Dessie Ellis (Dublin North West, Sinn Fein)
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The Minister of State is aware of the crisis in the buy-to-let market, with 29% of the 150,000 buy-to-let mortgages in arrears and 17% in arrears for 90 days or more. This means a staggering 26,770 rental properties are at risk of serious default. One of the most immediate consequences of the crisis is that the people living in these properties are at great risk.

When a bank repossesses a buy-to-let property, it appoints a receiver, which writes to a tenant to demand from that point that rent must be paid directly to a receiver and not to the landlord. The tenant is left not knowing whether the terms of the tenancy agreement will be met or if the receiver will take on the full role of landlord. Added to this is the question of whether the term of the tenancy agreement will be kept or a deposit will be returned when a tenancy ends.

Some receivers appear to be adopting a constructive approach but others are not, with some who act belligerently towards the rights of a tenant. That is unacceptable. As the buy-to-let mortgage crisis worsens, there will be ever more tenants left in a precarious position, and the Government needs to get a handle on the problem. It should immediately instruct the Central Bank to bring receivers and banks to the table to hammer out a clear code of conduct. At the end of this code of conduct must be a commitment by the receivers to honour the terms and obligations of the tenancy agreement. No tenant should be allowed to go homeless as a result of the appointment of a receiver, and no tenant should lose their deposit because such an appointment. A tenant should not be left without maintenance services because of a receiver's appointment. In the first instance the Central Bank should seek agreement with receivers and banks but there should be no doubt that in the absence of agreement, the Central Bank should impose a code of conduct.

In dealing with individual cases I have engaged with Threshold, which shares my concern that this problem is serious and likely to escalate. This means the Government must act now and not wait for the problem to spiral out of control. I ask the Minister to examine the problem, establish its extent and the probable rate of increase as the buy-to-let mortgage crisis deepens and set out a clear plan to ensure no tenant will lose rights or entitlements because a landlord defaults on a mortgage. I hope the Minister of State appreciates the serious nature of the problem and that the Government will take the necessary action to address it before it is too late.

Brian Hayes (Dublin South West, Fine Gael)
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I thank the Deputy for raising this important matter in the manner he has. He is correct in pointing out the scale of the buy-to-let market, and there are approximately 150,000 mortgages through all the financial institutions that are effectively buy-to-let mortgages. The most recent information available to me indicates that approximately 18% of those accounts have been arrears for approximately 90 days or more. For primary dwelling mortgages, the corresponding arrears are between 11% and 15%, so the problem is real.

As we begin the process of introducing the schemes we have through financial institutions, we will see more of the buy-to-let mortgages moved on from the banks' loan books. It is an inevitable consequence. The Deputy is more aware than I am of the recent comments of the Governor of the Central Bank in this matter when he correctly put pressure on the banks to get on with the task of moving on some of these properties.

It is arguable that we will not get to the bottom of the housing market until such time as much of the buy-to-let market, which is in a difficult and precarious position, has been moved on.

I will not rehash the various arguments on the general issue as the Deputy is aware of them. We have had the Keane report and the Government wants the banks to fully implement the provisions of the Personal Insolvency Act. More important, a new agreement has been reached between the Central Bank and financial institutions to introduce a suite of measures to meet the needs of their customers, whether by writing down or restructuring debt, where necessary. As I noted in the House the other day, the banks are well capitalised for this purpose. When we capitalised them in March 2011 we made abundantly clear that we were providing money for the purpose of substantial write-downs on their mortgage books. There is frustration across the Government that the banks need to proceed with this task and write down more mortgages. I am confident that we will see much more action in 2013 than we did last year on moving on housing stock.

The Deputy referred to a code of conduct for receivers who are given powers to act on the part of the banks. I will refer to the reply provided to me on this matter as it has been issued by another Department. Regarding the protections and rights of tenants in the private rental sector, these rights are provided for in tenancy law, including the 2004 Residential Tenancies Act, which is the main regulatory framework for the private rented sector. It is important that the rights of tenants, as provided for under tenancy agreements and the Residential Tenancies Act, are protected. While the circumstances of each case may vary depending on the terms of the mortgage or charge under which a receiver is appointed, it is important that the policies and procedures of banks in appointing receivers do not affect the statutory or contractual rights of tenants. This is the point the Deputy raised.

It is also important that clarity be given to tenants as to where the responsibilities of landlords, as set out in the 2004 Act, now rest. Clear and legally sound direction must be given regarding to whom the rent should be paid. It should also be noted that receivers who are acting on behalf of an entity regulated by the Central Bank are also subject to the requirements of the consumer protection code.

To cut to the chase, the view of the Minister of State with responsibility for housing and planning, a portfolio that cuts across the financial area, is that protection is in place in respect of how a receiver should act. It is logical that where a receiver is appointed he or she will want to have a rent roll and will want tenants in situas a means of maintaining the business as a going concern, if that is the choice of the receiver. Ordinarily, the rights that are prescribed for the tenant in a case where the tenant has a rent book and lease agreement still stand and would take precedent. The view of the Minister of State with responsibility for housing is that protections are in place under the consumer protection code. However, if the Deputy has specific proposals he would like me to put to the Minister of State, I am all ears.

Dessie Ellis (Dublin North West, Sinn Fein)
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I thank the Minister of State for his response. There is a major problem in this area and some form of code of conduct is required to address it. While I accept that other issues arise in respect of the banks, a code of conduct is needed for the receivers who work on behalf of the banks. My party and Threshold are encountering cases where tenants have not had their leases renewed and maintenance and other issues connected with private rented dwellings are not being addressed. This is unfortunate. The receiver and banks should have a role to play in this regard. For example, the receiver could issue a letter to tenants guaranteeing their rents and providing a commitment that the lease will be continued. It is vital to have a code of conduct in place because people are being left at the mercy of landlords and financial institutions. While some of the financial institutions pull out all the stops and do everything possible to help, others are frustrating tenants, for example, by failing to inform them that a lease has expired, with the result that they are in danger of being put out on the streets. Tenants are being left in limbo. A code of practice must be introduced that encompasses all the financial institutions, the borrowers and the receivers who work on their behalf.

Brian Hayes (Dublin South West, Fine Gael)
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As the Deputy raised the matter, I should point out that the Minister of State with responsibility for housing and planning, Deputy Jan O'Sullivan, recently met representatives of the Irish Banking Federation and agreed a draft guide for tenants regarding rent receivers and the rights and responsibilities of landlords and tenants under the Residential Tenancies Act. This guide, which has the imprimatur and support of the Irish Banking Federation, will be rolled out across all the covered institutions in the coming months. This is an important development in that the financial institutions will be made aware of their responsibilities towards tenants in cases where the property in which they reside has been taken over by a receivership. The guide is backed up by the Irish Banking Federation. We will monitor closely what effect this initiative will have and I believe it will make a difference. The Deputy's observations will be forwarded to the Minister of State immediately.