Dáil Éireann debate -
Tuesday, 30 Sep 2003

Vol. 571 No. 1

Residential Tenancies Bill 2003: Second Stage (Resumed).

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

Mr. Gilmore

I have the distinction of being the first speaker on the resumption of legislative business in this House following the three month recess of this Dáil or the three month interruption in the legislative work of the House. Incidentally, the Opposition, including the Labour Party, the press and the public did not want those three months recess. They were wanted only by the Taoiseach and the Government. The rationale given to us for such a long recess is that it enables the Government, Ministers and Ministers of State, to get behind their desks to deal with the issues in their portfolios without the interruption or the inconvenience, as they see it, of having to come before the House on a regular weekly basis to account for themselves.

With three months free from having to attend the Dáil, one would have expected that the issue of housing, which is so big a concern for many people in this country, would have been high on the order of priorities of the Minister of State with responsibility for housing, who is present, and his colleague, the Minister for the Environment, Heritage and Local Government. Looking back over the three months I wonder if the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, and the Minister fell asleep at their desks. Certainly, they have done nothing to address the housing problems of this country over those three months. Not a single new initiative has been taken by the Government to deal with any aspect of the housing problems in that time.

I looked over the website of the Department of the Environment, Heritage and Local Government and saw that 78 statements were issued by the Minister's office during the Dáil recess. Only eight of those related in any way to housing matters and these were only routine announcements of funding for individual housing projects or provided information as to where the Minister might be photographed when he went to view the demolition of Fatima Mansions. There was not a single word in any of those statements regarding any aspect of the real housing problems that exist.

It is not that the Government was not reminded that there is a housing problem because during the recess there were a number of reports highlighting the continuance of house price inflation. House prices last year rose at a rate of between 15% and 16%, about four times the rate of inflation. There was a good documentary film on homelessness, prepared and presented by the Simon community. Despite those reminders we still have no action from the Government on any aspect of housing.

It is time to remind the Government that in the six years it has been in office house prices in Dublin have risen by 206%, nine times the rate of inflation, five times the rate of increase in average earnings and four times the rate of increase in the cost of building, but still there has been no action from Government. There are twice the number of families on local authority waiting lists, some of them now waiting for over ten years for housing, and still there is little or no action. This year we saw a cut in the budget. The Government's lack of urgency and concern about the housing problems faced by the people is the reason the Bill is three years late. This Bill, which is to implement the recommendations contained in the report of the Commission on the Private Rented Sector, was recommended in July 2000. The Bill was not published until May of this year and we are only now resuming Second Stage as we come into October. It will be well into 2004 by the time the Bill progresses through committee, goes through the Seanad and is passed.

It is difficult to imagine any other sector of Irish society whose needs would be treated in a less urgent manner by the Government. Threshold estimates that there are 150,000 tenancies in the country. At the time of the report of the commission it was 135,000. I think the Threshold estimate may be conservative. Threshold estimates that these 150,000 tenancies make up about 12% of all the housing tenure in the country. If the distribution of the population among those who are renting privately is the same as among the rest of the population, between 400,000 and 500,000 people in the country live in private rented accommodation. These people enjoy little or no legal protection. The one item of legislation which was to provide protection has been three years coming and the Government is dealing with it with a marked lack of urgency. If, for example, workers did not have basic legal protection, I could not see the Government treating the equivalent of the entire membership of SIPTU in this way. I could not see it treating the equivalent of twice the population of Cork city in this lethargic way.

Unfortunately this Bill has come too late for many tenants who over recent years have been evicted from their accommodation or who have seen their rent increase dramatically. At a Labour Party conference about 18 months ago I made the rhetorical charge that in the six year lifetime of the present Fianna Fáil-Progressive Democrats Government more Irish families lost their homes through eviction than in any equivalent period under the British in the 19th century. I was surprised, particularly when I repeated the charge on a number of occasions since, that it was never refuted by any member of Government. Neither was it ever contradicted by a historian. The more I repeat it and the more often it is not refuted, the more convinced I am that it cannot be refuted. I do not have empirical evidence for the charge but I am aware of many cases, as I am sure many Members are, of people who lost their homes through eviction over the past four or five years.

One example I can think of is the case of an elderly former employee of The Irish Press who was evicted after 19 years and 11 months. Presumably, this was so that he could not accumulate tenancy rights. Another case was the dressmaker in her 50s who was 13 years in the same accommodation and who had built up a dressmaking business in the locality. She never believed that she would have to face the indignity not only of losing her home but of becoming a homeless person living in temporary accommodation until eventually allocated a home by a local authority. I met a woman this week who has lived in private rented accommodation for all her adult life and is being evicted for the second time in three years. A working couple with two children in my constituency were recently featured in a “Prime Time” programme on housing and are now facing eviction. The reality is that many people have lost and continue to lose their homes through eviction. If this Bill or some variation of it had it been in place when it should have, it would have provided these people with some protection.

Not only is the Bill late, but it has a huge gaping loophole. When the Bill was published, I was astonished to read that the commencement date for its provisions are to be decided at some stage after it is enacted when the Minister gets around to writing a regulation to commence them. I would have though that, at a minimum, the Bill would have stipulated that the basic rights which are provided would take effect from its date of publication.

