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16 1978

LANDLORD AND TENANT (GROUND RENTS) (NO. 2) ACT, 1978

PART II

Purchase of Fee Simple

General Right

General right to acquire fee simple.

[1967, s. 3(1)]

8. —A person to whom this Part applies shall, subject to the provisions of this Part, have the right as incident to his existing interest in land to enlarge that interest into a fee simple, and for that purpose to acquire by purchase the fee simple in the land and any intermediate interests in it and the Act of 1967 shall apply accordingly.

Lessees

Right of lessee.

[New in pt. cf. 1958, s. 4 (2) in pt., (4) (5) (6); 1967, s.3 (2) in pt.]

9. —(1) This Part applies to a person who holds land under a lease, if the following conditions are complied with:

(a) that there are permanent buildings on the land and that the portion of the land not covered by those buildings is subsidiary and ancillary to them;

(b) that the permanent buildings are not an improvement within the meaning of subsection (2);

(c) that the permanent buildings were not erected in contravention of a covenant in the lease; and

(d) one of the alternative conditions set out in section 10.

(2) In subsection (1) (b) “improvement” in relation to buildings means any addition to or alteration of the buildings and includes any structure which is ancillary or subsidiary to those buildings, but does not include any alteration or reconstruction of the buildings so that they lose their original identity.

(3) Where it is claimed that a lease complies with this Part on the ground that the permanent buildings were erected in pursuance of an agreement for the grant of the lease on their erection but express evidence of the agreement is not available, the following provisions shall have effect:

(a) if it is proved that the buildings were erected by the person to whom the lease was subsequently made, it shall be presumed, until the contrary is proved, that the agreement was in fact made and that the buildings were erected in accordance with it;

(b) in any other case, the arbitrator may, if he so thinks proper on hearing such evidence as is available and is adduced, presume that the agreement was in fact made and that the buildings were erected in accordance with it.

(4) Permanent buildings erected by a lessee in pursuance of a covenant in his lease to reinstate the buildings comprised in the lease in the event of their destruction by fire or otherwise shall be deemed to have been erected by the person who erected the original buildings.

(5) The arbitrator may declare a person to be a person to whom this Part applies notwithstanding that the buildings were, in whole or in part, erected in contravention of a covenant, if he is of opinion that it would be unreasonable to order otherwise.

Alternative conditions to be complied with.

10. —The following are alternative conditions one of which must also be complied with in a case to which section 9 relates:

[1958, s. 4 (2) (d)]

1. that the permanent buildings were erected by the person who at the time of their erection was entitled to the lessee's interest under the lease or were erected in pursuance of an agreement for the grant of the lease upon the erection of the permanent buildings;

[New. cf. 1958, s. 4 (3) (a)]

2. that the lease is for a term of not less than fifty years and the yearly amount of the rent or the greatest rent reserved thereunder (whether redeemed at any time or not) is of an amount that is less than the amount of the rateable valuation of the property at the date of service under section 4 of the Act of 1967 of notice of intention to acquire the fee simple or the date of an application under Part III of this Act, as the case may be, and that the permanent buildings on the land demised by the lease were not erected by the lessor or any superior lessor or any of their predecessors in title:

provided that it shall be presumed, until the contrary is proved, that the buildings were not so erected;

[1958, s. 5 in pt.]

3. that the lease was granted by a lessor to the nominee of a person (in this paragraph referred to as the builder) to whom land was demised for the purpose of erecting buildings thereon in pursuance of an agreement between the lessor and the builder that the builder having contracted to sell the buildings would surrender his lease in consideration of the lessor granting new leases to the builder's nominees;

[1958, s. 5 in pt.]

4. that the lease was granted by a lessor to the nominee of a person (in this paragraph referred to as the builder) in pursuance of an agreement between the lessor and the builder that the lessor, upon the erection of the buildings by the builder, would grant leases to the builder's nominees;

[1971, s. 8 (1)]

5. that the lease was granted, either at the time of the expiration or surrender of a previous lease or subsequent to such expiration or surrender—

(a) at a rent less than the rateable valuation of the property at the date of the grant of the lease, or

(b) to the person entitled to the lessee's interest under the previous lease,

provided that the previous lease expired or was surrendered before the 31st day of March, 1931 and that it would have been a lease to which this Part applied had this Act then been in force and provided that it shall be presumed, until the contrary is proved, that the person to whom the lease was granted was so entitled;

[1958, s. 19 in pt.]

