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A Brief Summary to the Planning and Development (Amendment) (No. 2) Regulations 2018 (S.I. No. 30 of 2018)

A Brief Summary to the Planning and Development (Amendment) (No. 2) Regulations 2018 (S.I. No. 30 of 2018)

A Brief Summary to the Planning and Development (Amendment) (No. 2) Regulations 2018 (S.I. No. 30 of 2018)

The Aim of the Regulations

The aim of the Planning and Development (Amendment) (No. 2) Regulations 2018 (S.I. No. 30 of 2018) (the “Regulations”) is to facilitate the re-use of existing and vacant commercial buildings for residential purposes by providing an exemption for the change of use, and any related works, of certain vacant commercial premises to residential use, without the need to obtain planning permission.

They form part of the Government’s action plan to increase much needed housing supply, maximise the use of vacant underutilised spaces and assist in the rejuvenation of inner-core urban areas.

When the Exemption applies

The exemption applies to existing buildings that have a current commercial use with reference to Classes 1, 2, 3, and 6 of Part 4 to Schedule 2 of the Planning and Development Regulations 2001 (S.I. No. 600 of 2001) (referred to in the Regulations as the “Principal Regulations”), the definition of which Classes are set out below:

  • Class 1: Use as a shop.
  • Class 2: Use for the provision of (a) financial services, (b) professional services (other than health or medical services), (c) any other services (including use as a betting office), where the services are provided principally to visiting members of the public.
  • Class 3: Use as an office, other than a use to which class 2 of this Part of this Schedule applies.
  • Class 6: Use as a residential club, a guest house or a hostel (other than a hostel where care is provided).

Limitations

There are certain limitations on the nature and type of buildings that may benefit from the exemption, as follows:

  • The building must have been completed prior to the making of the Regulations (on 8 February 2018);
  • The building must have been used for one of the 4 classes of use referred to above at some time in the past;
  • The structure or part of the structure which is to be developed must have been vacant for 2 years or more immediately prior to the commencement of the development.

The change of use, and any related works, must occur between 8 February 2018 and 31 December 2021, so while the exempted development permitted is permanent in nature once the criteria are satisfied, the exemption can only be availed of during this period.

A number of other conditions and limitations apply, relating to works, the detail of which are set out more particularly at section 2 (Sub-Article (6)(d)) of the Regulations in the link below.

Notifying the Planning Authority

A developer must notify the Planning Authority in writing of the details of the development at least two weeks prior to the commencement of the proposed change of use and related works, and the notification shall include information on the location and number of residential units involved, including the unit sizes and number of bedrooms in each unit.

Compliance with the Building Regulations 1997 to 2017 must still be achieved, and Building Control procedures will still apply.

RELEVANT LINKS


See relevant links below:

1. Planning and Development (Amendment) (No. 2) Regulations 2018 (S.I. No. 30 of 2018) 

2. Circular Letter PL 01/2018 issued by the Department of Housing, Planning and Local Government, on the Planning and Development (Amendment) (No. 2) Regulations 2018

 

 

 

Vicky Pigot – Senior Associate

5 June 2018

Repayment of Stamp Duty where land used for Residential Development

Repayment of Stamp Duty where land used for Residential Development

Section 83D of the Stamp Duties Consolidation Act 1999 as inserted by Section 61 of the Finance Act 2017


Introduction

The Finance Act 2017 introduced a mechanism for repayment of stamp duty paid on land where that land is subsequently used for residential development, such that if the maximum amount of stamp duty is repaid under the mechanism, the effective rate of stamp duty ultimately payable would be 2%.

Repayment of Stamp Duty – criteria

Stamp Duty paid on instruments executed on or after 11 October 2017 that relate to the transfer of non-residential property and on which 6% stamp duty liability was paid, may be repaid by the Revenue Commissioners up to a maximum of two-thirds of such stamp duty paid,  if construction operations of one or more dwelling units on the land commence on or before 31 December 2021 and pursuant to a commencement notice within the period of 30 months following the date of execution of the deed.

Clawback provisions

The section contains clawback provisions and any stamp duty repaid will be clawed back if:

  • the residential development is not completed within the period of 2 years of issuance by the relevant building control authority of their acknowledgment of the commencement notice; or
  • when the development is completed: (i) at least 75% of the total surface area of the land is not occupied by dwelling units; or (ii) the gross floor space of dwelling units on such land does not amount to at least 75% of the total surface area of that land.

The Repayment

The amount to be repaid is determined by the formula A x B x 2/3 where:

A = the amount of stamp duty paid (at the rate of 6%); and

B = the proportion of the area of the land on which residential development occurred,

      expressed as a fraction.

Documentary evidence

To satisfy themselves that either the conditions for the making of a repayment, or the conditions for the avoidance of a claw-back, are satisfied, the Revenue Commissioners may specify documents and particulars be submitted, to include the following:

  • copy of any commencement notice
  • copy of any acknowledgment sent by the Building Control Authority
  • copy of any planning permission granted
  • the number and gross floor space of dwelling units constructed
  • the area of the land expressed in hectares.

All relevant documentation should be retained by the claimant for six years, as same may be requested by Revenue to evidence the legitimacy of any such claim.

Making a Repayment Claim

Once construction operations have commenced pursuant to a commencement notice acknowledged by the Building Control Authority, a claim for a repayment can be made by an accountable person by electronic means (in a form and manner yet to be specified by Revenue) and should include a statutory declaration stating that construction operations of one or more dwelling units on the land commenced pursuant to a commencement notice within the period of 30 months following the date of execution of the deed, and (where a claim relates to a part of the stamp duty paid) the proportion of the area of the land represented thereby. Note that a repayment does not carry interest (although interest shall be repayable on a clawback) and cannot be made after the expiry of 4 years following the date of acknowledgment by a Building Control Authority (notwithstanding the development might be carried out in phases).

