Concurrent wrongdoers and debt recovery

Concurrent wrongdoers and debt recovery

A concurrent wrongdoer in Ireland is defined in s. 11 of the Civil Liability Act 1961 as “one of two or more people responsible to a plaintiff for the same damage” (“Concurrent Wrongdoer/s”).  Concurrent Wrongdoers are jointly and severally liable for the damage sustained by a plaintiff[1].

A recent Court of Appeal decision[2] has clarified that in terms of a debt secured by a mortgage over a property, a valuer who produced a negligent valuation and a borrower who was contractually obliged to repay the debt are NOT Concurrent Wrongdoers for the purposes of the Civil Liability Act 1961 (the “Act”).

The significance of the foregoing lies in the way in which a Court is required to ascertain the extent of the liability of one Concurrent Wrongdoer when a plaintiff has reached a settlement agreement with another pursuant to s. 17 (2) of the Act.

The decision will be of particular interest to lenders and professional valuers.

The Law

S. 17 (2) of the Act provides that where a plaintiff (“P”) has reached an accord or agreement with one Concurrent Wrongdoer (CW1) to release him/ her from liability, unless the agreement/ accord expressly or by implication releases the other Concurrent Wrongdoer/s (CW2) from liability, the liability of the other Concurrent Wrongdoer/s (CW2) will be released by the greater of :-

  • The amount of the settlement between P and CW1; or
  • Any amount stipulated in the settlement agreement between P and CW1; or
  • The extent by which it can be said that CW1 was liable to contribute to CW2 if CW2 had paid the entire claim.

S. 35 (1) (h) and s. 17 (2) of the Act also require, (in the case of an agreement reached between P and CW1 WITHOUT the intention to release CW2) a plaintiff to “identify” with CW1 in any proceedings it issues against CW2. Identification is a legal term, and in this case is employed here so that P does not recover on the double and enjoy a windfall from CW2. Identification provides that in the foregoing instance P be deemed to be responsible for any acts of CW1 in those proceedings by way of contributory negligence.

Executive Summary

In the case in question, the borrowers (ie CW2) alleged[3] that the valuer (ie CW2 due to allegedly negligent provision of a property valuation), as Concurrent Wrongdoer with them, would have been required to contribute to them some or all of the loan outstanding and that consequently the borrowers’ liability to the bank should be reduced or set at nought pursuant to s. 17 (2) of the Act.

The borrowers’ argument was ultimately rejected by the Court of Appeal on the basis that a borrower and a valuer that provided a negligent valuation of property that induced a bank to lend to the borrower, were not Concurrent Wrongdoers. The Court held that any windfall to the bank by reason of its claims against both the valuer (for damage caused by an alleged negligently drafted report) and the borrowers (for the amount of the loan unpaid), was to the detriment of the valuer only and not the borrowers.  Therefore, the Court held that the borrowers could not rely on any settlement reached by the bank with the valuer to relieve the borrowers of having to repay the full amount of the unpaid loan.

The Case and Background/ Facts

The appellants in this case, Ulster Bank Ireland Limited & Others, Plaintiffs/ Respondents -v- Brian McDonagh & Others, Defendants/ Appellants, IEHC 2022 87, were three brothers (the “Borrowers”) who borrowed €21.5 million from Ulster Bank Ireland Limited (“the Bank”) to part fund the acquisition of a site at Kilpedder, Co. Wicklow in 2008.  The Borrowers secured planning permission for a data centre, but the development did not go ahead and the Borrowers were not able to repay the loan.  The Bank and the Borrowers entered into a Compromise Agreement and the Borrowers had to disclose all their respective assets in a Statement of Affairs. The Borrowers were alleged to have breached the Compromise Agreement and the Bank looked for summary judgment for €21.5m against the Borrowers. The Bank issued professional negligence proceedings against its valuer, CBRE for allegedly failing to properly value the Kilpedder lands. This claim was settled for €5 million which, (at the election of the Bank) was applied against the Borrowers’ loan in reduction of the debt. As set out in the decision of the Court of Appeal, there was no apparent legal basis for the Bank to reduce the Borrowers’ liability by the amount paid by CBRE.

