COMHAIRLE CONTAE ÁTHA CLIATH THEAS
SOUTH DUBLIN COUNTY COUNCIL

MEETING OF SOUTH DUBLIN COUNTY COUNCIL

Monday, July 14, 2014

QUESTION NO. 4

QUESTION: Councillor M. Devine

To ask that the Chief Executive to convene a meeting with those homeowners that wish to negotiate a fair and equitable cost to purchase freehold title from the landlord - which is SDCC?

REPLY:

The procedure to purchase the fee simple of a house which was purchased under a lease and is subject to payment of ground rent is governed by the legislation as set out in the Landlord and Tenant (Ground Rents) Act 1978. The criteria used to calculate the amount required to purchase the fee simple is also set out in legislation and in particular in Section 7 of the Landlord and Tenant Amendment Act 1984.

In the case of residential properties of less than one acre and with more than 15 years remaining on the lease, which would apply to the majority of houses where the Council holds the fee simple, the price is based on the annual rent multiplied by a set multiplier. The multiplier is calculated on the basis of government bonds.

With regard to properties which were built and sold as part of the Small Builders Scheme in the 1970’s-- whereby the Council made lands available to small builders to build reasonably priced houses for purchase by persons in need of housing-- the annual ground rent payable is €19.04. This rent is billed to the house owner bi-annually and the amount required to buy out the freehold/fee simple of the property is also notified to them at that stage.

Having regard to the fairly nominal annual rent, the amount required to buy out the freehold is considered reasonable. The current figure in relation to the 126 properties remaining in this category is circa €446.00-- plus payment of any arrears outstanding on the ground rent account. The amount fluctuates slightly from month to month.

As the house owners are notified twice a year regarding the procedure and amount required to buy out the fee simple of their properties and can apply at any stage to do so, it is not considered necessary to convene a meeting of these residents.

Ground Rent on Tenant Purchase Properties

Tenant purchasers that purchased their home before May 1978 became the owner of what is known as the leasehold interest. This meant that that the purchaser did not own, or 'hold full title to', the property but only owned the house and not the land it stood on.

Under the terms of the leasehold interest an annual ground rent was payable to the Council as they still owned the land, this ground rent is not demanded on an annual basis. The amount of ground rent to be paid varied with the charge, in most cases it was circa €0.06 (£0.05) for a fixed number of years commonly 99 or 150 years.

How Ground Rent affects Tenant Purchasers:

When a tenant purchaser purchased their home through a Sales Scheme the consent of the Council is needed if that purchaser decided to sell, re-mortgage or transfer their interest in the property. This consent is a legal requirement under the terms of the scheme and is only granted when certain conditions have been met. Consent is required only for the first sale, re-mortgage or transfer of interest in a property.

The requirement for consent is for a fixed number of years only from the date of purchase.

In the case of houses sold before May 1978 consent would normally no longer be needed after 25 years (May 2003 at the latest) but if the Ground Rent has not been bought out the Council continues to have an interest in the property and consent is still required regardless of the original date of purchase. Buying out the ground rent would free the tenant purchaser from seeking such consent.

For houses sold prior to 1992 the requirement for the Council’s consent ends after 25 years and for houses sold after 1992 the Council’s consent requirement expires after 20 years.

A tenant purchaser can check the title they hold on the Property Registration Authority’s website at www.landregistry.ie or at LoCall 1890 333 001.

Should a tenant purchaser wish to buy out their ground rent they can download the application form the Council website at www.sdcc.ie or call the Loan Account Section at 4149000 ext.: 7138.