Since the publication of the Bill on 28 May, any unscrupulous landlord who wants to literally get his or her house in order has almost a year to do so between the publication of the Bill and its enactment. Anecdotal evidence is coming through to the Labour Party of unscrupulous landlords de-tenanting in order to avoid the provisions of the Bill. They are increasing rents because they know when the Bill becomes operative, rent increases will only be on an annualised basis and that, until then, the tenant has no recourse to the private rented tenancies board in order to have his or her case examined.

At a minimum, an operative date for the provisions of this Bill must be set and I urge the Minister of State to use the opportunity at the conclusion of Second Stage to introduce an appropriate amendment to that effect. Such a provision would have the support of the Labour Party.

As I said earlier, this Bill is to give effect to the recommendations which were contained in the report of the commission on the private rented sector. The Labour Party will support the Bill and welcomes that it will provide a minimal level of protection to tenants. However, it must be acknowledged that the conclusions of the commission on the private rented sector were themselves a compromise between the various interests which were represented. I wish to pay tribute to the excellent work of the chairman and members of that commission because they put together the framework upon which this legislation is based.

There are a number of aspects of the Bill which require attention and the Labour Party will table a number of amendments on Committee Stage to deal with its weaknesses. There are a number of types of tenancies which are exempted from the provisions of the Bill. For example, a building which is partly used for business purposes is exempted. That seems to exempt a considerable number of tenants who occupy buildings, part of which are used for a business purpose. Dwellings let by public authorities are also exempt. I can understand why dwellings let by local authorities, and which come under the Housing Act in the normal way, are exempt. However, dwellings which are let by other public authorities, of which there are many examples such as State companies and agencies, are essentially let as if they were private tenancies and they need to be brought within the scope of the Bill since they are not part of the Housing Act as I understand it.

We also need to examine the exemption for tenancies which are employment related and which are, in many cases, provided on a long-term basis by public authorities. The Bill also exempts dwellings in which the landlord also resides, of which there are many cases. It is unreasonable to deprive tenants of rights purely on the basis that the landlord lives on the property.

We need to look at the exemptions in regard to the grounds for termination of tenancy. One provision allows for a termination on the grounds that the number of bed spaces is too few for the number of people requiring them. This will affect families with new born babies, given that the number of bed spaces becomes fewer than required by the family and they could be exposed to termination of tenancy. There are areas of exemption which need to be looked at on Committee Stage and I will table appropriate amendments to that effect.

One of the main provisions of the Bill relates to security of tenure. The formula used is a six month probationary period of tenancy, following which a tenant may become eligible for a four year tenancy. There are problems with this, particularly with any succeeding four year tenancies. For example, when a tenant comes to the end of the four year tenancy and becomes eligible for a second four year tenancy, he or she is effectively required to revert to a probationary period. That is unfair and a way can and should be found in order that when a tenant reaches the end of the four year period, he or she does not effectively lose all of his or her entitlements and revert to the status of a probationary tenant.

The length of the probationary period is also a problem. I do not see the necessity for a six month probationary period. Threshold has recommended a period of three months and this issue should be looked at on Committee Stage. Within the probationary period, there is a danger that tenants would be exposed to having no rights at all and that a landlord could, for reasons other than the good management of the property, decide to act unfairly against that tenant if, for instance, he or she raised questions about his or her rights or entitlements. We need to insert some minimal rights into the probationary period in order that tenants may be protected against being treated unfairly by a landlord.

I am not a great fan of the idea of fixed term tenancies and I can see difficulties arising with them and the formula by which they are dealt with in the Bill. There is, for example, a possibility of tenancies of five weeks or three months duration so that tenants do not acquire the right to a four year tenancy. As a tenancy comes to the end of the four year period, there is a danger that it will be terminated after four years rather than allow succeeding rights to build up. Therefore, it would have been preferable if the model used here was analogous to the type of arrangements that exist, for example, in employment law whereby once the probationary period has expired it is assumed that if employment is available the employee has the first call on it. Similarly, there should be a formula whereby once the probationary tenancy has expired, and as long as the property is available for letting, the tenant should have the right to continuing tenancy.

Issues relating to termination of tenancy are provided for in the Bill which, by and large, are reasonable. Given that the circumstances whereby a landlord would be entitled to seek recovery of the property and issues relating to, for example, the setting and adjustment of rent are provided for in the Bill, I do not understand why the idea of a continuing tenancy could not have been addressed.

The second major issue relates to rents. The Bill provides essentially for a formula whereby the initial rent will be set by reference to the market and thereafter rent increases will be limited to annual increases and the Private Residential Tenancies Board will be able to adjudicate on the level of rent increase. By and large, this is a reasonable formula for dealing with rent. However, it is inconsistent with the current regulations in relation to rent allowances operated by the Department of Social and Family Affairs and administered through the health boards. Under the legislation the rent for a property will be set by the market but the regulations introduced by the Minister's colleague puts a cap on the amount of the allowance that may be paid. The Government cannot have it both ways. It cannot, on the one hand, have a legal framework for the determination of rents which is market based and, on the other, have an arrangement for the setting of rent allowances which is determined by ministerial diktat.

There is an absurd situation currently in relation to rent allowances. A tenant does not qualify for a rent allowance if the rent exceeds the maximum set through the health boards. There are anecdotal stories, at least, that arrangements are being made whereby one rent is declared to the health board for the purpose of the rent allowance but private arrangements are being entered into between tenants and landlords which are in excess of that. This issue can be approached in either of two ways. Either there is an arrangement whereby the rent, as well as the rent allowance, is determined by the Minister – I am not sure that is the best way to go – or, alternatively, there is an arrangement whereby the rent allowances are related to the market rent, which is provided for in the legislation. If tenants are required to have their rents set by the market then the rent allowance regime should conform to this.

