Two cheers for the new Residential Tenancies Bill
Posted on May 01, 2019: by Gavin Elliott
At the end of last year the Government introduced the Residential Tenancies (Amendment) (No. 2) Bill 2018. As it has passed through the Oireachtas the bill has undergone a number of changes and a number of things have been added that were not in the original Bill. The majority of the changes are positive for tenants, and will increase security for people who are renting, but the Bill represents a missed opportunity to make more substantial changes which would have greatly improved the security and viability of the sector.
Some of the proposed changes are very welcome. The inclusion of purpose built student accommodation, and halls, in the rent certainty measures will reduce the instances of massive rent increases that we saw recently in Dublin and Galway. Unaffordable accommodation is a significant block on access to education. Students in purpose built accommodation will be able to take cases to the RTB which will allow them to vindicate their rights in a way that is not straightforward at present.
The notice periods that a landlord must give when terminating a tenancy are being increased. The proposal is to increase the notice period to 180 days for everyone in occupation for more than 3 years and less than seven. Tenants in occupation for more than six months but less than a year will get 90 days’ notice rather than the current 35 days, and the notice period for more than one year but less than two years is increasing from 42 days to 120 days. The increase in notice periods is welcome and reflects the current reality of renting in Ireland where finding alternative accommodation can be exceptionally difficult. However the notice period for tenants in occupation for less than six months will remain at 28 days. It is disappointing that the Government has not seen fit to increase this period. Tenants in occupation for a short period face as much difficulty finding alternative accommodation as longer term tenants.
Perhaps the most noteworthy change is the creation a new administrative sanctions regime within the Residential Tenancies Board. The RTB will appoint Authorised Officers who will be given significant powers to investigate particular matters. They will be empowered to investigate breaches of the Residential Tenancies Act relating to landlord registration, the rent certainty rules (including the claiming of an exemption) and provisions relating to the offering back of property after a tenancy termination. Perhaps most significantly for tenants, the Authorised Officers will be able to investigate the citing by a landlord in a notice of termination of a reason that is false or misleading in a material respect. The imposition of sanction will be by a decision maker appointed by the RTB, subject to confirmation of the sanction in the Circuit Court. A landlord may be fined up to 15,000 euros and ordered to cover the cost of the investigation up to another 15,000 euros. Any enforcement regime will only be as effective as the will to use it. It is important that the scheme is properly funded and that the RTB make full use of the powers granted to them.
A new criterion is proposed for the determination of the Rent Pressure Zones. The proposal seeks to take the distorting effect of Dublin and the Greater Dublin Area out of the calculations. The problem with the use of ‘national average rent’ as a criteria was that some places, like parts of Limerick, had sustained rent increases but they were consistently below the national average. The National Average in Q4 2018 was €1,134, the average in Dublin was €1650, the average rent in the GDA (excluding Dublin) was €1,167 and if the GDA and Dublin are removed from the calculations the average rent is €833. This proposal may bring a number of areas into PRZs upon commencement of the legislation or soon after. While more areas qualifying is welcome and necessary, it is time to consider the expansion of rent control measures to the whole country.
The bill falls short in some regards, most significantly in the absence of provision for dwelling specific rent transparency, and there is a missed opportunity to make small but significant legislative changes which would bring certainty to both landlords and tenants such as the removal of no reason evictions at the end of every six year cycle. The Bill contains several measures which will increase security for renters, which is to be welcomed, but the ambition of the proposals is not commensurate with the challenges we face and the crisis which continues to unfold. The March homelessness figures indicate that 6,484 adults and 3,821 children were homeless during that month. The Private Rented Sector is the main driver of homelessness and while any measures to reduce pecarity in the sector are welcome, a lot more remains to be done.
At the time of writing the Bill has not yet completed its journey through the Oireachtas and changes to the measures mentioned above are still possible.