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Committee on Finance. - Landlord and Tenant Bill, 1965: Committee Stage.

Tuesday, 7 June 1966

Dáil Éireann Debate
Vol. 223 No. 1

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Question proposed: “That section 1 stand part of the Bill.”

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins I should like to ask the Minister has he any idea yet as to when it is proposed to bring this into operation. It seems to me the kind of Bill that should come into operation on a fixed date, a date we would all know at this stage. Why has it to be fixed by Order rather than in the Bill itself? I assume there is some good reason for it.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I would be thinking in terms of bringing the Bill into operation on 1st of August, depending on getting it through the Seanad in July.

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne On a point of order, I had no idea this Bill was coming before the House at this stage. I understood the House was adjourning to enable us to study another Bill.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins The motion was adjourned.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin The debate on the motion was adjourned until 6 p.m.

Mr. S. Dunne: Information on Seán Dunne Zoom on Seán Dunne We did not have any announcement on the Order of Business that this Bill was coming on.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin It was included in the Order of Business.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan Deputy O'Higgins will appreciate that certain notices have to be prescribed. This may cause [70] a delay of weeks or something of that nature.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins I am not objecting. I should have thought the notices, at least in draft form, would be prepared when the Bill was being introduced.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan It will be some time around 1st August—as soon as possible.

Question put and agreed to.

SECTION 2.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I move amendment No. 1:

In subsection (1), page 3, after line 21, to insert the following:

“‘fee simple’ does not include the interest in land of a person holding the land under a fee farm grant”.

This is a drafting amendment, for the purpose of clarification.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins Deputy Dunne has adverted to a little bit of difficulty inasmuch as it is difficult to get our minds on this quickly when it was not anticipated it would come up for discussion today. Is it clear that this amendment is not precluding from benefiting, as potential buyers-out of the head interest, those who hold under a fee farm interest?

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan To enable them to buy out is precisely the purpose of the amendment.

Amendment agreed to.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I move amendment No. 2:

In page 4, after line 2, to insert the following subsection:

“( ) References in this Act to a covenant, condition or agreement in a lease include references to a reservation, stipulation or proviso or to any other similar provision in the lease.”

Again, this is a drafting amendment, to make sure that reservations, etc. are also included along with “covenant”“condition” or “agreement”.

Amendment agreed to.

[71]An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin Amendments Nos. 3 and 4 might be taken together.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I move amendment No. 3:

In subsection (2), page 4, line 5, after “two”, to insert “or more”.

This amendment, and amendment No. 4, are drafting amendments.

Amendment agreed to.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I move amendment No. 4:

In subsection (2), page 4, line 6, after “larger” to insert “or largest”

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins It is possible that land would be situated in areas of more than two county registrars. This is just tidying up that.

Amendment agreed to.

Section 2, as amended, agreed to.

SECTION 3.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins I move amendment No. 5:

In subsection (2) (c), page 4, line 28, to delete “and” and substitute “or who was so entitled, if he is still lawfully in possession of the lands, and”.

This arises from a point I made on Second Reading. Subsection (3) provides generally for the cases in which the fee simple can be acquired by purchasing out the ground rent. I raised the question of a person who had the right, under the Reversionary Leases Act, 1958, to acquire a new lease and who, for one reason or another, possibly default on his own part, had forfeited that right. The Minister thought at the time that such a case was in fact covered under subsection (2) (c). I suggested that it seemed that the case was not fully covered because the concluding sentence of subsection (2) related only to the case of a person who is now entitled to a reversionary lease under the Act of 1958. I was concerned for the person who had lost that right.

