Categories
Property Law

The Different Types of Tenancies and Leases in Irish Law

leases-property-law

Tenancies or leases fall into two broad categories:

  1. A tenancy for a fixed term
  2. A tenancy from year to year or other period of time.

Fixed Term Tenancies

A tenancy can be created for any fixed term of any duration. Once the fixed term is arrived at the interest of the tenant in the property ends and the lessor is entitled to possession.

Periodic Tenancies

A periodic tenancy runs for a period of time which can be a week, month, year, etc. It automatically renews on the expiry of the initial period and will continue indefinitely until the lessor serves a notice to quit.

The notice periods are set by statute and common law. These tenancies can be created expressly or by implication.

Tenancy at Will

A tenancy at will is a common law concept and involves the person being in possession of the property for an indefinite period with the consent of the owner. This type of tenancy can be terminated by either party at any time.

It is worth noting that the relationship of landlord and tenant does exist but the tenant has no interest in the land which he can transfer to third parties. His tenure is ‘personal’ between himself and the landlord.

This type of tenancy is not covered by landlord and tenancy legislation and is deemed to end one year after it commences unless determined beforehand.

Tenancy at Sufferance

This type of tenancy arises by operation of law and occurs when a tenant is in possession at the end of the lease without the landlord’s consent and without paying rent. However this tenant is not a trespasser as his original entry into possession was lawful.

A tenant at sufferance has no interest in the land and is not in a landlord/tenant relationship; in fact, he is only called a ‘tenant’ because his original entry into possession was lawful.

Statutory Tenancy

A statutory tenancy arises under various pieces of legislation such as the Housing (Private Rented Dwellings) Act, 1982 and the Landlord and Tenant (Amendment) Act, 1980.

Part 4 of the Residential Tenancies Act, 2004 also provides relief to tenants who have been in occupation of a dwelling under a tenancy for a continuous period of 6 months.

Temporary Convenience Lettings

These lettings can arise in residential or commercial situations. If they are genuinely for the temporary convenience of the owner of the property they fall outside the statutory protections afforded to tenants under landlord and tenant legislation.

In such commercial lettings, it is essential that it is stated in the letting agreement that the nature of the temporary convenience is set out. There is no legal definition of ‘temporary convenience’ but it must be for the bona fide temporary necessity of the landlord.

Otherwise statutory protection and controls will be available to the tenant.

There is no limit on the duration of such lettings.

Conclusion

It is clear that there is a wide range of tenancies which can exist for both commercial and residential properties.

The Land And Conveyancing Law Reform Act 2009 provides that the relationship of landlord and tenant does not now arise in relation to a tenancy at will or tenancy at sufferance.

Categories
Business and Company Law Property Law Property Purchases and Sales

How to Become a Licensed Property Services Provider

From May, 2012 a new body, the Property Services Regulatory Authority (PSRA) has been set up to regulate the provision of property services in Ireland.

This new body covers auctioneers/estate agents, property management service providers, and letting agents.

Anyone providing property services in Ireland requires a licence and is leaving themselves open to up to 5 years in prison and an unlimited fine if they provide property services without one.

A separate licence is required for each property service.

There are a number of different application forms depending on whether you are a sole trader, independent contractor, company or partnership.

The Property Services (Regulation) Act 2011 is the relevant piece of legislation which you can find at www.IrishStatuteBook.ie and the PSRA (www.NPSRA.ie ) have produced a booklet explaining the whole procedure together with the application forms and notes to help you with filling out the application.

Sole Trader/Independent Contractor Example

The following comprises the main requirements for a sole trader/independent contractor but is not comprehensive or exhaustive.

Please refer to the guide here. ..Guide to Becoming a Licensed PSP

Your application would be as a sole trader or independent contractor (depending on whether you have employees or not) and the main requirements are as follows:

  • A completed and signed Application Form (PSRA/LA 3)
  • Evidence of your qualification(s) or necessary experience (see below)
  • Evidence that the required level of Professional Indemnity Insurance, which covers both the employer and employees, is or will be available to you,
  • Accountants Report,
  • Tax Clearance Details,
  • Certificate of Business Name Registration (only required if you intend using a business name-it is not necessary to trade under a business name but if you choose to do so the business name will have to be registered),
  • Prescribed Licence Fee (€1,000),
  • Passport size photograph,
  • Compensation fund contribution of €200.