High Court decision

Two broad issues were contested before the High Court. The first centred on whether or not the Borrowers/ defendants had breached the Compromise Agreement and secondly, whether CBRE was a Concurrent Wrongdoer with the Borrowers/defendants and thus whether or not the Bank was precluded from pursuing the Borrowers/defendants for the debt under section 17(2) of the Act in full or in part.

Mr. Justice Twomey delivered two judgments on behalf of the High Court. The first judgment[4]  was delivered on 6 April 2020 and determined that the Borrowers/defendants were jointly and severally liable to the Bank for the full amount of the outstanding debt. It was determined that the Borrowers had breached the Compromise Agreement and the Bank was entitled to pursue its claim for monies against the Borrowers/defendants.

With respect to the Act, the Court determined in its second judgment[5] that if some defendants in an action are alleged to be in breach of a contract for failing to pay a debt, and there were others responsible for that same debt on the basis of their wrongful conduct, then they were Concurrent Wrongdoers and s. 17 (2) of the Act applies.

However, the High Court concluded in its second judgment[6] that as no evidence was available to the Court to establish that the valuer was negligent in relation to the issue of its valuation report and that the report was the cause of the non-repayment of the loan by the Borrowers the Borrowers were found to be liable for the full amount of the debt outstanding in the amount of c. €22m. The Borrowers/ defendants appealed the case to the Court of Appeal.

The decision of the Court of Appeal relating to the Act

The Court of Appeal comprising the Honourable Mr Justice Brian Murray, Mr Justice Maurice Collins and Ms Justice Teresa Pilkington, delivered its judgment on the 6th of April 2022 and held that the Act is concerned with apportioning responsibility between wrongdoers facing legal proceedings for the recovery of “damages”[7]. The Court concluded that a claim for the recovery of a debt is not an action for the recovery of damages but for the enforcement of a primary contractual right. Even if a claim for a debt could be construed as a claim for “damages” as defined by the Act, the Court of Appeal held that a claim for damages for professional negligence and a claim for repayment of a debt were not actions for the “same damage”, as required by the Act[8]. The Court went on to say that a debtor would be liable for the entire debt, whereas the maximum amount for which the valuer could be held liable was a figure representing the amount of the loan which the lender could not recover from the debtor. Therefore, it was held that the liability of the debtor and valuer were not concurrent as required by s. 17 (2) of the Act.

Ultimately, the Court dismissed the Borrowers’ case on the matter of the application of the Act to proceedings for the recovery of debt and found the Borrowers liable for the full amount of the debt outstanding.  The Court of Appeal found absolutely no basis on which it could be suggested that the valuer, CBRE, could have any liability to contribute to the debt of the defendants, as required by s. 17 (2) of the Act. The Bank was not obliged to have deducted the €5m received from CBRE on foot of the settlement from the debtors’/Borrowers’ liability but as it had elected to do so, the Borrowers’ liability was reduced in that amount.  Therefore, the Borrowers were found to be liable for the full amount of the loan (€27m) less the settlement sum received from CBRE and applied to their loan account (€5m) with interest thereon. The effect of the second judgment of the High Court was upheld and the judgment of c. €22.9m against the Borrowers on a joint and several basis remained.

Further, the Court held that proofs critical to establish negligence – including a professional report confirming that the valuer failed in meeting its standard of care by adhering to general accepted and approved practice – were not present and the Borrowers’ argument was bound to fail for that reason, even if the Court held that the valuer/CBRE and the Borrowers were Concurrent Wrongdoers (which, as above, was not the case).