The Minister will appreciate that, even though a person may have technically [72] lost his rights of renewal under the Landlord and Tenant (Reversionary Leases) Act, 1958, the mere fact that he has lost his rights of renewal does not mean he has necessarily lost his rights to the land. He may still be perfectly lawfully in possession of the lands. It could be that neither himself nor the owner of the superior interest had in fact adverted at all to the effluxion of time and that, because of the passing of time, he was losing his rights to apply under the 1958 Act. I suggest that, in those cases, once nothing irrevocable has been done and once the occupant of the land is still there, and still lawfully there, he should have the right to buy out the fee simple, to purchase out the ground rent, just as, in the other cases described in subparagraph (c) of section (3) (2), that is, a person who holds the land or held the land under a building lease which had expired, or a proprietary lease which has expired or who is entitled to be granted a reversionary lease under the Act of 1958. If the Minister considers this, I think he will see that there is a case for putting the people whose case I am urging on a par with the others, with cases of those who hold under a building lease or a proprietary lease which has, in fact, expired.

I would urge the Minister to accept the principle of this amendment. If he does not like the wording of my amendment, I am quite prepared to withdraw it and allow the matter to be considered by the Minister with the parliamentary draftsmen, between now and Report. Indeed, that applies, to a greater or lesser extent, to the various amendments I have tabled. The Minister will appreciate that a Bill of this sort is very technical. It is not very easy for Deputies, acting without the assistance of a parliamentary draftsman, to prepare amendments which will conform in all respects to what is required. Therefore, if the Minister accepts the principle of any of these amendments, I should be quite happy to withdraw them and to allow the parliamentary draftsman to word them later.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I have a certain [73] sympathy in that direction in connection with some later amendments by Deputy M.J. O'Higgins but with this particular one I am not so sympathetic. I feel that, under the existing law, particularly under the Reversionary Leases Act, 1958, there is ample protection already for the sort of case mentioned by the Deputy. At the present time, the tenant has a statutory right to obtain a reversionary lease at any time up to 15 years before the expiry of that lease. There is the further protection that the landlord must give notice of expiration of the lease to the tenant. The tenant then has three months after the expiry of the notice to seek his reversionary lease. Having done that he can then proceed to act under this Bill when it becomes law and secure the purchase of his ground rent. The sort of case where a tenant would neglect to act in the manner I have just mentioned would be one of gross neglect on the tenant's part. I am not over-predisposed to spoonfeed the tenant too much. Under the existing 1958 Act the tenant has this right within three months of receipt of a notice of termination of his lease to apply for a reversionary lease. He can then either get his reversionary lease—the terms of which are carefully controlled by the 1958 Act so as not to prejudice him—or he can apply to purchase his ground rent. I feel he is safeguarded sufficiently well in that respect.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins I would ask the Minister to have a look at this again.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I will.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins The Minister may be correct in saying that there might be gross default on the part of the tenant and that he was, if you like, his own worst enemy in not getting his lease renewed. That may be the case in a large number of cases. But there is always, as the Minister well knows, the exceptional type of case where a tenant is absent, where possibly things go astray, where there might be illness or something of that sort in the house and the notice is overlooked.

We are entering into a completely [74] new departure here. The general principle behind the Bill is to breach in a very dramatic way the whole concept of landlord and tenant law and get away entirely from the idea of leases. In those circumstances, it would seem to me that a person in the position I am talking of should at least get the benefit of the new broom regarding landlord and tenant law rather than that we should adopt the attitude that because he defaulted in the past, he will have to put up with the old position rather than have the benefit of the new.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I will look at it.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry I have found in Midleton, where a row has been going on for the past two years in connection with the purchase of this estate by a certain bank and an auctioneer, that in the meantime a number of leases fell in. I do not know under what law it was claimed but I have been given cases where the new landlord demanded on the new leases practically double or treble the previous rent. The tenants naturally refused to pay. In those circumstances, the Minister should consider the position of those tenants now. The three months to which he referred have elapsed. What is the position now of those tenants who had their leases finished in 1963 or 1964 and who now in 1966 are still in possession of the houses? I would like to have that aspect dealt with by the Minister. There is certainly much merit in what Deputy O'Higgins has said.

