Dáil Éireann debate -
Thursday, 7 Dec 2023

I move: "That the Bill be read a Second Time."

I thank the Minister of State for attending. Unlike the Topical Issue debate, we have the right Minister, as such, for this Bill. There is no better Minister for it from the Department. I know he shares a lot of the same concerns as I have on this. I wish to state at the outset my firm view, and that of the Social Democrats, which I have articulated for a long time, that nobody who pays their rent should be at risk of eviction or homelessness, as is the case in most other European countries. What we need overall is a ban on no-fault evictions, as is the norm in most European countries. I believe that as a country we will get there eventually, but the sooner we get there, the fewer difficulties there are going to be for renters.

The Bill is a measure that would only address this situation for the smallest of cohorts of renters, effectively. It is a much more limited measure than the overall reform that we believe is needed in the rental sector, but it is an important measure all the same. I welcome the confirmation from the Taoiseach to me yesterday in the Dáil that the Government will be supporting the Bill going to Committee Stage. The Minister, Deputy Darragh O'Brien, also spoke with me yesterday about it. I welcome that support for it.

The aim of the Bill is to fix the Tyrrelstown amendment and to put an end to situations of mass evictions, where multiple households can be evicted at the same time simply because the owner of the building or a number of rental properties is seeking to sell. I will listen very keenly to what the Minister of State has to say in response to the Bill. I am very interested in the detailed response that will be given. I am prepared to work very constructively to try to address any concerns the Minister of State and the Department have, and I will certainly be engaging with them to see what we can do to address them. I will be pushing to have time allocated for this in the Oireachtas housing committee to enable it to progress as quickly as possible.

By way of background, the Tyrrelstown amendment came about after the events in Tyrrelstown in west Dublin.

The eviction notices were issued after the original landlord loans were bought by the Wall Street giant, Goldman Sachs. Some of the tenants had lived in their own homes for eight years and had paid in the region of €120,000 in rent at that time. Residents successfully challenged the eviction notice to the Residential Tenancies Board and this resulted in the Tyrrelstown amendment, a legal move to block landlords trying to sell up entire estates or groups of apartments and homes to ensure vacant possession.

One of the fundamental changes brought about by the Planning and Development (Housing) and Residential Tenancies Act 2016 was the introduction of the Tyrrelstown amendment which aimed to prevent these situations where large numbers of residents in single developments are served with termination notices simultaneously by a landlord in order to sell the entire development with vacant possession. The amendment was supposed to ensure that where a landlord intends to sell ten or more units within a single multi-unit development, that sale would be subject to the existing tenants remaining in place. There was an exception to this new rule where the market value of the property sold with the tenant in situ was 20% below the price that could be obtained for the property with vacant possession and the application of the rule would be unduly onerous and cause hardship to the landlord. That was the wording. Unfortunately, the amendment did not provide any guidance on what would be considered unduly onerous or hardship to a landlord, which are quite vague terms. They certainly have been used by some landlords to go ahead with mass evictions.

The Tenancy Protection Bill we are discussing seeks to remove these exemptions so renters are properly protected from mass evictions. How this exemption has been used is not what I believe was intended by legislators at the time. All of us who engage with landlords and renters in our constituencies will be aware there can be a huge amount of hardship for renters. When there are individual landlords who own one property or a small number of properties, there are instances where individual landlords can indeed be in hardship. They may be reliant on the rental income and, particularly now with increased interest rates, they may be falling behind in payments. While in many cases it is renters who are in difficulty, there are situations where individual landlords are in difficulties as well. I absolutely recognise that.

However, it is hard to extend that consideration to those who own multiple properties, ten or more. It is hard to equate a landlord who owns that many properties with the hardship of an individual renter who is getting an eviction notice, who has always paid their rent, and who could be going into homelessness. Of course, when a new buyer buys those homes and continues to rent them out, there is no reason the original tenants should not stay in place.

There was good discussion of vacant possession at the Oireachtas housing committee yesterday when representatives of Threshold, IPAV and the Irish Property Owners Association appeared before the committee. What came through very strongly from their contributions was how inefficient achieving vacant possession is. There is a huge human cost for renters. It is very destructive and stressful. In the worst-case scenario, it leads to people becoming homeless, even without the destruction to kids potentially being uprooted out of the community away from their friends, having to go to new schools and all those different things. There are inefficiencies even from a landlord's point of view of having several months where they are not getting any rental income, the vacancy in the housing stock is unnecessary, and the cost then potentially of a new landlord reletting and so forth.

