Friday, 31 July 2020
Residential Tenancies and Valuation Bill 2020: Second Stage
I am grateful to the Leas-Chathaoirleach and to all Senators for facilitating the urgent passage of this very important legislation through Seanad Éireann today. I accept that the time allowed for debate is necessarily short. The Government is keen to deliver for renters today.
The programme for Government recognises the important role that the private rental sector plays in housing many people and we want the sector to continue to play this key role into the future. Through this Bill, the Government seeks to address challenges in the rental sector including standards, security and affordability for renters. I ask Senators to pass the Residential Tenancies and Valuation Bill 2020 to help mitigate the adverse social and economic impacts of the Covid-19 pandemic which, unfortunately, have been felt by many tenants in the residential rental sector.
Some tenants continue to deal with the fallout of Covid-19. The Emergency Measures in the Public Interest (Covid-19) Act 2020 was enacted on 27 March 2020. Part 2 of that Act modifies the operation of the Residential Tenancies Act 2004 during the Covid-19 emergency period, initially for 3 months, to better protect tenants by prohibiting rent increases in all cases and tenancy terminations in all but limited and exceptional cases. Section 4(1) provides that upon the request of the Minister for Housing, Planning and Local Government, after consulting with the Minister for Health and with the consent of the Minister for Public Expenditure and Reform, the Government may make an order to extend the emergency period for such period as it considers appropriate, if it is satisfied that making the order is in the public interest, having regard to the threat to public health presented by Covid-19, the highly contagious nature of the disease and the need to restrict the movement of persons in order to prevent the spread of the disease among the population.On 19 June, the previous Government made an order extending the emergency period until 20 July in accordance with the aforementioned section 4(1). On 20 July, upon the request of the Minister, Deputy Darragh O'Brien, a further Government order was made to extend the emergency period until 1 August. This extra time has enabled the development of policy and law by my Department for the consideration of the Seanad today in the form of the Residential Tenancies and Valuation Bill 2020.
The recitals at the start of the Bill set out the policy context in which the temporary and limited restrictions on landlords' constitutionally protected property rights are framed, in Part 2 and section 12, for the social common good. Covid-19 has undeniably caused a crisis for the world and Ireland has not escaped, with significant adverse impacts being visited upon those who have contracted the disease and their families and friends. The broad social impacts of Covid-19 are closely interwoven with the adverse economic impacts. There has been a substantial and sudden increase in unemployment. Many in the residential rental sector have faced jobs losses, restricting their ability to pay rent and putting them at risk of losing their homes. There is a significant risk that some renters would have difficulty securing alternative rental accommodation and might end up in overcrowded accommodation at a time when the State is keenly focused on suppressing the spread of Covid-19. We want to minimise the occurrence of any overcrowded accommodation, and in doing so we want to minimise the risk of transmission of Covid-19 in Ireland, which has already cost the country dearly. We want the economic recovery to start now with the help of the July stimulus. Working together and continuing to adhere to the public health advice, we can arrest the fallout for our society and economy by getting people back to work.
The Bill recognises that Covid-19 has been hard on many tenants, particularly those working in the worst affected sectors of the economy, such as retail and hospitality. The Bill proposes short-term and long-term solutions. Where tenants make a written declaration that the economic impact of Covid-19 has rendered them unable to pay their rent and at a significant risk of tenancy termination, the Bill provides for increased notice periods for failure to pay rent due, from 28 days to 90 days, for notices of termination served on tenants in the residential rental sector during the emergency period from the passing of this Bill to 10 January 2021. Any notice of termination grounded on rent arrears and served during this new emergency period cannot specify a tenancy termination date earlier than 11 January 2021. The Bill also provides for a prohibition on rent increases on tenancies of dwellings during the new emergency period.
In the longer term, permanent amendments to the Residential Tenancies Acts in the Bill provide that before a notice of termination grounded on rent arrears can be served, a tenant will have 28 days to pay outstanding rent. Those 28 days will start from the date of receipt by the tenant or the Residential Tenancies Board, RTB, of a written rent arrears notification from the landlord, whichever date occurs later. The Residential Tenancies Act will be amended to include specific requirements relating to the giving of notifications and notices of termination by landlords to tenants and the RTB in respect of arrears of rent.
