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COMMITTEE FOR FINANCE AND PERSONNEL

Report on Ground Rents Bill
(NIA Bill 6/99)

VOLUME 1 - REPORT ON THE SCRUTINY OF THE COMMITTEE

REPORT

Introduction

General

Deliberations of the Committee

Schedule of Amendments

COMMITTEE FOR FINANCE AND PERSONNEL:
MEMBERSHIP AND POWERS

POWERS

The Committee for Finance and Personnel is a Statutory Departmental Committee established in accordance with paragraphs 8 and 9 of Strand One of the Belfast Agreement and under Standing Order No. 45 of The Northern Ireland Assembly. The Committee has a scrutiny, policy development and consultation role with respect to the Department of Finance and Personnel and has a role in the initiation of legislation.

The Committee has the power to:

MEMBERSHIP

The Committee was established on 29 November 1999 with eleven members, including a Chairperson and Deputy Chairperson and a quorum of five members.

The membership of the Committee is as follows:

REPORT [1/00]

(COMMITTEE FOR FINANCE AND PERSONNEL)

Report on the Ground Rents Bill (NIA Bill 6/99)

GENERAL

1. Introduction

1.1. The Committee for Finance and Personnel met on the dates given below to consider the Ground Rents Bill (NIA Bill 6/99) that was referred to the Committee on 26 June 2000 for consideration under Standing Order 31 (1) of The Northern Ireland Assembly.

1.2. The Committee had before it the Ground Rents Bill and the Explanatory and Financial Memorandum to the Bill (NIA Bill 6-EFM), as introduced. Mr Hugh Widdis, Research and Library Services, NI Assembly provided specialist advice on the Bill to the Committee.

1.3. The Minister in charge of the Bill, Mr Mark Durkan MLA, Minister of Finance and Personnel, made the following statement under Standing Order 28 of the Northern Ireland Assembly.

"In my view the Ground Rents Bill would be within the legislative competence of the Northern Ireland Assembly."

2. Extension of Committee Stage

2.1. The Committee made the following motion seeking an extension to the Committee Stage of the Bill. The extension was requested due to concerns raised on its provisions and its technical complexity. The Assembly agreed the motion on 3 October 2000.

"That this Assembly proposes that the period referred to in Standing Order 31 (4) be extended by 54 calendar days to Monday, 27 November 2000 in relation to the Committee Stage of the Ground Rents Bill (NIA 6/99)."

[In the name of the Chairperson, Committee for Finance and Personnel]

3. Meetings Held

3.1. The Committee considered the Ground Rents Bill on the following dates.

Date: Subject/Witnesses:

5 July 2000 Briefing by Office of Law Reform
July - August SUMMER RECESS
7 September Evidence session with Law Society, RICS
12 September Committee consideration with Office of Law Reform
19 September Committee consideration with Office of Law Reform and Lands Registers of Northern Ireland
26 September Committee consideration
10 October Committee consideration
12 October Committee consideration
19 October Committee consideration
24 October Clause-by-clause scrutiny with Office of Law Reform
31 October AUTUMN RECESS
16 November Clause-by-clause scrutiny with Office of Law Reform
21 November Draft Report agreed

4. Evidence

4.1. The following bodies and individuals made written submissions in response to an invitation from the Committee or wrote independently to the Committee in connection with the Bill:

4.2. The General Consumer Council of Northern Ireland was approached but declined to comment.

4.3. Two bodies gave oral evidence on foot of their written evidence. They were the:

DELIBERATIONS OF THE COMMITTEE

5. Introduction

5.1. The Committee gave detailed consideration to each part of the Ground Rents Bill over a number of meetings and concluded its deliberations with a clause-by-clause scrutiny on 24 October and 16 November 2000 when the parts of the Bill were formally agreed. The decisions made and areas where substantial clarification and amendments were considered are given below. The record of the Committee's deliberations can be found in Appendix 1, Minutes of Proceedings and Appendix 2, Minutes of Evidence.

5.2. Ms Judena Goldring, Director and Mr Neil Lambe, Office of Law Reform were called before the Committee and questioned. Mr Arthur Moir, Registrar General and Chief Executive, Lands Registers of Northern Ireland appeared before the Committee and was questioned at the meeting on 19 September.

