166 / 244
GAZETTE
SEPTEMBER 1979
15.15
Positive Covenants and Freehold Land:
A Galway member conferred with the
Committee on the difficulties in attempting to create positive covenants which would be
enforceable against a subsequent owner of freehold land which was being sold. What he
had in mind was a situation frequently encountered of selling a site where the benefit of the
enforceability of positive covenants attributed to a building estate scheme would not be
available and where the vendor wishes to include a building covenant to build a wall or
erect a fence. He himself eventually suggested what the Committee felt was the correct
solution, namely that a covenant be inserted in the deed providing that no development
was to take place until the wall or fence specified had been erected.
15.16
Exceptions and Reservations in Transfers and Conveyances:
Arising out of the
enforced discontinuance of leases for the sale of new houses, various members have
queried the question of easements, exceptions and reservations which are reserved or
granted in conveyances or Land Registry transfers of new houses. The sub-committee of
the Committee is still investigating the position but the initial view of the Committee was
that if the transfer reserves out of the grant various rights, as it should do, that it should
go on to grant the usual easements to the transferee for the benefit of the property
transferred. A report of the Committee will be published in the
Gazette
in due course on
the subject.
15.17
Issue of Contracts to Auctioneers: Private Treaty Sales:
A number of
members have queried the practice of auctioneers, particularly in the country, who press
to have contracts issued to them before any sale has been arranged, which in most cases
they then proceed to get signed by a purchaser without reference to his solicitor. The
Committee were of the opinion that the practice was ill-advised both from the point of
view of the vendor and the purchaser and intends to take the matter up at its next meeting
with the Auctioneers' Association.
15.18
Clause in Contract providing for Redemption of Loan after Closing:
The
Committee considered the apparently increasing practice of the insertion of a clause in
contracts for the sale of property providing that the purchaser should accept an under-
taking from the solicitor for the vendor to pay off the vendor's mortgage after completion
of the sale. The Committee disapproved of the practice but takes the view that there is no
objection to a clause providing that an undertaking be accepted provided that the
redemption took place on or before closing.
15.19
Stamp Duty on VAT:
The Committee considered the practice of the Revenue
Commissioners of charging stamp duty on the sale of development property (developed
since 1972) where the sale price is inclusive of VAT. This can be particularly significant
where the VAT has the effect of rendering the transaction liable for a higher rate of stamp
duty. The Committee came to the conclusion that the Revenue Commissioners were correct
in regarding VAT being part of the price for the assessment of stamp duty.
15.20
Law Society Building Contract:
The Committee made certain alterations to
update its existing form of building contract. Most of the changes arise out of changes in
stamp duty, CRV and housing grants.
15.21
Bridging Finance:
The Committee has carefully monitored the position
regarding the recent furore in the newspapers about bridging finance and some of the
allegations made that delays in completion of mortgages were often attributable to
solicitors. The Committee took the view that there was nothing to be gained for solicitors
in getting involved in the crossfire between the banks, builders and building societies over
this contentious matter. The delays in the completion of mortgages take many forms and
the Committee does not accept that delays on the part of solicitors are in any way
significant in this respect.
15.22
Apart from the specific matters mentioned above, the Committee dealt during
the year with many points in relation to practice and procedure. The Committee
welcomes comment and queries from members on any matter of practice or procedure,
particularly if it is something that may be of interest to the profession in general.