Seanad Éireann díospóireacht -
Wednesday, 8 Jul 1987

Vol. 116 No. 15

Landlord and Tenant (Ground Rents) (Amendment) Bill, 1987: Second and Subsequent Stages.

Question proposed: "That the Bill be now read a Second Time."

Minister for Justice (Mr. Collins)

The special ground rents purchase scheme that is administered by the Land Registry under Part III of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978, originally had a life of five years and was extended by legislation in 1983 for another year and again in 1984 for a further three years to 31 July 1987. The purpose of this very short Bill is to extend the operation of the scheme indefinitely.

The general right to acquire the fee simple is given by the Ground Rents Act of 1967. That scheme is, in the case of dwellinghouses, supplemented by the simplified and less costly procedure provided by the 1978 Act, which I had the pleasure of initiating. For a fixed fee the Land Registry undertake the legal work involved in the acquisition of the fee simple of dwellinghouses. A considerable number of people have availed themselves of that procedure — the total number of applications received into the Land Registry between 1 August 1978 and 31 May this year was 52,742.

The vast majority of such applications are made by persons in occupation of their dwelling house, who have the consent of the ground landlord to the purchase of the fee simple. The current fee in these "consent" cases is £26. The position following the 1984 legislation is that all fees may be revised by ministerial order but, since the scheme is self-financing on the basis of current fees, I am glad to say that no increase in fees is called for at present.

The Bill does not purport to deal with any substantive issues for the reason that we must get the Bill through if the special purchase scheme is to continue after 31 July next. However, the scheme is now in operation for nine years and it may be that some aspects can be improved. There is, for example, the question of assimilating the scheme more to the ordinary registration functions of the Land Registry taking into account the fact that by virtue of this legislation the scheme would be placed on a permanent footing.

In the context of possible future changes, I want to mention also the question of ground rents payable to local authorities. Many such rents are for nominal amounts, payable if demanded, which are not and were never intended to be collected. The No. 2 Ground Rents Act of 1978 gives local authority lessees the right to buy out their ground rents but it may be that since what we are dealing with here are public sector ground rents further arrangements can and should be made to enable their ground rents to be brought to an end. That is another matter I am having examined.

The scope of the Bill is confined to repealing the provision of the No. 2 Act of 1978 which limits the period within which applications may be made under Part III of that Act. Section 1 proposes the repeal of section 18, as amended by an Act of 1984, of the No. 2 Act of 1978 and its effect will be to ensure that the Land Registry scheme of ground rents purchase shall extend beyond 31 July next. Section 2 is a standard provision in relation to short title, construction and collective citation.

I commend the Bill to the House.

Mr. Manning

I do not know if it is due to the change of venue a Chathaoirligh, but I hope you will not grow weary of me. This is the sixth occasion, I think, on which you have had to listen to me today.

An Cathaoirleach

I do not think that that will happen, Senator Manning.

Mr. Collins

I agree with the Cathaoirleach.

Mr. Manning

Before I begin a very brief contribution on this Bill, may I commend the Minister for the very moving ceremony which he and his Department organised today in Iveagh House to confer citizenship on the refugees from Vietnam who have been living in this country. He is to be commended for the way in which the ceremony was organised and it can do nothing but good to make these people feel they are full citizens of their country of adoption and show to them and to the world that they are very warmly and generously welcomed.

I will be very brief, because this is a non-controversial Bill. Clearly there are still a large number of ground rent tenants who are anxious to avail of the scheme set up under the Landlord and Tenant (Ground Rents) Act, 1978. I see it as a relatively simple and inexpensive way of buying out the fee simple of their properties and we on this side of the House fully support that.

However, if the Bill is welcome and non-controversial, the whole question of ground rents continues to be highly controversial, highly contentious and capable of generating a great deal of heat if not light, especially at election time. This is not the appropriate time to enter into that controversy. This Bill is simple and welcome and this is not the proper occasion to go any further, but I ask the Minister to give some thought to the possibility of preparing a White Paper or some document on the whole question of ground rents. It has been around for a very long time. It raises its head especially at elections. It is the source of a great deal of misinformation.

The whole question has been abused by certain political parties and activists in spreading false information about what is possible. It is an emotional subject. It is a question the justification of which many people have great difficulty in accepting, and it might be a great public service if the Minister — perhaps during the summer recess — could have prepared by his Department some short document on the history of ground rents, the current state of play and what options are open to us as a people. It is not a party issue. It is an inheritance from the less happy parts of our history in many ways, and simple information, simple factual statements on what the options are would be very welcome.

For example, what are the constitutional difficulties in face of the abolition of ground rent at present? What are the constitutional options open to us if we were to have a constitutional referendum on this question? What would be the cost of compensation to the public Exchequer, to the taxpayer, should the parties in this House decide — because I suspect it would have to be an all-party matter — to go ahead with some form of abolition of ground rents? Who are the people who would need to be compensated? Who are the people who own the ground rents? These are some of the questions which many people would like to see resolved and they can be resolved only if there is a fair, open, factual discussion. I know the Minister's Department are busy, but the publication of a paper of this sort could be enormously helpful to the debate. Having said that, may I welcome the Minister into the House and say that we, on this side of the House, have no difficulty whatsoever in supporting the Bill?

