ground rents is an integral part of this whole area. That is why I felt this was not something which could be introduced in a separate Bill, that it should be married into the general landlord and tenant code, and so it will be. It will not be introduced as a separate Bill.

The other misconception which is current is that it is possible or desirable to abolish existing ground rents. I am glad of the opportunity this debate gives me to clear the air in that regard. As a matter of policy, I am not in favour of the abolition of existing ground rents, not for any theoretical love of ground rents, but because of the practical difficulty that it is not possible to abolish them and remain constitutional unless compensation is paid at the same time.

As Deputy Collins rightly pointed out, to abolish them without compensation, apart from the constitutional issues, would be to work a serious injustice on many people up and down the country who, bona fide, have come into possession of ground rent income and rely on it to stay alive. A serious inequity could be worked on those citizens, and they are entitled to justice in the same way as the person paying the ground rent feels he or she is entitled to justice. Apart from the constitutionality of it, the balance of justice requires that ground rent should not be abolished without compensation.

As I pointed out in the letter to my colleague to which the Deputy referred, compensation raises two questions. One is the availability of funds in time of scarce resources. Even in a time of affluence it raises the question of the priority of applications of State funds. There are far greater priorities for the spending of State funds than the paying of compensation to landlords in cases where it is felt their ground rents should be compulsorily acquired. We have to consider it as a hardship on the ground tenants. I use the word "hardship" to point out the fact that it may be irksome to a ground tenant to have to pay this rent. I personally feel it would be. That is why I recommended to the Government that it should be abolished. It is irksome and there is something distasteful about the principle. Whether it is a hardship is something we could debate and it is something I would be very doubtful about.

I feel quite strongly that the current campaign against existing ground rents, the campaign telling people not to pay existing ground rents, is somewhat exaggerated and does not reflect the general feeling of people paying ground rents. I am aware of one Irish firm—I do not want to name it; it would not be proper to do so—with a large number of ground rents. They offered these ground rents for sale on very advantageous terms, at a price about seven times the annual rent and with costs not exceeding £25. The tenants to whom this offer was made showed very little interest in it and this leads me to believe that the agitation is, perhaps, more in the headlines than in the reality.

Deputy Collins mentioned a number of people who had decrees obtained against them. I think the advice these people got not to pay the ground rent was extremely wrong and bad advice. If it was given in the expectation of there being legislation to abolish ground rents I would like here and now to take the opportunity of removing that expectation and saying to these people that to persist in a campaign of not paying their ground rents will only involve them in litigious processes, legal costs and difficulties. The Government have no proposals to abolish ground rents for the two reasons I have given: it would be unconstitutional and the amount of compensation which would have to be paid to avoid the unconstitutionality would be such that it would not be justified in terms of social priorities. There are far more pressing interests in need in the country than providing money for that purpose. But the Government have taken a decision to prevent the creation of future ground rents and this will be coupled with a mechanism which will enable ground rents to be purchased at a reasonable cost and in a simplified way so the Deputies opposite can be assured that legislation is coming. I am disappointed this legislation has not come before now. I have indicated the reasons. They are reasons of the immense technical difficulties in drafting a provision that will simplify title and, at the same time, avoid the element of confiscation. I am sure all of us would regret devising legislation which would end up being declared unconstitutional. Indeed, with regard to another measure, the Opposition have already indicated their concern and I am sure——

Mr. G. Collins

The Minister did not heed us on that one.

Mr. Cooney

——they will discuss this measure, even if it is delayed for some months, with the same care——

Mr. Andrews

How many months? Will it be 12 months?

Mr. Cooney

I would not think so.

Mr. Andrews

Will it be 24 months?

Mr. Cooney

No. Deputy Andrews will be seriously disappointed when it comes.

Mr. Andrews

When will it come?