The Court of Appeal made clear[9] that the case is not concerned with the manner in which liability as between joint debtors or debtors and guarantors should be determined. In its decision, the Court emphasised that its findings do not in any sense have the consequence that in either of these situations a creditor is entitled to effect double recovery nor does it mean that a compromise with one debtor in these circumstances has no implications for another party liable on the debt. Instead, the relevant common law rules and applicable equitable principles (in particular of recoupment and contribution) continue to operate, the court held.  In the case of joint debtors this means that the release of one co-debtor in an agreement which did not expressly or impliedly reserve the creditors’ rights against the others will wholly extinguish the creditor’s rights. In the case of the relationship between guarantors and debtors issues as to whether and if so at what point of time in the context of a particular guarantee the guarantor has a right to indemnity or contribution from the principal debtor, those rights, the guarantor’s rights to subrogation, and indeed its rights against co-sureties fall to be determined in accordance with those equitable principles developed ‘to ensure that the person primarily liable should bear the whole burden in relief of others’ (Re Eylewood Ltd. [2011] 1 ILRM 5 at para. 35 per Finlay Geoghegan J.)[10].


The decision, insofar as it relates to the application of the Act to cases where it appears more than one person is or may be responsible for loss sustained by a plaintiff, is an important one as it clarifies the fundamental steps to take when examining the relationship between two parties to ascertain if they are Concurrent Wrongdoers.  The decision will be welcomed by banks and lending institutions as it makes it clear that the full amount of a loan remains outstanding even in situations where the lender was induced to lend on foot of an allegedly negligently prepared valuation report.

Further reading – see “The Blame Game”, by John Kennedy SC in the Law Society Gazette, 01 July 2022 and for wider background Appeals court upholds €22m judgment against brothers over data centre lands”  Anthea McTeirnan of the Irish Times dated 06 April 2022.

[1] S. 12 of the Act

[2] Ulster Bank Ireland Limited, Paul McCann and Patrick Dillon, Plaintiffs/ Respondents -v- Brian McDonagh, Kenneth McDonaghj and Maurice McDonagh, Defendants/ Appellants. 2022 IECA 87

[3] amongst other arguments that will not be addressed in this article

[4] Ulster Bank Ireland Limited & Others, Plaintiffs -v- Brian McDonagh & Others, Defendants, 2020 IEHC 185

[5] Ulster Bank Ireland Limited & Others, Plaintiffs -v- Brian McDonagh & Others, Defendants 2020 IEHC 311 delivered on 20 June 2020

[6]  Ulster Bank Ireland Limited & Others, Plaintiffs -v- Brian McDonagh & Others, Defendants 2020 IEHC 311 delivered on 20 June 2020

[7] As defined in s. 2 of the Act

[8] S. 17 (2) of the Act

[9] Para 104,pg 63 & 64 of the Court of Appeal judgment

[10] These principles, the Court found were summarised before in Breslin and Corcoran, Banking Law (4th Ed 2019) at paras. 14-19 – 14-27.

Whilst every effort has been made to ensure the accuracy of the information contained in this article, it has been provided for information purposes only and is not intended to constitute legal advice. Amorys Solicitors is a boutique commercial and private client law firm in Sandyford, Dublin 18, Ireland.

For further information and advice in relation to “Concurrent Wrongdoers and Debt Recovery ”, please contact Deirdre Farrell, Partner, Amorys Solicitors, telephone 01 213 5940 or your usual contact at Amorys.

Virtual Meetings and Increased Threshold for Winding Up to remain Law until 31 December 2023

Virtual Meetings and Increased Threshold for Winding Up to remain Law until 31 December 2023

The Minister for Trade Promotion, Company Regulation and Digital has announced the extension of the interim period of two temporary measures introduced by the Companies (Miscellaneous Provisions) (Covid 19) Act 2020 (the “Act”) to 31 December 2023 which will be of interest to company directors, shareholders and business owners.

