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Dáil Éireann debate -
Tuesday, 27 Jan 2009

Vol. 672 No. 2

Residential Tenancies (Amendment) Bill 2009: Second Stage.

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.

The Minister of State has one minute remaining.

This raised staffing level will help significantly with the administrative work relating to the processing of dispute cases.

While there is much road to be travelled, there have been verifiable improvements in workload processing in the PRTB. For example, 516 determination orders issued in 2008 compared to 400 in 2007. Processing time for tenancy registration has been reduced significantly in the past year and there has been an expansion in the range of activities.

Due to the nature and complexity of the Act, one element of the board's remit is to assess the functioning of the PRTB and of the Act itself and to make suggestions for improvements to the original legislation. This review is ongoing and a number of notable legislative changes to the Act have been proposed to my Department by the board. I hope to take a significant number of those suggestions on board as part of the Housing (Miscellaneous Provisions) Bill 2008. Some relevant amendments to the Residential Tenancies Act were debated on Committee Stage in the Seanad late last year. I hope to table a number of other related amendments on Committee Stage in this House. I commend the Bill to the House.

May I share time with Deputies Bannon and Charles Flanagan?

How is it proposed to share the time?

It will be four minutes, three minutes and two minutes.

Is that agreed? Agreed.

I am anxious to facilitate the Minister of State in respect of this legislation, as I understand the legal difficulties that could arise for his Department were the House not to approve it. However, I am critical of the mess that the PRTB and the Department have made in terms of overseeing the appointment of the people in question.

In June 2008, the Opposition brought to the attention of the Minister, Deputy Gormley, the fact that two of his appointees were members of a local authority, but he dismissed the matter. He then discovered that they were not entitled to be members of the board in light of the fact that they were political representatives. The legislation was unambiguous in prohibiting members of local authorities or other public representatives from being appointed.

One would have expected the Department to put in place the necessary oversight of this and other agencies to prevent a similar mistake from recurring, but it has recurred. It is embarrassing for the Minister of State to correct the error on behalf of the Government. I do not level the blame at him, but at his Department and the senior Minister. That there was a problem with the manner in which corporate governance issues and appointments were being made was up there in lights. A mistake was made as recently as last September.

In the briefing given by the Minister of State, he mentioned how much head way has been made by the board in respect of these matters, but I am afraid that I must differ with him on the basis of experience. The board was set up as an agency to improve the system through which disputes between landlords and tenants are resolved. However, there are still cases where, after lasting for an average of 11 or 13 months, landlords must go to court to repossess their houses. At the time, the Department was warned about the possibility of these cases being dragged out to the extent that the landlord suffered by being unable to collect rent. Irresponsible tenants, of whom there are unfortunately too many, are playing every trick in the book in order to prolong the length of time they can remain in accommodation free of charge. This arises because the Private Residential Tenancies Board is not making decisions quickly enough.

I ask the Minister of State, in the context of the Housing (Miscellaneous Provisions) Bill 2008, to which he has indicated he will introduce amendments, to take on board the genuine cases and the suffering endured by people in having their rights vindicated under this legislation.

I received a letter today from a person in County Wicklow who is out of pocket to the tune of €31,000 in unpaid rent, of which more than €20,000 has accrued owing to delays on the part of this board, which is unacceptable. I will provide the Minister of State with the relevant information in this regard which may assist him in reaching conclusions about the operation, or not, of this board.

While I will support the passing of this legislation given the legal issues to which the State could be exposed, I am critical of the board's operation.

When speaking in the Seanad on the Residential Tenancies Bill 2003, I pointed out that the Bill contained 11 additional pages that had not been debated in the Dáil and that it was imperative we prevented it being rushed through or being merely rubber-stamped by the House. The guillotine of the Dáil Report Stage led to 37 Government amendments being passed without debate, many of which were substantial and involved considerable additions to the Bill as originally introduced.

I had hoped that the Bill, when completed, would be well structured, watertight legislation, encompassing rights and responsibilities for tenants and landlords, that would revitalise the private rental sector. However, it seems the maxim that rushed legislation is bad legislation holds true in respect of this and many other Bills rushed through both Houses by this Government.

So flawed is the Residential Tenancies Act 2004 that neither the Minister of State nor his Department was able to interpret its provisions, or so he would have us believe. Five years later, the product of that rushed legislation has brought us back to debate loopholes that could potentially lead to more than 100 decisions being open to legal challenge or having to be set aside by the board. It would be a shameful misuse of resources if the PRTB were required to visit the tribunal cases in questions. Equally, it would be shameful if any hint of a cover-up were to attach to this legislation.

It now appears that rushing through of what became the Residential Tenancies Act 2004 left grey areas which have led to problems of invalid appointments to the Private Residential Tenancies Board. This could lead to massive legal challenges that would impact adversely on the work of the board. As I said earlier, the Residential Tenancies Bill 2003 was rushed legislation which stands as a testament to Government mismanagement. We are now forced to debate all Stages of this Bill today.