The necessary experience required is that you have held an auctioneer’s licence for three out of the last five years.(This is not now the case-see the amendment below which points up the difference between the booklet published by PSRA and the published regulations covering the qualifications requirement)

The level of professional indemnity insurance cover which must be provided for is as follows:

“the amount insured for each and every claim (exclusive of defence costs) must be at least twice the business’s annual fee turnover (exclusive of VAT) in the previous fiscal year subject to a minimum cover of €500,000 (five hundred thousand euro), with no limit on the number of claims in any one year.”

Hopefully this article together with the guide above will give you a good understanding of what is now required to become a licensed property services provider in Ireland.

Update 18th June, 2012

The PROPERTY SERVICES (REGULATION) ACT 2011 (QUALIFICATIONS) REGULATIONS 2012 sets out the qualifications requirements for applicatnts for the various licences and were published on 5th June 2012.

These regulations appear to different significantly from the booklet published by the PSRA as the regulations now give some discretion to the PSRA in relation to the applicant proving he/she has attained the minimum qualification requirements.

Here is an extract:

“minimum qualification requirements”, in relation to an application for a
licence, means—
(a) the applicant has, in respect of the subject areas specified in the Schedule, successfully completed a course of studies which has led to the
awarding to him or her, by a nationally recognised awarding body or
awarding bodies, of 120 ECTS compatible higher education and training credits at levels 6 to 10 of the framework of qualifications (in this
definition referred to as the “Irish framework”),

(b) the applicant has, in another jurisdiction, in respect of the subject
areas specified in the Schedule, successfully completed a course of
studies which has led to the awarding to him or her, by a body or
bodies in that jurisdiction that is or are equivalent to a nationally
recognised awarding body or awarding bodies, credits, under a framework in that jurisdiction that is equivalent to the Irish framework,
equivalent to levels 6 to 10 of the Irish framework,
(c) the applicant has lawfully engaged in, and for periods amounting
together to not less than 3 years of the 5 year period immediately
preceding the making of the application, the provision of the property
service for which he or she is seeking the licence, or
(d) the applicant has such other qualifications or experience, or both,
which, although not falling (or fully falling) within paragraph (a), (b)
or (c), satisfies the Authority that the applicant is suitable to provide
the property service for which he or she is seeking the licence

The PSRA application form for a sole trader/independent contractor now refers to “evidence of my engagement full time in the provision of Property Services for 3 of the last 5 years” which is a significant difference from page 13 of the PSRA booklet which states:

In the case of a Sole Trader or Independent Contractor evidence that the applicant was the holder of a licence or permit issued under the Auctioneers and House Agents Acts 1947 to 1973 for three of the five years immediately preceding the making of the application.

Categories
Property Law

Easements and Rights of Way in Ireland-the Essentials

right of way

Rights of way are one of the most common forms of easements you are likely to encounter in Irish law. And they can be sources of real tension and disputes between neighbours.

They can also cause problems when buying or selling property as the vendors of a rural house with an unregistered right of way will have difficulty selling it as the purchasing solicitor will have concerns about providing a certificate of title for the purchaser’s lender.

What is an easement?

An easement is a right over the land of another, which attaches to land. The land with the right attached is called the “dominant land”, and the right transfers with the land when the land is transferred.

The land over which the easement is held is called the “servient land”.

The most common type of easement is a right of way.

Another type of easement is called “profits-a-prendre” which are rights to take from the land of another. Examples include the right to cut turf/timber, the right to fish, quarry, extract minerals from another’s land.

Two of the most common methods of acquiring rights of way, by prescription and by the doctrine of the lost modern grant, have been abolished by the Land and Conveyancing Law Reform Act, 2009.