The key measures, now in place until 31 December 2023 are the result of amendments to both the Companies Act 2014[i] and to the Industrial and Provident Societies Act 1893[ii] and are as follows:-

  • Virtual Meetings: Companies and co-operative societies will retain the ability to hold virtual general and creditor meetings.
  • Winding Up: the threshold for initiating a windup of a company has been increased to €50,000 for one single creditor claim and the same amount for claims by two or more creditors[iii].

Two other significant measures introduced by the Act[iv] have not been extended and consequently, the protection period offered by the examinership process may last no more than 100 days[v] and documents executed under seal by a company may no longer be executed in counterparts.

The Act was introduced on 21 August 2020[vi] as a response to the pandemic and specifically with the intent to act as a means of support to small and medium-size enterprises and to address critical issues such as potential company solvency arising from operational issues caused by the crisis.

We see the extension of the temporary measures as a positive development. By allowing corporate bodies to continue to hold meetings electronically it acts to ensure that those entities comply with their legal obligations. Virtual meetings aid companies in their governance and as a result it is expected that same will be provided for in the Companies Act 2014 on a permanent basis in the near future.

[i] Section 6 of the Act and section 14 of the Act

[ii] S. 28 of the Act

[iii] S. 14 of the Act

[iv] s. 13 of the Act (re length of protection offered by examinership process) and Section 5 of the Act (re execution by a company of documents by counterpart)

[v] S.520 of the Companies Act 2014 provides that the period of protection provided by examinership is 70 days from date of presentation of the petition. S. 534 of the Companies Act 2014 allows for an extension of that time period by a further 30 days where examiner unable to provide report within 70 days from presentation of the petition.

[vi] By Commencement Order S.I. No. 320/ 2020 – Companies (Miscellaneous Provisions) (Covid-19) Act 2020 (Commencement) Order 2020

Whilst every effort has been made to ensure the accuracy of the information contained in this article, it has been provided for information purposes only and is not intended to constitute legal advice. Amorys Solicitors is a boutique commercial and private client law firm in Sandyford, Dublin 18, Ireland.

For further information and advice in relation to “Virtual Meetings and Increased Threshold for Winding Up to remain Law until 31 December 2023”, please contact Deirdre Farrell, Partner, Amorys Solicitors, telephone 01 213 5940 or your usual contact at Amorys.

Survival of Actions on Death….

Survival of Actions on Death….

Do legal actions and claims survive the death of a Plaintiff or prospective Plaintiff? Can such claims/actions be maintained or initiated subsequent to the death of the intended Defendant?


Prior to 1961 when an individual died (“the Deceased”) any cause of action in civil cases ended upon his/her death. The Civil Liability Act 1961 reformed this area and since then certain causes of action survive for the benefit of the Deceased’s estate i.e., assets owned by the Deceased as at the date of death (“the Estate”). In practical terms this resulted in the Deceased’s personal representative being able to sue and be sued, with some limits applied. Such limited or excluded causes of action (referred to in the legislation and case law as “excepted causes of action”) which do not survive death include breaches of promise to marry, seduction, inducing one’s spouse to stay or leave or criminal conversation. Defamation was also excluded until the introduction of the Defamation Act 2009.

The Personal Representative

Civil actions, which are not in the list of exceptions, survive for the benefit of the Estate. The personal representative of the Estate becomes responsible for actions on behalf of (or against) the Estate under s.48 Succession Act 1965. As such, it is required that a Grant of Probate (if the Deceased died testate), or Letters of Administration (if the Deceased died intestate) are taken out to enable proceedings to be issued or defended on behalf of the Estate.

Claims on Behalf of the Estate

Where a personal representative of an Estate takes an action against a third party, the damages which are recoverable for the benefit of the Estate are limited. For example, the personal representative can take an action seeking damages on foot of a defamatory statement made by an individual against the Deceased and can recover damages where financial loss was suffered by the Deceased as a consequence of the defamatory statement. However, certain damages will not be awarded by the courts and therefore the Estate will not be successful in a claim for damages which fall into the following categories;

  • exemplary damages, which are generally awarded only in limited circumstances where a wrongdoer’s actions are particularly aggravated;
  • pain and suffering;
  • personal injury;
  • loss of or diminution of life expectancy or happiness.

