Amendments Nos. 1, 3 and 16 are related and may be discussed together.
Committee on Finance. - Rent Restrictions (Amendment) Bill, 1966: Committee Stage.
I move amendment No. 1:
In subsection (1), page, to delete lines 14 to 17 and substitute "of ‘(if the dwelling is neither a house nor a separate and self-contained flat) or forty pounds (if the dwelling is a house) or thirty pounds (if the dwelling is a separate and self-contained flat)' and by the insertion after ‘forty pounds' of ‘(if the dwelling is neither a house nor a separate and self-contained flat) or thirty pounds (if the dwelling is a house) or twenty pounds (if the dwelling is a separate and self-contained flat)'."
The object of this amendment is to remove from the scope of the rent restrictions code self-contained flats having valuations exceeding £30, if they are situated in the Dublin area, or £20 where they are situated elsewhere. Of course, any tenants affected by this decontrol will be given automatically the right to the protection afforded by Part III of the Landlord and Tenant Act, 1931. This means that they may have a 21 year lease at something less than the open-market rent, less an allowance for any improvements which they or their predecessors have made. However, where payment of this rent would cause hardship, special provision is made in section 12 of the Bill, as it is now proposed to be amended, to ensure that in such cases a lease of ten years duration is given at a rent which the tenant is able to afford. As in the case of houses with valuations exceeding £40 in Dublin—£30 elsewhere—which the Bill already proposes to decontrol, it is extremely unlikely that the kind of person who occupies a self-contained flat of such a high valuation will not be in a position to pay the economic rent; but if there are any such persons, their requirements are fully catered for in the provision for having a reduced rent in such cases.
This is really an extension to self-contained flats of the decontrol by reference to valuation already provided in the Bill for houses.
Amendment No. 3 is of course related to this in that it proposes to transfer from the protection of the Rent Acts to the protection of the Landlord and Tenant Act any houses or self-contained flats which become occupied, after this Bill becomes law, by an unmarried person between the ages of 21 and 65 years. It means that in this limited category, while the tenants' right to security of tenure is being fully protected—in fact they will be automatically entitled to a lease for 21 years at least—the rent may be increased to what they can afford to pay. As in the case of the other premises which are being decontrolled under section 2 of the Bill, section 12 will ensure that where payment of the economic rent would involve hardship, the court may fix the new rent at a figure which the tenant can afford, and this figure will continue to govern the rent for the following ten years.
My main object in moving this amendment is that of encouraging the fullest use of the existing housing accommodation. There are many cases where houses are seriously underoccupied because they have passed into the possession of unmarried men and women who remain in possession because the rent is so far below economic levels. In my opinion, there is no strong case for continuing the application of the Rent Acts to such persons and the protection of the Landlord and Tenant Acts to which I propose that they should be transferred is fully adequate in present-day circumstances.
Amendment No. 16, which is also being discussed, is really a consequential amendment on Nos. 1 and 3.
On Second Reading, I made a case, generally speaking, that a time of acute housing shortage was not the time to proceed with decontrol. I also pointed out that there is an anomaly in the rent restrictions code in that what we are in fact doing is requiring private landlords to subside tenants. I pointed out, I think, that whatever might be said for the case of needy tenants—on the balance of hardship, I thought most people would come down on the side of the needy tenant and there is a case for requiring, as we are doing in this legislation, a landlord to subsidise the needy tenant—there is that distinction in the view of many people, the distinction between the needy tenant and the tenant who cannot be classed as needy. By and large, the grievance which householders have against rent restriction is not so much the question of control of rent but control of getting possession. I wish to query the Minister on this point.
Having regard to house values today, a case can be put up that in reducing the valuation limit to £40 and £30, we may be continuing to benefit what one might call the comfortable or well-off tenants who are obtaining subsidies from their landlords. I imagine that in many cases houses with valuations of £30 have a market value of anything up to £5,000. Therefore, by relating the poor law valuation to the market value of the house, we are saying that an owner of a £5,000 house must continue to subsidise the tenant of that house because the house is controlled. My query is whether we are holding the scales of justice evenly in this case. I am not talking about control of rent but from the point of view of the landlord not being able to get possession. The Minister has pointed out that in cases where control has been taken off by reducing the valuation limit, the tenant's rights under the Landlord and Tenant Act to get a lease——
Would the Deputy go further on the valuation question?
It is my view that when there is a housing shortage, it is not good to go in for a policy of decontrol. I am trying to distinguish, and I think I can, between the needy tenant and the tenant who is not needy. I am in favour of extending decontrol in cases where you cannot make out a case that the tenant is needy or that he requires this additional subsidy which is being imposed by the legislature on the Landlord.
One other point I wish to raise concerns the drafting of the Minister's amendment. The amendment states, "if the dwelling is neither a house nor a separate and self-contained flat". The definition of "dwelling" in the 1960 Act is "a house or part of a house". It seems to me we are becoming a little absurd if we read the Minister's amendment and then have regard to the definition of "dwelling". Here we state in the amendment: "If a dwelling is neither a house nor a separate and self-contained flat", whereas, by definition, "dwelling" is a house. Reading the definition and the amendment together it would come out something like "if a house or part of a house is neither a house nor a separate and self-contained flat". That is what the Minister is asking us to do now. The distinction is in the use of the word "means", in the definition section of the 1960 Act. This seems to me to require further amendment to make it state that "dwelling includes a house or part of a house", again condensing it, rather than stating: "A dwelling means..." If we retain the definition it simply makes nonsense of the amendment. I should like the Minister to look at that small point which might make trouble.
I shall certainly take it up.
I move amendment No. 2:
In subsection (3), page 2, lines 24 and 25, to delete "of which, the flat having been in existence at such commencement," and to substitute "(not being a flat forming part of any such buildings) of which".
This is a drafting amendment to clarify the terminology of subsection (3). There is nothing in it really.
Amendment No. 3 has been discussed with the first amendment.
I move amendment No. 3:
To add to the section the following new subsection:
"(4) Section 3 (2) of the Principal Act is hereby amended by the addition of the following paragraph:
(i) a dwelling which is a house or a separate and self-contained flat, being a house or flat of which, after the passing of the Rent Restrictions (Amendment) Act, 1967, a person, being a bachelor or spinster and being over the age of 21 years and under the age of 65 years, has become the tenant.' "
I move amendment No. 4 :
To add to the section the following new subsection:
" (2) Section 7 (3) (a) of the Principal Act is hereby amended by the insertion after ‘(as the case may be)' of ‘appropriate by reference to the rates for the local financial year ending on the 31st day of March, 1966'."
