Dáil Éireann debate -
Thursday, 17 Nov 1960

Vol. 184 No. 8

Rent Restrictions (No. 2) Bill, 1960 [Seanad.] — Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Major de Valera

I had practically concluded what I wished to say when the debate was adjourned. I was referring to Section 10 and at the outset, I think we should realise that the provisions of that section, when one examines it, must be considered to be as much in the interests of the tenants as of the landlords. The first remark to be made in regard to this provision, which we can deal with in more detail on the next Stage, is that it follows rather closely a recommendation made by the Commission set up to examine this problem, a Commission set up not by this Government but by a previous Government from the other side of the House.

This provision will possibly be the centre of discussion in this Bill and therefore I content myself at this stage with pointing out that the problems from the tenants' side in regard to repairs had become more and more apparent as time went on. One of the bad effects of the Rent Restriction Acts from the point of view of the tenant was that because of the controls, and particularly the controls in regard to the return the landlord got from his property, property was falling into disrepair and various steps had been contemplated, and some had been taken, to deal with that in the Housing Acts and otherwise, but for the unfortunate tenant of property falling into disrepair, there was a very real problem.

This section will deal with that. There will be objection, of course, to the 12½ but against that there must be balanced the necessity to deal with the problem which the tenant has in regard to premises going into disrepair because of uneconomic considerations and the problems which tenants have had in regard to lack of repairs and these problems must be balanced and an equitable solution found as between landlord and tenant.

Therefore, as this is a matter which no doubt will get most careful consideration on Committee Stage, I shall not elaborate further on it, except to appeal for as objective an approach to the Bill as possible. We had such an approach, to a large extent, I think on the 1946 Act and I think the result issuing from this House was, by and large, a good one. We can hope for an equally good result, if there is a cool and dispassionate examination of all the provisions of this Bill.

The final remark I shall make in regard to Section 10 is this: remember that the tenant has certain rights and his existing rights are to some extent preserved in Section 40 or in some later section which gives him the right either to compel the landlord to repair or to deduct any sum which is recoverable. Therefore, this must be regarded as an increase given to the landlord for the benefit of the tenant and the tenant will have the power to enforce that for his own benefit. In order to put the matter in perspective, all I shall say now is that although it may be considered from one point of view as benefiting the landlord, this section has very real benefits to offer the tenants. It is a matter of finding a balance, to see what is the right solution and that balance can best be determined after the Committee Stage discussion. I think I should leave the further consideration of the Bill to that Stage.

Parliamentary Secretary to the Minister for Justice (Mr. Haughey)

The discussion that has taken place on this Stage may, I think, be fairly readily divided into two categories. In the first, I would put the arguments which have been directed to the principles in the Bill, the general policy of the Bill. The second category contains those arguments which have been advanced and which deal with the details of the Bill and its specific provisions and which, strictly speaking, are more correctly discussed on Committee Stage.

If I take the discussion which we have had on the policy in the Bill, I think it can be dealt with under five main headings. In the first case, it has been said that there should be no decontrol and that, so far as this Bill provides for any element of decontrol, it is a bad Bill. The second point made was that the 12½ per cent. increase which is being given on basic rents is unfair, unjust and unnecessary. The point was made that this Bill is only an instalment and that what we are really doing is setting out on a programme the ultimate aim of which is to abolish rent control completely. Then we have the argument that the Bill will not achieve the objectives it sets out to achieve and, finally, we have what is possibly the soundest argument of all, that the Bill is very complicated and that we should try to simplify it as much as possible.

I should like to deal first with the suggestion that there should not be any decontrol. To my mind, that proposition is completely indefensible. Every sound principle of national economics dictates that we should have the maximum possible degree of decontrol. The reasons for that are fairly simple and indeed have been pretty clearly set out by the Capital Investment Advisory Committee. National capital is scarce and we are engaged in a programme of economic expansion which will use up to a greater and greater extent our available capital. So far as capital is available, it should be used for productive purposes in accordance with that programme for economic expansion and anything we can do to save capital for productive purposes is good from the national economic point of view. It follows that if we can do anything to preserve the existing stock of houses or to increase the supply of rented houses, we are following the dictates of good, sound national economic policy.

In this regard we are not alone. The whole trend in western Europe is along these lines. Deputy Costello seems to be under a misapprehension when he thinks that, in bringing in this Bill, we are going against the general trend. I want to quote from a United Nations publication on housing published in May, 1960, and dealing with European Housing Trends and Policies in 1959:

In western Europe, there was a continuing liberalisation of rent policy and therefore further rent increases during 1959. The aim is generally the eventual abolition of rent control, for example, in Denmark, Finland, the Federal Republic of Germany, France, Greece, Sweden, Switzerland and the United Kingdom. Rents of old houses have been progressively increased, the area of rent control reduced and, in two countries, Belgium and Finland, rent control has virtually disappeared in recent years. Almost all western European countries have come to regard the upward adjustment of old rents as inevitable; most consider, however, that the termination of rent control in whole or in part should depend on the elimination of serious housing shortages. The level of controlled rent has normally been increased in order to make possible more adequate repairs and maintenance and in some cases also to take advantage of a more favourable rent income relationship.

