Jan O'Sullivan (Limerick City, Labour) | Oireachtas source

I thank the Chair and members of the committee for inviting me to make a presentation on detailed consideration and scrutiny of my Bill, whose purpose is to rebalance the landlord-tenant relationship by providing for greater security of tenure and rent certainty for tenants. I am aware that Deputy Barry, the Minister for Housing, Planning and Local Government, and a number of other Opposition Deputies have introduced Bills relating to this area, largely because so many individuals and families are insecure and in fear of becoming homeless because of insecurity in the private rented sector. My Bill covers a wide range of measures that are urgent and necessary to provide transparency, security from eviction and protection from unfair rents and unfair deposits.

In my written submission to the committee, I provided some background, which is important in the context of arguments which are often made about certain measures being unconstitutional because of the balance in the Constitution between property rights and the public interest. I refer to the 2004 report of the all-party Oireachtas committee on the Constitution, which concluded that the power of the Oireachtas to impose restrictions on property rights in the public interest was constitutionally well-established. I was a member of the committee, which heard much eminent legal advice from constitutional lawyers and examined a number of precedents and cases. The report recommended that the Kenny report could be implemented and, generally, that the Constitution should not be used as a shelter or excuse for inaction on the rights of the public versus the rights of private property. I also refer to a document that the Oireachtas Library and Research Service provided, entitled Private Rental Sector: an International Comparative Study, which examines the impact of the European Convention on Human Rights, its various provisions, and how decisions on these issues need to be in harmony with European Court judgments.

Recent decisions of the European Court of Human Rights affirm that interference with property rights is authorised if it is in accordance with the law, is necessary in a democratic society and is proportionate to the aim sought.

The document also goes on to outline the regulations of the private rented sector in various countries across Europe. That is very useful because there is a great deal more security for tenants in most of our European neighbouring states. For example, in Germany the private rental sector comprises 41% of the housing stock and renting is considered a secure and long-term option. Germany has strong contract protection and rent control. There is a database of all the rents in the local area, tracking all rents agreed in the preceding four years. Landlords determine a rent for their property by referencing - the referenced rent concept - dwellings of comparable size, quality and location. Rent may not exceed the reference rent in the locality by more than 10%.

Interestingly, and I am aware the landlords' representatives will be here later, it points out that the law benefits landlords as well as tenants. There is an argument for rights for landlords as well and recognising the costs to them. In Germany there are depreciation allowances, mortgage interest tax relief, deduction of maintenance costs and the possibility to deduct losses from the income tax base. There is, therefore, a balance in other European countries. The proposals in our Bill are far from being abnormal from an international comparative perspective.

I will briefly go through the provisions of the Bill. Some of them overlap with Deputy Barry's Bill and others. In section 1 we seek to commence the provisions of the Residential Tenancies Acts that have not been commenced, particularly with regard to a deposit protection scheme. That would come into operation within six months. That has been provided for already but has not been enacted. Second, our Bill introduces a new definition of "landlord". That would deal with the issue of receivers, something that has been raised by many people here. Threshold and other bodies have said that the extent, if any, to which a receiver is bound by the tenancy agreement is uncertain and that tenants' rights in respect of adequate notice, upkeep of the property, deposit return and so forth may be ignored. We want the definition of a landlord to include a receiver. Third, we provide for a definition of "deposit". We say the deposit must not in any case exceed one month's rent under the tenancy. We have heard reports of people asking for two and three months' rent, basically to deter people who cannot afford to have that amount of money up front.

Sections 5 and 6 deal with rent control. Again, other parties have made the same proposal, that increases which are currently limited to 4% in rent pressure zones should be linked to the annual rate of inflation as measured by the all items consumer price index published by the Central Statistics Office, CSO. We also propose that for a three-year period, the entire country should be designated as a rent pressure zone. As I am from Limerick city, members will understand why I feel strongly about that issue.

The next set of measures deals with security of tenure. Most of them are not original. There is a consensus, which includes many parties and members, as to the need for most if not all of these proposals. Some of them are included in Deputy Barry's Bill.

In section 7 we propose that the Part 4 tenancy effectively will become a tenancy of indefinite duration. We also propose to delete paragraph 3 in the table to section 34, which permits a landlord to terminate a tenancy on the grounds of an intention to sell the property within three months. We are saying that sale should not be a ground for giving a notice of termination of tenancy to a tenant. The National Economic and Social Council, NESC, recommendation in this regard states:

One view is that this could reduce the price that those selling rental properties could achieve, compared to the price with vacant procession. On the other hand, the more the Irish rental system is driven by long-term yield, rather than changing asset prices, the higher the value purchasers will put on properties with an existing, secure rental stream.

Obviously, there is insecurity for the tenant. We argue this would yield more long-term security for the landlord as well.

We also deal with refurbishment to renovate the property. I note the Minister has a definition in that regard in his Bill. However, our definition says that termination is permissible on this ground only if no reasonable measures can be taken to maintain the dwelling fit for human habitation during the refurbishment or renovation. A person who has a private home generally does not move out of the house if he or she is doing significant renovations, so we do not believe tenants should have to move out either.

Finally in the area of security of tenure, we narrow the definition of the family member moving into the property. Currently, it is very broad and includes a sister, nephew, niece, parent-in-law and so forth. We shorten the list to include just a spouse or civil partner or a child, including a stepchild, foster child or adopted child, of the landlord.

Section 9 provides for a rent register. It would be a dwelling specific rent register, which is argued for by Threshold. However, it would protect the identity of the landlord and of the tenant.

That is an outline of what is in the Bill. The Bill is comprehensive because tenants face a number of difficulties and insecurities. I believe everybody here agrees that we need legislative reform and this is our contribution. I am happy to answer any questions from members of the committee.