Appeal

If Revenue refuses the repayment they shall notify the claimant in writing of the decision and the reasons for it, who may appeal to the Appeal Commissioners within 30 days of receipt of any such notice.

Single-unit developments and multi-phased developments

While the above relates to multi-unit single phased developments, Section 83D of the Stamp Duties Consolidation Act 1999

also applies to single-unit developments and multi-phased developments with the conditions set out above modified accordingly.


Author: Vicky Pigot

12 April 2018

Overview of The Mediation Act 2017

Overview of The Mediation Act 2017

Overview of the Mediation Act 2017 (“the Act”)

The Purpose of the Act


The key policy objectives of the Mediation Act 2017 (“the Act”) are to promote increased awareness and use of a particular alternative dispute resolution (“ADR”) mechanism known as mediation. This mechanism can be used even if proceedings have been issued and the Act has been designed so that mediation will co-exist alongside the court system.

What is Mediation?


The Act defines mediation as a confidential, facilitative and voluntary process in which parties to a dispute, with the assistance of a mediator, attempt to reach a mutually acceptable agreement to resolve a dispute. Certain types of disputes have been excluded for example arbitration, disputes which fall under the function of the Workplace Relations Commission and judicial review.

Key Principles of Mediation


Facilitative

There are a number of different forms of mediation; for example facilitative, evaluative, narrative or transformative mediation.

However, it appears from the definition of mediation in the Act that the legislature has adopted the traditional form of mediation known as facilitative in which the mediator is a neutral intervener who offers minimal assistance.

This is reinforced by section 6(9) which provides that it is for the parties to determine the outcome of the mediation. Therefore, the Mediator will facilitate communications between the parties, but full responsibility will lie with the parties to achieve a resolution.

One exception is set out in section 8(4) which provides that the mediator may, at the request of all the parties, make proposals to resolve the dispute, but it shall be for the parties to determine whether to accept such proposals. This provision may perhaps be used where the parties have reached an impasse but are still committed to reaching a resolution.

Confidential

Both the definition of mediation and section 10 of the Act provides that the mediation process is confidential. In particular, section 10(1) of the Act provides that all communications (including oral statements) and all records and notes relating to the mediation shall be confidential and shall not be disclosed in any proceedings before a Court or otherwise. There are of course exceptions to this namely:

A. Exception under section 10(2)

  • In order to implement or enforce a mediation settlement,
  • To prevent physical or psychological injury to a party,
  • Is required by law,
  • Is necessary in the interest of preventing or revealing the commission of a crime, the concealment of a crime, a threat to a party, or
  • Is sought or offered to prove or disprove a civil claim concerning the negligence or misconduct of the mediator occurring during the mediation or a complaint to a professional body concerning such negligence or misconduct.

B. Exception under section 10(3)

Evidence introduced into or used in mediation that is otherwise admissible or subject to discovery in proceedings shall not be or become inadmissible or protected by privilege in such proceedings solely because it was introduced into or used in the mediation.

C. Exception where Court has invited parties to consider using mediation

In circumstance where a mediation did take place after an invitation from the Court under section 16 (see below) but an application to re-enter the proceedings was subsequently made, the Mediator is required to prepare a report setting out whether or not a settlement was reached and, if one was reached, a statement as to the terms of the mediation settlement. It appears that this report and the terms of settlement may not enjoy the protection of confidentiality.

D. Exception where the Court is deciding to award costs of proceedings following an unreasonable refusal by a party to consider using mediation following an invitation under section 16 of the Act.

3.  Voluntary

Mediation is a voluntary process in that the parties must voluntarily agree to participate in the process. They must also choose voluntarily to continue participating in the process, for example section 6(4)(A) provides that a party may withdraw from the mediation at any time during the mediation. A person can be accompanied to a mediation by a person including a legal advisor who is not a party to the dispute.

Any settlement reached must be agreed voluntarily between the parties. The Mediator or an opposing party cannot impose a solution or settlement terms on the other party.

4. Enforceability of Agreement

Pursuant to section 11(1) of the Act, the parties shall determine if and when a settlement has been reached and whether that settlement is to be enforceable. However, section 11(2) provides that notwithstanding subsection 1 a settlement shall have effect as a contract between the parties to a settlement except where expressly stated that it shall have no legal force until it is incorporated into a formal legal agreement or contract to be signed by the parties.

Section 11(3) provides that a court may on application of one or more parties to a mediation settlement, enforce its terms except where the court is satisfied that the mediation settlement:

  1. Does not adequately protect the rights and entitlements of the parties or their dependants (if any),
  2. Is not based on full and mutual disclosure of assets,
  3. Is otherwise contrary to public policy
  4. A party to the mediation settlement has been over borne or unduly influenced by any other party in reaching the mediation settlement.

