I thank the Chairman and the committee for the invitation given to the Private Residential Tenancies Board to make this presentation. We are pleased to have the opportunity to brief the committee on the operations of the board to date.
The Private Residential Tenancies Board, PRTB, was established on a statutory basis on 1 September 2004, the date on which the first large portion of the Residential Tenancies Act 2004 came into operation. The principal functions of the board are: dispute resolution and tenancy registration; provision to the Minister of policy advice on the private rented sector; development and publication of good practice guidelines; collection and provision of information on the sector, including information relating to rents; research and monitoring of various aspects of the sector; and to review the operation of the Act and make recommendations to the Minister in respect of any necessary amendments, as well as any additional functions conferred by ministerial order.
The Minister for the Environment, Heritage and Local Government appointed the 15 members to the board on 28 October 2004. The terms of membership of six members will expire on 31 December 2007 and the terms of the remaining nine will expire on 30 September 2009. The intention is to ensure that there will always be a continuity of experienced members. The members who, in accordance with the Act, were appointed for their relevant expertise and experience are primarily from legal, auctioneering, landlord, tenant and social policy backgrounds.
The 2004 Act allows the Minister to provide services to the board — including the services of staff — and up to now the board has been primarily staffed by departmental officials in a combination of formal assignments, loans and temporary arrangements. It has also engaged varying numbers of agency or contract staff to undertake specific duties that mainly relate to the registration system. The total number of staff working there at present is 43, including 16 contract staff. The board is affected by the embargo on public service numbers and, like all State bodies, the numbers, remuneration and conditions of employment are subject to the consent of the Minister for Finance. In addition, panels of 120 mediators and 88 adjudicators were established in preparation for the board's dispute resolution role.
The PRTB is currently in a developmental phase as it makes a transition from its former purely advisory role to operating statutory services and moving onwards to a point, probably in the next year or 18 months, where it is likely to become a fully stand alone operation with its own staff corps. At that point, it will directly provide or procure various support services currently provided to it by the Department in areas such as personnel, accounts and IT. During this process of transition, it will build up a considerable store of experience and expertise in addition to fine tuning its procedures and services.
The residential tenancies legislation passed by the Oireachtas last year has already enjoyed considerable success. This legislation represents major reform in the area and, to date, there has been no evidence of, or commentary on, interference with the operation of the market and the supply of and access to accommodation. Given that the legislation was enacted at a time of quite static rent levels and less attractive capital yields, the fact it did not result in any departure from the market by investors is an encouraging vote of confidence in the new regime. It is also good to note that the PRTB has no evidence, contrary to the predictions of some doomsayers, that there was a higher than normal instance of termination of tenancies before the security of tenure rights kicked in for pre-existing tenants on 1 March 2005.
Over 80,000 tenancy registration applications have been made to the PRTB. This contrasts sharply with the fact that the numbers recorded under the local authority registration system never reached 30,000. Literally, tens of thousands of queries and information requests on private rental matters have been dealt with. Several hundred tenancy problems have been resolved, through the assistance of the PRTB's staff, without the need to have recourse to the formal dispute resolution mechanism. These include cases where evictions have been averted. A very effective model of formal dispute resolution, involving mediation, adjudication and tribunal hearings, has been developed and strong panels of mediators and adjudicators have been assembled.
As can happen with any entirely new undertaking, the PRTB encountered some teething problems and it has taken longer than we would have wished or anticipated to get to the sort of response time to queries and applications we would consider desirable. The sheer volume of calls and applications has been a major factor. The high rate of defects in applications has added to the workload and some landlords seem to have had difficulty, for example, in obtaining tenant details. Some difficulties in the IT area were encountered and it has taken longer than anticipated to build up the board's permanent staff corps. Action has been put in train to address these issues, significant progress is being made and the learning curve being followed will stand to the benefit of the board in refining is operations and services.
I hope these remarks will give the committee a reasonably good picture of where the board stands at present. I propose to comment in more detail on some of the key functions of the PRTB. I will be glad to respond to the best of my ability to any questions from the Chairman or members.
It may be helpful to refer back briefly to the origins of the PRTB. As many members will know, the Residential Tenancies Act and the PRTB came out of the report in 2000 of the Commission on the Private Rented Residential Sector, which I chaired, the recommendations of which were accepted virtually in their entirety by Government. The legislation was considered at length during its passage through the Oireachtas and a number of improvements were made. In anticipation that enactment would take a certain amount of time, the Government set up the board on an interim or ad hoc basis in October 2001 to inform the development of the draft legislation and to offer a mediation service for disputes referred on a voluntary basis by both parties. I also chaired the interim board and several of the current board members also served on it, so some of us have built up quite an amount of experience in this private rented sector reform process.