These exclusions are listed in Section 7 of the Civil Liabilities Act 1961 and are describes as “excepted causes of action”.

Recent Case

The 2016 case of Doyle (As Per. Rep. Of the Estate of Bridget Doyle, Deceased) v Dunne [2016] IESC 68 is a recent example of the limitation of damages being upheld by the Supreme Court and provides useful commentary from as to the rationale for these exclusions.

The Plaintiff, Mr. Doyle, cared for his mother who was in ill health since suffering a brain haemorrhage in 1996 up until the time of her passing in July 2014. In 2010, Mrs. Doyle underwent a surgical procedure to remove cataracts and suffered complications in surgery. Arising out of these complications, Mrs. Doyle brought legal proceedings seeking damages for personal injury on the basis that those in charge of her treatment acted negligently.

For technical legal reasons, Mrs. Doyle’s case was ultimately dismissed. Due to Mrs. Doyle’s ill health she was unable to appeal the dismissal herself. As her son and next-of-kin, Mr. Doyle, acting on behalf of his mother, appealed the dismissal his mother’s action to the Supreme Court. Unfortunately, Mrs. Doyle died before the conclusion of this hearing and the Estate was not awarded any compensation on her behalf.

The Supreme Court upheld the arguments of the Defendant that the relevant provisions under the Civil Liability Act were designed to uphold the compensatory nature of personal injuries and not to afford a windfall to the Estate. The Supreme Court emphasised that as the Deceased was dead, damages for the personal injury of the Deceased could not be awarded to the Estate in line with the Civil Liability Act. It was held that damages for pain and suffering could only be claimed by the individual who experienced the injury for which compensation was sought and the Estate could not claim for the suffering of another person i.e. the Deceased.

This case confirms that the provisions of Section 7 of the Civil Liability Act continue to apply.

Claims Against the Estate

The personal representative of an Estate can also be sued by someone who decides to take an action against the Estate, but not an action based on the “excepted causes of action” listed above. Any loss or damage suffered by the Deceased under these headings will be deemed by the court have occurred before the death of the deceased and therefore not eligible for an award in favour of the Estate.

In order to make a claim against an estate, legal proceedings must be issued within a specific time limit. Proceedings must be commenced within the relevant period under the Statute of Limitations 1957 i.e., i) prior to the death of the Deceased or ii) within a period of two years after the death occurs. Failure to adhere to these time limits will result in the prospective plaintiff’s inability to take action against an Estate.

Wrongful Death

A claim can be taken on behalf of the Estate in circumstances where the death was caused by a tortious action, on foot of which the Deceased could have sued had they not died. This is known as “wrongful death” and is actionable under Part IV of the Civil Liability Act 1961. Only one action in respect of wrongful death can be taken and is for the benefit of all or any close family members, known as dependants, as its purpose is to compensate the family. Dependants include the spouse, children (including step children), parents, grandparents, grandchildren, and siblings (including half-siblings).

This action should be taken by the personal representative. If after six months of the Deceased’s death no Grant of Probate or Letters of Administration have issued and there are therefore no personal representatives legally entitled to issue such proceedings, any dependant can take the action. The action must however be commenced within three years following the Deceased’s death.

Damages/Compensation Payable on Foot of Wrongful Death

There are three types of damages which may be awarded under a wrongful death action;

  1. Special damages including funeral and other expenses, legal costs etc;
  2. Compensation as solace for suffering, loss or injured feelings i.e., reasonable mental distress but not physical suffering (called a “solatium” in legal jargon). Compensation under this category is capped at €35,000 and divided between all of the Deceased’s dependants, regardless of the number of dependants;
  3. Financial loss caused by the death of the Deceased such as prospective income and other benefits due to him/her prior to death.

The court will not take into consideration and will ignore the proceeds of insurance policies or pensions payable upon death when calculating the amount of damages under a wrongful death action.