Ground Rents Bill (NIA Bill 6/99)

6. Long Title

6.1. The Committee questioned the Office of Law Reform on whether the Long Title should be amended to include a specific reference to the subject of the Bill i.e. ground rents on residential property in Northern Ireland.

6.2. The Committee concluded that it was content and agreed to recommend that the Long Title stand part of the Bill.

7. Clause 1 - 'Power of certain rent payers to redeem ground rent'

7.1. No substantive issues were raised and the Committee agreed to recommend that Clause 1 stand part of the Bill.

8. Clause 2 - 'Compulsory redemption in case of dwelling house'

8.1. No substantive issues were raised and the Committee agreed to recommend that Clause 2 stand part of the Bill.

9. Clause 3 - Exceptions to, or restrictions on sections 1 and 2

9.1. The Committee considered the Clause and raised a concern about the reference in Subsection (1) (a) to " a proposal to .obtain an extension" under The Property (NI) Order 1997. The Committee considered that the drafting of Clause 3 (1) (a) was unclear, in particular as regards the reference to "a notice of a proposal to acquire the fee simple, or to obtain an extension, under section 2 of the Act of 1971". The Committee was concerned that the meaning of the word "extension" was uncertain. The Office of Law Reform explained that Section 2 of the Act of 1971 makes it clear to what the extension refers and advised against any amendment to this provision.

9.2. The Committee considered Subsection (7) and raised a concern about the definition of a flat and common parts with respect to the submission by the Law Society of Northern Ireland, i.e. that the following change be made: 'In Subsection (7), line 24 after " "common parts" means" insert "party boundaries or any parts of the development or facilities therein"'

9.3. The Office of Law Reform explained in its written response dated 14 November (see Appendix 3) that it was not persuaded that there were cogent reasons for departing from the definition of "flat" contained in Clause 3 of the Ground Rents Bill. It said that the definition originated in the final report of the Land Law Working Group in 1990 and until recently had not been challenged. The Office of Law Reform has continued to discuss this issue with the Law Society. The Law Society was unable to predict the likely effect of deleting the reference to "common parts". The Office therefore advised that the existing definition remain unamended but explained that it would keep a careful watch on conveyancing practice to determine if the definition of "flat" requires amendment at a later date.

9.4. The Committee considered this issue and agreed leave the definition of a flat as it stood.

10. Amendment

10.1. The Committee considered a proposed amendment to Clause 3 submitted by the Office of Law Reform to protect organisations providing affordable social housing from incurring additional costs which they would then have to pass on as part of the purchase price of the property to first time buyers. The Office of Law Reform explained in its written response dated 14 November that the amendment would ensure that when the Northern Ireland Co-Ownership Housing Association, or other designated housing associations, purchase property for inclusion in a co-ownership scheme they will not be required to redeem the ground rent under Clause 2.

10.2. The amendment introduced a new Subsection (9) and was as follows:

Clause 3, page 3, line 42, at end insert-

'(9) Section 2 does not apply to the conveyance or transfer of a dwelling house to-

(a) the Northern Ireland Co-ownership Housing Association; or

(b) any other housing association (within the meaning of the Housing (Northern Ireland) Order 1992 (NI 15)) specified by an order made by the Department for Social Development subject to negative resolution.'

10.3. The Committee considered and agreed the proposed amendment. The Committee agreed to recommend that Clause 3, as amended, stand part of the Bill.

11. Clause 4 - Redemption

11.1. No substantive issues were raised and the Committee agreed to recommend that Clause 4 stand part of the Bill.

12. Clause 5 - The redemption money and other money lodged under section 4 (2)

12.1. A number of minor issues were raised and resolved and the Committee agreed that Clause 5 stand part of the Bill.

13. Clause 6 - Disposal of money and other money lodged with Land Registry under section 4 (2): claims thereto

13.1. The Committee was concerned that, if possible, the Clause should provide for a simpler procedure to be used when the identity of the rent owner is known and the rent payer has served notice.

