Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I thank Deputies Shortall and Catherine Murphy for bringing this Bill forward and for providing us with another opportunity to discuss the development of the rental sector, which is a priority for the Government. I acknowledge the substance of the Bill and its genuine motivation to improve the situation for tenants at a time of under-supply in the residential rental sector. It also addresses some issues that will be covered in forthcoming legislation that is a priority for my Department. The Government will not oppose the passage of this Bill.

The Bill raises some issues that have been considered and addressed in recent legislation and in the Government's strategy for the rental sector, which was published in December 2016. The rental strategy sets out the Government's vision for a strong, viable and attractive rental sector, supported by a policy and regulatory framework that delivers long-term, affordable and high quality accommodation solutions to meet diverse tenants' needs and a secure, predictable investment environment for landlords and accommodation providers. The rental strategy contains 29 actions aimed at achieving improvements in respect of security, standards, services and supply in the residential rental sector. Implementation of the strategy is well under way with many rental reforms already introduced and in train.

A number of targeted measures and initiatives have been announced with the aim of providing better security of tenure, higher accommodation standards and greater rent certainty for tenants, as well as enhancing the supports and services available to landlords to facilitate the development of a more vibrant and sustainable rental sector. These initiatives include the establishment of rent pressure zones in areas of high and rapidly rising rents; the introduction of new rental accommodation standards; new legislative protections for tenants where multi-unit developments are being sold; the strengthening of the role and powers of the Residential Tenancies Board, RTB, to provide its services more effectively such as through accelerated dispute resolution processes, empowering tenants and landlords, and developing a one-stop-shop within the RTB to improve access to information for tenants and landlords. Of course, more must be done. Policies can always be improved and implementation of those policies must be driven.

As part of the review of Rebuilding Ireland, I outlined, last September, a list of further actions to be pursued to broaden further the role of the RTB - for example, a move towards annual registration of tenancies would provide more accurate and detailed data on the rents being charged - as part of a two-year change management plan for the agency. A key commitment is the planned new provision to make it an offence where landlords implement rent increases that contravene the law. The RTB will be given the powers to investigate and prosecute landlords who implement such increases. The onus will no longer be exclusively on the tenant to act.

Rising rents have not been left unchecked. The Fine Gael and Labour Party Government introduced amendments to the Residential Tenancies Act in December 2015 to double the minimum period between rent reviews to 24 months. This measure will apply until 2019. The current Government built on this by introducing an annual rent increase cap of 4% in rent pressure zones. The 2015 Act also increased significantly the minimum period of notice of new rent from 28 days to 90 days and significantly lengthened the minimum notice periods for the termination of long-term tenancies.

With regard to section 3 of this Bill, I am happy to advise Members that under section 12 of the Residential Tenancies Act, as amended by section 33 of the Planning and Development (Housing) and Residential Tenancies Act 2016, when the rent is being set for a new tenancy in a rent pressure zone, the landlord is obliged to inform the tenant of the previous rent paid for the property and the time at which it was set. The tenant or prospective tenant concerned is also able to see the previous rent and any rent increase being proposed and assess whether the rent being sought is in line with the legislation. If a tenant thinks he or she is being charged more than he or she should be in accordance with the law, the tenant can raise the issue with the RTB. In addition, there is valuable comparison data available on the RTB's website. The RTB's quarterly rent index provides rental data information from all rents registered with it during each quarter, based on the actual rents paid, the location, six categories of dwelling types, accommodation size, number of occupants and tenancy length. These reports provide tenants with a general picture of rents by which they can determine if the rent proposed is broadly in line with market rents in the area. Access to rental data as well as rent transparency for specific rental properties is being further considered in the context of drafting the Government's forthcoming Residential Tenancies (Amendment) Bill and of the RTB's change management plan which was announced last September.

