The Gazette 1986

GAZETTE

sepTemBER

1986

Practice Notes E.E.C. Milk Cessation Scheme

Auctioneer/Estate Agent is to hold any part of the deposit monies, pending the completion of the transaction. The Vendors' and Purchasers' Solicitor must also advise their clients of the risk to the deposit monies in the event of the Auctioneer/Estate Agent becoming insolvent; in this regard it should be noted that Auctioneers and Valuers who are members of the IAVI attract the protection of the IAVI Compensation Fund. Clients should also be advised that further protection may be afforded by having the Auctioneer/Estate Agent hold the monies in his possession as stakeholder. It must be emphasised that if the instructions received vary the General Conditions of Sale relating to deposits, the Contract should be altered to reflect those instructions. •

Council Regulation (E.E.C.) No. 1336/86 providing for the introduction of a Community Milk Cessation Scheme involves the surrender by producers who are entitled to milk quotas of those quotas and an Agreement by them to discontinue milk production for seven years or until the end of the Super Levy System if that occurs later. Applicants who are succesful in their application to participate in the Scheme will be paid approximately 15.31 p. for each gallon of milk quota surrendered in each year from 1987 to 1993. The latest date for receipt of the applications for the current year is 31st of December, 1986. This Scheme has implications for Lessors of lands which are leased with the benefit of a Milk Quota. The Scheme provides that where an application is made in respect of leased lands by the lessee or tenant, the application must include an undertaking from the lessor or landlord that he or she is prepared to accept the surrender of the quota and the division between the lessor and the lessee of the premium payments proposed. Since the initiative in such applications is likely to be taken by the lessee, it is important that the land owner understands clearly the implications of the arrangements so far as his land is concerned. It may well be that the lease will be terminated during the operation of the Scheme and in that event the land owner will not be in a position to relet with the benefit of any milk quota, or to resume milk production himself so long as the Scheme continues, and these facts should be borne in mind when negotiating with the lessee on the proportion of the premium which the landlord will be entitled to receive. Payments under the Scheme will be treated as capital gains and will be subject to Capital Gains Tax, rather than to Income Tax. The usual reliefs and exemption limits appropriate to Capital Gains Tax are stated to apply, but as yet no clear indication has been given of the basis of computing any "gain" or deciding how long the asset was held before the "d i spo s i t i on . "• Deposits in Sale Generally The Incorporated Law Society of Ireland General Conditions of Sale provide that in a sale by Auction and a sale by Private Treaty, the deposit monies are to be paid to the Vendors' Solicitor as stakeholder. It is the practice, in some instances, for the Vendors' Auctioneer or Estate Agent to hold the whole or part of the deposit monies pending the completion of the transac- tion. In these instances, the Vendors' Solicitor and the Purchasers' Solicitor must advise their respective clients of the provisions of the Contract for Sale relating to deposits and take instructions on whether or not the

Standard Form of Building Agreement

Members should please note that First National Building Society has decided that all Building Agreements for private residences on which the Society is lending subsequent to the 31st December, 1986, must be in the form of the standard Building Agreement issued jointly by the Incorporated Law Society of Ireland and the Construction Industry Federation. The standard Building Agreement (1985 Edition) is available from the Incorporated Law Society of Ireland at a cost of £10 per pack of 50. •

MichaelReily B.E. M.I.E.I. f f f lL « CONSULTANT CIVIL ENGINEER

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