I am moving this amendment because, as the Bill stands, the basic rent of dwellings let on 8th June, 1966, is the net rent arrived at by deducting from the actual rent the amount of the 1966-67 rates, where the landlord pays them. In actual fact, on that date landlords would not normally have been in a position to have increased the rent to take account of the increased rates for the present year so that it would not be fair to deduct the amount of the 1966-67 rates when only the 1965-66 rates were included in that rent.
I move amendment No. 5:
In subsection (1), page 4, to insert the following new paragraph after line 15:
"(c) Where, in the case of a dwelling to which this subsection applies and in respect of which an application to the Court under this subsection has not been made, the landlord, having agreed with the tenant upon a rent to stand determined as the basic rent of the dwelling, serves a notice of that rent on the tenant, thenceforth—
(i) that rent shall stand determined as the basic rent of the dwelling and the dwelling shall, without prejudice to the previous application thereto of paragraph (a) of section 16 of this Act become a dwelling to which section 9 of this Act applies as if such determination had been made under that section,
(ii) no application to the Court under this subsection may be made, and
(iii) in any application of paragraph (b) of section 16 of this Act to the dwelling, a reference to the date of the service of the notice shall be substituted for the date of the institution of proceedings".
Amendment No. 8 may be discussed with this amendment.
This is an amendment to the provisions which for the first time give a small landlord the right to have a fair rent determined by the District Court. It is designed to deal with the case where the landlord and tenant can agree between themselves on the amount of that rent, and thus obviate the necessity for any court proceedings. Of course, having the rent fixed by the court has the advantage that the amount becomes a matter of court record and there can be no subsequent dispute about it. On the other hand, I think we ought to avoid litigation wherever possible and encourage agreements voluntarily entered into. The amendment accordingly provides that any revised rent which is agreed between a small landlord and one of his tenants shall have the same effect as if the rent had been determined by the District Court itself.
I am all in favour of voluntary agreements where they can be arrived at, provided they are genuinely voluntary in the sense that the agreement is not influenced to any extent by duress, not by the landlord but by the particular position of the tenant. Generally speaking, I am in favour of the idea of voluntary agreement.
I hope the Minister will deal with Deputy O'Higgins's point. There is a very grave distinction between what the Minister has described as being a matter of court record— where the merits have been discussed by a judicial person—and a determination made of a rent in the matter of a private mutual agreement which, in this case, is almost always an agreement between two parties, one of whom is vulnerable and the other relatively invulnerable. I take it these agreements are very largely in respect of tenants of very small lettings. If every such tenant knew the law as well as an experienced Dublin solicitor does, he would, of course, know there was protection for him under the law. My experience of the small tenant——
The small landlord.
We are talking now of a voluntary agreement between two persons.
This is in case of the small landlord.
My experience of the small tenant is that he has not the faintest notion what his rights are. I am thinking now of an old lady living in a couple of rooms. The nightmare that hangs over her is the fear that she will be evicted. A blustering small landlord tells her: "This is now the law and, if you do not pay up the new rent, I will bring you to the District Court." She does not realise that the District Court is, in fact, her protector. She does not like going into the District Court at all. Am I right in understanding the Minister to say that, if such an elderly person, apprehending being brought into the District Court, enters into a private agreement with a small landlord, that will have the same statutory effect as a rent fixed by the District Court? If it has, then I think the Minister ought to look at it again.
It applies only to houses and self-contained flats. It does not apply to rooms.
I suppose Deputy O'Higgins knows what the statutory definition of a self-contained flat is! I do not. Some of the so called self-contained flats I have been in in the poorer parts of Dublin consist of a bedroom, something that is described as a kitchenette, and a lavatory in the yard. That would not be what most of us conceive a self-contained flat to be. Deputy O'Higgins has a good deal more experience of this kind of thing than I have. If he is satisfied with this arrangement, then so am I, but it causes me a little concern that the protection afforded by the intervention of the District Court should be weighted in this way if we are to give statutory effect to the rent created under the amendment the Minister now submits.
I think a self-contained flat is pretty well defined.
I think the Minister will agree that what Deputy Dillon says is true of a number of cases. If you have a large room divided, with one corner used as a kitchenette, and so on, that might be regarded as a self-contained flat, but it is stretching the definition a bit.
Apart from the common staircase, the self-contained flat would have to have all the amenities of modern living within itself. Literally, it would have to be self-contained.
I know a small two storey house in the city of Dublin. The landlord lives in what I and the Minister would ordinarily regard as a bedroom. The tenant lives on the ground floor, which consists of one substantial room, one small room, a kitchenette, and a lavatory in the yard shared between them. For the purposes of the Minister's amendment, I think the bottom of the premises would be deemed to be a flat. I can see that it is unreasonable to ask the Minister to answer this off the cuff: does that description adequately describe a flat or a room? What I am always afraid of is that, when one makes a concession of this kind and gives statutory effect to an agreement arising therefrom, it is some little anonymous person who gets hit. I do not know if the Minister saw Dr. Zhivago where you have a Russian colonel describing a femme fatale as having disappeared into Siberia as a forgotten number on a mislaid document. I am always thinking of the forgotten numbers on mislaid documents and we in this House are the people who represent them.
Generally speaking, we should encourage voluntary agreement between two parties, in this case between the small landlord and the tenant but, by and large, the tenant is in the weaker position. Quite apart from the landlord seeking to take advantage of the tenant, the tenant probably feels that he is in a position in which he cannot argue. The only thing that worries me is clause (c) (2) of the Minister's amendment in which it is specifically stated that where there is this voluntary agreement, there can be no question of an application to the court. Deputy Dillon is, therefore, correct in arguing that, whatever protection there is, there is no protection even if the tenant subsequently regrets the agreement and feels that, had he understood the position properly, that he could have gone into court and had the rent fixed, he would have done so. But here there is no remedy. There is no appeal. There is no way of bringing the matter into court. I see the Minister's difficulty. Offhand, I cannot think of an escape route. Possibly the answer is that, if there is any question of fraud, or anything like that, the tenant can then go in and explain and the agreement may be set aside. That is the only worry I have. In principle, I approve of the idea.