This is worrying; it is history repeating itself with the Government rushing all Stages of the Bill through this House by way of last minute changes to the Dáil schedule. This is outrageous given there were six weeks recess time during which the schedule could have been finalised, thus providing Members with adequate prior notice of this legislation. To add insult to injury, copies of the Bill were only made available to us this afternoon. The feeling of whitewash and cover-up persists.

I wish to pose a few questions to the Minister of State which I hope he will consider. Given the time restriction, I will pose these questions in the context of a Second Stage contribution.

For the Minister of State to say this is simply a technical amendment is, perhaps, an understatement deserving of some type of gold medal. To suggest this is a simple matter is most unfair. The board has serious questions to answer as, indeed, does the Minister of State and his superior.

The dispute resolution committee has been deemed invalid. It follows, therefore, that any decisions made by it were also invalid. The Minister of State said that approximately 100 decisions were made. Perhaps he will confirm if that is the case and, the nature of these decisions. How many of them have been challenged, how many court cases are pending and where stand the applications for judicial review, of which I understand there are a number? The Minister of State might also address the matter of costs borne by people who have taken legal action on the basis that a decision was invalid under the law. I would like also if the Minister of State would address the issue of the advice of the Attorney General, a matter not mentioned in his speech. I believe the Minister of State's speech to be a little less than what the occasion might warrant because he pads it for the first and last few pages and uses less than one page to set out the need for this legislation.

The need for this legislation arose as a result of a cock-up of a fairly basic nature in the Department on the part of the superior Minister who is not present in the House this evening. I want to know where stands the invalid decisions that are before the courts. Are they affected by this legislation? My answer is "No". I want the Minister of State to confirm that the invalid decisions will stand. If he takes issue with that, I want him to give me chapter and verse in this regard and outline what advice he adduces in that regard. I want to know why the claimants to the court have not been contacted and why and how this legislation is seen as no less than a bolt from the blue. No notice of its introduction was given. The Minister of State stated he first heard about it last month, which I find difficult to believe given the dogs in the street were barking about it for months prior to that.

This matter is wholly and entirely unsatisfactory. I regret that I must bring my remarks to a conclusion at this point. This is sham democracy at its worst. The Minister of State has approximately 40 minutes to respond to the questions I have asked and I hope he will do so.

I hoped, when putting my notes together this evening, that the Minister would be in the Chamber for this debate. It is unfortunate he is not here given the debacle of his two earlier appointments to the PRTB and the similarity of the situation in which we now find ourselves.

The Minister of State is proposing this evening to introduce retrospective legislation. We are going down the dangerous route of believing something can be rectified by latterly introducing legislation to correct past mistakes. It beggars belief that the Minister, Ministers of State and their advisers and handlers never read the Act. That is what happened. It is what happened in respect of the appointment of the two councillors concerned. The difficulty in which we find ourselves arises out of their not having read the Act. The Act was fundamentally flawed in terms of the dispute resolution committee's term of office being three years while that of the PRTB was five years. The sequencing in this regard was always going to create difficulties. Hence, the difficulty we are now in.

A valuable opportunity is being missed this evening to rectify a whole series of anomalies that exist under the PRTB and the Residential Tenancies Act. The first issue relates to the licensing of landlords. A coach and four is being driven through the legislation by property owners who rent out their properties and exempt themselves from registering their properties with the PRTB. The opportunity to address this matter is being missed. More fundamentally, the PRTB is not required under the Freedom of Information Act to disclose information. Given that the Exchequer and ultimately the State is paying for the operation of this board, it is a nonsense that FOI does not apply. Also, it is nonsense that parliamentary questions to the Minister in regard to the operations of the PRTB are not deemed to be in order in this House. That is another issue which could be corrected here, this evening. When one writes to the Minister about the PRTB, he says it is a matter for it, yet when one writes to the PRTB, it informs Deputies to the effect that it can only conduct itself within the scope of specific legislation. That is complete nonsense.

The other opportunity that might have been dealt with this evening is the introduction of a deposit retention scheme. I hope to debate this later, on Committee Stage. This is a proposal that would save the State millions of euro every year. The PRTB could operate a deposit retention system, rather than the present situation, whereby landlords hold deposits. This takes up much of Threshold's time, as the advocating agency on behalf of tenants and gives rise to much of the conflict that the PRTB deals with. There would be two benefits from this. A neutral agency would hold the deposit, which could travel from one tenancy to another. More importantly, given the rental accommodation scheme being operated by the HSE, millions of euro are being held in deposits, which the State could either notionally have held with the PRTB or lodged into an account from which it could derive interest. That is another question I shall put to the Minister of State this evening, as something that would provide an income for the State while improving landlord-tenancy law in Ireland inordinately.