13.2. The Lands Registers for Northern Ireland proposed a possible streamlined procedure. The Office of Law Reform explained in its letter dated 14 November that it was unable to agree with the proposal of the Land Registry that monies should be paid out by DFP without a Certificate having first been issued by Land Registry. The amount of redemption money is subject to appeal to the Lands Tribunal (Clause 23(4)) and hence the payment of the redemption money to an entitled rent-owner is in the nature of a quasi-judicial decision. The Office advised that Land Registry involvement should continue.

13.3. The Office of Law Reform went on to explain that as Clause 6(3) is currently drafted, Land Registry Rules may prescribe a modified procedure for disposal of redemption money to rent-owners if the amount of redemption money is small. Statutory Rules could provide that where the redemption money is small the Registrar will not require evidence of title provided that along with the application for redemption money the rent-owner provides a copy of the notice received from the rent-payer and signs (as part of the application form) an undertaking to apportion the rent amongst superior owners where they are known to him. An alternative "short procedure" could be confined to cases where there are no superior owners entitled to an apportionment of the ground rent. This is likely to be the case in modern properties with a substantial annual ground rent. The Office was actively pursuing the option for a modified procedure.

13.4. The Committee considered the issue and agreed that it was content with the Office of Law Reform's assurance that it was actively pursuing the option for a modified procedure and the reasons given for not providing a simpler 'streamlined' system within the Bill.

14. Amendment

14.1. The Office of Law Reform proposed to make an amendment to Clause 6 and stated that: "This amendment is technical in nature and is designed to ensure that all the requirements of the Northern Ireland Act 1998 are complied with in terms of allocated amounts out of the Consolidated Fund to individual departments." The proposed amendment was as follows:

Clause 6, page 5, line 33, leave out 'issue out the of the Consolidated Fund and '.

14.2. The Committee considered and agreed the proposed amendment and agreed to recommend that Clause 6, as amended, stand part of the Bill.

15. Clause 7 - Certificate of redemption

15.1. No substantive issues were raised and the Committee agreed to recommend that Clause 7 stand part of the Bill.

16. Clause 8 - Exclusion of re-possesion of land while redemption is pending

16.1. No substantive issues were raised and the Committee agreed to recommend that Clause 8 stand part of the Bill.

17. Clause 9 - Application of certain provisions of act to certain other periodic payments

17.1. No substantive issues were raised and the Committee agreed that Clause 9 stand part of the Bill.

18. Clause 10 - Effect of certificate of redemption

18.1. No substantive issues were raised and the Committee agreed to recommend that Clause 10 should stand part of the Bill.

19. Clause 11 - Superior rents

19.1. No substantive issues were raised and the Committee agreed to recommend that Clause 11 stand part of the Bill.

20. Clause 12 - Lands in separate occupation subject to single ground rent

20.1. The Committee considered a number of matters including:

20.2. The Committee was content with the responses from the Office of Law Reform and agreed to recommend that Clause 12 stand part of the Bill.

21. Clause 13 - Effect of redemption on titles

21.1. The Committee was concerned that in Subsections (1) and (2) the nature of the legal interest remaining in the rent-owner after redemption was unclear and whether the residual interest was capable of transfer by the rent-owner.

21.2. The Committee was content with the response from the Office of Law Reform and agreed to recommend that Clause 13 stand part of the Bill.

22. Clause 14 - Continuance of rights and equities affecting leasehold estate.

22.1. No issues were raised and Members agreed to recommend that Clause 14 stand part of the Bill.

23. Clause 15 - Mortgages and leases

23.1. The Committee had been concerned that existing or pending mortgages should not be affected by the Bill and the Office of Law Reform was asked to confirm that redemption would have no practical effect on any mortgage in existence or pending. The Office of Law Reform indicated that it would prepare two amendments to Clause 15 on mortgages.

24. Amendments

24.1. The Office of Law Reform explained that the first amendment would deal with the provisions on mortgages. And that mortgage lenders had requested such an amendment as an assurance that their existing mortgages on property subject to voluntary redemption would apply to the enlarged fee simple estate."

24.2. The amendment was as follows:

Clause 15, page 10, line 24, at end add 'and any provision in the instrument providing for an estate acquired by the mortgagor to be held in trust for the mortgagee or appointing the mortgagee as the mortgagor's attorney in relation to such estate applies to the fee simple.'.