Mr. McEllistrim

The purpose of the Landlord and Tenant (Ground Rents) (Amendment) Bill is to extend the operation of the special ground rents scheme. I congratualte the Minister for Justice, Deputy Collins, who initiated the 1978 Act which provided a new method for the purchase of ground rents on dwelling houses. That Act has proved to be a great success. The number of people who had applied up to 31 May 1987 was 52,742. This Bill is to allow people to purchase their ground rents. The purchaser can purchase his ground rent by paying the ground landlord's cost of the transaction. The Land Registry fee is fixed at £26 and this Bill ensures that occupants of dwelling houses can free themselves of ground rent in a reasonable and effective manner. The special purchase scheme had a life of five years when it was initiated and since then it was extended on two occasions, on the first occasion for one year and on the second occasion for three years.

It was first introduced in 1978 by the Minister for Justice, Deputy Collins. On both occasions there was an increase in the fees to cover the cost of administration. I notice that there is no increase in fees on this occasion. I would like to congratualte the Minister again for proposing in the Bill to extend the life of this scheme indefinitely. I am quite sure the ground rent tenants will welcome the amending Bill. It will enable those ground rent tenants to purchase their ground rent in as simple and inexpensive a way as possible. I am also delighted to see that the Minister is considering ground rents paid by local authority tenants to local authorities and that he may introduce special arrangements which will enable local authorities to bring an end to ground rents.

I would like to conclude by welcoming the Landlord and Tenant (Ground Rents) (Amendment) Bill. Many people who have ground rents will be enabled to purchase them in a simple and very inexpensive way. I hope the Bill will get a quick and safe passage through this House as I notice it must be law by 31 July 1987. Again I should like to congratulate the Minister on initiating the Bill in 1978. We are delighted he is here again to have it amended effectively.

Minister for Justice (Mr. Collins)

I thank the Senators for their very gracious welcome to this Bill which extends the life of the special ground rents purchase scheme indefinitely. I am sure it is a welcome that will be shared by ground rent tenants who will continue to have an optional purchase procedure that is as simple and inexpensive as possible. This has been the reponse in recent weeks of callers to the Land Registry and to my Department who inquired about the future of the scheme which was due to expire on 31 July 1987. There is an old trait of character in most of us Irish that we wait until the last day to do a lot of things.

It may be of interest to the House to know that when it was introduced in 1978, a limit of five years was put on the life of the scheme and wisely so because you cannot just create a mechanism and leave it there forever, bearing in mind the cost. It was hoped that many of the people who were genuinely interested in buying out their ground rents would use the mechanism which we set up to facilitate them and to help them to do just that. There was quite a rush at the end of the five year period. The Bill was extended for one year and subsequently for three years with the same logic behind it. We are going for an indefinite period this time because we believe that the well orchestrated, politically-motivated campaign that was conducted against this legislation which I introduced in 1978 has lost ground and has lost faith. The people see that it is there for their benefit and to help them to by out ground rents. Over 50,000 people have availed of the scheme and I hope many others will also avail of it.

I am glad that during the course of this debate Senator Manning, as leader of the Opposition party in this House, wisely and maturely but cautiously commented on the campaign that was waged against the legislation. I am glad, like every Senator in this House, that that campaign has failed. It was good legislation, trying to help in a very difficult area. It was one of two pieces of legislation which I brought in around the same time. The other No. 1 Bill prevented, as and from then the creation of any new ground rents on dwelling houses. The House will agree that since that Bill became law no new ground rents on dwelling houses have been created. It is a pity I suppose that we did not get around to thinking along those lines five or ten years earlier. Part of the problem as has been pointed out by Senators Manning and McEllistrim, was that it is a very complex area. There were those in the earlier years who believed that ground rents could be confiscated without compensating those who legally owned them but that could not be so. You just cannot confiscate without compensating. That point was been made during the course of reasoned argument on this issue. We had a Landlord and Tenant Commission chaired by the late Judge Conroy, a friend of many of us in this House and in the other House, a man whom we all respected. He put great effort into this question of ground rents. A genuine frustration was felt by all those who had to deal with this subject. I am speaking knowledgeably on this because I have discussed the matter with Deputy Paddy Cooney who held this portfolio in 1977 and who genuinely wanted to try to deal with this problem. There were, and still are, constitutional problems and difficulties, as Senator Manning has pointed out.

One of the biggest problems in this area, other than constitutional ones, is the one of compensation. It has been estimated — it is a guesstimate — that £35 or £40 million would be required to compensate persons who are legally entitled to compensation in the event of the ground rents being abolished.

I certainly will take on board the comments offered during the course of the debate on this issue. I am not sure if it is necessary to provide a White Paper on the subject but I am not closing the door on it in any way. I am saying I am not sure for the simple reason that we have had quite a number of debates on the matter in this House and the information on that is already available to those who are genuinely interested in the issues. I say that very deliberately because there were obstructionists in this case and they were entitled to their views even though I do not accept them. We could collect all that sort of information and have it available by way of an information sheet to anybody interested. It is very wrong that emotions can be whipped out at election time or that pressure groups fronting for political agencies or political parties can be used to create confusion in the minds of people who do not fully understand what is involved in this area.

I am having a number of matters examined in the Department. I will, when we are ready — and I hope it will not take too long — come back to the Oireachtas to try to improve the situation. This scheme has worked well. We are not interfering with the price structures. We are happy that the fee being paid at present, £26 where there is consent — this was mentioned by Senator McEllistrim — is sufficient to cover the expenses that are there. That fee for that type of transaction is a minor fee in comparison with what one would have to pay in the outside world if one had to engage a firm of solicitors to do the job. It is a good scheme. It has been in operation for nine years and it is totally non-political. It can operate more successfully now that the orchestrated campaign against it has lost momentum and is unlikely to get off the ground again.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without amendment, received for final consideration and passed.