Seanad Éireann - Volume 89 - 24 May, 1978

Landlord and Tenant (Ground Rents) (No. 2) Bill, 1977: Second Stage.

Question proposed: “That the Bill be now read a Second Time.”

[263] Minister of State at the Department of Foreign Affairs (Mr. D. Andrews): As Senators are by now aware, this is the second instalment in a trilogy of measures to give effect to the Government's proposals in the area of landlord and tenant law. The first of these measures — the Landlord and Tenant (Ground Rents) Act, 1978, to which I will refer for convenience as the No. 1 Act—became law on 16 May 1978. Its effect is that, as and from that date, no new ground rents on dwellinghouses may be created.

The objects of the present Bill are:—

(a) to provide a new purchase system under which ground rent lessees and tenants, including lessees under local authorities, may buy out the fee simple of the dwellinghouses they occupy, paying purely nominal fees in respect of the legal costs involved;

(b) to extend to new classes of lessees and yearly tenants the right to acquire the fee simple; and

(c) to abolish a landlord's right of re-entry for non-payment of ground rent.

The third instalment of this legislation will be initiated as soon as possible after proceedings in the present Bill have been concluded and will deal in the main with changes in the law relating to occupational tenancies, on the basis of recommendations that have been made by the Landlord and Tenant Commission.

Before dealing with the details of the Bill which is now before the House, I would like to refer to some general issues. First, I would refer to the Government's undertaking, as expressed in the Fianna Fáil election manifesto, in relation to ground rents. The actual undertaking was set out in one sentence at paragraph 9 of our manifesto, under the heading “Local Government”, and read: “Fianna Fáil will provide a scheme which will lead to the abolition of existing residential ground rents”. I am aware from the debate that took place on the No. 1 Act when it was before the Dáil in November and [264] December last that there are those who would like to misconstrue the undertaking in the manifesto. They would like that undertaking construed as if it were a promise to abolish ground rents directly, leaving landlords either with no compensation or to be compensated by the State. In the other House the Minister went into great detail to set the record straight on that subject. I do not propose to go into the same detail here, but I should like to emphasise that the record is there for all to see. If we wanted to promise the abolition of ground rents directly that is precisely what we would have said and, indeed, that is what we did say and do in relation to rates and car tax, for instance.

Apart from the political aspect — what was promised in the manifesto — it is important also to point out that nothing that has been said in the other House or outside it can reasonably be taken as indicating that the Minister or the Government favoured abolition in that sense — that is, abolition without compensation. On the contrary, I think it fair to say that the present Minister for Justice went to considerable pains when in opposition to make his position quite clear. He is on record as having referred to his discussions with the residents' associations on this very subject. He said that they had never suggested that the ground landlord's interest should be taken over without compensation. Neither did he ever suggest that the State should be responsible for compensation.

As I have indicated, an essential feature of this Bill is the way it proposes to deal with the long-standing problem of legal costs. If we can solve the problem of legal costs then, I would suggest, we have solved the problem of ground rents. If we enable tenants to get the fee simple at a fixed nominal charge for the legal work, then we have a scheme which will lead to the abolition of ground rents and that is precisely what we have in this Bill.

The State's contribution towards the costs of acquisition as proposed in this Bill is the kernel of the whole scheme. That contribution amounts virtually to [265] undertaking the whole task. The fees to be charged will be nominal and are the minimum which could be charged so as to avoid purely frivolous applications under the scheme.

What this Bill does, therefore, is to provide the means to make ground rents a thing of the past so far as ordinary dwellinghouses are concerned. It provides strong encouragement for ground rent tenants to exercise their rights. I feel it will succeed in this for the following reasons. I think that most people paying ground rents are genuinely interested in becoming full owners — that is to say, owners of the fee simple — of their dwellings if they can do so without too much inconvenience and without incurring an unknown but substantial burden of legal costs. If they are not, then the campaign against ground rents cannot have been representative of the feelings of ordinary householders. The terms of this Bill will offer the strongest possible encouragement to them to become full owners for the very simple reason that it offers what the Minister for Justice has already referred to elsewhere as the bargain of a lifetime. I also think that the vast majority of tenants will move quickly and will not put the matter on the long finger because this bargain will be available only for the coming five years or so.

This five-year limit was strongly contested when the Bill was being debated in Dáil Éireann, and a 25-year period was sought instead. The opposition to a five-year limit is, I believe, mistaken. That limit is not designed to reduce the State's financial commitment to the scheme. On the contrary, the time limit may well increase that commitment because it will encourage all tenants to avail themselves of the scheme. There are good practical reasons why tenants from time to time may wish to acquire the fee simple — that is, of course, apart from the general desire to be the full owner. It may be a question of needing freedom from certain covenants. It may be a question of raising a loan when the lease has less than 50 years to run. But to wait until these forces operate in the case of all ground leases would not, to my mind, be consistent with a scheme aimed consciously [266] at the abolition of the ground rent system. The limitation of the State's contribution to applications that are made within the period of five years is designed to introduce the concept of terminating the system, as far as dwellinghouses are concerned. I think it will work that way too. What is more, I genuinely believe that, if we were to make the scheme open-ended or have it available for 25 years, that would tend to destroy its potential efficacy.

I should now like to comment briefly on the various provisions of the Bill and in so doing, to indicate where the Bill differs from the proposals of the previous Government contained in the Bill which lapsed with the dissolution of the last Dáil. Part II of the Bill deals with the classes of tenant who will be entitled to acquire the fee simple in their properties. Senators will have seen from the Explanatory Memorandum circulated in connection with the Bill that this Part, together with section 26 in Part IV, is intended to be a fully comprehensive statement of the classes which are to have this right as well as of the law relating to the determination of a purchase price. It consolidates the provisions in this area which are at present contained in the Landlord and Tenant (Reversionary Leases) Act, 1958, the Landlord and Tenant (Ground Rents) Act, 1967 and the Landlord and Tenant (Amendment) Act, 1971. In addition, it provides for new classes of leases and tenancies which are to attract the right to acquire the fee simple in future and it clarifies the law as to the method of determining the maximum purchase price.

It is in this part of the Bill that we must face up to the problem of trying to determine what is a ground rent. Most Senators will be aware by now that there is no statutory definition of a ground rent. Indeed, this matter was discussed in detail during the passage of the No. 1 Act through this House. The essential thing about such a rent in the ordinary way is that it arises in a landlord and tenant relationship where the tenant owns the “bricks and mortar” interest in the property and, for that reason, the ground rent will tend to be a small rent in relation to the value of the entire [267] property. At the other end of the scale there is, of course, the concept of occupational rent, which is a rent payable when the landlord owns that “bricks and mortar” interest. This may appear simple enough at both extremes of the scale. Unfortunately difficulties do arise in determining whether a rent falls within one class or another in the middle, or grey areas.

The Landlord and Tenant Acts have since 1931 sought to distinguish between those two types of rents and to provide for the rights of the parties involved as appropriate to each type. The Acts did this initially by developing the concepts of a building lease and a proprietary lease as the types of leases which were taken to reserve a ground rent as distinct from an occupational rent. The problem was, however, that as time went by these concepts were found to be inadequate to describe all the types of lease which were found to reserve ground rents. As a result, in the 1958, 1967 and 1971 Acts new types of leases and tenancies had to be added to the concepts already established in 1931. The result is, to say the least, a somewhat complex body of law.

The provisions in Part II of the Bill provide, in turn, for the addition of new classes of leases and tenancies which have been identified as ground rent leases and tenancies. However, the former practice of adding to the 1931 Act concepts of building lease and proprietary lease is now being abandoned. Instead the Bill sets out all the conditions with which any lease or tenancy must comply if it is to attract the right to acquire the fee simple. This is of course a very welcome simplification of the law. I hasten to add that, as far as the substance of Part II of the Bill is concerned, it represents no change as against the provisions which were included in the Bill introduced by the Minister's predecessor except for one extension which was done by way of an amendment during the Dáil proceedings. There is, however, one important change of presentation.