I quote from that report to indicate the way our colleagues in western Europe generally are thinking about this matter and to show that the idea of a gradual relaxation of rent control in order to secure certain specific advantages is generally recognised.

Mr. D. Costello

Is that the aim of the Government here?

Mr. Haughey

I shall explain what exactly is the aim of the Government, if the Deputy will allow me to do so. As I said, it is clear from the point of view of pure economic policy what could be done but when the Government came to consider this matter—and indeed they gave it long and anxious consideration—they had to bear in mind that this matter involves questions of social justice, questions of hardship, and that rent control is more than just a simple economic problem. Rent control is designed primarily to protect the weaker sections of the community. Therefore, thinking of those two matters, the Government decided on this principle—and this principle is the foundation stone of the Bill— that we should endeavour to procure the maximum amount of decontrol, consistent with the avoidance of any hardship to tenants. I think that is an eminently fair and reasonable solution, and, as I said in my opening remarks, it represents a compromise between two conflicting interests: on the one hand, the natural desire of any Government to procure the greatest economic advantage and to pursue the soundest economic policies and, on the other hand, the equally compelling motive of any Government, to protect the weaker sections of the community and to avoid hardship on those who are less well able to protect themselves.

I want to make this point clear: we are retaining rent restrictions, by and large. From some speeches made here last night, one would be inclined to think we were doing away with rent restrictions altogether. In fact, we are not. This Bill is a comprehensive measure of rent restrictions and while we are bringing about some small measure of decontrol, we are in a number of ways strengthening rent restrictions, closing up loopholes and giving a greater degree of protection to tenants.

It is very easy to be critical about this sort of thing and to come down heavily on one side, but I should also like to put this principle to the Fine Gael Party for their consideration. When we are talking of rent restrictions, we are dealing with private property, property which belongs to individuals. There is a principle that a man should be able to do with his own private property as he wishes, consistent with the general good of the community. If we can do anything to contribute to that principle without causing hardship or working social injustice, I think we should contribute to it and that the Fine Gael Party, if they examine the matter, will agree with that.

I should like to draw the attention of Deputies to a statement made by the British Minister of Housing on this point. It was made recently and it did not enter into our thinking when we were coming to our decision because we had made our decision long before the British Minister made the statement.

However, I think it is relevant that we should consider it because it struck me as containing a great degree of common sense. In reply to Labour Party criticism, the British Minister stated he felt the real solution was, by more decontrol, to procure a greater supply of rented accommodation and that in fact increasing rent restrictions and the reintroduction of controls would have the opposite effect and was therefore completely undesirable.

Deputy Declan Costello, on this general matter of decontrol, dealt at some length with the fact that we propose to decontrol business lettings. We do. We propose to decontrol those business lettings which are controlled at the moment, provided they are pure business lettings; mixed lettings will still be subject to control. In doing that, we are fortified by the decision of the Conroy Commission. The Conroy Commission stated that it failed to see any reason why these types of premises should continue to be controlled. It must be remembered that the impetus behind rent restriction legislation is to procure a social objective. One of the fundamental needs of people is a roof over their heads and here we are introducing a form of price control for one of the necessaries of life. That is the main moral justification for rent control.

That does not apply to business premises. A businessman, if he is to stay in business, should be able to pay the normal outgoings proper to the business, one of which is rent. There is no moral justification for applying rent control to business premises. There is one important qualification to all this, that where— and I think this is the type of case Deputy Costello is mainly concerned with—there is a residence as well as a shop—in other words, where there is a mixed letting; where a small shopkeeper has a shop and lives over the premises—we are retaining rent control and I think that is a perfectly fair approach to the matter.

The second major criticism levelled at the Bill was that the 12½ per cent. increase on basic rents which the Bill proposes to allow to landlords is unfair and unjustified. Let me outline the background to this proposal. The Conroy Commission sat in 1952 and at that time, eight years ago, it recommended an increase of 25 per cent. in the case of landlords liable for all repairs and 12½ per cent. in the case of landlords liable for part repairs. Since then, repair costs have increased by 40 per cent. and even though they have increased by 40 per cent., we are still giving only 12½ per cent. in any case. In other words, we are not going as far as the Conroy Commission recommended in 1952, despite the fact that costs have increased by 40 per cent. since then.

