I move: "That the Bill be now read a Second Time."
I am grateful to the Ceann Comhairle and to all Deputies for facilitating the urgent passage of this very important legislation through the Houses this week. The programme for Government recognises the important role that the private rented sector will continue to play into the future. The Government is seeking to address challenges in this sector, including those relating to standards, security and affordability for renters. I am asking the Oireachtas to pass the Residential Tenancies and Valuation Bill 2020 to help mitigate the adverse social and economic impacts of the Covid-19 pandemic which, unfortunately, have been felt by many tenants in the residential rental sector.
The Emergency Measures in the Public Interest (Covid-19) Act 2020 was enacted on 27 March last. Part 2 of that Act modifies the operation of the Residential Tenancies Act 2004 during the Covid-19 emergency period, initially for three months, to better protect tenants by prohibiting rent increases in all cases, and tenancy terminations in all but limited and exceptional cases. Section 4(1) provides that upon the request of the Minister for Housing, Planning and Local Government, after consulting the Minister for Health and with the consent of the Minister for Public Expenditure and Reform, the Government may make an order to extend the emergency period for such time as it considers appropriate if it is satisfied that making the order is in the public interest, having regard to the threat to public health presented by Covid-19, the highly contagious nature of that disease and the need to restrict the movement of persons in order to prevent the spread of the disease among the population. On 19 June 2020, the previous Government made an order extending the emergency period until 20 July 2020 in accordance with the aforementioned section 4(1). On 20 July 2020 upon my request, a further Government order was made to extend the emergency period to expire on 1 August 2020. This extra time has enabled me to develop policy and law for the consideration of the House today in the form the Residential Tenancies and Valuation Bill 2020.
The recitals at the start of the Bill set out the policy context in which the temporary and limited restrictions on landlords' constitutionally protected property rights are framed, in Part 2 and section 12, for the social common good. Covid-19 has undeniably caused a crisis for the world and Ireland has not escaped, with significant adverse impacts being visited upon those who have contracted the disease, their families and their friends. The broad social impacts of Covid-19 are closely interwoven with the adverse economic impacts. There has been a substantial and sudden increase in unemployment. Many in the residential rental sector have faced job losses, restricting their ability to pay rent and putting them at risk of losing their homes.
There is a significant risk that some renters will have difficulty securing alternative rental accommodation and might end up in overcrowded accommodation at a time when the State is keenly focused on continuing to suppress the spread of Covid-19. We want to minimise the occurrence of any overcrowded accommodation and, in doing so, minimise the risk of transmission of Covid-19, which has already cost this country dearly.
We want the economic recovery to start now with the help of the July stimulus package. Working together and continuing to adhere to public health advice, we can arrest the fallout for our society and economy by getting our people back to work.
The Bill recognises that Covid-19 has been hard on many tenants, particularly those working in the worst affected sectors of the economy, such as hospitality and retail. It proposes short-term and long-term solutions. Where a tenant makes a written declaration that the economic impact of Covid-19 has rendered him or her unable to pay rent and at a significant risk of tenancy termination, my Bill provides for increased notice periods for failure to pay rent from 28 days to 90 days in respect of notices of termination served on tenants in the residential rental sector during the emergency period from the passing of this Bill to 10 January 2021. Any notice of termination grounded on rent arrears and served during the new emergency period cannot specify a tenancy termination date earlier than 11 January 2021. There will be a prohibition of rent increases on tenancies of dwellings during the new emergency period.
In the longer term, there are more permanent measures. Amendments to the Residential Tenancies Act in the Bill provide that, before a notice of termination grounded on rent arrears can be served, a tenant will have 28 days to pay outstanding rent. Those 28 days will start from the date of receipt by the tenant or the Residential Tenancies Board, RTB, of a written rent arrears notification from the landlord, whichever date occurs later. That is an increase from 14 days currently. The Residential Tenancies Act will be amended to include specific requirements relating to the giving of notifications and notices of termination by landlords to tenants and the RTB in respect of arrears of rent. The Bill also provides for a one-off extension from ten years to 12 years of the period under the Valuation Act 2001 within which a valuation list relating the rating authority area of Dún Laoghaire-Rathdown County Council shall be published, with a return to the usual ten-year period from 2023. This temporary provision is required to counter the logistical difficulties caused to that local authority by the Covid-19 restrictions.
We must continue addressing the immediate and drastic economic and social consequences of Covid-19, protecting as many jobs as possible and making sure that families and businesses can survive financially. The economic recession that the pandemic has caused is the most rapid and dramatic ever experienced by anyone in the House. The emergency measures introduced in March, with all-party support, have prevented a much deeper social and economic crisis.
Last Thursday, the Government approved my proposals to progress residential tenancy legislation before the summer recess to better protect tenants who remained vulnerable as society and business reopened after the Covid-19 lockdown. In light of the prevailing economic situation caused by the pandemic, this Bill provides further protection during a new emergency period until 10 January 2021 for tenants who have been impacted economically by the pandemic.
