PUBLIC BUSINESS. - LOCAL GOVERNMENT (RATES ON SMALL DWELLINGS) BILL, 1928—COMMITTEE STAGE.
SECTION 1.
(1) In this Act —
the expression "rating authority" means the council of a county, a county or other borough, or an urban district;
the expression "small dwelling" means a hereditament or tenement separately valued under the Valuation Acts whereof the valuation under those Acts does not exceed six pounds and the whole or any part of which is actually used or is adapted for use as a dwelling, and also includes any other hereditament or tenement which by virtue of any other provision of this Act is for the time being a small dwelling for the purposes of this Act;
The word "owner" means, as the case may require, either the person for the time being receiving (whether on his own account or as agent or trustee for another) the rack-rent of the small dwelling in relation to which the word is used or the person who would for the time being so receive such rack-rent if such small dwelling were let at a rack-rent;
the word "rack-rent" means rent which is not less than two-thirds of the valuation under the Valuation Acts of the property out of which the rent arises.
I move the following amendments:—
Section 1, sub-section (1). After the word "whole" in line 23 to insert the words "of which is used."
Section 1, sub-section (1). To delete in line 23 the words "actually used or is."
These two amendments may be taken together. The Bill applies to any dwelling the valuation of which does not exceed £6 and "the whole or any part of which is actually used or is adapted for use as a dwelling." The effect of the amendments is to take out the words "actually used." As I see it, a stable or warehouse may be actually used as a dwelling, and it may be adapted by putting in a washhand-stand and other appropriate furniture to bring it under the Bill. That cannot be the intention, and I think the amendments are necessary to safeguard any action of that kind.
I feel that the sub-section is more satisfactory as it is. If the amendment that Senator Sir John Keane introduces is accepted, I do not know in the first place if it meets his point, and in the second place I do not think it is advisable to do so, because the question will arise: If you have a stable with an upstairs, and that is adapted as a dwelling, whether you are going to split up the valuation of the ground floor of the house from the top floor, and what additions to the furniture besides a wash-basin and one or two minor things bring it within the scope of the word "dwelling." If the amendment is accepted the clause will still include "or any part of which is adapted for use as a dwelling." Having those words in, I do not think any possible interpretation is going to meet the Senator's difficulty. The idea of the clause is that any place, the whole or part of which is actually used as a dwelling, or the whole or any part of which is adapted for use as a dwelling, will be regarded as a small dwelling. I do not know that we could be simpler or clearer in that matter.
CATHAOIRLEACH
Do you think there would be any objection to taking out the words, "or is adapted for"? Would not your purpose be covered by the words, "the whole or any part of which is actually used"?
Then I am afraid it would cease to be a dwelling.
CATHAOIRLEACH
If it was never occupied as a dwelling it would never be used as a dwelling, but if occupation were only abandoned for a while it would not cease to be a dwelling. It might be adapted in the sense suggested by the Senator and yet never used for the purpose.
If we could be clear as to what the Senator desires——
I am looking at it from the layman's point of view. I want to prevent a bed being put into a stable so that it might be said that it was a dwelling and came within the Act. I am quite satisfied that a place suitable as a dwelling, or made suitable as a dwelling, would come within the Act, but the adaptation is a question of fact which can be argued out in court if necessary. I do not think that any Judge would hold that the mere insertion of a bed would in itself be adaptation. As I read it the insertion of a bed in a room or stable would bring such room or stable within the Bill. I think it is in the interests of better housing that some words of the kind I suggest should be inserted.
CATHAOIRLEACH
Supposing you leave out the words, "actually used or is adapted." Otherwise there is a question in it. A person might put a bed into it and never use it.
CATHAOIRLEACH
I think if you leave out the word "or" and leave in "and."
I do not ask for a decision on this matter now. The Report Stage will do.
I think the suggestion of the Cathaoirleach would meet the case.
Would not the words "or is adapted for use as a dwelling" bring in unoccupied houses for rates?
CATHAOIRLEACH
That is what I say. If the word "and" is put in it must be actually used and adapted. You could not simply make up a bogus dwelling and never use it, and at the same time claim that it came within the Bill.
There are unoccupied houses in this country that were originally built as dwelling houses, but, being unoccupied, rates are not payable on them. It seems to me that, with the words I have referred to in the Bill, rates will be payable on these unoccupied houses.
CATHAOIRLEACH
Not if you have in the words "actually used and."
Section 7 deals with unoccupied houses.
If that is so the matter might be left over until the Report Stage.
CATHAOIRLEACH
It would be more satisfactory if the Minister could consider that suggestion to change "or" into "and."
Yes, on the Report Stage.
CATHAOIRLEACH
I think by changing the word "or" to "and" that the position would be met. That suggestion also covers the second amendment.
Amendments, by leave, withdrawn.
I move:—
Section 1, sub-section (1). — To delete in line 27 the word "either."
Section 1, sub-section (1). — To delete in lines 28-29 the words "(whether on his own account or as agent or trustee for another)."
The effect of these amendments is to exclude personal liability of the agent. The point is quite simple. At present the agent is personally liable for the liabilities of his principal. I cannot say that that is altogether new, but it is a very important principle, and one that has been hitherto safeguarded. It now emerges without any restrictions. The Minister told the Seanad last week that he claims the precedent under the Act of 1878. My information is that under that Act the agent was not under any financial liability; he was merely a person on whom notices could be served.
CATHAOIRLEACH
When a notice was served on him that was good notice, as far as that went. But if, having received that notice, he failed to carry out what was required in such notice under the Public Health Act, personally he was not responsible for the tort. The principal alone was liable. That seems to be only elementary justice. Under this Bill the agent can be sued in persona, and can be distrained upon under whatever power the law gives for the failure of his principal to collect the rates. I think that a most dangerous principle, and one which we should resist. If extended, to my mind it would strike a very serious blow at the whole status of agents, the contractual liability of agents and landlords, and create uneasiness in all commercial institutions of a most far-reaching character. It would be dangerous for agents under this Bill to become personally liable for the liabilities of principals. I do not think we should close the door by having dangerous innovations of that kind.
CATHAOIRLEACH
Obviously it would be necessary where you are dealing with a dwelling-house or house property of any kind that you should provide for cases, if I might so call them, of absentee landlords. They are represented by the agent, and therefore it is quite right that, for the purpose of serving notices, the agent should be placed in the position of his principal. That is done under the Public Health Act of 1878, if I recollect aright. This goes further, and not only makes the person responsible who received the notice, but also makes him personally responsible for the default of the owner. That, I think, is a new principle.
