Dáil Éireann debate -
Wednesday, 15 Oct 2003

Vol. 572 No. 4

Residential Tenancies Bill 2003: Second Stage (Resumed).

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

Mr. Perry

Those with the greatest need in this area are those with no homes at all and the housing statistics bulletin states that there are 5,581 homeless people in the country. The reaction of groups outside the House with an interest in this area must be borne in mind during this debate. Threshold has welcomed the Bill as a major step forward for both landlords and tenants, saying it will address imbalances in the sector. However, it has pointed out that loopholes exist which could be exploited by unscrupulous landlords, who are in the minority, in order to escape their obligations under the Bill. I will return to these loopholes in a moment.

Fine Gael views this Bill against the need for proper recognition of rights and responsibilities. Mine is a progressive centre party and we completely reject the arguments of those who seem to jump down the throats of anyone who owns property. It is very easy to characterise all landlords as bad but that is wrong. We also reject those who believe the market is king. With the right to hold and let property comes important responsibilities – to treat tenants with the respect they deserve and to grant them their rights. Rights are provided in this Bill for the most part, which is very important. Transparency is also important, such as a contract which clearly indicates the entitlements of landlords and tenants.

Fine Gael understands that a vibrant rental sector which is attractive as a medium-term option – not just a short-term option as is the case at present – is vital to the future of our economy. That means ensuring the rental sector is fair to landlords so that we can boost supply, as well as making it fair for tenants in order to maintain demand. Regrettably, the escalation of house prices means many people are looking at the rental market and that is why the Bill is so important. It gives people tenure and the right of renewal of tenancy up to five years. Those are important provisions because the growth of the Irish economy has meant the possibility of home ownership is beyond the remit of a huge number of people.

In short, we need to root out exploitation, to give people the protection they deserve and to make the letting of property an attractive option. The Bill addresses the major issues in the sector and with some fine tuning it will stand the test of time. However, the inconsistencies in the Bill must be ironed out before it is passed.

The composition of the Private Residential Tenancies Board needs to be spelt out more clearly in section 147. The board is central to ensuring the spirit of the Bill is adhered to and that neither tenants nor landlords can abuse perceived loopholes in the Bill. The Minister is free to choose whoever he wants as long as he deems that they have adequate experience in the area and there is an equitable balance between men and women on the board, while the balance between landlord interests and tenant interests must also be maintained. That is very important.

Deputy Allen has proposed a balance of five landlord representatives, five tenant representatives and five impartial people; it is important to have equity in this area. The Minister has significant powers regarding appointing people and section 148(2) allows him to make a very subjective decision to remove a member of the board at any time. This gives the Minister great power over the functioning of what needs to be an independent group. These groups should be seen to be independent, like the groups granting broadcasting licences. At any debates I attended involving the latter groups, it was made clear that they were independent bodies and had no responsibility to the Minister. If the Minister has the power to sack or fire—

Minister of State at the Department of the Environment, Heritage and Local Government (Mr. N. Ahern)

The Deputy is probably thinking of the Minister of the day in that regard.

Mr. Perry

It is also important that if the Minister appoints board members, they should attend those meetings.

Mr. McCormack

They need not all be Fianna Fáil councillors.

Mr. N. Ahern

They are not the worst breed.

Mr. Perry

I would not go as far as that.

People like the honour of being appointed to independent bodies and advisory groups and they put it on their CVs. However, when it comes to attendance the Minister should ensure he can review attendance at meetings so that board members take their appointments seriously. Many of them do not, which is regrettable. One hears about people in the local press when they are appointed but how many of them are unavailable to attend meetings in the following 12 months? That is wrong. I believe in merit and those people should make a commitment when accepting such a responsibility. They should not just take the nomination.

Mr. McCormack

The people I mentioned will attend.

Mr. Perry

They will. The Minister spoke about getting a balance and that was Deputy Allen's point. It is important to have people who are impartial but who are also passionate about the subject matter of the Bill and who feel they can contribute. Those are the people the Minister wants. He does not want not sidekicks but people who will do the job in the interests of landlords and tenants, people who will contribute.

Mr. N. Ahern

They do not have to be in either camp. It would be better if they were not.

Mr. Perry

I agree entirely. That is the very point I am making.

Mr. N. Ahern

Deputy Perry quoted Deputy Allen, who wants five tenants and five landlords. That is polarising the issue.

Mr. Perry

However, it is apolitical. It is important that these are people with knowledge of the area; that is the critical test. From where will they come? We need people who believe passionately in the aims of the Bill.

The power the Minister will have over the functions of the board seems to be at variance with what people expect from the Bill. Coupled with section 192, the Minister has effective control to rewrite the day-to-day working of the Bill subject to his own interpretation and that concerns me.