24.3. The second amendment would remove the requirement on mortgagees to submit a Certificate of Redemption to the Land Registry in order to have the Register corrected. The Certificate would have been issued by Land Registry and the Registrar of Titles has power in Clause 13 to make any necessary corrections." The amendment was as follows:

Clause 15, page 10, line 38, leave out subsection (3).

24.4. The Committee was content with the assurances given by the Office of Law Reform to its query and agreed each of the amendments. The Committee agreed to recommend that Clause 15, as amended, stand part of the Bill.

25. Clause 16 - Covenants

25.1. The Committee had a number of concerns with regard to how covenants were handled in the Bill.

25.2. The Committee was concerned about the impact of the Bill on the Northern Ireland Housing Executive (NIHE). The Office of Law Reform was asked whether an amendment was proposed to give protection to the NIHE on the enforceability of covenants that the NIHE includes in deeds under which dwellings are sold to sitting tenants.

25.3. The Committee was concerned in Subsection (7) that the definition of 'neighbours' appeared to allow the covenants at Clause 16 (2) (g) and (i) to survive only in the context of a building scheme. It appeared that similar covenants between a rent-owner and rent-payer who are neighbours (in the ordinary sense of the word) would not survive.

25.4. The Committee was concerned about covenants relating to party walls in Subsection (3) with regard to a covenant in respect of a garden fence or wall that may have ascribed the cost of maintenance or repair to one of two neighbours.

26. Amendments

26.1. The Office of Law Reform proposed an amendment to Clause 16 to make special provision for common covenants contained in leases by the Northern Ireland Housing Executive to sitting tenants purchasing property under the statutory house sales scheme. The amendment was as follows:

Clause 16, page 12, line 11, at end insert-

'(j) any covenant, not falling within any of the preceding paragraphs, which is contained in a lease granted by the Northern Ireland Housing Executive before 10th January 2000 and relates-

(i) to a district heating supply provided by the Executive; or

(ii) to the repayment to the Executive of any discount of part of the purchase price under a house sales scheme made under the Housing (Northern Ireland) Order 1983 (NI 15).'

26.2. The Office of Law Reform proposed the following amendments to Clause 16 to provide that the amenity convenants mentioned in Clause 16 (2) (g) will survive redemption and be enforceable as between neighbours in a building scheme (participants in a building scheme) and between any person by or against whom such covenants would have been enforceable if redemption had not occurred (i.e. in accordance with Clause 17 (4)):

Clause 16, page 12, line 6, leave out from 'his' to end of line 11 and insert 'other participants in a relevant building scheme immediately before the redemption of the ground rent by virtue of that scheme.'

Clause 16, page 12, line 26, leave out from '(2)(g)' to the end of 28 and insert '(2)(i)-

"building scheme" means a scheme (express or implied) under which land (whether freehold or leasehold) is divided into two or more parcels subject to obligations which are reciprocally enforceable (whether at law or in equity) between owners of the parcels; and

"relevant building scheme", in relation to any land, means a building scheme which includes the land or which is taken to subsist in respect of the land by virtue of section 17(6).'

26.3. The Committee agreed the proposed amendments and agreed to recommend that Clause 16, as amended, stand part of the Bill.

27. Clause 17 - Enforceability of covenants

27.1. The Committee considered three amendments proposed by the Office of Law Reform that are consequential to amendments made to Clause 16 in relation to the Housing Executive and to the definition of "neighbours" as regards the amenity covenants listed in Clause 16(2)(g). The Office of Law Reform also introduced a drafting amendment in relation to "successors in title" following a recommendation by the Committee.

28. Amendments

28.1. The first proposed amendment to Clause 17 refers to 'successors in title' and is as follows:

Clause 17, page 13, line 17, after 'successors' insert 'in title'

28.2. The OLR also recommended two amendments that are consequential to the changes in Clause 16. They are as follows:

Clause 17, page 13, line 37, leave out 'same meaning as in section 16(2)(i)' and insert 'meaning given in section 16(7)'

Clause 17, page 12, line 40, leave out 'or (h)' and insert ', (h) or (j)'

28.3. The Committee agreed the proposed amendments and agreed to recommend that Clause 17, as amended, stand part of the Bill.