My information is that the agent under the description given in the Public Health Act of 1878 is personally liable in cases where expense is incurred in default of certain acts being carried out. That is, he is personally and financially liable. The desirability of keeping the statutes uniform is one reason for including this here. There is the point that the agent as collector of moneys has full control over them, that he handles them for the owner. If the owner does not want to break the law, it is convenient that the agent who handles his money should pay the rates. If he does want to break the law and withhold the rates I do not think we should facilitate him in the matter. I would plead very much that while you have an agent acting for the owner and coming within the terms of owner from the point of view of the Public Health Acts, collecting rents as now under this Act he will collect the rates, it is not imposing any hardship or injustice on him if we should require by statute such people to hand over the rates to the rating authority. If we do not accept that, then we get into a great difficulty in finding out who the owner is, whether he is an absentee or a local man, if the agent declines to co-operate in the matter and acts as a bad contact in respect of houses for which he is acting as agent. I submit there is no hardship or injustice entailed.
CATHOIRLEACH
It might be well to put in the words "authorised agent," because anyone may be an agent or profess himself an authority for another and really have no authority. It would be very hard in that case for the principal to be made liable. If you put in those words it would be no injustice to anyone.
I think this is a matter that requires to be carefully considered by the Minister. I am not quite sure that the law is as clear as he states. If the agent is simply collecting rates, I think it is quite reasonable that he should hand them over to the proper authority. If he fails or is unable to collect the rents from the tenants, as I understand the Bill, he is liable himself. I am not quite sure that it is a wise thing to provide that. I think it is possible to get what the Minister requires without making a servant liable to pay rates that he has not been able to collect from the tenant.
I think your suggestion, sir, about "authorised agent" would meet the case. It would be quite possible for any agent to make arrangements with a person on behalf of whom he was collecting rents to pay the rates, so that there would be no liability whatever. I think if the word "authorised" were put in it would settle the matter satisfactorily.
Is it a fact that the money an agent collects belongs to him and that he has a right to pay it out? Does not the money belong to the owner? The agent has no right whatever to pay it out, except under his employer's authority. The Bill gives the right to an outside body to make the agent personally liable for money over which he has no control. I hold that the man for whom an agent acts will compel him to pay the money into his banking account. No agent should be held personally liable for the discharge of his employer's debts. We know that an employer is practically always made liable for the actions of his agent, but to make an agent liable for the default of his employer is to my mind a new procedure in law, and one which the Minister has not shown us any reason for, except as a matter of convenience. It seems to me that we would be breaking one of the first principles of ordinary law by doing that. We should not inflict any such liability on an agent.
CATHAOIRLEACH
There is no difficulty about where the agent got the money, because this Bill would be his protection and authority for paying. The case is different where, through no fault of his own, he did not get the rent.
In both cases he is liable.
In cases where the agent is not getting the rent, I propose to meet the Senator's amendment with regard to 10 per cent., so I think that ought to dispose of any particular difficulty about the rates not being received. What I desire is not to complicate the definition of "owner" for public authorities when dealing with their general work, and to be quite clear that if we are going to give facilities to property owners to pay their rates — the facilities of a percentage off — we are making our machinery simple and effective. If there is good-will on the part of the owners there can be no objection to the agents paying the rates in the way this would force them to do.
CATHAOIRLEACH
I think it is obvious that there must be some provision made to meet the case of an absentee owner, because otherwise you would never discover him. Do you not think that you want the words "the authorised agent"? "Agent" is a very ambiguous term. A man might be made an agent to collect rents and might disappear the next day, but if he is an authorised agent there would be some protection, as he has to give the owner some security.
He would not mind if the agent went away then.
CATHAOIRLEACH
I would like to consider the effect of the word "authorised.""Agent" as it stands here has stood the test of legal procedure for a number of years, and any necessary interpretation of it I am sure has taken place in the courts. For that reason I would not like to tamper with the description without careful consideration of what might be implied by the introduction of the word "authorised." If it is accepted at all, in the case of an absentee landlord, that the agent ought to be legally liable for the discharge of this work, I think we will have to extend it further, because, if the agent comes in between the public body and a landlord or a number of landlords, and if he is unwilling to cooperate in the disclosure of whom the landlords of these properties are, the local authority is put into a difficulty that the Legislature, at any rate, ought not to stand for, when it can get a simple and really not unjust way of solving it.
Is the definition here exactly as in the previous Act?
I think we have a clear definition. On the suggestion of including "authorised," I would like to have a clearer definition. Supposing I am a landlord and appoint an agent, and authorise him to collect rents; if he acts in an irregular capacity, and an officer of the local authority came along, he might produce my letter to show he was my authorised agent. But my authorisation was only in so far as the collection of rents was concerned. If I gave him a Power of Attorney for that purpose, and if he were to look after the sanitary arrangements and other matters, he is my duly authorised agent. I suggest that "authorised" would mean an agent authorised by Power of Attorney, which would be a very good term to use.
I think we will have to deal with this from the point of its interpretation in the courts — its capacity to hold water. I would like to deal with one point first, about the principle of this proposal. The Minister claims that the Act of 1878 is on all fours with this, as far as agents are concerned. That is not accepted by the people whose advice I have had. This, I believe, also cannot be denied: There is no single case known in Ireland or England where, under the Act of 1878, the agent has been made personally responsible for the torts of his principal under the Public Health Act. I would like to know if the Minister knows of any such case. I know that that is not a complete answer, but surely it would be likely that within the period of forty or fifty years some Act to reinforce the Minister's argument would have taken place. Furthermore — and this is a very different matter — assuming that his argument is correct, under the Act of 1878 there is a distinct and direct liability for doing certain things placed on a person. This is quite different. The rates are collected by the agent, but they are not necessarily all collected; some are admittedly irrecoverable, and it is now proposed that the agent would himself have to pay out for moneys which he has never received at all. Admittedly the principal is responsible for these moneys, but he may have no funds from which to meet them. All agents do not hold ample, or even slender, balances on behalf of their principals; there may be no money to discharge these liabilities, and the agent may have to pay it out of his own pocket. That surely is not just, even if it may be a rough and ready way of getting in these rates with the least inconvenience to the local authorities. I think this discussion has shown us as rather inclined to visualise the agent as a man of substance, as a properly equipped person with an office and an address; but if we carry our recollections down the country we know that collectors of rates are changed. One small man may be acting to-day, and without any notice another man is there to-morrow. They are not men of mark, and who they are the landlord sometimes does not know. Some rents are collected on sub-tenancies and are payable to tenants of mine, and it is not even known to me who the subtenants are. How is the local authority going to ascertain who is the agent, especially in the case of small dwellings? These rents are collected by a small man. Who is going to ask him for an authorisation? There should be something more than is provided in the Bill.
