Residential Tenancies Board: Chairperson Designate

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I welcome Mr. Tom Dunne, chairperson designate of the Residential Tenancies Board. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

I call Mr. Dunne to make his opening statement.

Mr. Tom Dunne

I believe a copy of my opening statement was sent to the joint committee. Does the Chairman want me to go through it?

We can take it as read if Mr. Dunne would like to proceed to questions instead.

Mr. Tom Dunne

It might be better to do so.

Are members agreeable?

If the opening statement is taken as read, have we resolved the matter of whether it will appear in the Official Report?

On committees of which I have previously been a member, they have certainly appeared in the Official Report.

I ask because recently we took some statements as taken as read and they did not appear in the Official Report. We generally prefer to take them as read, but we do not want to lose out on-----

We are not entirely sure what the position is.

It is a short statement. Mr. Dunne can get through it. He will be fine.

(Interruptions).

Will the clerk to the committee find out what happened to it?

Will the clerk to the committee find out what happened to that? We do not want to lose the value of having Mr. Dunne's words of wisdom on the record-----

Previously, we have treated them as being on the record. We will certainly look into that.

Mr. Tom Dunne

What does the Chairman want me to do?

If Mr. Dunne likes, he can certainly read an excerpt from it-----

Mr. Tom Dunne

At the risk of-----

-----or just the introduction and conclusion. It is his opening statement after all, so whatever he wishes.

Mr. Tom Dunne

In view of what Deputy Ó Broin said maybe it might be better to just read through it.

If Mr. Dunne so wishes. The floor is his.

Mr. Tom Dunne

I thank the Chairman. I am grateful for the opportunity to appear before the joint committee in my capacity as chairman designate of the Residential Tenancies Board, RTB. If it is acceptable to the committee I will first highlight my career as it is relevant to the role of the RTB.

I qualified as a chartered surveyor in the late 1970s and worked for ten years in one of Ireland's leading firms of surveyors, valuers and estate agents, gaining experience across a wide range of property consultancy, management, valuation and investment areas. In 1980 I joined the Dublin Institute of Technology, now the Technological University of Dublin, TU Dublin, as lecturer in urban economics and property evaluations where I have spent the bulk of my career, retiring recently as the head of the school of surveying and construction management. This is a large school in TU Dublin with some 1,000 students across 14 academic programmes from degree to post-graduate levels, including PhD students. That was a senior appointment in the university and it required an active role in public sector management, including participation in committees, boards and councils at the highest levels in the university and outside it.

During my career I lectured in variety of areas related to property, including property valuation techniques and housing. My research interests included property taxation, urban economics, housing and, in particular in later years largely because of my involvement in the Residential Tenancies Board, in the private rental sector. I have also engaged with professional and commercial organisations, including the Dublin Chamber of Commerce, the Society of Chartered Surveyors Ireland, and the Irish Property and Facility Management Association. These engagements have given me a wide range of experience in the management and governance of organisations with a public service remit and an active membership. This involved chairing many committees with those organisations and included a term as the president of the Society of Chartered Surveyors Ireland.

Internationally, I have served for eight years on the governing council of the Royal Institution of Chartered Surveyors, which is a very large professional body based in London with members in a large number of countries around the world.

Of particular importance in terms of my consideration of my role as chairman of the RTB is my lead role in the Commission on the Private Rented Residential Sector, which I chair. In 1999 I was asked by the then Minister of State with responsibility for housing and urban renewal, former Deputy Robert Molloy, to chair the commission and it reported in 2000. The purpose of the commission was to examine the working of the landlord and tenant relationship with regard to residential tenancies, and to consider key issues such as security of tenure, the supply of accommodation, investment return, market considerations and constraints on the development of the sector. The terms of reference were deliberately wide, as the private rented sector had been neglected for many years and was in need of reform. The commission's report informed the Residential Tenancies Act 2004, which provided for the creation of the Private Residential Tenancies Board, PRTB, now the RTB. From 2004 to 2009 I chaired the PRTB, as it then was, during the period it was established. Also of note in the context of my experience across housing is my role in 2003 in assisting the all-party Oireachtas committee on the Constitution in the preparation of its ninth report on property rights.

It is 15 years since the now RTB was established and 19 years since the Commission on the Private Rented Residential Sector reported. The sector has changed significantly in this time and the remit of the RTB has also expanded and devolved considerably. I believe I will be able to contribute positively to supporting change. The important changes I oversaw as the chairman of the commission and subsequently as chairman of the RTB created a new regulatory framework and a quasi-judicial service to replace the courts for landlords and tenants. The implementation of the recommendations from the commission was significant at the time and I believe this experience gives me a particular understanding and insight, which I bring to the RTB.