Mr. Cunningham: Information on Liam Cunningham Zoom on Liam Cunningham I would like to have the Minister's advice on the problem of the expiry of leases recently in Buncrana, Donegal, where ground rents have been increased in some cases by up to 500 per cent. In view of the fact that this legislation has been in contemplation for quite a while and the Report of the Commission issued some time back and in view of the fact that these people have had their ground rents multiplied by five or six in some cases, would it not be fair that they should be given the benefit of some of the favourable provisions of the [75] Bill? I would ask the Minister what can be done in that respect.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins Would the Minister bear in mind in connection with the service of notice under the 1958 Act—I think I am correct in this —that the notice could be served as long as 15 years before the expiration?

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan No, three months after it.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins Not later than that. Section 11 deals with building leases and says the reversionary lease could be obtained:

(a) not earlier than fifteen years before the expiration of his building lease, and

(b) not later than the expiration of the building lease or the expiration of three months from the service on him by his immediate lessor or any superior lessor of notice of the expiration of the building lease, whichever is the later.

It then goes on to say:

The notice referred to in paragraph (b) of subsection (1) of this section shall be a valid notice only if served not earlier than 15 years before the expiration of the building lease.

It is possible for the notice to be served very many years before the building lease expires. The person would think he had plenty of time and then might forget about it.

Mr. Moore: Information on Seán Moore Zoom on Seán Moore I would ask the Minister to consider the inclusion of a lighthouse authority under section 3. The Commissioners of Irish Lights, who control lighthouses around the coast, feel aggrieved by the fact they are not included in the Bill in any way. They make leases which might not necessarily be required for a lighthouse at that time. They want a clause put in that should they need it for a lighthouse in the future, they ought to be safeguarded. A simple amendment would meet their purpose. I would ask the Minister to consider including Irish Lights under section 3.

[76]An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin I think the Deputy is dealing with the section rather than the amendment in the name of Deputy O'Higgins.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan We will deal with that on the section. I will have a look at Deputy O'Higgins's amendment between now and Report Stage and see if anything can be done about it. There may be something in what he says.

As regards Deputy Cunningham's point, this applies in the case of all legislation. It is a question of going back on arrangements which have been finalised, where agreement has been reached under the existing law. Although I am sympathetic to the particular case the Deputy mentioned and to other such cases, I do not see how we can make retrospective legislation to cover cases where agreements are already reached privately between two persons, in this case between landlord and tenant. This Bill is designed to ensure that in the future the tenant will have his rights. I am afraid I cannot make those rights retroactive to deal with the situation where agreements have already been entered into.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Since the first word of this Bill was issued to the public, a considerable time has elapsed. People whose leases have expired have been asked to pay, as Deputy Cunningham said, increases of 500 per cent on their old ground rent. Those tenants refused to pay and they are still in possession of the property. Under Deputy O'Higgins's amendment, is the Minister prepared to consider some means by which these men will get justice?

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I have said I am going to consider between now and the Report Stage the principle behind Deputy O'Higgins's amendment which is similar to that behind the Deputy's proposal, but I cannot interfere where agreements have been reached.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry All right; I am not concerned with the fools who made agreements.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton I am finding it difficult to follow the intricacies of this Bill. [77] I was not expecting it to be taken today, and I am rather at sea about it. I understand the Minister to say that where agreements have been made, there is nothing he can do about such cases, but where discussion is still taking place—and this applies to quite a number of cases—will the Minister consider making this Bill retrospective to when it was first introduced into the House last August? Where negotiations are still taking place, even if the lease has expired some months ago, will the tenant get the benefit of this Bill?

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan That is what I am saying, that I intend to have a look at Deputy O'Higgins's amendment which I think is designed to cover the cases mentioned by Deputy Norton, Deputy Corry and Deputy Cunningham, where final agreement has not been reached.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton The Minister agrees in principle?

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan In principle. I shall have a look at it between now and Report Stage.

