13.1
INTRODUCTION
The following is a very general summary of certain aspects of real estate law in Ireland. Real estate in Ireland is held either in freehold, which is the most absolute form of ownership capable of continuing in perpetuity, or under a lease where title to the property is granted for a specific period of time. The difference between the two forms of property is blurred somewhat by the fact that in many instances owners of leasehold property will have rights to acquire the freehold or to obtain a new lease when the existing lease expires.
13.2
TITLE REGISTRATION
Title to real estate in Ireland may be registered in the Land Registry (commonly referred to as registered title) or in the Registry of Deeds (commonly referred to as unregistered title).
When dealing with unregistered title, it is necessary to trace the history of the ownership of the property and this requires a far more detailed and time consuming investigation than is the case when one is dealing with registered title. The Registry of Deeds system determines priorities of estates and interests in the land but it does not guarantee ownership which can only be proven by a detailed title investigation.
In the case of registered title, the investigation of title is significantly simplified as one deals essentially with just one document called a "Folio". The Folio, which is quite a short document, contains particulars of the location and size of the land, the name of the owner of the property and details of any burdens (other than certain specified burdens which do not require registration) affecting the title.
Titles to land in the cities tend generally to be registered in the Registry of Deeds whereas those in the country are usually registered in the Land Registry. Where land is acquired for development purposes, it is worth considering registering the title in the Land Registry to simplify disposals of the developed property. There are time delays in effecting registrations but the Land Registry will often give priority to the registration of land which is to be used for development purposes.
13.3
BUSINESS OCCUPATIONAL LEASES
In respect of leases granted after 10th August, 1994, the general rule is that if a tenant of business premises has been in continuous occupation for the five years immediately prior to the expiry of its current lease of the premises, that tenant acquires a statutory right to call for a further lease of the premises at the end of its current lease. The further lease will be for a term, at the tenant's option, of not less than five and not more than twenty years but the parties may agree to a shorter or longer term.
In general, it is not possible to contractually bind a tenant to waive its statutory right to call for a further lease. There are two important exceptions to this rule. Firstly, to facilitate landlords in granting leases in the IFSC, tenants in the IFSC who have been in occupation of premises for five years or longer, do not acquire a statutory right to call for a further lease. Secondly, in respect of tenancies of office premises granted after the 10th August, 1994, the tenant may, prior to taking a lease, agree to waive its statutory right to call for a further lease.
The parties can agree between themselves the provisions of the further lease. As the right to choose the term of the further lease rests with the tenant the term will often be for a period of five years or maybe for a longer period but with options to break the lease on the tenant's part. If the parties cannot agree the terms of the further lease, the tenant can apply to the Courts to have the terms agreed and if it delays in doing so then the landlord has the option of making the application to Court. The Court has power to fix the terms of the new lease, including the rent (which will be fixed at the current open market rental value of the premises) and the parties are entitled to have the rent reviewed every five years thereafter. The rent, in these circumstances, can be reviewed on an upwards or downwards basis, depending on market forces at the time of the review.
Landlord and Tenant legislation implies certain covenants in leases and also impacts on a number of covenants which landlords normally succeed in negotiating into leases. These include covenants against disposal, change of use and the carrying out of improvements, all of which are subject to implied statutory provisions that a landlord's consent cannot be unreasonably withheld. The onus of proving that consent is being unreasonably withheld lies with the tenant.
A provision in a lease which seeks to impose the landlord's legal costs on the tenant will be void and therefore both parties must bear their own legal costs in any leasing transaction. This however would not apply to reasonable legal expenses incurred by a landlord in giving consent to such matters as applications for consent to disposal or change of use.
Where the landlord's consent to assignment is required and a tenant, having obtained such consent, transfers his interest under a lease to a third party, that tenant is normally relieved of his obligations under the lease and the incoming tenant becomes liable to the landlord for the performance of the covenants in that lease. This is different from the position in the U.K. where the original tenant remains liable in contract to the original landlord for the duration of the term. Certain formalities require to be observed in connection with the granting of the landlord's consent.
13.4
PLANNING
The Local Government (Planning and Development) Acts, 1963 to 1992 state that development of land requires planning permission. "Development" is defined as constituting the carrying out of works on, in or under land or the making of any material change in the use of any structures or other land (being neither exempted development nor development commenced before the October 1, 1964).
One may apply for outline planning permission which is a form of preliminary permission and the granting of which indicates that the planning authority has no objection in principle to the outlined development. Such outline permission does not entitle the applicant to carry out the development. If the development is to be carried out, then the applicant must make a further and more detailed application for planning approval.
