Dáil debates

Thursday, 7 May 2015

Ceisteanna - Questions - Priority Questions

Private Rented Accommodation Eviction

10:00 am

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Socialist Party)
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5. To ask the Minister for Finance if he will report on the practice of banks evicting sitting tenants of repossessed buy-to-let properties; his plans to instruct the banks or introduce legislative change to oblige banks to honour existing leases; and if he will make a statement on the matter. [17840/15]

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Socialist Party)
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I wish to ask about the policy of banks repossessing homes that, though buy-to-lets, have tenants, sometimes of many years. These tenants are now becoming homeless. I have several cases involving families that are in hotels, sleeping in cars or sofa surfing, as it is called. I put it to the Minister that encouraging banks to repossess homes while prices are rising is a sanctioned Government policy and that he has the power to initiate a policy to stop it.

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I thank Deputy Coppinger for her question. Issues relating to the rental market and tenancy rights are for my colleague, the Minister for the Environment, Community and Local Government, Deputy Kelly. I am informed by his Department that, in circumstances where a receiver is appointed to a landlord's interest in a dwelling, it is essential that the rights of tenants be protected. While the circumstances of each case may vary depending on the terms of the mortgage or charge under which the receiver is appointed, the policies and procedures of banks in appointing receivers cannot affect the statutory or contractual rights of tenants. The tenant continues to enjoy the same security of tenure. The appointment of a receiver does not mean that a tenant loses his or her rights under the Residential Tenancies Act 2004.  That Act sets out the procedures and notice periods that must be complied with when terminating a tenancy.

In documentation submitted prior to recent meetings with the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, AIB, Bank of Ireland and Ulster Bank confirmed that they adhered to the legislative framework when dealing with the repossession of buy-to-let properties. Furthermore, I understand that the Private Residential Tenancies Board, PRTB, is aware of the impact on tenants of receivership and repossession proceedings. The board is looking to engage with the Central Bank and the financial institutions with a view to developing a code of practice to apply in such situations. The main purpose of the code will be to ensure that the financial institutions are fully aware of the rights, duties and obligations under the Residential Tenancies Act and to ensure that there is a consistency and fairness in the treatment of tenants in these cases.

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Socialist Party)
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Under our laws, there is nothing that a tenant can do if a bank or landlord - the owner of a property - decides to sell it. After due process has been followed, the tenant must vacate the property. Buy-to-lets are the homes of the people renting them, but those people are the group most likely to suffer from poverty and most in danger of becoming homeless because they cannot find alternative rented accommodation. Some are in receipt of rent allowance, while some are low-paid families.

The current homelessness crisis is the worst in the history of the State. The Government has a role in the two issues that have led to this situation. The mortgage arrears resolution targets, MARTs, that have been set by the banks put an onus on them to repossess properties. No code of conduct protects non-home owners. The code only protects those who have residential mortgages. Something could be introduced in this regard. The Minister has stated that he favours the continual rise in house prices because he believes it will lead to a recovery.

This is also why the banks are selling but nobody benefits other than the very wealthy.

10:10 am

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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As I noted in my original reply, when a buy to let is sold, the rights of the tenants continue. They do not lose any other their rights because of a change of ownership. In circumstances where a receiver is appointed to manage a landlord's interest in a dwelling, it is essential that the rights of tenants 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, the policies and procedures of banks in appointing receivers cannot affect the statutory or contractual rights of tenants.  The tenant continues to enjoy the same security of tenure.  The appointment of a receiver does not mean that a tenant loses his or her rights under the Residential Tenancies Act 2004.  Security of tenure under the 2004 Act is based on a rolling four year tenancy cycle. Where a tenant has been in occupation of a dwelling for a continuous period of six months and no notice of termination has been served in respect of that tenancy prior to the expiry of the six months, the tenancy is established for the remainder of the four year period and it becomes a Part 4 tenancy.

Photo of Ruth CoppingerRuth Coppinger (Dublin West, Socialist Party)
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If the bank and the receiver decide to sell the property, the tenant can do nothing about it. I am all in favour of the bank continuing to rent to the tenant in situ but the banks are not doing that because the Minister, the Government and the banks have set targets for repossessing properties. With house prices rising, it is worthwhile for the banks to sell properties and reduce the debt on their balance sheets. This problem is known to the Government and in August 2013, it committed to reviewing the laws on rent, receivers and tenants, and Threshold has asked it to do that. Nothing further has been done, however, and we are encountering the resulting human misery and suffering in our clinics. The Minister's own clinics must be dealing with similar issues. I have a large caseload of people who were made homeless because of repossessions by the banks. The Minister will be familiar with the case of Martin and Violet Coyne last year but they are only one of many families in this situation.

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The Deputy did not ask me in her original question to introduce legislation to prevent lending agencies from selling buy-to-let properties. She asked me to introduce legislation to oblige banks to honour existing leases. That is a tenant rights issue. Under the 2004 Act, lending agencies are obliged to fulfil the tenant rights obligations on a change of ownership. If a problem arises in practice whereby certain lending agencies are either unaware of, or are ignoring, the law, I noted in my reply that discussions are ongoing at Central Bank level to introduce a protocol to ensure all lending agencies are very clear on the rights of tenants under the 204 Act and that even with a change of ownership, they are obliged to continue to comply with the rights of tenants under that Act.