I now turn to what I see as the priorities important for the role of the chairman and for my approach as the chairman of the RTB. There are core tasks with regard to the leadership and effectiveness of the board. I have summarised a number of key priorities. One is to oversee the effective implementation of the considerable programme of change on foot of recent legislation. This expands the remit of the board to all student-specific accommodation. I am sure that members of the committee will be aware of much of this. It will also give the organisation extensive new powers that give the RTB the ability to proactively investigate and regulate the sector. This is an important development for the regulation of the overall rental market. It is important that the approach to doing this is sensitive and that we focus on supporting and informing people in complying with regulations, as well as empowering people with knowledge.

The ultimate goal is compliance, not punishment. We need to support landlords in fulfilling their obligations.

Second, the RTB has an important role to play in using and developing data and research to provide evidence and intelligence on the rental sector. We will continue to grow and invest in this area. It was an important aspect of the recommendations in the original commission's report because at the time it was seen, from the State's perspective, that a lack of information was one of the deficiencies in analysing what was going in the sector. It still happens to some extent.

Third, it is important that the RTB can deliver in a challenging environment. The organisation is supporting a significant proportion of the population and demand for its services continues to increase. Maintaining existing services, organisational supports and adequate resources to ensure effective delivery is a core priority.

Fourth, the RTB has an ambitious five-year strategic plan, underpinned by a vision, to support and develop a well functioning rental sector that is fair, accessible and beneficial to all. I believe in this vision and will work with the board, the director, the executive and stakeholders to support the delivery of the strategic priorities of the RTB.

Fifth, if appointed, I intend to strive to achieve the highest standards of good governance and adhere to best practice, consistent with the RTB's position as a public body and our important mandate. I will support the organisation and monitor our performance in delivery and achieving the planned outcomes within the strategy.

There are significant changes affecting the rental sector, with restricted supply alongside increasing demand for accommodation, affordability issues, with rents at an all-time high and significant legislative and regulatory change and uncertainty. The RTB plays a critical role in working to resolve the crisis. It does this through an enhanced regulatory function, education and awareness which empower people with knowledge on their rights and responsibilities, as well as our data which provide a robust evidence base to inform policy.

I again thank the Chairman and committee members for inviting me to meet them. I assure the committee that I have a genuine interest in this role and believe I can make an effective contribution to the important work of the RTB. I look forward to engaging with the committee again in the future if appointed to this important role.

If members wish to contribute, I will call them in the order in which they indicate.

I congratulate Mr. Dunne on his appointment which I have no doubt will be ratified. The work the RTB does is extremely important because essentially it is the watchdog to protect the rights of tenants and those of landlords when tenants do not fulfil their responsibilities. In that sense, the RTB has a dual role. Mr. Dunne has studied the legislation significantly and noticed and noted the amount of change there has been. Does the RTB have enough power? From his review ahead of his appointment, has he identified any area in which the powers of the RTB should be strengthened?

Mr. Tom Dunne

If I go back and look at the creation of the board, the intention was to remove what was contentious at the time, namely, dispute resolution, from the courts. Effectively, it was not working because if a landlord wanted to deal with a tenant, it was difficult to get the matter before the courts because it was very expensive. Solicitors were charging a lot of money because the issues were contentious and there were many difficult issues under landlord and tenant law. From a tenant's perspective, he or she could not access justice effectively because court procedures were complex and he or she would have to be supported by a solicitor. The intention of the original Act was to take all of it outside the courts and create a dispute resolution process which would enable landlords and tenants to come to some conclusion on their differences. Importantly, even at the time it was seen that tenants might be in their accommodation for longer than the norm. They were mostly in place for one year at the time, but the commission foresaw a period when that might change and tenants would spend longer in tenancies and that as a result, they would have an ongoing relationship with their landlord. The intention, therefore, was to create a structure which would allow disputes to be resolved in a way that would not sunder the relationship between the landlord and the tenant.

Tenants, therefore, would have to leave the accommodation and that is why the idea of mediation was brought in, adjudication followed by tribunals. Senator Conway calls the RTB a watchdog and while it has that function, it is more a dispute resolution service. It has to be impartial to maintain the integrity of that role. Landlords and tenants might not see it as being impartial but it is. One of the most important issues the chairman and the board of directors need to keep an eye on is making sure the dispute resolution service is seen as being as impartial as the courts in resolving disputes between landlords and tenants.