I shall ask the Opposition to be fair about this matter. Every section of the community has rights; landlords have had no increase in basic rents since 1926. Now when you consider that all prices have gone up and the way wages have gone and the way the cost of repairs—the factor of paramount importance in this—has increased, a 12½ per cent. increase is very modest indeed. Indeed, if we are to be criticised at all, we can be criticised for not going far enough on the side of the landlords. This legislature will naturally be weighted on the side of the tenant. Generally speaking, tenants are in a weaker position, less well off, and all of us will be more inclined to their point of view for that reason, but landlords have rights, too, and there are cases of hardship on landlords. Another point which we should keep in mind in this respect is that this reasonable, modest increase to landlords to enable them to carry out necessary repairs is in the long term interests of the tenant.

All of us know that there have been cases where it was not worth while for landlords to do any repairs. Good landlords and responsible landlords who wanted to look after their tenants properly just could not, from their income, look after their property as they wished. In so far as this 12½ per cent. increase will contribute somewhat to enable them to do that, it is a good thing and in the interests of tenant.

Mr. D. Costello

Our objection is that they will get the increase, whether or not they carry out the repairs.

Mr. Haughey

I am just coming to that point. It has been said that we are giving a bonus to landlords, giving them 12½ per cent. increase, and at the same time, not compelling them to carry out repairs. We cannot do any more in that respect than we have done. First of all, we have Section 40 of the Bill—and indeed in this respect I would be more than grateful to Deputy Casey if he would read the Bill before he indulges in criticism of it— which empowers the court to award a sum of money to the tenant to carry out repairs where a landlord has neglected to do so. That is important. Deputy Costello criticises that on the ground that the tenant has to go to court.

Mr. M.J. O'Higgins

There is a very big exception in subsection (2) of Section 40.

Mr. Haughey

I am coming to that. The general position is that the tenant can go to court and the court may award the tenant a sum of money to carry out repairs where the landlord neglects to do so. Actually subsection (5) of Section 40 specifically reserves all the other rights which a tenant may have in this respect. What are those rights? First of all, as Deputy Briscoe pointed out, there is the sanitary authority to whom any tenant may apply on payment of 5/-.

Then there is Section 61 of the Landlord and Tenant Act which provides that if a landlord is not carrying out the repairs, the tenant may carry them out himself and deduct the cost from subsequent payments of rent. The tenant has also the ordinary remedy for breach of contract at common law. That possibly is not as effective as the others but it is still there. All these provisions are designed to see that landlords meet their obligations regarding repairs. I think they are fairly comprehensive and fairly good, but if anybody else wants to suggest further safeguards, we can consider them. I think there are enough and if landlords are not carrying out repairs which they should, then I am afraid tenants are falling down on the job by not insisting that the work be carried out. In that case there is very little we can do. We have provided several adequate procedures to enable tenants to ensure that these——

Mr. M.J. O'Higgins

Will the Parliamentary Secretary deal with the question of part as against full repairs? As far as I can see, there is no definition of what constitutes part repairs.

Mr. Haughey

There is not, I agree. I think it is fairly widely accepted that where a landlord is liable for outside repairs, that is generally regarded as liability for part repairs.

Mr. M.J. O'Higgins

Supposing a landlord, under his contract with the tenant, accepts liability for replacing glass in a window, is that not part repairs?

Mr. Haughey

Yes, but there again the test of reasonableness applies.

Mr. M.J. O'Higgins

This is a new provision.

Mr. Haughey

The Conroy Commission examined the whole thing very carefully. This is their recommendation. The difference between "whole" and "part" is their difference.

Mr. D. Costello

This is not a Conroy Commission recommendation. The Conroy Commission suggested that the difference should be made between lawful additions in respect of whole repairs or part repairs.

Mr. Haughey

We are not going as far as the Conroy Commission recommendation. It recommended 25 per cent. where the landlord is liable for all repairs and 12½ per cent., where he is liable for part repairs. We are giving only 12½ per cent., no matter what he is liable for.

Mr. M.J. O'Higgins

There was a differential there in the report.

Mr. Haughey

We are not giving them what the Conroy Commission recommended would be fair and just.

Deputy O'Higgins and Deputy D. Costello mentioned the provision that the court will not recommend this sum of money to the tenant to carry out repairs where the house is too far gone. Again, in that respect, I can only say that we are following the recommendation of the Conroy Commission. I think there is eminent justification for the recommendation. It seems fair that where a House is obviously so far gone that money spent on repairs would be thrown down the drain, the court can refuse to give it. It is purely at the discretion of the court and a matter for reasonableness.

On the matter of the 12½ per cent. increase, I want to say this: naturally, since this Bill was introduced in the Seanad, we have had representations from many people about many aspects of it. We have had a lot to do with it and Deputy Briscoe, who spoke on it, has had more than I to do with a very large body of tenants, the largest single group of tenants of a private landlord in the country. In all the discussions which he has had with those people, and which we have had, there has not been one single complaint raised by interested parties about the 12½ per cent. increase. That is only natural when you consider the position fairly. I think the ordinary tenant recognises that his landlord is entitled to some increase and that 12½ per cent. is not an unreasonable increase.