The Mediator


It is up to the parties to select a mediator. In terms of regulation of the profession, the Act has adopted a “light-touch” approach. Pursuant to section 9 of the Act the Minister shall, as soon as is practicable after the coming into operation of the Act, prepare and publish a code of practice or approve a code of practice prepared by a person other than the Minister which sets standards for the conduct of mediations. Pursuant to section 12(1), the Minister can declare that the body specified in the said order shall be recognised and known as the Mediation Council of Ireland. The Act does however place certain requirements on the mediator namely:

  1. Conflict of Interest before mediation – Section 8(1)(a)(i) provides that the mediator must carry out enquiries as to actual or potential conflicts of interest prior to the commencement of the mediation. If a conflict comes to their attention prior to the mediation commencing, then they cannot act as a mediator.
  2. Details of qualifications – Section 8(1)(b) provides that prior to commencement of mediation, the mediator must furnish the parties with details of their qualifications, training, experience, CPD training and further furnish to the parties a copy of any code of practice published or approved in accordance with the Act which they subscribe.
  3. Conflict of interest arising during a mediation – Section 8(2)(a) provides that if during the course of the mediation, the mediator becomes aware or ought reasonably to be aware of an actual or potential conflict of interest, then the mediator must declare same. The mediator must cease to act unless the parties agree to them continuing to act as the mediator.
  4. Treatment of parties – Section 8(2)(b) provides that the mediator must act with impartiality and integrity and treat the parties fairly.
  5. Legal advice for parties – Section 8(2)(d) provides that the mediator must ensure the parties are aware of their rights to each obtain independent advice (including legal advice) prior to signing any mediation settlement.
  6. Length and speed of the mediation – Pursuant to section 6(5) of the Act, the mediator together with the parties is required (having regard to the nature of the dispute) to make ever reasonable effort to conclude the mediation in an expeditious manner which is likely to minimise costs.
  7. Charging of fees – Section 20(2) provides that the fees and costs of the mediation shall be reasonable and proportionate to the importance and complexity of the issues at stake and to the amount of work carried out by the mediator. It should also be noted that section 6(10) provides that the fees and costs of the mediation shall not be contingent on its outcome. Pursuant to section 20, unless ordered by the court or agreed between the parties, the parties shall pay to the mediator the fees and costs agreed in the agreement to mediate or share equally the fees and costs.
  8. Withdrawal from mediation – Pursuant to section 6(6), the mediator may withdraw from the mediation at any time by notice in writing to the parties.
  9. Negligence – In respect of negligence on the part of the mediator, section 10(2)(e) contemplates the potential for redress against a mediator by way of civil claims and/or complaints to professional bodies.

The Agreement to Mediate


The parties must enter into an agreement to mediate prior to the commencement of the mediation. Section 7 provides that the parties and proposed mediator shall prepare and sign an agreement to mediate which appoints the proposed mediator and contains the following information:

  1. The manner in which the mediation is to be conducted,
  2. The manner in which the fees and costs of the mediation will be paid,
  3. The place and time at which the mediation is to be conducted,
  4. The fact that the mediation is to be conducted in a confidential manner,
  5. The right of each of the parties to seek legal advice,
  6. The manner in which the mediation may be terminated (subject to section 6(6) which allows the mediator to withdraw at any time by notice in writing stating the reasons for withdrawal),
  7. Such other terms as may be agreed between the parties and mediator.

Statute of Limitations


Section 10 of the Act provides that the period beginning on the day on which an agreement to mediate is signed and ending on the day which is 30 days after (a) the mediation settlement is signed by the parties and mediator or (b) the mediation is terminated, whichever first occurs, shall be disregarded for the purpose of the Statute of Limitations.

It should be noted that the time spent obtaining the other sides agreement to mediate and approving and engaging a mediator is not counted. As these stages can take time, the parties should be careful that the limitation period does not expire (or that the other side is delaying matters so that the matter becomes statute barred).

Solicitors’ Obligations


Part 3, section 14 of the Act sets out Solicitors’ obligations. From the 1st of January 2018 (being the date of commencement) a Solicitor shall, prior to issuing proceedings on behalf of a client, advise the client of the following:

  1. Consider using mediation as a means of attempting to resolve the dispute,
  2. Provide the client with information in respect of mediation services, including names and addresses,
  3. Provide information about the advantages of resolving the dispute otherwise then by way of the proposed legal proceedings,
  4. Advise the client of the benefits of mediation including that it is voluntary (but may not be appropriate where the safety of a child is at risk), confidential and that the mediation settlement can be enforceable if the parties agree.

Court Intervention


A.  Inviting parties to mediate – Pursuant to section 16 of the Act, the Court may on application of a party or of its own motion invite the parties to consider mediation and provide the parties with information about the benefits of mediation. An application by a party requesting the court to invite the parties to use mediation must be made no later than 14 days by motion on notice before the date on which the proceedings are first listed for hearing, unless the court orders otherwise.

If the parties decide to engage in mediation following the invitation, then the Court may adjourn the proceedings, make an order extending time for compliance by a party with the rules of the court or make such order or direction as it considers necessary to facilitate the use of mediation.

The existing Order 56A rule 2 of the Rules of the Superior Courts have been amended in accordance with the Act and provides that the Court may issue an invitation to consider mediation mentioned in section 16(1) of the 2017 Act of its own motion in any civil proceedings to which the  Act applies, on any occasion on which such proceedings are before the Court. Furthermore, where following an invitation by the Court the parties decide to engage in mediation, the Court may having heard the parties, make such orders in accordance with section 16(2) of the 2017 Act as it considers appropriate.

Given that Order 56, rule 2 triggers Order 99, rule 1B in respect of costs (see below), the Court of Appeal’s decision in Atlantic Shellfish Limited and Ors v the County Council of the County of Cork & Ors [2015] IECA 283 should be considered when assessing whether an application pursuant to section 16 is appropriate. It should be noted however that the judgment was given before Order 56A rule 2 was amended following the commencement of the Act, however the wording of the rule was relatively similar.

Case Study


Background – The first named Plaintiff operated an oyster fishery and the second named Defendant was a shareholder and director of the first named Plaintiff. The first named Plaintiff had operated its business on foot of certain Oyster Fisheries Orders made in 1963 and 1970 and maintained that from 1988 onwards, the fishery was contaminated by untreated sewage water that had been redirected into Cork Harbour following the grant of a foreshore licence. As a result, the Plaintiffs had issued proceedings in 1992 against Cork County Council and the Minister for the Marine. Those proceedings were settled, and the parties agreed inter alia that a secondary waste water treatment plant would be constructed. The treatment plant was installed, however the oysters continued to be contaminated and a significant number of customers reported becoming ill over the subsequent years. In 2002, the first named Plaintiff was forced to close its fishery permanently.