If you would like any further information and legal advice in relation to the above issues, please contact Sharon Scally at, telephone 01 213 5940 or your usual contact at Amorys.

Financial Services and Pensions Ombudsman

Financial Services and Pensions Ombudsman – Does It Have the Final Say in a Dispute?

The Financial Services and Pensions Ombudsman (“FSPO”) in its current form was established in 2017 with the aim to provide a service that was impartial and accessible to customers and one which delivers fair, transparent and timely outcomes to disputes between customers and financial service and pension providers, thus limiting the number of disputes of this nature before the Courts.

In the case of Lloyds Insurance Co SA v Financial Services and Pensions Ombudsman [2022] IEHC 290, Lloyds Insurance Co SA (“Lloyds”) lodged statutory appeal against a decision made by the FSPO following a dispute with a customer of the insurance provider. The case addresses three important issues:-

  1. Challenging FSPO decisions;
  2. The jurisdiction of the FSPO;
  3. The lawfulness of compensation;

Background to the Case

This case originates from a complaint by the Claimants/Notice Parties, Joanna Donnelly and Harm Luijkx (“the Claimants”), who purchased a home from a developer in 2006 and entered into a contract with Lloyds for insurance cover relating to potential structural defects in the property. Two defects subsequently became apparent; 1) damage to the structure caused by pyrite and 2) damage to the structure of the roof. The Claimants submitted a claim to Lloyds in respect of both issues.

Lloyds accepted the claim in relation to pyrite but rejected the claim for damage to the roof. Lloyds adopted the position that the damage to the roof was not inherently a structural defect, but instead was caused by a leak from a water tank which had not been properly fitted, i.e., a workmanship defect. The Claimants submitted a complaint to the FSPO in 2020 following a 6-year period spent seeking resolution to the matter with Lloyds, who maintained their position throughout.

The FSPO upheld the complaint made by the Claimants on the basis that the rejection of the claim by Lloyds was unreasonable, unjust and improper and directed that compensation of €20,000 be paid to the Claimants.

The Appeal to the High Court

In line with section 64 of the Financial Services and Pensions Ombudsman Act 2017, Lloyds proceeded to challenge the decision of the FSPO before the High Court on the basis that the FSPO erred in their finding which benefitted the Claimants, that the FSPO exceeded their jurisdiction and that the compensation was disproportionate. Judge Siobhán Phelan of the High Court found in favour of the FSPO, providing useful commentary as to the remit and jurisdiction of the FSPO.

  1. Challenging FSPO decisions

Judge Phelan held that in order for a financial services provider to be successful in its challenge to a decision made by the FSPO, the provider must prove that a serious and significant error has been made by the FSPO in arriving at its decision. This standard has been consistently applied since 2006 (see Ulster Bank Investment Funds Ltd v Financial Services Ombudsman [2006] IEHC 323). In Lloyds, this threshold was extended to include a material error of law.

The standard of review that is to be adopted is to be one “not dissimilar” to Judicial Review as outlined in Verschoyle-Greene v Bank of Ireland Private Banking and FSO [2016] IEHC 236. The Court will not re-examine matters from the beginning or adopt the role of the FSPO. Instead, a decision made by the FSPO will not be deemed to be a serious and significant error if sufficient evidence put before the FSPO could reasonably lead to the decision made by it. In Lloyds, conflicting reports as to the cause of the damage to the roof was submitted by numerous engineers, therefore it was considered reasonable for the FSPO to arrive at its conclusion on foot of the evidence provided.

On that basis, the Court will not intervene to set aside decisions where it disagrees with the determination of the FSPO so long as no serious and significant error has been made in reaching this decision.

  1. The jurisdiction of the FSPO

Lloyds is an instructive case in setting out the jurisdiction of the FSPO. The purpose of the FSPO is to afford an “informal, expeditious and inexpensive” way to resolve complaints made against financial services and pension providers, without the parties having to resort to the Courts in pursuit of a resolution.