The point was made last night about old age pensioners and the poorer sections of the community. All I can say about that is that it is a separate matter. The care of old age pensioners and the care of these poorer sections of the community is a problem that we have always with us. It is a question which a Government must always have regard to, which every Minister for Finance must think about when he comes to frame his Budget proposals and I am quite sure it will get the same earnest consideration in future as it has always received from Fianna Fáil Governments in the past.

The effect of this proposal, as far as we can estimate, if no other factors enter into it, will be to increase the consumer price index by .35 to base 100 in August, 1947. If that is shown to have any particular effect of hardship on the poorer sections of the community, that will be considered in relation to the constant care and consideration which a Government give to these sections of the community and in relation to the continual adjustments which they make in social welfare benefits and payments of one sort and another.

Another point is that the poorer the type of person involved, the less the increase is. Twelve and a half per cent. may be a big increase on £1,000, but as you go down to the cheaper type of accommodation and the smaller rents, it becomes relatively less important.

Mr. M.J. O'Higgins

That is an extraordinary outlook—that the less a person has, the less an increase matters.

Mr. D. Costello

A shilling on the rent of the old age pensioner who has got 27/- a week is, much more serious to him than is an increase of 12½ per cent. to a wealthy person.

Mr. Haughey

All I am saying is that the smaller the rent—and in these cases the rents will be small—the less the increase will be.

Mr. D. Costello

Of course. That is commonsense. It is also a greater hardship.

Mr. Haughey

In so far as it has any effect on this class of people, it will be given due account in social welfare legislation.

Mr. D. Costello

Would the Government consider putting an exception in this Bill in respect of premises below a certain poor law valuation?

Mr. Haughey

The Deputy knows very well that is completely impracticable.

Mr. D. Costello

I do not know.

Mr. Haughey

It is.

Mr. D. Costello

The people we want to consider are old age pensioners and people living in one room.

Mr. Haughey

It is a far better way of dealing with old age pensioners to deal with old age pensions. That is the proper and effective way.

Mr. D. Costello

I take it the Parliamentary Secretary is not in a position to give an undertaking?

Mr. Haughey

I am not, but I can say that we gave an increase in last year's Budget and we have always shown that we are very mindful of this section of the community and we shall continue to be mindful of them.

Mr. Rooney

You kept them at 10/- for 16 years.

Mr. Haughey

I would not mention 10/- if I were the Deputy. It is a rather sinister sum "to come from over there.

Mr. Rooney

You kept them at 10/- for 16 years.

Mr. Haughey

Let us not try to make cheap political debating points.

Mr. D. Costello

I do not see the logic of introducing legislation, which we could amend now on Committee Stage, which would say that these people would not get an increase in their rents on the assumption that we may increase old age pensions later. It would be much better to deal with it now.

Mr. Booth

Are the landlords to subsidise old age pensioners?

Mr. Haughey

There is no validity or sincerity in that argument put forward by Deputy Costello. It would be practically impossible to devise a way of giving effect to that in this Bill.

There is another point about this. I do not know whether it is being overlooked deliberately or not. By far the majority of these people are housed by local authorities and are not concerned with this Bill at all.

The criticism was levelled from the Labour Party, I think, in the main, that this was only an instalment, that we in fact were setting out to abolish rent control altogether and that this was the first step. I reject that. That is not so. The decision of the Government in this regard is absolutely clear. They reviewed the whole situation, considered it as carefully as they could, evolved, as I say, the principle that we would provide whatever decontrol could be achieved without causing hardship to existing tenants. That is the position and it goes no further than that.

At any stage, any Government will keep these matters under review and if the interests of the economy and social justice indicate that there is a need for reintroduction of more restrictions or further relaxations of control, then I I have no doubt a good Government will act as they see proper at any given time in that regard.

The next point of criticism was that this Bill will not achieve its objectives. I think it will. In so far as we have set limited objectives, I think we shall succeed in achieving them. We hope the Bill will bring about, first of all, an improvement in the existing stock of houses. Do we not all know that the existing stock of houses is being allowed to go into disrepair, to become dilapidated and that generally there is a national loss in that regard? The first objective we hope to achieve is that that situation will be arrested and that from now on this national capital in the form of a stock of houses will be preserved as it should be.

Secondly, we hope for an increase in the supply of rented accommodation and that is a desirable objective. We hope, as I said in my opening remarks, for very good results from the provision about self-contained flats. There we are able to achieve that without causing hardship on any tenant. These will all be new buildings and will be let de novo. I think it is a very desirable provision. I said we were particularly interested in it and we hope to achieve very good results from it.