Mr. Cunningham: Information on Liam Cunningham Zoom on Liam Cunningham In some of the cases I mentioned maybe agreements have been reached, under protest of course. There is this point, however, that the provisions of the Bill were pretty well known and I am afraid that in some cases the landlord availed of that. Had the provisions of the Bill not been known, the increases would not be of the same magnitude, because in order, under any new agreement, to get the maximum under the Bill, it is more beneficial to have a very high ground rent. It may have been that because of the Bill the landlord “upped” the rent and would not otherwise have done so to such an extent.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton Where some tenants were unfortunate enough to have concluded an agreement with the landlord, would the Minister consider making the Bill retrospective in this way? Some rents and some leases will have been in force longer than others. Whether it is in force for 20, 50 or [78] 100 years, is obviously of material difference. Where a lease or a ground rent has been in force for 100 years, presumably it is at a lower figure and to raise it five times might not be the great hardship it might seem when it is related to some agreement that was only in force for 25 or 50 years. Would the Minister be agreeable to the principle that the purchasing power of the money which bought a lease should be related to the purchasing power of money today and that where a landlord has sought and obtained a higher ground rent or lease than would be justified on this basis, the Bill would be made retrospective to include these people even though they concluded an agreement? It could be said in these cases that the landlord got too much and has taken advantage of the tenant, that the landlord has taken too much of an increase, bearing in mind the purchasing power last year as against when the lease was originally granted. The Minister could protect the tenant by saying that where an agreement has been concluded providing for too high a rent, he will make it retrospective. While we are all anxious to be fair to landlords, the tenant needs protection under the Bill.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan The House must be aware that the 1958 Act dealing with reversionary leases gave fairly adequate protection in regard to the renewal rent, in that it cannot be more than one-sixth of the gross rent at the expiry of the lease. We are travelling further in this Bill and making it one-eighth. I cannot go the whole way and interfere with arrangements and agreements that have been already legally entered into between landlord and tenant, wherever my sympathy may lie, and in many cases my sympathy lies with the tenant. I am going as far as I can to meet what the House is asking, that is, to give the right to purchase the fee simple in any case where the tenant is in possession of the lands, which is the basis of Deputy O'Higgins's amendment, and where no legal or binding agreement has been reached, I shall see what I can do to meet the case of such a tenant, even if the lease has expired, and to bring him within [79] the ambit of the Bill. I do not think I can go any further.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton I do not quite follow the Minister.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan Deputy O'Higgins's amendment is what we are discussing. He wants to extend the provisions of section 3 to include anyone who is still lawfully in possession of the land even though the lease has expired. Under the Bill as it stands that tenant would be out. He loses his rights if he does not apply for his reversionary lease within three months of expiry. I have said I shall see what I can do to meet the case made by Deputy O'Higgins.

Amendment, by leave, withdrawn.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton I move amendment No. 6:

To delete subsection (2) (d) and substitute the following:—

“(d) a person who, or whose predecessors in title has or have been continuously in occupation of the land during the whole of the period of fifty years next preceding the date of the service by the person of a notice under section 4 of this Act in relation to the land.”

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I do not think I can accept the amendment. First of all, it expands the type of yearly tenant who will get the right of purchase by giving this right to any tenant irrespective of the size of his rent or the nature of his letting. In section 3 (2) (d) we provide that any yearly tenant who has been in possession up to 50 years and who is paying a rent which is less than threequarters of the amount of rateable valuation—and that sort of yearly tenant and that sort of small rent arrangement is equivalent to a ground rent arrangement—will have the right to buy out the ground rent. I would be open to persuasion to reduce the period of 50 years or possibly to “up” the rent to the amount of the full rateable valuation. The subsection might be mitigated in that direction and that might go some of [80] the way to meet what Deputy Norton suggests. However, he goes too far in that his amendment includes all sorts of tenancies. There are a number of leaseholding arrangements which are outside the scope of this Bill which is designed purely to cover building leases and proprietary leases.