The purpose of the section and the amendment is in ease of the small landlord who, as Deputy Dillon is aware, is in most cases quite poor. The section is in answer to representations made to me by a number of small landlords throughout the country. The definition is limited to a landlord with six, or less, houses or self-contained flats. We provide that the landlord must state the fact that he is the landlord of six, or less, houses or self-contained flats. There is nothing misleading in the form of the notice. The tenant has a remedy there because the landlord if he gives misleading information will be criminally liable and the tenant will also have his civil rights. I see Deputy Dillon's point. No matter how tight we make the regulations or the laws hardship may be done to some person but, on balance, I think there is a case for easing the position in relation to the small landlord. Here you have two small people, as it were, meeting each other by way of a voluntary arrangement. We do not want to drive them into court if they can reach agreement. If they can reach agreement on the new rent in the prescribed way, we say under the amendment that that will be the rent without the official court determination. I can appreciate Deputy Dillon's fear, the case of the strong landlord and the weak tenant but here we have an equalisation——
The difficulty is that one is six times stronger than the other.
There is that. I appreciate Deputy Dillon's point and I will have a look at it and, if possible, not close the door in that case——
——but have some outlet or appeal.
Would I be right in interpreting this section as meaning that the rent will be mainly based, through the court's determination, on his ability to pay and the financial standing of the landlord? These things change perhaps from month to month, or year to year. What I am getting at is that the tenant, on the one hand, could suffer a reduction in income and likewise, the landlord could suffer a reduction in income. Is there then freedom to go to the court a few times a year to have the rent refixed in the light of changing financial circumstances?
The question of the determination of a fair rent by the court would really only arise not on the question of the control but if application is made for a new lease under the Landlord and Tenant Act. This is a question of fixing the basic rent.
That has to stand. That would have to be the basic rent once and for all.
The definition of a small landlord refers to six houses and I think this definition is too loose because the actual market value of six houses in one area could be ten times the value in another area. The assets, therefore, of a landlord with six houses in one area could be ten times the assets of a landlord with six houses in another area.
But the total valuation cannot exceed a certain figure.
I am talking about the actual market value.
There is a valuation limit.
There is the market value and a landlord with——
60 pounds in Dublin and £40 anywhere else.
The definition in the explanatory memorandum is, to my mind, a lot clearer than in the Bill.
That often happens.
I move amendment No. 6:
In subsection (1), page 4, to delete lines 16 to 35 and substitute the following paragraph:
"(c) In this subsection ‘dwelling to which this subsection applies' means a controlled dwelling (being a house or a separate and self-contained flat)—
(i) to which section 7 of this Act applies, and
(ii) in the case of which the landlord at the time of the application or of the service of the notice under this subsection was the landlord on the 8th day of June, 1966, and has been the landlord continuously from that day,
except that the expression shall be construed as not including a controlled dwelling such as aforesaid unless the landlord shows that either—
(I) he was not on the 8th day of June, 1966, the landlord of any other controlled dwelling (being a house or a separate and self-contained flat) to which section 7 of this Act applies, or
(II) the total number of the controlled dwellings (being houses or separate and self-contained flats, or houses or a house and such flats or such a flat) to which section 7 of this Act applies of which he was the landlord on the 8th day of June, 1966, is not more than six and the total of their rateable valuations does not exceed (in case one at least of them is in the county borough of Dublin or the borough of Dún Laoghaire) sixty pounds or (in any other case) forty pounds."
The effect of this amendment is to bring self-contained flats within the definition of dwellings in respect of which "small" landlords may have a fair rent determined by the court. As the section stands, application to the court may only be made where the dwellings involved are houses.
Have I not a very farseeing mind?
The Deputy has, indeed. We have already dealt with this principle earlier on.
I do not think I am being unreasonable when I ask the Minister to elaborate on "self-contained flat". The Minister obviously must have given the matter some thought. The ordinary definition of a self-contained flat is that the flat should contain all the normal amenities of residence, save what may be a common staircase. In the poorer sections of Dublin city, and I am sure, in Cork and Limerick, you have what are called self-contained flats where you have a livingroom, bedroom, what is described as a kitchenette and not infrequently in the rear yard of the building, common sanitary accommodation. Many of these premises do not have running water in the premises except in the yard. Would such an apartment, if the landlord were living in the top flat and the tenant on the ground floor, be deemed to be a self-contained flat for the purpose of this amendment?
Is it not the position that none of the Acts, even up to and including the Codification Act, 1960, defined a separate and self-contained flat? It has been left——
To court determination.
——to judicial determination. I am not sure that it would not be a good idea to define it.
The effect of the decisions, which are pretty well accepted, is that "self-contained" literally means what it says, that the amenities must not be shared apart from a common staircase.
The amenities must not be shared?
Yes. That has been the judicial interpretation, that all the amenities, toilet amenities and so on, must literally be self-contained. The only amenity that is shared is the physical one of the common staircase so that the case of the shared toilet would be outside the self-contained category.
I do not know whether it is unreasonable to pursue this as the Minister has brought in this amendment but has the Minister had the matter examined where the common amenity normally associated with a residential unit, the bathroom and lavatory—and in fact there is frequently not a bathroom but only a lavatory—is located in the yard and the landlord and tenant use that amenity? The amenity is not within the structure of the house at all but is in the backyard. Does the fact that such an amenity as that, for both upstairs and downstairs, result in a conclusion that both premises are self-contained flats? You would be surprised how often that turns up.
That is what I said, that it is outside the self-contained category. It is a shared amenity. The amenities must all be contained within one rights, the right of the tenant.
If there is any amenity other than a common staircase shared by landlord and tenant, then that is not a self-contained flat?
Even if that is the intention, is there any objection to putting in a definition for clarification purposes? Deputy Dillon's point is that there is some doubt in people's minds and if we are putting in something about which there is a doubt, it is a pity to have to rely on a judicial decision. Would the Minister consider putting in a definition, just to get the matter clear beyond all shadow of doubt?
I will. As far as lawyers are concerned, the meaning is clear enough. It has been on the strict criterion that a flat is self-contained provided the only amenity shared is the common staircase. Anything outside that category is not self-contained. That has been a reasonably rigid categorisation which has been interpreted by the courts and has not been the cause of dispute. At the same time there is a lot of merit in defining it in legislative form and I will do that.