Section 125 of the Bill refers to the publication of the registry details. However, no information on specific identity and rent amount is to be included in published accounts. This is acceptable, but there are concerns that full taxes are not paid by all property owners on rental income and the Bill is not attempting to ensure this is not the case. This is an important matter, as taxation from this sector is significant. This is a very profitable business.

Mr. McCormack

There are fewer than 500 landlords registered in Limerick and fewer than 200 in Waterford.

Mr. Perry

Some landlords have several houses – I have heard of people owning ten to 15 houses. That is big business. Supervisory and maintenance staff have to be employed and accounts should be kept. A register should be kept of people with large amounts of property so they can be clearly identified. Deputy McCormack has referred to the low numbers of registered landlords.

There have been significant reductions in some aspects of our national tax take in the past ten years. Income tax, corporation tax and capital gains tax have all come down but there have been significant gains in the value of rent and capital values for property investors. Many of these properties have been section 23 properties, involving a considerable offset of income against capital expenditure. There are significant advantages involved in this and people with shrewd accountants can avail of the tax loopholes which exist in this regard. The Minister wants to encourage people into dealing with housing needs but the least that those availing of the section 23 provision could do is register as landlords and indicate their property portfolios. Those can then be inspected and people looking for tenancies will know exactly what properties are available for rent in Sligo, Galway or wherever.

It is in the national interest that the Revenue Commissioners be given access to the registry and specific details to ensure compliance with the law. There is no moral or legal case for not allowing this. If the Minister cannot see his way to accepting this amendment, he will invite the questioning of his own agenda. This is a critical aspect. It involves big business and the landlords have access to the financial institutions. If they own five houses, they can buy five more. However, the Bacon report contained a measure that addressed that practice. The Minister for Finance could ring-fence the revenue accruing from the taxation of rental income for housing development, which would benefit the Minister of State's Department. The health service will not fund itself and it is important for the less well off to see that those who are better off pay their fair share, accepting that some will already so do. It is important to close tax loopholes in this area.

With regard to section 17, the number and broad nature of the definitions of anti-social behaviour could lead to great ambiguity and to eviction simply because a tenant is not liked. Once a tenancy agreement has been signed, personality difficulties should be considered in terms of why a tenant should be evicted. Does someone listening to the radio constitute interference with peaceful occupation or someone smoking cause damage to a person living in a dwelling? Such behaviour is currently the subject of a major debate on anti-smoking legislation, with which I agree. Being in the licensed trade, I consider this issue has been over-hyped. Public health concerns are greater than any other consideration. Perhaps different phrasing is required to ensure reasonable justice in the implementation of this Bill.

Section 16(c) does not specify how much notice a landlord must give to inspect the premises or the recourse for a landlord who cannot get in contact with or the agreement of the tenant to a date and time for inspection. Perhaps a tenant could be required to give a registered postal address. In that way, notice of an inspection could be sent to a tenant by registered post and the tenant would have to acknowledge receipt of the notice. Greater clarity of rights and responsibilities in this area would resolve potential disagreements. The rights and responsibilities of tenants are equally important. Tenants have rights as have landlords. The relationship between the two is a partnership. If one is to enter into a tenancy agreement for five years, account must be taken of the maintenance of the property, and it is important to have a clear agreement.

I welcome the Bill. It is a step forward. It offers hope to young people in that renting a home need not necessarily be fraught with worry. It may be seen as a viable medium-term alternative to home ownership, and that is the best we can hope to achieve. It is important that potential tenants would be assured that they could have security of tenure for four or five years. Given the level of house prices, such an assurance could encourage tenants in that they could build up their savings during that period. Having regard to the level of funding given by banks, if tenants entered into a tenancy arrangement for a period, that would enable them to save money. The banks offered house loans of up to 100%, but that contributed to accelerating house prices. If potential tenants could enter into an agreement with a landlord to obtain a quality home at a fair rent, it is possible to ensure that there would be a good relationship between tenants and landlords.

While I welcome the Bill, I note the difficulty that has been experienced by many people in acquiring their homes. There has been the question of the role of the developer. I listened to what the Taoiseach said about the affordable housing option at the weekend, and there are possibilities in that regard. Local authorities can acquire ground on which to build houses, which people can purchase for a fixed price. That scheme must be welcomed. However, there is also the issue of social housing. I am aware of a recent housing development in Sligo, which consisted of social and affordable housing. The uptake for the affordable housing was slow due to the fact that people two blocks away acquired the same type of house for no expenditure. They questioned how they could justify paying €150,000 for the same type of house. I am not saying there should be a differential in the housing design, but there should be some modification that would give a perception of difference. In this case, the whole estate was perceived to be social housing. I am not saying there is a difference in social class between the dwellers of the two types of housing, although one may encounter such a difference. In this case, 19 social houses were allotted and they were snapped up. However, in the case of the offer of ten affordable houses in the same location and the same house design, the county council had to offer them as social housing, and 40 people then sought to take them up. I commend the Bill to the House.

Debate adjourned.