Fergus O'Dowd (Louth, Fine Gael) | Oireachtas source

I am taking this matter on behalf of the Minister for Justice and Equality. I thank the Senator for raising this issue.

As the Minister indicated to this House just yesterday, the Land and Conveyancing Law Reform Bill 2013 does not create any new right of repossession on the part of lenders. It restores a right which was specifically intended to continue to exist under reforming legislation enacted by the Oireachtas in 2009 in circumstances in which certain High Court judgments have raised doubts about the ability of lenders to exercise that right. The main provision in section 1 restores necessary certainty to Irish law in these circumstances.

While there is a troika commitment to introduce this legislation, the legislation is necessary in any event because we cannot sustain an ongoing lack of certainty with regard to the legal position on mortgages and we cannot sustain a situation in which banks are expected to lend money by way of mortgages on the one hand and on the other hand there is a lack of certainty about the exercise of their rights when it comes to major default by a borrower.

As the Minister and the Government have stated a number of times, repossession of a family home or a principal private residence is intended to be the very last resort after all other avenues have been tried but have failed. Even where the point of a court action for repossession of a person's home is reached, this Bill makes very specific provision for a late intervention safeguard for borrowers by allowing for an adjournment for the parties to investigate the alternative of a personal insolvency arrangement. In addition, the Bill also provides that repossession proceedings in relation to the principal private residence must be commenced in the Circuit Court which will reduce the cost of the proceedings for the parties.

This Bill is not an isolated measure. It exists within the context of a range of interventions which this Government has made to assist with the debt and mortgage arrears crisis which we face. For example, the Personal Insolvency Act 2012 introduced major bankruptcy and insolvency reform, in the year after this Government took office, where precisely nothing had been done in this area by our predecessors.

I do not believe, as has been suggested both in the Oireachtas and in the media, that the passing of this Bill will open the floodgates for repossessions. One of the main reasons for this view is precisely the issue raised tonight by Senator Higgins. It makes no economic or financial sense for financial institutions to place too many houses on the market as it would, as the Senator suggests, depress house prices even further.

In respect of the potential number of repossessions actions which will come before the courts on the passing of this legislation, the Minister has asked me to say that it is impossible to put a figure on this issue given the number of variables that exist. The Minister hopes that, rather than going directly to repossession proceedings, parties will seek to avail of the insolvency mechanisms contained in the Personal Insolvency Act when the Insolvency Service of Ireland becomes fully operational within the coming weeks.

I will the Deputy last point regarding legal costs to the attention of the Minister.