I do not want to rush the Minister — I appreciate his approach which is eminently reasonable—into any commitment which he might find some difficulty about on Report Stage. We frequently find in regard to adapted flats in urban areas that before the flat building is adapted the central heating system primarily designed for the residential part of the house had one heating unit or one radiator in what is now euphemistically described as the garden flat. Now the Minister might, with the best intentions, rush in to give a definition only to discover that the presence of the one radiator in the garden flat had taken that flat out of the category in which it was clearly his intention to include it. I acknowledge freely the question is one of some difficulty, because while we are here primarily concerned with an anomaly, I do not want to rush the Minister into a categorical undertaking that he will make a statutory definition which he might find it extremely difficult to make. However, if he will think about it and do the best he can, we shall be satisfied.
I shall look at it between now and the Report Stage, but the Deputy has pointed out an obvious weakness.
I move amendment No. 7:
In subsection (1), page 4, line 42, to insert "unless that Court, in all the circumstances and having regard, in particular, to the means of the tenant, considers it proper to order otherwise" after "that Court".
This is an amendment to paragraph (e) of the new subsection (1A) which section 4 of the Bill proposes to insert in section 8 of the 1960 Act. Paragraph (e) provides that where a small landlord applies to the District Court for the fixing of a fair rent he or she is to be liable for the tenant's costs in that Court. It seems to me, on reflection, that an inflexible rule of this kind may operate unfairly in the case of some of these landlords who are elderly and in reduced circumstances, and where some of the tenants in these cases could be fairly comfortably off. On balance, I think it is better to leave the decision to the Court, having regard to the circumstances.
In the Minister's amendment should he not insert that the Court will have particular regard not merely to the means of the tenant but the means of the landlord. Obviously the Minister is correct; the small landlord may be deriving only a very small income from a property and he will not be well off, and there are cases where the tenants who are not needy would be continuing to get protection. That kind of case could come in here, but what the Minister is doing in his amendment is directing the attention of the Court particularly to the income of the tenant. I do not think it would unbalance the Minister's amendment in any way to say simply that the court should have regard both to the means of the landlord and the tenant.
I would agree with what Deputy O'Higgins has said. We all agree there may be poor landlords and poor tenants. However, there are destitute tenants but there is no such thing as a destitute landlord.
There can be.
Define a destitute landlord.
A landlord who is destitute, without any means.
How could a landlord be destitute?
I know a case in which a destitute landlord went around offering his house to anyone who would take it and he could not get anyone to accept it. But it is not a common case.
We are here to do justice to both sides.
I think Deputy O'Higgins's suggestion is a sensible one.
I shall look at it between now and Report.
I move amendment No. 8 :
In subsection (1), page 4, to add the following paragraphs after line 42 :
"(f) Every notice served under this section shall be in the prescribed form, or a form substantially to the same effect, and shall contain the relevant particulars indicated by the form.
(g) If a notice served under this section contains any statement or representation which is false or misleading in any material respect, the person making or causing to be made such statement or representation shall be guilty of an offence and shall, on summary conviction thereof, be liable to a fine not exceeding ten pounds unless he proves that the statement or representation was made innocently and without intent to deceive."
I move amendment No. 9.
To delete subsection (3).
Amendment No. 17 may be taken with this amendment.
Yes, this amendment is consequential on No. 17 which proposes to repeal subsection (3) of section 8 of the 1960 Act. Subsection (3) of section 8 of that Act provided that the basic rent of a dwelling which was let on 31st December, 1960, and whose basic rent was, therefore, automatically fixed at the actual rent being paid at that date, could be adjusted by the tenant to the figure it should have been under the 1946 Rent Act simply by his going to the Court and producing evidence that the basic rent under the 1946 Act had been determined by the Court or by arbitration in accordance with the previous Rent Acts. This remedy of the tenant was a refinement of the remedy he was already given by subsection (2) of section 8 of that Act to have the rent reduced where he considered the 1960 rent to have been unduly high, that is, by exceeding the reasonable rent by more than 12½ per cent of the basic rent. This is really a deletion because in practice since 1960 it has not been used at all. Whatever might have been the case for putting it into the 1960 Act, I think it is an unnecessary refinement now.
Is it not the effect of this amendment to retain it?
No. It is the reverse, if the Deputy takes it with No. 17. I am really discussing amendment No. 17, of which this is a consequence.
I move amendment No. 10.
In subsection (3), to delete "subsection" where occurring firstly in line 44, page 5, and to substitute "subsections" and to add after line 17, page 6, the following:
(a) apart from this subsection, paragraph (f) of subsection (2) of this section would not apply in respect of a controlled dwelling which is not the sole controlled dwelling of which its landlord is landlord, and
(b) taking all the controlled dwellings of which he is landlord—
(i) during the period of three years ending on the 8th day of June, 1966, he has expended a sum exceeding one-third of the aggregate of the basic rents, or
(ii) during the period of six years ending on that date, he has expended a sum exceeding two-thirds of that aggregate,
on maintenance such as is referred to in the paragraph of all or any of the dwellings,
the paragraph shall apply in respect of the controlled dwelling."
The object of this amendment is to ensure that landlords of more than one dwelling who have spent sums in excess of the prescribed amounts on repairs during the six years between 1960 and 1966 would be entitled to the 15 per cent increase allowed by section 6 of the Bill on each of their dwellings. In other words, once a landlord of more than one controlled dwelling can produce evidence that he has spent more than the prescribed sums on the maintenance of all the dwellings during the period—that is, either a sum exceeding one-third of the aggregate of the basic rents during the three years ending on 8th June, 1966, or a sum exceeding two-thirds of the aggregate during the six years ending on that date—he becomes entitled to the increase. This amendment is in line, therefore, with the policy of the Bill, which is to give the presentage increase only to landlords who have, in fact, been spending reasonable sums on repairs. The purpose of the amendment is really to aggregate the repairs over the total number of dwellings on which a landlord has spent money.
Will the Minister make it clear, if more than the amount is spent over the lot, under this amendment is the landlord then entitled to a 15 per cent increase on each?
Yes, it is in case of the landlord who does that.
Suppose he spends the bulk on one house and very little on the other five? Does he still get the 15 per cent on the other five?
