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Must a Landlord who purchased property register as owner to collect rent due?

14/07/2015

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Ireland

In the recent Supreme Court case of Camiveo Limited v Dunnes Stores, the court noted that “one of the more recent knock-on effects of the collapse and partial recovery of the Irish property market has been the sale of a significant amount of commercial property subject to existing leases”. This case concerned the purchase by Camiveo Limited of two shopping centres in which Dunnes Stores held ‘anchor tenant’ leases.When Camiveo attempted to collect the rent due to them as l...

In the recent Supreme Court case of Camiveo Limited v Dunnes Stores, the court noted that “one of the more recent knock-on effects of the collapse and partial recovery of the Irish property market has been the sale of a significant amount of commercial property subject to existing leases”. This case concerned the purchase by Camiveo Limited of two shopping centres in which Dunnes Stores held ‘anchor tenant’ leases.

When Camiveo attempted to collect the rent due to them as landlord from Dunnes Stores, they were refused. Dunnes Stores did not claim that the leases it had signed with the previous owner were invalid and agreed that there was an obligation for them to pay the rent due under those leases. Rather they argued that the Purchase Deed by which Camiveo had purchased the property and became the new landlord had not yet been signed and further that Camiveo had not registered its interest in the land with the Property Registration Authority, a requirement before a sale is final citing the Land and Conveyancing Law Reform Act 2009.

The court provided a neat summary of the recent law on Dunnes Store’s arguments, stating that the strict wording of section 25 of the 1964 Registration of Title Act, as amended, would mean the postponement of all rent collection by Camiveo until the completion of the registration process. This would be an uncertain amount of time, given the limited resources of the Property Registration Authority and the amount of registration applications necessitated by the 2009 Act. The court then ruled the strict application of the section would create an impermissible situation and that the only workable solution was to allow the Property Registration Authority itself to continue to apply the section loosely. The court comprehensively ruled for Camiveo, stating that by paying the purchase price and acting as if they had executed the sale contract, they had gained an “inchoate right incapable of being defeated, and only waiting for an official duty to be performed to become an absolute estate”.

Therefore the court in effect stated that a purchaser could enforce rights under a leasehold interest it has acquired, despite the fact that the purchaser had not signed the purchase deed and that the registration of that deed had not been finalised in the Property Registration Authority.

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