Would the Minister consider, between this and the Report Stage, whether this could not be met by an amendment in some other part of the Bill by which the agent would not be liable personally where he did not actually receive the rates? That would meet the case as far as I am concerned.
CATHAOIRLEACH
That was what I was going to suggest—that he should only be liable when he had actually received the rates.
I will consider whether we could not work it like this — that where the rates were not paid in respect of a particular property the rents of that property could be garnisheed through the agent in respect of the rates until such time as the demand in respect of the rates was satisfied. While helping the agent to carry out a certain transaction, that would not be invading his private purse in respect of his employer's liabilities. I hesitate at all to interfere with the description of owner, but I will consider whether we could not meet Senator Sir John Keane's difficulty on the Report Stage.
CATHAOIRLEACH
The definition in the Act of 1878 is precisely the same as what is in your Bill, but I think the essential difference is this, that you have introduced the definition for the purpose of making the agent personally liable for the payment of the money. I doubt if that definition is used in the Act of 1878 for that purpose anywhere.
I am advised that it is. I will verify that as well as considering the matter.
CATHAOIRLEACH
Your information is much more up-to-date than mine.
CATHAOIRLEACH
I am only speaking from a very vague memory. The amendment can stand for the present.
Consideration of amendment deferred.
I move:—
Section 1, sub-section (1). To delete in line 33-4 the words "two-thirds of."
I do not think the effect of this amendment would be in any way to prejudice the intentions of the Minister. The object is really to make a person on whom the rate is made a responsible person, to avoid having to collect rates in small sums from people who cannot pay half-yearly. The rate is to be made in future upon the person who receives the rack-rent. The person who receives the rack-rent is a man who would possibly have a number of tenants, a man of mark, with some organisation for collecting. This turns on what is a rack-rent, and that is defined as not being less than two-thirds of the valuation. That is undoubtedly low. It will bring in a certain number of ground landlords, whereas the occupiers are men of ample mark, men with shops doing a substantial trade, who can well afford to pay, and about whose domicile there is no doubt. But owing to the definition of a rack-rent the obligation will be taken off them. Since 1878 rents are unduly increased, and this definition of 1878 is no longer applicable to the case. I suggest that it would not in any way limit or prejudice the proper working of the Bill if the rack-rent were defined as not less than the whole valuation. Frequently when one lets a small house the rent one gets is about the same as the valuation. Where the landlord perhaps built the house, repairs it and keeps it in order for a number of years and hands it over, the market gives him a rent at least equal to the valuation; the tenant is a substantial leaseholder, and in that case it is unreasonable to ask the owner to collect the rates.
This seems a very reasonable amendment. Under present conditions I think we realise that most houses are not let at two-thirds of their valuation, and I think that the definition suggested by Senator Sir John Keane would be a reasonable one.
The effect of the acceptance of this amendment would be to bring from under the operations of this Bill a large number of small dwellings. This definition of a "rack-rent" stands with the definition of "owner" through the Public Health Acts also, and the suggestion is that if in the case of a dwelling of £6 valuation, the rent is less than £6 per annum, the owner under this measure will not be liable for the rates. It would simply bring a large number of these smaller dwellings from under the operation of the Bill. One of its effects would be, I am informed, to create a serious difficulty for local authorities in establishing who the owner would be, so that I am very strongly of opinion that this amendment ought not to be accepted, and that the definition of "rack-rent" as we have it all along should be allowed to stand.
Can the Minister say how the difficulty of ascertaining the owner will be any greater under the amendment than under the provisions of the Bill — how the amendment makes the difficulty of identity any harder?
The definition of "rack-rent" in this particular way was, I understand, for the purposes of leaving out the ground landlord and getting down to the person who was in immediate receipt of the rent. That description of it gives you that position in the way in which an enlargement of it from two-thirds to three-thirds would not.
Amendment put and declared carried.
Section 1, as amended, put and agreed to.
Sections 2 and 3, put and agreed to.
SECTION 4, SUB-SECTION (1).
Every rate to which this Act applies made in respect of a small dwelling shall be made on the owner of such dwelling and, save where the owner is also the occupier, no such rate shall be made on the occupier of such dwelling.
I move:—
Section 4, sub-section (1). To add at the end of the sub-section the words "and the owner shall be provided with particulars of the rate in respect of each separate valuation."
I am not going to be controversial on this matter, because the Minister practically said that it was his intention that there should be something that amounts to an appointed date on which the owner would be deemed to have official knowledge of the rate. As the Bill now stands some general phraseology like "after the making of such rate" is used. What that means is not defined in the Bill and I do not think it is defined in any Act. When the rate is definitely made and fixed, the landlord has power to adjust his rents. There should be no doubt as to when that period actually does arrive, and, of course, the obvious time is when the demand note has been received. I saw only to-day in the papers that in the case of Monaghan, Senator Toal referred to the rate which was recently made, which shows that it is as late as May sometimes before the rate is struck or made. But that in itself gives no official information to the owner. Unless he happens to send around to the local authority, he knows nothing about what the rate is. He sees it in the paper, but, of course, owners or agents cannot act on that sort of information. In due course, an individual demand note in respect of each separate rating will issue, and that is the time when the owner will begin to function under the Bill. This is only to make that point clear, because these things are liable to be carried into the courts, and one wants to have the law perfectly clear in the event of any dispute.
So far as this amendment itself is concerned, I accept it, but so far as it relates to Amendment No. 7, I will have some remarks to make on that when I come to it.
CATHAOIRLEACH
Is it not a fact that under the Rating Act, the method, the time and everything else is prescribed in the case of rates that are struck? What I mean is this: whether it would not accomplish your purpose and the Minister's purpose better if you put in "within the prescribed time and form"?
If that would be effective. I only want it water-tight.