Preparations for the statutory services in the period before September 2004 involved mainly the following: development of the mediation and adjudication service; commissioning, implementing and testing the IT system to support the registration and dispute resolution services; drafting of relevant forms, rules and procedures; compiling informational material; and general administrative arrangements, including sourcing and equipping suitable premises from which to operate. A considerable effort was invested in developing the dispute resolution service. The panels of some 200 mediators and adjudicators, with very good qualifications and experience, were assembled. The board arranged information, training and support for these personnel in regard to landlord and tenant issues and the new residential tenancies legislation.
Significant resources were applied in providing and publicising a voluntary mediation service in advance of the full statutory dispute resolution service. Take-up of the voluntary service was unfortunately low due to the requirement for joint landlord and tenant agreement to use the service. In this period, the board contributed significantly to the refinement of the dispute resolution provisions in the Residential Tenancies Act.
As already stated, many of the provisions of the 2004 Act came into operation on the board's establishment date of 1 September 2004. These included improved security of tenure through a system of four year tenancy cycles, under Part 4; new tenancy termination procedures, including longer notice periods linked to length of tenancy, under Part 5; a new system of tenancy registration with the PRTB, under Part 7; and the provisions relating to the PRTB itself, under Part 8.
The remaining sections of the Act came into force on 6 December 2004. These included the new dispute resolution service through the PRTB instead of the courts, under Part 6; provisions setting out clearly the statutory tenancy obligations of landlords and tenants, under Part 2; and rent provisions whereby landlords are not entitled to seek a rent greater than the market rate and rent reviews, whether up or down, may not occur more than once a year unless warranted by a substantial change in the accommodation, under Part 3.
The Residential Tenancies Act is lengthy legislation containing 202 sections with some detailed and novel provisions dealing with quite complicated issues, particularly with regard to security of tenure. Since its commencement, the PRTB has strenuously engaged in providing information on the legislative provisions and responded to the thousands of queries we have received about various aspects of the new legislation and about specific lease covenants and other landlord and tenant statutes, which are not, strictly speaking, relevant to the PRTB. We have published a series of leaflets dealing with landlord and tenant obligations, dispute resolution, registration and termination of tenancies. A quick guide, providing an overview of the main provisions of the Residential Tenancies Act, has also been widely disseminated.
The volume of calls to the board from the time of its establishment has been far greater than anyone anticipated. Phone lines are constantly active and we are aware that callers find it difficult to get through. Unfortunately there have also been intermittent problems with the phone system which were outside our control, including, for a considerable period, a fault which caused a "ringing out" tone when all of the lines were engaged. This was particularly frustrating for unsuccessful callers, but has now been resolved. Additional staff has been assigned to the PRTB to deal with queries and improvements have been made to our telephone system to make it easier to get through to our staff. A new, directly accessible PRTB internet site has also made it easier and faster to obtain information, rather than having to go through the Department's website.
The registration requirement in Part 7 of the Act, which replaced the 1996 regulations requiring landlords to register their tenancies with local authorities, has applied since 1 September 2004. Landlords had a period of three months in which to apply to register existing tenancies while applications to register new tenancies are required to be made within one month of their commencement. Instead of the expected fairly even spread of applications during that three month period, the PRTB received a very large volume of applications in late November and December. When large quantities of records came to be inputted on to the computer system, commissioned for tenancy registrations, various technical difficulties came to light. The most notable of these was the inability to automatically generate confirmation notices in a format ready for posting. As a result, a backlog arose in entering registrations on the database and issuing confirmations of registration. Most of the technical difficulties have been resolved at this stage. Registration confirmation letters have now issued to landlords and tenants in respect of 60,000 tenancies and the backlog of registration applications for entry on to the computer system is largely cleared.
A significant number of applications have been sent back or are in the process of being sent back, to the landlords due to missing core essential information. As soon as these areas have been cleared, the extract of the register will be prepared for publication. The extract of data for transfer to local authorities regarding their functional areas will be prepared and staff resources can then be directed at identifying and pursuing non-compliant landlords.
The board is grateful to landlords for their co-operation during this initial period of operating the new registration system. It is very gratified at the relatively high level of compliance by landlords and intends to build from this good compliance base. We will introduce an on-line registration system as soon as possible, which will also require an amendment to the legislation and we hope to get to the stage shortly where current applicants can expect confirmation of registration within a few weeks of application. The board is also currently reviewing the registration form and will consult representative landlords and tenants about changes that may be needed.
