I move amendment No. 6:
In subsection (2), page 5, to delete "passing" in line 20 and substitute "commencement".
This amendment is consequential on amendment No. 1.
Rent Restrictions (No. 2) Bill, 1960 [ Seanad ]— Committee Stage (Resumed).
Amendment agreed to.
Amendment No. 7 not moved.
I move amendment No. 8:
In subsection (2), page 5, to delete "passing" in line 23 and substitute "commencement".
Amendment agreed to.
I move amendment No. 9:
In subsection (2) (f) (i), page 5, line 27, to delete "thirty" and substitute "forty-five".
We are opposing both amendments Nos. 9 and 10. The provision of the Bill is that houses which are over £30 valuation in Dublin City and £25 elsewhere should become decontrolled provided, after the passing of the Bill, they come into the possession of the landlord. We feel that the limits which are laid down in the Bill are reasonable limits and that an upward ceiling of £30 covers the vast majority of houses which are controlled. We feel that there is no necessity at all for either of these two amendments.
The House will realise that a house of £30 valuation today would be paying, depending on what part of the country it was in, in the region of £60 per annum rates. Houses of this sort are not generally let and if they are let the number of them that would come into the possession of the landlord would be very small indeed. In fact, the amount of decontrol which will be brought about as a result of the paragraph as in the Bill will be very, very negligible. I think it is an amount of decontrol that we can confidently incur.
Is there any particular reason for specifying £30 in respect of Dublin and Dún Laoghaire and £25 in other cases? Was it drawn out of the air?
No. Once you go over £30 in valuation you are getting into a class of house which, generally speaking, if it is let at all, is rented by a person who is much better off. It is only people who rent houses of under £30 valuation that we are really concerned with in rent restrictions.
Amendment No. 9, by leave, withdrawn.
Amendment No. 10 not moved.
I move amendment No. 11:
In subsection (2), page 5, to delete "passing" in line 31 and substitute "commencement".
This is consequential on amendment No. 1.
Amendment agreed to.
I move amendment No. 12:
To insert the following subsection before subsection (3):
"(2) The application of this Act to a dwelling forming part of a house (other than a house erected after, or in course of being erected on, the 7th day of May, 1941, or a house the letting of which is under the Labourers Acts, 1883 to 1958, or the Housing of the Working Classes Acts, 1890 to 1958) shall not be excluded by reason only of the fact that this Act does not apply to the house."
The House will recall that on the Second Stage Deputy Costello expressed some doubts as to whether the section as drafted was sufficient to ensure our intention that where a house became decontrolled and a room or flat in it was subsequently let that the room or flat should become controlled again. I was told that the Bill, as drafted, ensured our intention. However, once the doubt was raised it is desirable to put the matter beyond any question so we are introducing this amendment to make assurance double sure. The purpose of it is to secure that in any case where a house became decontrolled and where a room or flat was subsequently let control will again apply to the room or flat.
If the whole house is let as an entity it remains decontrolled.
It remains decontrolled.
Amendment agreed to.
I move amendment No. 13:
In subsection (4), page 5, line 52, to delete "passing" and substitute "commencement".
This amendment is consequential on amendment No. 1.
Amendment agreed to.
Section 3, as amended, agreed to.
NEW SECTION.
I move amendment No. 14 standing in the name of Deputy Russell:
Before Section 4 to insert a new section as follows:—
"Any tenant of a controlled dwelling shall be entitled at his option to a lease for a minimum period of twenty-one years at an open market rent where he or his family have been in occupation of the dwelling for thirty years or more."
We are opposing amendment No. 14. In the first place the House should be aware that, under the Landlord and Tenant Act, it is already provided that on the termination of a tenancy a tenant is entitled to a new lease of 21 years at the open market rent where he or his predecessors have occupied the house for 30 years. The amendment involves a change in the existing law in so far as the landlord would be compelled to grant the lease irrespective of whether the tenancy had been terminated or not. Such a proposal would not be a proper one for a Rent Restrictions Bill; it would be more appropriate to a Landlord and Tenant Bill.
As regards the proposal itself, the House will realise that rents at present are well below market values as a general rule and any landlord would be most anxious to give a tenant a long lease if he would get the open market rent. I do not think the proposal in the amendment is realistic at all. It is open to any tenant to approach his landlord for a long lease at a fair rent and certainly in 99 cases out of 100, if not in every case, a landlord would be more than anxious to do business with him.
Amendment, by leave, withdrawn.
Amendment No. 15 is out of order.
Section 4 agreed to.
Sections 5 and 6 agreed to.
SECTION 7.
I move amendment No. 16:
In subsection (1), page 6, to delete "1st day of February, 1960" in line 28 and in lines 37 and 38 and substitute "operative date" in each case.
The effect of this amendment, which I foreshadowed on the Second Reading, is to advance the date by reference to which basic rents are automatically determined from the 1st February, 1960, to the date on which the Bill will come into operation, the 31st December, 1960. The amendment is desirable for two reasons. Firstly, it will remove any difficulty in determining what the basic rent is when the Bill comes into force and, secondly, there is now no need to make provision for the basic rents which have been determined under the present law by the courts since the 1st February last.
Amendment No. 1 put in the 31st December, 1960, but you have not deleted the definition.
That is so.
Line 12 on page 4 says that the operative date is the date of the passing of the Act and amendment No. 1 says that it comes into operation on the 31st December, 1960.
If you study amendment No. 2, it will meet the situation.
That is right. There was another amendment passed which I had not spotted.
Amendment agreed to.
I move amendment No. 17:
In subsection (1), page 6, lines 40 and 41, to delete "being not more than three years before" and substitute "during the period of three years ending on".
This amendment is designed to meet the point made by Deputy O'Higgins on the Second Reading. As the Bill stands, it could be argued that this section applies to dwellings let for the first time after the Bill becomes law. This, of course, is not the intention. The basic rent of any such dwellings will fall to be determined under the provisions of Section 9.
Amendment agreed to.
I move amendment No. 18:
In subsection (1), page 6, to delete "1st day of February, 1960" in lines 41 and 42 and substitute "operative date".
This amendment is consequential on amendment No. 16.
Amendment agreed to.
I think we can take amendments 20, 22 and 24 with amendment 19. They seem to be related.
I move amendment No. 19:
To delete subsection (2) and substitute the following subsection:
"(2) The basic rent of a controlled dwelling to which this section applies shall be—
(a) in the case of a dwelling specified in the Schedule attached to the Agreement entered into on the 6th day of October, 1960, between the Dublin Artisans' Dwellings Company Limited and the Dublin Artisans' Dwellings Tenants Association— the rent specified in the third column of that Schedule in respect of the dwelling, and
(b) in any other case—the net rent at which it was held on the relevant date."
This amendment provides that the rents agreed upon between the Dublin Artisans' Dwelling Company and the association of their tenants following negotiations, under the chairmanship of Deputy Briscoe, shall be basic rents for the purposes of this Bill. The Dublin Artisans' Dwelling Company is, I think, the largest single landlord in the country apart from local authorities. It owns 3,500 dwellings, almost all of them having been built before 1914. In recent years about half of the dwellings were put into repair. Substantial increases of rents resulted from these exceptional repairs as the Company did not avail themselves of repair and reconstruction grants when they became available. Protracted litigation between the Company and the tenants followed and by the 1st June last literally hundreds of cases were pending in the Circuit Court and District Court and under the special procedure provided by Part III of the Rent Restrictions Act, 1946.
In these circumstances I asked the Company and the Association representing the tenants whether they would be willing to meet, under an independent chairman, with a view to seeing whether the matters in dispute between the Company and the tenants might be settled. The Company and the Association having agreed to this proposal I asked Deputy Briscoe whether he would act as Chairman at meetings between the Company and the Association. I am very glad to say he accepted because I have no doubt that it was largely due to his efforts that agreement between the two sides became possible.
The agreement set out the agreed weekly rents for each of the controlled dwellings owned by the Company. In particular, those specified in column 3 of the Schedule were described as the agreed weekly basic rents having taken into account additions for improvements and certain agreed reductions but being exclusive of rates. The agreement also specified the agreed gross rents inclusive of rates and provided that these rents would be payable by the tenants commencing on 5th November, 1960.
It was provided that the agreement was subject to statutory effect being given to the agreed basic rents and provision being made that they would not be subject to review. All pending legal proceedings between the Association and the Company are being stayed pending the passing of this Bill and will be withdrawn when it becomes law. After withdrawal of legal proceedings each side will be responsible for its own costs and the Company will waive all claims against the tenants for legal costs to date. As regards arrears, it has been agreed that any arrears will be paid and accepted at the rate of 5/- weekly or, in case of hardship, by such lesser instalments as the Company may agree.