This subsection is designed to cover cases where a certain equity arises in the case of long possession by yearly tenants. Other types of leaseholding are at the moment being examined by a Landlord and Tenant Commission which I appointed last December to examine the whole matter from Deasy's Act of 1860 to the 1931 Act and on to the 1958 Act. I have asked this Commission which consists of legal men and auctioneers and valuers to report to me as a matter of urgency on how leaseholding arrangements not covered by this particular Bill can be dealt with. This Bill covers ground rents primarily but I have also included in it certain types of letting where a tenant has been there for over 50 years; although it is not exactly a ground rent, it can be presumed to be a ground rent. I should also be disposed to reduce the period of 50 years and possibly raise the limit from threequarters of the valuation to the equivalent of the full valuation. That might go some way to meet the Deputy.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton What the Minister proposes to do will not cover a great number of leases from our point of view in the city and in the country generally. When I heard the Minister introduce the Bill, I was more optimistic. I thought it would strike at the heart of the problem because I think we can accept today the position is that the balance of public sympathy is on the side of the tenant. This is desirable and I thought the Minister's proposals would cover practically all cases. Since then I have made investigation and I find the Minister is really only scraping at the problem.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan The Bill purports to deal only with ground rents but in awareness of what Deputy Norton states I set up the Commission last [81] December to deal with all leaseholds and I have asked that Commission to report to me as a matter of urgency. As a result of their report I hope to bring in comprehensive landlord and tenant legislation which will be up to date and in accordance with present day views of what is right and wrong. This Bill had no other purpose or pretensions but to deal with ground rents.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton But the Minister knows that many cross-Channel firms are coming in and buying blocks of property here. The tenant is normally entitled to get a renewal of lease when it expires unless the property is up for redevelopment.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I met representatives of the tenants of whom the Deputy speaks and within a week of meeting them I established this commission which is now sitting to deal with their particular problem.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton It is a pity we cannot do something to help these people before the Minister gets the report, considers it and then gets round to doing something about it. There will be very few of these people left by then.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan In 12 months?

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton I remember that last year soon after coming to the House the Minister assured us this Bill would be before the House. This time last year——

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan No.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton ——the Minister was hopeful of introducing the Bill last August but then we had the printers' strike and something else. Now it is the following June and before anything really happens it will be another year.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan The Deputy appreciates that these are fundamental matters concerning property rights and one has to consider constitutional implications and other matters.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton The Minister has suggested [82] he would consider raising the figure to the equivalent of the valuation.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan Yes, and possibly reducing the period from 50 to 30 years also.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton Could we get the Minister to make it twice the valuation? It will still only cover a small number of people. The Minister is not on the side of the tenant and I feel that the Minister and the House should be on the side of the small tenant.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan But it would be outside the ground rent category. I am only bringing in this provision which is really outside ground rents because I feel there is an equity involved by reason of the long leases and low rents and I think there is a similarity to ground rents. I am sympathetically disposed to the point of view expressed by the Deputy to the extent that I will reduce the period from 50 to 30 years and bring up the valuation limit. After all, valuations have risen considerably over the years and many of these were fixed a long time ago.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton But valuations fixed 50 years ago would be very low and the Minister could double them.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan Many valuations have gone up in the meantime.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton Only if the property was revalued. Most of them have not been revalued.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I am going a good part of the way to meet the Deputy.

Mr. Norton: Information on Patrick Norton Zoom on Patrick Norton I think the Minister put in a low figure at the beginning like the man who is going to bargain and then lets you haggle him up. I do not think the Minister is going very far.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I shall do something about it between now and Report Stage.

Amendment, by leave, withdrawn.

[83]Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins I move amendment No. 7:

To add to subsection (2) a new paragraph as follows:-

“(e) a person who is in actual possession of land under any lease or sublease made for a term of not less than ninety-nine years at least twenty-five years of which term remains unexpired provided such lease or sublease is not now subject to a rack rent or that the rent has been redeemed whether or not such lease or sublease is a building lease or a proprietary lease.”

