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. Nolan

I welcome the introduction of this Bill. It represents a major and overdue advance in tenants' rights. Most of us are familiar with the concept that our home is not only the biggest single purchase we will make in our lives but it is also the most important one, and it is no less important an expenditure for tenants. Rented property represents tenants' homes and tenants are entitled to have a sense of home. The Bill vindicates that right and brings long overdue protection to tenants.

The Bill provides for the legislative reforms approved by the Government arising from the recommendations of the Commission on the Private Rented Sector, which reported in July 2000. The commission put forward imaginative and far-reaching proposals dealing with complex issues and involving fundamental changes to a number of long-standing aspects of the landlord and tenant law. The Bill provides a comprehensive, modern legislative framework for the private rented sector here. It introduces a number of key provisions to the rental market: a statutory private residential tenancy board with specific functions essential to the operation and development of the sector; a new dispute resolution system which is designed to be both supportive and user friendly; and a national tenancy registration system to replace the current local authority registration system which has never been effective. The report from local authorities throughout the country is that in some cases it has been an abject failure. The Bill also provides for legally specified obligations of landlords and tenants. It further provides for improved security of tenure for tenants allied with longer notice periods and the limiting of rents to market levels. That is an important feature of the legislation.

These provisions will help balance the rights and responsibilities of landlords and tenants whereas the system currently tends to favour landlords. This Bill gives tenants a very fair deal. The rented residential sector in Ireland is of growing importance due to the changes in our society. For example, the labour market is far more mobile now than it ever was and for many, the rented sector is a tenure of choice. This legislation will help stabilise the private rented sector. This, in turn, will lead to increased confidence in the sector and, ultimately, to a further expansion in it to help meet Ireland's increasing housing needs. It will lead to a more professional approach to the rental market, which will benefit both tenants and investors. The Bill represents only one element of Government action to promote development of the private rental sector. Tax measures relating to this sector have already been implemented through the 2001 and 2002 Finance Acts. I know that the Minister will also be exploring and progressing other possible ways of promoting the development of the sector.

I welcome in particular the proposed establishment of a statutory private residential tenancy board which will be charged with a number of key functions. It will operate a national registration system for tenancies, which is a critically important function. The existing local authority registration system has not worked. However, it is essential that we know what tenancies are in existence. The commission on the private rental residential sector noted the dearth of information available on the sector. Without such basic information as the number and nature of tenancies, it is difficult to develop informed mechanisms for its development and expansion. Such basic information is standard in almost every other area of business activity and should also be standard in the rental sector. In this regard, there has been a certain reluctance on the part of landlords, particularly in the past, to register for which there are a number of reasons. I hope the Bill will tackle that reluctance.

The proposed national registration system must be complied with by landlords. In the past they have mounted legal challenges to registration. I now urge them to comply with the law and I urge the board to take any necessary steps, including legal procedures, to ensure that tenancies are registered.

The registration process will help the board to undertake much-needed research into the sector and provide other information and policy advice to the Minister. I am glad to note that the Minister is considering enabling the board to monitor the operation of this legislation and to make recommendations for any amendments that may be required for its efficient and effective implementation. This process can be monitored as time goes by and the work of the board is reviewed by the Department and the Minister.

I suspect the board will become primarily known for its dispute resolution services. This is a particularly innovative development, which will be welcomed by landlords and tenants alike. Currently, if a landlord and tenant are in dispute, their only legal recourse is through the courts. Taking court action is very expensive and it can take months for a case to be heard. Inevitably, especially because of the costs involved, many parties do not pursue legal action and thus fail to have their rights upheld and their problems addressed.

Under the new process, the parties will have a reasonably inexpensive, speedy and efficient alternative available. As I understand it, what is proposed is a two-stage process involving a choice of either mediation or adjudication followed by a tribunal investigation which, if the dispute remains unresolved, can then proceed to court. The procedures will be very user-friendly and in most cases should remove the need for costly professional representation. This must be welcomed by all sides in this area of business.

The importance of mediation cannot be overstated. The board's mediation service, which is already up and running, gives the parties in dispute the opportunity to resolve their problems together, with assistance from the board. This facilitates them to reach their own solution to whatever problems they may have. It will in many cases allow the relationship between landlord and tenant to continue, and may even strengthen it. The process is designed to be supportive, whereas the current court procedures are of their nature confrontational and almost guaranteed to sever an ongoing relationship.