On the matter which caused the greatest dissatisfaction among tenants, that is, the fact that the Company had not taken advantage of repair grants, the Company agreed to give favourable consideration, in consultation with the tenants, to taking advantage of any grants which might be available in the future towards the cost of carrying out exceptional repairs. Finally it was agreed that the Company would establish, after consultation with the tenants, a benevolent fund for the purpose of dealing with isolated cases of hardship among tenants. Both the tenants and the Company will contribute funds for this purpose.
It is a very great pleasure for me to move that the basic rents agreed upon between the Company and the tenants be given statutory effect and that they should not be subject to review. I should like, on my own behalf and on behalf of the Government, to thank Deputy Briscoe for his help in making the agreement possible and also to thank the representatives of the Company and of the Association for their reasonable approach to the matters in issue. I hope that the good relations which have been re-established will long continue.
Perhaps I should add that this is not the first time that specific provision is being made in a Rent Act for the Company's tenants. Provision was made in the 1946 Act for deeming the standard rents set out in an arbitration award of 1922 to have the same effect as standard rents determined by the Courts. Owing to a technical defect, the provision did not achieve its object with the consequence that there was no longer any certainty attaching to any of the Company's rents. I am hoping that the provisions now proposed to be inserted in the Bill will not have the same fate and it is with a view to preventing such a result that the amendment refers specifically to the particular agreement and not, as in the 1946 Act, by way of a general provision.
Amendments Nos. 20, 22 and 24, as indicated by An Ceann Comhairle, give effect to the provisions of the agreement that the agreed basic rents are not to be subject to review under Section 8.
The whole tenor of the Parliamentary Secretary's speech was that we should all now stand up and cheer one of his colleagues.
That would be reasonable.
I am not interested in that. This is the first occasion on which I have seen a provision like this where the agreement in question is not scheduled in the Bill itself. We are asked to pass a section referring to a document that the House has not seen. That is a bad precedent. It is an excellent principle that where two people come together and agree the House should adopt that agreement. It is a very bad principle that the House should be asked to adopt an agreement without having had the opportunity of seeing it. The size of the agreement that the Parliamentary Secretary is holding up depends entirely on the size of the type and the amount that is typed on each page. It could well be that it is a page per house, so to speak.
It is a list of 3,500.
It must be identifiable in some way by the Legislature. One way would be to add a special subsection stating that the Minister shall embody it in an order. Another way would be a similar type of regulation. There must be some way by which the Legislature, as apart from the individual Parties, can have access to this document at any time. Otherwise it is improper to include a section to this effect.
I welcome the principle that, if a large body on both sides get together, we should endorse it and adopt it. However, we should know, in some shape or other, what exactly we are adopting. Tabling would be adequate, from the point of view of the discussion here, but tabling is not certainty for the legislation for the future. We must not have a position, even for the purpose of a Court, that a successor of a tenant who was not a member of the association that negotiated this agreement cannot prove the agreement as a matter of statute law rather than as a matter of evidence of the document itself.
There is a variety of ways in which it can be done, if it is not desirable, because of bulk, to incorporate the document in the Bill. I strongly urge the Parliamentary Secretary to adopt one of those ways. He is aware that in all the normal cases the agreement is scheduled. We had one the other day in relation to the new subsidiary of the World Bank. The very long Memorandum and Articles of Association of the new international association were incorporated in a Schedule of the Act. The Act took half a page but the Schedule took something like 20 pages. That is the right way to do it. I do not mind whether this is done in that way but it must be done in some legislative manner—regulation, power for the Minister to order, or something like that. But it must be available to the Legislature as a legislative document once it is incorporated in the Bill.
Major de Valera
Could a certified copy not be deposited in some public office?
The Public Records Office.
Major de Valera
Would that not meet it?
Some way by which it is taken out of merely being a document between two parties and put on record as a public document.
Naturally we considered this matter and, as Deputy Sweetman suggested, the ideal thing would be to have scheduled the agreement but we could not do that because of its size. I was assured that this would meet the situation. We proposed to deposit photostat copies in the courts, the Department of Justice and if necessary in the Library of the Oireachtas. However, now that Deputy Sweetman has brought up the point we shall consider whether anything further than we proposed is necessary.
Or even a subsection, saying that a photostat copy which has been deposited in so-and-so shall be accepted as evidence, or shall be evidence.
Major de Valera
And if there are a number of photostat copies one copy should be certified.
Yes, we do not want arguments between two copies, if they are blurred.
Major de Valera
There should be one certified copy in some public office. I agree that there should be some reference to it in the Bill.
Amendment agreed to.
Section 7, as amended, agreed to.
SECTION 8.
I move amendment No. 20:
In subsection (1), page 7, line 7, to insert "not being a dwelling referred to in paragraph (a) of subsection (2) of that section," before "the Court."
As I explained, this amendment is consequential on amendment No. 9. It is to ensure that rents in the agreement between the landlords and the tenants will not be subject to review.
Amendment agreed to.
I move amendment No. 21:
In subsection (1), page 7, lines 29 to 32, to delete "a reference to that Chapter shall be substituted in subsection (2) of section 9 of this Act for the reference to Chapter 2 of that Part" and substitute "‘(being dwellings to which Chapter 1 of Part II of the Act of 1946 applied)' shall be regarded as being contained in subsection (2) of section 9 of this Act after ‘controlled dwellings."
This amendment is necessary because of amendment No. 25, which I propose to move, and which will delete certain words.
It is consequential on amendment No. 25?
It is.
Would it not be better to discuss it on amendment No. 25 because there is a point I want to raise?
Amendment agreed to.
I move amendment No. 22:
In subsection (2), page 7, line 35, to insert "not being a dwelling referred to in paragraph (a) of subsection (2) of that section," before "the Court."
This amendment is also consequential.
Amendment agreed to.
I move amendment No. 23:—
In subsection (2), page 7, lines 53 to 55, to delete "a reference to that Chapter shall be substituted in subsection (2) of section 9 of this Act for the reference to Chapter 2 of that Part" and substitute "‘(being dwellings to which Chapter 1 of Part II of the Act of 1946 applied)' shall be regarded as being contained in subsection (2) of Section 9 of this Act after ‘controlled dwellings'".
This amendment is also consequential on No. 25.
Amendment agreed to.
I move amendment No. 24:—
In subsection (3), page 8, line 7, to insert "not being a dwelling referred to in paragraph (a) of subsection (2) of that section," after "applies,".
Amendment No. 24 is consequential on 19 and 20.
Amendment agreed to.
Question proposed: "That Section 8, as amended, stand part of the Bill".
I do not like the provisions of subsection (1) because they are far too indeterminate to be satisfactory. It should be a basic principle of legislation that in so far as it is possible to be precise one should be precise. I cannot see any prospect of subsection (1) of Section 8 being utilised except on the basis of building up a whole new set of case law as to what are special circumstances. That section as it is drafted is going to mean more litigation and far greater uncertainty as to what exactly is involved and I feel that if we enact it as it is at present we will do something which is going to be unsatisfactory, with our eyes open.
I understand the Parliamentary Secretary is aware that certain aspects of this situation have been considered by people who would be interested and they would far prefer to give way very substantially in paragraph 1, clause (a) of subsection (1) in order to avoid the uncertainty and litigation that paragraph 2 would involve. The suggestion was put to me that a variation in basic rent of one-eighth was perhaps so small that it might mean too much litigation if paragraph 2 was dropped. They suggested it would make for greater certainty, less litigation and less expense on all concerned, landlord and tenant, if the amount by which the rent must be short of the basic rent was increased from one-eighth to one-quarter and paragraph 2 dropped altogether.
In many of these smallish rents a difference of one-eighth from the basic rent would be very small and it would be undesirable to have litigation covering an amount as small as that. If it was increased to one-quarter and the special circumstances dropped, then the mere fact that the basic rent was one-quarter and the one-quarter could not vary must be to create the presumption that there was a special circumstance and you would not have the necessity to have the special circumstances in the Bill.
With the Bill as now drafted I cannot see any vista in front of us who have to advise clients except to say that we cannot possibly tell what view the court is going to take about special circumstances. It is not defined in the Bill and we can only wait to see what court decisions there are and until such time as the case law is built up we will be completely in the air. It is going to mean expenses for both sides and, if I may put it facetiously, a type of expense which is going to be very unremunerative for the legal practitioner.
