Ms Catherine Comer:

I thank the Chairman and members for the opportunity to discuss the general scheme of the residential tenancies (right to purchase) Bill. I am accompanied by my colleague Liam Smyth. We both work in the rental market policy section of the Department of Housing, Local Government and Heritage.

Before outlining the main provisions of the Bill, I will provide some background and context to the proposed Bill. On 7 March 2023 the Government agreed that the Minister for Housing, Local Government and Heritage would develop a legislative-based first right of refusal. The Department developed this general scheme in consultation with the Office of the Attorney General. On 24 October the Government approved the scheme as a basis for priority legal drafting, which is now under way. The key provision is head 7, which requires a landlord who wishes to sell their rented dwelling to give to their tenant an invitation to bid - that is, the first right of refusal - and a further invitation to bid under certain conditions to purchase the rented home. Heads 5, 6, 8 and 25 also relate to the first right of refusal. The other heads in the Bill provide technical amendments to the Residential Tenancies Act to enhance its operation, the outcomes thereunder and the operational efficiencies of the Residential Tenancies Board, RTB.

I will provide a brief overview on how the first right of refusal is intended to operate. I assure the committee and the housing and rental sectors that the intention is to minimise interference in the bidding and conveyancing processes in the context of the sale of rental homes. It might be helpful to chronologically illustrate the sequence of events from the serving of the notice of termination to the closing of a sale in compliance with the requirements of the first right of refusal.

On day 1, the landlord serves a notice of termination on an eligible Part 4 tenant - in other words, they must be a tenant in situfor at least six months - in respect of an eligible rented dwelling. On that day, she or he is also required to give the tenant an invitation to bid. Both documents must be simultaneously copied to the RTB on day 1. If one or both documents are not so copied, the notice of termination can be invalidated by the RTB in a dispute resolution. The minimum periods to be given by a landlord to terminate a Part 4 tenancy are set out in table 1 to section 66 of the Residential Tenancies Act. They range from 152 to 224 days. The longer the tenancy has existed, the longer the minimum notice period to be given.

From day 1 to day 90, a tenant can make any number of bids on the property, which may or may not be accepted by the landlord. If the tenant cannot bid due to his or her financial status and is deemed at risk of homelessness by his or her local authority, a local authority, approved housing body or the Housing Agency can bid to buy the property so that the tenant can remainin situ, if appropriate. The interaction between the tenant and the local authority, etc., in this regard will operate administratively under the local authority tenant in situscheme or under the cost rental tenantin situ scheme, which is currently administered by the Housing Agency, as appropriate to their means and social housing support eligibility. An enforceable agreement to transfer the dwelling - in other words, a sale - can only be entered by the landlord during this initial 90-day period with the tenant, a local authority, approved housing body or the Housing Agency, where the latter bodies are acting on the basis of keeping the tenant in the property. During this time, there is no prohibition on the landlord placing the rented dwelling on the open market, nor on bids being made on the dwelling by any party. The tenant could be asked by the landlord to facilitate viewings, etc.

From day 91 onwards, if an enforceable agreement to transfer has not been entered by the landlord during the initial 90-day period with the tenant, a local authority, approved housing body or the Housing Agency, the landlord can enter an enforceable agreement to transfer with a third party, subject to the new requirements. If the landlord receives and is willing to accept a bid on or after day 91 from a third party on the open market which is lower or equal to the highest bid made by the tenant during the initial 90-day period, he or she is obliged to give the tenant a further invitation to bid at a specified value that matches the bid from the third party.

The landlord must afford ten days to the tenant to match the third party bid. If the tenant does not make this further bid during the ten-day period, an enforceable agreement to transfer can be entered by the landlord with the third party.

These new provisions are likely to prompt the landlord to put the rented property on the open market at an earlier juncture, with any consequential bidding that occurs on the open market during the initial 90-day period, followed by the serving of the notice of termination, informing the landlord and the tenant as to the market value of the rental property in question.

I hope this opening statement has been of help to the committee. Mr. Smyth and I are happy to take any questions members may have.