Ground Rents

• Original version: <a href='/vid/ground-rents-907695882'>Ground Rents</a>

Appendices:

1. Introduction

1.1 The Ground Rents Purchase Scheme was introduced by the Landlord and Tenant (Ground Rents) (No.2) Act, 1978 , (hereinafter referred to as “the Act”), which

1. re-defined the categories of tenants given the right by law to acquire the fee simple interest in their premises, and
2. empowered the Registrar of Titles:

• to vest the fee simple interest in such tenants, where the premises comprise a dwellinghouse, and
• for that purpose to arbitrate where agreement is not reached between tenant and landlord.

1.2 Other relevant Acts:

• The Landlord and Tenant (Ground Rents) Act, 1967 , (hereinafter referred to as “the 1967 Act”), gave to certain tenants the right to acquire the fee simple interest in their property, and set up a procedure for Arbitration by County Registrars.
• The Landlord and Tenant (Ground Rents) Act, 1978 , prohibited the creation of leases of private residential houses after the 16th May, 1978.
• The Ground Rents Purchase scheme introduced by the Act was initially given a life of 5 years, but this was extended by subsequent acts and, finally, the time restriction was removed by the Landlord and Tenant (Ground Rents) (Amendment) Act, 1987.
• The Act was amended by the Landlord and Tenant (Amendment) Act, 1980, (“the 1980 Act”) and the Landlord and Tenant (Amendment) Act, 1984 , (“the 1984 Act”) the British Irish Agreement Act 1999, as amended by the British-Irish Agreement (Amendment) Act 2005, & The Landlord & Tenant (Ground Rents) Act 2005

1.3 Meaning of “Ground Rents”
Nowhere is the term “Ground Rent” defined. It is, however, conceived to be a rent paid by a tenant where the tenant has provided the buildings and the landlord has provided the ground only. The various conditions can be seen as attempts to define exactly the circumstances where this general principle obtains.

2. The right to acquire the Fee Simple

2.1 The right is defined by section 8 of the Act, i.e., a right “to enlarge” an “existing interest” into a fee simple, “and for that purpose to acquire by purchase the fee simple in the land and any intermediate interest in it.”

2.2 A lease of land made after the passing of The Landlord And Tenant (Ground Rents) Act, 1978 is void if the lessee would have the right to enlarge his interest into a fee simple and the permanent buildings are constructed for use wholly or principally as a dwelling. A person who has given consideration for such a void lease has the right to acquire the fee simple in the land and any intermediate interests therein at the expense, as to both purchase money and costs, of the person who purported to grant the lease.

2.3 The right to purchase exists only to enlarge the interest held by lessee into a fee simple interest. Where the lessee already has the fee simple, there is no right under the Act to acquire intermediate interests.
[see Metropolitan Properties Ltd. V John O’Brien & The Commissioners of Public Works [1995] 2 ILRM 383]

3. The persons to whom the right is given

3.1 The right is given by the Act, where there are permanent buildings on the land:

(i) to persons holding land under a lease (section 9) provided one of the conditions set out in section 10, (as expanded by sections 12 and 14 of the Act, and as amended by sections 71 and 72 of the 1980 Act), is complied with; [see Appendix 2 for a list of these conditions]

(ii) to persons holding a yearly or statutory tenancy (section 15 of the Act, as amended by section 9 of the 1984 Act), where all the conditions set out are complied with;

(iii) to tenants of houses provided by housing authorities (section 26(1)) , and

(iv) to housing authorities who have provided dwellings under statutory authority on land to which they do not have the fee simple, (section 26(9)).

3.2 The categories of tenants entitled to acquire the fee simple were extended by section 73 of the 1980 Act to include persons who, as at 1 August 1978, were entitled to acquire the fee simple under section 3 of the 1967 Act. Under section 12 of the 1984 Act, such persons holding under an expired lease and making an application are given the right to continue in possession of the premises until their application is determined.

3.3 The term “Lease” includes a fee farm grant (section 3). Note: The creation of fee farm grants at law and in equity is prohibited by section 12 of the Land and Conveyancing Law Reform Act 2009. Existing fee farm grants continue to have full force and effect.

4. Restriction on the right

4.1 Section 4 provided that the Act would not bind a Minister of Government, the Commissioners of Public Works in Ireland or the Irish Land Commission. Section 16(2), in paragraphs (d) and (e), excluded leases made by the Commissioners of Irish Lights or by harbour authorities. These provisions were amended by section 70 of the 1980 Act, so that such bodies are now bound by the Act, except where the body is satisfied that such acquisition of the fee simple would not be in the public interest.