While on the subject of rent allowances, I might as well make the case for reforming the whole rent allowance regime. It is absolutely absurd that if one goes into full-time employment, very often a low paid job, one loses one's rent allowances. It is time the Government considered introducing a housing benefit which would be neutral on the question of whether one was in employment and related to the income of the tenant and their housing need. This is a matter to which we might usefully return.

The Private Residential Tenancies Board has been given considerable responsibilities and powers under the legislation, which I welcome. It is long overdue that we had a housing court or private rented tenancies board which is able to determine disputes between landlords and tenants. I agree, by and large, with the approach being taken for the setting up of a mediation service, the appointment of adjudicators and the provisions for appeal to a tribunal. My worry, however, is that given the remit the board has been given, including the remit for the new arrangements for the registration of tenancies, it will be able to carry out its duties given the resources being provided for it. The explanatory memorandum states that staffing for the board is likely to be in the order of 20 people and the annual budget €2.5 million. Given that there are 150,000 tenancies in the State, with the number increasing, the obligations being placed on the board to register these tenancies and the issues which may now be referred to the board for mediation or adjudication, ranging from the standard of accommodation, rent, disputes about tenure and so on, I cannot see a staff complement of 20 being capable of dealing with this.

I am concerned that we would put in place a legislative framework governing the relationship between landlords and tenants, and the Private Residential Tenancies Board which exists to deal with it, and that we would reach a point where people are referring their cases to the board and they are not being dealt with expeditiously. There are a number of examples of where this has happened in the past. It happened, for example, in the industrial relations area when the Employment Appeals Tribunal and the Labour Court at different times were under-resourced and disputes which should have been dealt with quickly ended up taking months to go through the system. It has happened in the Garda complaints area whereby a complaint may be submitted but God knows when it will be dealt with. It has happened, for example, in the planning area where appeals to An Bord Pleanála have taken a considerable length of time because of a lack of resources and insufficient staff to deal with them. If this legislation is to work it must be resourced.

The board has been given responsibility for the registration of tenancies. We come to the issue of registration with some experience because, unfortunately, the 1996 regulations which required tenancies to be registered with local authorities have not been enforced. There is evidence that approximately 20% of private tenancies were registered with local authorities. Local authorities, particularly those showing great enthusiasm of late for the collection of outstanding charges of another kind, owe the public an explanation as to why they failed to pursue the registration and collection of registration fees due to them for the registration of tenancies.

I refer to an example of the "Nanny State", about which we have heard a great deal in recent times, finding its way into this legislation. Section 16 places obligations on tenants, a number of which are reasonable. However, under section 16(m) the tenant is required to notify the landlord of the identity of each person, other than a multiple tenant with whom the individual is sharing the flat or house, “residing for the time being in the dwelling.” I can see where this will lead. I have heard of people putting notches on their bed posts but, if they are required to write down the names of everybody who has been invited in for coffee and supply it to the landlord with the rent, it will be “Nanny State-ism” that puts smoking bans and no children in pubs after 8 p.m. in the ha'penny place. I do not know how that provision was inserted in the legislation or what is its purpose. I will be interested to hear on Committee Stage what was on the Minister of State's mind when he inserted this provision. The Bill is intended to provide for the legal protection of tenants but it will have a devastating effect on the social life of the country if the provision remains in that form. The Labour Party will support the Bill on Second Stage but will seek a number of amendments on Committee Stage.

Mr. O'Donovan

Today is similar to the first day back at school and, like Deputy Gilmore, it is nice to speak on the first day. He mentioned the long summer recess but both Deputy McCormack, who is present, and I worked long and tedious hours during July on the Joint Committee on the Constitution dealing with the property rights issue. The summer was extremely swift, but that comes with the terrain. The public is at times under the impression that once the Dáil goes into recess in early July, we all put our feet up or go fishing, hill walking and golfing. Unfortunately, that was not the case for me. I enjoyed August because the weather was excellent. However, a great deal of committee work was done in July and September.

I welcome this important legislation, which could and should have been introduced 20 years ago, as Deputy Gilmore said. One could slate the current Government parties for being inactive over the past six years but the protection of tenants' rights has been on the agenda for more than 20 years and various Administrations comprising different parties have been in power in the meantime.

Deputy Gilmore mentioned the exemption for employment-related lettings, which is important. My father-in-law was a maintenance foreman at Bantry hospital and lived for 23 years in a house adjacent to the hospital. When he died suddenly, his wife and children were given six months to leave the house. That was a harsh measure as they were expected to walk away from their home of 23 years, a hospital lodge, in difficult circumstances. Perhaps the Minister of State will re-examine this issue.

The thrust of the legislation is to protect tenants' rights and it is not before time. The general trend of legislation introduced since the foundation of the State, particularly Bills enacted in 1931 and 1967, was to protect the landlord rather than the tenant. That continued until the 1970s when a new school of thought emerged. Tenants realised they did not have security of tenure, particularly in the private rented sector, and set up various organisations such as Threshold. The Bill addresses problems that have pertained for many years in a fair way.