In the previous Bill, which was, of course, a general landlord and tenant Bill as opposed to a ground rents Bill, [268] there was no single comprehensive statement of the classes of leases and tenancies which would attract the right to purchase the fee simple. Instead, there was a list of conditions to apply to leases which would attract the right to obtain a renewal of the lease on termination, that is a reversionary lease, as well as a list of conditions applicable to yearly tenants who would have the right to acquire the fee simple. By way of a cross-reference, the lessees who were to have the right to a reversionary lease were also given the right to acquire the fee simple.

I think it is perhaps fortunate that this Bill, limited as it is to ground rents, could not adopt the same approach and that a new one had to be found. To my mind, there is a considerable advantage in doing things the way we have them in the present Bill. For most people the acquisition of the fee simple will be a matter entirely separate from other landlord and tenant rights, particularly in the context of a State-aided scheme. Very many people who have no great knowledge of the law will find it necessary to check their leases against the provisions of this Bill. For that reason it seems to me to be useful that there should be one comprehensive statement of the conditions which must be complied with, and that this should be as simple and readable as it is possible to make it. Indeed the Bill has been welcomed by residents' organisations in this regard.

At this stage I do not propose to go into detail as to the classes which are to have these rights. Such a discussion would be more appropriate for the Committee Stage of the Bill and in that regard, the explanatory memorandum which sets out the categories to be newly entitled under the Bill may be of some assistance. I should like to say, however, that the general intention behind this Part of the Bill is that all known classes of ground rent tenant should be given the right to acquire the fee simple.

When I say “all known classes” I do not want to give the impression that there is anything arbitrary about proposals to extend the right of purchase to new categories of leases or yearly tenancies. Such proposals have in the past been made only after the fullest [269] consideration and following thorough investigation. In recent years this investigation has been done by the Landlord and Tenant Commission and the proposals in this Part are based on their recommendations. This is only as it should be, since a decision to move a tenancy from one category to another is not only a technically complex matter but one which affects important property rights.

I should now like to comment on Part III to which I have already referred as containing the kernel of this Bill, that is, the State's contribution to the purchase scheme. It is, I think, generally agreed that the main reason why people did not avail themselves to a greater extent of their right to purchase the fee simple under the 1967 Act was the legal costs of doing so. I think it fair to say that this is acknowledged in the approach which the Minister's predecessor had adopted in the Bill which lapsed. The proposals in that Bill to introduce a system of transfer by way of a vesting certificate to be issued by a State authority was intended to deal with the problem of costs.

There are, however, important differences between the approach adopted in this Bill and what we might call Senator Cooney's Bill. The most important difference — and one which is an essential feature of the scheme — is that we are in this Bill telling the tenant precisely how much it will cost him to get his fee simple. For a transfer by consent the fee will be £5 and no more. When we were debating the previous Bill we had no idea whatsoever what the intention was with regard to the costs of acquisition. At no stage was the actual fee to be charged mentioned and this was, indeed, to have been left over for determination in the context of regulations to be made after the Bill had passed. However, Senator Cooney, as Minister for Justice, did indicate that he did not expect that the fee would be less than £25. This uncertainty was, to my mind, a serious defect in the Bill that lapsed.

While the detailed provisions of section 23 in relation to fees will appropriately be discussed on Committee Stage, there is one aspect I should like to mention now. In the Dáil a comparison [270] was made between the £12 arbitration fee to be charged in this Bill, or £17 in a successful case which leads to the issue of a vesting certificate, and a fee of £2 payable for arbitration under the 1967 Act pursuant to the Circuit Court Fees Order. The Minister dealt fully with this and indicated how unreal this comparison was but I should like to say, as emphatically as I can, that any comparison of this kind is utterly wrong and misleading. The true comparison with the fees to be charged under this Bill for arbitration — which will represent the tenant's only costs of getting the vesting certificate — can be summarised under five headings of costs for which the tenant is liable under the 1967 Act. These could include all of the following:

(1) the fee of £2 mentioned already which merely covers the application to the county registrar,

(2) the tenant's own legal costs, if any, of the arbitration,

(3) the immediate landlord's and any superior landlord's costs of the arbitration,

(4) the county registrar's costs of the arbitration, if any, and

(5) in a successful case, that is where the award specifies that the fee simple is to be conveyed to the tenant, the costs of the conveyance.

As the Minister pointed out, these costs—which are all payable by the tenant—could amount to hundreds of pounds. The fee of £2 would be only a tiny proportion of them.

There is another important difference between the scheme now proposed and that of the previous Bill. It is not merely a procedural point that the task of converting leasehold titles into fee simples is being given in the Bill to the Land Registry rather than to county registrars as was proposed in the previous Bill. Serious doubts had been voiced as to whether a procedure based on county registrars would work. The view of the Government is that it could not have worked well. Many problems could have arisen if this job had been given to 26 different offices around the country. This is particularly true since the staff of these offices could not be augmented by the recruitment of suitably qualified [271] persons. Of course, this has added significance when we are introducing a scheme which will be widely availed of, as I expect it will. In this context, it would be well to bear in mind that the potential response is of the order of 250,000 applications. On the other hand, what we are proposing in this Bill must be, from an objective point of view, more efficient and less expensive in real terms. The Minister has made all the necessary arrangements to ensure that the Land Registry will be properly equipped to carry out the tasks to be imposed upon it under this legislation and I am fully convinced that there is no other institution of the State which could do it as well.

One further advantage accrues from operating the purchase scheme through the Land Registry. That is that it will enable close liaison to be maintained with the Registry of Deeds so that purchasers who wish to register their new fee simple titles there — and purchasers will be given every encouragement to register either in the Land Registry or in the Registry of Deeds — can be enabled to do so with minimum trouble and expense. I would like to make it clear that purchasers who do not register will still have a perfectly good title that is not only statutorily guaranteed but that is also already a matter of official record in the register of vesting certificates that will be kept in the Land Registry. Registration is nevertheless most desirable and indeed close consideration has been given to the question of providing for compulsory registration of the vesting certificates in those cases — the great majority — where registration is optional. The Government's view, however, is that it would be wrong in principle to introduce compulsion here, that is apart from the areas in which compulsory registration already applies, and that the furthest we should go is to give purchasers under the scheme the maximum encouragement and facility to register.

Some Senators will undoubtedly be aware that there have for some time been arrears of work in the registry and may ask if the addition of new responsibilities will not exacerbate that position. [272] While I realise that the ordinary work of the Land Registry is not directly relevant to the Bill, I think I should explain briefly how it is proposed to deal with the overall situation so that the scheme will be workable, without adversely affecting the ordinary work of the registry. What has been arranged is that there would be a special addition of staff designed specifically to handle the ground rents work. In addition, other substantial staff increases in the registry have been authorised to enable the arrears of ordinary work to be disposed of in a reasonably short time. In fact, I understand that there are already encouraging signs that these measures are having a beneficial effect.

There remain two important aspects of this Bill — which were not in the lapsed Bill — upon which I should like to comment. The first is the fact that it extends the right to purchase the fee simple to ground rent tenants of local authorities. The second is the proposal it contains to abolish a landlord's right of re-entry for non-payment of ground rent.

One of the main criticisms of the Bill which lapsed was that it distinguished unfairly between ground rent tenants in the private sector and those in the public sector. There were references to making second-class citizens of people who had purchased or who were purchasing their own homes from local authorities by way of leases. Under the present Bill local authority lessees will, for the first time, have the right to acquire the fee simple. The procedure will be by way of vesting orders to be made under the Housing Act, rather than by way of the Land Registry procedure under the Bill. The fee payable by the tenant will be £5.

The remaining point I should like to deal with is the question of the abolition of the landlord's right of re-entry for non-payment of ground rent. Senators will be aware that leases normally contain a condition that in the event of the rent being in arrears for a specified period, the lessor may re-enter on the lands. In addition, section 52 of the Landlord and Tenant Law Amendment Act, Ireland, 1860, Deasy's Act, gives the landlord a right to take an action for ejectment where the tenant allows the [273] rent to run into one year's arrears, even if the time for re-entry provided in the lease has not expired.

