Thursday, 12 December 2019
Landlord and Tenant (Ground Rents) (Amendment) Bill 2019: [Seanad Bill amended by the Dáil] Report and Final Stages
This is a Seanad Bill which has been amended by the Dáil. In accordance with Standing Order 148, it is deemed to have passed its First, Second and Third Stages in the Seanad and is placed on the Order Paper for Report Stage. On the question "That the Bill be received for final consideration", the Minister may explain the purpose of the amendments made by the Dáil. This is looked upon as the report of the Dáil amendments to the Seanad. For Senators' convenience, I have arranged for the printing and circulation of the amendments. The Minister will deal separately with the subject matter of each related group of amendments. I have circulated the proposed grouping to Members. A Senator may contribute once on each group. I remind Senators that the only matter that may be discussed is the subject matter of each group of amendments made by the Dáil.
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.
Group 2 contains amendments to the eligibility conditions in section 9 of the Act of 1978 as far as those conditions apply to the buildings on the land. Currently, eligibility to acquire the freehold title does not exist in the case of an improvement to such buildings but will arise where the alteration or reconstruction causes the buildings to lose their original identity. This formulation has given rise to some confusion and uncertainty over the years. The Government's amendments, based on the expert group's recommendations, adopt a somewhat different approach from achieving the same objective as the Private Members' Bill. They seek to do so in a manner that reduces the risk of a future constitutional challenge. The Bill's proposals to delete subsection (1)(b) and subsection (2) of section 9 would remove those provisions that require that the permanent buildings are not simply an improvement of the buildings as defined in subsection (2). The expert group has agreed that the concept of an improvement creates uncertainty and should be dropped from the legislation. However, instead of simply repealing subsection (1)(b) and inserting a new definition of permanent buildings in a new subsection (6), the expert group has proposed that subsection (1)(b) be amended to exclude the reference to an improvement, but with a revised focus on whether the buildings in question have lost their original identity, together with the revised wording of paragraph (c). These amendments are complemented by the new subsection (6), which sets out a number of factors to be taken into account for the purpose of determining whether the permanent buildings have lost their original identity.
The third group is amendment No. 8. It contains revised collective citations. Subsection (2) provides for a new collective citation for the Landlord and Tenant Acts, which will include this Bill, other than the new section 6 that inserts sections 67A and 67B into the Valuation Act 2001. Subsection (3) contains a revised collective citation for the Valuation Acts to incorporate section 6, which contains the new sections 67A and 67B. Subsection (4) contains a standard commencement provision.
Cuirim fáilte roimh an Aire go dtí an Teach. Cuirim fáilte roimh na daoine atá anseo ó Charraig Mhachaire Rois. Tá súil agam go mbeidh lá iontach maith acu. The Minister is very welcome and I extend a very warm welcome to the people from Carrickmacross who are here this afternoon. If I could start on a lighter note, I note that the Minister apologised for the length of her contribution. That is a welcome development that I hope will continue going forward.
We have this Monaghan day in the House and will enjoy the moment. Today brings to a conclusion the Landlord and Tenant (Ground Rents) (Amendment) Bill, which I first introduced to the House in November 2017. The Bill is an amendment to existing legislation that enables a tenant, under certain prescribed conditions, to have the opportunity to buy out the freehold of his or her premises. It is an honour for me personally to bring this legislation back to the House for completion on behalf of the business people on the west side of Main Street, Carrickmacross, and indeed for other business throughout Ireland that hold qualifying leases. They will now, thankfully, have the right to buy out the freehold of their premises and end hundreds of years of being tied to landlords. In the case of Carrickmacross, it dates to the time of Elizabeth I.
This Bill is an example of how politics on all sides can work together for the benefit of all our citizens. The story of this Bill began with a documentary, entitled "What's next for Carrickmacross", produced and edited by Pat Byrne of Carriage Productions. I am delighted that Pat is here today. It was presented by Michael Fisher who I understand is also in the Gallery this afternoon. They are both welcome. The documentary drew sharp focus to the problems facing tenants with qualifying leases in Carrickmacross and throughout Ireland as a result of a Supreme Court decision in 2012 in the case of the O'Gorman family. I am delighted to see Gus and Cathal here from Carrickmacross, and JDS Holdings, known locally as the Shirley estate. It was an excellent documentary, on which I compliment Pat. It highlighted the fact that a number of lawyers, both in the academic world and in practice, had serious reservations regarding the judgment of the Supreme Court.