The Bill also provides for the once-off extension from ten years to 12 years of the period under the Valuation Act 2001 within which a valuation list in relation to the rating authority area of Dún Laoghaire-Rathdown County Council shall be published, with the return to the usual ten year period in 2023. This temporary provision is required to counter the logistical difficulties caused by the Covid-19 restrictions.
We have to continue to address the immediate and drastic economic and social consequences of Covid-19, protecting as many jobs as possible and making sure that families and businesses can survive financially. The economic recession the pandemic has caused is the most rapid and dramatic ever experienced by anyone in the Houses of the Oireachtas. The emergency measures introduced in March, with all-party support, have prevented a much deeper social and economic crisis.
On Thursday of last week, the Government approved the proposals of the Minister to progress residential tenancy legislation before the summer recess to better protect tenants who remain vulnerable as society and businesses reopen after the Covid-19 lockdown. In light of the prevailing economic situation caused by the Covid-19 pandemic, the proposed Residential Tenancies and Valuation Bill 2020 provides further protection during a new emergency period, until 10 January 2021, for tenants who have been economically impacted by the Covid-19 pandemic.
There are three parts to the Bill, which comprises 14 sections. Part 1 includes preliminary and general provisions. Sections 1 and 2 contain standard provisions relating to the short title, collective citations and definitions.
Part 2, which covers the protection of tenants during the emergency period, provides key and urgent enhancements to protections for tenants during an emergency period where they have been economically impacted by the Covid-19 pandemic and are unable to meet their obligations under the Residential Tenancies Acts to pay the rent due. Section 3 defines the emergency period to mean from the date of the passing of this Act to 10 January 2021. Section 4 provides that Part 2 shall not apply unless the tenant makes a written declaration that he or she is unable to comply with his or her obligations to pay rent due because he or she is or was temporarily out of work due to having contracted Covid-19 without entitlement to be paid by his or her employer; or is in receipt of, or entitled to receive, the temporary wage subsidy or any other payment out of public moneys provided for under statute and paid for the purpose of alleviating financial hardship resulting from the loss of employment occasioned by Covid-19, including rent supplement or a supplementary welfare allowance, and as a consequence is at significant risk that the tenancy will be terminated by the landlord. Such a declaration must be served on the RTB and copied to the landlord. It shall be an offence to make a false or misleading declaration.
During the emergency period and where the declaration has been made, section 5 provides that before a notice of termination is served by a landlord on foot of rent arrears, a tenant must have been afforded a minimum of 28 days to pay his or her rent arrears after a written rent arrears notice has been received by both the tenant and the RTB. A 90-day notice of termination period will now apply where rent arrears are the basis of the termination. The corresponding notice period for rent arrears terminations outside of the emergency period is 28 days. A notice of termination served during the emergency period shall not specify a termination date that falls earlier than 11 January 2021. A tenant cannot acquire Part 4 security of tenure rights as a result of this section.
Section 6 provides that no rent increase can take effect during the emergency period and no increase in rent will be payable in respect of any time during that period.
Section 7 provides that tenants can submit the relevant declaration to the RTB by electronic means to avail of the enhanced protections under Part 2 of the Bill.
Part 3 provides for amendments to the Residential Tenancies Act 2004, the Emergency Measures in the Public Interest (Covid-19) Act 2020 and the Valuation Act 2001. Section 8 provides that during the period from the date of the passing of this Act to 10 January 2021, tenancy tribunals are not required to be held in public. This is a continuation of the provision first introduced in the Emergency Measures in the Public Interest (Covid-19) Act 2020 in the interest of safeguarding public health.