I should like to add my voice to Deputy Sweetman's in relation to this section. This is a matter which I raised on the Second Reading of the Bill. I must say I had hoped that the Parliamentary Secretary would appreciate the strength of the argument which, in all modesty, I feel I put up on that occasion and that he would have brought in an amendment to cover the position. Section 8, subsection (1) (i) corresponds roughly to Section 15, subsection (3) of the 1946 Act, but the addition of the clause requiring a landlord to prove special circumstances is an entirely new one as between the present Bill and the 1946 Act.
Like Deputy Sweetman I feel that in the absence of some clear definition by the House—and I appreciate the difficulties in giving that—of what are to be regarded as special circumstances, this question can be settled only by building up a mass of case law to establish, having regard to various applications coming before the court, what are special circumstances. There must be a great number of these applications to cover the various contingencies that may arise. The fact that a court decides on an application before it that special circumstances exist in that case is not going to be a guide if there is a slight variation in another application under this section. Like Deputy Sweetman, I can foresee a position in which a great number of decisions from the court will be required before landlords or their legal advisers get any kind of adequate guidance as to what will be regarded as special circumstances under this section.
I expressed the view on Second Reading that I do not think this provision is fair. If the landlord is entitled to a basic rent of a given amount and if the basic rent falls short of that, I think, in fairness to the landlord, he should have exactly the same right as the tenant to go to the court and ask it to remedy the position. That right is given to the tenant in this Bill and was given to him in the previous Act. It was given to the landlord in that Act also but without this restrictive and limiting provision we now find in the new legislation.
Deputy Sweetman has put up an alternative suggestion which was put to him. I feel that those who put up that suggestion are making a sacrifice which, to my mind, is unnecessary because I do not think they should be asked to make that sacrifice; but in support of that point of view I should like to call the attention of the Parliamentary Secretary to the fact that in subsection (3), Section 15, of the 1946 Act, the rate was set out at one-fifth by which the basic rent might fall short of or exceed the correct basic rent. It seems to me that the Parliamentary Secretary would be following precedent and playing fair with both sides if he simply incorporated that provision in this Bill; in other words, adhere to the proportion of a fifth, which appears in the 1946 Act, leave it at that and not complicate the position by bringing in this requirement of special circumstances.
I am convinced that the landlord who would be prejudiced by the Bill as it now stands is the landlord who is a kindly, lenient type of landlord —the type of landlord who did not bother increasing his rents when he would have been entitled to lawful additions for rates and repairs. He did not avail of them not because there were no special circumstances that might stand up in court but simply because that was his make-up. He was the type of man who was not going to be bothered troubling the tenant with minor increases which, however, over the years might accumulate to a fairly reasonable increase. That is the type of landlord who will be penalised and prejudiced by this section because he will not be able to prove special circumstances when he goes into court.
Might I raise another point on this section? There is some very considerable doubt in certain legal circles as to how the joint operation of Sections 7, 8 and 9 will arise in one type of case. It arises because of the manner in which line 24 in particular, and indeed the whole of Section 8 in that page, brings in Section 9 in a case of determination of the basic rent. You have a terrace of six houses, all let at the same rent. One of them suffers very considerable damage in a storm. We will say the basic rent of the whole six before the storm was £30 and one of them suffers very considerable damage. The roof can be lifted and blown off. It costs £100 for a new roof. The landlord under the old Act has got the basic rent increased by the appropriate proportion of the expenditure. It has been suggested by some people more competent to construe Rent Acts than I am that the effect of Section 2 and Section 9 as applied by Section 8 is that the court must fix the basic rent of the house that has suffered the storm damage at exactly the same figure as the other five and that the landlord can make no addition for the additional expenditure he had already incurred.
I do not think that is intended but, as I say, counsel—I was almost going to say allegedly learned counsel but of course this counsel and all counsel are learned in the law—have given it, I am advised, as a formal opinion that the effect of the way in which the Bill has been drafted prohibits the court taking those circumstances into account. Does the Parliamentary Secretary intend that? I should be glad if he would have that matter examined by his legal advisers between now and the Report Stage. I think he will agree, if he does that, that it is wrong and should not be so intended.
First of all, I shall deal with the question of special circumstances. The whole motive of the Bill is to procure certainty. We want to establish basic rents which will be known to everybody. Section 7 provides that the rent which will be payable on 31st December, 1960, will be the basic rent. Section 8 will apply to and come into operation in only a very limited number of cases. Its provisions should be transitory because, if a landlord does not avail of the provisions of Section 8 fairly quickly, he can be accused of having slept on his rights.
We want to get certainty into the conception of basic rents. It is for that reason we have inserted special circumstances in the provisions of Section 8. We want to ensure that only in a very limited number of cases will it be possible to apply to the court. In the case of rents which were exceptionally low and about which the landlord has done nothing over the years, I do not think we can be asked to upset our principle of certainty for that type of landlord. If he is the type of landlord about whom Deputy O'Higgins spoke—the kindly landlord who has made a special letting—we are providing for him. It is open to him to show that the rent was fixed at a very low level because of some special circumstances. It is open to him to go to the court and have that rent brought up to what the court thinks is a proper basic rent. In any other case, if there were no special circumstances, even if the rent is exceptionally low, I am not prepared to prejudice the principle of certainty for a landlord of that sort. We must assume that landlords look after their rights and get what they are entitled to. If they do not, and there are no special circumstances, I do not think we should be asked to worry about them.
The suggestion that we increase the 12½ per cent. to 25 per cent. and drop special circumstances would not meet the case at all. With regard to the suggestion that there would be difficulty in establishing what special circumstances are, I do not think there would be all that difficulty. It will be a simple question of fact. Was the rent fixed at this level because of some special circumstances affecting the case? Surely, that is a simple thing for the court to decide?
I imagine a typical case would be where a landlord let a dwelling to a close relative and, because of the fact that it was a close relative, he would fix a very low rent in order to be generous to his relative. There, the landlord would have no difficulty in proving there were special circumstances and having the court fix a proper basic rent. We have had a great deal of representation on this point. As some Deputies know, we have considered it all very carefully and one would like to meet the representations that have been made to us as far as one could but the fear that I have in going any distance to meet them would be that we would be leaving a very great number of rents in a degree of uncertainty and we would be upsetting the basic principle of the Bill which is to give certainty in 99 cases out of 100.
Major de Valera
I do not know whether I quite understand the point Deputy Sweetman was making in regard to Section 8, line 24. Surely in the case he cited, the case of specific damage, there are two things that can happen. If the tenant applies to have the basic rent fixed under Section 9—which will rule in the case— the state of repair is a factor to be taken into consideration. That is the first point. The second is that, presumably, in the case which Deputy Sweetman mentioned there would be the expenditure by the landlord of an amount on repairs. He mentioned the sum of £100. Would that not be captured by Section 10?
I think that is just what the doubt is.
Major de Valera
Is there a doubt? First of all, the basic rent is fixed and the lawful additions in Section 10 are over and above the basic rent. Is that not so?
Yes, that is the lawful additions under this Act. When I say there is doubt, the doubt is as to whether it applies to lawful additions or exceptional repairs already incurred which were lawful additions under the previous Act.
Major de Valera
Yes, but presumably Section 8 does not apply unless there is a controlled dwelling with a basic rent there already. Although this is not the place for it, one sometimes cannot avoid getting into a fine legal argument on a section. The net question I should like to put to save the time of the House is: could Deputy Sweetman nail down the point precisely for us? If he did that I think the Parliamentary Secretary would be able to cope with it but for my part I do not quite follow the argument he is making.
In regard to the remarks of the Parliamentary Secretary in relation to Section 8, I appreciate his concern to get certainty into the legislation so far as the basic rents are concerned but, with respect, I think he is going the wrong way about it. I think he is opening up a field which will give rise to anything but certainty.
I think he is creating a situation which from its inception will be quite uncertain both from the landlords' and the tenants' points of view. The Parliamentary Secretary will appreciate the point I have been trying to make, that you want some definition of special circumstances—and I know that Deputy de Valera will appreciate the difficulty of trying to get a definition— but in default of a fairly comprehensive definition as to what special circumstances are, special circumstances can only be ruled on and dealt with in each case as it arises. You will have the case referred to by the Parliamentary Secretary which, like himself, I assume to be accepted as special circumstances but I do not know whether it would or not. That is a matter which the courts have to decide.
The courts will interpret the whole Bill if it comes to that, every word of it.