Any measure which helps the parties to find their own solution rather than have one imposed on them is beneficial and will result in happier outcomes for all involved. The process will be confidential. This will perhaps be of particular importance in some smaller communities. It will enable the parties to conclude their business in private and without fear that others will be privy to their affairs.

The dispute resolution aspect of this Bill is of major importance to everyone in the residential tenancy business. The dispute resolution process outlines procedures for the resolution of disputes between landlords and tenants. The principal function being assigned to the private residential tenancies board to be established under the Bill is the resolution of all disputes arising between landlords and tenants of dwellings to which the Bill applies. This means that for these tenancies, the board's dispute resolution function will replace the current role of the courts in such matters. All Members are no doubt aware of disputes and difficult situations where tenants involved in disputes with landlords find that due to a lack of means, they are unable to get resolution to their difficulties. The manner in which some landlords treat their tenants is often referred to as employing a big stick. Moreover, some tenants do not play their part in taking care of houses and apartments.

The dispute resolution procedures to be followed have been refined and developed by the ad hoc private residential tenancy board, established some time ago by the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Noel Ahern, from those procedures described in the report of the commission on the private rental sector.

The process will consist of two stages. The first is either mediation or adjudication, which will be confidential. The second stage is a public hearing by a tenancy tribunal comprised of three persons drawn from the board's dispute resolution committee. The tribunal will operate like a court but in a more informal manner, and the more informal, the better. With too much formality, one finds people taking up difficult positions and matters can become increasingly difficult to resolve.

A mediated agreement or determination order of an adjudicator or the tribunal will result in a determination order of the board which will be binding on all sides. The determination order resulting from the tribunal may be appealed in accordance with the provisions of the Bill. This can be appealed to the High Court but only on a point of law. The enforcement of any orders not complied with will be done through the Circuit Court in accordance with the provisions of the Bill.

I welcome this Bill as it is a step in the right direction. The one disappointing aspect is the length of time it has taken to come before the House. I commend the Minister for bringing it this far and I hope it will have a speedy passage through both Houses. The Bill will bring fairness, certainty and professionalism to the rented sector. Its provisions are balanced and will provide benefits to both landlords and tenants.

Ms McManus

I wish to share my time with Deputy Lynch.

The Labour Party supports this Bill. It has arrived into the House at a very leisurely pace, which is hardly appropriate considering the issues it sets out to address. It is certainly not a Bill which will meet all the needs of tenants, but welcome progress is being made. When one considers that according to the latest estimate of Threshold, 150,000 tenancies currently exist in the private rented sector, that indicates that we are talking about a sizeable population. In total we are probably talking about 400,000 or 500,000 people.

Ireland is unique in the European Union in terms of our high level of home ownership. However, partly because of demographics, a fairly sizeable number of people still live in the private rented sector. Very often they live in situations which make them vulnerable and their rights, as compared with those of people in other EU countries, are underdeveloped. Many of us have experienced an increase in the number of non-nationals attending our clinics. We learn a great deal about ourselves from these people. EU nationals, in particular, are struck by the inadequacy of protection for people living here in private rented accommodation. They are critical of our system in that regard. This Bill is long overdue.

I recall a very sad case in my constituency which received a great deal of media attention in the last few months. A 70 year old man and his wife were in court fighting an eviction order from their landlord, Lord Meath, a fairly extensive property owner in his own right. He was not a man struggling to meet his bills. He sought an eviction order against the elderly man who had lived in the modest house since he was three years old. Fortunately, the tenant won the case. He was protected by a technicality in a caretaker's agreement which his father held rather than by the strength of his position as a tenant. Even though we live in a modern world where the idea of people having rights and the principle of equality are spoken about a great deal, people can remain tied to archaic and grossly unfair relationships with powerful landlords.

I was shocked to learn, during my time as Minister of State with responsibility for the environment and local government, that landlords tended to be resisters rather than promoters of change and progress. I was surprised that unlike other vested interests in this country, they had not recognised the need to have a good, professional body representing their interests. They tended to be highly secretive in their approach. The IPOA became more public in those days, in particular, in resisting the very modest registration introduced and initiated by my colleague, Deputy Stagg, during his time as Minister of State with responsibility for housing. It strenuously resisted that change. Currently, one in five landlords are properly registered with the local authority. That is not a good record nor is it one in which landlords should take pride. It is a pretty shameful record. Despite the commission's good work in trying to deal with irreconcilable forces within the private rented sector, we now have resistance from that same source in the IPOA. It is attacking the provisions for registration as being a bureaucratic nightmare. It is trying to ensure it is protected against what, again, are reasonable registration proposals which should not be resisted by anybody of a reasonable frame of mind. Perhaps that says a great deal about the workings of that organisation.

