It has become apparent that we need to buy out the freehold for this property as the lease is running out
I really hope you can help me with the query below as we have been going around in circles for the last year with this and I’m getting pretty desperate. I am in the process of buying a piece of land in Dublin city centre from a family member. It has become apparent that we need to buy out the freehold for this property as the lease is running out in 61 years’ time and, as such, it is impossible to get a mortgage on this. It is commercial land which has planning permission for a house.
According to the lease which dates back to 1871, the annual rent is £20. As it is commercial it is not covered by the Ground Rents Purchase Scheme. We have hit so many brick walls with this process, not helped by our family solicitor being taken over by the Law Society. Ground rent has never been paid for the lease and the lease holder is a religious society which disbanded many years ago. So it would appear no one has a claim to it. However, we must put an ad in the newspaper to establish this.
Our new solicitor says he must apply to the courts to resolve this and has estimated his costs at €5,000 but doesn’t seem able to tell us how long it will take and how much it will cost to buy out the lease. Can you shed any light on this?
The conditions for buying out the freehold interest (that is a right given to a person to enlarge his existing, “leasehold” interest into a freehold interest) are set out in the Landlord & Tenant (Ground Rents) No. 2 Act 1978.
The first condition to be satisfied is that there are permanent buildings on the land and the portion of land not covered by those buildings is “subsidiary and ancillary” to them. Whether or not the unbuilt-on land is subsidiary and ancillary is a question of fact and there is much case law on this point.
Your solicitor will examine the following matters to see if the conditions imposed by the Act are met: (1) an existing lease on the property, (2) permanent buildings built on the land, (3) whether the premises is residential or business premises. The restrictions on the right to buy the freehold set out in section 16 of the Act will also be considered.
If your solicitor is satisfied that you do have the right to buy out the freehold interest but the holder of the freehold interest in the property named on your title deeds no longer exists or cannot be located, then searches against the title will be made to ascertain whether or not the freehold interest was acquired by any other party and you will be required, as indicated in your query above, to advertise a notice seeking information on the holder of the freehold interest before making an application to the county registrar.
The above process of investigation, notification and application to the county registrar may take several months and the cost to buy out the lease is determined by statutory formulae. If you are not satisfied with the decision of the county registrar, you may appeal to the circuit court.
Mandu Nkomo is a South African attorney who worked with Whitney Moore solicitors, under an Irish Rule of Law International project