We have all seen on television and have witnessed in person the appalling standards of some accommodation and the RTB certainly has a job to do to ensure that is properly policed. Another group who feel forgotten are what Mr. Dunne describes as "incidental landlords" because they were advised for whatever reason to buy a second property. They have difficulty evicting tenants and find their properties wrecked. The only comeback they have is the deposit. I am not talking about big landlords with multiple properties because they just take the good with the bad but where people are struggling to pay the mortgage on a property and thousands of euro worth of damage is done, they feel disenfranchised. The RTB has significant work to do to convince incidental landlords that it is a fair and level playing pitch.

Mr. Tom Dunne

I completely understand this. It is a business risk that a landlord takes when taking on a tenant that the tenant may not work out. The important point to bear in mind is that in any business or sphere of life, a few people will always cause many problems. If the incidental landlord has borrowed money, perhaps to create a pension fund for himself or herself, or has inherited a house or has a dwelling that he or she put on to the market and the tenant acts in a disruptive way and proves difficult, that costs him or her an enormous sum. That fear is one reason incidental or accidental landlords are getting out of the market. One of the intentions of the legislation was to try to empower landlords to deal with tenants in a timely way. The board has a focus on making sure that the landlord gets a tenant out in as timely a fashion as possible but the board has to work within the law as laid down. That law originates in landlord and tenant law and is influenced by the Constitution where there are strong property rights and rights to protect the home, which people forget. It is difficult for the State to create a law that covers a situation where a landlord can get a tenant out very quickly. I do not think that will ever happen. It remains a business risk for landlords. All the board can do is try to make its dispute resolution processes as efficient and effective as possible and in the event of there being a tenant who has caused trouble that costs the landlord a lot of money-----

What are Mr. Dunne's views on rent pressure zones, RPZs? They were introduced to ensure that rents did not skyrocket and to provide affordability for renters. Does he think they are working? An incidental landlord in Wicklow rented out a property for several years to the same person at a discount. That person moved out but because of the laws and regulations governing RPZs, the landlord was not even able to get market value for it because they could only increase the rent by 4%.

Is there a role for the RTB in advising or making recommendations to Government on improving the structure of RPZs?

Mr. Tom Dunne

Of course. That will be an important aspect of the board's work. It was also provided for in the original legislation that the creation of the board would afford the Government the opportunity to receive some good advice based on evidence from the board's activities and that is available. The board has an important role in advising the Government on RPZs. However, any system of rent certainty one brings in is going to contain some anomalies and that is one of them. That might be examined in the current RPZ system. Rent certainty and rent control are fraught issues. Getting the model right is difficult the world over. The model we brought in here has been pretty cleverly constructed, given all the constraints that are brought to bear in trying to construct a model of rent control. I take the point, and the board and I are certainly conscious that there are anomalous situations in which benign landlords lost out in the formula that was brought in to deal with these zones. How to deal with that now is a question to which I would have to give a lot more thought at this stage.

I congratulate Mr. Dunne on his proposed appointment; that is probably what we can say at this stage. Based on his presentation and having worked with him in the past, he is eminently qualified and will do a good job in the role. I wish him good luck with that. I would like to make a couple of comments so that he knows where some of us on the committee are coming from. We pay close attention to the RTB and many of us have been arguing for the board to be given increased powers. We are supportive of the Government's albeit belated introduction of some of those powers in the recent legislation. One of the main priorities is to ensure the new legislation hits the ground running as quickly as possible. Recruitment and IT issues have to be resolved but the sooner all of that is in place, the better. While it is not all completely under the control of the RTB and some of it was time-lined by the Department, it is something we would all like to happen as quickly as possible.

From a policy point of view and in respect of the RTB's role of offering policy advice, one of the issues that is not getting enough attention in government or in the Department is the considerable loss of rental properties that occurred in 2017 and 2018. Over that two-year period, 12,000 rental properties were lost from the market. The most recent figures from the RTB indicate that 3,000 new rental properties were gained in the first quarter of this year but we will have to wait to see if there is a trend indicating that the loss has stabilised. My big fear last year was that we were seeing a disorderly exit of accidental and semi-professional landlords who were availing of the upturn in property prices to get out of the market. There is not an awful lot we can do about that in terms of those people wanting to leave, but sitting back and doing nothing is the worst option. The RTB could usefully lead a conversation informed by the evidence, as we get more data quarter on quarter, as to whether we are seeing a disorderly exit and what the most appropriate policy responses would be to ensure that, if it happens, this exit has the least damaging impact on tenants and the rental sector overall. Much of it is driven by accidental landlords simply wanting to get out. Now that property prices have recovered to their original mortgage purchase prices, it is the opportune moment to go. However, we do not know if that is the case and we do not know what other factors are influencing this. Perhaps some research, data and discussion on that would be useful.

