I move: "That the Bill be now read a Second Time."
Before outlining the precise circumstances which have given rise to the need for this legislation I will first provide an overview of the Private Residential Tenancies Board, PRTB. I shall then outline the background to and the need for this legislation before making use of this opportunity to consider some of the key challenges facing the PRTB in the months ahead. In all this, I recognise the collective commitment of this House to a well-functioning private rental sector in general and to an efficient and cost-effective means of resolving disputes between tenants and landlords. I trust that colleagues on the benches opposite will understand the need for this legislation and will engage with it positively in the best interests of tenants, landlords and the taxpayer.
A commission on the Private Rented Residential Sector was established by my Department in July 1999. The terms of reference of the commission were:
To examine the working of the landlord and tenant relationship in respect of residential tenancies in the private rented sector and to make such recommendations, including changes to the law, as the Commission considers proper, equitable and feasible with a view to:
Improving the security of tenure of tenants in the occupation of their dwellings;
Maintaining a fair and reasonable balance between the respective rights and obligations of landlords and existing and future tenants;
Increasing investment in, and the supply of, residential accommodation for renting, including the removal of any identified constraints to the development of the sector; and to report to the Minister for Housing and Urban Renewal by 1 June, 2000.
The commission consisted of representatives of the legal, accounting and auctioneering professions, property investment specialists and representatives of both landlord and tenant interests, as well as representatives from my Department and the Departments of Finance, Justice, Equality and Law Reform and Social and Family Affairs. The commission conducted extensive research into the situation on the ground for landlords and tenants, the existing regulatory framework, including regulation of standards of rented housing, and the financial and taxation implications for landlords, tenants and investors.
The report of the commission was published in July 2000, and this report formed the basis of the Residential Tenancies Act 2004. The Act provides, inter alia, for a measure of security for tenants of certain dwellings, amendment of the law of landlord and tenant on basic rights and the obligations of each of the parties, for allowing of disputes between such parties to be resolved cheaply and speedily, and, most importantly, for the establishment of the PRTB.
The PRTB was established as an independent statutory body under the Residential Tenancies Act 2004. The principal activities of the PRTB include the registration of private rental tenancies, the resolution of disputes between tenants and landlords and the provision of information, assistance and advice to the Minister on the private rental sector.
I would like to turn to the specific reasons for this legislation. Section 159 of the Residential Tenancies Act empowers the board of the PRTB to establish a dispute resolution committee, DRC, to delegate functions to it and to appoint its members. The members, when required, form the tenancy tribunals that determine tenancy disputes. Section 159 provides that the membership of the committee must contain at least four members of the PRTB's board, but also specifies that, to be eligible for appointment to the committee, any board member must, at the time of appointment to the committee, have at least three years remaining in his or her term of office as a board member. Subsection 159(4) requires the board to consult the Minister before appointing members, including the chairperson, to the DRC.
It was brought to my Department's attention by the PRTB in mid-December 2008 that nine of its board members who had been appointed a year earlier to the committee and one further member appointed in January 2007 did not satisfy the three-year rule. On further examination, doubts were also raised concerning the extent to which the consultative requirements of section 159 were formally complied with. The effect of this was to raise questions around the constitution of the committee and, hence, the dispute resolution work carried out under its aegis. To ensure that the matters involved are regularised urgently, today's legislation has been introduced to validate the appointments to the committee and the associated work undertaken by it and its members.
It is important to stress that the competence and professionalism of the tribunals is not in question. The procedures adopted were robust and proper and the outcomes and judgments were arrived at properly. None the less, the technical mistake places a question mark over the more than 100 tribunals convened that have contained at least one incorrectly appointed board member.
To remove any uncertainty in this regard and in respect of compliance with the consultation requirements of section 159 more generally and, thereby, to ensure that tribunal-related work by the PRTB is validated, I have introduced this legislation. Given the good progress made by the PRTB in recent months in addressing the challenges facing it, it is essential that this potential uncertainty be removed. To do otherwise would not serve tenants, landlords or the taxpayer well.
The Bill validates the appointments to the DRC and the associated work undertaken by the committee and its members. It validates the irregular appointments and deems as valid any acts by the DRC prior to the emergency legislation. It corrects a technical legal error and allows the PRTB to proceed confidently with its essential work.
I would like to emphasise to the House that when attention was brought to this issue last month, my Department requested the PRTB to commission urgently an external audit to check compliance with the provisions of the 2004 Act in terms of governance and legal structures, the appointment of board and committee members and any other relevant aspects. This audit was to be undertaken by an appropriate external party, with access to legal advice as necessary. The compliance audit has since been completed and has identified no similar issues requiring legislative correction.
Regarding the details of the PRTB's mission, I am pleased to report on the significant achievements it has attained in providing a stable framework for the better operation of the landlord-tenant relationship. Since its establishment in September 2004, a notable success of the PRTB has been the registration to date of more than 304,735 tenancies compared to fewer than 23,000 registered with local authorities in 2004. Almost 210,000 current tenancies are registered with the PRTB. During 2007, the PRTB received almost 1,500 dispute applications for determination and slightly in excess of that in 2008. These disputes are in areas such as deposit retention, illegal eviction, rent arrears, anti-social behaviour and various other breaches of landlord or tenant obligations.
Partly as a consequence of the board's success in ensuring registration compliance and the resulting large workloads arising, it is acknowledged that the processing times for dispute resolutions are not yet optimal. This situation has arisen due to a combination of the significant increase in demand in line with expansion of the sector and the quasi-judicial process involved, which requires time-consuming work, for instance, the heavy administrative requirements of proceeding with court actions. However, it is important to note that, while the PRTB provides dispute resolution services, fewer than 1% of all registered tenancies seek to avail of its dispute resolution mechanisms. This indicates that a healthy and stable landlord-tenant relationship prevails in the vast majority of tenancies.
In response to the large and ongoing volume of work with which it needed to deal, the board of the PRTB requested an additional 14 permanent staff to bring its permanent staffing complement from 26 to 40. This was approved by my Department in early 2008 and the additional personnel were recruited during the summer of 2008.