Of course a right of way can always be created by a Deed of Grant by one landowner to another.

In order to now claim legal title to an easement such as a right of way it is necessary to get a Court order and register it with the Property Registration Authority either in the Land Registry or in the Registry of Deeds.

Owners or easements prior to the commencement of the Land and Conveyancing Law Reform Act, 2009 have three years within which to bring their application.

However, this period of three years, which would have expired on 1 February 2012, by Section 38 of the Civil Law (Miscellaneous Provisions) Act 2011 this was extended to 1 December 2021. This applies to easements that are acquired by prescription but also to easements that have been granted by deed where these are not already registered.

In order to obtain an easement by prescription by way of Court application now you will have to prove that you were a user as of right for a minimum period of 12 years (or 30 years where the servient owner is the State).

A user as of right means use without interruption without force, without secrecy or without consent of the servient owner. This is important as it means if you are using the land with oral or written consent of the servient owner your claim to a right of way will fail. (See also houses for sale in Ireland and related property law articles)

Obtaining an Easement

The most common way is by deed of easement. This is a grant of easement-for example a Grant of Right of Way.

When you buy a house in a housing estate you will be granted easements over the land of others to allow you access to pipes etc. These types of easements are registered with the Property Registration Authority either in the Registry of Deeds or Land Registry.

The second most popular way is by “prescription”. This occurs where a right has been exercised over a long period of time (20 years), even though there may be no document or deed confirming this.

The right would have been exercised openly, without force, and without consent of the servient land owner.

This type of easement would not have been registered with the Property Registration Authority. When the land was being transferred, though, the vendor would give a statutory declaration setting out his history of use of the easement. The purchaser would then rely on this statutory declaration to show his right to use the easement once he obtains the land.

A third category of easement arises: implied easements or easements of necessity. These were covered by a rule known as the Rule in Wheeldon v Burrows.

However, this rule was abolished and replaced by section 40 of the Land and Conveyancing Law Reform act, 2009:

40.— (1) The rule known as the Rule in Wheeldon v. Burrows is abolished and replaced by subsection (2).

(2) Where the owner of land disposes of part of it or all of it in parts, the disposition creates by way of implication for the benefit of such part or parts any easement over the part retained, or other part or parts simultaneously disposed of, which—

(a) is necessary to the reasonable enjoyment of the part disposed of, and

(b) was reasonable for the parties, or would have been if they had adverted to the matter, to assume at the date the disposition took effect as being included in it.

(3) This section does not otherwise affect—

(a) easements arising by implication as easements of necessity or in order to give effect to the common intention of the parties to the disposition,

(b) the operation of the doctrine of non-derogation from grant.

Section 34 of the act abolishes acquisition of an easement by prescription:

34.— Subject to section 38, acquisition of an easement or profit à prendre by prescription at common law and under the doctrine of lost modern grant is abolished and after the commencement of this Chapter acquisition by prescription shall be in accordance with section

Section 35 sets out how to obtain an easement based on prescription:

35.— (1) An easement or profit à prendre shall be acquired at law by prescription only on registration of a court order under this section.

(2) Subject to subsection (3), in an action to establish or dispute the acquisition by prescription of an easement or profit à prendre, the court shall make an order declaring the existence of the easement or profit à prendre if it is satisfied that there was a relevant user period immediately before the commencement of the action.

(3) The court may make an order under subsection (2) where the relevant user period was not immediately before the commencement of the action if it is satisfied that it is just and equitable to do so in all the circumstances of the case.

(4) An order under subsection (2) shall be registered in the Registry of Deeds or Land Registry, as appropriate.

Interruption of use

If use of the land is interrupted for a continuous period of one year will break the relevant user period and prevent the acquisition of the easement. However, there is an exception to this in section 37(1) which provides that if the interruption occurs when the servient owner is incapable of managing his affairs because of a mental incapacity the running of the user period is suspended.

Note:

  • A servient owner is the owner of land subject to an easement;
  • Servient land is land subject to an easement;
  • Dominant land is the land benefited by an easement.