Part 3 covers rent reviews. Rents have increased annually for the past ten years. In what circumstances would tenancies be renewed with lower rents? Would that happen because of the poor state of the accommodation or lack of repairs by the landlord or market trends? Housing demand has exceeded supply in recent years. Deputy Gilmore pointed out the housing shortage is a major problem. The committee I chair is examining this issue in depth and we conducted extensive hearings and consultations. It is expected that approximately 60,000 houses will be built this year, a phenomenal number. Construction industry representatives who appeared before the committee stated the industry was at breaking point and could not deliver more houses than that annually. Great Britain has a population of 60 million and almost one million housing units would have to be built to compare with the construction rate in Ireland. However, only 200,000 units are built there annually. The US would have to build two million units per annum to meet Ireland's rate of construction on a per capita basis. Despite record construction of houses, problems persist but Ireland is doing remarkably well in comparison to the US and Great Britain.

The Bill provides that rent reviews should be conducted on an annual basis. Given my experience as a solicitor, frequent reviews are difficult to manage. Reviews should take place not less than every two years and not more than every four years unless the date of the review is set in stone and the rent is index linked. Most tenancies do not involve a written agreement.

Part 4 deals with security of tenure. I am intrigued by the four year cycle, which is an interesting and novel concept. What we had in the past was totally inadequate as far as tenants were concerned. To give credit to the Minister, this is the first time in the past 20 years that a Government has grasped the nettle by introducing the Residential Tenancies Bill 2003, which will give security of tenure and protect tenants rather than landlords.

A number of questions occurred to me when studying the Bill. Why should a landlord be unilaterally entitled to terminate a tenancy within the first six months of a four-year cycle? This seems very harsh. Further study of the Bill reveals that the notice of termination must in all instances be served, but it is not necessary to give a reason during the first six months. That seems to favour the landlord. Perhaps there is another explanation that has not occurred to me. Otherwise, if a termination notice is served a reason must be given. The landlord must prove that renovations of some magnitude are to be carried out to the house or that he or she needs the house for a relative or friend.

Would the fact that a house is structurally unsound be sufficient cause for a landlord to ask a tenant to leave? I came across an interesting case in the commercial sector which ended up in court regarding a building that was falling down around the tenant and, having been reported to the Health and Safety Authority, was found to be unsafe. The tenant was asked to leave despite the fact that he was claiming a business equity tenancy. Would the private sector be subject to similar regulation and would the fact that a building was structurally unsound or unsafe be sufficient reason for the landlord to terminate a tenancy?

The previous speaker, Deputy Gilmore, mentioned long tenancies. I appreciate that this legislation cannot operate retrospectively. However, I am concerned about the situation where a tenant who has had a continuous tenancy in the same property for ten, 15 or 20 years must start afresh after four years. That militates against the tenant. Deputy Gilmore mentioned cases where people had been in occupation for 19 years. He mentioned a dressmaker who had been in occupation of a premises for more than 19 years, and a former Irish Press worker. It is very harsh that a family or a couple who have occupied a house for ten, 15 or 20 years – and I come across them frequently enough – can find themselves with no rights whatsoever. I am not sure whether this Bill can redress that. The Minister may say the legislation cannot operate retrospectively, but the operation of a four-year cycle is of concern to me and it should be examined for the future. I understand that even at the end of the third cycle the landlord and tenant must start afresh. Tenants may have to pay the market rent, but if they have been in occupation for 12 years they should be entitled to longer notice than 16 weeks. I suggest at least six months' notice should be given.

I have already touched briefly on the procedure of termination and how the termination notice is to be served. This Bill provides for the setting up of the Private Residential Tenancies Board, which is a very salient feature of the Bill. I presume the serving of a termination notice will be simplistic, served not by registered post but handed by the landlord to the tenant, and that there will be no problems regarding proof of service and declarations of service. I understand this Bill is intended to be user friendly for both tenant and landlord to avoid difficulties in landlord and tenant actions in court involving the service of notices and so on. I would like clarification that what is intended is a very simplistic form of notice served in a particular way that does not require consultation with a solicitor.

In the second three and a half years of the tenancy the notice required is graduated from four weeks up to a maximum of 16 weeks. This applies to both landlords and tenants. Should a lesser period of notice apply to tenants if they want to leave for any reason? The requirement to give 16 weeks' notice where a tenant has a genuine reason for leaving seems to favour the landlord, given that the purpose of this Bill is to protect the tenant. Perhaps there is a good reason for it.

Part 5 of the Bill refers to the termination of a tenancy where a sub-tenancy has been created. My understanding is that landlord and tenant law frowns on sub-letting and that the standard letting agreement which is endorsed by the Law Society of Ireland contains an explicit agreement not to sublet. I would like clarification that sub-tenancies will be a new phenomenon and that they will be covered if a person rents a premises and after nine months, without contacting the landlord, sub-lets to a brother or sister or relative and the rent is the same and has been paid. Is that acceptable? It may well be.

Part 6 of the Bill deals with dispute resolution. I compliment the Minister on this. This is probably the cornerstone of the Bill, for many reasons. I will touch on a few of them within the time allowed. It is a very welcome approach. Up to now all disputes concerning landlords and tenants inevitably ended up in court. If they did not end up in court the tenants, usually the least well-off in society because they cannot afford to buy housing, often had to walk away from a situation and did not get a fair deal because they had not the money to pay a solicitor or the wherewithal to go to court. More often than not, this whole area was weighted heavily against tenants. Great credit is due to the Minister for advocating the notion of the Private Residential Tenancies Board. I am sure it is not a novel approach, but it is an excellent one. It should be welcomed by every Member of the House. I am delighted that the Labour Party spokesman, Deputy Gilmore, has expressed his full support for this Bill.

