LANDLORD AND TENANT (GROUND RENTS) ACT, 1978

AN ACT TO PREVENT THE CREATION OF NEW LEASES RESERVING GROUND RENTS ON DWELLINGS AND TO PROVIDE FOR RELATED MATTERS. [16th May, 1978]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

1 Definitions.

1.—In this Act—

“the Act of 1958” means the Landlord and Tenant (Reversionary Leases) Act, 1958;

“the Act of 1967” means the Landlord and Tenant (Ground Rents) Act, 1967;

“dwelling” does not include a separate and self-contained flat in premises divided into two or more such flats;

“person” includes his personal representatives and successors in title.

2 Restriction on right to create leases of dwellings.

2.—(1) Subject to subsection (2), a lease of land made after the passing of this Act shall be void if the lessee would, apart from this section, have the right under section 3 of the Act of 1967 to enlarge his interest into a fee simple and the permanent buildings are constructed for use wholly or principally as a dwelling.

• (2) Subsection (1) shall not apply where the lease is a reversionary lease under the Act of 1958.

• (3) The construction of permanent buildings for use wholly or principally as a dwelling on land which is held under a lease made after the passing of this Act shall render the lease void if the existence of the buildings, as so constructed, immediately before the making of the lease would have rendered the lease void under subsection (1).

• (4) A person who has given consideration for a lease that is void under subsection (1) shall have the right to acquire the fee simple in the land and any intermediate interests therein as if he were a person to whom section 3 of the Act of 1967 applies at the expense, as to both purchase money and costs, of the person who purported to grant the lease.

• (5)
• (a) Where, immediately before the passing of this Act—

• (i) a person holds land under a lease for a term of not less than ninety-nine years, of which at least fifty years are unexpired, and

• (ii) permission exists under Part IV of the Local Government (Planning and Development) Act, 1963 (including permission granted on an outline application under regulations made under section 25 of that Act) for the development of the land, wholly or mainly by the construction of dwellings,

that person shall, during the period of one year after such passing, have the right to acquire under the Act of 1967 the fee simple in the land and any intermediate interests therein, except in a case in which he has entered into an enforceable agreement with another person for the assignment to that person of his interest under the lease or for the grant of a lease for a term of not less than ninety-nine years, in which case the latter person shall during that period of one year have such right.

• (b) Section 18 (1) (b) of the Act of 1967 (which refers to the maximum purchase price) shall not apply in any such case.

• (6) Where the trustees of a trust established by any enactment for the provision of dwellings are prevented by reason of this section from disposing of such dwellings to their tenants by way of lease, they shall be empowered in lieu thereof to dispose of them to their tenants by the grant of the fee simple.

• (7) Where a lease is rendered void under subsection (3)—

• (a) a sublease of any portion of the land shall not be terminated thereby, if the buildings referred to in subsection (3) are not constructed, either wholly or in part, on that portion,

• (b) the person who would, but for this subsection, become entitled by virtue of the voidance to the possession of the land comprised in the sublease shall become entitled to the reversion on the sublease and to the benefit of the rent reserved by and the covenants and conditions contained in the sublease, and

• (c) the sublessee shall, from the date of the voidance, hold the land demised to him at whichever of the following rents is the greater—

• (i) the rent reserved by the sublease, or

• (ii) such portion of the rent reserved by the avoided lease as is fairly attributable to the land comprised in the sublease.

• (8) Where a dispute arises in regard to the apportionment of the rent under subsection (7) (c) (ii), the matter shall be determined under section 17 of the Act of 1967 (which refers to the determination of certain matters by arbitration).

• (9) In subsection (7), references to a sublease or sublessee include, where appropriate, references to an assignment and to an assignee, his personal representatives and successors in title.

3 Extension of section 2.

3.—(1) Section 2 shall extend to a lease which would be a lease to which section 4 of the Act of 1958 applies if, in substitution for paragraph (d) of subsection (2) of that section, the following paragraph were substituted:

• “(d) that the lease, being a lease for a term of not less than fifty years, was made—

• (i) 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

• (ii) 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

• (iii) partly in consideration of both that payment and that expenditure and that 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.”

• (2) In determining, for the purposes of subsection (1) 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.

4 Sales of dwellings by housing authority.

4.—(1) The power conferred by section 90 of the Housing Act, 1966, on a housing authority to vest a dwelling provided by them under that Act in a tenant or other person shall, after the passing of this Act, be exercisable only by the vesting of the fee simple in the dwelling subject to such terms and conditions as may be specified in the transfer order under that section.

• (2) The following special conditions, in particular, shall be specified in every transfer order vesting a dwelling in the tenant thereof:

• (a) the dwelling shall, unless the housing authority otherwise allow, be occupied as a normal place of residence by the purchaser or the purchaser's successor in title or by a member of the purchaser's family or the family of his successor in title, and

• (b) the dwelling or any part thereof shall not, without the consent of the housing authority, be mortgaged, charged or alienated otherwise than by devise or operation of law.

• (3) The special conditions mentioned in subsection (2) shall apply in relation to the dwelling for the period of twenty-five years from the date of vesting and shall be binding upon the purchaser, his personal representatives and successors in title during that period.

5 Short title, construction and collective citation.

5.—(1) This Act may be cited as the Landlord and Tenant (Ground Rents) Act, 1978.

• (2) The Landlord and Tenant Acts, 1931 to 1971, and this Act shall be construed together as one Act and may be cited together as the Landlord and Tenant Acts, 1931 to 1978.