Long Leases
Fee farm grants are almost unique to Ireland. Fee farm grants are freehold leases, effectively leases forever. They are subject to lease covenants and conditions in the same way as leases. They are regulated by the same Landlord and Tenant Amendment Act (Ireland) 1860, which still contains a significant amount of the leasehold law in both the Republic of Ireland and Northern Ireland.
Fee farm grants have been prohibited since January 10, 2000. In addition to fee farm grants created as leases forever, a second category of fee farm grant is also unique to Ireland. The Renewable Leasehold Conversion Act 1849 converted existing so-called leases for life renewable forever into fee farm grants. Leases for life were a product of legal disabilities in the 18th century. To circumvent the disabilities, the courts allowed for an equity of renewal for certain leases for life, which effectively obtained the characteristic of a perpetual freehold estate.
The 1849 legislation enabled the holders of such leases to obtain a fee farm grant from the lessor subject to a rent. Any new leases for life renewable forever were deemed to operate as a fee farm grant. As with the other category of fee farm grant, they are converted into fee simple interest.
As in the Republic of Ireland, leases are fundamentally based on a contract. The famous Deasy’s Act (Landlord and Tenant (Ireland) 1860) deems a lease to be founded on the parties’ contract and provides a code of law applicable to leasehold interest.
Leases may range from short-term arrangements, lettings at market rent to long leases at a nominal rent. In the latter case, the landlord is the owner, and the tenant pays an economic rent. In the former case, the lessee or tenant is effectively the owner, while the lessor or landlord’s interest is a nominal right to collect a ground rent at best.
As in the Republic of Ireland, layers of long leasehold interest exist in urban areas. Due to ground rent legislation reform, the number of such interests will diminish over time. The creation of new long leases of dwelling houses was prohibited under the 1997 legislation, and rights to purchase and redeem freehold interest for long leaseholders were strengthened.
Long leases are common in urban areas. Ground rent legislation has eased their purchase so that over time, they will disappear.
Long leases are also used in apartment, retail, and commercial development with common areas. The use of a long lease facilitates covenants required for the management and maintenance of the entire development. It facilitates the creation of a service charge payable by way of a lease covenant. A long lease dwelling of more than 50 years may no longer be created.
The terms and conditions of a lease are broadly whatever is agreed and provided for in the lease document by the party. A lease for a period of more than a year must be in writing. However, it is possible to have periodic tenancies not in writing.
Tenancies arise where a lease’s rent is paid by the tenant and collected by the landlord on a periodic basis. This may occur when the term of a lease has expired. There are special rights for certain commercial and residential tenants. These may have the effect of granting tenants under expired leases or under tenancy significant rights of renewal.
A reversion is generally described as the interest of a landlord upon termination of a lease. A remainder is the interest of the freehold owner after an earlier freehold estate such as a life interest terminates.