The Opposition cannot have it both ways. They cannot say to us that we are doing too much and giving too much relaxation of controls, that the 12½ per cent. increase in basic rents should not be given and at the same time, criticise us that our Bill will not achieve its objectives.

Those were the main points of principle on which the Bill was criticised and so far as those criticisms have been made, I have dealt fairly adequately with them. I think the general policy of the Bill can be defended as being in the best interests of the nation and the economy generally and, at the same time, we can stand foursquare on the principle that we are protecting sitting tenants in every possible way and, indeed, improving their protection in many ways.

Now I come to the various points of detail, as I may describe them, Committee Stage points, made by various Deputies. Deputy Costello compared this Bill with the attempt made to achieve a certain amount of decontrol which started in 1926 and which was subsequently abandoned. There is no comparison at all. The attempt at decontrol which was commenced in 1926 was made on a valuation basis and gave no protection whatever to sitting tenants. There is the essential difference that in so far as we are attempting to achieve decontrol, we are doing it only in cases where no existing tenant will be interfered with in any way.

Deputy Costello made two points on Section 31, subsection (3). He mentioned a recent case in connection with the position of an administrator who was in possession or, indeed, of an executor who is not in possession.

I must say that we were grateful to Deputy Costello for bringing this case to our notice. We were not aware of it. In the light of what he says, we shall consider these proposals further. The House will realise that we have done quite a bit to improve the situation in this regard.

Mr. D. Costello

On that point, would the Parliamentary Secretary consider the position of executors?

Mr. Haughey

I mentioned that.

Mr. D. Costello

Administrators in possession and executors not in possession.

Mr. Haughey

I mentioned that. There was, of course, the discussion which we had last night on the question of houses which become decontrolled and where there is a subsequent letting of a room or a flat in those houses. I think Deputy Costello's fears in this regard are groundless. First of all, I want to state that our intention is quite clear. We intend, where houses become decontrolled and a room or flat in the house is subsequently relet, that they should again come under control. Apart from that, we shall make sure, with the Parliamentary draftsmen, that we achieve that effect. Apart from that, the sort of situation which Deputy Costello envisaged last night is a little unreal—that all the tenants would suddenly die overnight and that the landlord would get vacant possession and seek to charge exorbitant rents.

Mr. D. Costello

Before the Parliamentary Secretary leaves that point, could I refer him and his advisers to the 1944 edition of Mr. Coghlan's book on the Rent Acts, 1944, page 68 in which the cases dealing with this particular problem are digested and the cases which arose under the 1926 Act? I think the Parliamentary Secretary, if he does that, will see the necessity for clarifying this section.

Mr. Haughey

I suppose legal science is not an exact one. You never ultimately arrive at any point of finality on questions of definition and interpretation. All I want to do is to state our intention and to say that I am assured by the expert in this field —the Parliamentary draftsman—that we have achieved our purpose. I am prepared to consider it again and do anything I can to ensure that we achieve our purpose.

There is no basis at all for the suggestion of a fair rent court. The Conroy Commission rejected it and, I think, rightly so. What we are trying to achieve in this Bill is certainty. We want to fix rents with certainty. By and large, that is a very desirable thing to do. Everybody will know where they stand. Tenants will have basic rents. We shall avoid, I hope, if not almost entirely, certainly to a very great extent, any real volume of litigation. I am not accusing Deputy Costello or Deputy O'Higgins of wanting a lawyers paradise when they speak about such a court, but that is what it would be. I think it is far more desirable to try to do what we have done—fix basic rents and have certainty in the position.

There may be a little hardship here and there. If there is, the provisions of Section 8 will try to deal with it. That is far more desirable and beneficial than any suggestion of fair rent courts. You have to give some indication to the courts what a fair rent would be. Once you do that, then you are back to all the provisions of the Bill. We have achieved certainty and we want to keep it.

Deputy Costello got himself tied up in knots about this question of grants. The position is quite simple although the language of the sections concerned may be a little technical. We believe that landlords are entitled to a basic 12½ per cent. increase. We have excepted two types of case. In the one case, where a landlord has carried out exceptional repairs without taking a State grant to meet part of the cost, and has got the full benefit in the form of increased rents, we are not giving any increase. He is not benefiting from this 12½ per cent. increase at all.

There is another case. There is the case where a landlord has carried out exceptional repairs and has taken the State grant. In that case, the rent at present being paid will consist in part of the original rent and in part of an increase procured as a result of the special repairs, but that increase procured will already be very considerably reduced by the fact that the expenditure in arriving at that increase was reduced by the amount of the grant. In that case, all we say is: take the original rent and give 12½ per cent. on that. You do not give any 12½ per cent. increase on the amount of the increase procured by virtue of the special expenditure. That is exactly what the Conroy Commission recommended. I think it is perfectly sensible and fair.