Section 2 of the Residential Tenancies (Amendment) Bill 2018 provides for significant increases in the range of minimum notice periods for tenancy terminations by landlords as they apply to shorter tenancies. The current graduated notice periods were prescribed in December 2015 and implemented a recommendation in a 2014 report on the future of the private rental sector, which was commissioned by the RTB. The 2015 provisions introduced the current graduated notice periods as they apply to tenancy terminations by landlords for tenancies of five or more years duration. While the current graduated notice periods have been in place for a relatively short time, the length and notice periods for longer-term tenants appear to be working well. However, having regard to this Bill's proposals relating to extended notice periods for shorter-term lettings, I will reflect on these points in the context of developing the Government's residential tenancies Bill, which is being drafted for publication during this term, cognisant of the impacts on, and needs of, both tenants and landlords.

It is important to understand the need for balance as we address these proposals. The majority of landlords only own one property. The vast majority of landlords are good landlords who are providing a service that people want and need. It is important that further analysis be carried out on the potential impacts of substantially increasing the notice periods to ensure there are no adverse consequences which might deter new landlords from entering the rental market or drive existing landlords from the sector. It is equally important that there are no unintended consequences that might see a sudden surge of notices issued out of fear of what might be perceived as a hasty move to new conditions that are too restrictive for the landlord to continue as a landlord. While the acute pressures in the rental market mean we must manage the inflation of rent prices in the short term, ultimately the most effective way to reduce and stabilise rents in the medium to long term, and benefit the entire sector, is to increase supply and accelerate the delivery of housing for the private and social rented sectors. That is what we are doing under Rebuilding Ireland.

As regards the other section in the Bill before us, it might be useful to outline briefly the current penalties that apply to anybody guilty of an offence under the Residential Tenancies Act. On summary conviction of an offence, a class B fine with a maximum of €4,000 applies or imprisonment for a term not exceeding six months or both. If after the summary conviction the offence continues, a further offence is committed under the Residential Tenancies Act on each day that such action or inaction continues. The maximum class E fine of €500 can be applied to each further offence. If, for example, a landlord persists with an offence for one month following his or her initial summary conviction, a further penalty of €15,000 will quickly clock up. The quantum of the maximum fine proposed in this Bill will be quickly reached under the current law. The Fines Act 2010 under the remit of the Minister for Justice and Equality provides for the payment of fines and the default of fine payments, including the publication of a list of names of persons who do not pay fines on time. However, I have asked my Department and the RTB to re-examine the scale of the penalties applying to offences under the Residential Tenancies Act in the context of developing the Government's residential tenancies Bill which is currently being drafted and is a priority for the Department. I have also asked them to look at what might potentially be described as criminal acts under those legislative changes.

Developing the rental sector is an important goal for the country. In doing this, it is paramount that we avoid unintended consequences of new Government measures. It will continue to be important to balance the rights and responsibilities of both landlords and tenants. The vast majority of small independent landlords are good landlords. They look after their accommodation and their tenants. The Government in its work will continue to enhance the protections under the Residential Tenancies Act and to invest in the services provided by the RTB and Threshold. True housing security for people in the long term must be delivered. All parents wish to be sure that they do not have to uproot their families from their community, schools and familiar environment. This is not just about parents. We all accept that homelessness is particularly difficult for children. Familiarity and community are important. They are settling and a type of personal security, particularly when one is young. Furthermore, developing a more mature and modern rental sector requires introducing affordable rental schemes, as we are doing, as well as incentivising the development of thousands more homes for rent, which we are doing through our new build to rent guidelines.

Implementation of the rent predictability measure is a priority for the Government. When passing the relevant legislation in December 2016, Members will recall that both Houses extensively discussed and reached decisions on the issues and options involved. The rent predictability measure is being implemented and currently covers a majority of private tenancies in the country. I accept that some legal enhancements are necessary to enforce its implementation. That is the clear focus of the legislative measures currently being developed by my Department following the public consultation and review of the rent predictability measure last autumn.

The Government has given priority to the early publication of a Bill during the current Oireachtas term to address rent issues and Deputies will have the opportunity to propose and discuss any new ideas in that regard. I will be asking my officials to reflect on the proposals outlined in this Private Members' Bill to see whether and how to best address these concerns. In light of this, I do not oppose the Second Reading of the Bill.

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