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26/07/2002
Significant change in rights for homeowners
Director of the Office Of Law Reform, Gareth Johnston, has said the new Ground Rents Act is a "significant piece of reforming legislation and an important step in updating residential property law in Northern Ireland”.
Mr Johnston described the Act, which comes into force on the 29 July 2002, as an important step in simplifying the conveyancing process in Northern Ireland by getting rid of complex pyramids of title to residential property. He said: “This legislation delivers tangible benefits to homeowners and home purchasers in Northern Ireland. They should see a reduction in costs and an improvement in the conveyancing process.”
The Act contains two schemes, one voluntary and one compulsory.
Voluntary redemption allows a homeowner who pays a ground rent to redeem it and thereby secure the freehold to the property free from any obligation to pay a ground rent. The rent-owner will be informed that the redemption process has been commenced, but cannot object to it.
Following a review of the operation of the voluntary scheme, Compulsory redemption may be introduced next year. This will require a purchaser of residential property to buy out the ground rent before his or her title to the property can be registered in the Land Registry. As with voluntary redemption, the rent-owner will be informed that the ground rent is being purchased but has no power to object.
When a homeowner wishes to buy out the ground rent they will have to pay compensation to the rent-owner. This will be nine times the annual ground rent, which is comparable to current market values. Land registry costs will be kept to a minimum in the early stages of the scheme.
Land Registers of Northern Ireland will administer the process of buying out a ground rent.
The Ground Rents Act (Northern Ireland) 2001 applies mainly to long leases on residential property and does not apply to flats and commercial property.
Application forms available from the office of Land Registry are also to be made available on the Internet.
(SP)
Mr Johnston described the Act, which comes into force on the 29 July 2002, as an important step in simplifying the conveyancing process in Northern Ireland by getting rid of complex pyramids of title to residential property. He said: “This legislation delivers tangible benefits to homeowners and home purchasers in Northern Ireland. They should see a reduction in costs and an improvement in the conveyancing process.”
The Act contains two schemes, one voluntary and one compulsory.
Voluntary redemption allows a homeowner who pays a ground rent to redeem it and thereby secure the freehold to the property free from any obligation to pay a ground rent. The rent-owner will be informed that the redemption process has been commenced, but cannot object to it.
Following a review of the operation of the voluntary scheme, Compulsory redemption may be introduced next year. This will require a purchaser of residential property to buy out the ground rent before his or her title to the property can be registered in the Land Registry. As with voluntary redemption, the rent-owner will be informed that the ground rent is being purchased but has no power to object.
When a homeowner wishes to buy out the ground rent they will have to pay compensation to the rent-owner. This will be nine times the annual ground rent, which is comparable to current market values. Land registry costs will be kept to a minimum in the early stages of the scheme.
Land Registers of Northern Ireland will administer the process of buying out a ground rent.
The Ground Rents Act (Northern Ireland) 2001 applies mainly to long leases on residential property and does not apply to flats and commercial property.
Application forms available from the office of Land Registry are also to be made available on the Internet.
(SP)
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