It is set out in Molyneaux v Financial Services and Pensions Ombudsman [2021] IEHC 668, the FSPO enjoys a “hybrid jurisdiction” which extends to both the adjudication of alleged acts of maladministration and to make determinations in respect of disputes of fact or law. The FSPO has jurisdiction over cases centred around the assertion of legal rights, but cannot make determinations in cases where a financial services provider has acted unlawfully.

  1. The lawfulness of compensation

In the Lloyds judgment, Judge Phelan outlined that the FSPO enjoys a wide discretion regarding compensation up to a higher limit of €250,000. The €20,000 compensation payable to the Claimants in Lloyds was held to be reasonable on the basis that the delays in repairing the roof issue interfered with the Claimants occupation and enjoyment of the home and therefore the personal rights of them as homeowners. It was noted that the FSPO cannot and should not compensate for ‘stress’ but instead can justify making an award based on inconvenience.

Key Learnings

  • The FSPO aims to provide an impartial and accessible complaints handling service that seeks to resolve issues between financial services and pension providers and customers without the need to commence legal proceedings, which is an expensive and time-consuming process;
  • The case of Lloyds reiterates that the FSPO is an independent service which has jurisdiction to handle a range of complaints with interference from the Court only where sufficiently serious and significant errors are made;
  • Financial services and pension providers, therefore, have a significant hurdle to overcome in order to sustain a challenge to the decisions of the FSPO and will therefore likely bring fewer challenges before the Courts in the future;
  • The boundaries created by Lloyds regarding the required criteria to be established by financial and pension providers in order to succeed in a legal challenge to decisions of the FSPO therefore now provide customers with a welcome sense of closure and finality in decisions made in their favour when dealing with the FSPO.
If you would like any further information and legal advice, please contact Deirdre Farrell at, telephone 01 213 5940 or your usual contact at Amorys.

Builders, Developers and Landowners: Residential Zoned Land Tax – What You Need to Know

Residential Zoned Land Tax – What You Need to Know

Residential Zoned Land Tax (“RZLT”) was introduced by way of the Finance Act 2021 and will be payable from 2024. The RZLT is an annual tax calculated at 3% of the market value of land which is suitable for residential development and is serviced. The aim of the RZLT is to mobilise lands on which housing can be developed in order to increase the much-needed housing supply by incentivising property developers to develop the land.

The first payments under RZLT will be due on or before 23 May 2024, and annually on 23 May thereafter. Payment will be made to the Revenue Commissioners who are responsible for the management of the tax. Given the time period between introduction of the tax and the first payment due date, any site upon which development has commenced before 1 February 2024 will be exempt from payment of RZLT.

Relevant Lands

In order to fall within the scope for the RZLT, the lands must, on 1 January 2022 (and 1 February after 2024), be;

  1. Suitable for residential development;
  2. Serviced, including public infrastructure for which there is sufficient capacity for housing to be developed;
  3. Included on the Local Authority’s map (see below), which will be updated annually; and
  4. Not included in the exclusions (listed below).


There are certain types of land which are excluded from the scope of RZLT as follows;

  1. Existing residential property including gardens/yards under 0.4047 hectares (1 acre). Where lands over 0.4047 hectares (1 acre) otherwise fall in-scope, owners must register for RZLT but are NOT liable to pay the tax;
  2. Land which is zoned for residential use but is permitted for use as a business to serve people in the locality;
  3. Land which is zoned for a mix of uses including residential where the land is integral to the operation of a business on or beside it;
  4. Derelict sites to which the Derelict Sites Levy applies;
  5. Land which is unsuitable for development for reason of contamination, presence of archaeological artifacts etc.

Local Authority Maps

The Local Authorities will issue maps on an annual basis which will indicate the lands within that Local Authority’s area which will be within scope for RZLT. This map will be published on the website of each of Local Authority every year. Draft maps will first be published in November 2022, supplemental maps in May 2023 and a final map in December 2023. Following the initial mapping process, maps will be updated annually and be available by 31 January each year.

