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

I thank the Senators for tabling the amendments. Before we had a crisis in homelessness, before we had families in the numbers that they are in emergency accommodation, we had a problem, as Senator Humphreys referred to, with families not having the kind of tenancy security they needed to be able to live in an area as a renter and raise a family and have their kids in school. That had to be addressed, notwithstanding the very serious problem we now have in terms of families living with housing insecurity and those living in emergency accommodation.

As for the amendment that speaks to tenancies of indefinite duration, Government policy approves of that. We want to move to tenancies of indefinite duration. That is why the changes we have made in previous legislation about subsequent Part 4 tenancies is very important . That is why the changes we are making to notice to quit periods are very important. That is why it is going to be one of the central pillars of the next rent legislation that we are bringing forward. To bring this amendment as it stands on its own, without the much larger piece of work that needs to be done on tenancies of indefinite duration unfortunately risks unravelling that actual section of the Residential Tenancies Act of 2004, which for the first time in decades brought in protections that were not there at all. The 2004 Act was quite groundbreaking in that regard. It has been built upon in the Act that brought in rent caps, and we are building on it again today in this House, but there is a risk in how this amendment is worded and that it stands alone, not with the other things that we have agreed to do around tenancies of indefinite durations, that it could unravel that section of the Act.

I have done a great deal of work on the area of the intention to sell properties. What we would like to have is a healthy landlord market where one landlord sells their property to another landlord, where people are investing as landlords not for capital appreciation of the property which they one day sell and have a pension return but on the basis of a stable rent roll. It is a different type of operation. It is what we see in Europe, it is what people say they want, and it is what we are trying to build. One might be able to have that system because they have it in other countries. In those countries it is not necessary for the tenant to vacate the premises because it is being sold by the owner. However, there are a couple of things we have to look at here. In the first instance, I have been back and forth with the Attorney General on this and I have met the leading NGOs, as did the Taoiseach on a number of occasions. It is not constitutional. I am not just putting that down as if to shut a door, I am going to move beyond that argument but the first thing we were told is that it is not constitutional. We have tested that but we would not be able to proceed forward. Even if it were constitutional, it would not be retrospective, so it would not apply to existing leases. Therefore, even as a temporary solution for six months, as a sticking plaster to prevent any more families being served with notice to quit for these reasons and then potentially going into emergency accommodation, bringing in this measure would not have helped those people.

If we could overcome the constitutional issue and overcome retrospectivity, it must be asked whether it is a good policy decision to make given the given the type of rental sector we have today, rather than the one we want but do not have. A total of 70% of landlords own only one property, a number of whom are accidental landlords, who found themselves buying a rental property, losing their job subsequently and not being able to sustain it, or who bought a home, whose family circumstances changed, who rented another home and let out their own property. They do not want to be landlords and never meant to be landlords. They are coming to a point in time where, because of the increase in property prices, which is still 20% off peak and which has dramatically cooled, which we saw from evidence again today, they are now in a position where they might be able to sell that property. If they have to sell with tenants in situ, and we have evidence for this from cases that have been taken to the Residential Tenancies Board, RTB, it is likely that the property would sell at a value of 20% to 30% less. That is not 20% to 30% less profit but 20% to 30% less value of the home. While the intention would be to help the tenant in that situation, we could be forcing the person who owns the home into a situation of bankruptcy where he or she would not be able to meet his or her obligations with the banks on that property. In trying to help one person, we are hurting another. Again, when I talk about unintended consequences, that is what I mean. It is different in different countries where they have a different rental sector. The way our particular rental sector has developed and grown over the years means that people are exposed in this way.

Furthermore, even if we were to say that was okay, that we did not mind if potentially we could hurt that person on that side of the equation because we would protecting a tenant, we would then be moving the obligation for eviction to the person buying the home.If a young couple are buying a home for the first time, and there are tenants in situ, they now have to evict those tenants. That is a very invidious position to put someone in, particularly if the people do not leave that house. That couple now has a mortgage on a house they cannot move into, and are also paying rent on the house they are currently in. They may be waiting six months, 12 months, or even longer to move in. I do not think it is fair to shift the burden of responsibility to the person buying the home. Even if we could get past the first barriers from a legal, legislative and constitutional point of view, I am not sure, given the landlord market and rental sector we have today, that it would even be good policy.

As regards section 34, which states the reasons people can invoke to serve a notice to quit, they cannot do that and break a lease agreement. If one has a three-year lease agreement with one's landlord, which is something we need to see far more of, it cannot be broken for any reason. One has to wait for it to expire before section 34 can kick in. People need to understand the importance of a lease agreement, and that one cannot just break the contractual agreement one has with one's landlord.

Notwithstanding that, we have greatly extended the periods of time for which a notice to quit period will be in force. For example, if one has rented a property and been there over 12 months, going into the 13th month, one is working on a month-by-month basis with the landlord, and there is no lease agreement any more. That person has 42 days' notice under the current law. After these changes he or she will have 120 days' notice, or four months. That is a big change. If someone has been there for the average tenancy length of two years or more, has stepped out of the lease agreement and is working month-to-month with his or her landlord, and wants to serve a notice to quit, the notice period today is 56 days. After this, it will be 120 days, and if the person is there three years it jumps from 84 days to 180 days, or six months. These are very long notice to quit periods, which give people more than enough time to find another property. Where they cannot, we know that early engagement with services helps prevent those people having to go into emergency accommodation. That is a really important change we are making in the legislation, and a really significant step.

In addition to that, when we talk about housing assistance payment, HAP, hundreds of thousands of people are renting in our rental sector today very successfully. More than 40,000 HAP tenancies have been created. Some people find themselves in difficulty in HAP, for reasons that are not to do with the operation of HAP itself, and so we try to put in place what other supports we can to help those people. It is unfair, based on some instances of insecurity, to draw wide conclusions around the rental sector as a whole. We know it is not functioning the way we want it to. We know it needs to be improved and reformed, and that is why we are bringing forward these reforms.

One of the amendments, which was not spoken to, seeks to change what we define as a family member and restrict it to just landlords themselves if they want to move back into a property. However, it is very important that we retain the right in law that if someone has a second property and another family member falls on hard times, they could then house that family member in that home. Landlords would take that responsibility on if they felt they could, rather than a family member having to go into State services unnecessarily. I do not think we should be changing the definition we have in the legislation under section 34 as to what constitutes a family member, because it is important that we protect that. I know it was not spoken to, and I am trying to see who is placing that amendment, but I do not think it would be a good amendment to accept. I do think the changes we have made here around tenancy protection, security for tenants and lengthening the notice to quit periods, are very important and strong.

As regards tenancies of indefinite duration, due to Government policy we could not put it into this Bill, but it will be in the next Bill which will commence in this House.