CATHAOIRLEACH
I think the rating code always contains information specifying the time, so that if you had in these words "within the time and form prescribed by law," it might meet your case. That is for your consideration.
My own opinion is that this thing would happen in any case, but if the Senator desires to have it statutory, there is no objection to it. I will inquire as to whether there is any question of statutory limitation with regard to the time for the serving of the demand note.
The owner has no control over that. That is a matter for the local authority. Sometimes they dawdle very much over the preparation of the demand notes.
CATHAOIRLEACH
If you think the words you have accomplish the purpose you have in mind that is all right.
I would not care either to admit or deny that. It is rather obscure.
CATHAOIRLEACH
It is not easy for anybody who is not a lawyer to do so.
Does the Senator desire to have this accepted now?
I would like the Minister to accept it for the Report Stage.
Amendment put and agreed to.
SECTION 5, SUB-SECTION (1).
Whenever a rate to which this Act applies is made by virtue of this Act on the owner of a small dwelling every gale of rent which becomes due and payable by an occupier of such small dwelling in respect of such small dwelling (whether together with or without other premises) during the twelve months next after the making of such rate shall be increased by an amount which bears the same proportion to the amount of such rate as the period in respect of which such gale is payable bears to one year.
I move:—
"Section 5, sub-section (1).—To delete in line 2 the words ‘the making of such rate' and to substitute therefor the words ‘particulars of the rate in respect of each separate valuation have been supplied to the owner.'"
That is, I think, almost consequential. The Minister demurs to that. It is only making quite clear the date from which the rent can be increased. At present the rent can be increased twelve months after the making of such rates, but my objection lies to the incorporation of the term "the making of such rate" as being unnecessarily vague. I propose to substitute for that twelve months "particulars of the rate in respect of each separate valuation have been supplied to the owner." Then when he gets his demand note he is authorised to increase the rent. I cannot see anything controversial in that. It is only in the interests of lucidity that I put it in.
I have an amendment on the same point, and it might be convenient to have it considered now. It is:—
"In Section 5, sub-section (1).— To delete the word ‘next' in line 1 and to substitute therefor the words ‘commencing at the expiration of one month.'"
CATHAOIRLEACH
Do you prefer your method to Senator Sir John Keane's?
Yes. This amendment is intended to meet the case put forward at the last meeting, and again to-day, by Senator Sir John Keane in reference to the difficulty of the landlord who finds it impossible to adjust his rent immediately after the rate has been struck, and who would have a further difficulty owing to the variation of the time at which the demand notes might be received. Obviously, as the section now stands, it would be impossible for him to adjust the rent immediately after the rate is struck. On the other hand, the Senator told us last week that sometimes it runs up to the end of June or the beginning of July before the demand notes are received. This amendment proposes to fix an appointed date. It fixes a date a month after the striking of the rate as the time from which the adjustment of the rent shall be made.
I think that would have many advantages. It would give the owner an opportunity of learning what the rate was and of making his calculations for the adjustment of the rent. It would also give notice to the tenant that at the end of a month from the striking of the rate he would be obliged to pay a greater or lesser rent according to whether the rates had gone up or had fallen. Both sides would know exactly where they were. Furthermore, it would give uniformity. Instead of the owner having to wait until he received the demand note, which would be within a couple of weeks after the striking of the rate, or it may be, as Senator Sir John Keane said, two months after, this would give uniformity, and uniformity not only to the individual owner and the individual tenant, but uniformity with respect to all the holdings in a rating area. The owner would benefit by that, because as things stand in the Bill at present it would be harsh if he were to receive demand notes on different dates in respect of different holdings in the same rating area. Under the amendment I propose he would be quite independent of the demand note; he would know at once when the rate was struck that a month later he would be entitled to increase his rent on all the holdings within the rating area, and he would have plenty of time to make the adjustment. For that reason, I think that this is a more satisfactory way of dealing with the problem than that which Senator Sir John Keane has suggested.
I think we are both actuated by a desire to get the right solution, that there is nothing controversial about this at all. But I do not think that Senator Hooper's amendment is the right one. This again arises when there has been a division of the valuation. You might say that the owner ought to know all that goes on. The valuation may be revised and a new valuation may be in operation for the coming year. The owner will not know, and will proceed to adjust his rents on the figure that he has read in the papers. How is he to get knowledge of the striking of the rates? You cannot believe these things through hearsay or gossip. The striking of the rate is a formal act within the walls of the county council undoubtedly, but you cannot regard that fact as an official notice. There are four or five hundred owners in the county, and you must give formal notice to each owner that the rate has been struck and is of such an amount. Until that information is conveyed to him he cannot proceed to work, or if he does proceed he will do so at his own peril and he may make mistakes and may actually demand illegal increases. The valuation might be reduced or increased. To my mind this is not a clear and straightforward way. The machinery is all there; the demand note is sent out, and the rates are never payable until the demand note is received, and that is full formal notice of the owner's liability. The other way is lax and not exact.
CATHAOIRLEACH
Would it not be better to delete the word "next" and to substitute the words "commencing on the expiration of one month from the delivery of the particulars"? You see what I mean there? The House has already put in an amendment entitling the owner to the receipt of a demand note, and if your month, then, were to run from the receipt by him of the demand note it might be better.
It is very desirable to have a definite date, but I would much sooner have the suggestion of one month, such as is suggested in Senator Hooper's amendment, if necessary putting in a safeguard with regard to the non-reception of the demand note. But if we leave it entirely open to the reception of the demand note we would have different dates all over the whole rating area and in respect of different people under a particular landlord, whereas if we introduce the idea of a definite month, or whatever the period would be, after the making of the rate, with a safeguard with regard to the demand note, we have something to speed up the local authorities and make them toe the line. Perhaps in some cases there has been a delay in making the rate, and perhaps in the issue of the demand note, but we want to get away from that, and we can get away from that by proper administrative action. So that if the Senator would agree to my considering the acceptance of Senator Hooper's amendment, with a safeguard in respect of the non-receipt of the demand note, I think that that would be the best.
CATHAOIRLEACH
I think that is a very reasonable suggestion.
I am satisfied. Naturally, I would like to see what the exact words are.
In connection with that I will, perhaps, have a consultation with the Senator before actually putting the amendment in, in view of the fact that the Seanad will not be sitting for a fortnight.
Amendments, by leave, withdrawn.
