Oireachtas Joint and Select Committees

Tuesday, 15 October 2019

Joint Oireachtas Committee on Housing, Planning and Local Government

Residential Tenancies Board: Chairperson Designate

Mr. Tom Dunne:

I will comment on some of those points. Very briefly, I agree with the Deputy on the need for the Residential Tenancies Board to support landlords. As has been said, many landlords are incidental or accidental landlords and are not as aware as they might be of the risks they undertake when they become landlords or of the procedures and policies. That points to one original intention of the Residential Tenancies Act 2004. It had to be complex. There were 202 sections in that Act. The Residential Tenancies Board started out with the intention of ensuring that the experience of landlords would not reflect the complexity of the Act. There was enough information on the website so that if a landlord looked at it, he or she could find out how he or she should behave as a landlord. We intended to support landlords in that way. We must continue with that work.

The Deputy is probably right about what has happened in the marketplace. Many of those incidental and accidental landlords are finding the going a bit tough. They appreciate the risks associated with residential investment. They live in fear of a boiler breaking down, a roof coming off or some other major event which would require them to fund repairs. They do not have the resources to do that. As such, they are a very vulnerable class of people. That is one of the motives for getting out. That points to a wider debate which is perhaps not for this committee. This committee can look at the rental sector, but if I may say so there is a need for the State to look at housing in a very broad way. I would advocate the State sitting down to examine the housing system and how it interacts with the social welfare system, the planning system and all the other systems. This could be done in a somewhat similar way to what was done for the health service. We might get a rental sector that works better out of that.

As Deputy Ó Broin pointed out, one of the problems with the current legislation is that because there have been several amendments it is getting very complex. Many landlords see the complexity, do not know how to handle themselves and decide they need a solicitor. That in itself is a deterrent against getting involved.

The issue security of tenure occupied more of the Commission on the Private Rented Sector's time than perhaps any other issue. If the committee members are looking for pointers on that, the back of the original commission report contains some very good discussions of the reasons for the mechanism that was put into the legislation.

There are some good discussions in the back of the original commission report on why the mechanism was put into the legislation. It is very difficult to bring in a measure of security of tenure. If one rents from a professional landlord, a REIT or a company one has stronger security of tenure than if one rents from a private landlord. A REIT cannot recover possession on the basis of wanting a family member to occupy the accommodation, nor will it recover possession on the basis of wanting to refurbish because the properties have probably been kept at a higher level and it will be longer before they need to be refurbished. Property investment companies put money in for the long term and are generally not going to sell a property. Indeed, an amendment to the rules stipulates that if such a body wants to sell a block of flats, it has to do so in phases. A tenant gets better security of tenure when they rent from an institution than if they rent from a private landlord.

If we move from the present situation where there are a lot of accidental landlords to one where there are more professional landlords, that will help security of tenure. Professional landlords anywhere in the world will say they want to keep tenants because changing tenants costs money and it is a disincentive for them for tenants to be moving all the time. It is very hard to give security of tenure when market rents are volatile because, as soon as rents exceed the controlled levels, there is pressure to get tenants out and this can be nasty, as we have seen in other countries. It is a very complex area and the safeguards put into legislation represent a delicate balance. If we brought in a measure of security of tenure that did not allow a person to retrieve his or her property for their own use or that of their family, it would deter people from bringing their properties to the marketplace, thus reducing supply. If a person goes to work abroad and fears they will not get possession of the property again, they will not rent the house. It could have the effect of reducing supply and this needs to be thought about in great detail before we move from where we are at the moment.

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