Requisitions III

Planning and Development

Requisition 27 deals with planning and development legislation.  See the separate sections on this legislation.  A buyer will want assurance that the property which he purchases is compliant with planning permission and is not vulnerable to enforcement either by the local authority or a third-party.

The requisition seeks information in relation to the status of various works and change of uses of the property since the commencement of planning legislation. Where there have been works, a certificate by an architect or a property qualified professional that the works are either exempt from planning permission or compliant with the planning permission are required.

Certain planning conditions require approvals, acknowledgements and confirmations from the local authority.  Many planning permissions require financial contributions.  In these cases, it is necessary to obtain proof from the local authority that the relevant condition has been complied with or financial obligation paid.

The standard Law Society sale contract contains a potentially onerous condition whereby the seller promises that the planning law status and position is wholly compliant.  This is potentially very onerous and is frequently varied or modified.  Sometimes,  it is deleted entirely so that the entire planning risk is taken by the purchaser.  In this case, the purchaser must satisfy himself in relation to the status of the property under planning legislation prior to entering the contract.

The position under the contract will determine the extent which the seller is obliged to comply with and answer planning requisition.  It may be amended in terms of the substantive position or the proof of compliance to be given.

Planning permission goes both to physical works and to change of use.  The governing planning permission must be consistent with the use of the property.  Some planning permissions contain conditions in relation to use of property that is very restrictive.  It may, for example, purport to limit use to persons born in a particular area or speaking Irish etc.

Building Regulations

Requisition 28 deals with the Building Control Act and the building regulations.  See the separate sections on this legislation.  This legislation sets building standards for all buildings since June 1992.  The legislation also deals with changes of use and material alterations of existing buildings.

The requisition seeks information on the status of buildings since 1992.  It also seeks evidence of compliance by way of an architect’s or (more pertinently|) engineer’s certificate of compliance with building regulations.

In the case of two aspects of the building regulations, a fire safety certificate and disability access certificate is required.  Since  2014 full building regulation certification has been required.

There is a building control compliance warranty in the standard Law Society contract which parallels the planning warranty mentioned above.  The default condition requires proof of compliance with building regulations as well as an opinion on compliance by certain qualified professionals. In the same way, as with planning permission, the warranty is commonly altered or deleted. It may be amended in terms of the substantive position or the proof of compliance to be given.

Prior to building regulations, building byes laws under the  Public Health Act applied in a handful of urban areas.  Formerly it was practice to obtain an opinion on compliance with building by-law approval.  The Building Control Act deemed all building works completed before 13 December 1989 to be building bye-law compliant.

Where a new property is being purchased, certification of compliance with the planning permission and building regulations will be forthcoming generally in a standard form offered by the developer.

Requisition 35 deals with a one-off piece of legislation dealing with multi-story buildings.  Following a notorious gas explosion in 1987, all buildings over five floors  of a certain age were required to be certified as compliant with building regulation.

Fire Safety

Requisition 29 deals with inspection by fire authority and fire safety.  This is generally only a legal compliance issue for multi-unit residential properties and commercial properties.

The fire authority may make requirements under its discretionary powers.  This is particularly important in relation to properties to which the public has extensive recourse such as public houses, hotels, restaurants, places of entertainment etc.

Construction Safety

Requisition  30 deals with the Health, Safety and Welfare Construction Regulations.  Parts of these regulations requires that a file vouching safety compliance obligations be kept.  In the case of commercial property, the file is to be handed over to the owner on completion for reference.  The requisition deals with issues surrounding these obligations.

The safety file will only be available in respect of larger commercial units.  It will not usually be available in respect of the residential property.

Environmental

Requisition 31 deals with legal environmental property controls.  It asks whether any enforcement action of any type has been issued under environmental legislation.  It asks whether there has been any breach of environmental legislation.

Generally, a seller’s solicitor will not wish to give definitive answers in relation to such open-ended questions.  Legislation will be relevant in most cases, only certain types of business which are specifically subject to licence or other control under environmental legislation.  Generally, environmental issues are dealt with prior to contract.