Proceedings were issued in October 2001 by the Plaintiff in respect of the loss suffered as a result of this closure. In 2014, the Plaintiffs issued a motion seeking an order pursuant to Order 56A, rule 2. The Court refused to exercise its discretion concluding that the purpose underlying the Plaintiffs’ application was artificial and that the real purpose of the application was to seek to “copper fasten its position with regard to a future application for costs”. The Court indicated that it might have taken a different course had it been satisfied that the State Defendants’ reasons for declining mediation could be considered to be other than bona fide or where there was still some reasonable possibility that the invitation, if so ordered, would be accepted.

Issue – The appeal focused upon the circumstances in which a court should exercise its discretion in favour of making an order pursuant to Order 56A, rule 2 inviting the parties to engage in ADR.

Decision – The Court outlined that when dealing with an application pursuant to Order 56A, rule 2, it must consider whether it would be appropriate to exercise its discretion having regard to all of the circumstances of the case.

  1. It must first be satisfied that the issues in dispute between the parties were amenable to the type of ADR proposed.
  2. Assuming that the Court answered the first question in favour of the applicant, then the Court should consider any other relevant circumstances inter alia whether the application was made bona fide and that the applicant was genuinely willing to engage with the proposed ADR rather than one made for the sole purpose of improving the applicant’s negotiating position given that the effect of the order would be to trigger the cost provisions of Order 99 rule 1B (see below).
  3. The Court’s decision may further be influenced by factors such as:

 (i)            the manner in which the parties had conducted the litigation up to the date of the application,

(ii)           the existence of any relevant interlocutory orders,

(iii)          the nature and potential expense of the proposed ADR,

(iv)         the likely effect of the making of the order sought on the progress of the litigation should the invitation be accepted, and the ADR prove unsuccessful,

(v)          the potential saving in time and costs that might result from the acceptance of an invitation,

(vi)         the extent to which ADR can or might potentially narrow the issues between the parties

(vii)        any proposals made by the applicant concerning the issues that might be dealt with in the course of the ADR, and

(viii)       any proposals as to how the costs of such a process might be borne.

Decision – In this particular case, the Plaintiffs’ motion failed to pass the first question.

The dispute was not amenable to mediation as it raised a novel point of law in relation to the grant of the foreshore licence. It was argued that the State owed a duty to any person who may be adversely affected by the operation of that licence such that the State is obliged to police and enforce the licence in order to protect such third parties (i.e. the Plaintiffs).


B. Adjournment of proceedings where agreement to mediate has been entered into – pursuant to section 19, where parties have entered into an agreement to mediate and one of those parties commences proceedings in respect of the dispute, then the other party can apply, after an appearance is entered but before delivering any pleadings or taking any steps in the proceedings, to adjourn the proceedings.

The Court will adjourn the proceedings where it is satisfied that there is insufficient reason why the dispute should not be dealt with in accordance with the agreement to mediate and the applicant at the time when proceedings were commenced was willing (and still remains so) to do all things necessary for the proper implementation of the agreement to mediate.

C. Costs – section 21 of the Act provides that where the Court has referred a matter to mediation under section 16, it may have regard to any unreasonable refusal or failure by a party to consider using mediation or to attend mediation, in the awarding of costs in proceedings. Section 21 sets out the factors to be considered by the Court in awarding costs namely that the court will consider any unreasonable refusal or failure by a party to consider using mediation and any unreasonable refusal or failure by a party to attend mediation following an invitation to do so by the Court under section 16.

Order 99, rule 1B already provided that the Court, in considering the awarding of costs of any appeal or of any action, may where it considers just, have regard to the refusal or failure without good reason of any party to participate in any ADR process referred to in Order 56A, rule 2 (as it was before it was amended in accordance with the Act). Order 99, rule 1B has been amended as follows:

  • In considering the awarding of the costs of any appeal or of any action in which the parties have been invited by the Court to consider mediation as a means of attempting to resolve the dispute the subject of the proceedings in accordance with section 16(1) of the Mediation Act 2017, may, where it considers it just, have regard to the matters set out in section 21 of that Act.

Consequently, a Court will consider when deciding on the issue of costs whether a party has, following an invitation made in accordance with section 16 of the Act, unreasonably refused or failed to consider using mediation or to attend a mediation.

It should also be noted that the Court has confirmed that Order 99 rule 1B will only be triggered once an invitation has been made in accordance with Order 56A, rule 2 [Hollybrook (Brighton Road) Management Company Limited v All First Property Management Company Limited and Anor [2011] IEHC 423]. An informal invitation by the Court should not trigger cost implications.

Whilst it appears that there have been no written judgments yet in which an Irish court has awarded costs against a party who had unreasonably refused an invitation to mediate the dispute, the English Court of Appeal case of Dunnett v Railtrack plc [2002] 1 W.L.R. 2434 may provide some guidance going forward.

Facts – the Claimant brought a case suing for damages arising from negligence following the death of her three horses which had been struck by the Defendant’s express claim. The Claimant was unsuccessful at first instance and on appeal. At first instance, the Judge has suggested that the parties consider mediation. The Claimant then referred this suggestion to the Defendant who instructed its solicitors to turn it down as it would involve the payment of money, which it was not willing to contemplate, over and above what it had already offered during negotiations.