The courts were obliged for too long to deal with these matters under old legislation. I am aware, from personal experience, that District Court and Circuit Court judges were not keen to get involved as arbiters in many instances of disputes between landlords and tenants. The new board will have a number of other roles. The new dispute resolution committee represents an excellent way forward.

I would like to conclude by speaking about the registration of tenancies. I concur with Deputy Gilmore's views in this regard, on the basis of my experience of the system that was to be operated by the local authorities. The registration figure of 20% cited by the Deputy is absolute proof that the system did not work. I think the figure should be closer to 80% or 90% in future. A person who contacts a landlord, after seeing accommodation advertised, often encounters difficulties when he or she asks the landlord to sign a health board form. I have seen this happen in rural areas – perhaps it does not happen in Dublin. The landlord often says that he or she does not want the person as a tenant if he or she has to sign a form that may lead to his or her being brought into the tax net. Such landlords want to deal with cash customers only. This practice should be brought to an end.

I wanted to make a few more points, but I will respect the fact that my time has almost elapsed. I welcome this important Bill. The Minister deserves great credit for its introduction. I do not doubt that it will have a major impact on the lives of thousands of tenants who are renting property. I wish the Bill a safe passage through the Houses.

Mr. McCormack

I am glad to have the opportunity to speak on the Residential Tenancies Bill 2003 so early in the new term. The Bill was published at the end of May following the recommendations of the Commission on the Private Rented Sector. It was right that it was published at that time, because more and more people are entering the rented sector every day. We have to lay down proper regulations to deal with this fact.

The fact that 50,000 families are on the national housing waiting list is an indictment of Government policy. Sufficient funds have not been provided to local authorities to enable them to provide the necessary housing numbers in local authority areas. Many people have to avail of the private rented sector as a result. A record number of people – some 1,600 in total – are on Galway City Council's housing waiting list. These people are either homeless or are involved in the private rented sector as they wait. Those who are qualified to do so can avail of rent supplement payments to stay in the private rented sector. Clearly laid-down legislation that deals with the rights of tenants and landlords is timely at this point.

This Bill is being introduced against a background of poor quality rented accommodation, generally speaking, in all cities and towns. A survey conducted by a Sunday newspaper in advance of the new third level college year indicates that a large percentage of student accommodation in our cities is below an acceptable standard. In some cases, student accommodation does not comply with building and other regulations, but nobody seems to care. The fact that rents are high, standards are low and enforcement by the authorities is minimal is a serious one. I do not lay the blame entirely at the feet of local authorities, as this is a matter of resources. If local authorities are not resourced to do their job, they are unable to do so. Many local authorities do not have the resources to ensure enforcement with the regulations.

The Minister of State is responsible for ensuring that those being exploited, many of whom are students, are not priced out of the market. They should be able to get accommodation that is in line with their needs. Academic life is stressful enough without having to tolerate substandard and inadequate accommodation. I can speak from personal knowledge in this regard, as members of my family attended third level colleges in cities other than Galway. The accommodation they availed of in such cities certainly left a lot to be desired – that is all I will say about it.

The Irish Property Owners Association, which has made a submission on this matter, feels that the Government has failed to understand the needs and the operation of the private rented sector. The association believes that this lack of understanding has led to a succession of failed and harmful measures.

Deputy O'Donovan and others have referred to the 1996 registration regulations, which did not work properly because they were not enforced. While conducting some research recently, I encountered some figures in the housing statistics bulletin for the March quarter of 2003. The numbers of houses registered in each of the five major cities are as follows: Cork, 1,724; Dublin, 6,609; Galway, 3,468; Limerick, 541; and Waterford, 393. Such figures represent a ridiculous return for the amount of rented accommodation that exists. It is believed that there are 150,000 tenancies, or people in rented accommodation, in the State. I would like to compare some of the figures. The figure of 3,468 for Galway is not too bad, especially when compared to the figure of 1,724 for Cork, which is ten times the size of Galway. More than twice as much property is registered in Galway as in Cork. Galway is comparable in population to Limerick and Waterford, but there are just 541 and 393 registered properties, respectively, in these cities. It is clear that somebody is not doing his or her work.

When the registration regulations were introduced in 1996, the penalty for non-registration was a fine of £1,000. No landlord has been fined for non-registration in my local authority area and I am fairly sure that is also the case in other local authority areas. Local authorities do not have the resources to follow up the work that is involved in this area. It is clear that landlords are known to the city councils, as they can be traced for refuse charges in Galway and other cities where people pay their refuse charges. I do not know if that is the case in Dublin, as I do not know what is going on there. Given that local authorities are able to trace landlords in many cases, I cannot understand what is happening in places other than Galway, where the figures are very good. It seems that less than one tenth of rented properties are registered in accordance with the regulations which have been in place since 1996, but which have not been implemented. This matter should be examined.

Existing legislation, combined with measures taken as a result of the first of the three Bacon reports, led to clearly increased rents. Mortgage interest relief was scrapped when demand for rented accommodation was at its greatest. It is regrettable that the net impact of these measures, combined with the notion that rental income is unearned income, was to drive investment out of the sector at a time of maximum need. This Bill should be viewed in light of the need for proper recognition of rights and responsibilities.