The first step on the journey that has taken us here today was a meeting that was set up with our justice spokesperson, Deputy O'Callaghan, and former Ceann Comhairle, Dr. Rory O'Hanlon, whom I am delighted to see here today. Pat Byrne introduced a gentleman called Professor John Wylie, a leading academic on all matters relating to land law who featured in Pat's documentary, to Tony Donagher, a local Carrickmacross-based solicitor who I am delighted to see here this afternoon. Together, Professor Wylie and Tony Donagher drafted the legislation in the summer of 2017. I introduced the Bill to this House in November 2017 and was delighted that it received support from all sides of the House. The Minister for Justice and Equality, Deputy Flanagan, said on Final Stage in the Seanad that he would set up a special working group to strengthen the first draft. He did so, and I was delighted that Professor Wylie was a member of that working group. I thank the officials in the Minister's office for their work. I am sure they began to think I was hounding them in this process but I was conscious of the timeframe of the lifetime of this Government and was anxious for this legislation to be carried through both Houses before this Government calls it a day.
On 6 November 2019, in the Select Committee on Justice and Equality, chaired by Deputy Ó Caoláin, our local Deputy, the Government introduced some working amendments to the Bill. On 4 December 2019, the Government presented the Bill to the Dáil for Report and Final Stages, which, thankfully, passed successfully. I thank all my fellow Oireachtas Members from all parties for their support for the Bill. I also take the opportunity to acknowledge the support of local councillors from the Carrickmacross-Castleblayney municipal district, namely, P.J. O'Hanlon who is here this afternoon, former councillor Pádraig McNally, now retired, Noel Keelan, Colm Carthy and Aidan Campbell, for their support. It was very much appreciated. There have been many other people, some of whom I am delighted to see here today, who have helped to get this Bill to where it is. I thank them too for their efforts.Tenants who wish to buy out the freehold on the premises they occupy will now be able to do so with the passing of this Bill, giving them business certainty and the ability to reinvest in and expand their business without the stress of not knowing what tomorrow might bring. The passing of the Bill will confirm the original intention of the Houses of the Oireachtas, which was to confer rights on tenants who have long occupied their premises and who have over the years developed such premises at their own expense.
When the Bill was introduced, it was remarked that tis is an example of what is called new politics at work. I see it as good politics and a great example of what can be achieved with cross-party support on an important issue such as this which impacts not just the good people of Carrickmacross but indeed the entire country. Again, I express my sincere thanks to everyone who supported the legislation and worked together in a collaborative way to address this long-running issue. I am delighted we have now crossed the final fence. Go raibh míle maith agaibh go léir.
I congratulate Senator Gallagher. It is a great day for him to have a Private Members' Bill pass all Stages in both Houses. What is good for Carrickmacross is good for Ireland. The consequences of the legislation will benefit people in many towns throughout the country. I come from Ennistimon, County Clare, where, I think, Devas was the gentleman to whom people paid their ground rent. It was up to the estates in England or wherever else as to whether they would sell the properties. When this legislation is passed, signed by the President and enacted, it will benefit a great many people. I acknowledge the presence of the people in the Gallery. It is a great day for them. I see a former Ceann Comhairle, Mr. Rory O'Hanlon, in the Gallery. It is wonderful to see new politics working because new politics is good politics. The one thing about Seanad Éireann is that, more so than even the Lower House, Members engage in good politics and come together on important issues a lot of the time. When something is right and we all regard it as right, it is done.
I welcome the passage of the Bill. I also congratulate Senator Gallagher. It is tough getting legislation through, but when one gets to the final curtain it fells really good because one is doing something worthwhile. I acknowledge the work of my colleague, Deputy Ó Caoláin, which Senator Gallagher also acknowledged. Deputy Ó Caoláin has sought to address this issue over many years. In his role as Chairman of the Select Committee on Justice and Equality, he recently facilitated the Bill's passage through Committee Stage. I welcome the delegation from Carrickmacross. They have been to the fore of our thinking and consideration on the Bill. I say "Well done" to all of them. I will not remember all their names but Senator Gallagher has read them into the record so they will be there.