One of the criticisms made of the present law is that it gives landlords a security for their rent which is out of all proportion to the size and nature of their interest in the property concerned. There may have been an argument in favour of the extensive power which this enables landlords to wield when they had a real responsibility for good estate management in the interests of all the tenants. This is no longer so. The protection of the amenities is now a function of planning legislation. It follows that the landlord should no longer have a right to re-enter but should be in the same position as any other creditor. He should have only a right to sue for the debt owed him. Section 27 of the Bill abolishes the right of re-entry for non-payment of ground rent in the case of a dwellinghouse but leaves unaffected the landlord's right to sue for arrears of rent as a civil debt.

As Senators are, no doubt, aware this Bill was before the Dáil from early in February until last week. The lengthy debates in that House were most useful in as much as they resulted in quite a number of amendments. Some of these were of a drafting nature, others covered points of substance and we can, as necessary, explore them on Committee Stage.

During the passage of the No. 1 Act through this House, the question was raised of instruments which could create a rent charge, as an alternative to the creation of a ground rent, as well as other possible means of evading the prohibition on the creation of future ground rents on dwellinghouses. This matter clearly is relevant to Part II of the present Bill and it has been examined in that context. As a result of that examination we are satisfied that the scope of the Bill in respect of ground rents is as wide as the scope of the landlord and tenant relationship itself. We are indeed satisfied, and satisfied on the basis of the examination to date of this area by the Landlord and Tenant Commission, that this Bill — and ipso facto the Act prohibiting the creation of ground [274] rents — does extend to every known form of landlord and tenant arrangement creating a ground rent.

If new kinds of conveyancing arrangements are devised to evade that prohibition and are brought into use, these arrangements will come under examination and if necessary new legislation can be promoted to deal with them. However, that legislation would not necessarily fall within the code of landlord and tenant law. Apart from that consideration I feel it necessary to say that concern about the possibility of sophisticated evasions is academic rather than practical. What that concern postulates is that conveyancing lawyers will sit down and devote themselves to devising means of circumventing the clear intention of an Act of the Oireachtas. I cannot see why that should happen; I cannot see what is to be gained. As regards devices like rent charges, in particular, anyone who sought to circumvent the No. 1 Act might be treading on very thin ice. If his or her new arrangement turned out to be, after all, a lease he or she would have advised his client, as vendor or lessor, very much to that client's disadvantage. The purchaser, instead of paying a disguised ground rent, would have — under the No. 1 Act — the right to buy in the fee simple at the lessor's expense. Finally, uncertainty about the status of any such new arrangement would mean, in practice, that the intending purchaser could not raise loan finance for his purchase, and this would be a deterrent even from a vendor's point of view. Lending institutions are most unlikely to lend money on a security that is at risk of being found to be a nullity.

I should like on behalf of the Minister for Justice, to take this opportunity of expressing the gratitude of the Government to the members of the Landlord and Tenant Commission and their Chairman, Judge Conroy. I have already mentioned the part that the Commission have played in regard to the question of determining what classes of lease or tenancy should attract the right to acquire the fee simple. The work of the commission will also be of the greatest significance in regard to the [275] further Landlord and Tenant Bill which will be required, dealing in the main with occupational tenancies. The members of the commission are all busy men whose time is devoted voluntarily to the important tasks which have been allotted to them.

I commend the Bill to the House.

Mr. Cooney: I should like to commence by echoing the tribute which the Minister of State has paid to Judge Conroy and the members of the Landlord and Tenant Commission. There is no doubt that they are owed a big debt for all the work they have done in this complex but important legal and economic sphere. Having said that I fear that my first expression will not be as harmonious because it is to complain at the absence once more of the Minister for Justice. I make this complaint not by way of reflection on the person of the Minister of State who is present and for whom I have a high personal regard. This is the second Bill exclusively the province of a Minister for Justice and the promoting Minister has not come to the Upper House of the Oireachtas to present it. Senators will have noted from the script that was handed out that the ostensible reason is that the Minister for Justice was taking Questions in the other House. When this debate started it was 4.30 p.m. and Questions had finished one hour previously. The excuse now is a patently hollow and insincere one. It is regrettable that an excuse so patently insincere and hollow should have been included in the script that was circulated to Members of this House. It is nothing short of an insult that the House be offered an excuse that is patently untrue.

Mr. D. Andrews: On a point of order, with respect to Senator Cooney's allegations I should like to make it clear that I did not articulate the first sentence of the script. I did not do so on the basis that it was no longer relevant. I am here on behalf of the Minister for Justice. He has asked me to come here and I do so in my own right on his behalf. I must say I cannot see what the Senator sees so ill about that. The Minister has asked me to do it for him and I am doing it for him.

[276] Mr. Cooney: Of course the Minister was asked as Minister of State. Otherwise he would not be here. I acknowledge that he did not read out the part of the script that contained the excuse, but nevertheless this is the excuse that is being given; that is the reality of it.

Mr. D. Andrews: At that time.

Mr. Cooney: But when the time had passed making that excuse irrelevant, one would have expected the Minister to be here when the reason for which he was excused no longer applied. However, that is by the way. I have made my protest. It is no personal reflection on the Minister of State, but it is a matter of regret that the promoting Minister is not here for this Bill.

All of us were awaiting this Bill originally with expectation and no less in curiosity to see what was going to be provided, because expectation and curiosity had been aroused that this Bill was going to have some principle that would be radical, that was going to fulfil the spirit of the manifesto. We were looking forward to radical changes in the whole concept of ground rents in the relationship of landlord and tenant. We were looking forward to something that was going to change the existing ground rent compulsory acquisition scene. But what we got, I am afraid, was nothing radical, nothing new, because if this Bill is one to lead to the abolition of existing ground rents, so was the 1967 Act and so was the Bill that fell on the dissolution of the last Dáil. There is no difference in principle between any of those three Bills. It was with a great sense of anticlimax that one eventually saw the Bill that was produced. For some time before the last election there had been a vociferous and persistent lobby demand — and it is interesting to note that lobby groups do not ask any more, they demand — radical changes in relation to ground rents and their acquisition.

I can speak from experience because I had personal contact with the main lobby group in that area, the Association of [277] Combined Residents' Associations. It might be interesting for Senators to know what were precisely their demands. They demanded that ground rents be ended. When it was pointed out to them that ground rents were a property right and could not be confiscated under the Constitution, they said: cannot you have an amendment to the Constitution to enable this to be done? When it was pointed out to them that there were difficulties in having a referendum on a matter such as that and that there would have to be compensation, they were against compensation, some of them, on the grounds that these rents were immoral of their very nature and the owners of them were not entitled to compensation. Some of them would not hear of compensation; they insisted on cessation without compensation. It was also put to me at some of these meetings that not merely should the ground landlord not get compensation but that certain ground landlords should be ordered to pay compensation to the ground tenants in many cases where it could be shown that the rent paid by the ground tenant over a number of years would have exceeded what some independent party would regard as having been the value of the property when first leased. That was the scene and the nature of the demand for radical, revolutionary change. These people had to be told that what they were seeking was constitutionally, practically and legally impossible, constitutionally impossible because to interfere with one property right would end all property rights. It was not on as a matter of practice because I felt and still feel that there are greater demands on the Exchequer resources than in some way subsidising the purchase of ground rents. But that was the demand and the case being made.

I am aware that these people saw the present Minister, when he was in Opposition, and members of his party. I do not know what he said to them, but obviously he did not go on the same lines as I had gone. I am led to believe from various clues, tips of icebergs here and there, that the impression was given to these people that something radical would be given to them. The Minister, [278] when in Opposition, was speaking in the Dáil in 1975 and it is reported in Dáil Official Report, column 1123 of 9 December 1975:

It is part of the Fianna Fáil package in relation to the ordinary householder that not only should he be relieved of the burden of rates but also of ground rents.

That was a clear signal to these people, and to the rest of us, that this was the message he was giving to this lobby group; they were going to be relieved of their ground rents. It was used in the same sentence as the question of rates. When the manifesto came out and promised the abolition of rates and promised a scheme to lead to the abolition of ground rents the people who had seen the two things linked so publicly by the Fianna Fáil Party assumed that abolition meant the same thing in regard to each subject. Of course, the small print was there, and the small print is what the clever salesman always relies on. The small print was “lead to the abolition of ground rents”. Nevertheless it had the effect of satisfying the lobby. The Minister deserves, from one politician to another, congratulations on his political opportunism and sleight of hand in managing to convince these people that they were getting what they were demanding. Of course what they are getting is nothing different from what was already a principle of the law both in the 1967 Act and what was promised in the Bill which fell with the dissolution of the last Dáil.