Yes. The case was made to me by a number of landlords that otherwise there would be an undue burden placed on them. They want this 15 per cent in respect of such repairs. The case was made that if the increase were allowed only in respect of each of the houses repaired, this would place an undue burden on them in respect of administration and accountancy. The case was made that, if the specified sums were spent on all the property, they could increase the rents in each case by 15 per cent. There is some merit in that case. We are giving very minimal rent increases in the Bill and there is no doubt that a number of these properties are falling into disrepair.
The case put to me was that if the 15 per cent increase had to be justified for each house in a big property, it would cause an undue administrative and accountancy burden for the landlord. They have done many little jobs here and there over the past six years in order to keep the property in repair and they maintain that it would be a burden on them to account for each of these jobs. They have made a case for a 15 per cent increase, but it is a matter on which I have a fairly open mind.
I appreciate the importance of allowing a reasonable sum for repairs for the preservation of property. That is the case made for this Bill and the whole justification is that the money is spent on repair of these premises. Under this amendment, it could be that this 15 per cent increase, which is intended to be justified only if money has been spent on repairs, can be put on five out of six houses, even if not a penny has been spent on five of the houses. If a landlord spends a lot on one house out of the six, under the amendment he is not only going to be allowed to increase the rent on that house by 15 per cent, but he is also going to be allowed to increase the rent by 15 per cent on the other five houses on which he has not spent a penny.
It seems to me that this is running completely counter to the arguments advanced in favour of the principles of the Bill, arguments which have considerable strength. It is necessary, if houses are to be preserved, that landlords should get some compensation to encourage them to keep their property in proper repair but this amendment gives an increase to the landlord for five houses out of six, although he has not spent a penny in repairs on these five.
Surely this amendment materialises the ghost of which Deputy Pattison was speaking, the ghost of the rich landlord? Here we are faced with the situation of the landlord who has houses in Raglan Road, Kenilworth Square, Palmerston, Ballsbridge and Sandymount. He repairs one of the houses in Sandymount and he arrives out to the tenants in Palmerston and tells them that he is going to increase their rent by 15 per cent. The tenants ask him why and he says that it is because he has spent money repairing his houses in Sandymount.
The total valuation must not exceed £60.
The whole case for the proposed adjustment of rent restrictions is based on the sustainable theory that if you do not enable landlords to keep their property in a tenantable condition, it would become unfit for human habitation, would be condemand by the corporation and the tenants would then have to seek municipal housing if the houses did not fall down. If the principle of rent restriction is to be maintained at all, and on the Second Stage it was apparently determined to maintain it, surely it is a complete departure from that principle to say that the person who is in possession of six houses and carries out repairs on one can charge a 15 per cent increase on the six.
It is not confined to that.
I have to correct myself; it is not confined to the small landlord.
It is in case of the big landlord who is carrying out repairs over a number of houses.
My prescience is positively astounding. I thought I heard rumours of this proposal in circles far removed from the destitute landlord. This is in relief of the big property owner who has been hit by the recent Finance Act. Up to the passing of that Act, revenues from some of these properties were not subject to the ordinary code of income tax and these people have suddenly found a fresh burden of income tax placed on them. To describe them as long-suffering is a great mistake.
I did not describe them in that way.
If the House assumed that these people were a long-suffering and impoverished section of the community, it would be a great mistake. They are a body of people owning very valuable property which has given them a fair return but which, over the past ten years or so, has not given a corresponding revenue expansion. It is our business to see that they are equitably dealt with under the law if they are citizens of this country, but I think that the Minister is going too far in saying that this proposal is consistent with the principles of the Bill. Under it, a person who owns ten flat buildings in Dublin can come along and say that because he repairs one of these buildings, he is therefore entitled to raise the rent on all ten by 15 per cent in order to compensate himself for the exceptional outlay he has made on one of them. This is an amendment the Minister would do well to reconsider. I think it will be felt to be a concession to a not inconsiderable vested interest, which is more than they can reasonably expect to enjoy under a rent restriction code.
This amendment cuts across the very principles outlined by the Minister when introducing the Bill, which he said were for the purpose of having more and more of these buildings put into proper repair. The effect of this amendment will be that the landlords will concentrate money on a few houses to the deteriment of others. I am not satisfied that the arguments put forward to the Minister by the representatives of the landlords are valid at all. The landlords are business people and, as such, keep strict accounts of the money they spend and where they spend it. I do not think they are so careless as not to be concerned about what house they spend the money on. These arguments do not hold water and are too trivial to support this amendment.
(Dublin): I am in agreement with the other Deputies. I think this amendment will defeat the whole purpose of control. If a landlord has three houses in good condition that are controlled, one of the first things he will do is to try to get a house in rather dilapidated condition, spend 15 per cent to cover the entire property, thereby decontrolling the other three. Even as it stands at present, the section is dangerous.
I think there is a misunderstanding about this. This is the basic 15 per cent rent increase we are talking about, not the ten per cent allowed for the future expenditure on maintenance. This applies in effect to repairs that have already been executed since June, 1960 and before June, 1966. This was dealt with very fully on the Second Stage. It goes to the whole root of the Bill. We must get down to the reality of how repair costs have risen since 1960. Everybody is familiar with the rise in building cost since 1960. Repair costs have gone even higher and are in the region of from 35 per cent to 40 per cent of an increase.
I think all that can be conceded.
We are dealing here with a situation of the inability of landlords to meet mounting repair costs since 1960. I am providing here that, where they have in fact spent money on repairs since 1960, they may have an increase of 15 per cent, although in most cases repair costs have increased from 35 per cent to 40 per cent——
That is where the Minister is going off the line. If it is being spent on a particular property, the rent of which is being increased, I do not think anybody objects to that; but what the Minister is recommending in his amendment is that, if it is spent on any part of the landlord's property, he can increase other parts of his property.
I am coming to that. All we are doing here, in effect, is providing a minimum increase as far as the landlord is concerned. All the attacks on me have been on account of the inadequate nature of the increase. The case has been put to me, and I am convinced of it, that it is not sufficient to meet the repair costs falling on landlords since 1960. In order to keep their property in a proper state of maintenance, an average increase of from 35 to 40 per cent has been required. Going strictly on that, this 15 per cent is entirely inadequate. The amendment proposes that their property be looked at in toto in assessing this 15 per cent.