Decision – the Court of Appeal held that the reasoning used to reject the offer indicated that the Defendant misunderstood the purpose of ADR. It was a lawyer’s duty to further the overriding objective of the Civil Procedure Rules 1998 being that the Court must deal with cases justly and at proportionate cost. This duty included consideration of whether ADR was a possible remedy. Consequently, if a party rejected ADR out of hand, he would suffer the consequences when costs came to be decided and for that reason no order was made as to the costs.


AUTHOR:

Natalie Coen – Solicitor

ncoen@kanetuohy.ie

Basic Legal Provisions in Ireland for Lease of Business Premises

Basic Legal Provisions in Ireland for Lease of Business Premises

Basic Legal Provisions in Ireland for Lease of Business Premises

Legal Regulations in Ireland (excluding Northern Ireland)

In relation to the basic legal provisions in Ireland for lease of business premises, in general terms the law of landlord and tenant is governed by common law and by statute law.

The latter operates to impede the freedom of both landlord and tenant to contract as they might wish in certain circumstances, e.g. statute provides that a lease which contains an absolute prohibition against alienation and the carrying out of improvements are subject to the proviso that a landlord cannot unreasonably withhold consent to a request by a tenant to do so.

Form of the Lease

Statute requires leases to be in writing if they are to create the legal relationship of landlord and tenant.  In addition, implied and oral tenancies are also recognised.

Object of the Lease

The object of the lease is to reflect in writing the commercial terms of the letting negotiated between a landlord and tenant, subject to compliance with statute law.  Under Irish Law a lease is founded on contract rather than tenure.  The tenant has an interest in property which entitles it to exclusive possession for the period of its tenancy, a right it may assert against third parties as well as the landlord.  Also, a tenant may dispose of or deal with its interest for example by assignment or a subletting subject to the terms of the lease.

Different forms of lease are used for residential and business premises.

Duration of the Lease

Under statute, a lease must have a definite duration either in years, months or weeks.  A business tenant is entitled to a new tenancy commencing on the termination of its previous tenancy provided it can prove business equity or long possession equity or improvements equity.  Business equity is established after five years of continuous occupation of the property for the purpose of carrying on a business.  The tenant can contract out of its right to a new tenancy by executing a renunciation of its entitlement to a new tenancy and by obtaining independent legal advice in relation to the renunciation.

In general, when a landlord grants a business lease of between five to ten years it requires a tenant to renounce its right to a new tenancy.

Basic Legal Provisions in Ireland for Lease of Business Premises

Maintenance/Reparations

  • With a single letting of an entire building, the tenant is liable for all repairs and outgoings, unless the parties agree otherwise.  Parties sometimes agreed to append a Schedule of Condition to the lease which records the condition of the property at the date of the granting of the lease which limits the tenant’s repairing obligations to the condition of the property as detailed in the Schedule of Condition;
  • In the case of a letting of part of a building, the landlord usually covenants to maintain the structure and common areas but passes on the cost to the tenant through a service charge.  The tenant is responsible for all internal repairs;
  • In the case of a short term letting of an entire building, i.e. one for less than five years, the repairing obligation will normally apply to the interior only with the landlord being responsible for the exterior including the structure.

Rent

The rent of a business lease is negotiated between the parties.

The normal business lease in Ireland contains a rent review clause which provides that the rent payable under the lease will be reviewed every five years on the basis of the market rent which might reasonably be expected to be achieved for the property at the time of the review.

Prior to 28 February 2010, a rent review clause provided that the rent could never fall below the rent payable immediately before the review.  These clauses were referred to as “upwards only” rent review clauses.

As a result of legislation, in any business lease entered into after 28 February 2010, any rent review clause must provide that the rent payable following a review will be fixed at an amount that is less than, greater than, or the same as the amount of rent payable immediately prior to the date on which the rent falls to be reviewed.  This, in effect, prevents the operation of an “upwards only” rent review clause.  The objective is that any reviewed rent must reflect the market conditions prevailing at the time of the review.

New Ownership of a Lease – Transferring or Assigning a Business Lease

A tenant can, subject to obtaining landlord’s consent (not to be unreasonably withheld) transfer/assign its lease to a new “owner”.  The tenant must, under the terms of the lease, obtain the landlord’s consent to such transfer/assignment and provide the landlord with details of the new “owner” together with evidence of its financial standing. The new “owner” will be bound by the obligations on the part of the tenant contained in the lease.

Termination of the Lease

The terms of the lease will contain the basis on which a lease can be terminated e.g. breach by a tenant of the covenants and conditions such as non-payment of rent.

The parties can negotiate a “break date” by either party during the term of the lease and the notice period for such intended “break”.

In general, a landlord has no right to forfeit a lease unless the tenant has been in breach of one or more of its terms.

Statutory Reliefs – Compensation

There are various statutory reliefs which entitle a tenant to compensation e.g. for carrying out improvements, for disturbance and where a tenant is entitled to a new tenancy and the landlord refuses to grant same on the basis of redevelopment of the property.

Very often, a landlord can be entitled to compensation from a tenant for failure by the tenant to repair the property in accordance with the terms of its lease.  Compensation payable to the Landlord cannot  exceed the value of the property.

VAT on a Lease

VAT may be payable on rental income where a landlord opts to charge VAT.

Jurisdiction

The Irish Courts have jurisdiction over all matters relating to Irish property.


AUTHOR:  SHEENA BEALE, PARTNER

sbeale@kanetuohy.ie

01-6722233

ALL CHANGE? The Sectoral Employment Order (Construction Section) 2017

A Sectoral Employment Order for the general construction industry has been signed into law by the Minister for State at the Department of Business, Enterprise and Innovation.