6. that the lease is a reversionary lease granted on or after the 31st day of March, 1931, to a person entitled thereto under Part V of the Act of 1931 or the Act of 1958, whether granted on terms settled by the Court or negotiated between the parties;

[New. cf. 1958, s. 7]

7. that the lease, being a lease for a term of not less than fifty years, was made—

(a) partly in consideration of the payment of a sum of money (other than rent) by the lessee to the lessor at or immediately before the grant of the lease and, for this purpose, any money paid in redemption of any part of the rent reserved by the lease (whether the money was paid in pursuance of a covenant in the lease or in pursuance of an agreement made between the lessee and the lessor during the currency of the lease) shall be deemed to be part of the consideration, or

(b) partly in consideration of the expenditure (otherwise than on decoration) of a sum of money by the lessee on the premises demised by the lease, or

(c) partly in consideration of both that payment and that expenditure,

where the sum so paid or expended or the total of those sums was not less than fifteen times the yearly amount of the rent or the greatest rent reserved by the lease, whichever is the less.

Greatest rent under section 10.

[1958, s. 7 (3)]

11. —In determining for the purposes of section 10 the greatest rent reserved by a lease the following provisions shall have effect:

(a) where during the currency of a lease part of the rent is redeemed by a capital payment, the reduced rent shall be deemed to be the greatest rent reserved by the lease;

(b) a penal rent payable for any breach of covenant and any exceptional rent reserved for a specified period not exceeding five years shall be disregarded.

Extension of section 10, condition 7.

[New]

12. —A lease for a term of not less than fifty years shall be deemed to comply with condition 7 in section 10 if—

(a) the lease was granted partly in consideration of an undertaking by the lessee to carry out specified works on the premises demised by the lease,

(b) the amount to be expended on the works was not specified,

(c) the works were carried out by the lessee, and

(d) it is proved that the reasonable cost of the works taken either alone or together with any fine or other payment mentioned in that condition was not less than fifteen times the yearly amount of the rent or the greatest rent reserved by the lease, whichever is the less.

Right of lessee under expired lease.

[1958, s. 14; 1971, s. 9]

13. —Where—

(a) a lease expired within ten years before the commencement of this Act, and

(b) the lessee is, at such commencement, in possession of the land comprised in the expired lease under a yearly tenancy arising by implication from the acts of the parties or under a statutory tenancy under the Rent Restrictions Acts, 1960 and 1967, or as a tenant at will or otherwise, without having obtained a new tenancy from the lessor or acquired the lessor's interest in the land, and

(c) no person was, immediately before such commencement, entitled to be granted a lease under the Act of 1958,

the lessee shall, during the twelve months after the commencement of this Act, have the same right to acquire the fee simple as he would have if his lease had not expired.

Partly-built leases.

[New in pt. cf. 1958, s. 6]

14. —(1) Where a person holds land under a lease (in this section referred to as a partly-built lease) which would entitle him to acquire the fee simple but for the fact that the portion of the land which is not covered by the permanent buildings is not wholly subsidiary and ancillary to those buildings, the following provisions of this section shall have effect.

(2) The partly-built lease shall, for the purposes of this Act, be deemed to comprise two separate leases as follows:

(a) one lease (in this section referred to as the built-on lease) comprising that portion of the land demised by the partly-built lease which is covered by the permanent buildings, together with so much of the land as is subsidiary and ancillary to those buildings, and

(b) the other lease (in this section referred to as the vacant lease) comprising the residue of the said land.

(3) For the purposes of the division of the partly-built lease, such portion of the rent reserved by that lease as is fairly attributable to the land comprised in the built-on lease shall be apportioned to the built-on lease and the remainder of the said rent shall be apportioned to the vacant lease, and the covenants on the lessee's part and the conditions contained in the partly-built lease shall be apportioned likewise so as to relate separately to the land comprised in the built-on lease and to the land comprised in the vacant lease.