That leads to a broader conversation on the fact that we have too many accidental and semi-professional landlords. It is not that we cannot have professional landlords with one or two properties. Germany and other countries show that we can. The work that the RTB has been doing on attempting to assist landlords to become more professional needs to be accelerated, as I am sure the officials will agree. What that looks like, how we do it and whether it should be compulsory or voluntary is a conversation we need to have. It needs to be ensured that landlords fully understand that this is not a passive investment or something they can do in their spare time. It is almost a full-time job in many cases.

This committee might want to return to that as a key issue some time next year.

The third issue is security of tenure. While Part 4 tenancies give the impression of security of tenure on paper, section 34 is filled with problems. This committee has returned to that repeatedly. Many of us, including Deputy Mick Barry, myself and others, have tabled legislation to remove many of the section 34 grounds such as sale and the use by a family member. If we want to professionalise the sector, we need to ensure that people who want to rent can do so for very long periods without that insecurity. With the rental market in a period of transition, maybe now is the time to grapple with that. We cannot continue with a drip-feed of amendments to the Residential Tenancies Act 2004 because that destabilises the market, but some of these things need to be tackled.

I wish to discuss the rent pressure zones, RPZs. Without opening a broader policy conversation I note that according to the latest Residential Tenancies Board, RTB, information new rents in Dublin have increased by 8.8%. While the policy might have been well-crafted, there is not much evidence the RPZs are working effectively. The fact that more and more areas are being included in the RPZs confirms one of the fears many of us originally had, namely, that there would be a ripple effect pushing up rents in the areas adjoining them. We will have to return to the conversation on rent certainty, rent management and a more effective way to guarantee them.

The great difficulty of our current system is that both the landlord and the tenant are the losers at both the low point and the current high point of rental price. That huge volatility is built into the system. The RPZs were a temporary measure, one which I did not support and I do not think is working. If we are going to reform the rental sector over the long term, how can we get the balance right between tenants' legitimate rights and expectation to reasonable rents that they can manage over the course of their life cycle and landlords' reasonable expectation of a fair return on their investments as long as they are fully compliant with the law and are providing a good service to tenants? I am a tenant and I have a good landlord, so I have experienced this directly. We have not fixed that yet. That is another policy conversation we need to have. We would welcome the opportunity to come back to that discussion next year.

Mr. Tom Dunne

I will comment on some of those points. Very briefly, I agree with the Deputy on the need for the Residential Tenancies Board to support landlords. As has been said, many landlords are incidental or accidental landlords and are not as aware as they might be of the risks they undertake when they become landlords or of the procedures and policies. That points to one original intention of the Residential Tenancies Act 2004. It had to be complex. There were 202 sections in that Act. The Residential Tenancies Board started out with the intention of ensuring that the experience of landlords would not reflect the complexity of the Act. There was enough information on the website so that if a landlord looked at it, he or she could find out how he or she should behave as a landlord. We intended to support landlords in that way. We must continue with that work.

The Deputy is probably right about what has happened in the marketplace. Many of those incidental and accidental landlords are finding the going a bit tough. They appreciate the risks associated with residential investment. They live in fear of a boiler breaking down, a roof coming off or some other major event which would require them to fund repairs. They do not have the resources to do that. As such, they are a very vulnerable class of people. That is one of the motives for getting out. That points to a wider debate which is perhaps not for this committee. This committee can look at the rental sector, but if I may say so there is a need for the State to look at housing in a very broad way. I would advocate the State sitting down to examine the housing system and how it interacts with the social welfare system, the planning system and all the other systems. This could be done in a somewhat similar way to what was done for the health service. We might get a rental sector that works better out of that.

As Deputy Ó Broin pointed out, one of the problems with the current legislation is that because there have been several amendments it is getting very complex. Many landlords see the complexity, do not know how to handle themselves and decide they need a solicitor. That in itself is a deterrent against getting involved.

The issue security of tenure occupied more of the Commission on the Private Rented Sector's time than perhaps any other issue. If the committee members are looking for pointers on that, the back of the original commission report contains some very good discussions of the reasons for the mechanism that was put into the legislation.