Section 9 provides for an amendment to the table in section 34 of the Residential Tenancies Act 2004 to provide a new separate ground 1A for termination of a tenancy for reasons of non-payment of rent within the minimum 28-day period afforded for payment, following receipt of a written rent arrears notice by both the tenant and the RTB. The 28-day period commences upon receipt of the written rent arrears notice by the tenant or by the RTB, whichever occurs later. Section 10 is a consequential amendment to section 35 of the Residential Tenancies Act arising from the new ground 1A provided for under section 9. Section 11 inserts a new section 39A into the Residential Tenancies Acts. The new section 39A provides that where a landlord serves a notice of termination in relation to the failure to pay an amount of rent set under the tenancy, a copy of that notice must be sent to the RTB at the same time as to the tenant. When the RTB receives a copy of the notice, it will notify the tenant in writing of his or her right to refer a matter in connection with the notice of termination to the board for resolution under section 76. In the resolution of any dispute arising, the RTB adjudicator shall have regard to any advice provided to the tenant by the Money Advice & Budgeting Service, MABS, when making a decision or determination. Where there is an appeal to a tribunal, the tribunal shall also have regard to any advice provided by MABS when making its determination.
Section 12 provides for a number of amendments to section 67 of the Residential Tenancies Acts. Paragraphs (a) and (b) provide conditions for the serving of a notice of termination where the tenant has failed to pay an amount of rent due. The conditions are that the tenant and the RTB have been notified in writing that: such amount of rent due, as is specified in the notification has not been paid, and that the rent has not been paid to the landlord within the minimum period of 28 days following receipt of the written rent arrears notification by the tenant, or by the RTB, whichever occurs later. Paragraph (c) provides that where the RTB receives a notification that an amount of rent due has not been paid, it shall provide information in writing to assist the tenant in getting advice from MABS. Provision is also made that any notice of termination for failure by a tenant to pay an amount of rent due shall be deemed to be invalid if the landlord fails to simultaneously serve a copy of that notice on the tenant and the RTB.
Section 13 amends section 5 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 in subsection (6) to redefine the revised termination date so that it cannot expire any earlier than 10 August 2020. This applies to tenancies where a notice of termination had been served but the notice period had not expired before the 2020 Act came into law on 27 March 2020. Section 5(7) of the 2020 Act is also deleted to ensure that Part 2, operation of Residential Tenancies Act 2004, of that Act ceases to operate at the end of the emergency period under section 3(1) of that Act.
Section 14 modifies the application of section 25 of the Valuation Act 2001 by extending the period from ten years to 12 years within which a valuation list in relation to the rating authority area of Dún Laoghaire-Rathdown County Council shall be published, with a return to the usual ten-year period in 2023.
This Bill is being debated in the Houses of the Oireachtas during an economic emergency. The measures that we take now have to target those who most need our help. The tailored approach in this Bill targets a prohibition on rent increases to those who most need it. It protects tenants from imminent tenancy termination caused by rent arrears. The earliest that they will have to leave their home is 11 January 2021. We recognise that some landlords also find themselves on the wrong side of Covid-19, and we also recognise constitutionally protected property rights. That is the reason this Bill balances the need to protect those worst affected by Covid-19 with the need to respect property rights and the legitimate interests of landlords.
On the back of our hard-won progress in suppressing the spread of Covid-19, Ireland now has to face the challenge of restoring society and the economy. This Bill will play its part in that regard. Our focus, heading into the autumn term, will be to continue the adjustment of our lives to living with Covid-19. We need a new normal that is safe. We must respect the efforts that all of society has contributed in getting us this far. The residential rental sector has been affected by the economic fallout of Covid-19. Tenants, landlords and professionals engaged in the sector all needed to adapt to the situation presented the pandemic. It has not been easy and uncertainty remains.
This legislation seeks to protect both tenants and landlords. Landlords accept that some tenants will face serious financial challenges over the coming weeks and months and I know that they will work to support tenants to the greatest extent possible. Landlords recognise that forbearance is required. The provisions in this Bill will help during and after the economic fallout from Covid-19. It will ultimately help landlords by ensuring early and active engagement by tenants with Government support structures where they find themselves in difficulty in making rent payments. The usual rental protections under the Residential Tenancies Acts will apply as normal from 2 August. It is only where rent arrears is a problem during the new emergency period to 10 January 2021 that the temporary prohibition on rent increases and tenancy terminations will apply.