In most European countries that kind of vacant possession is not achieved when a landlord is selling a property. What happens is that the renter stays in place, a new landlord now owns the property, the renter changes the bank account they are paying into and life goes on in most cases. I absolutely accept there would need to be exceptions for people renting out their principal primary residence, for example. They would obviously need to have different arrangements. In the larger context, we need to address the issue of vacant possession. If we were to get to the European norm, we would be in a much better place for renters and for the efficient use of the housing stock. Switzerland, where 52% of households are renters, is the country with the largest rental sector. There, people who pay their rent do not get evicted and a Bill like this would not be needed. In Germany, 48% of households rent and renters cannot be evicted on the grounds of selling. This Bill does not address that larger problem. It only looks at the Tyrrelstown amendment and those multiple households.

I will give an example where the loopholes with the Tyrrelstown amendment are causing genuine problems. There have been multiple cases where something similar has happened. In Tathony House in October 2022, nearly 100 people were given eviction notices when the landlord claimed that a sale with tenants in situ would cause more than a 20% drop in value and that this situation would cause undue hardship to the landlord. Dublin City Council contacted the owner of Tathony House five times since the start of the year to query his plans for the building but did not actually receive a response. The residents took a case to the Residential Tenancies Board where the landlord claimed the sale would garner €6 million while the sale with tenants in situ would only get €4 million and this would cause the landlord unto hardship. This was appealed and the Residential Tenancies Board found in favour of the renters.

The landlord who claimed hardship made €3.7 million in leasing the property to the State between 2003 and 2007 alone, not to mention the rental income collected since. The landlord appealed the decision of the RTB and then dropped the case last month just before the tribunal hearing took place. In that time, with all of the stress and hassle caused by these eviction notices playing out, 29 out of 34 households at that point had given up their tendencies. That meant the landlord was then free to issue fresh eviction notices to the five remaining households which were no longer protected by the Tyrrelstown amendment. This is not a once-off occurrence and it is happening in multiple situations. It highlights how these exemptions can be used by landlords to wear down the tenants and effectively bypass the protections that were intended with the Tyrrelstown amendment. With the threat of pending eviction, they get the number of tenants below ten and they are able to go about their business as usual and carry out evictions. I pay tribute to the residents of Tathony House who have been campaigning on this. I know it is hugely stressful and difficult for them.

The purpose of the Bill is to protect renters from mass evictions, which was the original intent of the Tyrrelstown amendment. The current protections are clearly not fit for purpose which has been highlighted by the ongoing situation in Tathony House and in other locations. The Tyrrelstown amendment is supposed to protect renters from mass evictions. The multiple exemptions ensure it has not worked in many instances. Although the amendment states that ten or more households cannot be evicted at once, landlords can avoid this rule by claiming that selling the homes with tenants in situ would cause them undue hardship. Simply in terms of proportionality, I have to question what kind of hardship can be solved when compared with the hardship of renters facing those kinds of evictions.

We do not know what will happen in Tathony House. In other locations where this has happened, this has been used to get vacant possession of apartment blocks. People who have been renting for a number of years and have paid a massive amount in rent have all moved out of their homes and then the new owner starts renting them out at massively inflated rents. This is massively destructive to people and is a cost to the State and local authorities in terms of support services, trying to prevent people going into homelessness and then supporting households who become homeless.

This Tenancy Protection Bill would end mass evictions once and for all by scrapping these evictions. I very much look forward to hearing what the Minister of State has to say and I will work constructively with him and the Department to try to get this fixed. While I have a strong view, this is a small aspect. We should not be in a situation of having to consider this. We should take the bold steps to move towards a European-style situation. There could be exemptions where the principal private residence is being rented out by somebody who is going away for a year or two years for work, education or other reasons. That is a different scenario and a discussion for another day.

I thank Deputy O'Callaghan for bringing forward this Bill. As he stated, the Government will not be opposing the Bill and will allow it to progress for detailed debate on Committee Stage. In preparation for this, I have gone through the Bill quite forensically with the officials in order to see where we stand. I will go through a couple of aspects.

