October 2011-Increase in Litigation relating to land

The current economic climate has given rise to an increase in litigation relating to land. In recent years, banks freely lent money to purchasers and vendors often had a further purchaser lined up for the event that the transaction was not completed. Since the downturn, vendors and developers are more likely to litigate as property has become harder to sell. In addition, purchasers have become more particular and are less likely to accept minor discrepancies in relation to title.

In addition, there has been a large increase of applications to enter litigation relating to land into the Commercial Court List. This is because there is a much shorter waiting time to obtain a hearing date in the Commercial Court which allows for the speedier resolution of disputes.

The Land and Conveyancing Law Reform Act 2009 (commenced on the 1st December 2009) is an extremely important development in the area of conveyancing remedies. The Act replaces and amends the law relating to land transactions and conveyancing in general. Under the Act, it is possible to obtain a range of remedies in litigation concerning land both in equity and common law. The most effective remedies include damages, declaratory relief, injunctions, specific performance, rescission, rectification and forfeiture of deposit and resale. The common law remedy of damages can be sought separately or in conjunction with one of the equitable remedies mentioned above.

If you require further information or advice relating to the above please contact us.

August 2011 DEADLINE ALERT!-Avoid loss of right of way

Significant changes to the Law of Easements under the Land and Conveyancing Law Reform Act 2009

An easement is a right in relation to land whereby an owner of land has an entitlement to enjoy rights over the land of another.   An easement is for example:

  • a right of way to travel across private land belonging to another to gain access to your own land
  • a right to have a water pipe brought across land owned by another to bring water to your own land

Some of these easements have been acquired by deed where the landowner intended to grant rights to another over his land.   Unfortunately in many cases there are no deeds or other written documents granting the easements or rights although these unwritten rights have been in existence for a number of years.   Irish land law has always recognised easements by prescription where such customary rights have been used on a continuous basis of up to twenty years.

The law has been changed from 1 December 2009 and the changes are that an easement may only be acquired by prescription after twelve years of continuous use of the right in question. Under the new provisions it is necessary to obtain a Court order declaring the existence of the easement and a further step is to register the Court order on title.   The new law will only apply to a twelve year period commencing 1 December 2009 and such rights may only be confirmed by Court order after December 2012.

Effectively, the new law means that people with unregistered rights of way and other easements have from 1 December 2009 until 1 December 2012 to register their rights in the Land Registry.   If they do not, then their rights may be extinguished and the time period for re-acquiring that right legally starts on 1 December 2009 with previous use being considered irrelevant.  This could result in the complete loss of right of way.

Please contact Malachy O’Callaghan.

07/02/11-New Laws for Property Management Companies

We are frequently contacted by property owners relating to issues with their management company or service charges. The Multi Unit Developments Act, 2011 was enacted on 31/01/11 and introduces some much needed regulation to the area. The Act provides a statutory framework for developments such as apartment blocks and for the regulation of the property management companies which own and manage the common areas in these developments. Some of the more important features of the Act are:

Owners Management Companies
The developer must establish a management company and those buying units in the development will automatically be given part ownership of the company. An important note here is that people should not confuse management companies and management agents. A management company is established by the developer and is part owned by all of the owners of units in that particular development. Management agents are a professional management business appointed by the management company to look after the day to day running of the development and maintenance of common areas etc. The Act introduces an obligation for developers to establish a management company but there is no obligation on developments or residents to employ the services of a management agency.

Service Charges
All service charges must be calculated on a fair and transparent basis. The owners’ management company must establish a scheme for annual service charges to fund expenditure on the maintenance, insurance and repair of common areas within its control and for the provision of common services to unit owners. The owners’ management company are also obliged to set up and maintain a sinking fund for the development.

House Rules
An owners’ management company may make House Rules for the effective operation and maintenance of the development. The Rules should have a general objective of enhancing the quite enjoyment of the unit owners and achieving a fair balancing of the rights of owners. The act also states that where a unit is let, it shall be a term of the letting that it is subject to the observance of the Rules by the tenants.

The Act establishes a jurisdiction in the Circuit Court for the resolution of any dispute under the Act. The Circuit Court may direct parties to engage in mediation if it sees fit.

For further information please contact Conor Griffinwho will be happy to assist.

Budget 2011-Consequences on Conveyancing

Ireland’s Budget for 2011 was presented by the Minister of Finance on 7th December 2010. It announced tax increases of approximately €2 billion and expenditure cuts of approximately €4 billion. The budget follows the National Recovery Plan of November 2010 and introduces some of the measures which have been suggested in it.

Positive changes have been made in relation to the stamp duty on residential property with effect from 8th December 2010 for all instruments of transfer executed on or after that date. It is to be noted that the rates of stamp duty on commercial property have not been changed.

The new rates are measured solely according to the price of the property. A rate of 1%on the price applies to properties up to €1 million and a rate of 2% applies to the balance should the property price be more than €1 million.

All former reliefs and exemptions have been abolished. It is no longer of interest whether or not you are a first time buyer as the so called “first time buyer relief” does not exist anymore and a person formerly qualifying for this relief will not be exempt from paying stamp duty. Also the exemption for new houses of up to 125 square meters in size and the relief for houses over 125 square meters have been abolished. Before 8th December 2010 only half of the normal rate of the applicable stamp duty was to be paid on a transfer of property between related parties. This so called “consanguinity relief” has been abolished insofar as residential property is involved but remains in existence until December 2014 where commercial property is to be transferred between certain relatives. Stamp duty has to be paid on every purchase of property regardless of its price as the exemption for properties under €127,000 has been abolished too. Lastly, the so called “site to child relief” has been abolished so that stamp duty has to be paid at the regular applicable rates even where parents transfer property to their children.

For those who entered into a binding contract to purchase residential property prior to 8th December and who will execute it before 1st July 2011 transitional arrangements are in place to preserve the otherwise lost reliefs and exemptions.