This is in case of the good landlord. That is the ironical part of it. It is not in case of the bad landlord who allows his property to fall into disrepair. They do not come under this. This is in case of the good landlord who has a proper repair service. There are a number of property companies, in Dublin particularly, who may have between 100 and 500 houses under their control, who are concerned about keeping their housing investments in proper repair and who have spent money on housing repairs over the past six years well in excess of the minimum required to qualify for the 15 per cent increase. These people do not keep an itemised account of each house repaired. The case has been put to me that it would be an intolerable burden that, every time a plumber or carpenter went out to do repairs to a house, an itemised account be kept in respect of a couple of hundred houses week in week out over a period of six years. These people say that is out of the question. They have not got these records. As I say, these are the good landlords. These are the people who are known in the city to keep their dwellings in proper repair, who have tenants happy in their dwellings, at a lower rent in practically all cases than local authority houses. These people have not kept such records. They know in total what they have spent on repairs over that number of years, but they could not keep an itemised account in respect of each small repair. They have not done so in the past. This amendment is designed to case their burden.
Perhaps the Minister is very naive on this, but I am quite sure he is being honest about it and is making an honest case. I do not want him to misunderstand me therefore, when I say I do not accept that case. I do not. The person who is efficient and who has been doing work over the last six years, the person of whom the Minister speaks, is the person who most certainly has kept accurate records of exactly how much has been spent on each house. There may be some cases where that has not been done and where there is simply a global figure. But I would be very surprised to find any substantial number of cases where there is only a global figure.
Every one of them I met said that.
Even if we accept it fully, what is the Minister doing here? Even where it can be proved up to the hilt that no repairs at all were done on a particular house, that not a single penny was spent, under the Minister's amendment, because the landlords can produce and prove a global figure spent on their property, that house is going to be subjected to a 15 per cent increase. I would go further. I think the Minister will agree with this. Under the amendments a landlord is going to become entitled to the 15 per cent increase even where he is not liable for repairs. If he has 600 houses and is liable for repairs in some and does these repairs, spending whatever the appropriate sum is, under this amendment as I read it, he will become entitled to increase by 15 per cent the rents of houses where he has no responsibility for repairs at all and which he has not repaired and has no intention of repairing. That is going much too far.
I could accept the position, commend and see the justice of the position of compensating a landlord for repairs done and money spent on them, but I find it extremely difficult to accept the argument that because my landlord does repairs for me. Deputy Fitzpatrick should have to pay for that if he is a tenant of the same landlord. There seems to be no justification for that sort of arrangement. It seems to me that under this amendment that if Deputy Fitzpatrick and I are tenants of different houses of the same landlord and if Deputy Fitzpatrick arranges with the landlord that he, Deputy Fitzpatrick, will be responsible for all repairs to his house and the landlord will not do anything there but if the landlord has done repairs to my house and has spent, over the past six years, sufficient to justify a 15 per cent increase in the rent, notwithstanding his agreement with Deputy Fitzpatrick, Deputy Fitzpatrick's rent is subject to an increase.
(Dublin): I can see a certain amount of merit in the proposal where we have a landlord with 300 or 400 houses but I am worried about the landlord who has two or three. Would it be possible to raise the valuation limit before a landlord would qualify? The normal valuation qualification is very easily overcome. This could be put much higher.
Before the Minister replies, may I say that I see that point also? If there is a very large number of houses concerned and a repair service in operation, I can see that it might be difficult to segregrate. Presumably this was the kind of case made to the Minister. Where a large number of houses is concerned, it is quite understandable that records might not be kept but I am thinking of a number of houses up to five or six, or even 12.
If there were a section in the Bill giving the tenant the right to appeal against the 15 per cent increase in the event of no repairs being carried out, it might cover the danger.
(Dublin): If there were a certain valuation of £10,000 or £15,000 before qualifying, it would protect the tenants but in the case of the man with a small amount of property, it is very easy to overcome the valuation qualification. He just has to buy one old house, spend so much money on it and so decontrol the rent.
I accept that there is a case here. While Deputy O'Higgins was speaking I was trying to think of some scheme whereby you could give tenants the right to come in and prove that nothing was spent on their houses and thereby they could avoid the 15 per cent increase. That could give rise to too much litigation. I think this idea of Deputy Fitzpatrick, which has been followed up by Deputies Pattison and O'Higgins, might help—if we could write into the Bill some limit by way of valuation or number of houses and that over that certain valuation or number this amendment would apply. In that way one would avoid, as I have been trying to avoid, putting the onus on a good landlord—and I am satisfied the people who came to see me were good landlords, operating a repair service— of itemising accounts in respect of petty repairs over a number of years. We must draw the line somewhere. Between now and the Report Stage, I shall possibly look into the possibility of drawing an equitable line or division between the categories and having this amendment apply only to the upper category while the lower category, the case of two or three or six or 18 or 20 houses—I shall look into the level at which we should put it— should be able to itemise. In their case this amendment would not apply and landlords could only increase rent in particular cases rather than in the total. There is much merit in this idea.
I think the best thing is to leave it at that until we see the Minister's recommendation; but I believe he will have to go further. When I was speaking about the, if you like, efficient landlord and his inability to say from the records where the money was being spent, I was thinking of the activities of the landlord who owns up to half a dozen houses. I could not see how such a landlord would not be able to say: "I spent X pounds on repairing this hous," without knowing which house it was. I can see that if there is a very large number of houses, and some of these people have 200, 300 or 400 houses, if it was not of importance to them to have a record of which houses the money was spent on, it might only go into some kind of global account showing that so much was paid to such and such a builder's provider and so on.
I want to correct myself. I can now see that the other situation could arise but even if the suggestion that has been made now to meet the case were accepted, I think the Minister would have to go much further. Merely fixing some arbitrary line on the valuation basis or on the basis of the number of houses would not be sufficient because, to my mind, it would still be doing less than justice—to put it that way—to the tenant of a house where no money was spent that he be required to pay the increase, the justification for the increase being that money was spent on repairs. The Minister must try to fit in with his new thinking on the matter something possibly on the lines suggested by Deputy Pattison. He must try to fit in with his thinking the requirement that in spending the aggregate sum over all his property only houses on which some work has been done should be increased. In other words, if it can be clearly established that no repairs have been done on a particular piece of property, the justification for an increase fails completely in that case.
