The act (section 6) further imposed a penal late payment fee of €20 per month in respect of non-payment of the charge. Section 7 provided that any charge or late payment fee due, and unpaid by the owner of an NPPR, be a charge on the property to which it related.
Section 8 provided that local authorities issue certificates of the amount paid, which a vendor of an NPPR could provide to a purchaser as evidence that there was no charge as prescribed in section 7 affecting the NPPR.
On 28 August 2009, the Law Society’s Conveyancing Committee issued a practice note advising that, on the purchase of an NPPR, solicitors should seek a receipt for payment of the charge and/or a letter of discharge of the charge.
In circumstances where the vendor claimed that the charge did not apply, solicitors were advised to seek such confirmation by way of statutory declaration of the vendor. The 2009 act did not make any provision for the issuing of certificates in circumstances where the property was not an NPPR.
Section 8 of the 2009 act was amended by the provisions of section 19 of the Local Government (Household Charge) Act 2011 by the insertion of section 8A(4) into the 2009 act.
This amendment provided that, with effect from 1 January 2012, a vendor of a residential property furnish on or before completion of a sale to a purchaser (a) a certificate of discharge or (b) a certificate of exemption, as appropriate, in respect of each year in which a liability date fell since the date of the last sale of the property.
This change caused considerable confusion for solicitors in circumstances where properties were acquired in the years 2009, 2010 and 2011 as, prior to 1 January 2012, it was not possible to obtain a certificate of exemption in respect of the matter.
This resulted in the Conveyancing Committee issuing a further practice note on 6 April 2018.
This practice note advised the profession that, where there had been a sale of a property in the years 2009 to 2011 inclusive, and the then vendor had furnished a statutory declaration that the property was his sole or main residence and was, accordingly, exempt from the charge, that, absent any reason to doubt the validity of the vendor’s declaration, a purchaser should be entitled to rely on this declaration and to seek a certificate of exemption or discharge, as appropriate, in respect of the liability dates from the last sale.
Unfortunately, in very many instances of a sale of a residential property in the years 2009, 2010 and 2011 that was exempt from the charge by reason of being the vendor’s sole or main residence, no statutory declaration confirming the position was furnished on the closing of the sale.
Confirming the position
Solicitors for vendors of properties that were acquired in the years 2009 to 2011 inclusive continue to have to go back to the solicitor, who acted for the vendor to their client, to see if either a statutory declaration confirming the position or a certificate of exemption can be obtained.
This is often simply not possible, as the vendor who sold the property in 2009, 2010 or 2011 may be deceased, may have emigrated, or may simply be unwilling to cooperate.
Many solicitors have, consequently, paid the charge and the late payment fee of up to €7,230 out of their own pockets.
This payment is, in many instances, made in respect of properties that were exempt, but the necessary evidence was/is simply not available, and a purchaser’s solicitor is concerned – since, if there was a liability and it was not discharged, it is stated to be a charge on the property.
Given that local authorities have no information as to whether or not a residential property was someone’s sole or principal residence on the liability dates 2009 to 2013 inclusive, the reality is that the solicitors’ profession has policed and enforced the legislation.
Difficulties for solicitors have been exacerbated by disparities in the requirements of different local authorities on applications for certificates of exemption.
Some local authorities will accept a copy folio showing ownership covering the requisite liability dates, together with an affidavit from an owner stating that the property was his sole or principal residence. Others require, in addition, evidence such as utility bills, which are now some 11 years old.
A question arises as to how the charge on property created by section 7 of the 2009 act affects a purchaser for valuable consideration of registered land?
There are two groups of burdens that may affect registered land. Section 69 of the Registration of Title Act 1964 lists the matters that may be registered as burdens on registered land.
Importantly, in order to affect registered land on a sale for valuable consideration, a burden capable of registration under section 69 must, in fact, be registered on the folio.
The burdens capable of being registered under section 69 include, in section 69(1)(b), any charge on the land duly created after the first registration of the land. The other group of burdens that affect registered land are what are commonly known as section 72 burdens. These burdens, known as overriding interests, are set out in section 72 of the 1964 act and affect registered land without registration. Section 72 burdens are not capable of registration on the folio.
Insofar as section 69 burdens are concerned, the 2012 case of Roche v Leacy is illustrative. In this case, Laffoy J looked at the effect on a sale of registered land for valuable consideration of a lis pendens. A lis pendens is a burden capable of registration under section 69. In this case, the lis pendens was registered in the central office of the High Court, but was not, in fact, registered on the folio.
Laffoy J quoted section 52 of the 1964 act:
“1) On the registration of a transferee of freehold land as full owner with an absolute title, the instrument of transfer shall operate as a conveyance by deed within the meaning of the Conveyancing Acts, and there shall be vested in the registered transferee an estate in fee simple in the land transferred, together with all implied or express rights, privileges and appurtenances belonging or appurtenant thereto, subject to (a) the burdens, if any, registered as affecting the land, and (b) the burdens to which, though not so registered, the land is subject by virtue of section 72, but shall be free from all other rights, including rights of the State.
“2) Where, however, the transfer is made without valuable consideration, it shall, so far as concerns the transferee and persons claiming under him otherwise than for valuable consideration, be subject to all unregistered rights subject to which the transferor held the land transferred.”
At paragraph 5.4 of her judgment, Laffoy J further stated: “While unregistered rights may be created over registered land, section 68(2) of the act of 1964 provides that all such rights shall be subject to the provisions of the act of 1964 with respect to registered transfers of land or charges for valuable consideration.
“This is consistent with subsection (2) of section 52, which provides that, where the transfer is made ‘without valuable consideration’, it shall be subject to all unregistered rights subject to which the transferor had held the lands transferred.”
Section 72 lists the burdens to which registered land is subject without registration. This includes, in section 72(1)(a), estate duty and succession duty. Importantly, in the context of NPPR, the category of burdens that affect registered land without registration was expanded to include taxes such as gift tax, inheritance tax and, at a later date, farm tax.
In contrast to these other statutory provisions, there is no specific statement in section 72 that the NPPR charge is an overriding interest for the purposes of section 72.
Section 31(1) of the 1964 act provides further that the register is conclusive evidence of ownership and shall not (in the absence of fraud) be “in any way affected in consequence of such owner having notice of any deed, document, or matter relating to the land”.
Wylie’s Irish Land Law (fifth edition) states that section 31(1) “in effect abrogates the doctrine of notice with respect to registered land, at least to the extent that a purchaser for value who becomes registered as new owner of the land is not affected by notice of anything not appearing on the register, unless it is a burden affecting registered land without registration”.
Deeney’s Registration of Deeds and Title in Ireland (first edition) states that the conclusiveness provided for in section 31(1) “abrogates the equitable doctrine of notice (express or constructive) in relation to registered land … the equitable doctrine of notice (express or implied) is excluded in relation to dealings with registered land. The only form of notice recognised is by entry on the register.”
Argument to be made
The 2009 act falls to be read in conjunction with the well-established provisions of the Registration of Title Act 1964 set out above, which specifically provide that a purchaser takes free of any interests other than overriding interests, even if they have actual notice of them.
There is no provision in the 2009 act, as amended, stating that the charge created thereby is an overriding interest.
Such charge would appear to be an interest capable of being registered under section 69, which, in order to affect the land, must be registered.
There is a very real argument that a purchaser of registered land may, by reason of the absence of any provision in the 2009 act specifically declaring the charge created by that act to be a section 72 burden, succeed in taking free of an NPPR charge not registered on the folio at the date of their application for registration.
Solicitors should carefully review the law and come to their own conclusions.