To my certain knowledge a statement was issued by the Government propaganda services about the middle of 1974 to the effect that it was the Government's intention to prevent the creation of future ground rents. An article appeared in The Irish Independent of 16th May, 1975, written by Chris Glennon, one of the political correspondents of that newspaper, on this subject. It stated:

A plan to enable many thousands of householders to buy out their ground rents without having to face huge legal fees, has been worked out by Government legal experts and agreed to by the Cabinet.

If it has been worked out and agreed to by the Cabinet why has it not appeared in the House? Mr. Glennon, in fairness to him, did not get this information off the top of his head; this information was provided through the normal Government services. It was reasonable that he should print that information bona fide, which he did. If he had information to the effect that plans had been worked out by the Government legal experts and agreed to by the Cabinet there is no good reason why the plans should not be before this House.

Mr. Glennon's article continued:

It is based on a system used by the Landed Estates Court, which went out of existence about 50 years ago, but which had power to give clear title to land where titles had been lost or where decisions could not be based on old titles.

Parliamentary draftsmen are already putting the plan into the form of a Bill, which also will fulfil the Government's commitment to ban the creation of ground rents in the future.

Despite pressure from tenant groups like the Association of Combined Residents' Associations (ACRA), there will be no provision in the Bill for the abolition, without compensation, of existing rents, assuming new and controversial significance in housing estates built around all the major cities and towns in the last decade.

That raises a question of a very important nature: the longer the Minister puts off the bringing into this House of such a Bill the more new ground rents will be created. Today new ground rents are being created bringing further hardship on those people who buy houses because, even if the Minister brings in this Bill during the next year, they cannot do away with their ground rents as such. My information is that leases were created yesterday and today and will possibly be created tomorrow and the next day imposing a great hardship on people. It is most unfair.

I should like to quote from an interesting letter from the Department of Justice to my colleague, Deputy Seán Browne, our assistant Chief Whip. This letter announces the time when the Minister intends to introduce the Bill. The letter, dated 3rd February, 1975, was written to Deputy Browne arising out of representations to him from the residents in Enniscorthy, New Ross and Wexford town, where there is a serious ground rent problem. The letter stated:

Dear Deputy,

I am directed by the Minister for Justice, Mr. P. Cooney, T.D., to refer to your letter of 25th January concerning legislation on ground rents, particularly in relation to the position of——

At this stage the name of the individual on whose behalf Deputy Browne was making representations was mentioned.

——whose lease has eight years to run.

The Government intend to introduce legislation which will prohibit the creation of future ground rents on dwelling houses and the Minister hopes to be in a position to arrange for the circulation of the necessary Bill shortly after Easter.

I can understand why the Leas-Cheann Comhairle has a smile on his face because Easter Sunday, 1975, was on 30th March. How could we accept the undertaking of the Minister, given during the course of this debate, that he hopes to have this Bill before the House in the coming months? The letter continued:

As regards existing ground rents, the Landlord and Tenant Commission have recommended the extension to new classes of leases and yearly tenants of the right to acquire the fee simple that is given by the Landlord and Tenant (Ground Rents) Act, 1967. These recommendations are contained in the Report of the Commission, entitled "Report on Certain Questions arising under the Landlord and Tenant Acts, 1958 and 1967" (Prl. 59), copies of which are abtainable from the Government Publications Sale Office, GPO Arcade, Dublin I (Price 17½p plus postage). Legislation on the basis of these recommendations, which will have to "mesh in with" the legislation to implement the Government's intention to prohibit the creation of future ground rents, is at an advanced stage of preparation.

An advanced stage of preparation is one thing, but an advanced stage of passage through this House is another, and that is what motivated Deputy Collins to produce this worthwhile motion.

The Minister's unfair method of avoiding division was by introducing his own amendment which then becomes the motion. It is agreed by all that ground rent is an immoral rent. It is an abuse of our concept of social justice and a penal taxation. I would go so far as to categorise it in the same way as I would rates and the effect they have on urban private dwelling houses. We in Fianna Fáil over the year have been committed to the prevention of the creation of future ground rents and we illustrated that commitment through the passage of the 1967 Landlord and Tenant (Ground Rents) Act. That showed our bona fide commitment to the whole question of ground rents. We have committed ourselves to the abolition of rates on private dwellinghouses. All these things are nothing new as far as this side of the House is concerned.