Yes but we are dealing with this. The Parliamentary Secretary assumes as I assume, that if a landlord has let a house at a nominal rent to a member of his family or to a close relative, that will be "special circumstances" and will be so regarded by the courts. I assume that will be the position but I do not know any more than does the Parliamentary Secretary. That is a simple example. You will have a great number of other cases. You will have the landlord who buys property, controlled premises occupied by a tenant, possibly an elderly tenant. The landlord feels that, notwithstanding the fact that he is entitled to lawful additions, he does not want to increase the rent while this elderly person is there and he thinks he will let it go until that particular tenancy terminates and he is getting in another tenant.
You may also have the case where the landlord simply did not know his rights, did not increase the rent and did not get what he was lawfully entitled to get out of a premises because he did not think of consulting a solicitor who might advise him. You will get the case where, possibly, a landlord forgot to increase the rent when he was entitled to do so. You will get a case where the tenant has made representations to the landlord that he could not afford an increase. You will get a case where possibly there is a dispute about the rent between the landlord and the tenant. All these cases must be dealt with individually in the courts as they arise and there will be an infinite variety of them.
By insisting on this position the Parliamentary Secretary is not bringing in any certainty at all but quite the opposite. He is creating a very vague and uncertain position. I certainly cannot see the reason for it. There would be far greater certainty if the Parliamentary Secretary left the position as it was under the 1946 Act, if he allowed the position to be that if there was an excess, or if the basic rent was too little, by a definite fixed amount either the tenant or the landlord could go into court and get the position remedied. That is a simple, straight, certain situation; nobody is in any doubt about it and there is no lack of certainty. There was no lack of certainty under that provision in the 1946 Act. The only element of uncertainty that arises is the bringing in of this new provision of the present legislation.
I would very strongly urge on the Parliamentary Secretary that that subsection should be deleted and I think it would be better all around if it were deleted. Deputy Sweetman referred to Section 9 and I want to make a few remarks on that but I think it might be better left until we are discussing the section.
When I say that I want to get certainty I think I am right in saying that I should resist any proposal to delete "special circumstances" in pursuance of that objective because Deputy O'Higgins's argument is for every rent and every landlord being thrown into the melting pot. If Section 8 were to apply without any regard to special circumstances, every landlord presumably would consider that the rent was more than 12½ per cent. too low and would go to the Courts.
I have not any figures—perhaps the Parliamentary Secretary has—as to the number of applications under Section 15 (3) of the 1946 Act? That might be a guide.
Do not forget that the provisions of that Act were only provisions to review rents which were in operation immediately before, open market rents operating before the passing of the Act. The review provisions in the 1946 Act did not apply to the vast majority of houses that were fixed at the 1914 level of rents. The 1946 Act in so far as it provided for review referred only to rents payable in the open market in 1941. That is a completely different situation from the one we are dealing with here. This Bill, when passed, will deal with all controlled rents, most of which have been rigidly fixed for years. Unless there are special circumstances entering into the case, I am not prepared to leave it open to landlords to go to court and say: "These rents are 12½ per cent. too low. We want them increased." That would result in a great many claims being brought whereas the whole object of Sections 7, 8 and 9 is to have the minimum of legislation, to try to fix rents in such a way that everybody will know what they are. Only in special circumstances affecting the original fixing of the rent will we leave it open to the landlord to go to court.
Deputy Sweetman has unfortunately left the House. With regard to the point raised by him, I should like him to state exactly what type of case he has in mind. Does he envisage the situation he spoke about happening after 31st December when basic rents will be fixed for all houses or is he referring to something which happened before basic rents will be fixed? As he has left the House, I suggest we leave the matter over to the Report Stage.
It was dealt with reasonably fully by me on the Second Reading. We can deal with it when we come to Section 9. I do not want to prolong the discussion. The Parliamentary Secretary seems to have made up his mind. He may be proved right ultimately in that this will limit the class of persons referred to and also limit litigation, but I do not think he is right. I think he is creating a situation of uncertainty. I shall not pursue that any further except to ask him if he thinks his approach is a fair one to the landlord concerned.
The basic rent is admittedly too low and a landlord can get this rights only by proving special circumstances. It does not seem to me that that is holding the scales evenly between landlord and tenant. The Parliamentary Secretary says these rents have been fixed. They have been known for a number of years; they have been paid for a number of years. If a landlord did not take the trouble to adjust them when he should have adjusted them, we will not permit him to do that now, despite the fact that under the law, as it existed, he would be entitled to more.
I think we are being perfectly fair to landlords. The whole scope of the Bill proves that. We are doing something for them which has never been done before. On the particular point at issue, let me reiterate that we cannot be expected to lean over backwards for landlords. Landlords must be presumed to know their rights and must be presumed to be receiving the rents to which they are entitled. If there are odd cases in which that is not so, I suggest that it is not our fault. It is not we who are depriving them of their rights. It is they themselves who are doing that. We are going as far as we can when we say that if their rents are unduly low because of some special circumstances they can go to court and have them raised. I do not think we can be expected to go further than that.
Question put and agreed to.
SECTION 9.
I move amendment No. 25:—
In subsection (2), page 8, lines 32 and 33, to delete "being dwellings to which Chapter 2 of Part II of the Act of 1946 applied."
Deputy O'Higgins raised this matter on the Second Stage. The effect of the section as it stood would be that when the court came to fix basic rents, they would have regard to the 1941 level of rents and not to the 1914 level. That was a recommendation of the Conroy Commission and it is one with which, I think, the House will fairly readily agree.
First of all, purely on the phraseology side, it has been suggested that it is inappropriate to have this reference back to the 1946 Act. There is weight in that argument. Furthermore, a practical difficulty arises in different parts of the country from the point of view that there would probably be no 1941 cases to which the court could refer easily. Difficulty, therefore, would arise in that regard and we have decided that it is better to delete the reference to the 1946 Act and leave the courts free to determine the matter on the basis of the section with these words deleted.
I should emphasise that Section 9 will be invoked in relatively few cases. Section 7 should take care of the majority of cases. It is only in exceptional cases where there was no letting either on 31st December, 1960, or within three years before that, that Section 9 will come into operation. We visualise its coming into operation mainly in relation to rooms and flats let for the first time after the passing of this Bill.
Amendment agreed to.
Question proposed: "That Section 9, as amended, stand part of the Bill."
The point raised by Deputy Sweetman was that one may have cases to which this section refers where the landlord will, because of exceptional circumstances, have to pay out exceptional sums in repairs in order to put a premises into a proper state of repair. As envisaged by Deputy Sweetman, you may have a terrace of houses, or a number of houses of the same type of construction and accommodation in the same locality, and it may be necessary to expend an exceptional sum to put one of those houses into the same state of repair as the other houses of similar type.
At what stage?
It does not matter whether it is before or after. I do not raise it as a debating point but as a serious problem. The situation envisaged by Deputy Sweetman may not apply at all, but if it did apply, the Parliamentary Secretary will agree that it is something which should be remedied. If, for instance, one of the houses suffered storm damage and the landlord had to spend a considerable amount putting it into a reasonable state of repair, the court under this section will not be entitled to take into consideration any exceptional expenditure of that sort.
I raised this on Second Reading and expressed doubt as to whether the phrase "state of repair" was adequate. The Parliamentary Secretary, when replying to me, as reported at column 1244 of the Official Report for November 17, agreed that he did not know whether the phrase was adequate to cover the situation.
I do not know whether I am right in this but I should like to raise it for the purpose of examination by the Parliamentary Secretary—whether or not Section 9 would apply to cases where, under previous legislation, lawful additions had been made to a basic rent and whether, under this section, such cases, where covered, could be taken into account by the courts in fixing the rent under Section 9 in respect of lawful additions made already under existing legislation or again, may the courts have regard only to the state of repair?
I shall certainly have the point examined. Deputy Sweetman, I think, is concerned with the Section 8 cases which necessitate a determination of the basic rent on the basis of Section 9, because Section 9 would deal practically exclusively with rooms and flats. I cannot see— perhaps I am wrong—that the sort of difficulty Deputy Sweetman envisages would have any practical application.
However, in case there is I shall examine the matter carefully. My own view about the operation of Section 9, as to whether or not lawful additions to existing rents would be taken into account, is that they would, as part of the general level of rents of comparable dwellings, that is to say.
But the section refers to taking basic rents into consideration. The lawful rent would be the basic rent plus lawful addition.
That is so. Would that type of house be out from the point of view of comparison purposes because of the fact that the expenditure which gave rise to the lawful addition would make it a different sort of house, particularly from the point of view of amenities?