I have some concerns regarding exempted tenants, in particular the exempted tenant renting accommodation in property with part commercial use. Something which has concentrated the minds of a number of Ministers, including myself, was how best to use the space above commercial premises for residential purposes. The idea of living above a shop is one which deserves to be promoted and has been promoted in very generous ways. There is a general lack of use of space in commercial premises at first, second or even third floor level. That means many premises in our towns and cities are underused in terms of their capacity to house people in good quality accommodation, close to services and using existing infrastructure, all the things which provide for sustainable development. It is not helpful or appropriate if such tenants lose out as a result of their being tenants of a mixed use building. That does not help to promote the idea of living above the shop. We should ensure that people living above commercial premises are secured to an ever greater degree because it is an important environmental move that needs to be encouraged.

I note social housing tenants are not covered by this legislation and one can understand why. It is important to take this opportunity to note that very often tenants living in social housing suffer greatly at the hands of their landlords. I know of many people living in council houses that have no central heating, where windows and doors are falling out, where they are subject to the most gross anti-social behaviour and where people are dumping next to them. However, the response from the local authorities is non-existent or ineffective.

The Minister of State with responsibility for housing when on this side of the House would assiduously seek improvements for tenants in his constituency and rightly so. I commend him for that. Unfortunately, the same people often live in grossly inadequate council properties in terms of today's needs. In particular, young families are living in houses with no central heating with all the attendant problems such as dampness and so on. The Minister of State is as aware as I am of these problems and people's needs. They are the ones who are losing out at a time when we have, as Deputy O'Keeffe pointed out, the most right-wing Government in the history of this State.

I know the Minister of State, Deputy Noel Ahern, is not a right-wing Minister. I call on him to examine the rights of tenants who are dependant on councils to take care of their property. Those councils very often fail to do so. On the terms of reasons for termination of tenancies, I agree with Deputy Gilmore who argued for a more flexible tenancy or more open-ended tenancy. The Bill provides a four-year timeframe. The exemptions are very wide. I had difficulty thinking of reasons to terminate a tenancy other than those exempt from the four-year tenancy agreement. While I have a great deal more to say, I will give way to my colleague, Deputy Lynch.

Ms Lynch

There are extremely good landlords in this country. There are kind people who offer their property for rent and there are those who take on tenants as virtual family members. However, they are few and far between.

The main gripe people have about rented property is the lack of security. I do not believe I am the only public representative in the Dáil to be contacted by people in this regard, not only on a daily but on virtually an hourly basis. They fear, usually following a period in which they have received threatening letters, that they will be given only two weeks notice before they will be thrown on to the streets. They feel they have no security, that their home is not their own and that once they live in private rented accommodation they cannot put down roots in an area.

Tenants with children, usually very young children, often find themselves in this position. Their situation then becomes ten times worse. It is difficult enough for single people to try to find alternative accommodation, but it is virtually impossible if there are young children involved, especially where the rent allowance has been capped and where to work would mean complete forfeiture of the allowance. To hold a job would mean having to pay the full rent, which could not be afforded, plus child care.

In view of this the Bill is welcome. It has been a long time in preparation, which is not the fault of any one Administration. I am aware of the resistance it has met. While it has a number of flaws, it will provide the kind of security people seek.

However, the Bill will not address the problem of bad accommodation. In 2002, there were 5,059 inspections of private rented dwellings. This must be seen in the context of what can be conservatively estimated as 150,000 tenancies in the private rented sector. More than half of those inspected failed to meet minimum standards. By this is usually meant the availability of hot and cold water, the avoidance of dampness making it unfit for human habitation and the lack of rodent infestation, rotting floor boards or roof leakages. Of those inspections that failed, only 17 cases were taken to court, of which 15 were in Dublin. This means that outside Dublin only two prosecutions were taken, which is of significance to non-Dublin Deputies, such as myself. It is an appalling statistic.