The Sectoral Employment Order (Construction Sector) 2017 (the “Order”) gives effect to measures recommended by the Labour Court in July 2017 relating to pay and conditions for employees in the general construction sector and takes effect from 19 October 2017.

Who does the Order affect?

The Order relates to the general construction sector, including operatives and general craft workers and so affects all employers and employees (whether agency or otherwise) in both “Building Firms” and “Civil Engineering Firms” (“the Sector”) which definitions are historically widely accepted.

The objective of the Order is to set the mandatory pay and conditions of employment for a basic hourly rate for the Sector and two higher rates of pay based on the level of skill of the operatives concerned. Therefore, employers within the Sector are first tasked with categorising their employees and workers.

Categories and Pay Rates

In relation to pay, specific mandatory pay rates have been set for categories of workers in the Sector, as follows:

Category 1 Worker: Skilled general operatives who have worked in the Sector for more than one year: €17.04 per hour.

Category 2 Worker: Skilled general operatives including scaffolders who hold an advanced scaffolding card and who have four years’ experience, banks operatives, steel fixers, crane drivers and heavy machine operators: €18.36 per hour.

Craft and New Entrant Workers: Bricklayers/Stone Layers; Carpenters and Joiners; Floor Layers; Glaziers; Painters; Plasterers; Stone Cutters; Wood Machinists; Slaters and Tilers: €18.93 per hour. Apprentices in these trades are to be paid at one third of the full craft rate, rising to 90 per cent of the full craft rate in their fourth year. Notably the categories do not include electricians and plumbers. Operatives who are over the age of eighteen and entering the sector for the first time: €13.77 per hour.

Extra Time Pay

The Order also fixes unsocial hours payments at either “time plus a half”, or double time, depending on the timing of the work. The Order does not include provisions on travel times as the Labour Court requires further consideration of the many legal and technical issues before it is in a position to come to a definitive recommendation. Existing contractual arrangements in this regard remain in force.

Pension

The Order provides that employers must provide a pension scheme to workers from the age of 18, with no less favourable terms, including both employer and employee contribution rates, than those in the Construction Workers Pension Scheme.

Sick Pay

The Order provides for a mandatory sick pay scheme with mandatory employee and employer contributions in line with the Construction Industry Sick Pay scheme. Employers who fail or neglect to make the authorised deductions shall be liable for the total contribution required to ensure that the worker’s sick pay benefits are maintained in full for the period of service with them.

Dispute Resolution

The Order provides for individual and collective grievances with recourse in the first instance to the employer; then to the WRC and then the Labour Court.

No industrial action can take place in relation to matters the subject of the Order until the dispute resolution procedure has been exhausted.

Next Steps

Employers in the Sector will need to categorise their employees and then review their terms and conditions to ensure that they comply with the Order. The Order applies from the 19 October 2017 and is legally binding on the Sector. The provisions are enforceable by the WRC.

Any Questions?

Contact Jenny Martin of Kane Tuohy, Solicitors at jmartin@kanetuohy.ie or telephone 016722233

The Sectoral Employment Order (Construction Section) 2017

The Sectoral Employment Order (Construction Section) 2017

ALL CHANGE?

The Sectoral Employment Order (Construction Section) 2017

A Sectoral Employment Order for the general construction industry has been signed into law by the Minister for State at the Department of Business, Enterprise and Innovation.

The Sectoral Employment Order (Construction Sector) 2017 (the “Order”) gives effect to measures recommended by the Labour Court in July 2017 relating to pay and conditions for employees in the general construction sector and takes effect from 19 October 2017.

Who does the Order affect?

The Order relates to the general construction sector, including operatives and general craft workers and so affects all employers and employees (whether agency or otherwise) in both “Building Firms” and “Civil Engineering Firms” (“the Sector”) which definitions are historically widely accepted.

The objective of the Order is to set the mandatory pay and conditions of employment for a basic hourly rate for the Sector and two higher rates of pay based on the level of skill of the operatives concerned. Therefore, employers within the Sector are first tasked with categorising their employees and workers.

Categories and Pay Rates

In relation to pay, specific mandatory pay rates have been set for categories of workers in the Sector, as follows:

  • Category 1 Worker: Skilled general operatives who have worked in the Sector for more than one year: €17.04 per hour.
  • Category 2 Worker: Skilled general operatives including scaffolders who hold an advanced scaffolding card and who have four years’ experience, banks operatives, steel fixers, crane drivers and heavy machine operators: €18.36 per hour.
  • Craft and New Entrant Workers: Bricklayers/Stone Layers; Carpenters and Joiners; Floor Layers; Glaziers; Painters; Plasterers; Stone Cutters; Wood Machinists; Slaters and Tilers: €18.93 per hour. Apprentices in these trades are to be paid at one third of the full craft rate, rising to 90 per cent of the full craft rate in their fourth year. Notably the categories do not include electricians and plumbers. Operatives who are over the age of eighteen and entering the sector for the first time: €13.77 per hour.

The objective of the Order is to set the mandatory pay and conditions of employment for a basic hourly rate for the Sector and two higher rates of pay based on the level of skill of the operatives concerned.

Extra Time Pay

The Order also fixes unsocial hours payments at either “time plus a half”, or double time, depending on the timing of the work. The Order does not include provisions on travel times as the Labour Court requires further consideration of the many legal and technical issues before it is in a position to come to a definitive recommendation. Existing contractual arrangements in this regard remain in force.

Pension

The Order provides that employers must provide a pension scheme to workers from the age of 18, with no less favourable terms, including both employer and employee contribution rates, than those in the Construction Workers Pension Scheme.