It is a matter of amazement to me that the people concerned still have not realised the stroke that was pulled on them. I find it difficult to understand the reason. I can only reckon it is for one of two reasons. One is that they are so incredibly obtuse that they do not realise that what they have been offered here is exactly the same as what they had been objecting to all along. It is difficult to believe that any group could be that obtuse. Their present silence is due possibly to the fact that the Minister belongs to the party to which he belongs. However, we now know what was intended by the Minister. It was an anti-climax when there was an expectation that radical [279] changes were going to be introduced. What we have here, in effect, is the same principle dressed up in somewhat different clothing. The mechanics are different but the principle remains exactly the same. I have no objection at all to that because it repeats the principle of the Bill which I was introducing during the course of the last Dáil.

I shall make a couple of comments on some of the changes proposed in the clothing on the principle. The Minister is allowing his bargain price, as he describes it, to be available for five years. In the Dáil I understand he was very definite that it would be only five years and that if people did not avail of it within five years they were back then to buy out under the 1967 Act. I notice in the course of the Minister's speech today two significant little words, and one must pay attention to the small print, as I have demonstrated, where he says that the bargain will be available only for the coming five years or so. I would be interested, if the Minister would let us know exactly how long “or so” means. It is a serious change from the principle set out in the other House. I do not think it is a good thing to put any limitation at all on this so-called bargain. It should be available without limitation of time and people should be entitled to avail of the bargain when it suits their own situation or circumstances. Fees might not arise until after the five years. If a person is quite content to continue paying his ground rent for a longer period than five years from the passage of the Bill, that is entirely a matter for himself. The Minister in the other House—he does not repeat it here—said that he was not forcing people to buy out the ground rents. But this raises the question when are people being forced or compelled, and if there is a financial sanction being placed on somebody for failing to do something, then there is an element of force. The Minister, I think, is compelling people to act or move within the five years when it might not be suited to them. It is wrong, having introduced the idea of this bargain, that it should have to be availed of within a limited time. That smacks of the Christmas sales that shops run and seems to me to be an [280] altogether inappropriate principle to introduce into legislation.

The other change in relation to the mechanics is that the vesting order will be made by the Registrar of Titles and not by the county registrar. This raises the question of the capacity of the Land Registry to deal with a potential avalanche of applications. The Minister spoke of potential response of the order of 250,000 applications. If they all have to come within five years, there is going to be literally an avalanche of paper into the Land Registry, 250,000 vesting orders descending on the Land Registry, 1,000 a week and, for an office already stretched, this seems slightly incredible. The Minister in his speech has said that he has made all the necessary arrangements to ensure that the Land Registry will be properly equipped. I would be anxious to hear precisely what these arrangements are. I would like to know the number of extra heads of staff, their position, and what procedural changes are being introduced in the Registry to ensure that the whole mechanism of that body does not become clogged with this avalanche of papers that has to be dealt with within the next five years—one thousand a week if they are spread over the five years; it they all come within the first year or thereabouts, it will be an appalling position altogether. The Minister said also that other substantial staff increases in the Registry have been authorised. I would like to know precisely how many extra people are going to be involved and at what level.

When replying I would ask the Minister to deal with something that puzzled me in his speech when he was speaking of the question of the registration of the vesting orders, I would like him to link that with the requirements of section 22 (3) which provides that:

(3) The vesting certificates shall be deemed to be a conveyance of sale ... and to be an instrument in the prescribed form ... for the purpose of registration under the Registration of Title Act.

I understood that a document of that type does not vest the legal estate until such time as it is registered in the Land Registry, that it merely gives an equity [281] but that the legal estate does not accrue until registration, that is, registration vests the legal estate, not the signing of the instrument and, presumably, not the making of the vesting order. I would be interested to have the Minister's views on that aspect of the proposed arrangement when he is replying.

The last thing I want to say is related to something which the Minister mentioned towards the end of his speech when he referred to the passage of the No. 1 Act through the House and various points made, when it was indicated that there were loopholes in the Bill. I take the point that the drawing of these matters to his attention is somehow resented. One gets this impression when reference is made to the possibility of sophisticated evasions as being academic rather than practical. It is the duty of an Opposition to parse a Bill as closely as it can. If in that parsing potential loopholes are revealed it is a matter for the Minister to show that the parsing is not correct or that the loopholes can be blocked. I do not think that is merely an academic exercise because we are passing legislation that will be of practical benefit in the lives of citizens. Lawyers will have to deal with it and advise their clients on it in their day-to-day activities. We have to be in a position to see exactly what is in it.

This is a Bill which is being passed to meet widespread but not a universal demand for a change in the law. There would be a substantial number of citizens who are ground landlords, who are perfectly entitled to be the owners of ground rents and who would not be enamoured of the changes which are being proposed here. If those citizens want to examine the new legislation with a view to evading it that is their perfect entitlement. I do not think they should be able to evade it, because it is our job here to try to pass legislation so that they cannot. But they are perfectly within their rights to engage lawyers to try to evade it for them if the legislation is not drawn tightly enough. That is the entitlement of any citizen. Our efforts to try and tighten up the Bill are not merely efforts at academic games but have a real practical end, that is, to [282] render the Bill, before it leaves here, tight so that it cannot subsequently be evaded by people who bona fide, and correctly if they so wish, are entitled to look to it. The last Bill was just finished in this House when I received a letter from I think the building industry itself raising two points with regard to the previous Bill: (1) the unsatisfactory position of people with contracts for leases or executory leases at the time of the passage of the Bill. That is a matter we raised here at some length but which was not taken up by the Minister. The other point raised by the builders' federation was in regard to the question of a person holding land on lease after the passing of the Act but without planning permission at the time of the passing of Act. It is significant that these people made precisely the same points that we made here and indicated the reason the Bill was faulty in that regard. These are not points of academic titillation but are matters of practical law.

This Bill is an anti-climax when one considers the atmosphere, the demands, the winks, nods, half promises and the hints that were being made in regard to those demands before the election. I do not quibble with the Bill at all because its principle is exactly the same as that in the Bill which fell. I recognise the child; he is exactly the same child. It would be wrong of me to complain because his clothing is somewhat different.

Mr. D. Andrews: The same father; an unusual situation.

Mr. Molony: The only difference between the two children is that one tells lies. This Bill, which enables householders to buy out their ground rents, is an excellent measure and must be welcomed, certainly as a matter of principle. As everybody knows for a number of years certainly the whole question of ground rents has been a cause of considerable public disquiet and all political parties have been anxious to do what they could to remedy the situation. Any change that one tries to bring about in the area of landlord and tenant law is difficult because it is an area of law that is extremely complex. Indeed there are a great number of areas in our [283] landlord and tenant law that require updating and change. One hopes that the final Bill in the trilogy of Bills referred to by the Minister of State will be brought before the Houses of the Oireachtas as quickly as possible. As Senator Cooney has already said the last Dáil, before it was dissolved, had before it a Bill which was a major and comprehensive one in the landlord and tenant area. This Bill now before us is very largely based on the provisions of the old Bill. Its principle is precisely the same.

Just on a general point I disagree very much with the idea of bringing in a trilogy of Bills. In an area like landlord and tenant which is, of its nature, so complex it creates big problems for the future to bring in three separate measures in an attempt to reform the existing legislation when one could bring all the legislation together and bring in a substantial and comprehensive document so that, firstly, so far as legislators are concerned, they be given the opportunity to consider the reforms, not in isolation—as we have had to do up to now—but rather in the context of the entire landlord and tenant legal area. In addition, I noted with some amusement the Minister's remark in his opening address that the purpose of having separate Bills, and particularly the purpose of having a separate Bill for this particular reforming measure, was to enable tenants to read the Bill and understand it themselves. I ask Senators to look at the Bill and if anybody who has not got a legal background can explain it to me I will get him an excellent job in a solicitor's office. It is a highly complex, technical Bill. To expect any layman to be able to read that Bill, as it stands and understand in detail its purpose or whether he will qualify under its provisions is the greatest load of hogwash I have ever heard. To start with the Bill refers back to existing legislation and, of its very nature, definitions of “ground rents” of “leases” or whatever are incomprehensible to a lay person. I cannot accept that as being a valid reason for introducing three separate Bills where, in my belief, one would have done. Anybody who has a problem in landlord and tenant law of any significance is left [284] in the situation at present where not only to find a solution to his problem or find what exactly is his position in law, but even for definitions, he must go through a number of our enactments.