(4) The built-on lease shall be a lease to which this Part applies.

Yearly Tenants

Right of yearly tenant.

15. —(1) This Part also applies to a person who holds land in the following circumstances—

[New in pt. cf. 1967, s. 3 (2) (d) (ii), (4) (b)]

(a) that the land is covered wholly or partly by permanent buildings and any land not so covered is subsidiary and ancillary to those buildings;

(b) that the land is held under a contract of yearly tenancy or under a yearly tenancy arising by operation of law or by inference on the expiration of a lease, or under a statutory tenancy implied by holding over property on the expiration of a lease which reserves a yearly rent;

(c) that the land has been continuously held under any one or more of the tenancies referred to in paragraph (b) (including any expired lease) by the person or his predecessors in title for a period of not less than twenty-five years prior to the date of service by the person of notice of intention under section 4 of the Act of 1967 to acquire the fee simple or the date of an application under Part III of this Act;

(d) that the yearly rent is less than the rateable valuation of the property at the date of the service of that notice of intention or application;

(e) that the permanent buildings were not erected by the immediate lessor or any superior lessor or any of their predecessors in title, provided, however, that it shall be presumed until the contrary is proved that the permanent buildings were not so erected;

(f) that the contract of tenancy is not a letting which is made and expressed to be made for the temporary convenience of the immediate lessor or of the person holding under the contract and, if the letting was made after the passing of the Act of 1931, stating the nature of the temporary convenience, and

(g) that the contract of tenancy is not a letting which is made for or dependent on the continuance of the person holding under the contract in any office, employment or appointment.

[New. cf. 1958, s. 6]

(2) Where land (in this section referred to as a partly-built holding) would be land in relation to which this section applies but for the fact that the portion of the land which is not covered by the permanent buildings is not wholly subsidiary and ancillary to those buildings, subsections (3), (4) and (5) shall have effect.

[New. cf. 1958, s. 6]

(3) The partly-built holding shall, for the purposes of this Part, be deemed to comprise two separate holdings as follows:

(a) one holding (in this section referred to as the built-on holding) comprising that portion of the land which is covered by the permanent buildings, together with so much of the land as is subsidiary and ancillary to those buildings, and

(b) the other holding (in this section referred to as the vacant holding) comprising the residue of the land.

[New. cf. 1958, s. 6]

(4) For the purposes of the division of the partly-built holding, such portion of the rent for the holding as is fairly attributable to the land comprised in the built-on holding shall be apportioned to the built-on holding and the remainder of the rent shall be apportioned to the vacant holding, and the covenants on the part of the person holding the land and the conditions attached to the tenancy of the partly-built holding shall be apportioned likewise so as to relate separately to the land comprised in the built-on holding and to the land comprised in the vacant holding.

[New. cf. 1958, s. 6]

(5) The built-on holding shall be land in relation to which this section applies.

Restrictions

Restrictions on right to acquire fee simple.

[1967, s. 3 (3) (4) (a)]

16. —(1) Section 8 does not apply, in relation to any land, to a person who has been declared by virtue of section 15 (1) of the Act of 1958 not to be entitled to a reversionary lease of the land under that Act and who is in possession of the land under a lease or tenancy or by virtue of subsection (2) of the said section 15.

(2) A person shall not be entitled to acquire the fee simple under this Part if the lease on which such right is based is—

(a) a lease of land which is used for the purposes of business or includes a building divided into not less than four separate and self-contained flats being a lease which contains provisions enabling the amount of the rent reserved by the lease to be altered within twenty-six years from the commencement of the lease (not being provisions enabling such rent to be altered once only and within five years from such commencement or upon the erection after such commencement of any buildings upon the land or upon the breach of a covenant in the lease), or

(b) a lease granted before the commencement of the Act of 1967 of land which is used for the purposes of business, being a lease which contains provisions requiring the lessee to carry on business on the land which is restricted in whole or in part to dealing in commodities produced or supplied by the lessor, or

(c) a lease of land containing a covenant by the lessee to erect a building or buildings or carry out development on the land if and so long as the covenant has not been substantially complied with, or

(d) a lease made by the Commissioners of Irish Lights, or

(e) a lease made by a harbour authority, within the meaning of the Harbours Act, 1946 , whether before or after the passing of that Act.