I will turn to the main provisions of the Bill. There are three Parts, comprising 13 sections. In Part 1 the preliminary and general sections 1 and 2 contain standard provisions relating to the Short Title, collective citations and definitions.
Part 2 provides key and urgent enhancements to protections for tenants during an emergency period where they have been economically impacted by the Covid-19 pandemic and are unable to meet their obligations under the Residential Tenancies Acts to pay the rent due.
Section 3 defines "emergency period" to mean from the date of the passing of this Bill to 10 January 2021.
Section 4 provides that Part 2 shall apply unless the tenant makes a written declaration that he or she is unable to comply with his or her obligations to pay rent due because he or she: was or is temporarily out of work due to having contracted Covid-19, without entitlement to be paid by his or her employer; or was in receipt of, or entitled to receive, the temporary wage subsidy or any other payment out of public moneys provided for by or under statute and paid for the purpose of alleviating financial hardship resulting from the loss of employment occasioned by Covid-19, including rent supplement or a supplementary welfare allowance, and, as a consequence, is at significant risk that his or her tenancy will be terminated by his or her landlord. Such a declaration must be served on the RTB and copied to the landlord. It shall be an offence to make a false or misleading declaration.
During the emergency period and where the declaration has been made, section 5 provides that before a notice of termination is served by a landlord on foot of rent arrears, a tenant must have been afforded with a minimum of 28 days to pay his her rent arrears after a written rent arrears notice has been received by both the tenant and the RTB. A 90-day notice of termination period will now apply where rent arrears are the basis of the termination. The corresponding notice period for rent arrears terminations outside of the emergency period is 28 days' notice. A notice of termination served during the emergency shall not specify a termination date that falls earlier than 11 January 2021. A tenant cannot acquire Part 4 security of tenure as a result of this section.
Section 6 provides that no rent increase can take effect during the emergency period and no increase in rent will be payable in respect of any time during that period.
I am proposing a new section for insertion into the Bill by way of a Committee Stage amendment to clarify that tenants can submit the relevant declaration to the RTB by electronic means to avail of the enhanced protections under Part 2. The Government also needs to make a technical amendment to section 4(3).
Part 3 provides for amendments to the Residential Tenancies Act 2004, the Emergency Measures in Public Interest (Covid-19) Act 2020 and the Valuation Act 2001.
Section 7 provides that during the period from the date of the passing of the Act to 10 January 2021, tenancy tribunals are not required to be held in public. This is a continuation of the provision first introduced in the Emergency Measures in the Public Interest (Covid-19) Act 2020 in the interest of public health and safety.
Section 8 provides for an amendment to the table to section 34 of Residential Tenancies Act 2004 to provide a new separate ground - 1A - for termination of a tenancy for non-payment or rent within the minimum 28-day period afforded for payment following receipt of a written rent arrears notice by both the tenant and the RTB. The 28-day period commences upon receipt of the written rent arrears notice by the tenant or the RTB, whichever occurs later. Section 9 is a consequential amendment to section 35 of the Residential Tenancies Act arising from the new ground 1A provided for under section 8.
Section 10 inserts a new section 39A into the Residential Tenancies Acts. The new section 39A provides that where a landlord serves a notice of termination on the failure to pay an amount of rent set under the tenancy, a copy of that notice must sent to the RTB at the same time as to the tenant. When it receives a copy of the notice, the RTB will notify the tenant in writing of his or her right to refer a matter in connection with the notice of termination to the board for resolution under section 76. In the resolution of any dispute arising, the RTB adjudicator shall have regard to any advice provided to the tenant by the Money Advice & Budgeting Service, MABS, when making a decision or determination. Where there is an appeal to a tribunal, the tribunal shall also have regard to advice provided by MABS when making its determination. This is a new provision and a further new protection for tenants.
Section 11 provides for a number of amendments to section 67 of the Residential Tenancies Act. Paragraphs (a) and (b) provide conditions for the serving of a notice of termination where the tenant has failed to pay an amount of rent due. The conditions are that the tenant and the RTB have been notified in writing that an such amount of rent due as is specified in the notification has not been paid, and that the rent has not been paid to the landlord within the minimum period of 28 days following receipt of that notification by the tenant, or by the RTB, whichever occurs later.
Paragraph (c) provides that where the Residential Tenancies Board, RTB, receives a notification that an amount of rent due has not been paid, it shall provide information in writing to assist the tenant in getting advice from the Money Advice and Budgeting Service, MABS. Provision is also made that any notice of termination for failure by the tenant to pay an amount of rent due shall be deemed to be invalid if the landlord fails to simultaneously serve a copy of that notice on the tenant and the RTB.
Section 12 amends section 5 of the Emergency Measures in the Public Interest (Covid-19) Act 2020 in subsection (6) to redefine the revised termination date so that it cannot expire earlier than 10 August 2020. This applies to tenancies where a notice of termination had already been served but the notice period had not expired before the 2020 Act came into law on 27 March. Section 5(7) of the Act is also deleted to ensure that Part 2 - Operation of Residential Tenancies Act 2004 - ceases to operate at the end of the emergency period under section 3(1) of that Act.