At present, Cork City Council has 3,065 applications for housing on its books while 1,200 are waiting approval. Some 80% of these are in private rented accommodation, which according to my discussions with officials is a conservative estimate, of which it may be taken that 10% are living in reasonable accommodation. It is striking to come across people living in good accommodation. Last year, one in four callers to Threshold's advice centre had a gross annual income of less than €15,000. This forces them into the type of low grade accommodation of which we are all aware.

Social welfare recipients must deal with the cap on rent allowances. This means the only type of accommodation available to them is at the lower end of the range. We have all seen the threatening letters and are aware of landlords who, without an appointment or hindrance, access such accommodation with their own key to undertake an inspection. We are all aware of flats with faulty and dangerous electrical wiring, where the water has been turned off for no apparent reason and where children are continuously suffering from coughs, colds, pneumonia and chest infections, going on to develop asthma and bronchitis due to unhealthy living conditions.

The Bill will offer people a degree of protection, but it does nothing to rid us of the awful accommodation in which those on very low incomes are forced to live. I am sure Deputy Gilmore will move amendments on Committee Stage. It must be ensured that landlords do not delay in providing tenants with tenancy agreements, thereby extending the period over which they control the tenancy and depriving the tenant of security. The Bill must also be amended to ensure that landlords who deliberately set out to obstruct the rights of tenants will be subject to penalties.

It is likely that tenants of six months standing or longer, who have passed the requisite probationary period, will seek the security the Bill will provide. They will seek a tenancy agreement, at which point they may be seen as trouble-makers for asserting their rights. They may then be served with a week's notice to quit. The legislation must ensure that this kind of situation cannot be allowed to arise.

The Bill is welcome, even if it is long overdue. It is about time it was introduced. Despite the appalling conditions in which some tenants must live, it will at least offer them a degree of security. However, there is no timeframe for its implementation. When it is passed into law, it will be at the discretion of the Minister to make regulations to bring its provisions into operation. This could cause difficulties and I see no reason its provisions should not take immediate effect following passage of the Bill into law.

Mr. Kelleher

I welcome the opportunity to debate the issues surrounding private residential tenancies. It is topical on a number of fronts, especially the escalating house prices and expensive rental market. While huge advances have been made with regard to the increase in the number of houses under construction, young people who are not on the capital ladder continue to encounter difficulties when purchasing their first home. That issue must also be addressed and it must be ensured that landlords and tenants have rights. The legislation addresses both sides of the argument and provides a compromise.

I recall during history classes in school learning about the Land League and the three Fs – free sale, fair rent and fixity of tenure. The Bill addresses security of tenure. Rents have increased significantly in recent times and Members will be aware of many evictions, particularly in urban areas, because tenants had no rights and landlords sought people who were capable of paying higher rents. While that may be considered to be part of a fair and open market, it was unfair to long-term tenants who kept their accommodation in reasonable nick. They were evicted because of increased rents, which resulted from an increase in our population through immigration and the return of many emigrants.

However, we must be broad minded and adventurous in addressing the underlying problems. House prices are escalating at a pace that will create major problems down the road. My friends are finding it exceedingly difficult not only to secure rented accommodation but also to meet the rents being sought, which only a few years ago were the equivalent of a mortgage repayment. While that pressure remains on the housing market, it must be addressed.

Threshold has welcomed the Bill's provisions while the Irish Property Owners Association has not. Under the chairmanship of Tom Dunne, the commission brought forward sensible proposals and I compliment the Government on implementing its recommendations in legislative form.

Local authorities are among the worst landlords in Ireland. They renege on their basic responsibilities to ensure anti-social behaviour is eradicated on their properties and the curtilages of properties are maintained in a reasonable condition. People dump rubbish outside their houses, for instance, on many local authority housing estates and local authorities make no effort to ensure this activity ceases. This issue must be addressed. The Housing (Miscellaneous Provisions) Act 1997 contains provisions to address anti-social behaviour but many local authorities are shirking their responsibilities and washing their hands of the problem by pointing out they are suffering from a lack of resources. It does not take much to deal with people who engage in anti-social behaviour on local authority estates and who do not maintain their properties in a reasonable condition. Every person who is physically capable should be obliged to maintain their property. Once the standard of local authority housing estates falls, it has a knock-on effect and communities are demoralised across the board.

I refer to stage payments, which is a serious issue in Cork. When a person is purchasing a house, he or she puts down a booking deposit and pays the balance on signing the contract. This is followed by a payment when the ground work is completed and another payment when joist level is reached. Finally, when the snag list is completed, the person draws down the mortgage.

Debate adjourned.