It is an area that badly requires complete updating. I would hope that at some time in the future the Minister for Justice might find the opportunity of having a study group set up, something like the Landlord and Tenant Commission, but a working group set up, to codify all our landlord and tenant legislation. It is a big job but one that will be worth while and that will prove to be of use not only to legislators and law students but to everybody who has any concern or interest in the area.

One can think of a lot of areas in which our laws could do with codification. I do not know whether it is our history coming from common law into the type of system we have now, but we seem to have a tendency in Ireland, and certainly in the United Kingdom also for this patchwork legislation. It is a bad practice and something which we should try to avoid. The trilogy of Bills now referred to, although none of us has any major argument with the content of any of them—it is silly not to bring them all together when they could be.

I might add, in relation to something Senator Cooney said about the defects in Bill No. 1, that even since that Bill was passed a couple of weeks ago I am aware of certain problems that have already arisen under it in relation to people being unable to get bridging finance from their bank and unable to get definite loan sanction from building societies because a building society's concern is the length of time it will take to get in a fee simple. Oddly enough, in this Bill—and I propose to examine it very carefully—I can see a solution to one of the problems that we raised. The disadvantage we have had is that when we dealt with Bill No. 1 we had no idea what was coming. There is another Bill yet to come which although it does not directly impinge on the principle of this Bill will, because of its being a landlord and tenant Bill, have consequences, connections and alliances between various of its provisions. It is a great pity that an [285] opportunity that existed to bring them all together was not taken.

In so far as the principle of this Bill is concerned, as Senator Cooney has already said, it differs in no degree whatever from the principle of the Bill that died with the last Dáil and, for that matter, to a very large extent is similar to the provisions of the 1967 Act. I am interested that the opening statement made by the Minister of State contained in the very first paragraphs the defence or the attack against the Opposition that was to be expected. It is an indication of the weak ground that the Minister recognises he stands on. His colleague, the Minister for Justice, took the same stand in the Dáil. It is clear that the Minister for Justice and the Minister of State at the Department of Foreign Affairs are both very concerned at people's reaction to this Bill. There are certainly differences, there are differences that are not substantial in any sense. There is one difference which can be regarded as an extension which was not in the old Bill. That was the proposal to include local authority lessees under the provisions of this Bill. I welcome that. The old Bill was not passed and no one knows to what extent it might have altered before it was passed. But the fact is that the then Fianna Fáil Party, now Government, knew exactly what was in the old Bill. They knew exactly what ACRA were looking for, they knew that ACRA were dissatisfied with the principle in the old Bill.

Whilst I accept that the Fianna Fáil manifesto was vague and innocuous, as it was in certain convenient areas—and it said that Fianna Fáil would introduce a scheme that would lead to the abolition of ground rents—Fianna Fáil canvassers did not knock on doors and say: we are going to introduce a scheme that will lead to the abolition of ground rents. They said: we are going to abolish ground rents. Not only did Fianna Fáil canvassers say it but, in newspaper advertisements sponsored by Fianna Fáil and paid for by Fianna Fáil during the course of the General Election, even in my own constituency, a rural one, Fianna Fáil were quite prepared to state the bald facts if returned to office and a list of promises, many of which have not [286] yet been fulfilled, many of which I doubt will ever be fulfilled. These can be catalogued in time. Amongst that list appear the bald statement: will abolish ground rents.

This Bill does not abolish ground rents. It does nothing more in substance or in principle than the Bill that Senator Cooney introduced as Minister for Justice in the Lower House before the last Dáil was dissolved. The description Deputy John Kelly has given this Government, as the fraud squad, can be aptly applied to this situation. This is like the Fisheries thing. It is like a whole series—unemployment and so on. Virtually every one of the substantive promises Fianna Fáil made have been left unhonoured. But, in this instance, Fianna Fáil have the incredible gall to stand up and defend their position when they know in their hearts and souls what was said at door to door canvassing, what was said in newspaper advertisements and what was intended. I accept now that the present Minister for Justice knew that he could not introduce such a scheme, but that was not to say that he could not mislead people into believing that he could introduce such a scheme. I must say that that type of approach, whilst it has worked very well for Fianna Fáil on this occasion, is likely to kick back against them on future occasions because people will be very slow to accept what they hear in election campaign promises from a political party that acted like that in the past.

Of course the position is that this election manifesto promise—just taking the manifesto promise itself, that Fianna Fáil would introduce a scheme that would lead to the abolition of ground rents—apart from the misleading aspect of that or the way it was construed—I wonder very much whether or not this scheme will lead to the abolition of ground rents.

The figure given by the Minister is that there are approximately 250,000 potential applicants under this scheme. If they are to apply over the next five years it would mean that there would have to be an average of 1,000 applications per week. Only time will tell whether that will actually happen, but I am prepared to wager with anybody [287] who wants to take me up on it that there will not be 250,000 applications. I am also prepared to wager that in 20 years' time, unless some different and very radical legislation is introduced, solicitors and lay people will still be dealing with ground rents problems. The only way this scheme could be said to lead to the abolition of ground rents would be if it were made compulsory for people to apply. Of course it is not and it should not. That is the only way it could be said fairly about this scheme that it fulfils the Fianna Fáil promise. Enough said about the political promise aspect of it. We have become used to it already and obviously we will have to galvanise ourselves before the next two or three years have passed.

Whether the Land Registry or the local county registrar's office is the appropriate office to deal with these applications is a moot point. From my own experience I would think the local county registrars' offices are operating efficiently at the moment. They probably have not got the same workload as the Land Registry. I would prefer to see applications going through the county registrars' offices unless there was a definite commitment to increase the staff in the Land Registry. The Minister has given that commitment not only in relation to operations under this Bill but also generally speaking. I welcome that commitment but if there are to be thousands of applications as are envisaged it would be necessary to increase the staff of the Land Registry very substantially indeed. It is most desirable that the staff in the Land Registry should be increased very substantially if only to clear up the arrears of work at the moment.

In the other House the Minister for Justice referred to the third leg of the trilogy we are to see. This is in relation to the problem arising at the moment over business leases where one applies for a reversionary lease of a 21-year period and the Circuit Court does not have the power to include provision for rent reviews. The Minister for Justice said he would have this before the House in a very short time. That was last February and I should like to ask whether we are likely to see it before the [288] summer recess. This is causing very serious problems not only for business people but also for judges who recognise a market rent for a business premises as being, for example, £50 a week at the moment, but they have not got the power to allow for a rent review in five or seven years' time. In order to compensate the landlord they tend to add something extra to the initial market rent. This is highly unsatisfactory and is causing hardship for business lessees and difficulties for judges and uncertainty in the whole area. It should be changed.

It was interested to note the remarks in the Minister's speech about the concern we expressed on this side of the House over the possible creation of future legal instruments to get around the provisions of the No. 1 Act as it now is. It strikes me that this business about rent charges does not apply at all in a landlord and tenant context but only in a conveyancing context. I accept that this Bill seems to apply to every conceivable landlord and tenant situation but the point made in the debate on the No. 1 Bill was not that a landlord and tenant situation was not being covered, but that it was a simple conveyancing situation which could allow for a recurring sum to be paid on an annual or bi-annual basis. I will look at it again but quite honestly I cannot see the sense in that.

The final point I want to raise is in relation to remarks in the Minister's address regarding registration. I see that registration is most desirable but the Government have decided not to make it compulsory. I wonder whether the ramifications of this have been fully thought out. Certainly as matters stand in law, you have a transfer deed, or a vesting order as it will be in this case, signed, stamped or whatever, you have priority, but you have not got priority over somebody who registers before you. If for one reason or another people did not take steps to have it registered, they could put themselves in a very dangerous position. Not from any political point of view, but from the point of view of trying to ensure we are not enacting any bad or loose law, I suggest that should be looked at again. I suspect [289] it is recommended—and will be recommended again—to tenants to register their new vesting orders to save costs. Perhaps this is a hidden cost which will be involved.

