1.1 Main Sources of Law
The main source of Irish 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, 2004–2021 (the RTA).
The other main source of Irish real estate law is case law, derived from judgments of the Irish courts.
1.2 Main Market Trends and Deals
The focus throughout 2021 was on the recovery of the Irish real estate sector from the impact of COVID-19. Activity in the sector increased quarter on quarter throughout 2021 and surpassed all expectations with over EUR5.5 billion invested in Irish real estate in 2021. This year has started strongly and with most COVID-19 restrictions lifted by February 2022, the outlook for the remainder of 2022 is positive. In fact, January and February were considerably busier than usual given the freedom for investors and occupiers to travel to Ireland to view assets. 2022 promises to be a very active year for Irish real estate. Investor appetite remains strong with particular interest in environmentally conscious and alternative assets. Ireland remains an excellent place to invest and do business and offers a high degree of economic and political stability with the benefit of a common-law legal system and favourable tax structure that is relatively easy to understand. Ireland is strongly aligned with the EU and benefits from the common trade area and access to talent from across Europe. 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 on 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 that would significantly impact real estate investment, ownership or development in Ireland. There has been a move towards the use of electronic signatures for the acquisition of real estate, however, procedures to deal with electronic signatures have not yet been implemented by the Land Registry so it remains the case that original wet ink signatures are required for most documents dealing with real estate. See 2.3 Effecting Lawful and Proper Transfer of Title for further detail on the use of electronic signatures.
2. SALE AND PURCHASE
2.1 Categories of Property Rights
The categories of property rights that 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 predating the establishment of the Irish State. The 2009 Act replaced much of the old law and modernised conveyancing practice. The 2009 Act is the main statute applicable to the transfer of title in Ireland and applies to all asset classes, including residential, commercial, industrial, offices, retail and hotels. The RTA govern the residential landlord and tenant sector and the LTA govern the commercial 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 that 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.
While the use of electronic signatures has become more widespread in Ireland since 2020 due to the COVID-19 pandemic, the transfer of Irish real estate is still required to be effected by way of original wet ink signature. The Elec-tronic Commerce Act 2000 (the E-Commerce Act) governs the use of electronic or digital sig-natures in Ireland. Previously interests in land were specifically excluded from the ambit of the E-Commerce Act. However, the Electronic Com-merce Act 2000 (Application of sections 12 to 23 to Registered Land) Regulations 2022 (the Regulations) amended the E-Commerce Act by providing that it shall apply to the law governing the manner in which an interest in registered land may be created, acquired, disposed of or registered. This amendment allows for the legal recognition of the electronic execution of documents dealing with interests in registered land. Notwithstanding the Regulations, practice has not yet changed in Ireland as the Land Registry, while welcoming the introduction of the Regulations, has clarified that it is not currently in a position to accept electronic or digital signatures on documents submitted to it for registration. Ultimately Land Registry practice will dictate whether electronic signatures are acceptable on documents relating to real estate interests.
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, eg, 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. While parties are free to negotiate the terms and warranties provided in a Contract for Sale, generally speaking the COVID-19 pandemic has not resulted in new warranties or representations being provided.
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 res 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.
Representation and warranty insurance is available in the Irish market; however, it is not frequently used as part of real estate transactions, save where real estate is being acquired by way of a corporate rather than an asset acquisition.
2.6 Important Areas of Law for Investors
An investor should ensure that the title to the property is good and marketable, that the property complies with the Planning and Development Acts 2000–2021 (the Planning Acts) and environmental laws, and that the property has all necessary easements for access and services. Investors will also need to ensure they understand the application of Irish tax law.
2.7 Soil Pollution or Environmental Contamination
The buyer may have secondary liability for soil pollution or environmental contamination. If the person or entity which caused the pollution or contamination cannot be identified, the current owner or occupier of the property could become liable under the applicable environmental legislation for remediation. For this reason, it is important that environmental due diligence is carried out by a buyer where compliance with environmental laws is a concern.
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