That is where the house would suffer from storm damage and exceptional repairs were necessary?
I see the point the Deputy is making—that they were not necessarily improvements?
We shall be satisfied if the Parliamentary Secretary agrees to examine the question.
Question put and agreed to.
SECTION 10.
I move amendment No. 26:—
To delete paragraph (b) of subsection (1) and substitute the following paragraph:
"(b) in the case of a controlled dwelling to which section 9 of this Act applies—
(i) in case it has become such a dwelling by virtue of section 8 of this Act, the operative date, and
(ii) in any other case, the date of the institution of the proceedings in which the basic rent of the dwelling is determined."
This is a drafting amendment. It may happen that after the passing of the Bill the landlord of a dwelling to which Section 7 applies may do improvements, structural alterations or exceptional repairs and that subsequently the tenant may get the basic rent revised under Section 8, with the result that the dwelling becomes a dwelling to which Section 9 applies. In that event, as the Bill stands, the landlord would get no lawful addition for the expenditure as he would have incurred it "before the date of the institution of the proceedings in which the basic rent of the dwelling is determined." This amendment enables him to do so.
I take the Parliamentary Secretary's word for it. I find it very difficult to read.
That makes two of us.
Amendment agreed to.
I move amendment No. 27:
In subsection (2), page 8, to delete paragraph (b).
Since amendments Nos. 30 and 31 appear to be related to this amendment, I think we could take the three together.
The subsection to which the amendment relates says that in case the landlord is liable for the whole or part of the repairs to the dwelling, a sum equal to 12½ per cent. of the basic rent may be added to the tenant's payments. This subsection, which we are seeking to delete from the Bill, provides for, in our view, a gift of 12½ per cent. to the landlord. It provides for permission to the landlord to impose this increase in rent without any provision being made which would show that the expenditure on the dwelling was in fact incurred. The subsection merely states "in case the landlord is liable for the whole or part of the repairs to the dwelling". Accordingly, the landlord needs only show that he is liable for repairs; he does not have to show that he has spent any money on the repairs.
Having regard to the fact that for many years people have been paying rents on dwellings on which landlords are supposed to be liable for repairs up to the present time and having regard to the fact that the landlords have never spent a single penny on repairs, it appears to be completely inequitable that at this stage such landlords should be entitled to impose an increase of 12½ per cent. even though they may never carry out repairs but are only liable for them.
There is the case of the landlord who is responsible for part of the repairs. Under this subsection, it would be possible that a landlord would enforce an increase of 12½ per cent. on a tenant even where the expenditure was a nominal one. The main purpose of this subsection is to permit an increase in rent. There are other provisions in the Bill for increases in certain circumstances, but this is one which permits the landlord to increase the rent by 12½ per cent. without any qualification. The only condition is that the dwelling comes under the control of this Bill. In circumstances where people today are finding it difficult enough to meet their commitments generally, it appears to be most unjust for this House to give authority to the landlords, on the day this Act is passed, to go to the tenant and say: "I am responsible for the repairs in your dwelling whether in whole or in part because I got that responsibility. Would you please give me an increase of 12½ per cent. on the rent you are now paying?" We are pressing, therefore, for the deletion of subsection (b).
We would ask that consideration should be given to the fact that this section of the Bill is seeking to hand to landlords this additional money without requiring from them the expenditure of one single penny. We are opposed to an increase in rent on these grounds. We are opposed to any increase in rent in cases where it cannot be shown clearly that there is justification arising from essential expenditure which is of benefit to the tenant.
There are a considerable number of cases where efforts by tenants, who have repairs carried out, to have their dwellings put in proper order over the years have failed completely because of the attitude of their landlords. In those circumstances, the proposal to grant all landlords the right covered under the section dealing with tenants coming within the scope of the Bill, the right to seek and obtain an increase of 12½ per cent. of the basic rent, is objectionable. We say that the section should be deleted from the Bill.
Are we dealing with amendment No. 30?
Amendment No. 30.
I formally move that.
It is not necessary to move the amendment. The Deputy may discuss it.
Under the section, a landlord may add 12½ per cent. to the basic rent if he, the landlord, is liable for part or whole of the repairs to the dwelling. The amendment would ensure that a dwelling must have been kept in a reasonable state of repair before an increase would be applicable.
Major de Valera
I think it would be well at this stage to appreciate the full content of this subsection. I am rather disappointed that Deputy Larkin did not expand and take into account all the factors. He merely put it on the basis, as he called it, of a present. To be kind to Deputy Larkin, that is a very serious over-simplification.
Here is the situation you have to face in this Bill. You had premises which had been out of repair in the previous Rent Act and particularly the 1946 Rent Act. You had provisions giving sanctions to tenants in regard to their landlords for the maintenance of their premises in repair but the situation had developed where it was clearly seen that the remuneration to the landlords did not fully cover the landlord in maintaining the condition of the property and the property had very frequently deteriorated as a result.
One of the arguments that would be advanced for bringing this subsection in now is that it is in the tenants' interest that there should be proper maintenance of property in repair and that the primary purpose of this subsection is not to give a present to the landlords, as Deputy Larkin says so simply. The primary purpose of this is to ensure that property is maintained in repair and that it is maintained in a proper condition as much for the benefit of the tenant as of the landlord—in fact, more for the benefit of the tenant than the landlord.
The difficulty had arisen heretofore that the rents, when repairs were taken into account, were so uneconomic that no court or nobody responsible could in equity compel the landlord to go beyond a certain stage with it, having regard to the remuneration he had for the premises. I think that is the essential reason for introducing this amendment.
I will content myself with pointing out the other side to Deputy Larkin's argument. I am not at all suggesting it is not arguable that it is a further burden on the tenant but this point should be taken into consideration. The section is in the long term as much for the tenant's benefit as for the landlord's. That is particularly so in regard to other sections to which Deputy Larkin did not advert. For instance, there are sections in this Bill, largely carrying over legislation already existing, giving sanctions to the tenant if his landlord does not maintain the premises in repair. For instance, you have Sections 40 and 15. Section 40 provides for payment to the tenant in the case of disrepair of a controlled dwelling owing to the default of the landlord and Section 15 provides for a reduction of the rent owing to the default of the landlord in keeping a controlled dwelling in repair.
These sections, I admit, are largely parallel in previous legislation but one of the reasons for the failure, perhaps, of these sections to do their work as previously envisaged was the very fact that the maintenance of premises in repair by the landlord was uneconomic, having regard to the overall economic factors of the situation. I make these remarks primarily to bring this discussion into a proper focus here at the moment.
I should also like to express the viewpoint I mentioned on Second Stage and to point out that I have met tenants who, before this Bill was introduced, had complained about the state of repair of premises and had gone so far as to say that they would be willing to pay a little more if the landlord would keep the premises in proper repair. That is the other side. It is a side which we should keep before us in this discussion.
I support Deputy Larkin's amendment and Deputy Russell's amendment, which is rather similar. I hold that landlords should not have the right to increase the rent by 12½ per cent. unless they are obliged to keep the premises in proper repair. I have had from time to time complaints. I had to communicate with the sanitary department of Dublin Corporation. Certain repairs were alleged to be carried out by landlords but the defects were only doctored up. In other words, landlords aim to spend little or nothing on repairs. They exaggerate the cost of repairs. Their repair is some little bit of a job carried out by some handyman.
I know a gentleman who asked for a quotation for the building of a wall in a yard and he was told it would cost £100. He got it built for £15 because he used old bricks and the wall was not half as thick as it had been. Landlords ought to be compelled to carry out proper repairs. It is the practice of some landlords, where their tenants are paying a small rent, to penalise those tenants by making it impossible for them to carry on. They deliberately carry out repairs to that part of the house where the tenants are paying a high rent and they leave the part where the tenants are paying the low rents in a dilapidated condition.
Landlords are very clever gentlemen. They know the tenants who are paying the good rent and they know the tenant who is not paying so much and they put the squeeze on him. If they get this 12½ per cent. increase for every tenant, then every tenant who has a claim for repairs should have those repairs done. Remember that most landlords have a considerable number of vacancies now due to the activity of the local authorities in building houses. Once a person has three children, he is entitled to a local authority house so that the landlords have been able to let to new tenants at double and treble the rent.
If they did so, they did so illegally.
They are doing many things illegally and the tenants do not complain because they are delighted to get in. There are thousands of newly-married people delighted to get a place to live.
A simple application to the district court would get their rent reduced.
