Thursday, 5 May 2005
Registration of Deeds and Title Bill 2004: Second Stage.
I am pleased to have this opportunity to introduce the Registration of Deeds and Title Bill 2004 and to outline its provisions. Before doing so, however, I wish to explain why the provisions set out in the Bill are so important. I also wish to inform Senators about a related joint project involving my Department and the Law Reform Commission, currently under way, which aims to modernise all our land and conveyancing laws.
Effective and efficient property registration structures and systems are essential requirements in a successful market economy. Registration of ownership of land confirms and underpins the owner's rights to use and enjoy that land. The ability to demonstrate good title also facilitates the disposal of the land, whether the owner is trading up or trading down, a private individual or a business enterprise. Having good title to land allows the owner to use the asset to gain access to borrowing which, in the case of an enterprise, may be required to launch or expand the business or to diversify into another area of business. In the case of private individuals, re-mortgaging a property may allow the owner to, for example, assist a family member in gaining a foothold on the property ladder.
It is clear that effective land registration systems have the capacity to contribute in a meaningful way to the level of economic activity in a country. The costs within an efficient registration system should be maintained at reasonable levels by ensuring that registration procedures are straightforward and delays are avoided. Effective registration systems also have the capacity to enhance national competitiveness by making the country more attractive to the international community as a potential investment location.
A report published by the World Bank earlier this year entitled Doing Business in 2005, drew attention to the need for sound property registration systems as a means of enhancing business activity. The bank included two new indicators in the report, in addition to the five indicators in the report of 2004. One of these new indicators deals with the registration of property and includes the following specifics: the number of procedures legally required to register a property; the time spent in completing the procedures; and the costs involved including fees, stamp duties and payments to lawyers.
According to the World Bank, Ireland ranks 15th overall out of 145 countries studied in terms of conducting business. While this is a good performance, it should be noted that five EU countries had a higher ranking: the UK was ranked seventh, Sweden ninth, Denmark 12th, the Netherlands 13th and Finland 14th.
Ireland's overall ranking would have been higher but for our showing under the new property registration indicators. According to the bank's report, five procedures are legally required in Ireland to transfer property from seller to buyer, whereas three are required in Austria, Finland and Spain and only two procedures are required in Belgium and the UK. It takes an average of 38 days to register property in Ireland, compared with five days in the Netherlands, 14 in Finland and 21 in the UK. The costs involved appear to be much higher in Ireland than in most of the countries surveyed. Direct comparisons of costs must be treated with caution, however, because of differences of approach between countries on taxation and other charges.
This is the first time the World Bank has used property registration indicators in this way and I am reluctant to draw decisive conclusions from the 2005 report. However, from the bank's analysis, it appears that Ireland is lagging behind certain other EU member states on property registration and that reforms in this area would make it easier to do business in this country and would help to improve our overall international competitiveness rating.
I am committed to reforms in two areas for which I have responsibility, with a view to overcoming shortcomings that have been identified. I want to modernise land and conveyancing law and bring about a structural reform of the registration system, which is the subject matter of the Bill before us today.
My Department is involved in a joint project with the Law Reform Commission aimed at modernising our land and conveyancing law. A commission consultation paper, Reform and Modernisation of Land Law and Conveyancing Law, was published in October 2004. It contains over 90 recommendations for a radical overhaul of all our land and conveyancing statutes.
Publication of the consultation paper marked the end of the first stage of the joint project. It was followed by a consultation process, including a conference last November that was addressed by several international experts on land and conveyancing law. The final stage of the project, which is now under way, involves the drafting of a Bill to give legislative effect to the commission's recommendations. I expect the draft Bill to be published in the form of a Law Reform Commission report in mid-July of this year. This report will comprise a fundamental reforming statute on property law in Ireland. I intend to seek Government approval for proposals for future legislation in this area later this year.
The emphasis in future legislation will be on simplifying and updating the law. Radical reforms are justified for several reasons. First, they will simplify the land and conveyancing law, making it more easily understood by legal practitioners and the public. Second, the reforms will update this area of law to accommodate changing social, economic and demographic needs, including new forms of property ownership such as shared apartments. Finally, the reforms will make the conveyancing of property easier and faster, with a view to reducing onerous costs and delays.
The Law Reform Commission consultation paper identified over 150 pre-1922 statutes that will now be repealed, the earliest of which date back to the 13th century — the 1285 Statute of Westminster II and the 1290 Statute of Westminster III. The removal of so much ancient and redundant statute law will be a significant contribution to the process of regulatory reform, including statute law revision, to which the Government has committed itself.
The main aims of the Registration of Deeds and Title Bill 2004 are to reform the structure and procedures of the Registry of Deeds and to improve the operation of the registration of title system operated by the Land Registry under the Registration of Title Act 1964. As it stands, the Bill provides for a combination of administrative and technical provisions concerning the Registry of Deeds, while those relating to the Land Registry are largely technical.
The registration of deeds system operated by the Registry of Deeds provides for the registration of documents in respect of land to establish priorities between documents dealing with the same piece of land. The act of registering a document does not in itself guarantee title to the land covered by that document. On the other hand, the registration of title system, which is operated by the Land Registry, registers the actual ownership of the land.
The Registry of Deeds was established under the Registration of Deeds (Ireland) Act 1707 and many of its current practices and procedures are governed by the provisions of that Act, as well as by other antiquated statutes dating from the 18th and 19th centuries. The result is that the Registry of Deeds does not have the required margin of operational flexibility to respond adequately to the changed conditions of today.