29. Clause 18 - Settled land

29.1. No substantive issues were raised and the Committee agreed to recommend that Clause 18 stand part of the Bill.

30. Clause 19 - Cesser of Act of 1971 as to enlargement of leases to which this Act applies

30.1. No issues were raised and the Committee agreed to recommend that Clause 19 stand part of the Bill.

31. Clause 20 - Avoidance of certain agreements

31.1. No issues were raised and the Committee agreed to recommend that Clause 20 stand part of the Bill.

32. Clause 21 - Mental patients

32.1. No substantive issues were raised and the Committee agreed to recommend that Clause 21 stand part of the Bill.

33. Clause 22 - Service of documents

33.1. No issues were raised and the Committee agreed to recommend that Clause 22 stand part of the Bill.

34. Clause 23 - Disputes

34.1. No issues were raised and the Committee agreed to recommend that Clause 23 stand part of the Bill.

35. Clause 24 - Offences

35.1. No issues were raised and the Committee agreed to recommend that Clause 24 stand part of the Bill.

36. Clause 25 - Civil remedy for misstatement

36.1. No issues were raised and the Committee agreed to recommend that Clause 24 stand part of the Bill.

37. Clause 26 - Fees and rules

37.1. No issues were raised and the Committee agreed to recommend that Clause 24 stand part of the Bill.

38. Clause 27 - General interpretation

38.1. No substantive issues were raised and the Committee agreed to recommend that Clause 27 stand part of the Bill.

39. Clause 28 - Interpretation: "ground rent"

39.1. In examining Subsection (1) the Committee was aware that a considerable number of ground rents are set at £1. The definition of nominal rents in the Bill excludes these rents and the Office of Law Reform was asked whether the definition of a nominal rent should be amended to include rents of "one pound or less". The Office of Law Reform explained that it had decided that the nominal rent should be set at an amount of less than £1 because setting a figure of £1 or higher would take a large number of existing ground rents outwith the redemption scheme. And that it was prudent at this stage to include such rents within the redemption scheme.

39.2. The Committee was content with the amount set for a nominal ground rent and agreed to recommend that Clause 28 stand part of the Bill.

40. Clause 29 - Interpretation: "dwelling house"

40.1. No issues were raised and the Committee agreed to recommend that Clause 29 stand part of the Bill.

41. Clause 30 - Application to the crown

41.1. No issues were raised and the Committee agreed to recommend that Clause 30 stand part of the Bill.

42. Clause 31 - Amendments and repeals

42.1. No issues were raised and the Committee agreed that Clause 31 stand part of the Bill.

43. Clause 32 -Commencement

43.1. No issues were raised and the Committee agreed to recommend that Clause 32 stand part of the Bill.

44. Clause 33 - Short title

44.1. The Committee questioned the Office of Law Reform on whether the Short Title should be amended to include a specific reference to the subject of the Bill i.e. ground rents on residential property in Northern Ireland. The Office of Law Reform advised the Committee that First Legislative Council had concluded that a change to the Short Title would be potentially misleading as the Bill may apply to mixed property.

44.2. The Committee was content with this explanation and agreed to recommend that the Short Title stand part of the Bill.

Schedules

45. Schedule 1 The redemption money

45.1. The Committee considered the intention in the Schedule that where - when the ground rent is fixed and the multiplier is applied to the redemption money - the ground rent is subject to a provision for increase, the redemption money takes account of that provision, but is subject to a discount of 8% per annum. Where that increase would occur more than 12 years after the application date, it is ignored.

45.2. The Office of Law Reform proposed an amendment to the Schedule as a result of the Committee's deliberations. It explained that the effect of the amendment is to remove the figure of 12 years and 8% from the face of the Bill and to leave it to the Department's Order making power to fix the relevant number of years and the appropriate discount rate. As these figures may change over time, the Office of Law Reform advised that the primary legislation should remain neutral as to the actual figures to be used.

46. Amendments

46.1. The Office of Law Reform proposed the following amendments to Schedule 1:

Schedule 1, page 22, line 36, leave out 'is more than 12 years after the application date' and insert 'falls after the expiration of the relevant period'

Schedule 1, page 23, line 1, leave out from 'is 12 years' to the end of line 9 and insert 'falls within the relevant period, the yearly amount of the ground rent shall be determined in such manner as may be specified in an order under paragraph 2.