That may be so, but if the former tenant had a very low rent, the landlord will at least get an increase from the new tenant. He profits as a result of the vacancy, apart altogether from any backhandedness that goes on in regard to key money. There is no need to shed any tears for the landlords at all. Much of the alleged repairs they do are only in the nature of a bit of whitewashing or the putting on of half a slate.
Deputy de Valera may possibly be right in saying that to describe this 12½ per cent. increase as a present to the landlord is over-simplification but I do not think it is a very great exaggeration. We are dealing here with three amendments, all of which relate to Section 10, subsection 2 (b) which is the provision in this Bill designed for the purpose of allowing the landlords a 12½ per cent. increase in the rents of all controlled premises. It is designed for the purpose of giving the landlords that increase if they are liable for repairs in whole or in part.
It does not set out in any section of the Bill that the landlord will forfeit that increase if he does not do the repairs. It is not made clear in the Bill what "part repairs" amount to. A number of us referred to this matter during the Second Reading discussion. The Minister has done nothing in relation to the points made on Second Reading and which, I believe, are perfectly valid points.
I can see that a distinction can and should be drawn in respect of tenants who are sitting tenants, who are in possession now and who have had the rent fixed by agreement as between themselves and the landlord or by legislation heretofore. We are now saying to those people that we are going to interfere with those rights and that even if the landlords do not ask for it, we are going to insist that they will get an increase of 12½ per cent. on the rent.
They still need not take it.
Perhaps, but that is what we are doing.
That is an artificial argument.
It is not. There are rights in existence between the tenant and the landlord. They are there by agreement, in the first instance; in the second instance, they are there because of the legislation which exists at the moment and which controls the rent which can be charged for these premises. A great number of these tenancies were entered into in the knowledge of these rights—that they were controlled rents and voluntary letting under conditions as they now exist. Under this section we are saying to the tenant that he must now pay an increase of 12½ per cent. in his rent because the landlord accepts liability for repairs.
It is necessary to note that the landlord gets what Deputy Larkin describes as a present and which I would describe as a bonus of 12½ per cent. of an increase in the tenant's rent if he is liable for repairs, whether he has them done or not. Deputy Russell's amendment is designed to remedy that situation. He is also going to get the 12½ per cent. increase in the rent not only if he is liable for the entire repairs but also if he is liable for part repairs, whether he does them or not.
In the absence of any clear definition in this Bill as to what "part repairs" are, can we not have the situation where a landlord enters into a written agreement with the tenant and imposes on himself the obligation to replace broken glass in one particular window in the dwelling? That is part repairs and once he accepts that liability under this Bill, he is entitled to the 12½ per cent. increase. That situation possibly does exist now where landlords are responsible for minor repairs to existing controlled dwellings.
The whole section in relation to this increase is altogether too loose and too dangerous to allow it to go through this House without some protest.
I believe the principle is wrong that we should interfere with the existing situation voluntarily accepted by both landlord and tenant under present legislation and that we should wade in on behalf of the landlord to increase the tenants' rents. I appreciate the arguments by Deputy de Valera and earlier by the Parliamentary Secretary with regard to the necessity to ensure that a landlord will not be treated unfairly, that he will not be put in the position of having to do repairs in face of increasing costs while at the same time being pegged down to a limited income from the property which was fixed at a time when costs were lower. There is a lot to be said for that argument.
I shall go as far as agreeing that in the case of any new tenancies, where the rights have not already been fixed and ascertained between landlord and tenant, an increase should be allowed. That is why I feel some difficulty in fully supporting Deputy Larkin's amendment. Deputy D. Costello's amendment meets exactly the case in point. In the absence of any clear definition in this Bill in regard to what repairs will consist of, in the absence of the requirement in the Bill that the landlord should do the repairs rather than simply be liable for them, I support Deputy Larkin's amendment as it stands that we should get rid of this section. It is a new section that was not in the 1946 Act.
The Parliamentary Secretary is entitled to point out that the 1946 Act, in dealing with controlled 1923 Act premises, did allow an increase of I think one-twelfth for repairs where the landlord was responsible for the entire repairs. That section of the 1946 Act applied only where the landlord was responsible for the whole of the repairs. This is a new section. It also gives the landlord the same increase where he is liable for part repairs.
On the Second Reading the Parliamentary Secretary claimed that this was simply putting into operation a recommendation in the Conroy Commission Report. I do not think that is accurate. The Conroy Commission recommended that there should be an increase to landlords on the basic rents for repairs. However, they suggested there should be a differential as between a landlord responsible for the entire repairs and a landlord responsible for part repairs only. I concede that the Parliamentary Secretary has taken the lower of the two increases suggested by the Conroy Commission and applied it to landlords whether responsible for whole or part repairs.
The Conroy Commission suggested an increase of 25 per cent. to the landlord responsible for the entire of the repairs and an increase of 12½ per cent. to the landlord responsible for part repairs only. However, the principle they enshrined in that recommendation was that there should be a differential—I do not know the amount —between the landlord responsible for the entire repairs and the landlord responsible for part repairs only. That has not been accepted by the Government and that is not being incorporated in this Bill. We feel a further important principle involved is that we should not interfere with the right of sitting tenants—those who are there at the moment—whatever we may do with regard to controlled premises that will be occupied by new tenants with new tenancy agreements.
Major de Valera
The Deputy has not dealt fully with all aspects of this matter. What about the impact of Sections 15 and 40, to complete the picture?
The Parliamentary Secretary.
I cannot accept any of the amendments. Deputy Larkin's amendment cuts across the entire principle of the Bill. I regard the other amendments as unnecessary. With reference to the 12½ per cent. increase in basic rents, there is no element whatever of a bonus to landlords. Let me go over the background again.
When the Conroy Commission sat in 1950 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. In 1950, rents had increased by five times since 1914. The majority of controlled rents are related to the 1914 level. The other category of controlled rents are those which are controlled at the 1941 level. Between 1941 and 1950 the cost of repairs doubled. In that situation, the Conroy Commission recommended that an increase of 25 per cent. in one case and 12½ per cent. in the other case be given to landlords to compensate them, and no more than compensate them, for the increase in the cost of repairs. The Conroy Commission pointed out that this proposal contained no element of an increase in the net income of landlords. That was in 1950. Since 1950, repair costs have increased by 40 per cent. Despite that further increase we still are giving to landlords in this Bill an increase of only 12½ per cent. whether they are liable for all or only part repairs.
The Parliamentary Secretary is right and I accept it that it is intended to compensate landlords. Surely it is reasonable, if compensation is to be allowed, that the repairs should be done?
I shall come to that. Everything else we can think of, because of the fall in the value of money, has increased in price except controlled rents. In the great majority of cases, landlords have received no increase of any sort since 1926. I shall not weep for landlords but I want to be fair to them. Every section of the community is entitled to a certain amount of fairness. It is a reasonable and fair increase.
The Parliamentary Secretary must know different landlords from the ones I know.
There are good landlords and bad landlords.
What about some of the slum landlords?
Landlords generally are entitled to a fair deal from this Bill. With regard to the 12½ per cent. increase, it does not apply when the landlord is not liable for any repairs. But if he is liable for repairs it still does not apply if he has carried out exceptional repairs and got a lawful addition without taking a repair grant. If he has got a lawful addition because of exceptional repairs and has taken a grant it does not apply to the element of the basic rent that is a lawful addition. It applies only to the original rent before the lawful addition was added on to it.
Keeping all those factors in mind there is, as I say, no element of a bonus in it. It will not increase landlords' net rents at all. It will merely compensate them for the increased cost of repairs. Landlords have had no increase in most cases since 1926 and in other cases since 1941, and I think on the side of justice, as between landlord and tenant, there is no doubt it is perfectly fair, and that most tenants will admit that it is fair. We have had no complaints from tenants that it is unfair. I think most reasonable tenants, if you ask them whether or not landlords are entitled to something, would agree that 12½ per cent. is not unfair. Tenants will agree also because it will enable landlords to do repairs for which they are liable. That is an important aspect of this question. You cannot get blood out of a turnip and if a landlord just has not got the resources, or if his rent is not such as to enable him to carry out the repairs, then despite what the law says he will not carry them out.
We are giving this 12½ per cent. in the first place to enable landlords to carry out repairs for which they are liable. Let me come to the other point, that the provision deals only with landlords who are liable for repairs and that we are not insisting that the repairs be carried out. That is the kernel of the two amendments, one by Deputy Russell and the other by Deputy Costello.