Builders, developers and landowners will have a right of appeal as to their inclusion in the in-scope lands on the maps published.

Our Clients

We have identified particular scenarios in which builders, property developers and landowners including our own clients may find themselves following the introduction of the RZLT;

  1. Builders, developers and landowners intending to retain lands subject to RZLT

If included as in scope for RZLT, a valuation of the lands must be carried out. RZLT is a self-assessed tax and therefore the owner/developer is responsible for valuing the lands accurately. A professional valuer may be engaged for such valuation but it is not a requirement. The property value must be ascertained for 1 February 2024 and can be used for the following three years. The valuation must then be revised every three years. 3% of the value will be the amount of tax payable. Documentation/records must be kept should Revenue seek to enquire further about the valuation provided.

Returns and Payment of Liability
Where lands fall in-scope of RZLT, the owner/developer of the relevant site is obliged to file returns and make payment. Returns and payment of RZLT will be due on 23 May annually for those landowners/developers who are in-scope on 1 February of that same year.

Penalties will apply to late payments and will be charged at 8% per annum. Surcharges for late filings may also apply at a rate of up to 30% of the liability for the year. In addition, undervaluing the lands can result in surcharges of up to 30% of the value of the lands. If sums remain unpaid, a charge will be placed over the lands by the Revenue Commissioners thus restricting a sale of the lands.

Where there is more than one owner of the site (e.g., the property is held jointly or in a property development partnership), only one return will be required per site which can be completed by the designated person. If there is no designated person, Revenue will appoint one.

  1. Builders, developers and landowners of lands subject to RZLT intending to sell or transfer ownership

Landowners or developers who wish to sell their land have certain obligations in respect of RZLT. These obligations also apply where ownership is transferring by way of gift, inheritance or long lease (35 years or more).

The landowner/developer, prior to the sale of the lands, must;

  • File a RZLT return;
  • Provide certain details of the site, the current landowner and purchaser;
  • Pay all outstanding tax and interest due. The seller must also pay or seek to make and agree with Revenue the amount of any penalties outstanding;
  • Submit all returns prior to completion of the sale;

Once these matters have been addressed, Revenue will confirm the tax position relative to the site at the date of the sale and will state whether there is a nil balance payable or if unpaid taxes are outstanding.

Outstanding liabilities will become a charge on the property if not properly dealt with, resulting in the inability to complete the sale.

  1. Builders, developers and landowners developing their property (Residential and Mixed-Use)

Where residential development commences on a site on which RZLT is payable, the payment of the tax may be deferred. In order to defer RZLT for the duration of the development; i) planning permission must be granted, ii) the site must be used wholly or partially for residential development and iii) a Commencement Notice must be lodged with the local authority. RZLT returns must continue to be filed throughout the period. A deferral will remain in place until a certificate of compliance on completion in respect of the development has been issued.

Where only a portion of a site which is liable for RZLT meets the criteria for deferral, RZLT remains payable on the other portion of the site. The site essentially becomes two relevant sites: one which meets the deferral requirements and one for which RZLT remains chargeable.

If the relevant site is zoned for a mix of uses, RZLT is only liable on the portion of the lands that are suitable for residential development. This will be deemed the ”qualifying part of the site” and must be valued for the purpose of RZLT.

  1. Out-of-Scope Landowners/Developers

Lands that are deemed out of scope as per the criteria set out above are subject to RZLT. However, for existing residential properties which are zoned residential on the local authority map and which comprise an area in excess of 0.4047 hectares (1 acre) in size, the landowner/developer must file a return in respect of RZLT and provide certain information in respect of the property.

If a property comes within scope, tax will be payable three years after it comes within scope.

If you would like any further information and legal in relation to residential or commercial property development then please contact Deirdre Farrell at, telephone 01 213 5940 or your usual contact at Amorys.

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