Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

It might be helpful to recall briefly the background to the Bill and the process leading to the Government's amendments. This Bill originated in the Seanad as a Private Members' Bill introduced by Senators Gallagher, Ardagh and Swanick. The Government agreed not to oppose it but to bring forward Committee Stage amendments in due course. Senators will recall that the Bill's primary objective is to deal with what are widely seen as potential adverse consequences for ground rent tenants of a 2012 ruling of the Supreme Court. The manner in which the Supreme Court interpreted certain technical provisions of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 in its ruling has narrowed the scope of the ground rents purchase scheme. This means that certain ground rent tenants who had been eligible to acquire the freehold title in their properties may no longer be eligible to do so.

Following the passing of the Bill by the Seanad, my colleague, the Minister for Justice and Equality, Deputy Flanagan, established an expert group with membership drawn from the Attorney General's office, his Department and external experts, including land law expert Professor John Wylie, to consider the proposals in the Bill and to recommend any necessary amendments. The Government amendments I am reporting to the House seek to give effect to the expert group's recommendations. Their objective is to reduce the risk of future challenges to the legislation on the grounds that it could be seen as infringing the property rights of ground rent landlords, which are safeguarded under the Constitution.

The first group comprises amendments Nos. 1, 2, 5, 6 and 7. I regret that many of the Government amendments involve intricate and complex detail, but that is the nature of ground rents legislation. The substance of this group of amendments concerns the issue of rateable valuation. Strange as it may seem, there is no statutory definition of ground rent in ground rents legislation. That is because a ground rent can arise in many different situations. Instead of a definition, the ground rents legislation outlines various conditions that must be met for a rent to qualify as a ground rent and for a tenant to be eligible to exercise his or her right to acquire the freehold title.

Section 9 of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 outlines conditions that must be complied with, one of which requires further compliance with one of the conditions outlined in section 10. The second condition in section 10, a condition that is frequently relied on in the case of buildings that may have existed before the lease was granted, is that the lease in question is for a period of not less than 50 years and the annual rent payable is less than the amount of the rateable valuation of the property on the date on which the application to acquire the freehold is made. The fifth condition in section 10 also contains reference to a rent that is lower than the rateable valuation of the property on the date on which the lease was granted. It deals with the complex situation arising where a lease is granted in succession to a lease that would have been covered by ground rents legislation had the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 Act been in place at the time. Similarly, in section 15(1)(d) of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 Act, which relates to yearly tenants, one of the eligibility conditions is that the yearly rent is less than the rateable valuation of the property on the date on which the application to acquire the freehold is made.

In short, in the case of the second and fifth conditions of section 10 and in section 15(1)(d) there is a rebuttable presumption that if the annual rent payable is lower than the annual rateable valuation, the rent is a ground rent rather than a commercial rent and, that being the case, the ground rent tenant has a right to acquire the freehold title of the property. Clearly, the rateable valuation referred to in the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 is the rateable valuation applying before the roll-out of the new valuation system arising from the national revaluation programme under the Valuation Act 2001. It is against this backdrop that the expert group concluded that certain amendments to both the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 and the Valuation Act 2001 relating to rateable valuation were required to safeguard the operation of the second and fifth conditions of section 10 as well as section 15(1)(d) of the 1978 Act.

Amendment No. 1 inserts a reference to the Valuation Act 2001 in the Long Title while amendment No. 2 inserts a definition of the Act into section 3 of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978.

Amendment No. 5 contains several important changes to section 10 of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978. The first of these is a technical amendment to the first condition. The second is the substitution of a new text for the second condition, which incorporates a number of elements. The first element is the inclusion of a definition of "rateable valuation" by reference to certificates issued by the Commissioner of Valuation under sections 67 and the new section 67A of the Valuation Act 2001. The second addresses another important matter arising from the Supreme Court ruling which relates to the definition of "predecessors in title". The expert group agrees that clarification on this point is required and the revised text incorporates a definition of "predecessors in title" that is broadly in line with proposals already in the Private Members' Bill. The third change to section 10 is a technical adjustment to the reference to rateable valuation in condition 5(a). The Office of the Attorney General has advised that the amendments to the second condition of section 10 will apply to notices of intention and applications made to acquire freehold title after the date of publication of the amendments to the Bill, that is, 5 November 2019.

Amendment No. 6 makes a similar provision in respect of section 15 of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978, which deals with the rights of yearly tenants.

Amendment No. 7 inserts two new sections, section 67A and 67B, in the Valuation Act 2001. Both sections provide an essential mechanism whereby the Commissioner of Valuation may issue valuations that are, in effect, rateable valuations referred to in the Landlord and Tenant (Ground Rents) (No. 2) Act 1978. These valuations would have existed before the roll-out of the new valuation system under the Valuation Acts 2001 to 2015. These amendments are necessary to provide the required proofs to ground rent tenants seeking to exercise their rights under the Landlord and Tenant (Ground Rents) (No. 2) Act 1978.

Section 67A deals with property that is rateable under the 2001 Act, that is, does not fall under Schedule 4. It allows the commissioner to have such property valued for the purposes of the second condition of section 10 and section 15(1)(d)(i) of the Landlord and Tenant (Ground Rents) (No. 2) Act 1978 by reference to the date on which the application to acquire the freehold title is made.Section 67B deals with the valuation of property for the purposes of condition 5 of section 10, which refers to the rent being less than the rateable valuation of the property on the date on which the lease was granted following the expiration or surrender of a previous lease. This allows the commissioner to issue a certified copy extract of a valuation list in existence by reference to the date on which the new lease was granted, stating the rateable valuation of the property. I apologise to Members for the length of my intervention on these amendments. However, it is necessary to provide as much clarity as possible on the changes being made to the text of the Bill as initiated for the benefit of the House.