Hundreds of repossession cases adjourned pending the introduction of legislation to repair a lacuna in the law, will have to be struck out under the proposed new Land and Conveyancing Law Reform Bill 2013.
As a result, once the legislation is passed, the rate at which homes may be repossessed by lenders will be slower than expected.
The troika had urged the Government to repair a lacuna in the Land and Conveyancing Law Reform Act 2009.
It had said the rate of repossession in Ireland was too low at 0.25 per cent of home loans, compared to 3 per cent in Britain and up to 5 per cent in the US.
At the end of December, almost 95,000 homes were in arrears of over 90 days with more than 23,500 in arrears for more than two years.
Under pressure from the troika, the Government agreed last December to repair the legislation.
The Act had failed to save aspects of previous legislation and in July 2011, Ms Justice Elizabeth Dunne ruled that as a result many properties could not be repossessed. Hundreds of cases then before the court were "adjourned generally with liberty to re-enter" pending the repair in the law.
Retrospective
The new Bill, published earlier this month, repairs that lacuna, but will not apply retrospectively.
It specifies in section 1(5) “this section does not apply to proceedings initiated before the coming into operation of this section”.
As a result the adjourned cases will not be covered by the repair and repossessions cannot be taken under them.
Lenders will have to issue fresh proceedings to start those legal actions again from the beginning, which is likely to add to the final costs imposed on borrowers once orders for possession are granted.
The new Bill also gives the court power to adjourn a case to repossess a family home for two months initially so that the homeowner can make a proposal for a personal insolvency arrangement.
This will add to the length of time it takes for numbers of repossessions to increase.
Adjourned under lacuna
Andrew Robinson from free advice service New Beginning, said he will be bringing applications on behalf of clients who have had their cases adjourned under the lacuna, to have them struck out and to get an order for costs against the lenders.
The lenders knew when they initiated many of these cases that they could not succeed, he said.
Mr Robinson also said he hoped the banks would only look for orders for possession in cases were individuals were not in a position to undertake insolvency arrangements. "This is very much the last resort and I hope it is only going to be for people who just aren't playing ball, who aren't interested and aren't being reasonable," Mr Robinson said.
A spokeswoman for the Department of Justice said section 1(5) reflects the established principle of separation of powers under the Constitution that the Oireachtas may not legislate in relation to cases of which a court is already seised.
“Section 1(5) thus does not seek to determine anything in relation to existing cases,” she said.
The spokeswoman also said the Bill would be discussed in the course of its passage through the Oireachtas.