I am not sure if I am right in this but I think the Minister must also look into the question of liability for repairs. As it stands, the Minister's amendment permits the landlord, even though he is not liable for repairs in some cases and is liable for them in other cases, to increase the rent, even where he is not liable for repairs, provided he has spent money on houses where he is liable for repairs.
The Minister should go the full way in this matter and give the same protection to all tenants of all landlords, no matter how many houses a landlord has or how many tenants. A tenant should have the protection that where no repairs have been carried out for five or six years, he will not be burdened with this 15 per cent increase. The Minister has leant over a bit too much in making the case for the 15 per cent increase. Building costs have gone up, as the Minister said, but the value of these properties has gone up much more. The fact that repairs have been done to premises has increased their capital value also. Property owners, landlords in general, have got the increases in their assets in the past six years. That alone is sufficient to compensate them and to induce them to keep the property in repair because they are getting rents that have risen in some places by more than the 40 per cent or 50 per cent by which the cost of repairs has gone up.
This is something we should not lose sight of. We must be satisfied that the increase is granted only in places where it has been clearly shown the work has been done—where there is no doubt that adequate steps have been taken to keep the property in good repair. Landlords have got adequate compensation for repair costs through the increases in the value of their property.
We must look at realities. An appreciation of capital value is a doubtful benefit when the property is subject to the rent code. I am attracted by what Deputy Fitzpatrick has said but again we must get down to realities. We are here dealing with the good landlords. A landlord with a large number of houses will, or the company will, have kept the houses in repair during the six year period. Anyone with 600 or 1,000 houses——
(Dublin): Associated Properties, for instance.
I am referring to such people. They have kept each house in proper repair. They are in business, they are professional landlords and it is in their interest, as well as in the interest of their tenants, that they should do so. Such people have spent up to ten times the specified minimum sum on repairs. That is why we should give these people the benefit of the amendment. We may put an onus, which I think is a reasonable onus, on smaller landlords to show that in each individual case the repairs have been done. To my mind that is a reasonable approach. It would be unfair for the landlord with a limited number of houses who has not done anything in the case of one house to increase the rent of that house. A person might not be the most efficient landlord in the world—they are not, these small landlords—and it might be unfair that the cost of repairs to all the houses should be aggregated and as a result the 15 per cent put on the tenant of a house in respect of which no repairs were carried out.
In the case of some smaller landlords hardship might be imposed on tenants. On the other hand, in the case of the big landlord it would be a fantastically unfair burden on him to vouch in an itemised way for each item of repair carried out to individual dwellings. However, I shall have a look at the matter and at the points made by Deputies O'Higgins, Pattison and Fitzpatrick before the Report Stage and, perhaps, meet the case half way.
The landlords Deputy Fitzpatrick mentioned take care of their property. I know them. At the same time, I do not think there is justification for an increase in the case of a house which had no money spent on it. There would be a common form of agreement, probably covering all tenants, but if you had a situation where a landlord had property in respect of some of which he is responsible for repairs, under agreement with the tenant, but in respect of the remainder of which he has no liability for repairs, he should not be entitled to increase the rent of the property in the latter category.
That is a refinement of it and I shall look at it between now and Report Stage.
I find it very difficult to believe that big business landlords do not keep itemised accounts of repair works done.
There would be many jobs involving ten minutes here and ten minutes there.
The larger they are the more particular they are about where the money is spent and the more staff they have to do the work. I find it difficult to believe that such landlords, having spent money on repair work during a period of six years, cannot give details of the work and the expenditure.
The repairs are not of a nature to be itemised. To be efficient, such landlords keep a repair unit—plumbers, carpenters, labourers and so on—who go along to perhaps 30 jobs a day and it would not be worthwhile itemising the work. I have seen their books and the landlords have assured me that they do not do it because to do so would be impracticable. I shall refine the amendment to meet what has been said in the House. I shall not go the whole way, only some of the way.
I move amendment No. 11:
In page 6, to delete lines 50 and 51.
The effect of this amendment is to delete subparagraph (iv) of paragraph (a) of the new subsection to be inserted in section 13 of the 1960 Act. Subparagraph (iv) provided an additional ground to the tenant for objecting against a notice of increase of rent based on expenditure by the landlord on improvements, structural alterations or repairs. That ground was that, at the time of the application by the tenant to the Court to disallow or reduce the proposed increase in rent, the dwelling was not in good and tenantable repair. On reconsideration, it seems to me that this additional ground is unnecessary because the tenant is already entitled under section 15 of the 1960 Act to apply at any time to the Court to have the rent reduced on the ground that the dwelling is not in good and tenantable repair. The amount of the reduction in rent provided for by section 15 of the 1960 Act in such cases is a maximum of 20 per cent. That maximum has been increased by section 8 of the Bill to 33? per cent. In the circumstances, as I have said, subparagraph (iv) is unnecessary and I am proposing that it be deleted.
It seems there are different matters in question here. Section 15 of the Act deals with the case of the courts reducing rents because of disrepair. Here we are dealing with reductions either in whole or in part and there are two different questions involved.
I wonder now.
It is clear that section 7 refers to the question of an increase of rent. After the long recital you have the words "the court may". It is discretionary and consequently I do not see any harm in leaving it in. The court may disallow or reduce the increase accordingly as from such a date. Section 15 of the 1960 Act refers to a rent reduction. This is a disallowance of the increase.
Is section 15 not inclusive?
There are two things, it seems to me. The marginal note to section 15 reads:
Reduction of rent owing to default of landlord in keeping controlled dwellings in repair.
That is a pretty accurate summary. Here, in section 7, we are dealing with the question of an increase of rent by means of amending section 13 of the 1960 Act. Section 13 of that Act deals with the "Determination of rent to be paid by tenants", finding out what is the rent to be charged by virtue of the increase to which the landlord claims to be entitled. It is made quite clear in section 7 here that what the court is getting is not a direct mandatory order from the Legislature but a discretion, amongst other things. If the dwelling is not in good and tenantable repair at the time the application is made the court is getting discretion to deal with the increase entirely, in which event it probably goes back to section 15 of the 1960 Act, or discretion to reduce the amount of the increase to which the landlord would otherwise be entitled.