Sick Pay

The Order provides for a mandatory sick pay scheme with mandatory employee and employer contributions in line with the Construction Industry Sick Pay scheme. Employers who fail or neglect to make the authorised deductions shall be liable for the total contribution required to ensure that the worker’s sick pay benefits are maintained in full for the period of service with them.

Dispute Resolution

The Order provides for individual and collective grievances with recourse in the first instance to the employer; then to the WRC and then the Labour Court.

No industrial action can take place in relation to matters the subject of the Order until the dispute resolution procedure has been exhausted.

Next Steps

Employers in the Sector will need to categorise their employees and then review their terms and conditions to ensure that they comply with the Order. The Order applies from the 19 October 2017 and is legally binding on the Sector. The provisions are enforceable by the WRC.


Any Questions?

Contact Jenny Martin of Kane Tuohy, Solicitors at jmartin@kanetuohy.ie or telephone 01-6722233

Legal Secretary Required

Kane Tuohy Solicitors based in Dublin 2 are seeking a Legal Secretary to join their litigation practice. This role requires an experienced candidate who has initiative, drive and practical experience in preferably Commercial Litigation/Debt Collection/Employment. This is a full time permanent position working for 2 Solicitors.

Duties will include:
Providing full support to two solicitors in managing their portfolio of files to include audiotyping, scanning and assigning of post, arranging meetings and maintaining a diary system and creating and editing legal documents.

The ideal candidate will have:
• Experience working as a litigation legal secretary;
• Good organisational skills;
• Excellent computer skills including knowledge of Word, Excel, Outlook and Keyhouse case management;
• Experience in audiotyping;
• Excellent writing, interpersonal and communication skills;
• Pro-active approach to work and willingness to learn.

Salary negotiable depending on experience.
If you wish to apply for this role please email a CV and covering letter to: mbarron@kanetuohy.ie

Workplace Relations Commission one year on

Workplace Relations Commission one year on

THE WORKPLACE RELATIONS COMMISSION ONE YEAR ON

The Workplace Relations Act 2015 (“the 2015 Act”) came into effect on the 1 October 2015. The 2015 Act transformed the manner in which employment and equality disputes are heard – it was one of the biggest reforms in employment law history.

The implementation of the 2015 Act saw the abolition of the Employment Appeals Tribunal, Equality Officers, Rights Commissioners, the Labour Relations Commission and created a new body known as the Workplace Relations Commission (“the WRC”).

The WRC brings all employment related claims under one umbrella and seeks to streamline how such claims are managed.

The WRC sits in Landsdowne House, Landsdowne Road, Dublin 4.

Credit: RTÉ

SEEKING REDRESS

When a complainant wishes to seek redress under any one or more of the many different employment related legislation, the complainant completes and submits one single complaint form to the WRC.

All complaints must be referred to the WRC within six months of the alleged contravention with an extension of up to 12 months where “reasonable cause” for the delay is demonstrated.

If both parties indicate their willingness to refer the matter to mediation to seek to resolve matters informally, the WRC may assign a mediator to the case. This is not happening as much as the WRC would like and it is anticipated that we will see a continued increase in mediation at the WRC.

If the matter is not referred for mediation, the matter is referred to a single decision maker called an Adjudication Officer (“AO”). The AO are often former Rights Commissioners, Equality Officers as well as Human Resource professionals and Industrial Relations experts.

The AO investigates a complaint, chairs a hearing and issues their decision. The AO has the discretion to deal with matters by written submissions only.

Some AOs like to try and mediate a resolution, others apply the formal rules of evidence and others still, undertake the hearing more informally by going through submissions only without direct evidence. It is expected the AO’s approach to hearings will become more streamlined so that we all know what to expect when we attend a WRC hearing.

Hearings before an Adjudication Officer are private and their decisions are anonymised.

Either party or indeed both parties may appeal the decision of the AO to the Labour Court within six weeks of the AO’s decision. There is one final right of appeal to the High Court on a point of law.

Neither the WRC or the Labour Court have the authority to award costs so all parties bear their own costs regardless of the outcome.

Whilst it was hoped that the WRC would reduce long waiting times for a hearing date, it often takes six to eight months to schedule the first hearing.

Whilst the WRC aims to issue their decisions within six weeks, it often takes six months to receive an AO decision.

Whilst the WRC has made significant and very welcome improvements to the management of the employment related claims, I think we can all look forward to continued improvements.


Jenny Martin – Solicitor

jmartin@kanetuohy.ie

The Governor and Company of the Bank of Ireland, Bank of Ireland Mortgage Bank and Michael McAteer – The Sheahan Cases

JUDGE FINDS IN FAVOUR OF BANK ON ALL POINTS

By judgment of 19th June 2014, Ms. Justice O’Malley found in favour of the Bank of Ireland (“the Bank”) and the Receiver (Michael McAteer) in their action against Mr Joseph Sheahan and Mr Frank Sheahan (Junior) after lengthy deliberation.

Issues:

The various proceedings related to borrowings of Mr. Joseph Sheahan and Mr. Frank Sheahan (Junior) between 2005 and 2008. There were five separate proceedings to be determined, although the fifth set of proceedings, The Guarantor Proceedings, has been held over to be determined at a later date. The issues determined related to:

1) Whether the Bank’s demands for the repayment of loans were validly made;
2) Whether the Deeds of Appointment of Receiver (Michael McAteer) had been validly executed;
3) Whether promises had been made by the Bank to extend the interest only terms of loans, giving rise to a collateral contract of an estoppel;
4) Whether an alleged “Loan Pool Agreement” between Mr. Joseph Sheahan and Mr. Frank Sheahan (Junior) and the Bank existed;
5) The effect of the cashing of cheques offered by the Sheahan’s to the Bank in response to letters of demand for payment of arrears on specific accounts, referred to as the “Recent Agreements” in the judgment;
6) The extent of the arrears at the time of issuing of the letters of demand for repayment of the loans.

