Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

I thank Deputy O'Callaghan for bringing forward this Bill. As he stated, the Government will not be opposing the Bill and will allow it to progress for detailed debate on Committee Stage. In preparation for this, I have gone through the Bill quite forensically with the officials in order to see where we stand. I will go through a couple of aspects.

It must be recognised that the legal grounds for termination of tenancies provided in the table to section 34 of the 2004 Act, as amended, including ground 3 whereby a landlord intends to sell the rented dwelling, are designed to underpin the constitutionally protected property rights of landlords. The intention to sell ground for termination is subject to the Tyrrelstown amendment, which prevents mass evictions, which the Deputy has already referenced.

Section 35A of the Residential Tenancies Acts 2004, as amended, better known as the Tyrrelstown amendment, provides that where a landlord proposes to sell ten or more units within a single development at the same time, or within six months, this sale is subject to the existing tenants remaining in situ, other than in the exceptional circumstances set out in subsection (3). The Deputy has already referenced them.

It is these exceptional circumstances that this Private Member's Bill seeks to delete. These exceptions are required to respect the constitutionally protected property rights of landlords. The exemption under section 35A(3) provides the necessary balance between reducing landlord’s property rights and providing strong protections for tenants. There is always a balancing act. Section 35A(3) which is proposed for deletion under this Private Member’s Bill, provides for the disapplication of the Tyrrelstown amendment, or section 35A, where a landlord can show to the satisfaction of the RTB that, first, the price to be obtained by selling at market value the dwelling with tenantsin situis more than 20% below the market value that could be obtained for the dwelling if it was sold with vacant possession; and the application of the Tyrrelstown amendment would be unduly onerous or cause undue hardship on that landlord.

During the Oireachtas debates on the Planning and Development (Housing) and Residential Tenancies Bill 2016, which was enacted that year, various Opposition amendments were tabled in respect of the proposed Tyrrelstown amendment. Amendments to that Bill sought to increase the 20% set out in section 35A(3)(i) to 30% or 40%; others sought to delete section 35A(3) entirely, similar to this Private Member's Bill. In 2016, the Government of the day recognised that to reduce the market price of a dwelling by more than 20% on foot of it being a rented dwelling and by requiring its sale with tenants in situ, represented a significant interference with the constitutionally protected rights of landlords. This remains true today.

Section 35A(3) was carefully drafted in 2016 to ensure that such interference could be legally defended as constitutional, just, rational and proportionate and carefully limited in its application. Section 35A(3) affords a landlord an opportunity to be exempt from the Tyrrelstown amendment. In doing so, it ensures that the Tyrrelstown amendment balances the rights of tenants and landlords and provides fairness.

The RTB advise that, since 2017 when section 35A was commenced, there have been just four cases - from a sample of 2,000 dispute cases examined by the RTB - where a landlord has sought to rely on section 35A(3). The RTB determined all four termination to be invalid. We can see, therefore, that reliance by a landlord on the exemption under section 35A(3) can be referred to the RTB as a matter of dispute. The exemption is provided because it is necessary but all notices of terminations must be valid and, if a dispute is referred to the RTB, the landlord needs to be in position to show that the exemption lawfully applies. The sole aim of this Bill seems to be remove an exemption that is legally required and is not currently causing problems in the sector.

The Residential Tenancies Acts do not prohibit a landlord from selling their property with the tenant in situ, which the Deputy has referred to. The commercial reality is that there is generally a lower market value for a property sold with tenantsin situ. The Acts protect tenants by requiring that a landlord must state a reason for the termination, in accordance with the allowable grounds, in any notice of termination served after six months of a tenancy’s commencement. The Acts also provide for minimum notice periods to be served before a tenancy termination can take effect. The longer the tenancy has existed, the longer the minimum notice to be given. The minimum termination notice periods increased significantly in 2019 and 2022, in recognition that it is difficult to secure alternative rental accommodation, and now range from 90 to 224 days.

The Residential Tenancies (Amendment) Act 2019 provides that where a landlord terminates a tenancy because he or she intends to sell the property, he or she must enter into a contract for sale within nine months of the termination date and, if not, must offer to re-let to a former tenant. Failure to offer such a relet falls within the definition of "improper conduct" by a landlord under the Acts, is liable to investigation and sanction of up to €30,000 by the Residential Tenancies Board.

The Tyrrelstown amendment prevents numerous tenancy terminations from taking place at the same time, grounded on the sale of an entire development of ten or more units, and thereby decreases the pressure on local rental markets and rents payable to reaccommodate tenants. The Tyrrelstown amendment was carefully drafted to promote security of tenure in the interest of the common social good, by only delimiting the constitutional property rights of an owner where he or she wishes to sell ten or more housing units in the same development at the same time. In such a case and subject to certain conditions, the landlord cannot terminate such tenancies to facilitate their sale for vacant possession and must sell the properties with tenantsin situ.

The Tyrrelstown amendment strikes a balance between a landlord’s right to sell their property and achieve fair return on their investment and a tenant’s right to security of tenure. The Residential Tenancies Board was established as an independent statutory body under the Residential Tenancies Acts 2004 to 2022 to operate a national tenancy registration system and to facilitate the resolution of disputes between landlords and tenants. Where there is a question as to the validity of a notice of termination, the tenant or tenants should refer the matter to the RTB for resolution. The RTB’s independent dispute resolution service will provide a determination order on the matter and may invalidate notices of termination as required.

I wish to assure renters, Deputies, and obviously Deputy Cian O'Callaghan, that the Government is helping renters. Where a tenant receives a valid notice for termination because their landlord intends to sell their home, and they are in receipt of HAP or RAS and are at risk of homelessness, their local authority is supported by the Department under the tenant in situ scheme to purchase the home. There are approximately 2,000 such tenant in situ purchases at various stages at the moment, and that number is increasing.

Where the tenants are above the social housing income eligibility limits but below the cost-rental income eligibility ceiling of €66,000 or less eligible for cost-rental housing in Dublin or €59,000 in the rest of the country, the Housing Agency can, in certain circumstances, purchase the home and the tenants can remain in place under the cost-rental and tenantin situschemes. Where the tenants wish to purchase the home from the landlord but do not have the requisite finance, they can applyto the first home scheme, which bridges the gap between the finance a person has and the finance they need to purchase a home.

It is important to remember that a valid notice of termination must be served in accordance with the Residential Tenancies Acts 2004 to 2022. It can be assumed that a proportion of tenants in receipt of a notice of termination are seeking or benefiting from the Government supports that I mentioned just now. On 24 October, the Government approved the general scheme of the residential tenancies (right to purchase) Bill as a basis for priority legal drafting with the aim of publishing the Bill during this Oireachtas session. Detailed and complex work has been ongoing in conjunction with the Office of the Attorney General to progress the implementation of the Government decision of 7 March to provide for a legislatively based first right of refusal for tenants. The Joint Oireachtas Committee on Housing, Local Government and Heritage is currently conducting pre-legislative scrutiny of the general scheme of the residential tenancies (right to purchase) Bill.

I wish to emphasise that the programme for Government recognises the important role that the private rented sector plays in housing many people and will continue to do so into the future. This Government will address challenges in this sector, including standards, security and affordability. Improving standards, security and affordability for renters is a priority for me and the Government. We are making significant changes in recognition of the fact that tenants continue to face persistent pressures in the rental and housing markets. Our approach to change must continue to be carefully balanced. We must recognise that we need landlords to provide a steady supply of rental accommodation and for that sector to be on a sound footing for both tenants and landlords.

I wish Deputy Cian O'Callaghan well with the Bill when it proceeds to Committee Stage.

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