Deputy Costello's amendment is designed to exclude those——
Yes, I am sorry. Deputy Costello's amendment is designed to see that this 12½ per cent. should be applied only to new tenancies. With regard to Deputy Russell's amendment and the argument put forward by Deputy Sherwin and other Deputies that we should do something more than just saying that we will give the increase where landlords are liable, there are different provisions at the moment which are designed to ensure that landlords carry out the repairs for which they are liable. Deputy de Valera pointed to Section 15 and Section 40 of this Bill. Under Section 40 a tenant may go to the court and the court may award the tenant whatever sum is necessary to carry out the repairs. Section 15 applies to the 1923 Act cases and under Section 15 the court can reduce the rent by up to 20 per cent. in order to compel the landlord to carry out the repairs for which he is liable. There is also the ordinary, simple process of common law whereby the tenant can sue in contract and have the landlord compelled to carry out the repairs for which he is liable.
There is also Section 61 of the Landlord and Tenant Act where the tenant can call upon the landlord to carry out whatever repairs are necessary and if the landlord fails to do that the tenant can carry them out and then deduct the amount he expends on the repairs from the rent. Surely those provisions are sufficient to ensure that landlords carry out the repairs for which they are liable. If they do not carry them out, it is the fault of the tenants for not insisting on their rights. Deputy Sherwin and other Deputies can do a very good public service by informing tenants of their rights in this respect. Rather than getting up here and talking about landlords not doing this or not doing that they can simply, calmly and factually tell the tenants what their rights are and show them that tenants can go to court or do this, that or the other, to have their rights enforced and ensure that landlords do the repairs for which they are liable.
Those are the main arguments which have been put forward. First of all, that the 12½ per cent. is unfair, unnecessary and unjust. That argument cannot stand up for one moment, on any considerations of social justice. Here let me join issue with Deputy O'Higgins who, on several occasions, said or implied that the existing relation between landlord and tenants is on the basis of freedom of contract.
No, no. I said that tenancies entered into in the last 14 years were entered into by the landlord and tenant in the knowledge that the rents were controlled under the 1946 Act, and in that knowledge the tenancies were voluntarily entered into by the landlord and tenant.
I think there is only one fact in regard to all the categories of houses here, whether they were controlled under the 1923 Act or under the 1946 Act. In the case of all those houses we have interfered with the rights of the landlord and have said, rightly: "As a Legislature, for social reasons we are going to interfere in this contract and we are going to see that you will not get any more for this property than so much." It is nonsense to argue that there is any element of freedom of contract with regard to the control of houses. There is a most rigid control and we have kept landlords under that control in some cases for 45 years. Now, for the first time since 1946, we are proposing to do some small thing to redress the balance.
As I say, I think we can defend it on any principle of social justice and we can defend it as being good national economics. We have a stock of houses which represent national capital. Those houses are getting into a state of disrepair and dilapidation because landlords out of their rents are not able to carry out the repairs which they would like to carry out, apart altogether from whether they are good or bad landlords. So far as this 12½ per cent. will do something to relieve that position and to enable that stock of houses to be kept in proper repair, it is a good thing from the point of view of the national economy. I think it is fair and just and I am perfectly satisfied that it is a reasonable compromise in a difficult situation.
I think the Parliamentary Secretary is being very fair indeed. One might even say he is leaning over backwards in this matter to look after the interests of the landlords. It surprises me that the Parliamentary Secretary, a member of a Party so frequently concerned about tenants of local authorities, a Party whose spokesmen almost say that tenants should not have to pay rents——
Do not become political.
—— should come in here and take the view that under this subsection if a landlord were only a landlord for the purpose of this Bill for 12 months, or if there had been changes in the tenancies of his dwelling or dwellings within the past year or so, as long as they were controlled dwellings—and without any requirement to show that a single penny had been spent in respect of his liability for repairs wholly or in part—he could put out his hand to the tenant and say: "Twelve and a half per cent. Dáil Éireann has said that we are to get a 12½ per cent. increase in our rent."
Provision is made in other sections of the Bill by which landlords may obtain increases for repairs carried out. This subsection confines itself to saying that in respect of controlled dwellings the landlord can be given a gift of a 12½ per cent. increase in the rent. A controlled dwelling may be a house, a couple of rooms or a single tenement room. If this Bill is passed, the landlord, even if he never spent a penny on repairs, is entitled to go to the tenant and tell him: "Dáil Éireann says I am entitled to get an increase of 12½ per cent. on the rent."
The Parliamentary Secretary said that this subsection does not apply in cases where a landlord has carried out repairs under the previous Act and sought and obtained lawful increases in the rent. I should hope it would not. This subsection does not concern itself with whether a landlord has incurred any expenditure at all or has faced up to his responsibilities. Deputy de Valera told us there was provision in the 1946 Act to compel landlords to complete repairs, but there were many ways in which a landlord could evade his responsibilities.
I would agree with the Parliamentary Secretary that, by and large, landlords should be in the position of knowing their rights. Landlords whose livelihood depends on the incomes they receive from rented dwellings under these Acts usually have the best of legal advice to make sure they get their pound of flesh. However, that is not the case with the majority of the tenants. I disagree fundamentally with the Parliamentary Secretary. He says that subsection (b) is not unfair. I say it is unfair and unjust to the tenants because it would have the result of permitting landlords to extract from tenants an increase in rent with no evidence whatever that they actually spent money on the repairs for which they are supposed to be responsible. Surely, if the case is made that a landlord is entitled to some increase in respect of repairs, it is only common justice that such increase should not be granted unless there is evidence that there has been some expenditure on repairs?
The Parliamentary Secretary tells us that over the years landlords were unable to carry out repairs because it was not an economic proposition. As I say, this section has the effect of empowering landlords to impose an increase of 12½ per cent. without requiring them to carry out repairs involving the expenditure of even £1. It is based on a supposition that for many years a considerable number of landlords did not carry out repairs because they were unable to do so. If you look around the city of Dublin and consult with tenants of long standing, you will find that a considerable number of them have occupied dwellings on which the landlord never spent a penny.
In hundreds of cases, even though the landlords were supposed to be responsible for repairs, the tenants, rather than be involved in litigation, carried out the repairs out of their own pockets. Only when it came to the point that they would have to seek the assistance of the sanitary authority did they make it an issue with the landlord. Deputies know how difficult it is for a sanitary authority to succeed in compelling landlords to put property into a proper condition of habitation.
I agree with the Parliamentary Secretary that this is a fundamental portion of the Bill because, to the ordinary man, it means giving permission to the landlord to obtain more rent without giving evidence of any greater service. I believe it is fundamentally wrong that we should allow a landlord to obtain an increase in the rent without any evidence that the increase has any justification. The Parliamentary Secretary recalled the position in 1926 and in 1950. All the tenancies affected by this Bill do not go back to 1926 or 1950. Deputy Sherwin was quite correct in saying that there is a changeover in tenancies.
But the rent remains the same. It is controlled.
The Parliamentary Secretary is anticipating me. The landlord is entitled to charge the tenant of a controlled dwelling, even though he may be a tenant of only 12 months, an increase of 12½ per cent. on the rent, though in respect of that dwelling perhaps not a single penny has been spent on repairs. The tenant who came into possession under a tenancy agreement one, two or three years ago is faced now with the position that, without a single penny being spent on repairs, the landlord can collect an increase of 12½ per cent. The particular landlord may have, in fact, already benefited substantially under the operation of the Rent Restrictions Acts because he may have come into possession of a dwelling that was let at a low rent and possibly has taken advantage of the Act, as he would legally be entitled to do, after coming into possession and if there is a change of tenancy, to seek to have the rent brought fully into line under the provisions of the Act. I do not know if he has done so will the position apply whether the tenancy is old or new, whether the landlord is the old landlord or a new landlord?
The accommodation is the same. Repairs are applicable to accommodation and the accommodation has been held either since 1914, on the one hand, or 1941 on the other hand.
The accommodation is there but I am concerned with what the landlord is going to collect.
You do not repair the tenant; you repair the dwelling.
I am quite aware of that, but it is not the dwelling that will have to pay the increase of 12½ per cent.; it is the tenant in that dwelling at that particular time, as the tenant on whose behalf no repairs whatever may have been done and perhaps no attempt made to do repairs. In some cases, there may even have been repeated applications without success to the landlord to have repairs carried out and the landlord is now told that because he is responsible for those repairs, we will give him a 12½ per cent. increase.
I want to close by saying again that, in our view, this subsection is the equivalent of a gift to landlords by and large. We oppose it and we think it should be deleted from the Bill.
