Vesting Certificates

1. Acquisition of the fee simple under a Vesting Certificate

Section 22(1) of the Landlord and Tenant (Ground Rents) Act 1978 (hereinafter called the 1978 Act) empowers the Authority to issue a vesting certificate vesting the fee simple and any intermediate interests, free from incumbrances in an applicant. The Act provides two separate circumstances where the Authority may issue such a vesting certificate:

1. 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 incumbrances (section 20 and section 22(1)(a));
2. where an application is made without the consent of such persons (section 21 and section 22(1)(b)).

The two categories of cases are distinguished colloquially as “Consent Cases” and “Arbitration Cases”. 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). ‘Dwelling’ does not include a separate and self-contained flat in premises divided into two or more such flats” (section 3).

For detailed information regarding the operation of the Ground Rents Purchase Scheme see Practice Direction Ground Rents (published 1 December 2009).. Once a Vesting Certificate has issued it may be lodged for registration in the Land Registry or in the Registry of Deeds. This Practice Direction deals with applications for registration of a Vesting Certificate in the Land Registry. Note that some applications for registration in the Land Registry may require full investigation of title.

2. Compulsory First Registration

The issue of a Vesting Certificate may give rise to a situation where the fee simple though unregistered is compulsorily registrable under the provisions of sections 23 and 25 of 1964 Act.

By virtue of section 22(3) of Land and Tenant (Ground Rents) (No 2) Act of 1978 Act, a vesting certificate is deemed to be a “Conveyance on Sale” for the purpose of section 24 of the Registration of Title Act 1964. This relates to the areas in which registration is compulsory consequent on a conveyance on sale.

Counties affected and effective date:

• Carlow Meath and Laois – 1st January 1970
• Longford Westmeath and Roscommon – 1st April 2006
• Clare, Kilkenny, Louth, Sligo, Wexford and Wicklow – 1st October 2008
• Cavan, Donegal, Galway, Kerry, Kildare, Leitrim, Limerick, Mayo, Monaghan, North Tipperary, Offaly, South Tipperary and Waterford – 1st January 2010
• Cork and Dublin – 1st June 2011

Cities affected and effective date:

• Galway, Limerick and Waterford [as defined in Section 10 of the Local Government Act 2001] – 1st January 2010
• Cork and Dublin – 1st June 2011

3. Where Investigation of Title is required

The cases listed in points 1-5 of Appendix A require investigation of title and are to be dealt with by an Examiner of Titles.

Appendix A provides full details of the documents to be lodged with the various types of applications to register a vesting certificate where an investigation of title is required.

The following matters must be taken into account when the application is being prepared.

3.1 Freehold Title

(i) Arbitration Cases – The fee simple title to be shown in arbitration cases is to commence with the vesting certificate and title is to be traced from there in the normal way subject to what is set out below.

(ii) Consent Cases – The fee simple title in consent cases is to commence with the Vesting Certificate provided the other documents lodged or the folios do not cast any doubt on the title.

3.2 Leasehold Title
The leasehold title should be investigated in all cases to establish the lessee/applicant’s title and to ascertain any burdens or charges to be registered on the new freehold folio.

3.3 Merger
When an application is made for registration of a title on foot of a vesting certificate merger of the leasehold interest is required in all cases. This is so as an intention to merge must be imputed to the lessee who avails of his/her right under the 1978 Act to enlarge his interest into a fee simple. The 1978 Act does not deal expressly with the issue of merger. Section 29 of the 1978 Act which provides that a mortgage or charge affecting the lessee’s interest is deemed to be a mortgage or charge on the fee simple implies that merger has occurred without any express declaration of merger.

When does merger take place?
If the two interests, freehold and leasehold, are unregistered, merger is effected on the issue of the Vesting Certificate. If one only title is registered, merger takes place with effect from the date of settling of the application for registration.

3.4 Original Lease to be produced
On a merger of an unregistered leasehold interest the original lease must be lodged or its absence accounted for e.g. refers to other property held by another, is lost as evidenced in usual affidavit containing undertaking and indemnity. The original lease need not be produced where the leasehold title has been registered on a leasehold folio.

3.5 Rights of Way
In the case of the enlargement of leasehold interests into fee simple rights of way which were granted with a lease as appurtenant to or for the benefit of the lease are not to be cancelled. Sometimes such rights of way were registered as separate entries on registration of the lease and sometimes they were coupled with the lease burden in the one entry. All such rights of way should remain as burdens on the freehold folio which they affect. On merger of a lease which was subject to a right of way register the right of way as a burden on the freehold folio- ” during the period specified in Instrument No……” (being the unexpired term of the lease).

These rights of way are usually over common roads...