Seanad debates

Tuesday, 22 November 2022

Nithe i dtosach suíonna - Commencement Matters (Resumed)

 

2:30 pm

Photo of Ossian SmythOssian Smyth (Dún Laoghaire, Green Party)
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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.

Photo of Fiona O'LoughlinFiona O'Loughlin (Fianna Fail)
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Let us be clear. We are not looking for a waiver in a situation like this. We want to know who owns the land. The Minister of State clarified that the OPW deals with real property that devolves to the State. Therefore, I feel this is in the hands of the OPW. In this instance, the company is not restored so the property has not revert to the company. The Minister of State made the point that in the area of dissolved-company property, the common areas of housing developments are of little value. This is a tiny strip. It is of no value. Is this a situation where the local authority should take this in charge? The estate has taken it in charge. If that is the case, the Minister of State might be able to respond that the council could take this in charge as a petition from the housing estate. I appreciate the area is complex. Again I specify that we are not seeking a waiver but rather want to ensure both residents and the ESB have access to this tiny strip of land and that we are able to resolve the current issue.

Photo of Ossian SmythOssian Smyth (Dún Laoghaire, Green Party)
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The Senator mentioned she had spoken to the Department of Finance. I clarified that the Department of Public Expenditure and Reform has responsibility and that the OPW is the section of that Department which deals with this. Second, a company can be restored for up to 20 years after dissolution. That is the reason the State is reluctant to carry out any development or works on bits of land it may own during that period.

With respect to taking in charge, the note I have tells me that ownership by the State does not prevent these areas being taken in charge by local authorities and that it is a complex legal area. It is a question for local government. It should be asked directly of the executive, the Minister of State, Deputy Peter Burke, or the Department of Housing, Local Government and Heritage. I would be happy to help with any other question the Senator wants to send to me or to the Minister of State, Deputy O'Donovan.

As a former councillor, I was involved in many taking in charge episodes, ransom strips, pieces of land and disputes between neighbours over small pieces of land. I understand that even if it does not have a particular financial value, it can have a significant social value or cause a lot of disruption within a community.