Legislation rushed through to close IDA property loophole

Emergency legislation was rushed through the Dáil and Seanad yesterday after it emerged that the State's ownership of 700 IDA properties was at risk because of a legal loophole.

Minister for Enterprise, Trade and Employment Micheál Martin introduced the urgent Bill after the State had to settle a case with a company in the Clonshaugh industrial estate in north Dublin, which set up a "puppet company" allowing it to buy IDA industrial land outright and lifting restricted usage.

Pat Breen (FG, Clare) said it "beggars belief that the law allowed this to happen".

The company, which was not named, had "taken us all for a ride", it had "attempted to rob the State, even though it did so in a legitimate fashion and its owners should be completely and utterly ashamed of themselves", he said.

It is the second time in just three weeks that ground rent legislation was introduced to protect State properties and the Opposition condemned the Government for its failure. Mr Breen said it "does nobody a service to govern or legislate this way".

Mr Martin said the Landlord and Tenant (Ground Rents) Bill was vital to protect State interests in property acquired for industrial development by IDA Ireland, Shannon Development and Údarás na Gaeltachta.

The IDA practice of selling property was through a 999-year lease. IDA property leased in 1981 to a company was subsequently sub-leased twice and an anomaly allowed the lease to be "extinguished". Mr Martin said the Law Reform Commission had noted this anomaly in 1989 and again in 1992. The issue was first brought to his attention in May this year, he said.

Mr Breen said that "Fine Gael is fed up with the Government's attitude to doing business" and the Landlord and Tenant (Ground Rents) Bill 2005 would not receive "appropriate scrutiny, reflection and debate".

The Clare TD said it was "amazing that a company can pay €7 million for a property, subject to restricted use, a rent review and long lease and can then set up a puppet company to circumvent the law".

Labour's finance spokeswoman Joan Burton said that all TDs supported IDA Ireland "and want to see its status and position protected but we have not been given the opportunity to tease out the substantial additional rights conferred by this Bill".

Ms Burton said that the Labour party "opposes ground rents and would support any mechanism for their abolition. They are an unnecessary and anachronistic relic of bygone times."

Green Party finance spokesman Dan Boyle said such emergency legislation was "something that has happened regularly in the life of this Government" and the House needed to question whether the Government had "got its act together" on ground rent legislation since it had introduced a similar Bill for cross-Border institutions.

Arthur Morgan (SF, Louth) described ground rents as a form of feudal tax, which "represent an ongoing injustice against the people of this State".