I reject the arguments of those who seek to downgrade or belittle landlords. Landlords have a vital part to play in the provision of rented accommodation. Without the provision of private rented accommodation we would have a housing crisis. It is easy to categorise all landlords as bad but it is wrong to do so. There are bad apples in every barrel but the majority of landlords provide a good service and get a fair return for their investment.

I reject the belief that the market is the king. The right to hold and let property is accompanied by a responsibility to treat tenants with the respect they deserve and to grant them the rights to which they are entitled and which are provided for in the Bill.

A vibrant rental sector, which is attractive as a medium-term and not just as a short-term option as it is at present, is vital for the future of our economy. This legislation gives tenants the security of a four-year lease at the market rate. It obliges landlords to maintain property while tenants must repair any damage caused and refrain from anti-social behaviour. It obliges landlords to register properties legally and threatens penalties if they fail to comply. I ask the Minister to spell out how this will be done, given that the 1996 regulations are not complied with. How is it proposed to ensure the requirements of this Bill are complied with?

The Bill gives assurances to landlords that their names will not appear on the public record. It provides for the setting up of an official private residential tenancies board to resolve disputes. With just one in five landlords currently registered, the Government must provide a significant carrot to entice them in. How does the Minister propose to do this? Section 147 provides:

(1) The members of the Board shall be such number, not less than nine and not more than 15, as the Minister considers appropriate from time to time.

(2) The members of the Board shall be appointed by the Minister as soon as may be after the establishment day and shall be persons who, in the Minister's opinion, have experience in a field of expertise relevant to the Board's functions.

(3) Except as provided for by subsection (2), the members of the Board shall be appointed from time to time as occasion requires by the Minister.

(4) The Minister shall, in so far as is practicable, ensure an equitable balance between the numbers of members of the Board who are women and the number of them who are men.

(5) The Minister, when appointing a member shall fix such member's period of membership which shall not exceed 5 years and, subject to this section, membership shall be on such terms as the Minster may determine.

(6) The members of the Board (including the chairperson) may be paid such remuneration as the Minister, with the consent of the Minister for Finance, may determine.

These are standard provisions regarding the appointment of boards. I hope the Minister will not fall into the trap of appointing only members and supporters of the Government parties to the board, as is the norm in appointing boards. The latest trend appears to be the appointment of defeated and former Deputies to State boards. I hope this will not be the case in the appointment of the private residential tenancies board but that its members will be appointed on the basis of their ability to serve and their knowledge of the private rented sector and the rights of tenants. My party will table amendments to the effect that a 15 member board should consist of five representing tenants' interests, five representing landlords' interests and, perhaps, five people who do not represent an interest but who have expertise in the area. If we repeat the common practice in the appointment of boards the private residential tenancies board will be a complete failure.

The need to reform the private rented sector has long been recognised. The Bill is published against a background where the percentage of housing stock available for rent has risen from 8% to 14%. This is a 50% increase in the number of rental properties. The percentage increase is all the more notable because the total number of units has increased substantially.

The housing situation is very different from that which existed when my party left office in 1997. Back then students could find accommodation relatively easily. They could pay for the places they found and hope, some day, to own a property of their own. Things have changed utterly because of the ever increasing cost of housing. Home ownership is an option that is being postponed. While it is still the ultimate goal of many it is often put off until later in life.

It is only right that we frame appropriate legislation to respond to these changing times in the rented sector. In the first three months of 2003, Galway City Council paid out over €1,342,000 to hostel owners and landlords for the provision of accommodation for asylum seekers. I do not know if such tenants will be catered for in this Bill. Perhaps the Minister will comment on this matter in his reply to the debate.

We must not underestimate the serious situation facing those in the rented sector and those wishing to enter the housing market. It is important that we are in no doubt about the facts. This is where Government policy has failed. The first-time buyer's grant of €3,000, which was a great help to people buying their first home, was abolished at last year's budget. A day or two later VAT on housing materials was increased from 12.5% to 13.5%, increasing the price of a typical €200,000 home by €2,000. These two measures left young people trying to buy their first home with €5,000 less in their pockets. Some of my own family were in that position. The cost of an average home is approximately 25% higher in this country than in the United States and has increased 180% since 1996. This is the reality facing young people trying to acquire their own houses.

In the 12 months during which the Commission on the Private Rented Sector held its meetings 12,000 people contacted Threshold, mostly on the issue of frequent and substantial rent increases. Health boards are paying rent subsidies to 100,000 people. Tenants have poor security of tenure while landlords have felt that Government decisions and policies were brought forward on the basis of out of date and inaccurate information. No one is satisfied with the current position. I hope this Bill will improve it.

The Bill addresses the major areas of importance in this sector. I believe it will stand the test of time when it has been fine tuned. The inconsistencies in the Bill must be ironed out on Committee Stage before it passes through the House. The make-up of the proposed board needs to be spelt out more clearly. It is dealt with in section 147 of the Bill but it is not spelt out clearly. Section 147 deals with board membership, which is to consist of no fewer than nine and not more than 15, inclusive of the member appointed as chairperson. The members, as appointed by the Minister, shall be persons who have experience in a field of expertise relevant to the board's functions and will be appointed for a term of up to five years. Board members are to be paid such remuneration as the Minister may determine, with the consent of the Minister for Finance. That spells out nothing about how the Minister intends to recruit the members of the board. Given the amount of work it will have to do, the board will require full-time staff. Board members would almost need to be full time to cater for all the difficulties that will arise between tenants and landlords when the Bill becomes operable.