It must be recognised that the legal grounds for termination of tenancies provided in the table to section 34 of the 2004 Act, as amended, including ground 3 whereby a landlord intends to sell the rented dwelling, are designed to underpin the constitutionally protected property rights of landlords. The intention-to-sell ground for termination is subject to the Tyrrelstown amendment, which prevents mass evictions, which the Deputy has already referenced.

Section 35A of the Residential Tenancies Acts 2004, as amended, better known as the Tyrrelstown amendment, provides that where a landlord proposes to sell ten or more units within a single development at the same time, or within six months, this sale is subject to the existing tenants remaining in situ, other than in the exceptional circumstances set out in subsection (3). The Deputy has already referenced them.

It is these exceptional circumstances that this Private Member's Bill seeks to delete. These exceptions are required to respect the constitutionally protected property rights of landlords. The exemption under section 35A(3) provides the necessary balance between reducing the landlord’s property rights and providing strong protections for tenants. There is always a balancing act. Section 35A(3) which is proposed for deletion under this Private Member’s Bill, provides for the disapplication of the Tyrrelstown amendment, or section 35A, where a landlord can show to the satisfaction of the RTB that, first, the price to be obtained by selling at market value the dwelling with tenants in situ is more than 20% below the market value that could be obtained for the dwelling if it was sold with vacant possession; and the application of the Tyrrelstown amendment would be unduly onerous or cause undue hardship on that landlord.

During the Oireachtas debates on the Planning and Development (Housing) and Residential Tenancies Bill 2016, which was enacted that year, various Opposition amendments were tabled in respect of the proposed Tyrrelstown amendment. Amendments to that Bill sought to increase the 20% set out in section 35A(3)(i) to 30% or 40%; others sought to delete section 35A(3) entirely, similar to this Private Member's Bill. In 2016, the Government of the day recognised that to reduce the market price of a dwelling by more than 20% on foot of it being a rented dwelling and by requiring its sale with tenants in situ, represented a significant interference with the constitutionally protected rights of landlords. This remains true today.

Section 35A(3) was carefully drafted in 2016 to ensure that such interference could be legally defended as constitutional, just, rational and proportionate and carefully limited in its application. Section 35A(3) affords a landlord an opportunity to be exempt from the Tyrrelstown amendment. In doing so, it ensures that the Tyrrelstown amendment balances the rights of tenants and landlords and provides fairness.

The RTB advises that, since 2017 when section 35A was commenced, there have been just four cases - from a sample of 2,000 disputed cases examined by the RTB - where a landlord has sought to rely on section 35A(3). The RTB determined all four terminations to be invalid. We can see, therefore, that reliance by a landlord on the exemption under section 35A(3) can be referred to the RTB as a matter of dispute. The exemption is provided because it is necessary but all notices of terminations must be valid and, if a dispute is referred to the RTB, the landlord needs to be in position to show that the exemption lawfully applies. The sole aim of this Bill seems to be to remove an exemption that is legally required and is not currently causing problems in the sector.

The Residential Tenancies Acts do not prohibit a landlord from selling their property with the tenant in situ, which the Deputy has referred to. The commercial reality is that there is generally a lower market value for a property sold with tenants in situ. The Acts protect tenants by requiring that a landlord must state a reason for the termination, in accordance with the allowable grounds, in any notice of termination served after six months of a tenancy’s commencement. The Acts also provide for minimum notice periods to be served before a tenancy termination can take effect. The longer the tenancy has existed, the longer the minimum notice to be given. The minimum termination notice periods increased significantly in 2019 and 2022, in recognition that it is difficult to secure alternative rental accommodation, and now range from 90 to 224 days.

The Residential Tenancies (Amendment) Act 2019 provides that where a landlord terminates a tenancy because he or she intends to sell the property, he or she must enter into a contract for sale within nine months of the termination date and, if not, must offer to re-let to a former tenant. Failure to offer such a re-let falls within the definition of "improper conduct" by a landlord under the Acts is liable to investigation and sanction of up to €30,000 by the Residential Tenancies Board.