Another significant area of PRTB activity is dispute resolution under Part 6 of the Act, which came into operation on 6 December 2004. The PRTB dispute resolution service replaces the courts in respect of the majority of landlord and tenant disputes. The board operates a two-stage dispute resolution process. The first stage consists of mediation, if chosen by both parties, or adjudication otherwise. Both mediation and adjudication are confidential to the parties. The second stage is a public hearing by a tenancy tribunal if the matter is not resolved at the first stage.
At this point, approximately 300 formal applications for dispute resolution services have been referred to the board. In addition, as I already mentioned, there has also been a large number of landlord and tenant problems, including threatened illegal evictions that have been informally resolved by PRTB staff. The majority of referred cases, approximately 60%, are from tenants and so far most have opted for adjudication rather than mediation. The concentration of effort on processing the registration applications and the fact that a high proportion of the dispute applications were received quite recently means that hearings must now be arranged for many cases and arrangements are being made to do so as quickly as possible.
An issue that has arisen in respect of the dispute resolution aspect of the board's work concerns the procedure for enforcement of the determination orders made by the board. The Act provides that where a determination order reflects an adjudicator's determination that has not been appealed by the parties to the dispute, the order is binding on issue to the parties. Where the board's determination order reflects the determination of a tenancy tribunal, set up where the adjudication determination was appealed or mediation was unsuccessful and a party requested a tribunal hearing, there is a 21-day appeal period to the High Court on a point of law only, after which the order is binding.
Section 124 of the Act deals with applications to the Circuit Court for orders directing the respondent to comply with the terms of a determination order of the PRTB. Such applications may be made by a party mentioned in the determination order or by the board if it is satisfied that another party has failed to comply with terms of that order. In practice, it is likely that parties affected by the non-compliance will seek to have the board make the application in the vast majority of such cases. This has been the case in the applications to date. The court must make the order unless it considers that there are substantial reasons for not doing so in respect of matters such as procedural fairness, material considerations, etc. which are listed in the section, or the respondent shows that one of those matters applies to the determination order.
Representatives of the board met the Circuit Court rules committee in March to discuss the approach for dealing with applications under section 124 and for interim or interlocutory injunctions under section 189 of the Act. The board's concern was to ensure that its applications to the court would be dealt with expeditiously, particularly as these would be made in the context of very serious situations under section 189 or having already followed a thorough statutory process in the case of section 124. The committee issued a practice direction, pending amendment of the Circuit Court rules, that section 124 applications are to be made by way of motion on notice and heard on affidavit evidence only, save where otherwise directed by the court.
The board has made two section 124 applications to the Circuit Court to enforce determination orders to date. The second of these is still being processed. The experience with the first application has been difficult. What was envisaged as a single application to the Circuit Court as the final stage in the process has involved a sequence of six separate court appearances by the board with attendant major costs. Although some of the delays and motions were due to difficulties of service of notices on the respondent, the effort required to secure partial enforcement of this order was unsatisfactory and a cause of concern to the board. If the experience with future applications is of a lengthy and expensive process, contrary to the intention of the Oireachtas and the purpose of the legislation as stated in the long title to the Act, the board may find it necessary to recommend to the Minister a review of this aspect of the legislation. An inexpensive, effective and speedy system for resolving disputes between landlords and tenants was one of the key recommendations of the Commission on the Private Rented Sector and the board must strive to achieve that objective.
In conclusion, the PRTB is a start-up organisation and like the vast majority of start-ups, we have had teething difficulties as we strive to become established and provide a good service to our customers during what is a developmental and transitional stage. The commission saw the private rented sector as an area that had been somewhat neglected over several decades and very much in need of modernisation. However, it has come as a surprise to everyone that such a demand for information about all aspects of renting existed. The volume of queries we received has placed big demands on the organisation and has had an impact on the allocation of resources to other functions of the board. We regret the PRTB has not been able to reach the level of customer service to which we aspire, as quickly as we would have liked. I reiterate our commitment to providing a high quality customer service. The board's staff has responded very positively to the challenges that have arisen. Their desire to provide a good service to tenants and landlords and their commitment to the work of the board is very commendable.
While the PRTB's attention up to now has been very much focused on dealing with the initial surge of demands with regard to queries, registration and disputes, as our operations develop we will increasingly become engaged in the provision of other valuable services in the areas of research, analysis, policy advice, the review of the operation of the residential tenancies legislation and making recommendations for any improvements that might be desirable. As systems bed down and board staff and members gain experience on the various facets of the board's work, the PRTB will play an increasingly important role in the private rented sector as a mature and self-reliant State body.