Perhaps the Minister would explain this. If somebody decides to take up the invitation by the Land Registry to have his vesting order registered, will the tenant have to pay any extra cost for having that done? One way or the other, if the cost is regarded as too high, I would recommend that the Government should sponsor it or subsidise it. A statement in the debate on the Second Stage of a legal Bill that registration is regarded as desirable but will not be made compulsory is not pleasing to somebody who is involved in the law at any level. I am sure the Minister would not agree with this as a general proposition unless there is a very sound reason behind it. I would ask that it be looked at again. Could the Minister now tell me whether there will be an additional cost on a tenant who chooses to take the sensible course and actually register his vesting order?

Professor Murphy: This Bill can be contrasted with the other Bill recently passed by both Houses. That very desirable and, indeed, historic Act put an end to an aspect of the feudal system of land tenure to which there was widespread and well-founded objection. The No. 1 Act has freed the rising generation of house buyers from an institution which, whatever its validity eight centuries ago, had in our own time become an easy legal method for raising pin money. The No. 1 Act has delivered the correct moral judgment on the system, which is why great interest was displayed in the Government's proposals to abolish existing residential ground rent. The present Bill purports to discharge a promise given in the election and printed in the national press advertisements providing for the abolition of existing ground rents. Enough has been said on this matter. I do not want to take up the time of the House with a fruitless exercise in further semantics about what “abolition” and “providing for the abolition” can be interpreted to mean.

Substantially this Bill before us is the [290] 1967 Landlord and Tenant (Ground Rents) Act with admittedly some welcome changes. Where the 1967 Act laid down that the householder wishing to buy out his ground rent would have to pay both his own and the landlord's costs for the legal fee involved in the transaction, this Bill reduces the legal fee to be paid by the householder to a possible maximum £17. For the first time, therefore, the householder can compute with fair accuracy what his total outgoings will be in purchasing freehold. That certainly is to be welcomed. This Bill continues the compensation clause of the 1967 Act whereby the person purchasing freehold has to pay an amount of compensation to the landlord reckoned according to the yield to redemption on the stock exchange in the latest 15 year national loan.

Many householders might be unaware that, under the most recent national loan raised since the budget, the multiple to be paid by a person buying out a freehold has risen to 8.34 times the annual ground rent. If, as is possible, a further national loan is raised at a further reduced interest rate, then this multiple will increase again. Under the interest rate prevailing in 1967, the multiplier is 13.2 times the annual ground rent. It is not surprising that many tenants are still dissatisfied with aspects of this Bill. In fact, it was against the background of the compensation allowed in the 1967 Act that the final ACRA campaign was launched which has been successfully completed to the extent that it contributed very substantially to Fianna Fáil's victory, especially in the Dublin area.

The only relief householders are to get will come entirely from State funds. This brings me to the five year limiting clause on the reduced legal fees provided for in this Bill. Does the minister hope to use the five year limitation as a stick with which to drive householders to avail of the buying out procedure established under the Bill? Householders were advised in the past that it was not in their economic interest to buy out under the 1967 Act. Neither is it in their economic interest to buy out under this Bill. But how can the Minister justify [291] withdrawing the State funding after five years from the householder when this Bill continues the full compensation afforded to landlords for the life of the present Bill? Is it because five years is the putative life of this Government and a promise of renewal of aid is deemed likely to hold votes on this issue through the following general election? Putting it brutally, are the lessees to be fooled in one election and insulted in the next? If the reduced legal fees are honestly intended, then an amendment asking for the deletion of any reference to five years will be accepted so that the Minister's “Sale of the Century” can continue for the life of the Act.

It has been said that to abolish ground rents without compensation would be unconstitutional. In this connection my own sympathies are with those who say the compensation should be on the other foot. Indeed, Senators will recall reading in their history books that, when Mr. de Valera was introducing the agreement which, in effect, ended the economic war—a very favourable agreement from the Irish point of view—his viewpoint was that, if justice were really to be done, the lump sum payable to the British Exchequer should in fact be payable the other way around. This is analogous to the situation here. I would not personally be terribly worried about the question of constitutionality, about no compensation being unconstitutional. Nor am I worried about the larger question raised which is that people say, “Look, if we move too harshly against ground landlords, we are challenging the rights of property itself.”

I am quite willing to support any campaign to abolish, not the rights of property, but the rights of property which are not allied to responsibility. I remember enough of my indoctrination in Thomism to remember that St. Thomas said that: “No man has a right to call anything his property unless he mixes his labour with it.” At any rate, on the view that to abolish ground rents without compensation would be unconstitutional, if we admit that it relates to property, it can hardly be contended that ground rents are property in that sense. Regarding ground rents as I do as a [292] species of robbery, I do not think it can be wrong to abolish them outright but, accepting ground rents as a form of property for the purposes of argument, we must remember that the Constitution speaks of the principles of social justice and gives the right to the State to delimit by law the exercise of the right to private property in order to reconcile their exercise with the exigencies of the common good.

Ground rent of all the forms of property or alleged property in this State is surely the best candidate ever for the application by the State of this common good limitation on the absolute right of property. We must remember that such an application would be securing the property rights of householders who have paid more than once for the ground space on which their house stands. In my own case, I must say it is not the actual money being paid in ground rent, which now with inflation forms such a tiny portion of anyone's total outgoings on property, it is not the actual payment of what is now a negligible sum that is annoying, but rather the fact that ground rent is paid, more and more, not to needy individuals or improvident widows who inherited some property, but to great blocks of anonymous landlords. I have long resented subsidising my own ground landlord to attend race meetings and to buy mink coats for his wife.

The proposal which ACRA put up for a tribunal which would operate under the criteria suggested by that organisation seems as fair a system as could be devised to seperate wrong from right on this issue, as well as avoiding the constitutional difficulty which seems to scare the Government and even certain members of the Opposition. At any rate, if the spirit of this Bill is really to abolish ground rent, rather than simply encourage lessees to buy out their ground rent, the Bill should be so amended as to give a much greater incentive and to remove every possible obstacle from the lessee. It will not be the job of the arbitrator, in this instance the Registrar of Titles, to arbitrate as between two equal parties who have corresponding equal right and equal obligations. The onus is [293] very much on the Government to make sure that the lessee gets every favourable interpretation of the Bill. That is why I would see that certain amendments are necessary if the Bill is indeed to lead to an abolition of ground rents and not simply to be another ineffective measure to encourage the lessee to purchase his freehold.

Having said that, I welcome one or two provisions of the Bill, in particular the new rights of the council tenants to acquire their freehold which gives them an entirely new right to their property—that is most laudable as is section 27 (1) which no longer gives the lessor a right to re-enter and take possession of the premises where rent is in arrears. That is long overdue.

Finally, on the whole, I welcome the Bill, noting that it comes about a century after perhaps the greatest social agitation in this country against landlord injustice. There was in the thirties a followup to the agitation of the rural tenants in the resolution of the annuity dispute. I like to think of what we are now doing as the final solution to the question of abolishing the rights of property in the 19th century sense of property without obligation.

Minister of State at the Department of Foreign Affairs (Mr. D. Andrews): I am most grateful to the various Senators who have contributed to the debate on the Second Stage of this very radical and far-reaching legislation. It is the purpose of the Opposition to examine what they consider to be the defects in the Bill but it is quite clear from the tenor and composition of the contributions—and indeed excellent contributions they were too—that there is very little controversy about this legislation in the House. Senator Molony said that when he examines the Bill in greater depth he will put down amendments to improve the Bill and make it more watertight, according as he sees it. I would like to assure Senator Molony and other Senators that amendments will be considered and examined and if they are neccessary they will be accepted.

This Bill has been given considerable thought. As I say, the function of the [294] Opposition is to knock certain aspects of it, but one thing they did not knock was the principle enshrined in the Bill. This brings me on to Senator Cooney's contribution. In Senator Cooney and Senator Molony we are dealing with two men who are solicitors in their own right, who have practices based on their own reputations. They know the highways and by-ways of landlord and tenant law probably better than most of us and consequently their contributions are welcome.