The Tyrrelstown amendment prevents numerous tenancy terminations from taking place at the same time, grounded on the sale of an entire development of ten or more units, and thereby decreases the pressure on local rental markets and rents payable to reaccommodate tenants. The Tyrrelstown amendment was carefully drafted to promote security of tenure in the interest of the common social good, by only delimiting the constitutional property rights of an owner where he or she wishes to sell ten or more housing units in the same development at the same time. In such a case and subject to certain conditions, the landlord cannot terminate such tenancies to facilitate their sale for vacant possession and must sell the properties with tenants in situ.

The Tyrrelstown amendment strikes a balance between a landlord’s right to sell their property and achieve fair return on their investment and a tenant’s right to security of tenure. The Residential Tenancies Board was established as an independent statutory body under the Residential Tenancies Acts 2004 to 2022 to operate a national tenancy registration system and to facilitate the resolution of disputes between landlords and tenants. Where there is a question as to the validity of a notice of termination, the tenant or tenants should refer the matter to the RTB for resolution. The RTB’s independent dispute resolution service will provide a determination order on the matter and may invalidate notices of termination as required.

I wish to assure renters, Deputies, and obviously Deputy Cian O'Callaghan, that the Government is helping renters. Where a tenant receives a valid notice for termination because their landlord intends to sell their home, and they are in receipt of HAP or RAS and are at risk of homelessness, their local authority is supported by the Department under the tenant in situ scheme to purchase the home. There are approximately 2,000 such tenant in situ purchases at various stages at the moment, and that number is increasing.

Where the tenants are above the social housing income eligibility limits but below the cost-rental income eligibility ceiling of €66,000 or less eligible for cost-rental housing in Dublin or €59,000 in the rest of the country, the Housing Agency can, in certain circumstances, purchase the home and the tenants can remain in place under the cost-rental and tenant in situ schemes. Where the tenants wish to purchase the home from the landlord but do not have the requisite finance, they can apply to the first home scheme, which bridges the gap between the finance a person has and the finance they need to purchase a home.

It is important to remember that a valid notice of termination must be served in accordance with the Residential Tenancies Acts 2004 to 2022. It can be assumed that a proportion of tenants in receipt of a notice of termination are seeking or benefiting from the Government supports that I mentioned just now. On 24 October, the Government approved the general scheme of the residential tenancies (right to purchase) Bill as a basis for priority legal drafting with the aim of publishing the Bill during this Oireachtas session. Detailed and complex work has been ongoing in conjunction with the Office of the Attorney General to progress the implementation of the Government decision of 7 March to provide for a legislatively based first right of refusal for tenants. The Oireachtas Joint Committee on Housing, Local Government and Heritage is currently conducting pre-legislative scrutiny of the general scheme of the residential tenancies (right to purchase) Bill.

I wish to emphasise that the programme for Government recognises the important role that the private rented sector plays in housing many people and will continue to do so into the future. This Government will address challenges in this sector, including standards, security and affordability. Improving standards, security and affordability for renters is a priority for me and the Government. We are making significant changes in recognition of the fact that tenants continue to face persistent pressures in the rental and housing markets. Our approach to change must continue to be carefully balanced. We must recognise that we need landlords to provide a steady supply of rental accommodation and for that sector to be on a sound footing for both tenants and landlords.

I wish Deputy Cian O'Callaghan well with the Bill when it proceeds to Committee Stage.

I thank the Minister of State for his response, which was interesting. If I listened to just what he said at the beginning and the end, I would be delighted. It is everything in between that causes me concern. Effectively, my understanding of what the Minister of State said is that it is his view, as well as that of the Government, that while they are allowing this Bill proceed to Committee Stage, they really do not agree with it at all. That is what I heard.

The Government feels that the existing legislation is fit for purpose. If I have misheard that, the Minister of State may clarify it for me at any stage. As that is what I picked up, I will have a job of work to do on Committee Stage to get agreement with the Government parties on this.

I will make a few points in response. I completely agree with the Minister of State that with everything we do around here, we have to be mindful of different rights and of balancing rights. There are different parties here that have rights and I recognise that. My support and sympathy are primarily with the families and individuals who are renting homes, who may be subject to eviction and who could become homeless. That is where my sympathies lie and I make no secret about that but I recognise that the investors have rights as well and that is the reality of the situation.