Mr. D. Costello

Could the Parliamentary Secretary refer me to the part of the Conroy Commission which refers to the grants and the question of 12½ per cent?

Mr. Haughey

I shall do that before I finish. Deputy Casey was concerned that we were freeing from control houses which were more than £30 valuation in Dublin city and £25 elsewhere of which the landlord subsequent to the passing of this Bill gets possession. He thinks dire results will follow from that. It is quite clear that Deputy Casey has not understood what is involved and I am afraid that he has not thought very carefully about it. In the first instance, a £30 valuation ceiling covers the vast majority of houses in this country. The number of houses over £30 valuation is limited and the number of houses over £30 valuation which are rented is even more limited. When you introduce the further factor that a house must not alone be over £30 in valuation and rented and in the category of rented houses which are controlled but must also have come into the possession of the landlord subsequent to the passing of the Bill, then the number of houses concerned would be infinitesimal and will not have the slightest effect on the type of person about whom Deputy Casey is worried, namely, the person who has moved around the country in the course of his employment from town to town.

Deputy Casey should bear this in mind. When a landlord gets possession of the premises, there is nothing to compel him to relet that premises as the law stands at the moment. By virtue of the provisions of the existing law, a landlord will almost certainly not relet the premises because he would probably have to spend a certain amount on decoration for which he will not get increased rent. He will have to let the premises at the 1914 level of rents. The effect of the law at the moment is to ensure that in these cases a landlord will not relet. In this particular regard, we are aiming to encourage landlords to relet houses above these valuations of which they get possession and which they will repair and decorate and be in a position to get some return from the increased rent.

Deputy Sherwin has concerned himself with a couple of points which are of very practical importance to the constituency which he represents and to a considerable portion of the neighbouring constituency which I represent. He was concerned about the question of key money. All I can tell him in that regard is that the acceptance or demanding of key money by a landlord is a criminal offence and we provide in this Bill that any tenant from whom key money is taken can come along and recover it.

I would like to make sure that Deputy Sherwin is not confusing key money deposited as security for rent. We think it reasonable for a landlord to demand a reasonable deposit as security for rent and we have provided that a landlord is entitled to demand security amounting to not more than three months' rent. We are improving the tenants' position in this regard by making better provision for the return of these deposits. Deputy O'Higgins brought up this point last night when he asked for an assurance that where there is a change of landlord the tenant will be able to secure the return of the deposit.

Mr. M.J. O'Higgins

Will the Parliamentary Secretary consider bringing in a provision making it invalid in a contract of sale to prohibit a requisition about deposits?

Mr. Haughey

I will think about that but I am trying to make clear to Deputy Sherwin the essential difference between key money and money deposited for security for rent. He had another point about an unscrupulous landlord who avails of the provision providing for caretakers' lettings to do injustice to the tenants. I cannot be of very great assistance to him there. No matter what provision we could devise or enact here in this House, it is very difficult to ensure that landlords who are sufficiently unscrupulous will not get away with something.

I suggest to Deputy Sherwin that he make the provisions of these Acts known to the tenants and that he would point out to them that the Acts are there to protect them, that they have available to them a useful protection under these Acts, that the courts are reasonable and that if they bring the whole facts before the courts they can be fairly certain that justice will be done.

Deputy Sherwin is concerned about the case of the landlord who refuses to accept the rent well knowing that working-class people are not inclined to look beyond next week or the week after and who hopes that by refusing to accept the rent for a considerable period and then demanding the arrears the arrears will not be there. We shall consider that to see if there is anything we can do in that regard. It might be possible to make some sort of provision that in considering whether to grant a decree the court will take into account to what extent the landlord has contributed to the situation in which the arrears arose.

Again, the best protection is that tenants generally should know their rights. So far as we can, in our capacity as public representatives, we should make sure that they do know about the Rent Acts, that they do know about these provisions and we should advise them, if they can afford it, to have proper legal advice and, if not, to make sure that the district justice or circuit judge is made fully aware of all the circumstances. That is the most effective way in which unscrupulous landlords can be defeated. The obvious answer is for the tenant to save the rent but, human nature being what it is, things may not always work out that way. If tenants procure a postal order and post it to the landlord he would be in a very invidious position if he refused to accept it.

Deputy O'Higgins asked why we did not retain the power the Minister for Justice formerly had to nominate a distict justice to deal exclusively with rent matters in Dublin. The position is as follows: The 1946 Act was passed before the Courts of Justice (District Court) Act, 1946, which made principal justices responsible for the regulation of the business of each division of the Dublin Metropolitan District Court. The position now is that a principal justice and not the Minister nominates a particular justice in the appropriate division to be responsible for rent matters. We also have this advantage, that whereas formerly when the Minister nominated one Dublin justice with sole jurisdiction, a Rent Act point which came up incidentally before any other justice had to be referred to that justice with consequential delay. Now, any other justice can deal with a rent point should it come before him. I think the deletion of the 1946 Act's provisions will make for better working.