On the question of there being no difference in principle between the No. 2 Bill and the 1967 Act, the three main differences are differences in principle. The State is putting money into this scheme. Local authority tenants should not be seen as second-class citizens. They are equal citizens under the Constitution with all other citizens and that equality must be seen to be enshrined in our legislation.

I am surprised that Senator Murphy, with his historian's view of contemporary history, did not refer to the fact that the right of re-entry of the landlord is being abolished, which is a significant social achievement and, indeed, an achievement which has not been referred to by those who wish to criticise the Bill. There we have a number of radical features straight away. The State is now intervening on behalf of the tenant. Local authority tenants are being included, and the right of re-entry in the event of non-payment of ground rent by the tenant to the landlord is now being abolished. These are significant departures from existing law and bring up to date the Fianna Fáil concept of social justice based on its natural application.

Senator Cooney suggested that the Minister had hinted in some way that he will introduce a scheme which will abolish ground rents in the sense of giving no compensation. Senator Cooney seemed to go into the realms of fantasy and speculation. He based many of his arguments on what the Minister might have said at meetings with ACRA and other tenant organisations in the corridors of power or in the Fianna Fáil Party rooms. I was present at quite a number of the meetings with the then [295] Opposition spokesman on Justice, Deputy Collins, and I should like to assure Senator Cooney and any other Senator who might have doubts in that regard that in no way did we misrepresent the situation to these tenants' organisations. As far as the constituent of compensation or no compensation is concerned, we put them in the picture as to where they stood. We were not dishonest or irresponsible in that respect. We in no way tried to infer or suggest that we would do away with the landlords's rights which as a citizen he has under the Constitution.

We pointed out to the tenants' organisations and others who attended numerous meetings when we were in Opposition that landlords had certain rights and that while we could do certain things in relation to ground rents, we could not strip the landlords of their ground rents overnight and not compensate them. We found this to be unconstitutional and improper in justice. We are living in a democracy and, if you are looking for something, you have to pay for it. The sensible approach as projected by Deputy Collins when he was spokesman on Justice to these organisations and other individuals was the approach taken by the then Minister for Justice, Senator Cooney. We saw the relevance of what he said then, and in no way were we irresponsible in that regard. While Senator Cooney may be wearing his constitutional purity on his sleeve, I should like to say we were also open in our actions and our attitude to that aspect.

Senator Cooney suggested that the Minister hinted in some way that he would introduce a scheme which would abolish ground rents with no compensation or payment by the State. This, of course, is not so. In his contribution in the Dáil on this legislation the Minister repudiated this totally. More than that, the residents' associations came out publicly and said they never expected such a scheme, a scheme without compensation. As I pointed out, I was present at these meetings on numerous occasions when we were in Opposition and at no time was an undertaking given as [296] suggested in Senator Cooney's allegations.

Senator Cooney made all the usual political insinuations which are difficult to take from a man of his accepted standards and high intelligence. He started off by saying that the Bill was essentially the same type in principle as his Bill. He then entered into the arena of speculation which is totally unrelated to reasonable argument and logic.

On the five year limit on the purchase scheme I have to admit that I welcome the view expressed by Senator Molony in this respect. If he puts down an amendment on the five year limit that may induce us to have another look at it. Senator Cooney referred to a 25 year limit and Deputy O'Keeffe in the Dáil suggested a 25 year limit. It would be no harm if the Senator put down such an amendment. I can certainly see the logic of the argument. It is understandable. It is important, however, that the Bill should not be open-ended and that is the reason why this five year limit was placed on it. The termination of the ground rents system must come sooner rather than later. I do not think the Minister is contemplating an extension of the five year period in the future. I think Senators would agree that this would postpone action. On the suggestion that there might be 250,000 possible applications for vesting orders in five years, I do not think 1,000 people a week will rush to the Land Registry with their applications.

Mr. Molony: Those were the figures given by the Minister for Justice.

Mr. D. Andrews: I am not in any way refuting the figures, but I am talking about the practicalities. The possibility of 1,000 a week is rather remote.

Mr. Cooney: If it has to be done within five years it is a practical proposition.

Mr. D. Andrews: Unfortunately life just does not work out that way, and one can be sure that quite a number of people would not accept the Minister's bargain of a lifetime.

[297] Mr. Molony: In other words it will not lead to the abolition of ground rents.

Mr. D. Andrews: Whose fault is that? It is not my function to give Senator Molony instructions on how he should read it.

Acting Chairman (Séamus de Brún): The Minister must be allowed to continue.

Mr. D. Andrews: It is not my function to tell Senator Molony how to run his legal practice. I am quite satisfied that he has the highest competence. I am sure that if he was concerned that his clients know about the five-year limit that he should circularise all his clients. It might do him some good and it might do his clients some good. Indeed, he might be accused of advertising, and that is the danger there.

Mr. Cooney: We would all like to do that but would be afraid of the consequences.

Mr. D. Andrews: In an investigation I completed in the Land Registry there were 250,000 applications in five years. That is the responsibility of the——

Mr. Cooney: How many extra staff?

Mr. D. Andrews: The purpose of the five-year limit is because we believe that if it is open-ended it would only encourage people to postpone action. What we sought to make clear is that the time-limit is part of a package which is designed to terminate the ground leasehold system as it applies to dwellings.

There was also a suggestion by one of the Senators that there is an element of force or compulsion being introduced by the five-year limitation. There is no such thing. This Bill was introduced as an improvement on the existing legal structures in relation to ground rents. There is no suggestion of force or compulsion, and it is being done as the State sees it in the best interests of those people for whom the legislation is being introduced. We feel that five years is a reasonable limitation. Senator Cooney referred to [298] the words “five-year limit or so”. He wanted the words “or so” explained. I assume that in the last couple of months of the five-year period, certain applications will come in and then pour over for another five or six months. That is really what five years or so means.

Senator Molony and Senator Cooney mentioned the question of land registry staff. I understand that the Minister for Justice dealt with this argument in the Dáil. He pointed out that additional staff are being recruited to do the work arising under the Bill and that separate accommodation is being arranged. I have had dealings with the Land Registry in my representative capacity over the years. I am sure the Senators and particularly the practitioner Senators would agree with me that in no way can we criticise the staff for the length of time it takes to deal with certain matters there. It is a criticism of the lack of personnel there to assist the existing staff. The staff there are excellent and superb people and are most accommodating and cooperative in every respect. That has certainly been my experience and I know it to have been the experience of other people who have dealt with the staff of the Land Registry. They are a fine group of public servants in every respect.

I understand that the officials here have checked on the position in the Registry about its arrears. There has been a very encouraging improvement in the position over the last few months particularly in respect of first registrations or examiners' cases which constitute the work area and is closely related to the proposed ground rents work. This trend is expected to continue and as a result arrears should be down to manageable proportions by the end of the year. The average delay will be down to two or three months, assuming that no violent increase in the flow of applications occurs.

In respect of the last interjection by Senator Cooney in respect of numbers of staff, there were some 50 extra posts recently sanctioned to deal with the general situation. I understand that they are in the course of being filled. I do not want to mislead the Senate. I am saying that the 50 extra posts recently sanctioned [299] are to deal with the general situation. In advance of the operation of this scheme eight to ten posts have been sanctioned and are being filled for ground rent work alone.

Mr. Cooney: Where will they operate? In the main registry?

Mr. D. Andrews: I assume so, until alternative accommodation is found for them. To return to the question that in some way the opening speech suggests that the Minister for Justice resented the suggestion that people might escape from the effects of this ground rent law by virtue of their superior legal knowledge and they might find some way of circumventing the terms of the Act itself when it becomes law, there is no question of resentment. That is a figment of Senator Cooney's imagination. He is reading something into it which does not exist. The Minister in his speech quite clearly makes a statement of fact, no more and no less. It is a matter of interpretation. If Senator Cooney and myself read the same book we can come up with different criticisms of it. So I assume that if we read the same speech we would put different interpretations on it. My interpretation of the Minister's very reasonable speech is that it is unresentful. It is a logical statement in relation to what it states.