I move:
Section 5, sub-section (1). To insert after the sub-section a new sub-section as follows:—
"(2) The owner of any hereditament or tenement to which this Act applies (who is not at the same time the actual occupier of such hereditament or tenement) who being so rated pays the amount due by him in respect of the rate before the expiration of half the period in respect of which the rate is made (or, if the rate is payable by instalments, within half the period in respect of which the instalment is payable) shall be granted by the rating authority an allowance equal to ten per cent. of the amount of the rate so payable by him."
The Minister has stated that the Government are prepared to accept that amendment, for which one is naturally grateful. I would ask the House not to mix up this allowance with any question of irrecoverable arrears. The Minister let slip a remark earlier in the proceedings which suggested that this remission for the collection of rates might also be held in a way to recoup for irrecoverable arrears. The two things are quite separate, and when arguing the section later on I will deal with that again.
I accept the amendment as far as the proposal to give a 10 per cent. allowance off rates paid is concerned, but it will be necessary in doing that to have a certain stipulation with regard to the time inside of which the rates are paid. Personally I would propose to bring in an amendment allowing that 10 per cent. on condition of the payment being made, say, two months after the making of the rate.
But rates are paid in two moieties. That is not for both moieties?
I would ask that the whole rate would be paid two months after the making of the rate.
I think that that is unduly hard, because rates are paid in moieties, and they are always asked for in two lots. I think one moiety is payable by May. I think they are payable now on certain prescribed dates — about two months from the date that the moiety is due. It would be rather hard to ask the owner to pay the rates for the whole year in the month of April or May.
They are due on the 1st April.
I hope that the Minister will not press that.
I feel that the granting of 10 per cent. off is a very substantial allowance, and simply because I feel that there is certain accommodation it is not unreasonable in all the circumstances to cover a number of things that the Senator complains about. It is a very substantial allowance, and we ought to be given a considerable amount of accommodation in the matter. In so far as poor rates are concerned, they are paid in two moieties, but urban rates are paid in one payment, and urban rates will be the rates that will be particularly affected by the operation of this Bill. I think we are not seeking too much in asking that for the return of 10 per cent. off the rates the owners of this particular class of property who are getting this rebate would pay their rates, say two months after the making of the rate, and I would urge the Senator to meet me in the matter without haggle, as I mean to meet him without haggle on the 10 per cent.
There must be some Senators with personal experience of the onus and responsibility that will be thrown on landlords by the privilege here referred to. The rent on most of these small houses ranges from 1s. 6d. to 2s. a week. Taking the rents over a period of say five years, landlords are not able to collect more than 20 or 25 per cent. of them. The very poorest people live in these small houses. They live, not merely from day to day, but, one might say, from meal to meal. If the landlord fails to collect one week's rent these people are not able to pay it afterwards. It has to be written off. The landlord, therefore, will never be able to collect the rates from these people. That being so, the burden will have to be distributed over the people who can and do pay their rates. That will mean that, in the following year, because of the fact that these poor people are not able to pay the rates, an extra rate will have to be struck and collected from the people who can pay it. That will be putting a certain burden on the local authority. It is true, of course, that the landlord will have power to eject the tenant who is not able to pay, but you must remember the new tenant coming into that type of house will be of about the same earning capacity as the one who has been evicted. With all the powers that local authorities have at present for the collection of rates, they find it impossible to get the rates from this class of poor people.
Under this Bill the landlord is offered a concession of 10 per cent. if the rates on these houses are paid by him on a certain date. I suggest that he will lose more than that. I have in mind the case of a landlord who has about 30 houses in a certain small town in the country. The houses are rated at about 30/- each. The rent on these houses amounts to about 1/7 or 1/8 a week. The local rate is about 15/- in the £. As the landlord will be obliged under this Bill to include the rates in the rent, that will mean, roughly, an extra fivepence a week from these people — increasing the rent from 1/8 to 2/1 a week. The landlord knows that he will never get a penny of that, and that this concession of 10 per cent. is not going to recoup him if you make him responsible for the payment of the rates on these houses.
By putting an extra rate on these people what will occur is this: they will drop a week in making their payments. They will pay for three or four weeks and drop paying for one week. When they do that it will mean that the extra rent will have been wiped out. That is the sort of attraction that is offered to the landlord to pay the rates on a stated date. Any advantage that there might be under this arrangement is wiped out, as far as the landlord is concerned, if they drop one week in the making of their weekly payments. In dealing with these people the landlord is really powerless, because the only alternative he has is to eject them, and for the reasons that I have just indicated that course of action is not calculated to better the position as far as he is concerned. I think, in view of the generous attitude of landlords in taking this burden upon themselves for the purpose of facilitating both the local authorities and the Government, that the Minister should also be more generous in his attitude towards them.
The difficulty that we have in discussing this is, that we have not the Minister's amendment before us. We are only discussing what the Government proposes to do. It would, I think, be meeting us fairly to act as the Minister has proposed. Under the law at present the rate is payable in two moieties. The first instalment is payable between April and September, and the mean date would be somewhere about May. The second moiety is payable between October and the following March, and the mean date would be somewhere about November or December. The landlord would be prepared to get that and suffer the loss of his commission. The proposal here is that if he does not do so the whole thing is ante-dated and the moiety system is swept away. Therefore, the whole rate would become payable in May. The rates are not recovered annually, but half-yearly. The weekly rates are recovered in small sums over the whole period, and the full payment in respect of them is not discharged until the end of the year. Under this Bill it will mean in very many cases that the owner will have to find in advance a very big sum of money if he is to pay the full rates in one payment. If he has to pay in advance he will have to borrow the amount of money required. That is not by any means a fantastic case to put forward. Many of these owners are very hard up. In the case of men who own ten or fifteen houses they have put their life's savings into them. Therefore, in these cases the owners will have to borrow the money in order to pay in advance so as to secure the benefits under this Bill.
I think that the date of payment should be left as it is, and that the ten per cent. should be given to the landlord for the additional trouble as well as odium that he is bound to incur by having to press for the payment of these rates. The fact that he will have to do so will relieve the local authority of the otherwise unpopular action that it would have to take. In many cases the owner collects himself.
