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Property Law

The Different Types of Tenancies and Leases in Irish Law

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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
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.

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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.