Purchase Price

Determination of purchase price by arbitration.

[New in pt. cf. 1967, s. 18]

17. —(1) This section applies to the determination of the purchase price of the fee simple or any other interest by arbitration under the Act of 1967 including an arbitration conducted by the Registrar of Titles in pursuance of section 21 of this Act.

(2) The purchase price shall, subject to subsections (3), (4) and (6), be the sum which, in the opinion of the arbitrator, a willing purchaser would give and a willing vendor would accept for the fee simple or other interest having had regard to—

(a) the rent payable for the land by the person acquiring the fee simple,

(b) where the land was held by the person acquiring the fee simple under a lease which has expired or is held by him under a lease which will expire less than fifteen years after the date of the service of the notice under section 4 of the Act of 1967 or of the application under Part III of this Act, the rent which, in the opinion of the arbitrator, would be reserved by a reversionary lease under the Act of 1958 of the land granted for a term commencing on the expiration of the first-mentioned lease,

(c) the current interest yields on securities of the Government issued for subscription in the State,

(d) if the land is used for the purposes of business or exceeds one acre in area and is not used for the purposes of business, the area and nature of the land, its location and user and the state of repair of any buildings or structures thereon,

(e) the price paid for the fee simple or any other interest in the land on a sale taking place on or after the 22nd day of May, 1964,

(f) any mortgage or other charge on the interest in the land of any person from whom, mediately or immediately, the person acquiring the fee simple holds the land,

(g) the costs and expenses which, in the opinion of the arbitrator, would be reasonably incurred by the persons from whom, mediately or immediately, the person acquiring the fee simple holds the land, in investing the purchase money payable in respect of the acquisition of the fee simple,

(h) the costs and expenses which, in the opinion of the arbitrator, have been incurred by a person acquiring the fee simple who holds the land under a lease by reason of the failure of the lessor to maintain any amenities which he is required to maintain under a covenant in the lease,

(i) the current price of the immediate lessor's interest in land held under leases or yearly tenancies similar to the lease or yearly tenancy, as the case may be, under which the land is held by the person acquiring the fee simple, and

(j) such other matters as are, in the opinion of the arbitrator, relevant to the determination of the purchase price.

(3) If the land—

(a) is not used for the purposes of business,

(b) is held by the person acquiring the fee simple under a yearly tenancy, under a statutory tenancy implied by holding over property on the expiration of a lease which reserved a yearly rent or under a lease which will not expire within fifteen years after the date of the service of the notice under section 4 of the Act of 1967 or of the application under Part III of this Act, and

(c) does not exceed one acre in area,

then, subject to the subsequent provisions of this section, the purchase price shall not exceed the amount which, if invested on the date of the award in the security of the Government which was issued last before that date for subscription in the State and is redeemable not less than fifteen years after the date of issue, would produce annually in gross interest an amount equal to the amount of the rent payable under the lease or yearly tenancy, as the case may be, during the year immediately preceding the date of the service of the said notice or application.

(4) Where the cost of extinguishing a rent or charge out of or on land the fee simple in which is being acquired under this Act or the Act of 1967 is fixed by statute, allowance shall be made for such cost in determining the purchase price of the fee simple under this section.

(5) Subsection (3) shall not apply in the case of a lease which provides for an increased rent payable at any time within fifteen years after the date of the service of the notice under section 4 of the Act of 1967 or of the application under Part III of this Act.

(6) If the land—

(a) is not used for the purposes of business,

(b) is held by the person acquiring the fee simple under a lease that will expire within fifteen years after the date of the service of the notice under section 4 of the Act of 1967 or of the application under Part III of this Act, and

(c) does not exceed one acre in area,

the purchase price shall not exceed the amount which would be determined under subsection (3) if the land were land to which that subsection applied, together with, in respect of each year by which the unexpired term of the lease falls short of fifteen years, one fifteenth of the difference between that price and the price that would be determined on the basis of a current reversionary rent.

(7) The arbitrator shall, if so requested by a party to the arbitration, specify the matters (if any) to which he has had regard under subsection (2) (j).