Where an agent is paid for collecting, of course, he will naturally want his commission on the extra receipts. No one, I am sure, will expect that an agent, collecting on the basis of a 5 or 7½ per cent. commission, is going to do this work of the rate collectors for nothing. When he makes out his bill for commission at the end of the year, he will naturally include the charge for collecting the rates. This new arrangement will mean more work for the agent. The rates will be collected by him weekly, just as insurance premiums are collected. In practice, I think it will be found that the whole of the ten per cent. will have gone in paying commission to the agent. I submit that the amendment as drafted is a fair one.
I take it that the rates will be paid in the ordinary way to the rate collector of the local authority, and not directly through the landlord to the local authority. What I want to know is, if the rates were paid in the ordinary way to the rate collector, will he receive poundage on the amount of the original demand or on the amount of the original demand less the ten per cent.?
The rate collector does not collect the ten per cent.
But will he be paid poundage on the original demand or on the original demand less the ten per cent.?
The position with regard to rate collectors has been examined. Until we see the way in which the Act operates, we have no grounds on which to review the rate collectors' position. The position of the rate collectors can be reviewed from time to time by the Department of Local Government and the local authority. At present the rate collector would get his poundage.
Does the Minister mean on £100, even though he only collects £90?
On 80 per cent. of the actual collection. That, however, is a matter that can be looked into. There is no intention of paying rate-collectors on money not actually collected by them.
As I understand, the present position is that the rate-collector gets paid his poundage on the full amount of his warrant even though all the money is not collected. That occurs, I think, at present even in cases where arrears have to be carried forward from year to year.
Under this measure the demand on the owner would be 80 per cent. of the total if paid before a certain date. Therefore, it will be quite clear what the rate-collector will be entitled to. He would not be entitled to poundage on a payment that never existed.
The point that I am making is an important one, and I hope the position will be made more clear when the Report Stage of the Bill is taken.
The point that has been raised by Senator Bennett is really an important one, and I do not think it is made clear under this Bill what the intention is. The rate-collector gets a warrant to collect a certain amount of money, and I think he is entitled to his poundage fees on that. According to the amendment, he would collect 10 per cent. less than the demand made on an individual owner. If he was paid the full amount of poundage on his warrant and he was a poor man, there would be an encouragement to him, I think, under this amendment not to collect early. The county council with which I am connected has made an arrangement with the rate-collectors under which it allows them a certain percentage on all money lodged within a certain period after the rate has been struck. That is an encouragement to rate-collectors to collect the rates as promptly as possible and make their lodgments at once. I think that under this amendment there will not be any such encouragement for them to collect early.
I think, as the Minister has stated, that it is not desirable to insist upon the ten per cent. on the full rate. As has been pointed out, the first instalment of the rate is due on the 1st April. Since the old grand jury days, however, the impression has gone abroad amongst the ratepayers in the country that they are not liable for the payment of this instalment until July. That was the month in which in the old days the grand jury used to meet. It is the law, of course, that the rate should be paid on the 1st April and on the 1st October, but it is very hard to collect on these dates. I do not think the amendment will improve the present position. I believe the effect of it would be to encourage rate collectors not to press for the rates. Even by allowing this ten per cent., it would be very hard on the majority of ratepayers if they were to be called on to pay their rates on the 1st April and on the 1st October.
CATHAOIRLEACH
I would like to know from Senator Sir John Keane if his amendment provides that an owner is only to get the ten per cent. on condition that he pays the whole rate within the first half of the year.
No. The rate was payable in two instalments. The owner gets an allowance equal to ten per cent. if he pays on or before the mean date of the period. For instance, if he pays his rates in two instalments he gets the ten per cent. if the first instalment is paid in the month of May.
CATHAOIRLEACH
Your amendment reads: "who being so rated pays the amount due by him in respect of the rates before the expiration of half the period in respect of which the rate is made."
If you read on my amendment you will see the point.
CATHAOIRLEACH
Your amendment then goes on to refer to instalments.
I think the rate is payable under the law as at present in instalments.
CATHAOIRLEACH
I thought it was in two moieties.
I call it instalment. Instalment covers the term "moiety." I do not put forward the amendment as an example of perfect drafting.
CATHAOIRLEACH
I thought you intended to draw a distinction between rates paid in moieties and rates paid by instalments.
No. The word "instalment" covers moiety.
I understand the position to be this, that the Minister is prepared to accept the principle of the 10 per cent. allowance and to bring in an amendment on the Report Stage dealing with that. My opinion is that we cannot get very much further on this until we see the amendment the Minister is prepared to introduce. I would urge that the Minister, in drafting his amendment, should keep to the system of having the rates paid in two moieties, and further, that the amendment should provide that the 10 per cent. allowance would only be applicable if there was a prompt payment made, that is, a payment made within some reasonable time after the rate became actually due. I do not think that this matter should be considered on the assumption that it is only wealthy landlords who own these small dwellings. I do not think that is the case, because I believe that really wealthy men have got out of that class of property rather quickly. Its management is rather troublesome at times.
I suggest that, when this Bill becomes law, it may prove extremely difficult for many owners to borrow the money they will require to make payments of the rates in advance so as to secure the 10 per cent. allowance. In some cases it is possible that the owner may be a building society. If the owner is an individual he may not be able to borrow the money he requires so readily on a mortgage on the property. The lenders will not be inclined to give him the money he requires even on a mortgage because if anything should happen so that the property was left on their hands they would have to pay the rates themselves.
I suggest, as regards the payment of the rates in the first period, that people, animated by the best intentions to carry out the provisions of the Act and anxious to get for themselves the 10 per cent. allowance, will not be able to make these payments in advance because of the fact that they will not be able to borrow the money they require for the purpose. I think the object that ought to be aimed at is to get prompt payment of the rates when they become due. The local authorities reckon on getting the rates paid in two moieties. If they get a prompt payment it will be a gain to them. I assume the 10 per cent. is given as a recognition of the loss the owner will have to suffer.
The Minister, in considering this amendment, should weigh its effect on the local rates. This allowance would amount to a very large percentage. Everyone recognises that the local rates are sorely taxed and overburdened at present. By giving this remission of ten per cent. you may very materially affect the position as regards local rates. This amendment establishes a precedent, and one that I do not think is good for the country at large. Take, for instance, large bodies like the City Commissioners or the Dublin Corporation. If they are obliged to make an allowance of ten per cent., or even five per cent., on the amount of the rates leviable in the city, it will amount to a very considerable figure. The subject is a very delicate one, and should be very carefully considered by the Minister, as well as by those who have to give consideration to the point of view not only of landlords and tenants, but of the rates as well.