Section 13 modifies the application of section 25 of the Valuation Act 2001 by extending the period from ten to 12 years within which a valuation list in regard to the rating authority area of Dún Laoghaire-Rathdown shall be published, with a return to normal in 2023.
This Bill is being introduced during an economic emergency. The measures that we take now have to target those who most need our help. The tailored approach in this Bill targets a prohibition on rent increases to those who need them. It protects tenants from imminent tenancy termination caused by rent arrears. The earliest they will have to leave their home is 11 January 2021. We also recognise that some landlords also find themselves on the wrong side of Covid-19, and we recognise constitutionally protected property rights. That is the reason this Bill balances the need to protect those worse affected by Covid-19 with the need to respect property rights and the legitimate interests of landlords.
Evidence suggests that we are moving from a public health emergency into an economic recovery phase. It is in this context of the hard-won progress that this Bill is being introduced. We must respect the efforts that all of society have made in getting us this far. We must adjust to this new normal. The residential rental sector has its part to play during the economic fallout and has some time to run.
This legislation seeks to protect both tenants and landlords. Landlords accept that some tenants will face serious financial challenges over the coming weeks and months and I know that they will work with tenants to the greatest extent possible. Landlords recognise that forbearance is required. The provisions in this Bill will help during and after the economic fallout from Covid-19. It will ultimately help landlords by ensuring early and active engagement by tenants with Government supports where they find themselves in difficulties paying rent. The usual rental protections under the Residential Tenancies Acts will apply as normal from 2 August. It is only where rent arrears is a problem during the emergency period to 10 January will the temporary prohibition on rent increases and terminations apply.
Earlier this month, the RTB, in conjunction with the ESRI, published a paper entitled Exploring the Impact of the Covid-19 Pandemic on Rental Prices in Ireland from January to June 2020: Early Insights from a Monthly Rent Index. The analysis shows that the annual growth rate of rent amounts declined significantly compared to the period prior to the lockdown. While the annual growth rate in March was over 3%, by April it had fallen to 0.4% and it declined again in May to 0.1%. By June, the annual growth rate had turned negative with prices falling by 3.3% compared to the same month the previous year.
The findings clearly show early downward pressure on rental prices and a lowering in the number of registrations, the latter of which is consistent with the restrictions on economic and social life brought in to stop the spread of Covid-19. Early estimates for April through to June 2020 show annualised rent falls in Dublin, with a clear reduction in the year-on-year growth rate in other areas.
My Department and the ESRI operate a programme of collaborative research principally focused on housing economics. Under this programme, researchers from the ESRI and my Department prepared a research paper exploring the short-run implications of the Covid-19 pandemic on the private rented sector. The research paper focused on rental payment affordability and the potential incidence of arrears during the first three months of the pandemic among non-supported private market renting households, that is, among renting households which do not receive a housing subsidy.
Changes in consumption patterns arising from public health measures are also considered in this paper. The preliminary research findings do not identify a significant rent arrears problem emerging during the first three months of the pandemic. I understand that this report will be published today. While tenants are legally obliged to continue to pay rent during this emergency, the Government is fully conscious that some tenants have seen a reduction in their working hours, some have lost their jobs, and others have been forced to self-isolate to protect their communities and in some cases have contracted Covid-19.
The Government has made a range of income and rental supports available to anyone in financial difficulty. I encourage tenants encountering difficulty to engage with their landlords and the Department Of Employment Affairs and Social Protection at the earliest opportunity to seek whatever income and rental support might apply in their case. Covid-19 has presented this country and the global community with enormous challenges over the last five months. The pandemic will continue to present challenges in the medium to long term, particularly for those most vulnerable in society and those working in sectors most heavily impacted by it.
The programme for Government, Our Shared Future, asserts the Government's ambition to meet those challenges, repair the damage that has been inflicted on our people by the pandemic and translate the renewed spirit arising from these challenging times into action. This has been a very stressful and testing time for our people. The economic impact of the pandemic will continue to be felt in all parts of the country and society for a long time to come. We now need to move decisively to recover from its devastating social, economic and cultural impact.
The key goal is to get as many people as possible back to work in a safe manner at the earliest possible time. The Government is committed to helping people who need help to meet their housing needs. It believes that everybody should have access to good quality housing to purchase or rent at an affordable price, built to a high standard, located close to essential services and offering a high quality of life. We understand that the provision of more affordable housing has a profound social and economic benefit. We believe that the State has a fundamental role in enabling the delivery of new homes and ensuring that the best use is made of existing stock. We will prioritise the provision of public housing on public land. We will build more social homes for families and individuals and we will make affordable homes to purchase or rent available to our working people.
As Minister for Housing, Planning and Local Government, I know that people need to get back to work and to be able to pay their rent, mortgage and other bills as soon as possible. This Bill will help tenants who most need it. I commend the Bill to the House.