This is another effort to expand section 3. I think I should declare something of a personal interest here, although it does not really concern me very much. My own house would be in the category referred to but I happen to know that a number of other houses are being developed in that neighbourhood and they would come into this category and it is from this point of view that I want to present the case to the Minister.

I suggest in this amendment that the person who is buying a premises under a lease or sublease which is being made for a term of at least 99 years and in circumstances where there is a minimum of 25 years of that term still unexpired and where the lease is not subject to a rack-rent, in other words, where it is subject to a nominal rent or ground rent or, in fact, no rent at all, in the case where the rent may have been redeemed, that the owner of the lessees' or sub-lessees' interest in such leases or subleases should be put in the same position as a person who is buying a ground rent so far as buying out the fee simple is concerned. In the particular cases I have in mind, I do not know if it can be established with any certainty whether the leases are building leases or proprietary leases. It may be that they are covered by the Bill but it may not be possible to establish with certainty whether they are building leases or proprietary leases or deemed as such under the 1958 Act, but what is certain is that the premises are held in the particular [84] instance I have in mind under a sublease for some 300 years where there are about 80 years of the sublease still to run. The rent has long since been redeemed. It was redeemed actually in Land Commission proceedings some years ago so that the present position is that the owner of the sublessee's interest in the premises holds for a term of 80 odd years still to run free of rent.

As I read the Bill at present a person who has redeemed his rent or whose predecessors in title have redeemed the rent without getting a conveyance of the fee simple is being put in a disadvantageous position as against a person who is at present paying a ground rent, although the market value so far as the head landlord is concerned obviously is nil because the superior lessee is not going to obtain any benefit out of the premises at all for 80 years or upwards. Consequently, the market value of the superior lessee's interest is practically nil. What I am trying to establish is that the sublessee in that position should be entitled to buy out his fee simple by agreement with the superior lessor. Under the machinery of the Bill, it does not seem to me that this kind of case is covered at the moment.

I think this is a proposed extension of section 3 of the Bill which would not breach the principles of the Bill as propounded by the Minister. I appreciate that this is an extension which might be going in a slightly different direction from that in which the Minister started but the extension is not that great and I do not think the principle would be breached. I would ask the Minister to examine the case. I have some later amendments to deal with other cases where it might not be possible to establish whether leases are buildings leases or proprietary leases and I am suggesting the phraseology of the 1958 Act in relation to them but I do not think that would suit in this case.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I will have this examined. We might move in the direction of extending subsection (2) (d).

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins In my own case, the rent is redeemed and I am [85] free of rent. It will not matter to me for 85 years and probably will not matter to me after that, but it is right that I should declare that interest when moving an amendment of this sort.

Amendment, by leave, withdrawn.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I move amendment No. 8:

In subsection (3), page 4, line 43, to delete “paragraphs (a) and (b) of”.

This is a drafting amendment. Subsection (3) of section 3 excludes certain building and proprietary leases from the right of purchase: leases which contain rent review provisions, leases by harbour authorities, et cetera. It does not, however, exclude such leases when they come within the category referred to at subsection (2) (c), that is, when they are expired leases which still attract the right to a reversionary lease. It is not intended that there should be separate treatment, in respect of the exempted leases, for the latter category and the amendment makes this clear.

Amendment agreed to.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I move amendment No. 9:

In subsection (3) page 4, after line 52, to insert the following paragraph:

“(ii) a lease granted before the commencement of this Act of land which is used for the purposes of business and contains provisions requiring the lessee to carry on business on the land which is restricted in whole or in part to dealing in commodities produced or supplied by the lessor,”.

The purpose of this amendment is to exclude from the right of purchased leases which contain provisions requiring the lessee to carry on a business restricted to dealing in commodities produced or supplied by the lessor. However, it is expressed to apply only in the case of such leases given before the commencement of the Act.

