Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I will deal with amendment No. 133. I appreciate the sentiment behind Deputy Healy’s amendment but I am afraid that I cannot accept a blanket ban, essentially, on all court orders removing people from a property. I do not accept that such a provision is in place in Northern Ireland, the idea that nobody can be removed from a premises in Northern Ireland. I do not think that is the case. However, the amendment tabled by Deputy Healy does not take account of the fact that the Government has and will be putting in place a number of measures to assist homeowners to remain in their homes where possible. In particular, I draw the Deputy’s attention to the new, innovative mortgage arrears resolution service - Abhaile - which the Tánaiste and Minister for Justice and Equality and the Minister for Social Protection officially launched recently. The new nationwide service marks a departure in State assistance by providing free, independent expert advice and support on financial and legal issues.

In addition, action 4 of the rental strategy, published today, commits to engagement with the banking sector to encourage banks and landlords in arrears to agree sustainable solutions which may include retaining the use of the property for rental uses – for example under HAP or rent supplement. The key is to prevent these cases from ever reaching the courts where possible. Furthermore, action 5 of the strategy commits to the establishment of a working group made up of the key public sector bodies involved, including my own Department, the Departments of Justice and Equality, Finance and Jobs, Enterprise and Innovation. This group will examine the scope for the obligations of landlords to transfer to receivers and will report by the end of the first quarter of next year. We are looking to revamp the mortgage to rent scheme to try to give people an option to effectively move from being in real difficulty from a mortgage arrears perspective to being able to rent the properties that they have been living in from local authorities or approved housing bodies. That scheme has not been the success that it could or should have been so we are looking to redesign it.

Amendments Nos. 145, 146, 159, 174 and 175 propose to amend Part 4 of the Residential Tenancies Act 2004 to provide for tenancies of indefinite duration. There are some very significant provisions included in this Bill in relation to security of tenure; both the Tryellstown amendment and the repeal of section 42 make important changes in regard to security of tenure for tenants. However, this Bill includes only the early action measures set out in Rebuilding Ireland.

The Bill does not resolve all of the problems in the rented sector and it was not intended that it would do so. To legislate for the problems in the rented sector in advance of having a strategic plan for that sector risks exacerbating the very problems that the Government is trying to solve. That is why the action plan committed to the publication of a strategy, by the end of the year, which was launched today. I presume some members have read the strategy already. It is relatively short. There is a commitment to move towards tenancies of indefinite duration but we are not making that jump just now. My judgment is that the so-called accidental landlords and those who invested in rental property for capital appreciation are essentially stuck with properties. We do not want to make decisions that spook landlords and result in people getting out of the market altogether. We have taken a step in the right direction by proposing going from four to six years with an intention that we are trying to create much longer tenancies. We also have a proposal for unfurnished properties under ten year tenancies. Again, we are looking for longer term tenancies, much more certainty and a clearer commitment from both landlords and tenants for longer term rental relationships. This is movement in the direction that Deputy Ó Broin and I want in terms of moving towards tenancies of indefinite duration, with reasonable break clauses that are available to both tenants and landlord. We will bring forward an amendment to that effect on Report Stage so we will have an opportunity to discuss it again.

Amendment No. 147 provides that the four year period would be changed to a “period agreed between the landlord and tenant”. I do not believe this is advisable. The four year period is a minimum right for all tenants at present and I intend to increase this to six years. By allowing the period to be determined by agreement between the landlord and the tenant runs the risk that the tenant, in a weaker bargaining position, would lose the right to remain for four or six years. Therefore, I do not propose to accept amendment No. 147.

Amendments Nos. 148 to 155, inclusive, all relate to the termination of a tenancy on the ground that the landlord wishes to sell the dwelling.Amendments Nos. 148, 150, 151 and 153 all prohibit a landlord from terminating a tenancy on the ground of sale where the dwelling concerned is an investment property, a buy-to-let or a section 23 dwelling. Amendments Nos. 149, 152 and 155 prohibit terminating a tenancy on theground of sale in all cases and amendment No. 163 reduces the number of dwellings that the Tyrrelstown amendment would apply to from five to one dwelling, which would have a similar effect.