(4) In this paragraph "the relevant period", in relation to a ground rent, means the period commencing on the application date and consisting of the number of years fixed by an order under paragraph 2 as the number of years purchase applicable to ground rents (or, as the case may be, applicable to ground rents of the same class or description as that ground rent).'

46.2. The Committee agreed the amendments and agreed to recommend that Schedule 1, as amended, stand part of the Bill.

47. Schedule 2 Amendments

47.1. The Committee was concerned to clarify concerns raised by the Law Society that Article 35 of the Property (NI) Order 1997 would be of no application. The Bill would amend Article 35 so as to include 'nominal' rents in its procedure. The Office of Law Reform explained that it had decided to repeal Article 3 (2) (a) of the Property (NI) Order 1997 as it could no longer have any practical impact. And that the repeal should address concerns of the Law Society as to the possibility of confusion in the 1997 Order on the definition of a 'ground rent'."

47.2. The amendment to repeal Article 3 (2) (a) Property (NI) Order 1997 was considered under Schedule 3 (see also paragraph 50.1).

47.3. The Committee asked the Office of Law Reform whether the Bill should be amended to provide for an amendment to the Article 35 procedure that would allow redemption thereunder of nominal fee farm rents. The Office of Law Reform explained that it was planning to amend Article 35 of the Property (NI) Order 1997 to cover nominal fee farm rents as well as nominal leasehold rents.

48. Amendment

48.1. The Office of Law Reform explained that the proposed amendment at line 18 of page 24 applies the enlargement of a leasehold estate subject to no or a nominal rent to no or nominal fee farm rents. This amendment would address the concerns of the Committee and the Law Society in relation to nominal fee farm rents. The substantive provisions of this amendment mirror (with appropriate modifications) the provisions on Article 35 of the Property (NI) Order 1997. The amendment was as follows:

Schedule 2, page 24, line 18, at end insert-

'( ) After Article 35 insert-

"Redemption of nominal ground rent

35A.-(1) Subject to paragraph (2), this Article applies where the rent payable under a fee farm grant is a nominal rent.

(2) This Article does not apply at a time when -

(a) the land is used wholly for business purposes; or

(b) the rent-payer is prohibited by any term of his title from using the land otherwise than wholly for business purposes;

but land is not prevented from being used wholly for business purposes by reason only of the fact that part of it is occupied as a dwelling by a person who is required or permitted to reside there in consequence of his employment or of holding an office.

(3) The rent-payer may by deed ("the deed of declaration") declare to the effect that the ground rent is discharged and may, in accordance with rules, make application to the Registrar for the purpose mentioned in paragraph (4)(a) or (b).

(4) On an application under paragraph (3)-

(a) if the land is registered land, the deed of declaration is sufficient authority for the Registrar (subject to compliance with rules)-

(i) to discharge any burden such as is mentioned in paragraph 2 of Part I of Schedule 6 to the Land Registration Act; and

(ii) to make such alteration in the class of title with which the land is registered as appears to him to be appropriate;

(b) if the land is not registered, the Registrar may register the rent-payer's title with such class of title as appears to him to be appropriate (and until the rent-payer's title to the land is so registered , the deed of declaration has no effect);

(c) in either case, the deed of declaration is sufficient authority (notwithstanding any caution or inhibition) for the Registrar to make in the register such consequential entries, changes, cancellations or notes as appear to him to be appropriate;

(5) Except where the Registrar is satisfied that the land was subject to no or nominal superior rent on the date of execution of the deed of declaration, the Registrar shall enter on the register a note to the effect that the fee simple estate is subject to a rentcharge of so much (if any) of any superior rent as would have been redeemed by virtue of Article 11(1) of the Ground Rents Act (Northern Ireland) 2001 if a ground rent to which the land was subject had been redeemed under section 1 of that Act on that date; and such a note may be discharged in accordance with rules, and it is sufficient to satisfy the Registrar as to the matter mentioned at the beginning of this paragraph that he is furnished by a solicitor with a certificate to that effect.

(6) Subject to paragraphs (4), (5) and (7), the deed of declaration operates by virtue of this paragraph to discharge the estate of the rent payer from all estates in the land of the rent-owner and any superior owners to the extent that those estates carry entitlement to ground rent or a superior rent or relate to matters connected with the rent and to that extent those estates are extinguished.