The Minister of State referred to the Constitution and the Constitution is clear on balancing the rights of investors with the common good. If the Government would get on with the referendum on the right to housing, that might strengthen our ability to have measures to support people who might be at risk of homelessness. Even without that we have had significant legal expertise and opinion over the years stating clearly that when it comes to issues around housing, the Oireachtas has the right to legislate and to do so in line with the common good. The Tyrrelstown amendment was exercising that right. Since it has been passed we have seen the difficulties with it. The Minister of State outlined that there have been four attempts to use-----

Based on a sample from what he knows. He has seen a sample where there were four attempts to use it, and from that four rulings were made by the RTB in favour of the renters. That would concur with the point I was making, which is that this clause is not being used by landlords and that they are not having findings on their side but that it is allowing for a tactical use of serving eviction notices, causing all the upheaval that goes with that and all the appeals and the process that are involved. Over that time, a landlord is able to get from 20, 30 or 40 households down to five, six, seven or eight but below the threshold of ten. Therefore the remaining tenants are no longer protected by the Tyrrelstown amendment.

If that clause or loophole were not in place, there would be no ability for a landlord to do that and they would just have to get on with it and sell the apartment block. They would decide to do the same as what happens in other European countries and sell with the renters in place. The problem would be solved in that way. If that happened, the norm for large-scale holdings, apartment blocks and so forth being sold would be that they would not be sold with vacant possession but with the renters in their homes. If that was the norm then the normal market return would be to sell with the tenants in situ. There would not be a group of landlords at a disadvantage compared with another group of investors that might be achieving a different rate.

The market return would settle in at that level and it would be baked into the situation. It would be baked into people's considerations when they are making investments and purchases and so forth. Investment would still continue and the market would know what to expect. It would get rid of this uncertainty we have where if an investor wants to get vacant possession he or she has to go through serving these eviction notices, eventually withdrawing them and whittling it down to below ten tenants before doing eviction notices. It would help avoid having this prolonged period, which creates inefficiencies for the landlord, creates terrible turmoil for the renters and creates inefficiencies in our housing stock of this ongoing vacancy in perfectly good housing for prolonged periods.

Our situation is almost a lose-lose one if we zoom out of it. What I am proposing, just for this small bit of rental stock, would bring us towards the European norm. Investors would know what the situation is, they would not be trying to achieve vacant possession and they would bake that into their calculations. It would be good for renters, the investors would still be in business and the system would work. I heard and respect the comments from the Minister of State, although I profoundly disagree with them. I will push ahead on this Bill and work to try to get it through. This would be a small measure that would make the world of difference to some people and we would still have a healthy and vibrant rental market.

As I have said, the countries in Europe with the largest and healthiest rental markets and with the most investment in rental markets would never be discussing a Bill like this because this is just the normal practice and standard for all rental properties in the likes of Switzerland, Germany and so forth. These are large rental markets with plenty of investment, plenty of return for investors and a bit of humanity for the renters. I am convinced we will get there as a country but if we got there in the next two or three years, it would save a lot of hassle, it would save a lot of people from going into homelessness and it would even provide cost savings for the State. It would be much better to get there relatively quickly than for us to get there in the next ten or 20 years.

I thank Deputy O'Callaghan for his Bill. We are not opposing the Bill and we want to engage. I mention the empirical evidence that has been provided to us to date. The Government has noted that we are allowing the Bill to proceed to scrutiny by the relevant committee. However, the Government has noted that the reliance on the exemption has caused few disputes or referrals to the RTB. From information provided by the RTB on a small number of dispute referrals, no landlord has been able to satisfy the RTB that, first, the price that would be obtained by selling at market value with the tenants in situ is more than 20% below the market value that could be obtained for the dwelling as if it was sold for vacant possession, and, second, that the application of the Tyrrelstown amendment would be unduly onerous and cause undue hardship. In all such disputes, any notice of termination that relied on the exemption was invalidated by the RTB.

We must also remember that the exemption from the Tyrrelstown amendment is legally required to provide the necessary balance between restricting the constitutionally protected property rights of landlords and providing security of tenure for tenants. The original aim of the Tyrrelstown amendment was to mitigate the destabilising effect of a large number of people all seeking new accommodation at the same time in the same location.

We are not opposing the Bill and we look forward to engagement on it on Committee Stage. Based on the empirical evidence to date, we have found that the RTB only had a small number of related dispute referrals and that no landlord has been able to satisfy the RTB during its dispute resolution process.