I am happy to be able to assure Deputy O'Higgins that the reference in Section 9 to Chapter 2 of Part II of the 1946 Act will disappear. We shall bring in an amendment on Committee Stage to get rid of it.

As regards Section 8, where Deputy O'Higgins was also concerned about the reference to Acts which have been repealed, I should like him to remember that Section 8 is a transitory section. We do not visualise that it will affect matters for more than a year or two years at the most. It deals with cases where the rent is either too high or too low and the court will be asked to fix the proper basic rent. All that should take place fairly quickly. Either the tenants or the landlords will move to have the position rectified. While it may be pointed out that we are, to some extent, making matters complicated by this reference to the 1946 Act I think it is unavoidable and that it should not lead in any way to trouble of the type envisaged by Deputy O'Higgins.

I was going to deal with the question of deposits as security for rents and the case of the change of landlords, but as Deputy O'Higgins has made a suggestion in regard to that, I shall leave it over to Committee Stage. Deputy O'Higgins was also concerned with the wording of Section 9 in so far as the courts would have regard for the term "state of repair". I am not sure that the term "state of repair" does get over the difficulty Deputy O'Higgins sees. I do not think it probably does, but I want to make clear that Section 9 will almost certainly not refer to houses at all. Its operation will, I think, be exclusively confined to rooms and flats let in houses which become decontrolled and in which lettings are subsequently made.

I was somewhat amused by the concern shown by Deputy O'Higgins about the fact that we were asking landlords to prove special circumstances when they sought to invoke the provisions of Section 8. Deputy O'Higgins, and the Fine Gael Party generally, are taking the side of the tenant. They object to the 12½ per cent. increase and they object to any form of decontrol. Surely you cannot have it both ways. If you are a landlord's man, be a landlord's man, and if you are a tenant's man, be a tenant's man.

Mr. M.J. O'Higgins

I think the Parliamentary Secretary will see that such landlords may be described as lenient landlords who omit to take advantage of the increase.

Mr. Haughey

Not necessarily.

Mr. M.J. O'Higgins

Not necessarily, but very often.

Mr. Haughey

The difficulty we see is exactly the opposite. There may be a kindly landlord who may make a letting at a low rent in special circumstances, but it is when that landlord sells his interest, or when it is transferred on death, that it is important that the special circumstances should have to be proved. Almost certainly, a decent, kindly landlord will not invoke the provisions of Section 8, unless there were special circumstances. Some successor in title might well do so.

A question was raised also with regard to the dangers inherent in the provision about a house becoming decontrolled where the owner is in occupation or subsequently comes into occupation. Deputies were inclined to imagine there was a danger that landlords would go in for some form of fictitious occupation. I do not think that is a very real danger when one considers that many landlords are limited companies or bodies corporate of one sort or another. In a great number of cases, social and economic circumstances would prohibit landlords from indulging in that type of practice. As well as that, if a landlord wanted to do that, he would be running a grave risk, because by entering into a fictitious occupation and ostensibly securing the decontrol of the house, then letting it to a tenant at a decontrolled rent, it would be open to that tenant at any stage to go to the court and prove the occupation of the landlord and his lack of bona fides. If the tenant proved that the landlord occupied the premises for a day, two days, or a week, as some Deputies envisage, the landlord would be in a very serious position. He would have sacrificed rights he legitimately would have under the Bill and he would almost certainly find his premises controlled again. I think the landlord would be aware of that danger and would not be too willing to run that risk.

Deputy O'Higgins made a very good point with regard to the operation of Section 7 as to whether a letting subsequent to 1st February, 1960, could be regarded as being a letting made "not more than three years before the 1st February, 1960." I must confess frankly that that had not struck me or my advisers, and we shall be very glad to have another look at it. I do not know if Deputy O'Higgins would care to tell us the results of his arguments in court on this point, and the decision.

Mr. M.J. O'Higgins

I remember the district justice offered to state a case, but my client could not afford that.

Mr. Haughey

That more or less covers all the arguments advanced by Deputies and I should like to conclude by saying, as I said in my opening remarks, that the situation is a difficult one. Important fundamental points of social justice are involved as well as the dictates of sound national economic policy. In those circumstances, I think the solution we have propounded in the Bill is reasonably fair, and is as good a solution as can be got, and I recommend the Bill on that basis.

Mr. S. Flanagan

There is one question I should like to ask the Parliamentary Secretary. Under the machinery of this Bill, some premises will cease to come under the Rent Restrictions Act and will come under the Landlord and Tenant Act. There is provision in this Bill for that and I should like to ask the Parliamentary Secretary in view of the great difference between the two Acts in their method of assessment of rents, will it not have the practical effect of greatly increasing the rents on property which, by virtue of this provision, becomes subject to the Landlord and Tenant Act rather than the Rent Restrictions Act?