Civil law (Miscellaneous Provisions) Act 2011

The Civil law (Miscellaneous Provisions) Act 2011 made further tweaks to the law in this area by making amendments to the Registration of Title Act 1964 and the Land and Conveyancing Law Reform Act, 2009. It provides that where there is agreement between landowners (an uncontested easement) there is no need to seek a Court Order and you can register your easement with the Land Registry.

The Civil law (Miscellaneous Provisions) Act 2011 also gives credit to the dominant owner for each year of use which has already passed prior to the commencement of the Land and Conveyancing Law Reform Act, 2009.

Register your easement with the PRA

It is important to register an easement with the Property Registration Authority, if it is not already registered. If it is not registered the easement may be extinguished (if there is continuous non use for 12 years) and the 12 years required to obtain it again will start on 1st December, 2021.

Section 36 of the Land and Conveyancing Law Reform Act, 2009 deals with a tenant acquires an easement:

36.— (1) Where the dominant owner acquiring an easement or profit à prendre under section 35 owns a tenancy only in the dominant land, the easement or profit à prendre attaches to that land and when the tenancy ends, passes to the landlord.

Section 39 of the act deals with extinguishment of an easement or profit a prendre.

The application to the PRA without a court order is under section 49A Registration of Title Act, 1964

Registration of easements and profits à prendre in certain cases.

49A. — (1) Where any person claims to be entitled to an easement or profit à prendre and the relevant requirements set out in sections 33 to 38 of the Land and Conveyancing Law Reform Act 2009 have been met, that person may apply to the Authority and the Authority, if satisfied that there is such an entitlement to the easement or profit à prendre concerned, may cause it, as appropriate, to be —

( a ) registered as a burden under section 69(1) (jj) ,

( b ) entered in the register pursuant to section 82 or, in the case of a profit à prendre in gross, in the register of ownership maintained under section 8( b )(i).

(2) Subsection (1) applies only in relation to claims in respect of which —

( a ) the land benefited by the easement or profit à prendre, to which other land is subject, is registered land, or

( b ) the claim is made as part of an application for first registration of that land. ]

Summary

There are now 3 ways to obtain an easement:

  1. A Deed of Easement, that is a formal grant, between the parties
  2. By prescription and filing an affidavit with the Property Registration Authority, provided there is no objection (see section 37 of the Civil law (Miscellaneous Provisions) Act 2011)
  3. By Court application and order (see section 35 of the Land and Conveyancing Law Reform Act, 2009)

The application to the Property Registration Authority referred to at number 2 above involves a detailed application with the PRA who will then send a notice of the application to the landowners over whose land the right of way is claimed. If there is no objection then the PRA will register the right of way to benefit your property and it would be registered as a burden on the folios of the affected land.

If there is any dispute, however, with these landowners then the Court route (number 3 above) is the only one open to you as the PRA will refuse to register it.

Public Rights of Way/Public Roads

Public roads in Ireland can be classified as national, regional, or local. However, there are also roads which have a public right of way over them, but may be classified as “private” because the local authority has not formally taken the road in charge.

So, in these circumstances a public road may be maintained by the council, or maintained privately.

Taking in Charge

All roads built by the local authority automatically become public roads, and the road is the responsibility of the local authority and there is no need for a formal declaration of “taking in charge”.

The taking in charge process will involve the publication of a notice in the local newspaper, with the opportunity given to the public to object.

Public Right of Way

There are very few public rights of way in Ireland that are not public roads, maintained by the council. The Roads Act, 1993 obliges local authorities to protect the public’s right to access public rights of way.

Therefore, a public road may be the responsibility of the local authority, without a formal taking in charge procedure having taken place.

Categories
Debt Problems | Bankruptcy Property Law

Repossessions of Properties Halted by High Court Judgment

Many hard pressed homeowners, fearful of losing their homes as a result of being unable to repay their mortgages, have been handed a lifeline by a High Court decision in July 2011 by Ms Justice Dunne.