The Constitution provides that private property shall be protected against outside challenge or interference. We accept that requirement without demur and it leaves us in the difficult situation of trying to evolve a system whereby existing ground rents can be bought out. You cannot abolish existing ground rents through any kind of instrument that can be brought into the House because I do not think it would be constitutionally on. We have been advised that is the position. It has been said people who own existing ground rents have a right which must be recognised and respected because the law and the Constitution should apply to everybody equally, to those who are subject to ground rents and who bear the fierce hardship of paying them, and to those who own ground rents as a particular type of investment. Both sides of the problem have to be appreciated.

The Minister has suggested he intends to introduce in his package of legislation in this area some method by which ground rents would be made easier on people, some system through which buying out ground rents would be made easier. I hope that what the Minister means is that the burden of the purchase would be reduced to a minimum. This is a very important point. As Deputy Collins has said, the 1967 Act left certain categories of leases untouched. We admit that piece of legislation proved to be not as worthy as we had thought it would be. We found that out after experiencing its workings over a period of years.

The Minister has been prevaricating about introducing a Bill to prevent the creation of future ground rents immediately. We are giving him until after the new Dáil term begins because we know that the legislative process is so blocked up that the prospect of having this legislation produced and debated in the Dáil before Christmas is not on: the time is not there, again due to the Government's mismanagement and mishandling of the legislative process. They have a great capacity for blaming the Opposition for obstrucing and holding up legislation. That is only another excuse for delaying legislation which is so badly needed in relation to the problem we are now discussing.

I suggest to the Minister that in the matter of existing ground rents we might evolve a system equivalent to the Land Commission. We might set up a board to buy out ground rents. This theory is undeveloped and it raises a spectre which would be of some concern to whichever Government happened to be in power—the cost of buying out blocks of ground rents. A board could be set up to examine the possibility of buying them out on a three- or four-year purchase. The serious matter is that the money would have to be forthcoming to give effect to the conclusions of such a board and my only concern would be the cost, which would run into millions of pounds. We must have our priorities right and I agree with the Minister's point of view that the priorities of the State demand that the State should not be asked to the detriment of other areas affected by lack of finance to buy out ground rents at enormous cost.

However, this is the only way we can overcome the constitutional difficulty. If individuals, groups of individuals or companies have invested money in ground rents, the only way that can be dealt with is by the State buying these blocks or individual ground rents. What one finds most offensive about ground rents is that an innocent house dweller goes into a house, having bought out the fee simple, and thinks he owns his property. One of the great tragedies is that, in fact, he does not, because the ground landlord, if the ground tenant refuses to pay the ground rent, can come in on that property and take from the value of its sale the amount due and owing to him by the ground tenant. This is an appalling hardship and a very wrong social concept. I am afraid we must all share in the blame for having allowed such a situation to continue.

The main burden of our argument during the course of this debate is that the longer the Minister postpones the introduction of the Bill to prevent the creation of future ground rents, he is guilty of their continued creation because they will continue to be created during that lapse. It is an appalling prospect, is most unfair and is something the Minister should remedy as a matter of urgency.

There is also the suggestion that the Opposition are in some way obstructing the passage of this type of legislation. In any reforming legislation the Minister for Justice has introduced in this House, or that introduced by any other Minister, which tragically has been very little, the Opposition have never been found wanting in co-operating. Of course, we put down amendments to the legislation. I do not think legislation should merely pass through this House as a matter of the Government's right. The Opposition have an obligation to scrutinise legislation to ensure that it goes far enough or perhaps guard against its going too far. That is the undertaking we have continuously given the Government. Unfortunately they are undertakings we have not had to honour too often, because the lack of legislation of a reforming nature has been tragic.

