Barry Cowen (Offaly, Fianna Fail) | Oireachtas source

While many might not like to hear that, it is the reality. While it might be a sad truth, it is nonetheless the truth. A blunt approach such as this, which is bound to fail from the start, is a recipe for further chaos in the rental sector. While doing nothing to improve security for renters, this Bill would nevertheless create massive uncertainty for investors and for existing landlords. I know that the proposers of this Bill may not believe in markets and are unlikely to appreciate the negative consequences of creating such needless uncertainty but such policies can and do have real consequences.

Wilfully creating upheaval in the sector simply for the sake of satisfying an ideological point would not be good for existing or new renters. Undoubtedly, the passage of the Bill would lead to a spike in rents and would very likely reduce supply for hard-pressed renters. All of this would happen without any positive pay-off in terms of increasing security for existing tenants.

If we want to tackle the rental crisis and, in particular, the lack of tenant security in the sector, it has to be done in a meaningful way that is not simply about undertaking an ideological crusade. There is no question that action needs to be taken in this area but measures have to be well considered and legally and constitutionally sound. Otherwise, one is creating chaos in the rental sector that will harm renters the most.

Before Christmas, Fianna Fáil submitted an amendment to the Government's so-called "Tyrellstown amendment", which has been mentioned by previous speakers. It sought to reduce the number of units in a single development from 20 to five where landlords could evict tenants for reasons of sale. This, we and others argued, would offer more secure occupancy to a larger number of tenants without having a detrimental impact on the market by preventing involuntary landlords from selling their properties. The Government rejected our amendment and restored the number of units to ten in a single development, thus preventing an estimated 5,000 potential properties from being covered by the provision. It did this on the basis of Attorney General's legal advice, arguing that its provision could be more robustly defended against constitutional challenge. While accepting its amendment for this reason, we will be holding the Government to its commitment to enhance security for a greater number of renters and increase the coverage of the Tyrellstown amendment.

There is a strong policy argument for why we need to be careful in how we design new tenant security provisions. We should not introduce provisions that will unintentionally act as a barrier to persons with distressed buy-to-let mortgages in disposing of their properties. This is because over 90% of Irish landlords - covering an estimated 85% of rental properties - own only one or two properties. Many of these people are involuntary or accidental landlords.

To completely get rid of sale as a reason for ending a tenancy in a blanket way, as this Bill attempts to do, could stall the turnover of rental properties from smaller landlords, many of whom are involuntary landlords who are not making a profit and are often in arrears or negative equity, to more professional landlords, who are in the game for the longer term. Like it or not, completely removing sale of property as a ground for terminating a tenancy would not be constitutional. A better approach, consistent with the Constitution's protection of property rights, would be to remove sale as a reason for ending a tenancy in most circumstances, but not in all circumstances. Such an approach can be robustly defended against constitutional challenge. This can be done in a number of ways. One would be to insert a proviso that would enable landlords to remove tenants in order to sell their property if they can prove it significantly affects the market sale price of the property by comparison with vacant possession. Such a provision would be much more effective in offering greater security to a larger number of tenants without leading to an infringement of constitutional rights and widespread uncertainty in the rental sector, to which the Bill's proposals would lead.

We wholeheartedly agree with a primary provision in the Bill on receiverships. As in respect of the Tyrellstown amendment, Fianna Fáil sought to insert a similar provision as an amendment to the Government's housing Bill before Christmas. This would have closed the legal loophole which has meant that receivers and lenders are not considered landlords under the Residential Tenancies Act 2004. As we argued at the time, this loophole means that receivers may seek to evict tenants summarily without giving them the notice required under law. Our amendment attempted to make it the position that where a bank or vulture fund appoints a receiver over a rented property, it should be required to take on all of the responsibilities of a landlord. This means receivers would have exactly the same obligations to existing tenants as landlords regarding Part 4 of the Residential Tenancies Act, including in respect of security of tenure, the maintenance and upkeep of rented property, and notice to quit provisions.

The amendment also attempted to avoid a legal lacuna that exists at present for tenants whose landlords are in receivership, where landlords are still solely and fully responsible for returning tenants' deposits even though the properties are in receivership. We agreed to remove the amendment at the Government's request, again on the basis of the Attorney General's legal advice. It stated it was legally complex and requiring new legislation. The advice pointed out that the existing law on receivers and their general rights and obligations is contained in common law rules, the Land and Conveyancing Law Reform Act 2009 and the National Asset Management Agency Act 2009 and warned of the care needed to ensure that any amendments would not make matters worse or lead to legal uncertainty.

The Attorney General's advice supposedly stated "that the effect on these and other Acts and instruments of amendments to the RTA would need to be considered carefully as they raise the possibility of conflicting legal rules on the same issues, thus creating uncertainty and the possibility of legal disputes. On this basis, the Government committed in the House to deal with this through new legislation this coming term. We hope it will be held to account in that regard. If it fails to deal with this issue, Fianna Fáil will have no option but to work with other parties to bring forward legislation to close this loophole for receivers.

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