Care urged on rights of residence in wills

The distinction between a personal right to occupy a property and a proprietary interest can have significant consequences in estate administration, a Dublin Solicitors Bar Association (DSBA) seminar has heard.  

The key was careful wording at drafting stage, the event was told. 

Eleanor Lindsay, partner at Fagan Killeen LLP, moderated the webinar on Getting your house in order – protecting your house and your head (3 November). 

Tim Harnedy BL explained that the legal character of a right of residence depended on the terms of the will and the circumstances in which the right was granted. 

There are three broad forms: 

• An exclusive right to occupy an entire property, 
• A general right of residence, and 
• An exclusive right to occupy part of a property. 

2009 act 

The Land and Conveyancing Law Reform Act 2009 prohibits the creation of new leases for life, although existing leases for life continue. In National Bank v Keegan, an exclusive right to use two rooms during a person’s lifetime was capable of constituting a life estate. 

Part 4 of the 2009 act also has implications for the control of property held on trust. Trustees retain control, while a beneficiary who is not also a trustee “has very limited security” in respect of their right. 

Section 22 (1) sets out the recourse that can provide a potential remedy where a dispute arises over the trust property on unregistered land. But, Harnedy noted, the courts had wide discretion. 

The barrister said that it was important to note that, where a life interest predated the 2009 act, there was “serious concern” for the security of that right of residence. 

Registered land 

For registered land, section 81 of the Registration of Title Act 1964 treats rights of residence, whether general or exclusive, as personal to the beneficiary and as a right in the nature of a lien for money’s worth, rather than an equitable estate. 

In Bracken v Byrne, the court considered the valuation of a right of residence where the beneficiary had been excluded, awarding €236,020, comprising the value of the right of residence and the associated rights to maintenance and support. 

In Reidy v Governor and Company of Bank of Ireland, the Court of Appeal overturned the High Court decision in Ryan v Governor and Company of Bank of Ireland. 

It held that part of a monetary award made in 2016 for the owner's failure to honour rights of residence, maintenance, and support attached to and formed part of the burden registered in the beneficiary's favour in 2006. This gave the monetary judgment priority over a bank charge registered in 2010. 

Nature and scope of rights 

Harnedy advised solicitors to take particular care when drafting wills that granted rights of residence. The wording should make clear the nature and scope of the right being granted, and solicitors should consider whether the beneficiary should also be appointed as a trustee. 

He also recommended considering if wills already in existence should be redrafted where there was potential for dispute or lack of clarity. 

John O’Regan BL examined caretaker's agreements, commonly used where someone is permitted to occupy a property temporarily – including where a family member moves into a house while an estate is being administered and the property awaits sale.  

The intention is to grant a personal licence to occupy, rather than a tenancy or proprietary interest, and to allow vacant possession to be recovered promptly. 

Warning on occupier payments 

He stressed the importance of a written agreement, as an informal arrangement could become costly to resolve if an occupier refused to leave. It is not enough simply to label a document a caretaker’s agreement: the court will examine the substance and overall intention of the arrangement. 

O’Regan advised against including periodic payments by the occupier that could be characterised as rent, particularly where residential property was involved. A tenancy could bring additional obligations – including registration with the Residential Tenancies Board. 

Agreements can include detailed repairing obligations and should expressly address the delivery of vacant possession. O’Regan recommended making clear that no tenancy was created and that the caretaker was not entitled to notice to quit.  

A payment by the owner to the caretaker in return for delivering vacant possession could provide an incentive to avoid a dispute. The agreement could also provide for the repayment of a deposit when the caretaker left. 

Possession 

Even a seemingly clear agreement may not secure immediate possession. Section 86 of Deasy’s Act provided a route to seek possession from caretakers in the District Court, he said.  

As confirmed in Cleary v Cleary, the Circuit Court has a concurrent jurisdiction for property up to the value of €3 million. Over that value, proceedings must be in the High Court. 

In Cork County Council v Burke, the High Court refused an application for an interlocutory injunction requiring a caretaker to give up possession pending trial. 

Although the council relied on a caretaker’s agreement and had demanded possession, the court considered that the balance of convenience favoured allowing the occupier to remain until the proceedings were determined. 

The decision illustrates the potential cost and delay involved in recovering possession, even where the property owner believes the agreement is clear. 

For solicitors advising estates, the terms should reflect the intended legal arrangement, while anticipating what may happen if the beneficiary or occupier refuses to leave. 

The session was followed by a wellbeing presentation, Navigating Grief in Legal Practice: Supporting Clients and Sustaining Ourselves, given by Antoinette Moriarty, director of Solicitor Services at the Law Society and Dearbhla Jordan of the Society’s Psychological Services Unit.