There are some good discussions in the back of the original commission report on why the mechanism was put into the legislation. It is very difficult to bring in a measure of security of tenure. If one rents from a professional landlord, a REIT or a company one has stronger security of tenure than if one rents from a private landlord. A REIT cannot recover possession on the basis of wanting a family member to occupy the accommodation, nor will it recover possession on the basis of wanting to refurbish because the properties have probably been kept at a higher level and it will be longer before they need to be refurbished. Property investment companies put money in for the long term and are generally not going to sell a property. Indeed, an amendment to the rules stipulates that if such a body wants to sell a block of flats, it has to do so in phases. A tenant gets better security of tenure when they rent from an institution than if they rent from a private landlord.

If we move from the present situation where there are a lot of accidental landlords to one where there are more professional landlords, that will help security of tenure. Professional landlords anywhere in the world will say they want to keep tenants because changing tenants costs money and it is a disincentive for them for tenants to be moving all the time. It is very hard to give security of tenure when market rents are volatile because, as soon as rents exceed the controlled levels, there is pressure to get tenants out and this can be nasty, as we have seen in other countries. It is a very complex area and the safeguards put into legislation represent a delicate balance. If we brought in a measure of security of tenure that did not allow a person to retrieve his or her property for their own use or that of their family, it would deter people from bringing their properties to the marketplace, thus reducing supply. If a person goes to work abroad and fears they will not get possession of the property again, they will not rent the house. It could have the effect of reducing supply and this needs to be thought about in great detail before we move from where we are at the moment.

I wish Mr. Dunne the best of luck. I am not sure whether he was headhunted or expressed an interest in the job. If the latter, why? He must have a reason for going for the job. What does he see as his priorities in the job?

Mr. Tom Dunne

As I said in my opening statement, I have just retired and I was asking myself what I would do. I saw the advert and decided I would be really interested in doing it, especially given the fact that I had been there before. One retains an interest in certain things. I have a knowledge of the creation of the legislation and the reasons it was created as it was, as well as the nuanced judgments that were made in framing the different sections of the Act. It is important to maintain that understanding and the possibility of becoming chair gives me the opportunity to try to influence the discussions about how the sector will evolve, which I believe it will do.

I expressed a view in 2010 or 2011 in the middle of the recession that when we emerged from it, the private rented sector would be a larger part of the housing system and that the importance of legislation relating to the sector would be crucial to having a good housing system. I have an interest in it and I would be happy to spend the next five years of my life watching that creation that I was part of at the beginning. That is the motivation. I have the time to do it. In fact, one of the problems I had the last time is that I had an onerous job as chairman of the board and I found it difficult to manage that with a full-time job. I do not mind admitting that. It was very time-consuming. My poor wife had to endure me reading board material on Tuesdays and Wednesdays and she could not come near me, but now I have the time.

I wish to follow up on a few points, but at this stage Deputy Ó Broin has raised most issues. Every member has had different views on the RTB be it from the point of view of a tenant or a landlord in terms of having had bad experiences and if they have not got the outcome they wished to achieve. It is the case that most landlords see the RTB as the enemy, as opposed to the board taking a more proactive role, which it could do. The challenge for the RTB from a landlord's point of view is to prove that it is there to assist him or her as well; that it is not the enemy but is are part of the solution.

Equally, as we transition from accidental or small landlords to the more commercial landlords, how does Mr. Dunne see the board promoting the interaction with both tenants and landlords? As he said, the entire area has become much more complex and that is causing problems for the accidental or small landlord.

Deputy Ó Broin referred to resources and IT systems. We inquired about that when the legislation was going through. We all know of significant, bad experiences concerning the roll-out of IT in the public sector. We are asking landlords to upload their rents on an annual basis. Equally, we have recruitment problems in the country now. What impact will it have if there are problems with IT and resources?

As a country, we have depended on the small landlord with one or two properties and there seems to be a move to the more commercial operation. According to my understanding, commercial landlords are looking to the higher income level of the rental market rather than the lower and middle income levels. Will that be a challenge in the future if they do not get involved in the lower end of the market?

Mr. Tom Dunne

The Deputy is correct. Many landlords see the RTB as an enemy. My answer to that when I was chair is that was not the board's position. Where a landlord will most likely come up against the board's operations will be in a tribunal or adjudication. That is not the board. The people involved are independent and they are employed by the board. Often, they are similar people to landlords such as solicitors, auctioneers and accountants. Many different professions are involved and they sit and make a judgment on the cases before them. The board does not do that, as such. It is not the board that is against them, if one likes. That is a mistake, but I can understand it.