Will the Minister elaborate on the appointment of the board in his reply? It appears that he is free to choose whoever he wants as long as he deems them to have adequate experience, provided there is a balance between men and women on the board – this latter point is acceptable. However, he does not have to ensure that there is a balance between landlord and tenant interests on the board. It is important to have such a balance.

Section 148(2) allows the Minister to make a subjective decision to remove a member of the board at any time. This gives him great power over the functioning of what needs to be an independent group. This provision seems to be at vari ance with what people expect from the legislation when taken in conjunction with section 129, which provides that the Minister has the power, in effect, to rewrite the day-to-day workings of the Bill, subject to his own interpretations. This is unacceptable and contrary to the principle of independent board hearings and proper lawmaking.

Section 125 refers to the publication of the registry details. I have dealt with how this will be implemented, although it is acceptable that no information on the specific identity of landlord or tenant or the rent amount is to be included in published accounts.

There is a concern that taxes are not paid by all property owners – this was alluded to by Deputies Gilmore and O'Donovan. Will the Minister state why the Bill does not ensure that this is not the case? The omission of such a provision by the Minister is strange, to say the least.

The proposed compulsory registration and deregistration of each tenancy will be a bureaucratic nightmare. We fail to see what it will achieve or what purpose it serves. We fully appreciate why local authorities should know where rented property is. One must refer to the 1996 regulations in this respect. Giving responsibility to the board to take on the function of registration centrally is excessive and will lead to much red tape. In no other European country, where there are far higher levels of rented accommodation, has such a system been implemented. It does not exist in Germany, for example, where 70% of property is rented, and I do not see why it is needed here. I ask the Minister to re-examine the matter because the bureaucracy that will obtain in respect of single and multiple tenancies will be excessive. I do not see how the system can be implemented.

I do not know how certain sections of the Bill can be implemented given that most rented property is rented to working people, who often do not stay in the same accommodation for long. One tenant may reside in a property today only to be replaced by another in three months, thus implying that there is no overall continuity over four years in a given house. I wonder how this matter will be worked out.

Mr. O'Connor

I propose to conclude my contribution at 7 p.m. so a new speaker may begin when the debate resumes. Like other colleagues, I am very happy to be back. It is important that we take this opportunity to talk of business which is very important. While coming in the gate today, I made a point to a journalist that I am particularly pleased that the Dáil is sitting again because colleagues opposite – I notice that they have gone to have their little rest – often promulgate the view that one is not working if one is not sitting in the Chamber. It is important that we try to correct this perception. As has been said many times from the Chair, much work is being done in the constituencies and in Leinster House generally.

I am pleased to note the presence of the Minister of State, Deputy Parlon. I welcome him back. He will know that I would be just as happy to ignore my script and talk about the need for a new Garda station in Tallaght, but I will resist the temptation. It is unfair to be suggesting that the Minister of State, Deputy Noel Ahern, and the Minister, Deputy Cullen, have not been working away on our behalf in recent months. There is no question that challenges exist and it is important that we continue to highlight them in the House. As a Fianna Fáil backbencher I will continue to honour my responsibilities, as will my more eminent colleague, Deputy Haughey.

As I go about my business in Dublin South-West, on the streets of Tallaght, Firhouse, Templeogue and Greenhills, I always take the opportunity to listen to what people are saying to me. An issue exists regarding people's ability to own their own homes. This is true of young people in particular, and there is no point in any of us standing up and saying it is any different. It has to be said that the impact of the economic boom of the past six years affects us all. One area that will never be the same as a result pertains to our expectation to own our own homes. This is a challenge for many in all our constituencies.

I believe the European model of lifelong tenancy is becoming a reality in our cities and towns. Such accommodation is being provided by large commercial interests and financial institutions, as is the case in Germany, Scandinavia and many other European countries, as was said by my colleagues.

In Ireland, which suffered a long history of absentee landlordism and where the rental culture was one of poor standards, the need for the Residential Tenancies Bill 2003 is very evident. I have read with interest the contributions of Members of the House when it was introduced and noted the responses from organisations such as Threshold. On balance, I agree with my colleague, Deputy Noel Ahern, who stated that the Bill is one of the most important housing Bills to have been brought before the House and the most comprehensive reform of the residential private rented sector.

The Bill is a step in the right direction. It offers hope to younger people that renting their own homes need not necessarily be fraught with worry, given the level of house prices. It can only be a good thing if renting a home is seen as a viable short-term or long-term alternative to home ownership. Bad landlords and bad tenants will suffer as a result of this Bill. Property owners who offer a good standard of accommodation will benefit from tenants who will realise that they have responsibilities as well as rights.

All of us, from both urban and rural constituencies, can talk about our experiences on this subject. Many residents' associations and individual residents throughout my constituency, particularly in Tallaght, often talk to me about problems associated with tenancy. I often make the fair point that where people have a rented house in estates, there is no reason they should act differently or why the standard of upkeep of that house should be any different from that of another. In many parts, certainly in Tallaght – I live in Springfield – there are fewer problems when landlords and tenants take their responsibilities seriously. Problems exist where they do not do so and where there are irresponsible landlords who will not give neighbours their telephone numbers and who just want to ignore difficulties. In recent years, this phenomenon has led to problems in my constituency and I suspect in many others, certainly across the city and county of Dublin, resulting in a decline in the image of rented accommodation. In South Dublin County Council many initiatives have been taken in respect of what could easily be determined as anti-social behaviour. There is a need to deal with such issues and the Bill affords us an opportunity to reflect on them. We should be positive about the merits of the Bill.

