Tuesday, 22 November 2022
Nithe i dtosach suíonna - Commencement Matters (Resumed)
I thank the Cathaoirleach and welcome our distinguished guests.
I thank Senator O'Loughlin for raising this matter, to which I will reply on behalf of the Minister of State, Deputy O'Donovan. I will explain what the OPW does on behalf of the Minister for Public Expenditure and Reform in this area.
Section 28 of the State Property Act 1954 provides that property held by a dissolved company at the time of its dissolution becomes property of the State in the name of the Minister for Public Expenditure and Reform. It was previously in the name of the Minister for Finance but a transfer of functions order in 2011 transferred responsibility to the Minister for Public Expenditure and Reform. A legislative exception to this property becoming vested in the Minister is where the property was held on trust for another at the time of dissolution. The legislation provides for both real and personal property and since 2005, the OPW has dealt with real property that devolves to the State. Management of personal property rests with the Department of Public Expenditure and Reform.
Since the early 1990s, the number of companies incorporated has risen significantly from approximately 8,000 per annum in the 1980s to more than 18,000 per annum from 2010 to 2019. There has also been a corresponding increase in the number of companies dissolved where the average number of companies dissolved in the decade 2010-19 was more than 13,000 per year. Only a small proportion of dissolved companies hold real property. There is no register of properties held by dissolved companies at the time of their dissolution. The OPW only becomes aware of property that has devolved to the State when an issue needs to be resolved.
Another important legislative provision to note is that companies can be restored to the register for up to 20 years after dissolution. If the company is restored, the property reverts to the company as though it had never devolved to the State. Therefore property can pass into and out of State ownership without any involvement or without the explicit knowledge of the State. The provision on company restoration significantly restricts what the OPW can do with this property. This is because the Minister's interest is defeasible by company restoration for a significant period. A significant proportion of dissolved company property is the common areas of housing developments such as roads, footpaths, green areas, residual interests in long-term leases and so on. Most of this property is of little value and, in some cases, the dissolution of the developer company causes it to become State property. Another situation is that property is transferred into the ownership of a management company that was allowed to be dissolved. Ownership by the State does not prevent these areas being taken in charge by local authorities. It should be noted that the OPW is not the occupier and does not take over responsibility for the maintenance of these areas.
The circumstances of property other than common areas of housing developments can be unique. A smaller, but not insignificant, category is where former directors remain in occupation but have sometimes inadvertently allowed the company to be dissolved. They often approach the OPW seeking a waiver of the Minister's interests under section 31 of the State Property Act 1954. The power to waive his interest is the only specific power granted to the Minister in the relevant part of the Act. Former directors as a rule are not deemed to be entitled to a waiver. Very few properties of value devolve to the State, especially properties on which there is no competing claim. Despite the volume of properties devolving to the State as a result of company dissolution, the OPW on behalf of the Minister is not managing a portfolio of valuable properties.Each situation and application to waive property rights is examined carefully in consultation with the Chief State Solicitor's office, as to whether it is an application for a waiver or a situation that involves risk or liability. It is a complex legal area and as such there are specific matters to be considered such as ownership and property rights before a decision can be taken for the Minister to waive ownership of such properties.
In the past five years a total of ten waivers were granted and the total number for the five years 2018-2022 was 30 waivers.