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Putting the ground rents legislation back on track

One of the most successful legislative schemes of recent decades in Ireland has been the ground rents legislation which enables lessees holding their properties on long leases at a small (ground) rent to buy out the freehold title. This applies not only to residential lessees but also commercial lessees. However, the scheme was thrown into disarray by a decision of the Supreme Court in 2012 involving a supermarket in Carrickmacross (Shirley v O’Gorman & Co [2012] IESC 5 ). The essential problem was that, in giving the judgment of the Court, Fennelly J interpreted provisions in the legislation in a way which made it more difficult for lessees to qualify for the right to buy out the freehold of their properties.

The Supreme Court’s interpretation was severely criticised by landlord and tenant experts and local businesses in Carrickmacross mounted a campaign to reverse the effects of the decision. A private member’s Bill was introduced to the Senate in early 2018 with this in mind. The Bill had considerable cross-party support but the Minister for Justice, Charlie Flanagan TD, was concerned about technical and constitutional issues concerning its drafting. The Minister established an Expert Group comprising the author, Gavin Ralston SC and officials from the Department and the Attorney General’s Office to advise him. That Group reported in the early summer and advised the Minister that the Government could support the Bill, subject to various amendments it suggested. On 18 July the Minister for Business, Enterprise and Innovation, Heather Humphreys TD, issued a statement welcoming progress on the Bill and anticipating that the Government would accept the Expert Group’s amendments and support progression of the Bill through the Oireachtas in the Autumn. She acknowledged the work of those who had campaigned for the reversal of the Supreme Court’s interpretation of the legislation scheme and its impact on businesses. In her view the Bill, amended as the expert Group suggested, would bring back certainty for businesses about their future.

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