During the course of the preparation of the motion in the name of Deputy Collins we had many discussions with various groups and many individuals concerned about the whole problem of ground rents. If there was one common thread running through those discussions it was the feeling by ground tenants that they were paying money for nothing; that, as far as they were concerned, they were paying a barren tax. One pays a tax and expects at least to get some form of return, either to oneself or to others for the common good. But there is nothing good in ground rents; nobody has said anything in their favour over the past number of years; there is no case to be made for them. We believe on this side of the House we have discharged our obligation to those individuals and groups who came to see us by placing this motion on the Order Paper. The Minister's amendment is a gimmick; it is phoney in the extreme; it is wrong, unfair and unjust. The only way we can have a decision is through legislation.

Mr. F. O'Brien

There has always been a great degree of concern regarding ground rents. They have always been considered an obnoxious form of recouping money from people who bought houses. When people bought a house and asked why it was so expensive, they were told the price of land had gone up £X and, by inference, they felt they were buying the land when they purchased the house. Then they found that there was this obnoxious charge on their small piece of land which is so untypical of what we preach in this country at present. Certainly it completely lacks social justice.

Deputy Andrews said the Minister's amendment was phoney. Surely the only phoney thing about it is the inaction on the far side of the House. Ground rents did not grow up overnight; they have been with us for some considerable time. When a commission reported on them in 1964, some 11 years ago now, Fianna Fáil took no action. When they introduced legislation in 1967 they did not accept that commission's report stating that no further ground rents should be created. Instead they introduced a rather bad piece of legislation, which Deputy Andrews admitted it was.

The Minister is endeavouring to bring before the House legislation which will stop the creation of any further ground rents and make it considerably easier for people to acquire their existing ground rents. There is no doubt that, while legislation was introduced to enable people purchase their ground rents, it was a rather expensive exercise in a lot of cases and people were put off by its cost. If it does take some further months to ensure that good legislation is brought before the House, it will be worth waiting for. When we introduce legislation in this House it should be effective and meet people's needs. The cry about ground rents has continued for so long now that, when we do introduce legislation to deal with it, it should be acceptable, operable and make it easier for people to acquire the ground they should have possessed always.

I cannot understand the previous speaker's attitude to this. He got an assurance from the Minister that the legislation would be introduced fairly soon. It is fairly difficult to get legislation through this House now. Throughout the summer we had quite an amount of filibustering on excellent capital taxation. It dragged on throughout the summer when we could have had other legislation passed as well. The people on the far side of the House were not concerned about getting legislation on to the Statute Book but rather with delaying it. If they want to point a finger for the blockage in legislation, then they should look at themselves, because it is they who caused the delay. While I admit it is the duty of an Opposition to oppose, it must be constructive and meaningful opposition. I believe their tactics throughout the summer were neither.

There is an amount of legislation required to be passed by this House. Fortunately, we managed to get the Family Law (Maintenance of Spouses and Children) Bill through a Special Committee. The Misuse of Drugs Bill is another going through a Special Committee. Hopefully, when this Ground Rents Bill is introduced, it will go to a Special Committee also because that type of committee work will prevent a backlog of legislation. There is no use in the Opposition crying that we are holding up legislation because we are not. In fact the House sat longer this year than in any other year in its history, which is an indication of the Government's serious attempt to get legislation through the House.

I am happy that the Opposition will not oppose the Ground Rents Bill when it is introduced and it should get a speedy passage. It is up to the Opposition to ensure that this happens and that it is on the Statute Book as quickly as possible. All sides of this House want this legislation passed so that the people can get their ground rents more quickly and that the creation of further ground rents will be stopped. It is regrettable that Dublin people today are being led astray by individuals who tell them not to pay their grounds rents. This type of advice is wrong. It is not coming from any political party but from the representatives on local authorities. It is wrong to mislead the people in this way and to put them to costly litigation.

Debate adjourned.

Dáil Éireann díospóireacht - Tuesday, 9 Dec 1975

Private Members' Business. - Ground Rents: Motion.

Dáil Éireann díospóireacht -
Tuesday, 9 Dec 1975