Am I right in saying section 15 of the 1960 Act applies to houses on which no work whatsoever has been done? Section 7 of the Bill applies to houses about which there is a dispute as to whether or not the work was done, as to whether or not certain repairs were adequately carried out. There is no question of a dispute in section 15 of the 1960 Act as to work being carried out or not carried out, as the case may be. It is a question of no repairs being done and the tenant applying for a reduction in rent because of the condition of the dwelling. My reading of section 7 is that certain work would be carried out, the tenant would not be completely satisfied and would apply to the court for a reduction in the increase or the waiving of the increase in full.
Surely retaining the words the Minister is now suggesting should be deleted ties in with precedent established under section 13 of the 1960 Act. There is roughly the same provision there with relation to increases.
Yes. Section 15 of the 1960 Act is, I think, sufficiently global in its phraseology.
If that is so, then section 13 of the 1960 Act is also redundant.
That is arguable, yes. I was doing this to make for cleaner drafting. I will meet the House on it. I will withdraw the amendment.
I move amendment No. 11:
In page 7, line 13, to insert "or the Housing Act, 1966," before "in respect of".
This amendment is consequential on the enactment of the Housing Act, 1966.
This is the section which deals with restriction of assignment. It prescribes that a tenant shall not assign a tenancy without the consent in writing of the landlord. The consent may be withheld only if the assignment is other than to a member of the tenant's family bona fide residing with the tenant. I think here again it is a question of having another look at it. In this kind of legislation we have to try to do justice to both landlord and tenant. As I said earlier, from the landlord's point of view, what he finds most irksome is not so much the question of control as rent as the feeling that he will never get his house. There might seem to be a presumption in section 10 that something positive is being done to enable a landlord to get control of his property; in fact, very little is being done. The definition of “family” in the 1960 Act, section 31, is very comprehensive. Subsection (5) of section 31 of that Act goes a great deal further than what one would normally regard as members of a family. Where there is undoubted bona fide residence justice is served by what is there at the moment, even with the fuller definition of family. Where, however, the bona fide nature of the residence is open to question the position is somewhat different. I am thinking of a member of a family who takes up residence with an elderly relative in order to cash in on the tenancy when the elderly relative dies. That is something I would not be keen to encourage. I wonder is there something that could be done about that either from the point of view of the definition of family as contained in the 1960 Act or by some limitation on the length of time of the residence; it should not be less than 12 months, or something like that. I am not inclined to press the Minister too hard on this but I should like him to have a look at the section in that context.
Yes. My whole purpose in bringing in the section was to meet the sort of case made by Deputy O'Higgins. He says that possibly I may not be going far enough in that direction. I shall have a look at it for Report.
I find myself in substantial agreement with Deputy O'Higgins. Section 10 invites us for a moment to reflect on the whole principle of rent control. I have been watching rent control operating in this House for over 30 years. I often doubted the wisdom of rent control at all. If we never had rent control, which began after the 1914-18 war, the housing problem would be far less intractable than it has proved to be. There is no use, however, crying over spilt milk; that was the decision taken 50 years ago and we are operating in the light of the situation that evolved from that fundamental decision.
And mitigating it somewhat.
We are trying to evolve in an equitable way but I have always tried to preserve in my mind the position of the sitting tenant whom in the atmosphere created by the legislation 50 years ago we determined to protect. We are in danger now, by a whole series of amendments and judicial decisions and the abracadabra which has grown out of the original decision, of creating a situation in which we invest a sitting tenant with an interest that he can bequeath to a pretty wide category of persons who have come to be determined as members of the family and we are inviting him to make this bequest, not at his own expense but at the expense of the owner of the house in which he has lived under privileged conditions for ten, 20 or 30 years.
As Deputy O'Higgins has pointed out, it is not now impossible for a person who comes within the wide definition of a member of the family, who is herself contemplating matrimony, to come and reside with an elderly relative to establish this residential qualification as a genuine resident with the sitting tenant so as to be in a position to say to the landlord, when the elderly tenant either assigns or dies: "Either you provide me with a dower or I propose to get married in this house and start the whole cycle all over again", and we can carry on the provision of rent control in this house for the next ten generations.
I should like to find a reasonable via media. This is a matter of special interest to Deputy Pattison. None of us wants to go to the point of extending rent control to the stage where it could become an abuse. We want to find an equitable arrangement which will protect legitimate interests and yet not open the door to what would develop abuses at the expense very often of people who have small properties and are dependent for their livelihood upon them. We all know of cases of elderly people who have been left two or three houses by their husbands, who have been collecting rents from them for 30 or 40 years and which could maintain them in a modest standard of comfort but who are now living in dire poverty while the houses they own are deteriorating to the point where they will qualify for demolition as being dangerous structures. I have forgotten the full scope of the categories of relatives but I think it extends to cousins.
Not that far.
To sons, daughters, nephews and nieces.
I have the list here—father, mother, grandfather, grandmother, stepfather, stepmother, father-in-law, son-in-law, daughter-in-law, son, daughter, nephew, niece, grandson, granddaughter, stepson, step-daughter, brother, sister, half-brother, half-sister, uncle or aunt.
If cousins are excluded, they are about the only degree of consanguinity, legal or lateral, which is excluded.
A cousin in loco parentis could come in.
The categories now are extremely wide. "Consent for the purposes of this subsection may be withheld only if the assignment is otherwise than to a member of the tenant's family who is bona fide residing with him at the time of the assignment.” I wonder would the Minister consider subdividing that category? I could see a strong case being made for children, or people certainly in close family relationship, being entitled to an assignment or a residence qualification which would be relatively light if we got into the outer categories of relationship, and then I think the burden of bona fide residence with the sitting tenant at the time of assignment might equitably be made somewhat more onerous than would be appropriate for a son or daughter or somebody who is genuinely living with an elderly couple for the purpose of looking after them. I recognise that the segregation may not be all that easy but I believe it could be undertaken in view of the fact that the distinction would involve the heavier burden of proof on the less closely related person, that the bona fide resident was in fact bona fide. That is a matter which might with advantage be examined.
The Deputy's thinking is in line with the section itself. It is an extension of the thinking behind the section in the Bill. I will certainly have a look at it between now and the Report Stage.
As we are not going to get much more done before Question Time, may I avail of the occasion to inform some of the less sophisticated observers of our deliberations here how a lot of our time is spent on the kind of pedestrian work we have been doing this morning which gets very little recognition from those who like to asperse Parliament as a talking shop?