Paudie Coffey (Waterford, Fine Gael) | Oireachtas source

I appreciate that the number of amendments is substantial and that it takes substantial contributions. In return, I will try to give a comprehensive reply to each of the Opposition amendments that are proposed to Seanad amendment No. 47. The first element of amendment No. 1 to Seanad amendment No. 47, tabled by Deputy Dessie Ellis, proposes that a review of rent may not occur more frequently than once in each period of 24 months. This already has been provided for in Seanad amendment No. 47. The second element of the Deputy's amendment would remove the sunset clause provided for in Seanad amendment No. 47. The sunset clause provides that the new provision will cease to have effect on the fourth anniversary of the introduction of this provision. The removal of the sunset clause also is the subject of Opposition amendments Nos. 3, 4 and 11 to Seanad amendment No. 47. Amendment No. 5, tabled by Deputy Clare Daly, provides for a review of the provision in four years time. The inclusion of a sunset clause sends a clear signal that the 24-month review provision is a temporary measure that will expire in four years' time. An amendment to remove this provision or to introduce the notion of a review in four years' time would send a negative signal to the market and would have an adverse impact on investment decisions by precipitating uncertainty for investors. The effect of this would be to have a negative impact on supply, thereby further increasing rents and significantly diluting the effectiveness of this provision. Therefore, I do not propose to accept these amendments.

Seanad amendment No. 47 provides that rent reviews commenced prior to enactment will not be affected by the new provisions. In general, the intended effect of Opposition amendments Nos. 8 to 10, inclusive, to Seanad amendment No. 47, tabled by Deputy Clare Daly, and Opposition amendment No. 7 to Seanad amendment No. 47, tabled by Deputies Paul Murphy, Ruth Coppinger and Joe Higgins, is to provide that the new provisions regarding a 24-month period between reviews will apply to rent reviews commenced prior to the enactment of the Bill. A landlord who has legitimately commenced a review in accordance with the 2004 Act prior to the enactment of the Bill before the House is entitled to complete that statutory review process in accordance with the law as it currently stands. The retrospective application of the new provisions to reviews that already have been commenced or completed would interfere in the substantive vested right of the landlord to continue the statutory process. For this reason and on foot of legal advice to that effect, I cannot accept these amendments.

I refer to the group of Opposition amendments to Seanad amendment No. 47 that seek to link rent increases to the consumer price index and rate of inflation. Amendment No. 6 in the name of Deputy Clare Daly and amendment No. 3 in the names of Deputies Paul Murphy, Ruth Coppinger and Joe Higgins generally seek to link rent increases to the rate of inflation. The proposals to introduce a limit or control on the amount of the review by reference to the annual rate of inflation would break the link with the fundamental mechanism for determining rent under the Act. The Government decided on an approach that would bring stability and predictability for the tenant but without changing the fundamental mechanism for the setting and reviewing of rent as laid down in the 2004 Act.

The Government is mindful of the need not only to protect tenants from the circumstances that currently exist, but critically also not to deter investment in the rental market. I believe Government amendment No. 47 achieves that balance. The longer period of predictable rent means that tenants who have had a review in the past 12 months will now not face a review until 2017. Based on average rents and the trends of increase, tenants will save between €470 and €1,400 in a full year depending on the location of the rented property. Therefore, I cannot accept the amendments.

Opposition amendment No. 2to Government amendment No. 47 and Opposition amendments Nos. 2 to 4, inclusive, to Government amendment No. 48 propose providing new ways to define rent. Under the current law, landlords may not charge more than the market rent for a dwelling under the Residential Tenancies Act and the Government amendments reinforce this provision by obliging landlords to present information that supports the proposed new rent. These provisions, collectively, will help to stamp out instances of landlords taking advantage of tenants, who may not be fully aware of their rights under the Act, by attempting to increase rents by a multiple of the current market rate. I do not propose to accept the deletion of subsection (2A), paragraphs (c) and (d).

As for the new definition of market rent, and the rent not being in breach of the proposed new subsection (7), I have outlined that the Government has decided not to alter the mechanism for the setting and reviewing of rent as laid down in the 2004 Act and has decided on an approach that balances the needs of tenants, and landlords and investors alike. Therefore, I am not accepting these amendments.

The Opposition has proposed an amendment to provide that notice of new rent will be 180 days. Government amendment No. 48 provides that tenants will now be given 90 days notice of a new rent rather than 28 days. As I mentioned, this amendment is being introduced on foot of a recommendation in the DKM report entitled, Rent Stability in the Private Rented Sector. The proposed Opposition amendment No. 1 seeks to compel a landlord to give six months notice of a new rent. I believe a 90-day notice period is a balanced and proportionate measure and as such I do not accept this amendment.

Amendment No. 5 to Government amendment No. 48 seeks to apply the new 90-day notice period to notices of new rent that have been already served on tenants by landlords. A landlord, who has legitimately issued a notice of new rent in accordance with the 2004 Act prior to the enactment of the Bill before the House, is fully in compliance with the law as it currently stands. The application of this legislation to that process would retrospectively affect the legal actions of an individual under the law as it currently stands. For that reason and on foot of legal advice, I cannot accept the amendment seeking to provide that notices of new rent issued in accordance with the law before the enactment of the Bill would be rendered null and void.

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