In conclusion, I shall deal with the points made by Deputy Larkin. The position in law is quite clear. In so far as a dwelling is controlled under the Rent Acts, a change of tenancy does not make any difference whatever. The control applies to the dwelling and, if a new landlord comes, the rent applicable to the dwelling still applies to him. If an unscrupulous landlord tries to increase the rent on a new tenant, the machinery of the Acts is available to the tenant who can go to court and have the rent reduced to what it should be. It is wrong for Deputies to try to convey the impression which may be given abroad that it is open to a landlord to increase the rent on the tenant. It is not. Let us be clear about that. I should be very unhappy if any contrary opinion were to go out from this House. I think it very desirable that Deputies should make the position as clear as they can to their constituents generally.
What about blackmail—the tenants afraid of being blackmailed by the landlord?
That is the whole point I am trying to bring out. The tenants have all the rights and the statutes there to protect them. Let us instruct them in their rights. If there are unscrupulous landlords, the courts are there to see that their tenants are protected. The best service we could give would be to get the true provisions of these Acts as widely known as possible and have clearly pointed out to tenants what their rights are.
With regard to the 12½ per cent. increase in respect of repairs, we are giving it only to landlords who are liable for repairs. The provisions of this Bill and other Acts are such that a landlord who is liable for repairs can be made to carry out repairs. Therefore, as we are giving the increase to landlords who are liable for repairs, we are giving it to landlords who have either carried out repairs or who can be made carry them out. There is no validity in the argument that it is a bonus or an addition to the landlord's income. That applies even in the case mentioned by Deputy Larkin where a tenant came into a dwelling only 12 months ago and no repairs have been done for him. Therefore, it was argued, the landlord should not be entitled to an increase. That is fallacious. The accommodation has been there and the landlord is liable for repairs. Even though he has not carried out repairs for the tenant who has been less than 12 months there, he has presumably carried out repairs since either 1914 or 1941, or whatever it may be.
The 12½ per cent. increase appears to be desirable from the point of view of national economics. It is not excessive and it will not be a burden on the tenants. It is some compensation to the landlords for the increased cost of repairs and it is perfectly fair, to my mind. I recommend it wholeheartedly to the House and ask the House to accept it.
The Parliamentary Secretary spoke of compensation for the increased cost of repairs but he already stated the increase does not apply in cases where landlords took advantage of the earlier Acts to carry out repairs and obtain the lawful increases.
The Deputy is confusing two different things. When I say it is compensation for repairs, I mean for the ordinary running repairs for which a landlord is liable. In the case of the other type of repair, the special, exceptional repairs or improvements —the sort of thing that happens where a landlord puts in a new bathroom or puts on a new roof; a major or exceptional repair of that nature—the landlord has for some time been entitled to make a special lawful addition to the rent. In such a case, either of two things takes place. If he carried out an exceptional repair and has taken a State grant to help him to carry out the repair, then we shall give him 12½ per cent. increase on the original rent but not on the increased rent. If he has not taken a State grant and if he has spent, say, £100 or £200 on exceptional repairs and has increased the rent by the appropriate percentage of the entire, or almost the entire, of that £100 to £200 in the form of a special lawful addition, the 12½ per cent. increase does not apply to him at all. We say he has already got a substantial increase on the rent charged or, rather, to put it the other way, the tenant's rent has been substantially increased and we shall not give any further increase.
Would the Parliamentary Secretary clarify this for me? I am a little confused. I understood the Parliamentary Secretary to say that this increase is compensation for landlords in respect of repairs in the past. We have put the case to him of the landlord who has not done those repairs. He is to be compensated as well as the landlord who has done them. That is No. 1. Secondly, under the remaining sub-paragraphs of this section, the landlord will be entitled to further lawful additions in respect of repairs. Under paragraph (c) of subsection (2), he will get eight per cent. of the amount spent on the improvement or structural alteration on or after the critical date; under paragraph (d) he will also get eight per cent. of the amount spent on repairs if they were due to waste on the part of the tenant——
That is different.
Under paragraph (e), he gets 15 per cent of the first £100 expended in excess of two-thirds of the basic rent. If the excess is over £100, he gets 15 per cent. on the first £100 and 8 per cent on the remainder. If the excess expended is over £200, he gets 15% on the first £100, 8% on the second £100, and 6 per cent. on the remainder. I want to know what is the position of the landlord who has not done repairs heretofore who is to be compensated by getting the 12½ per cent. arbitrary increase which the Legislature is now imposing on tenants' rent and who, in addition to that hereafter does repairs? Having got his 12½ per cent. for repairs he did not do, he now does the repairs; does he then get the increases set out in the other subparagraphs?
The short answer to that is "No". Let us take a case where there has been no special lawful addition to date. The provision will give that landlord a 12½ per cent. increase on the basic rent. If he subsequently comes along and carries out repairs which would entitle him to the 15, 8 and 6 per cent. lawful additions——
But some of these repairs will be for the purpose of putting the house into a reasonable state of repair. He should have done that for the 12½ per cent.
If there are exceptional repairs necessary and if he does not take the State grant and passes the full amount on to the tenant as a lawful addition, then the 12½ per cent. the Bill gives him will be wiped out. If he does take the State grant and passes a correspondingly reduced amount on to the tenant in the form of a special lawful addition, the 12½ per cent. will still apply to the original rent but not to the special lawful addition.
I fear that it will.
I am confused because of the many side issues brought into the discussion. Reference has been made to Section 40 under which the landlord may be brought into court and compelled to do repairs; if he fails to do the repairs, then the tenant may do the repairs and present the landlord with the bill.
That is not Section 40.
The court can make an award.
I think there should be some protection. Take the case where a landlord is empowered under this Bill to get an increase of 12½ per cent. on the rent and the dwelling is in a bad state of repair; the tenant is one of those people who is in a position to get legal opinion; he takes the landlord to court to seek to have the repairs carried out. Under Section 40 the landlord can plead a number of grounds to justify his not carrying out the repairs—the age of the building, the economic cost, etc. But he has already got the 12½ per cent. under this subsection. He seeks the protection of the court on various grounds. I am speaking now as a layman. Is it possible that a landlord will be presented with an increase of 12½ per cent. irrespective of whether he has spent a single penny on repairs, on the basis that he is entitled to compensation for something he has not done but which he may do in the future? If the tenant takes him to court and the landlord wins the case, he will not have to carry out the repairs. That is an added reason why this subsection should not go through in its present form.
First of all, in dealing with this question of the landlord's liability to carry out repairs, I mentioned several different provisions in the law. Subsection (5) of Section 40 provides:—
The right of the tenant to obtain relief under this section shall not prejudice his right to seek relief in any other form of proceedings.
Even if the landlord were able to establish to the satisfaction of the court that he should not be compelled under subsection (2) to carry out repairs, the other provisions to which I referred—Section 15 of the Bill, Section 61 of the Landlord and Tenant Act, 1931, and the ordinary common law of contract—are still available to the tenant. There is no need for Deputy Larkin to be worried about Section 40. It provides that if a dwelling is not in good and tenantable repair the tenant can apply to the court and the court can order the payment of a sum of money to put the dwelling into good and tenantable repair.
Subsection (2) was inserted at the suggestion of the Conroy Commission to deal with exceptional cases in which it would obviously be unfair to make a landlord put a dwelling into good and tenantable repair because of the kind of dwelling it is or because of the type of repair necessary. It might be a completely uneconomic proposition, and might cause an increase in rent which no tenant could reasonably be expected to pay. The Conroy Commission recommended that the court should have discretion in such a case. It is for the court—not the landlord —to refuse to order the payment of this sum. That would arise, of course, only in very exceptional cases. It could never reach the dimensions of a loophole through which landlords could seek to get out of their ordinary liabilities. The provisions of Section 40 will still apply in all cases where, due to the neglect of the landlord, repairs were not carried out and the dwelling fell into a state in which it could no longer be regarded as being in good and tenantable repair.
The Parliamentary Secretary referred to very exceptional cases. A census was recently taken by the Dublin Corporation—it is not official yet, but I got a copy of it this morning—and, according to that census, there are 1,500 families living in dwellings which are unfit for habitation. Those 1,500 families can be asked to pay this 12½ per cent., but the landlord will not be liable to repair the dwellings because they are unfit for habitation and, therefore, beyond repair.
I should like to have a little more information on that.
The number of cases is 1,500. It is not just a very exceptional case.
I do not think the Parliamentary Secretary has answered the point I made. I am concerned with subsection (2) under which tenants will be compelled to pay an extra 12½ per cent. increase in rent even though the landlord has no intention of carrying out any repairs.
Progress reported; Committee to sit again.