The Bill includes two significant provisions in regard to security of tenure. Section 30 provides that a landlord may not terminate a tenancy on the grounds that he or she wishes to sell a dwelling in circumstances where he or she is selling more than five dwellings, at the same time, in the same development. This amendment arises from a commitment in the strategy Rebuilding Ireland - Action Plan for Housing and Homelessness to deal with terminations in very specific circumstances, that is, where large numbers of tenants in a single development are served with termination notices at the same time. The original figure was 20 dwellings and this was amended to five on Report Stage in the Seanad. On foot of legal advice, I will bring an amendment on Report Stage to increase this number to ten dwellings and we will debate that then. In drafting the Tyrrelstown amendment, the Department was very aware that restricting the use of the grounds of sale to terminate a tenancy could be regarded as an interference with constitutionally protected property rights. Therefore, the amendment was drafted so as to ensure that this interference was both proportionate and justified. I believe that taken together with the measures in the strategy – including the increase in the length of the Part 4 tenancy from four to six years and the provisions to provide for rent stability – that the Government has provided a proportionate and balanced improvement in security of tenure for tenants and I do not propose to accept these amendments.

For similar reasons, I do not propose to accept that part of amendment No. 154 which also prohibits a landlord from terminating a tenancy on the ground that a dwelling is unsuitable having regard to overcrowding and that the dwelling is required for a family member.

Amendment No. 156 proposes that where a landlord terminates a tenancy because the dwelling is required by the landlord or a member of the landlord's family, the landlord will pay six months' rent as compensation to the tenant. The payment of six months' rent as compensation is neither proportionate nor balanced and I do not propose to accept this amendment.

A tenant acquires the protection of a Part 4 tenancy after six months' continuous occupation. Amendment No. 158 provides that the protection of a Part 4 tenancy should arise after two months. The purpose of the six-month period was to provide for a type of probationary tenancy whereby the landlord and tenant could ensure they were ready to enter into a long-term four-year tenancy. The six-month period is reasonable and provides for a balance in the Act and I do not propose to accept this amendment.

Amendments Nos. 160 to 169, inclusive, all relate to the Tyrrelstown amendment. I note the section is opposed and I have addressed this already.

Amendments Nos. 160 to 162, inclusive, 164 to 166, inclusive, 168 and 169 relate to the exemptions to the Tyrrelstown amendment. As I discussed earlier, the Department was aware that restricting the use of the ground of sale to terminate a tenancy could be regarded as an interference with constitutionally protected property rights. Therefore, the exemption to the amendment was drafted to ensure this interference was both proportionate and justified, while also taking account of cases of genuine hardship. These amendments were strengthened by Opposition amendments on Report Stage in the Seanad. I do not intend to undo these changes other than to provide for a consequential amendment to section 29 on Report Stage. The amendment, as drafted, addresses the concerns raised in the Seanad and I do not propose to go further.

Amendment No. 167 proposes to increase the figure of 20% to 40% in subsection 30(3)(a). High levels of landlord indebtedness are leading in many cases to insolvency and repossession. A breakdown of buy-to-let accounts for June 2016 found that more than 20% of these accounts were in arrears and that, of these accounts, more than 10% were in arrears for more than two years. The figure of 20% is proportionate and balanced. Not alone must there be a loss of 20% but the landlord must also be able to show hardship or that the effect of the provision is unduly onerous. For this reason, I will not accept the amendment.

Amendment No. 176 provides that a landlord may not terminate a tenancy for non-payment of rent unless the landlord has engaged in a rent arrears resolution process to be established by ministerial order. When terminating a tenancy for non-payment of rent, a landlord must first serve a 14-day warning letter to the tenant. If the tenant does not comply with this letter, the landlord may only then serve a 28-day notice of termination. Where the tenant believes that the notice is invalid, he or she may take a case to the Residential Tenancies Board and a termination of the tenancy may not be effected during that time. It is clear that while tenants have rights, they also have obligations and there is an obligation under the Act on a tenant to pay the rent. The protections provided for in the Act where a tenancy is terminated for non-payment of rent are fair and appropriate.

Amendment No. 177 proposes that the Minister report within three months on measures needed to ensure security of tenure and protections for sub-letters and licensees. The protections for sub-letters are set out in the Schedule to the 2004 Act and are detailed and robust. The Act does not apply to licensees.

In publishing the Rebuilding Ireland action plan and now in the rental strategy under pillar 4 of the action plan, the Government has set out a practical and readily implementable set of actions to create a functioning and sustainable housing system. Taken together and vigorously implemented, the proposals in the action plan and, more specifically, the strategy will deliver a strong, viable and attractive rental sector that delivers affordable and high quality accommodation. I hope I did justice to the officials who wrote these notes by reading them out accurately.