I did it when I was there previously and I am pleased to know the board has been trying to make the information available on the website as accessible to landlords as it can. That is important given the complexity of the legislation. The board must support landlords in setting down guidelines for how they should behave so that, first, they will be less likely to get in trouble and, second, if they do get in trouble then they can get out of trouble.

I will give one particular example of that. One of the things that landlords do not tend to do is monitor the rent coming in as assiduously as they should. Professional landlords do that. They check the rent coming in every Monday or whenever it is. That is the first sign that something might be going wrong with the tenancy, and they are on top of that. They will check and ring the person, because it is not personal. A private landlord is often embarrassed to ring up a tenant to say the rent did not come in, ask why and refer to giving two weeks notice.

It is seen as coming on heavy. That is the way the systems work. Landlords need to be given the confidence to work the system and not to be afraid to tell tenants how it works and that if they do not manage it or do certain things, they will lose out very badly. Landlords have to be helped and assisted in that regard.

Commercial landlords will be a feature of the future. This is happening worldwide. It is happening for macro reasons beyond Ireland as a State. Funnily enough, commercial landlords fear regulation and legislation less than the private landlords. They are quite happy to operate within systems of rent certainty and regulation. The more professional landlords we have in the sector, the better the sector will be.

I thank Mr. Dunne for his presentation. I read the opening statement. I apologise for being delayed getting to the meeting. I wish Mr. Dunne well on his appointment, should it happen.

I am greatly concerned about resourcing, which my colleagues have mentioned. While there has been a rush towards additional regulation and giving the RTB more responsibility, there has not been the same rush to provide additional resources and IT systems. Regarding annual registration, are those systems in place and robust right now?

I would like Mr. Dunne's view on co-living. I do not support co-living at all, as it is not a solution, or even a partial solution, to our housing problem. I was greatly concerned when reading the legal submission to an Bord Pleanála on a certain planning application. It argued that co-living would not come under the RTB or any of its legislation because club membership would be set up. People were to be regarded as lucky enough to be club members of the new developments and would, therefore, not be covered under the RTB legislation or any of the amendments thereto. Has Mr. Dunne a view on that? Has he looked into the area of co-living? How can it be ensured people are not being exploited in such circumstances?

Reference was made to the investors. I agree there is a role for them but the problem, which may be more at policy level, concerns the proportion and location. In certain parts of this city and county, the market is saturated with investor and investment fund landlords. They can effectively set the rent for the area, particularly with new units. There was a recent application to develop 1,200 units in six apartment blocks between Dublin city and Fingal. Almost 1,100 of the units will be build-to-rent. That is going to a REIT or pension fund. While there is a role for them, we certainly have to watch where the units are located and ask whether they are saturating or taking over certain parts of the market in the city. We need to do the same for purpose-built student accommodation.

My other question is on the licence to reside. The amendment to the RTB legislation, with which many of us present were involved, tries to ensure students have the protection of the board. Is Mr. Dunne happy that they have the requisite protection now? Has the board the resources to deal with the thousands of students who will come to Dublin city, generally for a nine-month period, year on year and then move to other areas?

On the proportion of renters, I was looking at figures from 1991. Nine percent of people were in the private market whereas now the proportion is 21%. It is of concern to me and my party that there has been such a massive move towards the rental market.

Others would have us believe in a further push towards public housing. I support such a move but they argue there should be more renting of both public and private, with cost-rental models and so on. It seems to be a continuation of the trend of reduction in home ownership and in giving people an opportunity to own their own homes. That is probably another policy issue, given there has been a distinct move towards pushing people into the private rented sector.

On enforcement of determinations, Mr. Dunne has some previous experience in the role. It is the most frequent complaint or feedback we receive from both sides after going through the process with the RTB, which can be extensive and time-consuming, as he will know. The enforcement aspect does not take place until the end of the process. We debated the matter with the Minister. A judicial determination is ultimately needed to enforce an RTB order. While the Department argued against quasi-judicial orders, people can ignore these determinations, and I am aware of such cases currently before the RTB. Has Mr. Dunne a view on the matter?

Mr. Tom Dunne

On the resources, I was happy, albeit unhappy on another level, that the recent budget has given the board an additional €2 million, although it sought €2.5 million. I certainly see a case for additional resources to be given to the board. I have reviewed the workplace plan for the board. It has expanded its roles in the recent past to the point where I expect it to be an issue that will face me as a chairman.