(7) Where a ground rent is discharged under this Article, section 13(8) (read with subsection (10)) and sections 15(2), 16 and 17 of the Ground Rents Act (Northern Ireland) 2001 apply in relation to the land as if the ground rent had been redeemed under that Act; and, accordingly, for the purposes of this Article those sections shall be read with the necessary modifications.

(8) For the purposes of paragraph (6) matters are connected with rent if they are concerned with the amount of the rent or its payment or recovery or are otherwise concerned (directly or indirectly) with the rent.

(9) In this Article "nominal rent" has the same meaning as in Article 35.'

48.2.

The Office of Law Reform proposed two technical amendments that are drafting amendments to tidy up the Bill. They are as follows:

Schedule 2, page 23, line 34 after '35(8)' insert 'or 35A(7)'

Schedule 2, page 24, line 12, leave out '(7) to (10)' and insert '(7), (8) and (10)'

48.3.

The Committee agreed the amendments and agreed to recommend that Schedule 2, as amended, stand part of the Bill.

49. Schedule 3 Repeals

49.1. The Committee considered proposed amendments by the Office of Law Reform to the Schedule of Repeals.

50. Amendments

50.1. The Office of Law Reform explained that the first amendment was a drafting law repeal measure to ensure that unnecessary definitions were not retained in the Property (NI) Order 1997. The amendment was as follows:

Schedule 3, page 24, line 29, at end insert 'and in the definitions of "rent-owner" and "rent-payer" the words ", without prejudice to Article 32,"'

50.2. The second amendment would have a similar effect in repealing the definition of a nominal rent in the 1997 Order. The Office of Law Reform explained that with the Ground Rents Bill coming into operation there was no need to retain this definition in Article 3 of the Property (NI) Order 1997. The amendment was as follows:

Schedule 3, page 24, line 32, at end insert 'Article 3(2)(a).'

50.3. The Committee agreed both amendments and agreed to recommend that Schedule 3, as amended, stand part of the Bill.

SCHEDULE OF AMENDMENTS
to the GROUND RENTS BILL (NIA Bill 6/99)
TO BE MOVED AT CONSIDERATION STAGE

The amendments to the Ground Rents Bill that were agreed and recommended by the Committee to be moved at Consideration Stage are given below.

Clause 3:

page 3, line 42, at end insert-

'(9) Section 2 does not apply to the conveyance or transfer of a dwelling house to-

(a) the Northern Ireland Co-ownership Housing Association; or

(b) any other housing association (within the meaning of the Housing (Northern Ireland) Order 1992 (NI 15)) specified by an order made by the Department for Social Development subject to negative resolution.'

Clause 6:

page 5, line 33, leave out 'issue out of the Consolidated Fund and'

Clause 15:

page 10, line 27, at end add 'and any provision in the instrument providing for an estate acquired by the mortgagor to be held in trust for the mortgagee or appointing the mortgagee as the mortgagor's attorney in relation to such estate applies to the fee simple.'

page 10, line 38, leave out subsection (3)

Clause 16:

page 12, line 6, leave out from 'his' to end of line 11 and insert 'other participants in a relevant building scheme immediately before the redemption of the ground rent by virtue of that scheme.'

page 12, line 11, at end insert-

'(j) any covenant, not falling within any of the preceding paragraphs, which is contained in a lease granted by the Northern Ireland Housing Executive before 10th January 2000 and relates-

(i) to a district heating supply provided by the Executive; or

(ii) to the repayment to the Executive of any discount of part of the purchase price under a house sales scheme made under the Housing (Northern Ireland) Order 1983 (NI 15).'

page 12, line 26, leave out from '(2)(g)' to the end of 28 and insert '(2)(i)-

"building scheme" means a scheme (express or implied) under which land (whether freehold or leasehold) is divided into two or more parcels subject to obligations which are reciprocally enforceable (whether at law or in equity) between owners of the parcels; and

"relevant building scheme", in relation to any land, means a building scheme which includes the land or which is taken to subsist in respect of the land by virtue of section 17(6).'