Liquor and Food Premises

Requisitions 30 to 42, and 41 and 42 are of specific relevance to property selling food and intoxicating liquor.  Requisition 32 deals with food, hygiene, registration requirements.  The legislation has been updated since the latest draft of the requisition.  In broad terms, most food premises must be registered and are subject to controls by the Food Safety Authority of Ireland and local authorities and in some cases, the HSE.

Public houses and restaurants are subject to licensing law which is complex.  A purchaser of a licensed premise must verify that there is a valid licence attaching to the premises.  The licence must be for the premises itself and be compliant.

The buyer’s solicitor will wish to ascertain whether there are any limitations affecting it, burdens, convictions etc.  which make it less than the buyer’s expectations  Failure to properly address licensing issues is a common source of solicitors’ negligence actions.

Requisitions 41 and 42 deal with restaurant licenses.  They are specific to those properties.

Requisition 33 deals with property held under a lease.  It is necessary to establish that the current transaction accords with the terms of the lease.  The consent of the landlord may be necessary, depending on the type and the terms of the lease.

Long Lease Title

In longer leases, the issue of compliance with lease covenants may be mitigated by legislation.  The buyer’s solicitor will seek evidence that the ground rent or rent or lease has been paid and that the terms and conditions are being complied with.

The Law Society General Conditions deal with cases in which landowners consent is required to assignment (Sale).

Requisition 34 deals with the acquisition of the freehold interest/ ground rent   In some cases, a property will be held under a long lease with an uncompleted purchase of the fee simple.  The requisition seeks to vouch the position, and if so, what the current status of the fee simple purchase.

Common  Managed Areas / Parts

Requisitions 36 and 37 deal with properties with managed common area.  This will cover flats and apartments, as well as houses, where there are facilities managed in common.  In the context of commercial properties, it will deal with multi-unit developments and stand-alone developments with privately managed estates.

The requisition seeks to establish the current status of the management scheme.  It will seek information on the management arrangements, management company, management contracts, and generally in relation to the upkeep, maintenance and management of the common area and parts.

It will be a critical concern to a buyer to establish both that there is a proper scheme whereby all appropriate parties are legally bound to comply with an obligation to contribute towards management costs and that the scheme is, in fact, operational  It may be necessary to examine accounts and other information to vouch that the scheme as set up from the outset is in fact operative.

Generally, there is a management company of which each owner in the development should be a shareholder.  In this way, each owner will have a say in the management of the common areas through the corporate meetings.  Frequently however the scheme should not operate as was originally intended.  The original developer may retain # and rights.

Because of the difficulty with managed common areas in particular apartments the multiunit development act was passed in 2011 which has great, overriding rights and obligations in this area.  New additional requisitions were prepared by the Law Society seeking to vouch the status of the property in light of the multi-unit development act obligations.

See the separate section on the act.  In broad terms, the common areas and common facilities of a privately managed property must be transferred to owner’s management company of which all owners have appropriate participation rights from the outset.  In the case of older developments, this must be done within six months of the commencement of the legislation, i.e., by 1 October 2011

Tax

Requisition 38 deals with tax allowances and benefits.  The actual legislation referred to is out of date.  However, there exists a significant amount of property which still enjoys tax allowance schemes notwithstanding that the schemes themselves have terminated.

A buyer of the property will generally take the benefit of the remaining allowances for their remaining lives.  Many of the # and benefits have been tapered away and withdrawn since 2009.

Requisition 16A deals specifically with the issue of value-added tax.  This will be of relevance in commercial property and in some cases development property.  Where the seller has claimed back VAT or been entitled # to claim back VAT then he will be obliged to charge that on his sale.  New houses are subject to VAT.

VAT impacts strongly on certain buyers who are exempt from value-added tax.  Although the benefit of not charging value added tax on the sales is positive, one downside is that they are not allowed to reclaim VAT when they purchase commercial property.