It is not necessary to go through the preliminary process of outline permission - one can apply at the outset for a full planning permission and this is the more general practice.
Once a proper planning application has been submitted to the relevant planning authority, that authority must indicate its decision within two months from the date of receipt of the application. If however the planning authority requests further information during that two month period, then it has a further two months from the date in which answers to the queries are furnished, to give its decision. Should the planning authority fail to give its decision within the relevant two month period, the applicant obtains a planning permission by default.
Appeals against the decisions of a planning authority are made to An Bord Pleanala. The time limit for bringing an appeal both in the case of third party objectors and in the case of the party who made the planning application is four weeks from the date of the planning authority's notification of decision to grant or refuse permission. An Bord Pleanala has a duty to dispose of appeals as expeditiously as possible. Its stated objective is to ensure that all appeals are determined within a four month period. Any appellant must set out in full the grounds of an appeal and the reasons, considerations and arguments on which they are based within the aforementioned four week period. Any application to judicially review a decision of An Bord Pleanala must be made within two months of that decision.
The Building Control Act, 1990 (in force since June 1, 1992) established a new system of building control regulations in Ireland to regulate the standards of construction of most new non-residential buildings. The planning authorities administer these Regulations, and grant or refuse application made for the requisite approval of the standard of construction of a particular building. There is provision in the Act for appeal of that decision to An Bord Pleanala, by the applicant. There is no provision for such an appeal by a third party. A decision is made by the Local Authority within two months of its receiving an application and any appeal of this decision should be taken within one month from the notification of the decision.
13.5
LAND ACT, 1965
Section 12 of the Land Act, 1965 (the "Act") relates to agricultural holdings and requires the owners of such holdings to obtain the consent of the Land Commission if the holdings are to be subdivided.
Section 45 of the Act imposed an obligation to obtain consent from the Land Commission to the acquisition by bodies corporate (whether Irish or non-Irish) and by non-Irish citizens of an interest in non-urban land.
The Land Commission was recently abolished and its functions in relation to Sections 12 and 45 of the Act are currently carried out by the Department of Agriculture.
Failure to obtain consent under Section 12 or Section 45 means that title to the land does not pass.
In most instances, the obtaining of consent under Section 45 is merely a formality. Indeed statutory regulations exist to assist citizens of member states of the European Union to acquire non-urban property in Ireland.
13.6
ACTS FOR SPECIAL CASES
There are a number of Acts, most of them recent in origin, which impact on the purchase and sale of specific types of real estate in Ireland. It would not be appropriate to deal with these in the context of a general review of real estate law in Ireland and advice on these matters will be required in the context of particular transactions.
13.7
ENVIRONMENTAL CONTROLS
Any investor who is intent on acquiring property in Ireland will have to consider environmental legislation. Environmental legislation in Ireland is relatively substantial, is largely EU driven and continues to change and expand at a fast pace. There are separate statutes dealing with water pollution, air emissions and waste.
Procedures will differ, depending on whether the potential investor will be starting up from a "greenfield" position or acquiring a business already in existence.
In a start up situation, planning permission will have to be applied for, and in relation to certain activities, would have to be accompanied by an Environmental Impact Statement (EIS). In addition, the activity may need operating/environmental licences. Operating licences are administered by Local Authorities and by the Environmental Protection Agency (the EPA), depending on the type of activity concerned. The EPA administers Integrated Pollution Control (IPC) licences for Scheduled Activities i.e. those likely to have the most significant effect on the environment. Time limits apply to the IPC application procedure which are similar to those described in the Planning Section above.
Where an investor is acquiring an existing business, due diligence would usually be carried out. This will check that the activity concerned is in compliance with all planning and environmental requirements.
The common theme to both the European Community and domestic law is clear: prevention of pollution is better than cure, and developers and manufacturers are obliged to use the Best Available Technology Not Entailing Excessive Cost (BATNEEC) in any development.
In addition, public participation in the processes of environmental control is both anticipated and facilitated by the legislation. The public have always had a say in the planning process. Public involvement in recent times particularly has been significant.
The enactment in Ireland of the EU Directive on freedom of access to information in 1993 enables the public to examine records held by the Local Authorities or the Environmental Protection Agency and determine precisely the processes and chemicals used by industry and the level of compliance achieved.
It cannot be stressed enough the extent to which EU Environmental law is evolving. For example, whilst BATNEEC has been enshrined into Irish law, the EU is already tending towards adopting the standard of BAT instead. Any changes at EU level necessarily affect the Irish position and cannot be ignored.
This article is intended to provide general guidelines. Specialist advice should be sought about specific facts.
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