PART III

Reversionary Leases

30. —(1) In this Act “reversionary lease” means a lease under this Part.

(2) (a) A person who holds or has held land under a lease shall subject to section 33 be entitled to a reversionary lease of the land if the conditions specified in section 9 of the Landlord and Tenant (Ground Rents) (No. 2) Act, 1978 (which provides for the acquisition of the fee simple by lessees) are complied with.

(b) Section 9 (1) (2) and sections 10 to 12 and 14 of that Act shall extend to the right to a reversionary lease.

(c) The reference in condition 2 of section 10 of that Act to an application shall include an application under section 31 and the reference in condition 6 of the said section 10 to a reversionary lease shall include a reversionary lease within the meaning of this section.

(3) Section 2 (1) of the Landlord and Tenant (Ground Rents) Act, 1978 (which restricts the right to create leases of dwellings) shall not apply where the lease is a reversionary lease.

31. —(1) A person who is entitled to a reversionary lease may apply to his immediate lessor to obtain from that lessor a reversionary lease of the land held by him—

(a) not earlier than fifteen years before the expiration of his existing lease, and

(b) not later than the expiration of the lease or the expiration of three months from the service on him by his immediate lessor or any superior lessor of notice of the expiration of the lease, whichever is the later.

(2) The notice shall be valid only if served not earlier than three months before the expiration of the lease.

(3) Where an application is made for a reversionary lease before the expiration of the lease under which the applicant holds, the lease if granted shall commence on the expiration of the previous lease or on such other date as may be agreed upon between the parties.

(4) In any other case, the reversionary lease shall commence on such date as may be agreed upon between the parties or, in default of agreement, on the date of the application for the lease.

32. —(1) Where a person is entitled to a reversionary lease his immediate lessor shall be bound to grant the lease to him.

(2) If the immediate lessor holds the land for a term which is less than the term for which the reversionary lease is to be granted, his immediate lessor and such (if any) superior lessors as may be necessary shall be bound to join in the grant of the lease.

33. —(1) A person shall not be entitled to a reversionary lease of the land or any part of the land where a necessary party to the granting of the lease satisfies the Court—

(a) that his interest in reversion in the land is a freehold estate or is for a term of not less than fifteen years, and

(b) (i) that he intends or has agreed to pull down and rebuild or to reconstruct the whole or a substantial portion of the buildings on the land and has planning permission for the work, or

(ii) that he requires vacant possession of the land for the purpose of carrying out a scheme of development of property which includes the land and has planning permission for the scheme, or

(iii) that for any reason the grant of a reversionary lease would not be consistent with good estate management.

(2) A person shall not be entitled to a reversionary lease where a planning authority, being a necessary party to the granting of the lease, satisfies the Court that, in case the reversionary lease would be a lease of the whole of the land, the land or any part of the land is situate in an area in respect of which the development plan indicates objectives for its development or renewal as being an obsolete area or that, in case the reversionary lease would be a lease of part of the land, that part or any part of that part is situate in such an area.

(3) A person shall not be entitled to a reversionary lease of land used wholly or partly for the purpose of carrying on a business where a local authority for the purposes of the Local Government Act, 1941 , being a necessary party to the granting of the lease, will require possession within a period of five years after the termination of the existing lease for any purpose for which the local authority are entitled to acquire property compulsorily.

(4) A person who has been declared under subsection (1), (2) or (3) not to be entitled to a reversionary lease shall be entitled to remain in possession of the land, upon such terms as the Court may think proper, until the person who successfully objected to the grant of the lease or his successor in title becomes entitled to possession of the land.

(5) Where a lease has been refused under subsection (1), (2) or (3) and it appears to the Court, on application by the person who has been refused, that the intention, agreement or purpose, as the case may be, on account of which the application was refused has not been carried out within a reasonable time the Court may order the person concerned to pay such sum as it considers proper by way of punitive damages.

(6) Where a lease has been refused under subsection (1), (2) or (3), compensation in lieu of the lease shall be paid in accordance with section 59.

34. —(1) Where the terms of a reversionary lease are settled by the Court the subsequent provisions of this section shall have effect.

(2) The lease shall be for a term expiring ninety-nine years after the expiration of the lease to which it is reversionary.

(3) Subject to subsection (5), the rent reserved by the reversionary lease shall be not less than the rent reserved by the previous lease or than the rent reserved by any superior lease the lessor under which is required to join in the grant of the reversionary lease.

(4) Where the land to be comprised in a reversionary lease is part only of the land comprised in the previous lease or of the land comprised in any superior lease the lessor under which is required to join in the grant of the reversionary lease, such proportion of the rent reserved by any such lease as is fairly apportionable to the land to be comprised in the reversionary lease shall, for the purpose of subsection (3), be deemed to be the rent reserved by that lease in respect of the land to be comprised in the reversionary lease.

(5) If any new covenant restricting the lessee's rights is included in the reversionary lease, the Court may, if it so thinks proper, fix a lower rent.

(6) If the Court fixes the covenants of the lease, the lessee shall be made liable to pay all rates and taxes in respect of the land and to insure against fire and keep the premises in repair.