Similar provisions apply to bodies such as Waterways Ireland, established by the British-Irish Agreement Act 1999 as amended by the British-Irish Agreement (Amendment) Act 2005.

The Landlord & Tenant (Ground Rents) Act 2005 added IDA Ireland, SFADCO and Údarás na Gaeltachta to section 4 and removed the Irish Land Commission as it no longer exists.

4.2 Section 16 of the Act (as amended by section 8 of the 1984 Act) also restricts the right to acquire the fee simple:

(i) where the tenant has been declared not to be entitled to a reversionary lease under the Landlord and Tenant (Reversionary Leases), Act, 1958 ;

(ii) in certain circumstances where a building is divided into not less than 4 flats; (this restriction should not be confused with the exclusion of flats from the jurisdiction of the Land Registry under section 19 and the definition of “dwelling” in section 3);

(iii) in respect of certain business leases.

4.3 The Act does not apply to a Shared Ownership Lease: Housing (Miscellaneous Provisions) Act 1992 section 2(3)

5. Expired Leases

5.1 A person holding under an expired lease may be entitled:

(i) As a yearly tenant arising by operation of law or by inference, where rent has been paid to and accepted by the landlord after the expiry of the lease, if the conditions of section 15 of the Act are satisfied;

(ii) Under section 13 of the Act, where the application was made within 12 months of the commencement of the Act, (on 1 August, 1978), or

(iii) (Under section 3(2)(c) of the 1967 Act, (as revived by section 73 of the 1980 Act), where the lease was a building lease or proprietary lease as defined by sections 4 & 7 of the Landlord & Tenant (Reversionary Leases) Act, 1958.

6. Statutory Tenancy

6.1 A statutory tenancy, referred to in section 15, is a tenancy that arises by virtue of the Rent Restriction Acts, 1946 to 1960, where a tenant of a controlled premises holds over the property on the termination of the contract of tenancy. The Rent Restriction Acts were repealed but largely re-enacted by the Housing (Private Rented Dwellings) Act, 1982. It would appear that a statutory tenancy could not subsequently arise. Note that for section 15 to apply the rent reserved by the lease must have been a yearly one.

The statutory tenancy should be evidenced by:

1. Agreement between the parties. [section 11(1) of the 1982 Act]
2. Court Order setting out the terms. [sections 11and 12 of the 1982 Act]
3. Court Order declaring that any tenancy otherwise than by virtue of the 1946 Act or the 1960 Act has terminated [Section 39 of the 1946 Act and section 32 of the 1960 Act].
4. Other evidence of the retaining of possession by the tenant after the contract of tenancy has terminated and the continued payment of the yearly rent.

In the case of 4, it will be necessary to establish that the property is a ‘controlled premises’ within the meaning of the 1946 Act or a ‘controlled dwelling’ within the meaning of the 1960 Act (Note the various exclusions), and that the applicant is a ‘statutory tenant’ [section 2 in each Act]

In the case also of 4 (and possibly 3), note also that the statutory tenancy is subject to the terms and conditions of the original contract of tenancy. [Section 40 of the 1946 Act and section 32 of the 1960 Act] These may be relevant to section 15(1)(e) of the 1978 Act.

In order to be satisfied that the applicant qualifies under the 1978 Act, we will require an affidavit sworn by him disclosing the facts relied on to show that all the provisions of section 15 of the 1978 act are complied with by the tenancy.

7. Intermediate interests

7.1 The right to purchase exists only to enlarge the interest held by lessee into a fee simple interest. Where the lessee already has the fee simple, there is no right under the Act to acquire intermediate interests.

8. Housing Authority Tenants

8.1 Tenants of Housing Authorities acquiring the fee simple do so by means of a transfer order from the Housing Authority, under section 90 of the Housing Act, 1966 (section 26(7) of the Act). They may not apply to the Authority for a vesting certificate.

9. Vesting by the Authority

9.1 The Authority is empowered, by section 22(1) of the Act, to issue a certificate vesting the fee simple and any intermediate interests, free from encumbrances, in an applicant.

9.2 This power is limited to cases “where the permanent buildings are constructed for use wholly or principally as a dwelling and are so used” (section 19). The dwelling must therefore be habitable. “‘Dwelling’ does not include a separate and self-contained flat in premises divided into two or more such flats”(section 3).

9.3 The Act provides two separate circumstances where the Authority may issue such a vesting certificate:

• where an application is made with the consent of every person who would be a necessary party to the conveyance to him of the fee simple free from encumbrances (section 20 and section 22(1)(a));
• where an application is made without the consent of such persons (section 21and section 22(1)(b)).

9.4 The two...