Mr. Haughey

In the first instance, a very limited category of properties is involved, that is, purely business premises let on less than yearly tenancies. Other purely business premises are not controlled at all. Mixed business and residential lettings will still be controlled and these represent the great majority of the business premises now controlled. Undoubtedly, the standards in the two Acts are different. I thought we would have been quite justified in removing control from those business premises and letting it go at that, but in an endeavour to be scrupulously fair, the Government decided to make the provisions of the Landlord and Tenant Act available to all of these premises. I cannot attempt to estimate or speculate on what will happen. I think there probably will be an increase but to what extent I cannot estimate.

Deputy Costello asked me about paragraph 163 of the Conroy Report which reads:—

Owners who have taken advantage of these provisions of the 1946 Act are already receiving an adequate return on their actual expenditure on these exceptional repairs and it would not be reasonable to allow a percentage increase on that return.

Mr. D. Costello

Yes.

Mr. Haughey

"On that return".

Mr. D. Costello

But what the Parliamentary Secretary is doing in this Bill is accepting that principle, but in respect of the 12½ per cent. increase where a landlord has put his premises into good repair by carrying out exceptional repairs he is not giving it, but he is giving it where a landlord has got a grant.

Mr. Haughey

The recommendation in the Conroy Report implies that the 12½ per cent. should be applicable to the original basic rent but not to the return secured by the landlord from the exceptional expenditure.

Mr. D. Costello

I think what the Parliamentary Secretary is implying is not correct.

Question put.

The Dáil divided: Tá, 60: Níl, 39.

Tá

• Bartley, Gerald.
• Blaney, Neil T.
• Boland, Gerald.
• Boland, Kevin.
• Booth, Lionel.
• Brady, Philip A.
• Brady, Seán.
• Brennan, Joseph.
• Breslin, Cormac.
• Briscoe, Robert.
• Browne, Seán.
• Calleary, Phelim A.
• Clohessy, Patrick.
• Collins, James J.
• Corry, Martin J.
• Crowley, Honor M.
• Cummins, Patrick J.
• Davern, Mick.
• de Valera, Vivion.
• Doherty, Seán.
• Donegan, Batt.
• Dooley, Patrick.
• Egan, Kieran P.
• Egan, Nicholas.
• Fanning, John.
• Faulkner, Pádraig.
• Flanagan, Seán.
• Flynn, Stephen.
• Galvin, John.
• Geoghegan, John.
• Gibbons, James.
• Gilbride, Eugene.
• Gogan, Richard P.
• Haughey, Charles.
• Healy, Augustine A.
• Hilliard, Micheal.
• Humphreys, Francis.
• Johnston, Henry M.
• Kennedy, Micheal J.
• Killilea, Mark.
• Lemass, Noel T.
• Lemass, Seán
• Loughman, Frank.
• Lynch, Celia.
• Lynch, Jack.
• MacCarthy Seán.
• McEllistrim, Thomas.
• Maher, Peadar.
• Medlar, Martin.
• Millar, Anthony G.
• Moher, John W.
• Moloney, Daniel J.
• Mooney, Patrick.
• Moran, Micheal
• Ó Briain, Donnchadh.
• O'Toole, James.
• Ryan, James.
• Ryan, Mary B.
• Sheldon, William A. W
• Teeha, Patrick J.

Níl

• Barett, Stephen D.
• Barry, Richard.
• Beirne, John.
• Belton, Jack.
• Blowick, Joseph.
• Burke, James.
• Corish, Brendan.
• Cosgrave, Liam.
• Costello, Declan D.
• Crotty, Patrick J.
• Desmond Daniel.
• Dillion, James M.
• Esmonde, Sir Anthony C.
• Everett, James.
• Flanagan, Oliver J.
• Giles, Patrick.
• Jones, Denis F.
• Kenny, Henry.
• Larkin, Denis.
• McAuliffe, Patrick.
• Byrne, Patrick.
• Byrne, Tom.
• Carroll, James.
• Casey, Seán.
• Coburn, George.
• Coogan, Fintan.
• MacEoin Seán.
• McQuillan, John.
• Manley, Timothy.
• Mulcahy, Richard.
• Murphy, Micheal P.
• O'Higgins, Micheal J.
• O'Sullivan, Denis J.
• Palmer, Patrick W.
• Reynolds, Mary.
• Rooney, Eamonn.
• Ryan, Richie.
• Sweetman, Gerard.
• Tierney, Patrick.

Tellers: Tá, Deputies Ó Briain and Loughman; Níl, Deputies O'Sullivan and Casey.

Question declared carried.

Committee Stage ordered for Wednesday, 30th November, 1960.