In this issue:-

  • Banning Upwards Only Rent Reviews
  • Land And Conveyancing Law Reform Act, 2009

BANNING UPWARDS ONLY RENT REVIEWS

The Minister for Justice Dermot Ahern signed an order on the 1st of December, 2009, banning upwards only rent review provisions pursuant to Section 132 of the Land and Conveyancing Law Reform Act, 2009 ("2009 Act"). The Section will come into force on the 28th February, 2010, however, it shall not apply to a lease or agreement to lease entered into prior to the commencement of the section.

LAND AND CONVEYANCING LAW REFORM ACT 2009

The Land and Conveyancing Law Reform Act 2009 provides for fundamental reform of land law and conveyancing law in Ireland. The changes will take effect as and from 1st December, 2009 unless otherwise highlighted below. The key features of the Land and Conveyancing Law Reform Act 2009 are:

  • Future interests in all kinds of property are affected in that the rule known as the rule against perpetuities is abolished both for real and personal property.
  • The rule providing that any future interest in land had to conform with the rule against perpetuities has been abolished.
  • Mortgages over land shall be created by way of a charge on the land (rather than by a conveyance of the legal estate or interest in the land by mortgage as has been the case historically).
  • With effect from 1st October, 2009, all standard banking documentation relating to home mortgages will need to be reviewed and updated in light of the new provisions relating to housing loan mortgages which:
    1. allow a mortgagor, in relation to a housing loan mortgage, to apply to court, among other, for time for redemption or payment of the mortgage debt or to direct a sale of the mortgaged property or to make a vesting order conveying the mortgaged property to a purchaser;
    2. the Lender will not be entitled to take possession of mortgaged property without a court order unless the mortgage holder gives written consent to the taking of possession of the property;
    3. the power of sale of a Lender is subject to a proviso that 28 days notice must be served on the mortgage holder warning him of the possibility of sale.
  • These provisions relate only to housing loan mortgages and in the case of all other mortgages, such as commercial mortgages, the obligations, powers and rights or a mortgagee will take effect subject to the terms of the mortgage.
  • "Upward only" rent review clauses in leases are rendered ineffective.
  • The 2009 Act provides that registration of a judgement mortgage against the interest of one co-owner will not sever the joint tenancy. Joint tenancies in relation to real property can no longer be unilaterally severed and the consent of all joint tenants will be required.
  • Concepts such as feudal tenure (estates in fee tail and fee farm grants) will be abolished.
  • Any rule of law which requires (a) a seal for the valid execution of a deed by an individual, or (b) authority to deliver a deed to be given by deed has been abolished.
  • The 2009 Act clarifies and updates the law in respect of judgment mortgages – a procedure by which a court judgment for an amount of money may be registered on the title of the debtor's land as a mortgage for that sum. The precise method of registration of a judgment mortgage will be prescribed by regulations. The changes are designed to streamline the process of registering, enforcing and releasing this specialist sub-set of mortgages.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.