Background

Prior to the implementation of the Land and Conveyancing Law Reform Act 2009  lenders relied upon section 62(7) of the Registration of Title Act 1964 to apply to Court to seek a possession order when the borrower had defaulted on his loan.

The decision of Ms Justice Dunne that section 8 of the Land and Conveyancing Law Reform Act 2009   repealed section 62(7) of the Registration of Title Act 1964 means that lenders can no longer rely on section 62(7).

Since the Land and Conveyancing Law Reform Act 2009 came into effect on the 1st of December, 2009 the consequences of this decision and section 8 of the  Land and Conveyancing Law Reform Act 2009 are as follows:

  1. There is no right to apply to Court for an order for possession of property where the borrower entered into the mortgage prior to 1st December, 2009 and have fallen into difficulties after this date.
  2. The Land and Conveyancing Law Reform Act 2009 does contain provisions (in Chapter 3) similar to section 62(7) of the Registration of Title Act 1964 but this will only be of use to lenders and banks in respect of mortgages taken out after 1st December, 2009.

The implications of this decision are far reaching as many of the mortgages which would now be in difficulty would have been taken out prior to 1st December, 2009.

The decision of Justice Dunne arose when four cases, in which orders for possession were sought, were heard together-

  • GE Capital Woodchester Homeloans Limited v Michael and Sinead Grogan
  • GE Capital Woodchester Homeloans Limited v Colm Mulkerrins
  • Secured Property Loans Limited v Tom Clair and Mary Clair
  • Start Mortgages Limited v Robert Gunn and Maura Gunn [2011 IEHC 275].

The details of each case above were slightly different but all four cases involved the mortgage being taken our prior to 1st December, 2009.

Effect of High Court decision

The net effect of the decision in these cases is:

  1. Where the mortgage was taken out prior to 1st Dec. 2009 and go into default after that date the bank has no legal right to seek possession;
  2. Where the mortgage was taken out prior to 1st December, 2009 and no letter of demand was issued prior to this date there is no right to seek possession;
  3. Where the mortgage was taken out prior to 1st December, 2009 and legal proceedings were initiated prior to this date the bank can seek an order for possession;
  4. Where the mortgage was taken out prior to 1st December 2009 and the letter of demand for payment was sent out prior to this date the bank can seek an order for possession.

 

For the many people who are affected by this decision they now have more time to negotiate with their lender and more time in which to sell their property.

They may also find the lender more amenable to a “deal” as the bank will face the difficulty of being unable to seek an order for possession in these cases without the necessary amending legislation.

And in the current economic climate it could be argued that it would be a brave (or foolish) politician who would champion the necessary amending legislation.

Alternative Approach by Banks

Notwithstanding the decision above there is an argument to be made that the banks will not be completely stymied by this decision but may in fact have a legal cause of action arising from a simple breach of contract (the mortgage contract). It has been held by the High Court in the past (Gale v FNBS, 1984) that a mortgage contract gives the lender a contractual licence to enter and take possession of the property.

As with all matters to do with the law consult your solicitor for his/her advices for your particular circumstances.

If you have a question or concern, please use the contact form below. We respond within 24 hours, guaranteed.

UPDATE 2013

Kindly note that the above post was written in 2011; the gap or “lacuna”  in the law identified by Justice Dunne has now been closed by the government by way of legislation.

Categories
Property Law Property Purchases and Sales

10 Key Areas to Consider When Leasing Commercial Premises in Ireland

leasing-commercial-premises
Leasing commercial premises requires caution

Thinking about leasing a shop unit?

Coffee shop?

Office?

Other commercial premises?

If you are thinking about leasing a commercial shop unit in Ireland there are a number of key areas you need to consider before going ahead.

Set out below is a non-exhaustive list of issues that you will need to be satisfied about before investing your cash in a full repairing and insuring lease (FRI lease).

At the end of the piece I also deal with some common questions I am regularly asked by people looking to start or grow their business by taking on a commercial unit.

1) The term

How long will your lease be? Will you have statutory rights under the Landlord and Tenant (Amendment) Act, 1980? Will you have a break clause? Is Vat payable?

