Sales under previous Purchase Acts were carried out by holdings. A landlord could agree with one or more of his tenants to sell them their farms, and if the Land Commission, after examination, found that the particular holding was security for the advance asked for by the tenant, such advance was made irrespective of any other sales on the estate. The Act of 1903 introduced the system of sales by “Estates.” A landlord, to obtain the benefit of the Act, is obliged to sell his entire estate, or such portion of it as the Land Commission considers fit to be regarded as a separate estate for the purposes of the Act. The Commissioners, before defining any lands to be an estate, have to consider all the circumstances of the district and of the property. Once the estate is “declared,” the holdings comprised in it are dealt with in accordance with the provisions of the Act. Those of them that are subject to judicial [pg 191] rents and are within certain “zones” laid down in the Act are freed from the liability to inspection as to security or equity of price. The Act presumes that a holding subject to a judicial rent which is sold at a price the annuity on which is from 10 to 30 per cent. less than the judicial rent, where that rent was fixed since the passing of the Act of 1896, or from 20 to 40 per cent. less where the rent was fixed before that date, is good security for the payment of the annuity, and that the agreed price is equitable. Holdings not subject to the “zone” provisions are liable in inspection as to security and as to equity of price.
The Act also introduced the system of sales of estates to the Commissioners under Section 6 (the direct sales to tenants by landlords being under Section 1). When a landlord is willing to sell in this manner, the Commissioners, after due enquiry as to the price that should be paid by each tenant for his holding, may offer to purchase the estate for the purpose of re-selling to the occupiers, provided that at least three-fourths of the tenants agree to purchase their holdings from the Commissioners at the estimated price.
To encourage sales of estates, and to enable owners to get such a sum as would give them their net income out of the purchase money, when reinvested in suitable securities, the Act provided that a bonus of 12 per cent. on the purchase money should be paid to the owner on the completion of the sale. At the same time the tenant was enabled to borrow the purchase money of his holding on easier terms. As we have seen, under the former Purchase Acts, the annuity rate was fixed at 4 per cent., of which 2-¾ per cent. was for interest and 1-¼ per cent. for a sinking fund, the accumulation of which, with compound interest, would repay the sum advanced in about forty-three years. Under the Act of 1903 the [pg 192] annuity rate which the tenant had to repay was reduced to 3-¼ per cent., of which 2-¾ per cent. is for interest and a ½ per cent. for sinking fund. This reduction in the sinking fund lengthens the period over which the repayment will extend to sixty-eight and a half years, and, of course, renders it practically impossible to continue the system of giving decadal reductions in the annuities. The decadal reductions, which were abolished by the Act of 1903, worked out at about 15 per cent. reduction in the annuity every ten years.
The Act of 1903 also enabled owners to sell their demesnes and untenanted lands to the Commissioners, and to repurchase them, or so much of them as the Commissioners approved, with the aid of advances made to them in the same manner and under the same conditions as to tenant purchasers.
The Act also gave considerable powers to the Commissioners of dealing with poor and uneconomic holdings. It enabled (Section 2) parcels of untenanted lands on the sale of an estate to be sold to the following persons:
(a) A person being the tenant of a holding on the estate;
(b) A person being the son of a tenant of a holding on the estate;
(c) A person being the tenant or proprietor of a holding not exceeding five pounds in rateable value, situate in the neighbourhood of the estate; and,
(d) A person who within twenty-five years before the passing of this Act was the tenant of a holding to which the Land Law Acts apply, and who is not at the date of the purchase the tenant or proprietor of that holding: Provided that in the case of the death of a person to whom [pg 193] an advance under this paragraph might otherwise have been made, the advance may be made to a person nominated by the Land Commission as the personal representative of the deceased person.
This last class (d) was intended to provide for the reinstatement of tenants evicted from their holdings within the prescribed time.