Michael McDowell (Independent) | Oireachtas source

I wish to make a few points about the general tenor of the finance Bill this year. First, it seems that the Government has realised that some of the measures it has taken in respect of rented properties in the private rented sector have been counterproductive and have encouraged landlords to leave the sector. It seems that the Government has finally realised that something needs to be done about it. I do not believe that tax concessions to landlords will keep them in the sector for this simple reason. The Minister, Deputy Darragh O’Brien, apparently last Tuesday went to Cabinet and got approval for an amendment to the landlord and tenant relationship for landlords who want to have vacant possession for the purpose of selling their house on the open market. First, to avail of the entitlement to end a tenancy, an agreement to sell is needed. Landlords must now offer the house back to the tenant at the same price the open market purchaser is willing to pay, in other words, allow the tenant the right to match the offer the landlord is proposing to sell the house at. Whereas that might seem reasonable in one respect, you have to ask how that will work in practice.I do not own any rented property any more but I used to. If I own a property and I want to sell it, I know I have to achieve vacant possession in order to sell it at a reasonable rate. Otherwise the purchaser is taking over all the problems that I may never have dealt with, and the purchaser may actually want to buy it to live in themselves. If I own a property in those circumstances, am I to market it on the basis that whoever buys it from me sits down and agrees to purchase it at a price but then the Government may intervene to say the sale may not go through, the tenant may match that price in which case the offer becomes irrelevant? I just wondered who is thinking up these schemes. What effect would that have on a landlord? To get a decent open market price in certain respects vacant possession has to be offered because, quite clearly, a person buying it who wants to live in it themselves with their family wants vacant possession. That is fairly elementary. Are we to say to such purchasers, "By the way, even if you do buy it, the landlord is legally obliged to effectively cancel his agreement with you and offer it back to the tenant"? Who is actually thinking these things through down in the Custom House or wherever the Department of the Minister, Deputy O'Brien, is now located? Who is actually working out what effect that would have on transactions and landlords' willingness to stay in the market at the moment if that new arrangement is superimposed on them?

The reason I mention all of this is that there has been an exodus of private landlords from the private rented sector. It has not all been the Minister's responsibility. I hope Senator Gavan will not take offence when I say that Sinn Féin has added fuel to the fire and frightened landlords as well. The real issue is this. Either we do or we do not regard it as reasonable for people to let property to other people who are not in a position or do not want to purchase the house themselves. They can be people whose means do not add up to it. They can be people whose age does not permit them to get mortgages or credit lines to buy a house. They can be people who want to share a house for a period of their life such as young women and men at a stage in their career where they want to share a house. They all are people who want legitimately to be tenants and are not in a position to become a homeowner for one reason or another. If that is a legitimate market, why is everything being done to scare people out of making housing available by way of letting of residential property? Why is that being done? It does not make sense.

Sometimes I look at legislative proposals and wonder where did the idea come from. Bedsits in Dublin were eradicated by the fomer Minister, John Gormley because he got a submission from Threshold, the housing charity, suggesting to him that to improve standards, every bedsit which did not have its own private bathroom and kitchen should be made illegal to let. He did this in 2009 with effect from 2013. It is very hard to estimate exactly how many but I think between 10,000 and 12,000 dwellings in the Dublin area became unavailable as bedsits as a result. That affected people right at the bottom of the housing ladder. I recall from my time as a Dáil Deputy separated men or oldish bachelors who were quite happy to be in a bedsit in Rathmines or wherever it was and to live their lives in those circumstances.One could say it was a very kindhearted thing to say they should have had their own bathroom as well, but the houses were not adapted for those purposes, and the consequence of all of that was that they were evicted and their houses were sold. I know this because all the houses opposite me on the road where I live in Ranelagh became trophy homes and they all have a price tag of about €2 million now, whereas they used to be in ten or 12 bedsits up to the abolition of bedsits. The people who lived in them were not wealthy but they did need accommodation of the first-step-on-the-ladder type for various reasons, be they students, temporary employees, birds of passage, people engaged and about to marry and move in with a spouse or whatever. All of those kinds of people found that their accommodation was wiped out. I am asking what the Government proposes to do to keep a thriving rented sector in existence. Although promises have been made for various tax write-offs and the like, they will not work if, at the same time, the Government makes it almost impossible to dispose of a property or to determine who the tenants are.

By way of a footnote to what I have said, the private rented dwellings legislation provides that if you do let a house to two tenants, the tenant is entitled to bring in a substitute tenant for any tenant that was there and that tenant will, in the fullness of time, have the same rights as the original parties to the lease. This means contracts of indefinite duration effectively become a permanent lease to people who one never contracted with in the first place. People can bring in their nephew, niece or whoever it is to come and live with them if their spouse dies and the thing just goes on and on. The landlord has to show good reason that the nephew or niece should not be considered a tenant. The onus is on the landlord to prevent that from happening and there is no good reason in most cases that one can establish to the satisfaction of a court. The Government, through its finance legislation, is posing as doing something for private landlords to keep them in the market but the Custom House, as opposed to Merrion Street, is determined to drive them out.