Commercial Property Freehold

Commercial Property Freehold

Acquiring the Freehold Interest in a Commercial Property

The best investment on earth is earth.

Louis Glickman

Commercial Freehold

Acquiring the freehold interest in a residential home has been streamlined under the Landlord & Tenant Ground Rents (No. 2) Act 1978. There is now an automatic entitlement to acquire the freehold interest in a residential home and an established process in place for acquiring same from the Property Registration Authority.

The procedure for acquiring the freehold interest in a commercial premises or a premises which is divided into a number of residential units is significantly more complicated. Accordingly it is best to seek the advices of a Solicitor well versed in the quagmire which is the legislation surrounding this issue.

Here at Griffin Solicitors, Ethna Ryan, Solicitor has carried out a number of these applications and would be happy to discuss same with you.

The first step is to determine that the property is a permanent building and that the portion of land not covered by this building is subsidiary and ancillary to it. The permanent building must not have been an improvement and cannot have been erected in contravention of a covenant in the Lease. There is significant case law surrounding the definition of what is deemed to be a permanent building and what comes under the term “ancillary and subsidiary” Lands surrounding a building which are less than an acre are generally accepted to be subsidiary and ancillary. If lands exceed one acre further proofs must be furnished to show how the lands are subsidiary and ancillary. Even if the property does come within the remit of this step, the property must then comply with at least one of the provisions of Section 10 of the Landlord and Tenant (Ground Rent)(NO. 2) Act 1978. There are seven options in Section 10 and they are as follows:-

  1. That the property was built by the lessee under a building Lease i.e. that the Landlord granted a Lease to the lessee with the purpose of the lessee building a property upon it.
  2. That the Lease is for a term of more than 50 years and that the yearly amount of rent is less than the rateable valuation of the property. This clause has an addendum to say that the building must not have been erected by the landlord or any of their predecessors in title. In order to establish the rateable valuation one has to go apply to the Valuation Office of Ireland to obtain a Certificate of Rateable Valuation.
  3. Where a Lease is granted to a builder who builds a number of properties pursuant to an agreement with the landlord to do so and then surrenders the Lease to the landlord who in turn grants a Lease of each of the houses built to to nominees of the builders.
  4. This covers a scenario akin to 3 above but that there is no Lease between the builder and the landlord, i.e the Landlord grants a straight lease instead to the persons nominated by the builder to take the individual properties built.
  5. That the Lease was granted on the expiration of surrender of a previous Lease at a rent less than the rateable valuation of the property and the previous Lease complies with Sections 9 and 10.
  6. That the Lease is a reversionary Lease.
  7. That the Lease is for a term of more than 50 years and was granted partly in consideration of a payment of money or partly in consideration of expenditure of a sum of money on the property or a combination of a fine and payment of monies on the property so long as the expenditure exceeds fifteen times the yearly rent.

Once it is established that your property complies a Notice must be served either on the landlord, if known, or published in a weekly paper or more appropriately in the Law Gazette issued by the Law Society of Ireland. This is to notify any party who holds an interest in the freehold of the property of your proposal to acquire same in respect of your property.

It is recommended, prior to publishing this Notice, that you would obtain an expert valuation of your interest in the property. There are specialist valuers who would be in a position to carry out this work as again the legislation is complex as to the issues that the valuer must take into consideration when determining the calculation of this figure.

If the freehold owner makes contact with you and evidences his entitlement to sell you the freehold interest then it is open to you to negotiate directly with the freehold owner and take a Deed in respect of the freehold interest directly from them.

If the freehold owner is not known and does not present themselves following the Notice or you cannot come to an agreement in respect of the price to pay for this interest then an application is made to the County Registrar of the Circuit Court in order for the Court to grant an Order confirming that you have the entitlement to buy the freehold interest, determining the value that needs to be paid to acquire same and nominating a solicitor to sign the Deed conveying the freehold interest in your favour. This application is done by way of Notice of Motion and Grounding Affidavit. .

This is a delicate and intricate piece of legislation. It is therefore always advisable to seek advices of a party who has an in depth knowledge of how the system works and to can obtain the relevant proofs on your behalf so that you are ready for any challenge by a freehold owner or query by the Court. Here at Griffin Solicitors, Ethna Ryan, Solicitor has carried out a number of these applications and would be happy to discuss same with you.

 Ring or email Ethna at 01 4907651 or email at [email protected] for a an initial consultation.


Ethna Ryan

Ethna Ryan

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