Agreements have in the past been entered into between business people by means of building and proprietary leases which make provision for exclusive [86] dealing. It is considered undesirable that such business arrangements should be prejudiced by the provisions of the Act where they have been freely entered into in the past. The fact that the exclusion will not apply to future leases will mean that whatever exclusive trading arrangements are agreed upon in future will probably not be by means of building or proprietary leases.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins I do not quite follow. Is this the case where there is a business letting and the lessee is restricted to carrying on the trade of butcher or something like that?

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan Yes, if the lessor's commodities must be sold. Petrol is the obvious one.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins I think I have a later amendment dealing with this matter. If I have not, I did consider it. The Minister is aware that in a number of new housing estates, there is an arrangement whereby the developer provides business premises with living accommodation above. There is a limited number of shops provided and frequently there is a provision that only a particular type of business will be carried on. In some of the leases there may be a covenant by the lessee that he will restrict the shop to a particular trade. This arises more appropriately on one of the later sections.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan Section 29, I think. The classic example is petrol. In such cases the petrol companies make a business arrangement with the owner of the filling station. I think it would be undesirable to disturb such arrangements entered into before the passing of the Act but subsequent to the operation of the Act, such an arrangement cannot be made without attracting the right of purchase.

Amendment agreed to.

Amendment No 10 not moved.

Section 3, as amended, agreed to.

SECTION 4.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry I move amendment No. 11:

[87] Before section 4 to insert a new section as follows:-

“The provisions of this Act in relation to private houses shall apply in all respects to business premises.”

In doing so, I must say that if any section of the community ever got a right blistering, it is the people in business premises.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan They are included in this.

Mr. Corry: Information on Martin John Corry Zoom on Martin John Corry Since the Bill passed its Second Reading, the town of Innishannon, near Bandon, has been purchased by Barclay's Bank of London for £9,500 at 9½ years' purchase, so that we are going to make them a present of 5½ years' purchase. I would like the Minister to check if it is correct that we have made it possible for an English bank to come over here and make profit out of legislation going through this House.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan The principle of the amendment is already covered.

Amendment, by leave, withdrawn.

NEW SECTION.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins I move amendment No. 12:-

Before section 4 to insert a new section as follows:-

“( ) Where a lease is for a term of not less than fifty years, it shall be presumed that the buildings on the land demised by the lease were erected by the person, who at the time of their erection, was entitled to the lessee's interest under the lease if—

(i) in the case of a lease granted before the 1st day of January, 1914, the rent reserved by the lease is less than three-quarters of the rateable valuation of the land thereby demised together with the buildings thereon as first fixed or revised subsequent to the date of the lease pursuant to the Valuation (Ireland) Act 1852, as amended and adapted, or

[88] (ii) in the case of a lease granted on or after the 1st day of January 1914, the rent reserved by the lease is less than that rateable valuation.”

I referred briefly to this amendment when moving the previous one. This is to try to deal with the case of persons whose leases may be building or proprietary leases but who may find it impossible to prove that, where the proof is not available to them. The proof might be available to the lessor or the lessor's predecessor if full search were made to uncover it. The suggestion I am making is that we should deal with these cases in the same way as they were dealt with in the Landlord and Tenant (Reversionary Leases) Act, 1958, omitting the words, “where proved to the contrary” which appear in the 1958 Act. I should like the Minister to consider it.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I will consider it. I have discussed the matter with the parliamentary draftsman and have been assured that the words used in section 2 will apply to all provisions of the 1958 Act.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins My amendment deliberately omits certain words in section 4 of the 1958 Act, that is, the words which provide that the presumption may be upset on proof to the contrary. I am saying that there should be an absolute presumption.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan I will look at it again between now and Report.

Mr. M.J. O'Higgins: Information on Michael Joseph O'Higgins Zoom on Michael Joseph O'Higgins If the Minister will examine it, I will withdraw the amendment.

Amendment, by leave, withdrawn.

Progress reported; Committee to sit again.


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