1. GENERAL
1.1 Main Sources of Law
The main source of real estate law is statute. The key legislative provisions are set out in the Land and Conveyancing Law Reform Act 2009 (the 2009 Act), the Registration of Title Act, 1964 (the 1964 Act), the Registration of Deeds and Title Act, 2006, the Landlord and Tenant Acts, 1967-2019 (LTA) and the Residential Tenancies Acts, 2004 to 2019 (the RTA).
The other main source of real estate law is case law, which is derived from the judgments of the Irish courts.
1.2 Main Market Trends and Deals
In Ireland, the real estate sector has demonstrated a remarkable recovery since the global financial crisis, with investment turnover reaching record highs in recent years. Indeed, despite the challenges presented during 2020 as a result of COVID-19, the appeal of Irish commercial real estate as an asset class endured with more than EUR3 billion invested in the sector. Despite the challenge of COVID-19 and its impact on the real estate sector, the fundamentals that make Ireland an excellent place to invest and do business remain. Ireland offers a high degree of economic and political stability with the benefit of a common-law legal system and favourable tax structure which is relatively easy to understand. Ireland is strongly aligned with the European Union and benefits from the common trade area and access to talent from across Europe. The Irish economy has recorded several years of strong, sustainable growth with 2020 likely to be the seventh consecutive year in which Ireland has emerged as the fastest-growing economy in the Eurozone. For a more detailed analysis on market trends and deals please see the separate Trends & Developments chapter.
1.3 Impact of Disruptive Technologies
The most significant obstruction to the use of blockchain technology, decentralised finance, proptech and other technologies in the legal sector in Ireland is the absence of regulation and the fact that these technologies have no fixed jurisdiction.
While blockchain and proptech should result in increased efficiencies in many areas of the Irish commercial real estate market and in the registration of title, it is unlikely to have a significant impact in the Irish real estate market in the next 12 months, given the absence of regulation.
1.4 Proposals for Reform
There are no current proposals for reform which would significantly impact real estate investment, ownership or development in Ireland.
2. SALE AND PURCHASE
2.1 Categories of Property Rights
The categories of property rights which can be acquired in Ireland are freehold title, which confers absolute ownership, or leasehold title, which confers ownership for the period of years granted by the relevant lease.
2.2 Laws Applicable to Transfer of Title
Historically, Irish law was based on legislation pre-dating the establishment of the Irish State. The 2009 Act replaced much of the old law and modernised this area of law and conveyancing practice. The RTA governs the residential landlord and tenant sector.
2.3 Effecting Lawful and Proper Transfer of Title
The Land Registry was established in 1892. When ownership of a property is registered in the Land Registry, the deeds are filed with the Land Registry and all relevant particulars concerning the property and its ownership are entered on folios which form the registers maintained by the Land Registry. In conjunction with folios, the Land Registry also maintains maps (referred to as filed plans). Both folios and filed plans are maintained in electronic form.
The Registry of Deeds was established in 1707 to provide a system of voluntary registration for deeds which affect property. The purpose was to give priority to registered deeds over unregistered but "registrable" deeds. There is no statutory obligation to register a deed in the Registry of Deeds but failure to do so may result in a loss of priority.
Title insurance is used in property transactions in Ireland, but is not widespread.
2.4 Real Estate Due Diligence
A buyer's lawyer will investigate the seller's title to the property to ensure a buyer will acquire a good marketable title. The underlying principle is one of caveat emptor (buyer beware). The buyer must satisfy itself as to the seller's title pre-contract.
The Law Society of Ireland produces a template contract for sale for property transactions.
This contract requires the seller to list the documentation and searches to be provided in relation to the property and incorporates the Law Society of Ireland General Conditions of Sale (the General Conditions). The General Conditions make a number of assumptions about the property and place certain disclosure obligations on a seller, which the seller can only exclude by inserting a bespoke special condition in the contract for sale. In this way, the buyer should be on notice of any deviations from the template. In commercial property transactions, it is normal for the seller to seek to limit the warranties being provided in the General Conditions. Where the seller's knowledge of the property is limited, for example, in an enforcement sale, it is usual to limit many of the warranties.
The buyer's lawyer also carries out a number of searches against both the seller and the property.
2.5 Typical Representations and Warranties
The principle of caveat emptor is diluted somewhat by the General Conditions, which place a number of warranties and disclosure requirements on the seller. For instance, the General Conditions include numerous warranties relating to matters such as notices, planning compliance, boundaries, easements and identity. These warranties can be excluded or amended by way of special condition by agreement between the parties. In addition to any specific disclosures, sellers often limit the warranty provided in respect of planning and building control compliance by reference to documentation and opinions/ certificates of compliance with planning and building regulations in the seller's possession and provided to the buyer. Where the property is being sold in an enforcement scenario (ie, by a receiver, a liquidator or by a mortgagee), it is usual that many of the warranties contained in the General Conditions are expressly excluded or varied/limited by reference to knowledge.
There are also implied covenants as to ownership on the part of the seller, which are detailed in the 2009 Act.
A seller can be liable for misrepresentation. General Condition 29 of the General Conditions provides that a buyer shall be entitled to compensation for any loss suffered by the buyer as a result of an error which includes any non-disclosure, misstatement, omission or misrepresentation made in a contract for sale. However, as outlined above, a seller may seek to exclude or vary this condition by inserting an appropriate special condition in the contract for sale, stating that the buyer shall not rely on any representations made by the seller.
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Originally Published by Chambers Global Practice Guide 2021
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.