In the first couple of years when we were trying to set up a system to register landlords, PPARS was in the back of our minds. We spent a small amount setting up a rudimentary system to learn how it would operate. The board has a great deal of intelligence in respect of how the system would operate. As I understand, it has a programme - RTB 360 - that will implement a new management system. I have some concern about its introduction because I share the Deputy's view that whenever one starts touching IT systems, they can be problematic. I will have to keep an eye on the matter in the future.

On the issue of co-living, the commission spent some time examining circumstances where people shared houses and examining the relationships between them. Often, a tenant had let somebody stay in a room and maintained his or her position as a tenant, but what was the status of the other person - a tenant or what else? It was a form of co-living. The formula in the Act is curious in that regard because the tenancy is the tenancy, and people become licensees within that tenancy and then can become enjoined to the tenancy. It is quite complicated and is probably often ignored, although trying to legislate for it is complex.

The licences and other contrivances that people raise to try to keep tenants out of the agreement have to be examined in the particular case that presents before a dispute resolution. I am sure it will happen that somebody will take one of the licences to the RTB. The disposition of the courts in the past was always to penetrate that and determine the nature of the relationship. If it was one of landlord and tenant, and if the written wording used between the parties was a contrivance to avoid the reality, adjudicators and the courts usually found such a contrivance was not acceptable. Such an arrangement was found to be a tenancy, or what it claimed to be. To some extent, that will have been an amelioration of the matter and there will doubtless be a few court cases relating to it. When people live together in other forms of accommodation such as student housing, where they share a great deal of the accommodation, it becomes problematic because the legislation deals with a dwelling, which is defined as being capable of being lived in independently. The co-living experience might cause some concern and may lead to some review of the issue.

I do not know how it will go. It is a very small sector and I am not sure it will grow to a size where it becomes a problem. It will always be a niche sector.

On the question of the move to rental, the Deputy made a good point about something I was trying to point out earlier. These Houses, and the parties in it, must think about housing more broadly. They need to sit down and look at the shape our housing sector will be in ten or 15 years hence. They should take a view through the cycle and into the future. We can use economic instruments to influence how much home ownership there is in society, how many people will be in the private rental sector and what we want in the social rental sector. We can influence that through taxation, the social welfare system, traditions and the situations with which we all live. We must think about this issue. Maybe all the parties can get together, sit down and think about it. I was part of a group of people who got together approximately a year and a half ago and we all said that the housing situation needs to be solved. We recognised it as an acute problem and saw the issue of its cyclical nature. The conclusion we came to was that there needs to be a collective view on how we manage housing. I will talk to Deputy O'Brien about that again.

It should be remembered that the role of dispute resolution was taken from the courts and given to the Residential Tenancies Board, RTB. That was a significant change because there is a question mark over the issue of administrative law and whether the State can create entities like the RTB to carry out functions that might be seen as the bailiwick of the courts. There is always a tension between these Houses and the courts. The formula that the Act came up with was that of a determination order, DO. The intention behind it was that if the courts had confidence in the board, they would accept the DO. The board established that in its first years and that enabled the Legislature to move the enforcement of DOs from the Circuit Court to the District Court, which makes it much easier to do.

It is a complex area. My own disposition is that the DOs should be enforced by the courts and they should not look behind the issues. That is a confidence issue. It is important that the RTB retains the confidence of the Judiciary because otherwise the whole scheme under which it operates could fall apart.

I have a short and simple question. Has Mr. Dunne ever had the experience of being a tenant and paying rent to a landlord? Has he ever had the experience of being a landlord and collecting rent from a tenant? If he has had either of those experiences, how did he find it?

Mr. Tom Dunne

Luckily, I am of a generation of people who tended to move away from home and into their own accommodation. I was lucky to be able to do that. I was never a tenant.

Members of my family are tenants. I recently accompanied my son to London to try to find accommodation for him because he is doing a master's degree over there. I had an interesting experience marching around London and looking for accommodation. He is now paying rent. That is my nearest emotional engagement with being a tenant.

I have never been a landlord. Going back to what I was said earlier, despite my engagement in the property business, one thing I learned early on was that being a landlord is not for the faint-hearted. I am not sure if I want to be a landlord or not. I made the decision not to be. In the property business, one can see when property values are going to go up and there were times when many fellas told me to get involved and buy something. I chose not to.

I call Deputy Ó Broin. I am conscious that this meeting is due to run until 2 p.m. and that we have five witness groups to talk to. We might keep this second round of conversations brief.

I have three quick supplementary points. I would add a note of caution to Mr. Dunne's optimistic view of the real estate investment trusts, REITs, on two grounds. First, there is a growing body of evidence here and internationally that where a real estate investment trust, REIT, purchases tenanted properties, there can be an even greater insecurity because it wants to get those tenants out and replace them with a more lucrative set of tenants.