Clause 17:

page 12, line 40, leave out 'or (h)' and insert ', (h) or (j)'

page 13, line 17, after 'successors' insert 'in title'

page 13, line 37, leave out 'same meaning as in section 16(2)(i)' and insert 'meaning given in section 16(7)'

Schedule 1:

page 22, line 36, leave out 'is more than 12 years after the application date' and insert 'falls after the expiration of the relevant period'

page 23, line 1, leave out from 'is 12 years' to the end of line 9 and insert 'falls within the relevant period, the yearly amount of the ground rent shall be determined in such manner as may be specified in an order under paragraph 2.

(4) In this paragraph "the relevant period", in relation to a ground rent, means the period commencing on the application date and consisting of the number of years fixed by an order under paragraph 2 as the number of years purchase applicable to ground rents (or, as the case may be, applicable to ground rents of the same class or description as that ground rent).'

Schedule 2:

page 23, line 34 after '35(8)' insert 'or 35A(7)'

page 24, line 12, leave out '(7) to (10)' and insert '(7), (8) and (10)'

page 24, line 18, at end insert-

'( ) After Article 35 insert-

"Redemption of nominal ground rent

35A.-(1) Subject to paragraph (2), this Article applies where the rent payable under a fee farm grant is a nominal rent.

(2) This Article does not apply at a time when -

(a) the land is used wholly for business purposes; or

(b) the rent-payer is prohibited by any term of his title from using the land otherwise than wholly for business purposes;

but land is not prevented from being used wholly for business purposes by reason only of the fact that part of it is occupied as a dwelling by a person who is required or permitted to reside there in consequence of his employment or of holding an office.

(3) The rent-payer may by deed ("the deed of declaration") declare to the effect that the ground rent is discharged and may, in accordance with rules, make application to the Registrar for the purpose mentioned in paragraph (4)(a) or (b).

(4) On an application under paragraph (3)-

(a) if the land is registered land, the deed of declaration is sufficient authority for the Registrar (subject to compliance with rules)-

(i) to discharge any burden such as is mentioned in paragraph 2 of Part I of Schedule 6 to the Land Registration Act; and

(ii) to make such alteration in the class of title with which the land is registered as appears to him to be appropriate;

(b) if the land is not registered, the Registrar may register the rent-payer's title with such class of title as appears to him to be appropriate (and until the rent-payer's title to the land is so registered , the deed of declaration has no effect);

(c) in either case, the deed of declaration is sufficient authority (notwithstanding any caution or inhibition) for the Registrar to make in the register such consequential entries, changes, cancellations or notes as appear to him to be appropriate;

(5) Except where the Registrar is satisfied that the land was subject to no or nominal superior rent on the date of execution of the deed of declaration, the Registrar shall enter on the register a note to the effect that the fee simple estate is subject to a rentcharge of so much (if any) of any superior rent as would have been redeemed by virtue of Article 11(1) of the Ground Rents Act (Northern Ireland) 2001 if a ground rent to which the land was subject had been redeemed under section 1 of that Act on that date; and such a note may be discharged in accordance with rules, and it is sufficient to satisfy the Registrar as to the matter mentioned at the beginning of this paragraph that he is furnished by a solicitor with a certificate to that effect.

(6) Subject to paragraphs (4), (5) and (7), the deed of declaration operates by virtue of this paragraph to discharge the estate of the rent payer from all estates in the land of the rent-owner and any superior owners to the extent that those estates carry entitlement to ground rent or a superior rent or relate to matters connected with the rent and to that extent those estates are extinguished.

(7) Where a ground rent is discharged under this Article, section 13(8) (read with subsection (10)) and sections 15(2), 16 and 17 of the Ground Rents Act (Northern Ireland) 2001 apply in relation to the land as if the ground rent had been redeemed under that Act; and, accordingly, for the purposes of this Article those sections shall be read with the necessary modifications.

(8) For the purposes of paragraph (6) matters are connected with rent if they are concerned with the amount of the rent or its payment or recovery or are otherwise concerned (directly or indirectly) with the rent.

(9) In this Article "nominal rent" has the same meaning as in Article 35.'

Schedule 3:

page 24, line 29, at end insert 'and in the definitions of "rent-owner" and "rent-payer" the words ", without prejudice to Article 32,"'

page 24, line 32, at end insert 'Article 3(2)(a).'

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