Rónán Mullen (Independent) | Oireachtas source

Ba mhaith liom fáilte a chur roimh an Aire Stáit. She said: "A well balanced housing sector requires a strong, vibrant and well regulated rented sector and the rented sector is an integral part of our housing policy for the future." That is a laudable sentiment. The Bill builds on the work of the Residential Tenancies Act 2004. Perhaps the most important impact of that legislation was the provision of security of tenure under Part IV, which allows a tenancy to extend to four years. That should be longer, perhaps up to ten years, in order that we can arrive at a more stable model, similar to those on mainland Europe.

However, I perceive a lacuna in the law where there is a change of landlord after a tenant has signed a lease relating to a so-called investment property and a bank appoints a receiver over the property. As a general proposition, the appointment of a receiver is one of a number of means by which a bank can enforce a mortgage. A receiver under a mortgage granted by an individual is often referred to as a fixed charge receiver. I understand such appointments have been commonplace in the UK for many years. They are a recent development in Ireland in the context of residential properties. Where a receiver is appointed pursuant to a mortgage agreement, his or her status will depend on the terms of the mortgage agreement. The question of the appointment of a receiver over a property was considered in a recent High Court judgment in McEnery v. Sheahan. The court considered the right to appoint a receiver. The late Mr. Justice Feeney held that the power to do so was acquired by the bank immediately upon the creation of the mortgage and in circumstances where there is no specific power to appoint a receiver in the mortgage deed of property, there is a general right under the conveyancing Acts. Due to the unique relationship created by the appointment of a receiver under the provisions of the mortgage agreement, it is often the case that the receiver acts not as an agent of the mortgagee or lender but as an agent of the mortgager or borrower. Under the unique form of agency created in most standard form mortgage contracts, the lender issues instructions to the receiver notwithstanding the fact that the receiver is not an agent for the lender.

The most pertinent question in this regard is what duty is owed by the receiver towards the tenant whose lease agreement is with the mortgager. There are not express provisions relating to the duty owed by the receiver to the tenant in the 2004 Act. In the UK, the receiver has various duties to the mortgagee and tenants beyond a duty to simply act in good faith and these were established in Medforth v. Blake. These include a duty to manage the property under receivership with due diligence. This would be useful if it formed part of Irish law but the position is not clear. Mr. Justice Clarke in Mooreview Developments Limited v. First Active PLC in 2009 stated that "it is at least arguable that Medforth v. Blake does represent the law in this jurisdiction" but this, the Minister of State will agree, is far from resounding judicial support for a proposition that a receiver owes a duty of care beyond simply acting in good faith to the mortgager and to the tenant where he or she is in effective possession of the property. Who does a tenant go to fix the heating when the landlord with whom he or she has a contract is no longer in control of the property and does not have the keys? There should be a specific provision in the legislation relating to the duties of receivers and banks in these scenarios. I would be grateful for the Minister of State's view on that. Has the Government plans to address this problem? Does she agree there is a potential lacuna in this regard?

In consultation with the relevant housing associations the Minister of State decided it was possible to extend the remit of the Act to even more of the approved housing body sector than was originally envisaged, and to provide that there would be no additional exemptions for approved housing body tenancies expect for those provided for in the 2004 Act. The Minister of State correctly identified the next natural question that follows, which is how best to deal in the long term with local authority tenancies, of which there are tens of thousands across the country. Is there a reason the Bill does not address the issue? Is there a single principled reason one class of tenant should enjoy protection under legislation and that another class of tenant should not? The Minister of State referred to further thought, research and consultation. When does she envisage that it will be forthcoming and what is the outcome likely to be?