That is something we need to be very concerned about.

More importantly, given the very generous tax benefits of real estate investment trusts or Irish Collective Asset-management Vehicles, ICAVs, not just here but internationally, there is growing evidence to suggest that their involvement in the rental market, particularly those that are more short-term in nature rather than the older longer-term pension fund investors, can lead to real affordability problems. That is something we are seeing in big cities. I mention that as a caution.

On security of tenure, in section 34, we have to make a decision at some point about whether we want amateur or professional landlords. I often use the following comparison. If I get into a taxi and halfway through the journey, the taxi driver stops the car asks me to get out because he has to go to pick up his daughter, nobody would think that was normal but that is what we allow landlords to do. They can enter into a tenancy agreement, but halfway through that tenancy agreement they can ask one to leave because they want to look after a family member. I understand why that was done when it was done. The difficulty is that it incentivises a lot of semi-professional accidental landlords. Many of those landlords should not be in the market but we need them to stay. At some point, however, we need to have a conversation about what it means to be professional landlord. There is a level of regulation and certification that applies a taxi driver or a door person but that does not apply to a landlord. I ask the witness to think about that.

If the budget allocation for the Residential Tenancies Board, RTB, is €500,000 shy of what was requested, does the witness know at this stage what will not be covered by the €500,000 that has not been provided? Are there things the RTB wanted to do with those funds that will not now be possible because the Government has only allocated €2 million rather than €2.5 million?

Mr. Tom Dunne

I do not know the answer to that question. I will be asking that question.

On the security of tenure issue, I am not sure that kind of analogy is the same here. The original legislation was constructed to ensure that there is nothing in the marketplace that stops a landlord offering a tenancy for 20 years or 30 years, or whatever. The tenancy can be as long as the landlord and tenant choose. I, as a landlord, can offer a person a house for 21 years or for the rest of the person's life and we could agree a rent. There is nothing in the legislation to prevent us from agreeing a fixed rent for the rest of the person's life. That is an institutional thing in the marketplace. A very important point to remember is that if one takes on a lease, one takes on a liability and a contract to pay the rent until it is over. It is a complex one. There is a culture in this country that we rent for a short time and not for long time.

Is this a culture or a consequence of a legislative framework?

Mr. Tom Dunne

We could have a debate about that. One could go down the road of influencing that through the tax or social welfare systems, better than dealing with it through legislation in the RTB. This is an open question. There is certainly nothing in the law that prevents anybody in this country from renting an accommodation to a person for his or her life or for 21 years. That is not prevented by the legislation. As to whether it would happen or not is a separate question. It does not happen in the marketplace. If one is going to take on a liability like that, one might as well take on a mortgage, if one can get one.

I call Deputy Casey now.

We must equally admit that a significant portion of the rental sector is working properly. From today's debate, one would get the impression that it is completely imploding and not working.

I return to the amateur landlords, as Deputy Ó Broin has described them. In fairness to Mr. Dunne's contribution, he made the point that the commercial landlord is more tuned in, more aware and is watching for things, and is mindful if the rent not coming in. What the commercial landlord, however, does not do, that the amateur landlord does, is that it does not have the same relationship with the tenant. The RTB has said that it is critical that there is a relationship between the tenant and landlord, so that when there is a crisis with the tenant, sympathy can be expressed, or if there is an issue, they can work things out. That does not necessarily work in the commercial field but it works with the amateur or accidental landlord. I do not want it to be seen that we are critical of the accidental landlord and that we want to move wholesale to the commercial model. They have a significant role and the majority of them are doing their job and behaving correctly as landlord and towards the tenant.

Mr. Tom Dunne

Absolutely. Over the years, I found while looking at rental sectors in different countries that there is not one model for all countries. They are very different. I have yet to come across a country where there is not a private rental sector with amateur landlords. There are always amateur landlords and they complement other systems. I cannot see a situation arising where there will not be a role for the private landlord. The Chairman is correct that they fulfil a role in the marketplace and sector that needs to be encouraged.

I thank Mr. Dunne. I wish him the best of luck as chairperson designate.

Mr. Tom Dunne

I thank the Chairman.

I hope that he is surrounded by as complementary a team in his role as I am in my role as Chair here. It is important work and as a former renter for eight years, I am acutely conscious of the RTB and its work. I wish Mr. Dunne and his board the best going forward and thank him for his submission and time today.

Sitting suspended at 12.16 p.m. and resumed at 12.18 p.m.