The Minister for Justice, Equality and Defence, Alan Shatter TD, today announced the publication of the Land and Conveyancing Law Reform Bill 2013. It confirms that certain statutory provisions that were repealed by the Land and Conveyancing Law Reform Act 2009 will continue, as intended by the Oireachtas when that legislation was passed, to apply to mortgages created before the entry into force of that Act, i.e. mortgages created before 1 December 2009. The Bill also contains proposals for new safeguards which will mean that in any repossession proceedings in respect of a borrower’s principal private residence or family home, the court may adjourn the proceedings in order to permit the drawing up of a Personal Insolvency Arrangement as an alternative to repossession.
The background to the legislation is a well-known 2011 case (Start Mortgages), in which the High Court found that the repeal of certain provisions in the 2009 Act may have had the unintended consequence in certain cases of restricting lending institutions from asserting their repossession rights. That judgment is now under appeal to the Supreme Court.
The proposed Bill addresses the uncertainty in the law which has resulted from the Start Mortgages case and High Court judgments in later similar cases which do not appear to have followed the same approach. Its primary purpose is to correct an unintended consequence of the reforming legislation enacted in 2009. In addition, the opportunity is being taken to strengthen safeguards where repossession proceedings relate to a borrower’s principal private residence or family home.
Minister Shatter stated: “What this Bill will do is to restore the law that has existed over the centuries which enables a lending institution to rely on its security in relation to a mortgage. It does nothing other than restore the position intended by the Oireachtas when enacting the 2009 Act. I am, of course, deeply aware of the issues that arise where repossession proceedings relate to family homes. In the course of preparing this Bill, I sought and obtained Government approval to include in the Bill a provision which will allow a court to adjourn repossession proceedings in such cases to see whether a Personal Insolvency Arrangement (PIA) under the Personal Insolvency Act 2012 would be a more appropriate course of action. The court may, in such cases, adjourn the proceedings to facilitate the drawing up of such an Arrangement as an alternative to repossession.”
The provisions relating to a Personal Insolvency Arrangement in the Insolvency Act 2012 are specifically designed, as far as is practicable, to facilitate a borrower’s continued ownership and occupation of his or her principal private residence unless he or she does not wish to do so or the costs of continuing to reside in it are disproportionately large.
The Bill will be formally distributed to Dáil members early next week. Its publication today meets a commitment made by the Government to publish the Bill by the end of this month in the context of the Revised Index of Conditions/Actions following Q3 2012 Review of the EU/IMF Programme of Financial Support for Ireland.