Senator Molony asks why there should be three separate Bills. The Minister is very strongly of the opinion that ground rents are a separate issue. In this he is fully supported by the tenants' associations. Senator Cooney seems to be a little bit resentful. This is my interpretation of what he said of the tenants' associations. Maybe the tenants' associations did not support Senator Cooney in the last general election. I do not say that in a personal way. I am very sorry to see Senator Cooney losing his seat in the lower House. I have a personal regard for him and I think he had a very difficult task as Minister for Justice, but that is by the way and not related to the present Bill. The Minister for Justice is very strongly of the opinion that the ground rents are a separate issue.

Mr. Molony: What was the last Bill [300] about? Bill No. 1 was ground rents too.

Mr. D. Andrews: Are you suggesting that the two of them should be incorporated?

Mr. Molony: It would be far more sensible if they were all dealt with together. We have a 1967 Ground Rents Act as well.

Mr. D. Andrews: I think you will agree that taken separately the two are quite understandable and comprehensive.

Mr. Molony: For a lawyer I am surprised to hear you say that.

Mr. D. Andrews: Senator Molony again suggested that if the previous Bill had lasted it might in time have been extended to cover local authority lessees. Again I must come back to Senator Cooney's remarks on the No. 1 Bill. Senator Cooney said here on Committee Stage of the No. 1 Bill that he was personally opposed to letting local authority lessees have the relevant rights. He also said it in the context of the last Bill. I say we want local authority tenants in. Senator Cooney in this Bill and the last Bill did not want them in in any circumstances.

Mr. Cooney: Clearly you are outnumbered.

Mr. D. Andrews: According to Senator Cooney the local authority tenants are second class citizens. Senator Cooney is trying to categorise and interject an element of class distinction into this, and it is a very bad principle.

Senator Molony makes the point, and I agree with him, that the citizen, the man in the street, reading the Bill could not off the record understand it. I accept that.

Mr. Molony: That is the Minister for Justice's argument for actually having a separate Bill.

Mr. D. Andrews: Oh, no.

Mr. Molony: The argument the [301] Minister for Justice gave for having a separate Bill was so that the layman could understand it. I think it is a very stupid move.

Mr. D. Andrews: I do not agree with you that it was the only argument. It was one of a series of arguments in relation to it.

Mr. Molony: It was the only one he gave.

Mr. D. Andrews: That is not true either. You can quote me on the Committee Stage. The arguments I put forward were quite clear and they certainly did not highlight that aspect. It is difficult for the man in the street to digest the offering on this particular legal plate and comprehend it on one or two readings. It would probably need a number of readings in addition to the assistance of a competent legal advisor.

Senator Molony then gave us an insight into Fianna Fáil canvassers during the last general election by saying that people knocked on the door saying that Fianna Fáil would abolish ground rents. I led a lot of canvassers in my own constituency and, unless Senator Molony has some inside information that he is not telling us about, Fianna Fáil canvassers were very responsible in relation to the ground rent campaign and they quite clearly stated what was in the manifesto. They were carrying around this bible with them. If anybody asked them what they had to say about anything the leader of the canvassing group would produce this excellent document and refer to it and read it out.

Professor Murphy: Perhaps it needed interpretation.

Mr. D. Andrews: You were not around at the time, Senator Murphy, with great respect, or I probably would have sought your interpretation at the time. But it did not need interpretation.

Mr. Molony: How about the newspapers?

Acting Chairman (Séamus de Brún): The Minister of State is to continue [302] without interruption, please.

Mr. D. Andrews: Now I refer to the fraud squad. Deputy Kelly referred to the present Government and the manifesto. Perhaps Senator Molony can help me on that one.

Mr. Molony: The Government.

Mr. D. Andrews: The fraud squad. I am sure Deputy Kelly should know something about frauds and squads. He was the Chief Whip, after all.

Mr. Molony: So were you.

Mr. D. Andrews: I was referring to the qualifications, Senator. He was a Chief Whip of the Coalition Government and he was also Attorney General in the Coalition Government so he should know a little about these things. I am not reflecting on Deputy Kelly's personal integrity.

Mr. Cooney: He will have to wait for his opinion.

Mr. D. Andrews: I never sought his opinion. In regard to the argument of the Land Registry versus county registrars, the staff of the Land Registry includes officers who are engaged full time in the scrutiny of titles and who require a knowledge of conveyancing work and all its complexities. The qualifications required for arbitration under Part III of this Bill are more abundantly available in the Land Registry than in any other Department of State or office of the public service. In fact it may be contrasted with county registrars' offices in this regard. In such offices it is simply not possible to recruit qualified staff to carry out the arbitration functions where the county registrar could not deal with all cases. The Circuit Court offices are staffed by general service civil servants. There is no way in which higher staff would need qualifications to be recruited.

There is a matter which I should put right on the record. It is in relation to the accommodation of newly recruited staff dealing with ground rents. The accommodation is going to be separate. I misled [303] the House on that. I thought they would be working in the same office. I understand that that is not so.

Senator Molony mentions the third Bill. I cannot tell Senator Molony what is in the third Bill. I do not know. The Minister for Justice, whilst aware of the definite outlines, has not finalised it. It is hoped that the Bill will be introduced before the end of this Seanad session.

Mr. Cooney: If the Minister is not coming up here maybe he could do that one concurrently in the other House.

Mr. D. Andrews: It will be a very complex piece of law.

Mr. Cooney: All the more reason we should deal with it early.

Mr. D. Andrews: I feel that law should be dealt with in the Dáil.

Mr. Cooney: That is what I am saying. It could be introduced in the Dáil while Deputy Andrews is up here.

Mr. D. Andrews: In relation to Senator Molony's remark, the Minister is very much aware of the problems arising out of the Supreme Court decision in relation to the rent on the 21 year renewal leases where no rent reviews are possible. This gives an urgency to the proposed Bill and the possibility of amending the law in this respect. The cost of registration of the vesting certificate of the Registry of Deeds will be £4. The cost of first registration of a house valued £20 in the Land Registry will be £5.50. The cost of transfer from the leasehold register to the freehold register of a house with a ground rent of £10 will be £2.90. The cost of registering a fee simple of a house valued £20 on registered land will be £5.60. A map would be required only in the second example, that is the first registration in the Land Registry, and that would have to be paid for by the applicant.

Senator John Murphy in his very strong and ultra-nationalistic speech made a very strong attack on landlords. I would like to remind Senator Murphy that landlords have their rights too. In all [304] circumstances they have to be treated like other citizens before the law. Whilst it is all very well to become emotional about it, we are bound by the Constitution which was given to us by the people. We have to apply it to all citizens. I understand that Senator Murphy has a very strong national sense of history. It is an approach to history which is peculiarly his and he is entitled to it. I do not make any criticism of it. But one must see his contribution in that light.

In relation to Senator Murphy's question about the eight and a half years' purchase, the most recent appropriate Government loan on which to base a current example for the purpose of the Bill is the 11½ per cent development loan 1997 to 1999 issued in February 1978. The price at which this is currently available, 15 May 1977, offers a yield of 12.4 per cent and the maximum purchase price of a £10 ground rent would accordingly be £75 or seven and three-quarter years' purchase.

There is nothing more I have to add. I am grateful to the Senators. We have done our best to produce a Bill which has no defects but if they feel that any aspect of the Bill might be loose, for the sake of improving legislation as they might see it, we would welcome an examination of any amendments they might consider necessary.

Mr. Molony: Would it be in order for me to ask a very brief question of the Minister? The Minister mentioned that the abolition of the landlord's right of reentry was a very serious step. I would like the Minister to tell the House the last occasion on which the landlord's right of re-entry was ordered by a court.

Mr. D. Andrews: I could not answer that offhand.

Mr. Molony: It will do on Committee Stage.

Mr. D. Andrews: I can see what the Senator is getting at. The Senator is not so much concerned about when it happened but as to the principle involved. I will certainly make every effort to have the information available.

[305] Question put and agreed to.

Committee Stage ordered for Thursday, 1 June 1978.

Business suspended at 6.25 p.m. and resumed at 7 p.m.