The Decision:

The Court upheld the validity of the Letters of Demand, relying on the oral evidence submitted by Bank officials. It accepted the position of the Bank, that once a recommendation was made to call in the repayment of loans from the personnel with authority to do so, the case manager of the Bank would have authority to implement the terms of that position. Furthermore, it was held that the validity of the demand made does not depend on the exact statement of the sums due, as in this case, it was clear from other evidence that all accounts were in difficulty for some time.

In relation to the Beechgrove property which Mr. Joseph Sheahan asserted was his family home, Ms. Justice O’Malley was satisfied that Mr. Joseph Sheahan was aware that the persons with authority to approve the loan did not approve it on the basis that it would be his family home.

Furthermore, she also determined that the subsequent offer of interest free period reflected a successful negotiation by Mr. Joseph Sheahan rather than an acceptance of the proposition that he had a contractual right to interest free terms.

The Court held that the decision to call in the loans and to appoint a receiver in the event of non-payment was made by an appropriately authorised person. To give effect to this decision, it then became necessary to validly execute a Deed of Appointment of Receiver (“DOA”), and the Court was satisfied that the appropriate procedure was followed in this regard. The Court also found that there was no requirement for further authorisation to be given to the Case Manager to empower him to furnish the DOA to the Receiver. Ms. Justice O’Malley held that there was no doubt of the Bank’s intention to treat the DOA as legally effective at the time of delivery and that this was all that was required to evidence proof of “delivery” of the DOA to the Receiver.

In relation to the alleged “loan pool agreement”, the Court held that in light of the surrounding circumstances, it was considered possible the Sheahans’ had to some extent persuaded themselves that the guarantee provided by Mr Frank Sheahan Senior would not be relied upon. The court did not find it possible to accept this position.

The assertion of an agreed variation of interest only repayment periods was held to be inconsistent with each of the individual written terms signed by the borrowers in relation to each of the 20 loans. Ms. Justice O’Malley held the fact that the decision makers would not agree to terms in writing could not be seen as indicating anything other than the Bank’s refusal to contract to new terms for repayments and be legally bound by them.

Finally, in rejection the Sheahans’ claim that there were (alleged) “Recent Agreements”, she noted that there was no consensus ad idem between the parties with respect to the lodgement of cheques. Ms Justice O’Malley stated that in her view, the cheques were accepted by the Bank on the basis of the banks’ demand for arrears owing to them, and not in settlement of the litigation.

For Full Judgment, please click on the link below:

Sheahan Judgment

For coverage of the Judgment in the Irish Independent, please click on the link below:
http://www.independent.ie/irish-news/courts/former-irish-rugby-star-and-brother-could-face-bank-repossession-of-properties-31315343.html

AML ENFORCEMENT IN IRELAND – DIRECTORS BEWARE AND BE INFORMED

Money laundering first became a criminal offence in Ireland with the enactment of the Criminal Justice Act 1994. Since then a much more comprehensive anti-money laundering (“AML”) regime has been established pursuant to the Criminal Justice (Money and Terrorist Financing) Act 2010 and the Criminal Justice Act 2013 (collectively referred to as “the Criminal Justice Acts”). AML law and policy in Ireland encompasses the recommendations made by the Financial Action Task Force (“FATF”), an international organisation specialising in the international fight against money laundering and terrorist financing (Ireland has been a member of FATF since 1991). The Criminal Justice Acts set out the procedures that must be followed to ensure technical compliance with, and effective implementation of, international standards relating to AML.

The Central Bank of Ireland is responsible for the monitoring and supervision of financial institutions’ compliance with their AML obligations under the Criminal Justice Acts. The Central Bank, over the last number of years, has designated AML as a top priority issue in their program for reform, and has articulated the policies and procedures that financial institutions operating in Ireland are required to follow to be AML Compliant. It has made it clear that it intends to ensure compliance with these policies and procedures by making boards of directors and senior managers of financial institutions responsible for compliance and through invoking their enforcement powers.

In a report published in February of this year, the Central Bank emphasised the responsibility of boards of directors and senior managers of financial institutions to demonstrate active engagement in effectively mitigating AML risk. The Central Bank further stated that boards of directors of financial institutions are ultimately responsible for ensuring compliance with the Criminal Justice Acts, and that they must put in place appropriate AML structures that effectively manage the nature and complexities of the organisation over which they govern.

In its press releases and publications over the past number of years, the Central Bank has repeatedly committed to using enforcement as a mechanism for effecting deterrence and promoting expected behaviour. In 2014 the Central Bank imposed administrative fines totalling €5.42 million. In the area of AML specifically, the Central Bank in 2014 responded to 188 complaints relating to alleged unauthorised activity and published warning notices in relation to unauthorised activity by 31 financial institutions. Between 2012 and 2013 three financial institutions were fined a total of €136,000.00 for AML offences.

A clear message is being sent to financial institutions that want to do business in Ireland that AML is taken seriously here and that expected procedures must be in place and be complied with. The Central Bank has repeatedly stressed that the responsibility for ensuring compliance with AML requirements rests with boards of directors and senior managers of financial institutions. It is therefore incumbent upon them to be aware of AML requirements and to be informed in relation to the business’ strategy in warranting compliance. In recent years the Central Bank has demonstrated its commitment to enforcing compliance with the Criminal Justice Acts by implementing a system of risk based supervision backed up with the real threat of enforcement.

By Elizabeth Hegarty (ehegarty@kanetuohy.ie)
and Sheena Beale (sbeale@kanetuohy.ie)