Earlier this month, the RTB, in conjunction with the ESRI, published a paper entitled, Exploring the Impact of the COVID-19 Pandemic on Rental Prices in Ireland from January to June 2020: Early Insights from a Monthly Rent Index. The analysis shows that the annual growth rate of rent amounts declined significantly compared to the period prior to the lockdown. While the annual growth rate in March was over 3%, by April this had fallen to 0.4%, and it declined again in May to 0.1%. By June, the annual growth rate had turned negative, with prices falling by 3.3% compared to the same month the previous year. The findings clearly show early downward pressure on rental prices and a reduction in the number of registrations, the latter of which is consistent with the restrictions on economic and social life brought in to stop the spread of Covid-19. Early estimates for April through to June show annualised rental falls in Dublin, with a clear reduction in the year-on-year growth rate in other areas.
My Department and the ESRI operate a programme of collaborative research principally focused on housing economics. Under this programme, researchers from the ESRI and my Department prepared a research paper exploring the short-term implications of the Covid-19 pandemic on the private rental market. The research paper is focused on rental payment affordability and the potential incidence of arrears during the first three months of the pandemic among non-supported, private market renting households, that is, among renting households which do not receive a housing subsidy. Changes in consumption patterns arising from public health measures are also considered in the paper. The research findings published on 28 July do not identify a significant rent arrears problem emerging during the first three months of the pandemic. While tenants are legally obliged to continue to pay rent during this emergency, the Government is fully conscious that some tenants have seen a reduction in their working hours, some have lost their job, and others have been forced to self-isolate to protect their communities and in some cases have contracted Covid-19. The Government has made available a range of income and rental supports to anyone in financial difficulty. I encourage tenants who are experiencing difficulties to engage with their landlords and the Department of Employment Affairs and Social Protection at the earliest opportunity to seek whatever income and rental support might apply in their case.
Covid-19 has presented this country and the global community with enormous challenges over the past five months. The pandemic continues to present challenges in the medium to long term particularly for those most vulnerable in society, and those working in sectors most heavily impacted by the pandemic. The Programme for Government: Our Shared Future, asserts the Government's ambition to meet the challenges, repair the damage that has been inflicted on people by the pandemic and take the renewed spirit arising from these challenging times and translate it into action.
This has been a very stressful and testing time for people. The economic impact of the pandemic will continue to be felt in all parts of the country and in society for a long time to come. We now need to move decisively to recover from its devastating social, economic and cultural impact. The key goal is to get as many people back working in a safe manner as soon as possible. The Government is committed to helping people who need help to meet their housing needs. It believes that everybody should have access to good quality housing to purchase or rent at an affordable price, built to a high standard and located close to essential services offering a high quality of life. We understand that the provision of more affordable housing has a profound benefit socially and economically and we believe that the State has a fundamental role in enabling the delivery of new homes and ensuring that the best use is made of existing stock.As Minister of State in the Department of Housing, Planning and Local Government, I know that people need to get back to work as soon as possible to be able to pay their rent and other bills. This Bill will help tenants when they most need it.
Gabhaim buíochas leis an Leas-Chathaoirleach. I thank the Minister of State for bringing this legislation to the House. I have not had the opportunity previously to address him and I thank him for coming in.
I am speaking as Fianna Fáil spokesperson for housing, local government and heritage. I was first elected to Dublin City Council in 2004 and was in Dublin City Council for more than 16 years when it was essentially established as a housing authority. For more than 16 years I have been dealing with people and trying to help them address their housing needs. I went from a situation when I was first elected to helping people apply to the local authority to navigate the process to secure a home, to helping them avoid becoming homeless. My constituency of Dublin Central is probably the one which has been hit greatest by the housing crisis. When I talk about this Bill today I see it for what it is, which is a very important piece of legislation which aims to protect renters who cannot pay their rent and helps to protect them from becoming homeless. However, I have to ask the Minister of State to indulge me for a minute or two to talk about the housing crisis. The housing crisis is not just about the acute end of it we see in homelessness that hits the headlines but is affecting people of every age and, quite honestly, every income level.
In this example of one family, and there are hundreds of such cases I have dealt with on a personal basis, both parents are working with four young children, they are on a housing list for more than seven years in rented accommodation and became homeless. They ended up being put in a hotel out in Ballymun and have to take a shuttle to the airport, take a bus into town and then take a bus back out to Cabra to get their children to school. The children’s attendance at school suffered and it had never been a problem or had they been late for school. The parents' ability to get to work suffered and the grandparents and older siblings ended up with an overcrowded situation as well. It affected everybody including their employers because they were then without very valuable workers. As a Government, we have an enormous challenge to address the housing crisis and we need to do that by having a significant change in attitude in how we see housing. It must be seen as a vital social infrastructure and cannot be seen as a financial asset. This Government is committed to taking on the challenge and to ensuring that there will be a significant State-led public house-building programme so that we will recover the lost decade in social house-building that we have experience in this State.