This is my first occasion to speak as a Member of the Dáil while no longer a member of a local authority. I do not feel any different and I am trying to use the time I used to spend in the council chamber in Tallaght in a worthwhile way. I am now finding lots of other things to do. I hope those colleagues that understand the challenges we face will help those of us who are wrestling with them for the first time.

Mr. Stanton

I thank the Deputy for telling us that.

Mr. O'Connor

I am happy to do that and I will listen very carefully to what Deputy Stanton has to tell us.

The Bill updates the legislation applying to the private rented sector. It brings overdue protection for tenants in terms of rent reviews and much-needed security of tenure. It also gives landlords and tenants an effective means of resolving disputes that arise between them. It addresses some long-standing deterrents to investing and residing in private rented accommodation and will lead to greater professionalism within the sector.

The Government – I am happy to be a Fianna Fáil backbencher – is acutely aware of the importance of the private rented sector in the overall housing market. This is reflected in the priority accorded in the current programme for Government and in the recently concluded partnership agreement, Sustaining Progress, to reform and develop the sector, which is increasingly becoming the sector of choice in which to reside for a growing number of people. Rental accommodation can facilitate mobility in the ever-changing jobs market and can also help to address social housing needs.

The Bill implements the recommendations made by the Commission on the Private Rented Sector, established by the previous Government to examine the workings of the landlord and ten ant relationship and to make recommendations regarding the sector. While the commission's recommendations did not fully meet all of the demands of the competing interests in this sector and the Bill does not contain everything that accommodation providers and renters might wish, it strikes a reasonable balance between these competing demands while providing a structure for a stable, effective and efficient private rented sector.

The Minister of State shares my hope that the Bill will encourage further development and growth in the sector. In a speech last June he stated that he would explore other possible means of promoting the development of the sector, including increased investment and greater professionalism. Like the Minister of State, I am keen to encourage the potential of public private partnerships in the rental accommodation area, specifically in the context of social and affordable housing and especially if the commercial model used in countries like Germany is applied or where there is a greater encouragement of housing associations.

We are informed that pension funds are being reduced by the volatile nature of international stock markets and in view of this, perhaps insurance companies should seek to invest in our housing needs and generate the secure income to meet the demands of their customers. This would be preferable to expecting us to work until the age of 75 years of age, although I have no difficulty with colleagues who wish to work until then. As society changes it is vital that as public representatives we seek the best solutions from countries that have already embarked on this area of social development and not waste time trying to reinvent the wheel.

Many prospective first-time buyers living in rented accommodation are pushed to buy earlier than they need because of the high cost of rent and the ever increasing cost of their goal, a new house. For some, the increasing drain of rental costs has moved the home ownership goal further away. In view of this I welcome the surveys that indicate that over the past 12 months, the supply of rental accommodation has increased substantially with rents moderating and even falling in certain segments of the market.

It is clear that with 50,000 families on housing lists throughout the country and against a background of some poor quality rented accommodation in most cities and towns, there is a poor, if any, enforcement of standards. Rents are high, standards are low and there is no enforcement by the local authorities. Always the shout will be "no resources". However, I am pleased the Minister of State outlined that funding from fee income will be distributed to local authorities to support their enforcement activity, especially with regard to standards for private rented accommodation.

Tallaght is no different from anywhere else, although it is the third largest population centre in the country and it contains several thousand local authority houses. Anti-social behaviour is now becoming a challenge that must be addressed, as it is in other urban and rural areas. I hope the Minister for the Environment, Heritage and Local Government and the Minister of State with responsibility for housing understand the message from our communities that protection must be afforded to those tenants who wish to live normal lives while not being bothered by bad neighbours. Some local authorities in Dublin, including my south county area, and elsewhere have made progress in dealing with anti-social behaviour. However, many of those in private estates point out that if powers have been given to local authorities to deal with anti-social problems in housing estates and to move families who create such difficulties, why is the same protection not afforded in private housing estates? Indeed, it often happens that families who are moved from local authority estates for serious reasons find accommodation in private housing estates through the rent subsidy system where they cause the same problems. There is a call for this aspect to be addressed. The Minister and his Department must consider this issue and understand the need to afford the necessary protection. Ultimately, we are all entitled to believe we are safe in our houses.

The increase in the supply of new housing in recent years, particularly apartments with tax relief for refurbishment, of which there are a huge number in Tallaght, is improving standards within the overall sector. However, the remainder of the sector needs to be inspected to maintain the correct level of supply standard. I agree with the Minister of State when he stated it is unacceptable in the 21st century that any accommodation provider should offer a product that does not meet minimum basic standards, especially when the product is to serve as a person's home.

It is right that the Bill has generated debate and a little controversy, although I do not agree with the criticisms of Members on the other side of the House. It is good legislation that will be welcomed by communities. We need to examine all the issues involved. Like many colleagues, I have received numerous submissions. Our role is to articulate in the Dáil the views and concerns expressed by families, organisations and associations. The legislation will ultimately be welcomed and built on. It is important that the Bill be subject to scrutiny and I look forward to supporting its passage through the Dáil. I know that people in my constituency will be happy that it will be well debated and dealt with. While I commend the Bill, a number of outstanding issues need to be addressed and other issues will arise from its passage which I hope will also be addressed in due course.

Debate adjourned.