While it was great to see such cross-party consensus delivering results in a timely manner, we must not think the issue of ground rents has been resolved or gone away. The legislation addresses an anomaly that seems most evident in Carrickmacross but I acknowledge there are other similar places, perhaps as yet undiscovered, throughout the country. My stance is that ground rents should be confined to the history books. They stick in the craw. It is time for them to go. There have many been appeals to protect precious property and the Constitution, but it is time for us to make this change. Everyone throughout the country has a similar feeling on paying ground rent to landlords. To the best of my knowledge, the State pays a landlord ground rent associated with Iveagh House. It is a little ironic that the conducting of one's own external affairs, which is a benchmark of sovereignty, is dependent on payments to figures associated with our past. This represents an odious hangover from colonialism. Perhaps the Minister will focus on that at some point, but not today. I do not want to pay my own ground rent. Many people have come to me to discuss this issue, but the hands are put up and it is said there is no remedy in the Constitution and that this cannot be stopped. We have matured, however. This is a republic, so let us try to act like it is.
There is a focus on Cavan and Monaghan, which is always good.
This Bill has received support from all sides of the House during its passage through Dáil Éireann and the Seanad, and I thank colleagues in both Houses for that support. As we know, the issue of ground rents in Carrickmacross has been long-running. It culminated in a Supreme Court judgment in 2012. That judgment had serious implications for local businesses on the west side of the town and their ability to buy out the freehold relating to their properties. I am delighted to see all the guests in the Gallery. I know they have made a huge effort in that every time the Bill has passed through another Stage, whether in the Dáil, in the Seanad or on Committee Stage, they have been present. I thank them for that.
Earlier this year, a Bill was introduced in the Seanad by my colleague, Senator Gallagher, to try to address this issue. The Bill was well intentioned and had cross-party support. However, it gave rise to a number of legal and constitutional issues. I will not go through them all again. I was concerned that it would be referred to the Law Reform Commission and could have been subject to a lengthy process there. This is why I met the Minister for Justice and Equality and asked that an expert group be established to advise the Government on this complex matter. I absolutely realise the urgency of this and, like the rest of my colleagues, wanted it dealt with as quickly as possible. The expert group comprised a number of legal experts, including Professor Wiley, who I know had been working very closely with solicitor Tony Donagher, who is also here today, and officials from the Department of Justice and Equality. They completed their work, which meant we would be able to make the necessary amendments to the Bill in order that it was legally sound.
In order to expedite the Bill, I have taken it through all Stages of the legislative process in both Houses of the Oireachtas. The Minister for Justice and Equality has a lot of important legislation in his Department. While I do not normally do the work of another Minister, I was delighted to make an exception in this case, and it is great to see the Bill pass today. It will be sent to the President for his signature and I hope it will be law before Christmas.
There has been much debate about the benefit of new politics in recent years. This is a prime example of what can be achieved when there is cross-party agreement on an issue and we can all work together on it. I acknowledge the work of Senator Gallagher and Deputy Ó Caoláin. We have worked together on this very closely and we wanted to progress it, as I said, as quickly as possible.
I also acknowledge the huge efforts of Pat Byrne, who produced a documentary to highlight this issue. I recognise the work of Michael Fisher in narrating the documentary and acknowledge the many local business people, some of whom are here today, who campaigned for this change. It is fair to say this shows the power of documentary. One could sit all day explaining this over and over, but seeing it visually is another matter. The documentary was really good and I think struck a chord with all of us - Senator Gallagher, Deputy Ó Caoláin and me. We all viewed the documentary. I pay tribute to those involved for taking the time to make the documentary. It was very well done. I offer a special thank you to Mr. Donagher, Mr. Byrne and Mr. Fisher because they impressed on us the urgency of the situation.I also thank the Minister for Justice and Equality and his officials, particularly Mr. Seamus Carroll, who prepared the complex narrative I read out earlier. It was complex and I was glad there were no questions on it.
It will be great to get the Bill enacted in order that businesses in Carrickmacross can have certainty about their futures. I acknowledge my colleague, Deputy Brendan Smith, who is also in the Chamber. What better Christmas present could we give than this legislation? It will be signed by the President shortly.