The rate collectors are paid anything from five to seven-and-a-half per cent.
Under this Bill you are really imposing a new burden on the landlord. He will have to pay the ten per cent. if the full rate is not collected. Under the Bill, as I mentioned a short time ago, he will have to collect an additional fivepence a week from the tenants of small houses. As I stated before, the poor people in these small houses will not always be able to pay the rates and rents. The landlord will have to pay from eight to ten per cent. to his agent for collecting this extra fivepence. In many cases he will not receive the fivepence himself at all.
In making this allowance of ten per cent. to landlords you are really saving the rate-collecting body anything up to ten per cent. — that is, if they were to collect the rates on these small houses themselves, a thing which they are not finding it possible to do at present. If they collected the rates themselves they would have to pay about seven-and-a-half per cent. to the rate collector. Senator Mrs. Wyse Power seems to suggest that the rate-collecting body, or the local body, should ride off without paying any commission at all, and that the landlord, who will really be acting as the rate collector, instead of getting any commission, should be penalised to the extent of ten per cent. That would create an impossible state of things.
I am in sympathy with the views expressed by Senator Mrs. Wyse Power. If the amendment is accepted it will, I think, be setting up a dangerous precedent. As far as I understand what is proposed, notwithstanding what Senator Kenny has stated, it is this: that in addition to the poundage paid to the rate collectors the person paying the rate will get a rebate of ten per cent. if he pays within a certain period. That is a dangerous precedent to adopt. The amount that would be involved under a proposal of that kind would come to a considerable figure in the City of Dublin when it is realised that the rates in the City are paid on a valuation of over £800,000. I would remind Senators that the ratepayers in the City of Dublin, as regards making prompt payments, are the best in Ireland or in the next country to it. I think that the Minister, before he gives us his assent to this amendment, ought to consider the question carefully. We are not going to swallow the statements made by Senator Kenny, who talked of the worries of landlords dropping a week's rent in a period of four weeks or so. Those of us who are acquainted with the position of weekly tenants are well aware that the landlords do not drop one week's rent in every four. What happens is that if the rent is not paid the unfortunate people are thrown out. There is no use in a Senator putting that sort of stuff before the House. Senator Douglas stated that wealthy people had got out of this type of property. If that be so, then the people who have got possession of it are a good deal worse than the former owners. They are more greedy and grasping than the predecessors. I think that, as this is a very important matter, it is reasonable to ask that this amendment should be left over for the Report Stage.
As far as I can see there is every indication of holding this over for the Report Stage. As to what some Senators have said with regard to this establishing a precedent, might I refer them to the Rating Valuation Act of 1925, which is admittedly a British Act? Still I think we should have some regard to a certain provision in that Act, as we ourselves are now dealing with an almost identical subject. Under a section of that Act the owners of property who collect the rates on small dwellings, under circumstances somewhat similar to those outlined here, get a reduction of ten per cent. In fact, my amendment is practically a copy of that section in the British Act. But lest that might not be regarded as satisfactory, might I refer Senators to the Dublin Corporation Municipal Act of 1890? Senator Farren is intimate with the affairs of the Dublin Corporation. Under Section 75 of that Act the Dublin Corporation obtained power to compound "with the owners of such premises for the payment of all or any rates leviable on such reduced estimate, the net annual value not being less than two-thirds nor more than four-fifths of the net value." Under that section the principle of giving a concession to the owner who collects the rates is definitely admitted.
That Act is not in operation now.
My information is that it is. My information on the point is first hand. It has been obtained from a person who is getting the benefit of such a rebate. Perhaps I am now giving information to the Corporation that I should not give.
There will be no precedent established by the adoption of this amendment. That section in the Dublin Corporation Act is in operation up to this date, but it only applies, I think, to small valuations up to £6. I would like to know definitely from the Minister if the Act is still in existence. I know that there are certain people who claim relief under it by paying their rates within a specified time.
Try it out and see will you get it.
So far as the Dublin Corporation position is concerned the rating question in the City is a very involved matter, and I cannot say at the moment whether that particular Act is in operation. The Rating Valuation Act of 1925 has been mentioned. In reply to Senators who have asked that I should give very careful consideration to this question of the 10 per cent. allowance, I may say that very careful consideration has already been given to it. I might mention that the 10 per cent. in the Bill offers comparatively better terms than the English property owner gets under the Rating Valuation Act of 1925. He is only getting 2½ per cent. as against the 10 per cent. that any prompt payer of rates can get here under the present system. The decision to give 10 per cent. was taken on the grounds that we wanted to make the Bill as simple and as clear as possible. We came to that decision, and in doing so felt that we were not going to be unfair either to the rating position or to the property owner.
I am quite alive to the danger that might arise if there was a demand on behalf of every big ratepayer or on behalf of ratepayers generally — ratepayers in some counties have been asking for this — to have rebates made on the prompt payment of rates. At present I must set my face definitely against any extension of this matter until our rating position is in a more satisfactory position than it is at present. Different circumstances during the last few years have operated to throw the collection of the rates backwards in some counties. That accounts, I think, to a large extent for the comparatively large amount of irrecoverable rates that have to be dealt with. As far as any fears may be felt on that, I should like to say this: that until the rate-collecting position in the country has had a better opportunity of settling itself down, my attitude would be not to consider any extension of the principle at all.
Ordered: That the amendment be allowed to stand over for Report Stage.
Question —"That Section 6 stand part of the Bill"— put and agreed to.
I move:—
New section. Before Section 7 to insert a new section as follows:—
"The rating authority shall repay to an owner that portion of the rates comprised in any rent which remains irrecoverable after full recourse to legal proceedings."
This infringes on the 10 per cent. allowance. That is for a definite purpose, to repay the trouble and cost of the collection of money they have actually disbursed, their out-of-pocket expenses. There arises a totally separate matter — what about the rates that are irrecoverable? I know the Minister wants the House to apply the principle of rough justice and say 10 per cent. for everything. I do not think that is fair. Irrecoverable rates should be treated as a matter totally distinct from the cost of collection. I ask the House to say that it is not fair or just that the owner should be asked to bear the cost of irrecoverable rates. The amendment asks that the owner should be refunded these irrecoverable rates when he has taken full legal proceedings, so that there would be no question of his not exacting his legal remedy, and going easy, and then coming for a rebate. I would point out that this is by no means an owner's Bill. I wish again to emphasise what is going to happen. For the first time under this Bill an occupier can be evicted for non-payment of rates. As the law stands at present an occupier can only be distrained, and the sheriff has to allow him his bed and tools and whatever the law allows. In future he can be evicted, and I am afraid he will be evicted after the landlord has taken full steps without success to recover the rates. In the circumstances, I think it is only just that the landlord should be refunded the rates by the local authority.