2) Repairs

Who is responsible for repairs? If it is a lease in excess of 5 years you as tenant will likely be responsible.
If it is a lease of less than 5 years you may only be responsible for internal repairs.

The question of whether it is a new building or an older building will also be significant and other issues to be addressed would include latent and inherent defects in the building, what is considered fair wear and tear and what risks are covered by insurance.

3) Insurance

If it is a full FRI lease then you as tenant will almost certainly have to pay the insurance premium held in your landlord’s name.
This will vary depending on whether you are the sole occupier of the building or if it is multi tenanted in which case you will be obliged to pay a proportion of the landlord’s premium.

You will therefore be concerned about the risks that the landlord is insuring against and whether the building is insured for reinstatement value or cost.

As tenant you will also want to insure against public liability, employers liability, plate glass and contents but this will depend very much on the nature of your business.

4) Alterations

You may need to make alterations when you take on the property to ensure that it is right for the purpose intended.
This will generally require the landlord’s consent which cannot be unreasonable withheld or delayed.

5) Alienation of the premises

Alienation is the legal term for your assignment of the lease to a third party; you will need the landlord’s consent to this but the landlord cannot unreasonably withhold or delay his consent.

However the question of reasonableness is one which might be disputed and the landlord may argue that his refusal is in the interests of “good estate management” and is therefore reasonable.

6) Service charges

Service charges may or may not arise in your particular circumstance. If there are service charges in respect of common areas you will need to ascertain exactly what is included and how much your service charges will be.

7) Rent reviews

How the rent will be reviewed will be of critical importance to you; generally rent reviews will take place at 5 yearly intervals and is an area that may require arbitration or some agreement as to how any disputes will be resolved.

8) Guarantee

Will you be obliged to provide a guarantee for rent, rates and other outgoings?

9) Break clause

Is there a break clause in the lease?

10) Stamp duty and VAT

You will be liable for the stamp duty on the lease but landlords also have an option to charge VAT or not. This is another area that you will want to check before investing as it can have a significant impact on your cash flow.

These are just some of the many factors you need to consider and be clear on before leasing a commercial premises.

Here are some questions that crop up repeatedly. If you have any questions simply send them in to me with the contact form below and I will answer them.

Commercial Premises F.A.Q.

‘How long should I sign a lease for?’

This very much depends on

  1. What you want and need
  2. What the landlord wants, needs, and is prepared to give you.

So, it depends on good, old-fashioned negotiation between you and the landlord, or his agent.

You need to consider your future needs and potential expansion/growth; however, you must also consider your business failing. It’s not a pleasant thought but you need to consider it. At least one break clause can give you a way out of the lease, and it could be exercised due to the growth and new needs of your business, or the failure of the business.

‘What documentation will I need?’

When you go to take a look at the premises to speak to the landlord and/or auctioneer, you don’t need any. Later on if you are going ahead, your solicitor will require some identification and anti money laundering papers, but initially when negotiating you don’t need anything.

‘What are my legal responsibilities (and the landlord’s)?’

Your main responsibilities will be to pay the rent, insurance, and any service charge. However, the location of your unit-for example in a shopping centre or multi unit development-may place some extra responsibilities on you. These will all be contained in your lease in the form of covenants and conditions; your landlord’s entitlements and obligations will also be found in the lease, and for this reason you need to negotiate a good one at the outset.

‘As the property is not finished it still needs toilets, railings walls plastered, staircases and a number of other unfinished works.  I am unsure as to what I should be asking them to finish as I don’t know what it is they will expect me to finish.’

This too is a matter for negotiation and agreement, and you want to be sure to avoid having to carry out a huge amount of renovations/refurbishments which may only benefit the landlord in the long run.

If there is work to be done, and the landlord undertakes to carry it out, get a surveyor or architect to check the work before signing a lease.

Your solicitor will also be looking for certificates of compliance with planning permission and building regulations from the landlord’s solicitor, but you need to be sure that the work is carried out to a satisfactory standard for your needs.