I wish the Minister of State well and he has all of our support in doing that but we have to act with urgency and ambition like this is an emergency, the way we did in the pandemic. We need to take this housing challenge and ensure that by the end of this four years there is a significant change in the delivery of housing in this State with public housing on public land and affordable housing to both purchase and rent. The Minister of State has our commitment to work with him on that.
On the Residential Tenancies and Valuation Bill 2020 , this is the third extension of the emergency legislation that was introduced in March. It aims to target those renters. I am thinking primarily of those young workers, the young women, the retail workers and those working in hospitality whose incomes have been dramatically cut by the pandemic. This is a targeted approach which will ensure that those renters are protected from eviction or from rent increases. Most critically, it will also ensure that the State will actively support those renters to avoid homelessness, rent increases and evictions. In that respect it is very welcome. From my experience, knowing how many people who have come to me who have been renting for a long time like the family I described earlier and faced with a notice to quit on the basis that the home is going to be sold, it is very important that the Residential Tenancies Board is being resourced to tackle those scenarios. I have seen those scenarios in real life and it is important that the Minister of State’s Department is giving 15 extra staff members to the Residential Tenancy Board to ensure that there are no bogus attempts to evict renters and deprive them of their home.
What is also very important is the other practical response that the Department is taking with the call for housing. I got to the bottom of all of those cases by going to Dublin City Council. When the person came to me I said to them to ask the landlord if they will sell the property to Dublin City Council. We would then know if the landlord was really selling it and if they were, Dublin City Council would engage with them. Dublin City Council, to its great credit, is the one local authority that has to a significant extent purchased properties and has managed to keep tenants in those properties and avoid homelessness.
The Minister of State’s call for housing from the Department is very welcome. What this does is it puts that call out there to all landlords who wish to sell properties. If they want to sell their property they can sell it back to the State. If their tenants are on the social housing list they will be retained in that tenancy. That is a practical measure and is not one that requires any legislation and what the Minister of State has done is welcome.
That is the type of approach we need. We need to stop people being made homeless and to secure what tenancies we have but, most critically, if we are going to address the housing crisis, we have to address supply. We must get on with a significant State-led public house-building programme. We need to have public housing on public land and affordable housing in sustainable communities close to where people want to live, work and enjoy their lives.
Gabhaim buíochas leis an Leas-Chathaoirleach.
I warmly congratulate and tAire Stáit, Teachta Burke, on his appointment which is a well-deserved one and I will welcome him in what I believe is his first visit to the Seanad. He has a big job of work to do but no better man.
This legislation is very welcome. I will pick up on one point that the Minister of State has made which is about striking a balance. This is about being fair and supportive - and rightly so - of tenants who find themselves in difficulty and in desperately challenging situations as a result of this pandemic. It also recognises the constitutional rights of landlords which can sometimes be overlooked. This legislation is trying to achieve what we all want to see which is fairness.
Senator Fitzpatrick is very correct on the challenge we face with the housing crisis, particularly in urban areas. Since 2016, between private and public housing, 50,000 houses were built and in the fullness of time former Minister, Deputy Eoghan Murphy, will get credit for at least doing his level best to manage the situation and to get stock built. The one way of dealing with the housing crisis is by building houses. There is a chronic shortage of houses and when one has a situation where supply and demand do not meet and where an equilibrium is not achieved, then, unfortunately, prices go up, and it is expensive for people to try to purchase houses. We have all dealt with people who were not in a position to get a mortgage even though they both had what would be considered well-paid good jobs.
The way one deals with properties for rent is by increasing the supply. The more houses that are built the more properties that are available for rent as well. It is certainly the ambition of this Government to deal with the housing stock situation head-on and to engage in a large-scale building programme. This, in itself, will create jobs in the short to medium term, outside of its long-term benefits to society.