CATHAOIRLEACH
Is this not part and parcel of the other proposition? Do you not think, Senator, that it also should stand over? I think you should consider carefully that this only entitles the landlord to be rebated after full recourse to legal proceedings, which would probably mean ten times the amount he is going to recover. Full legal proceedings means that he is to exhaust every possible step known to the law. I can only tell the Senator that the man who does that will have a pretty good bill to pay, and when he has done so, I think he would be left with a white elephant.
To my mind full legal proceedings there means effective eviction.
CATHAOIRLEACH
The rates would be, say, 2/6, and the cost of the eviction would be about £20.
There might be two or three years' arrears of rent. I have the case of a person who has not paid rent for four years and is still in occupation.
CATHAOIRLEACH
I see your point, and the Minister might be prepared to meet you on that. Would it not form part of your suggestion which is to be dealt with on Report?
The Bill as it stands gives certain relief. Sub-section (3) of Section 7 entitles the landlord to get back a refund equal to one-twelfth. The section deals with unoccupied dwellings.
CATHAOIRLEACH
The rates that are to be paid and recovered under this Bill are not confined to unoccupied dwellings.
I would like to explain my attitude with regard to this amendment. The 10 per cent. we propose to allow is 2½ per cent above what the owner is allowed for a similar purpose under the Rating and Valuation Act of 1925 in Great Britain. That 10 per cent. is intended to cover every possible accident that may happen to the landlord financially as a result of the responsibilities and duties put on him under this Bill. I think it is a fair, reasonable, and simple way of dealing with the matter. If the Senator wants to he can call it rough justice, but I think it is an attempt to be reasonable in giving justice to all concerned.
Section 11 of the British Rating and Valuation Act, 1925, states (sub-section 2) that:
"The owner of any hereditaments to which this sub-section applies, that is to say, hereditaments the rent of which becomes payable or is collected at intervals shorter than quarterly, may, by agreement in writing with the rating authority, undertake in respect of any such hereditament either —
(a) that he will pay the rates chargeable in respect thereof, whether it is occupied or not; or
(b) that he will, so long as the hereditament is occupied, pay the rates chargeable in respect thereof; or
(c) that he will on behalf of the authority collect the rates due from the occupier thereof,
and the authority may agree, where the owner so undertakes and pays over to the authority on or before the date or dates specified in the agreement the amounts payable by him thereunder, to make to him an allowance not exceeding in the case of an undertaking under paragraph (a) fifteen per cent. in the case of an undertaking under paragraph (b) seven and one-half per cent., and in the case of an undertaking under paragraph (c) five per cent."
That is a gamble. We are dealing with unoccupied premises. The only restriction in the matter is as long as the Restriction of Rents and Mortgage Acts apply.
That is a pretty firm restriction, especially as that Act is now going to be extended. We know there is little possibility of that Act being removed in the near future from these small dwellings. That point as to unoccupied premises will only become operative when the whole of the Rent Restrictions Act is repealed, and there is no possibility of that for a long time. I do not want to be tied up with what the British do, but they give 15 per cent. in cases where the owner voluntarily does the work which he is now being made to do compulsorily under this Bill.
CATHAOIRLEACH
There will be an excellent opportunity between this and Report for compromising with the Minister.
Amendment allowed to stand for consideration on the Report Stage.
Agreed that Sections 7, 8, 9 and 10 stand part of the Bill.
I move:—
Before Section 11, to insert a new section as follows:—"11. This Act shall not apply to any dwelling which is let on lease for a term of years and the rent of which is paid at quarterly or longer periods."
As the Bill stands, it only applies to weekly or monthly tenants. Occupiers who pay quarterly or half-yearly will continue to pay the rates as they now pay them. As regards occupiers paying half-yearly, surely it is not necessary to saddle the landlord with the collection of their rates. There are practically no losses in connection with rates on that class of property. It is not a class of property at which the Bill is aiming.
Is there not a danger if this amendment is passed that they might convert the weekly tenants into quarterly tenants?
Is it likely the owner is going to take his weekly tenants and give them leases for a term of years and turn them into yearly or half-yearly tenants? The idea is fantastic.
I oppose the amendment on the grounds of the practical working of the scheme. It would mean, apart altogether from the danger Senator Farren speaks about, that the local authorities would have to have knowledge of the conditions under which houses with a valuation under £6 were held, instead of proceeding in a simple way to deal with these dwellings from a systematic and straightforward point of view so that there would be involved no complications of any kind. On the other hand the work that would fall on the property owners cannot be very great, and if the Senator appreciated the fact that all these people are good pays there is very little difficulty in the matter. The amendment would open up a whole forest of difficulties for local authorities. I do not see how they could keep in touch with the conditions under which property of this class was held as between the tenant and the owner.
Admittedly, these classes of tenants are not bad payers. That is not the whole story. There is the trouble of readjusting the ledgers, and that would involve a very considerable amount of clerical work. When the Minister speaks of the difficulties of discovery does he realise the difficulty in that respect in the Bill at present? How does he discover except by the closest process of investigation? He will have to send a question to every owner as to whether he is within the purview of this Bill in respect of the rent he receives. It is a difficulty as regards the local authority and not the owner. The Minister must appreciate that before a local authority can issue demand notes they must find out the circumstances of every owner and find out whether he comes under this Bill or not. I suppose there is a roundabout way by which they can discover — that is by going to the occupier and saying: "How much do you pay?" and so forth. Surely it is far easier to find out whether the tenant is weekly or monthly, quarterly or yearly. It could be done at the one time. I do not see the administrative difficulty involved.
The difficulty arises in the actual collection of the rates, and another difficulty arises at the issue of the demand notes. It would be impossible for a local authority to know how they stood with regard to this property if houses held under these terms were excluded from the operation of the Bill.
Amendment put and declared lost.
Section 11 agreed to.
Title agreed to.
The Seanad went out of Committee.
Bill reported with amendments.