The Minister of State talks, in his response, about an audit being carried out last month. On 9 October, when this situation broke, with the appointment of two illegal appointees to the PRTB, I called for an audit from the Minister. I said at the time, "This cock-up opens up the possibility that the propriety of other appointments made by the Minister since taking office may also be questioned". I called for a full audit of all such appointments and a report to be placed before the Dáil.

If that audit had been carried out at the time, we would not now be in the difficult situation we are in. I also asked the Minister for the Environment, Heritage and Local Government, Deputy Gormley, four times during the course of the debate to explain how this information came before him, as regards those councillors. Again, I should like to ask the Minister of State this evening how this specific information came before him, because a number of matters are contained in the Bill, and it is important that the House knows how the information reached his desk.

I will summarise some aspects of the Bill, which contain a weakness. Where does section 159, in essence, the pillar we are debating today, now stand in the amended Bill? As regards the illegal appointments, if they are validated retrospectively and if members of the board have less than a year to run since their appointment, how will the sequencing be done in future? The board expires at the end of September 2009 for nine of the ten illegally appointed members and at the end of December 2009 for the tenth. There is a sequencing difficulty. When will these people actually be appointed? Are they being reappointed on foot of a new date, or is the Minister giving them a secondary position, whereby their appointment date is also being retrospectively looked at?

Ba mhaith liom fáilte a chur roimh an Bhille seo. Measaim gur cuid den jab atá againn istigh sa Dáil, nuair a n-aithnítear go bhfuil fadhb le reachtaíocht go ndéanaimid an fhadhb sin a réiteach. Is trua go bhfuil sé á dhéanamh faoi phráinn, mar tá a lán fadhbanna eile agamsa leis an mBille um Thionóntactaí Cónaithe (Leasú) 2009, nó an bun Bhille, 2004, agus ba chóir dúinn féachaint ar siúd chomh maith leis an bun-fhadhb atá anseo.

As regards the illegal appointments being retrospectively validated, it is great to be a Minister. The fact that illegal actions may be validated retrospectively is interesting, and this is not the first time. Only last year the Minister for the Environment, Heritage and Local Government had to act because two councillors, a Fianna Fáil and Green Party councillor, were illegally appointed to the board. That said, our job is to address faults when we spot them and ensure that a body such as the PRTB is able to function properly and can address the resolutions. If anything, we should address how to increase the capacity of the PRTB, especially going into the period where landlords will try to change tenancies, tenants will seek to avoid payments and so on. Yesterday I welcomed the announcement concerning new standards to improve rental accommodation. I hope the Minister of State will ensure they come into effect quickly because prevention of problems will help the PRTB deal with its enormous workload, enabling it to concentrate on the resolution of disputes.

I welcome the Bill. I hope it will address the problems so that we do not have to come back to the matter of dealing with appointments in future, but rather can concentrate on resource failures.

I have listened with great interest to what has been said and appreciate the quality of the contributions from Deputies and the positive manner in which the Bill has been considered. What was involved here was a procedural error, a tactical flaw which casts no reflection on the quality of the tenancies tribunal convened in the period in question. The mistake concerned the unexpired portion of the board's membership for those members appointed to the dispute resolution committee, DRC. There is also doubt as to whether statutory consultation requirements with me, as Minister of State, were properly complied with. It is purely a technical mistake by the board of the PRTB that did not impact on the quality or professionalism of the tribunal hearings. The competence and professionalism of the tribunal is not in question. The procedures adopted were robust and proper and the outcomes and judgments are not in question. That matter was raised by Deputy Charles Flanagan and the decisions arising out of the invalid composition of the DRC will be secured by this legislation.

As of this morning I understand that the decisions have not been challenged. Nonetheless, there could be grounds for legal challenges as regards the manner in which the PRTB was set up, specifically in terms of time resources and reputation damage, which is why I have urgently moved to close off this area. The issue of the invalid appointment of councillors was dealt with in June. The matter in hand today predates the incorrect appointment of the councillors. The PRTB has undertaken an audit of compliance with legislative requirements and reported to its board and to me on this. No similar issues were identified, and I am sure that enhanced corporate governance and oversight processes are now in place.

Deputy Hogan raised some serious matters that are of concern to me as well. I intend to deal with those matters under the housing Bill that will come before the Dáil in a month's time. It has already gone through all stages in the Seanad. It would therefore be inappropriate to have those concerns included in emergency legislation, such as this. However, I intend to address them and look forward to suggestions in that regard, both from Deputy Hogan and Deputy Lynch. This is new legislation and a new board and the legislation referred to allows for this type of review, in any event. I hope, we can together see what is best for the legislation in the review of the housing Bill, so that eventually it may be of benefit to the tenant, the landlord, and everybody else.

Question put and agreed to.