35. —(1) Subject to section 34 (3) and this section, the rent to be reserved by a reversionary lease the terms of which are settled by the Court shall be one-eighth of the gross rent. For this purpose the gross rent shall be reduced, where appropriate, by the special allowance provided for by subsection (2).

(2) The special allowance for the purpose of subsection (1) shall be such proportion of the gross rent as, in the opinion of the Court, is attributable to works of construction, reconstruction or alteration carried out by the lessee or any of his predecessors in title which add to the letting value of the land, other than works carried out wholly or partly in consideration of the grant of a lease or repairs and maintenance during the currency of the lease.

(3) (a) The Minister may by order amend subsection (1) by substituting for the fraction standing specified for the time being therein another fraction.

(b) An order under this subsection shall not come into force unless approved by resolution of each House of the Oireachtas but, upon being so approved, shall come into force forthwith.

36. —(1) The gross rent shall be the rent which, in the opinion of the Court, a willing lessee not already in occupation would give and a willing lessor would take for the land comprised in the reversionary lease—

(a) on the basis that vacant possession is given and that the lessee pays rates and taxes in respect of the land and is liable to insure against fire and to keep the premises in repair, and

(b) having regard to the other terms of the reversionary lease and to the letting values of land of a similar character to and situate in the vicinity of the land comprised in the lease or in a comparable area but without having regard to any goodwill which may exist in respect of the land.

(2) If the Court requires or the parties have agreed upon the expenditure by the applicant for a reversionary lease of a specified sum of money on repairs to the premises or the execution by him of specified repairs as a condition precedent to the execution of the lease, the gross rent shall be assessed—

(a) if under the previous lease the lessee is obliged to keep or deliver up the premises in repair, having regard to the condition in which the premises will be after the repairs have been carried out, or

(b) if there is no such obligation, having regard to the actual condition of the premises at the date of the application for the reversionary lease.

(3) If the premises are, in whole or in part, controlled dwellings (other than premises controlled under section 2 (6) of the Rent Restrictions (Amendment) Act, 1967 ) the Court in determining the gross rent shall have regard to the restrictions imposed by the Rent Restrictions Acts, 1960 and 1967, on the rents which tenants of such premises would be liable to pay.

37. —If any dispute, question or difficulty arises in regard to the right of any person to a reversionary lease, his failure to proceed with an application for such lease, the terms on which such lease is to be granted, or otherwise in relation to the grant of such lease, any person concerned may apply to the Court and the Court may make such order as justice shall require and, in particular, may fix the terms on which such lease is to be granted.

38. —(1) The Court may require an applicant for a reversionary lease to expend, within such time as the Court thinks proper, a specified sum of money on repairs or to execute specified repairs to the buildings to be comprised in the lease and may authorise the postponement of the execution of the lease until the requirement has been complied with.

(2) If the applicant refuses or fails to comply with the requirement of the Court, the Court may declare forfeit his right to a reversionary lease and discharge any order granting it to him.

39. —A reversionary lease, whether granted on terms settled under this Part or negotiated between the parties, shall be deemed to be a graft for all purposes on, and a continuation of, the lease under which the lease previously held the land and the lessee's interest shall be subject to any rights or equities arising from that lease being a graft.

40. —(1) A person who is entitled to obtain a reversionary lease and whose interest in the land has expired shall continue to be entitled to hold the land until either he is declared not to be entitled to obtain a reversionary lease or a lease is executed by his immediate lessor and such (if any) superior lessors as may be necessary, in terms agreed upon between the parties or settled under this Part and, during such period, he shall hold the land on the terms (so far as applicable) on which he previously held them, subject to any recoupments or adjustments that may be made under the reversionary lease if granted to him.

(2) Where an application is made in relation to the grant of a reversionary lease and the interest of the applicant in the land expires before the application is heard and determined, the applicant shall be entitled to remain in possession of the land until the application is finally heard and determined on the terms (so far as applicable) on which he previously held them, subject to such recoupments or adjustments as the Court thinks proper.

41. —Where it is claimed that a lease complies with this Part on the ground that the permanent buildings were erected in pursuance of an agreement for the grant of the lease on their erection but express evidence of the agreement is not available, the following provisions shall have effect:

(a) if it is proved that the buildings were erected by the person to whom the lease was subsequently made, it shall be presumed, until the contrary is proved, that the agreement was in fact made and that the buildings were erected in accordance with it;

(b) in any other case, the Court may, if it so thinks proper on hearing such evidence as is available and is adduced, presume that the agreement was in fact made and that the buildings were erected in accordance with it.

42. —Permanent buildings erected by a lessee in pursuance of a covenant in his lease to reinstate the buildings comprised in the lease in the event of their destruction by fire or otherwise shall be deemed to have been erected by the person who erected the original buildings.

43. —The Court may declare a person to be entitled to a reversionary lease notwithstanding that the buildings were, in whole or in part, erected in contravention of a covenant, if the Court is of opinion that it would be unreasonable to order otherwise.

44. —Subject to this Act, the provisions of the Act of 1967 shall, with necessary modifications, have effect as if the references to a building lease or a proprietary lease were to a lease which gives rise to a right to a reversionary lease.