I thank the Chairman and members of the joint committee and would like to begin by introducing the committee to the chairman and senior management of the Private Residential Tenancies Board. The chairman of the board of directors is Mr. Tom Dunne who was chairperson of the Commission on the Private Rented Residential Sector which reported in July 2000. He is also head of the school of real estate and construction economics at the Dublin Institute of Technology. I am the director of the Private Residential Tenancies Board and accompanied by four assistant directors. Ms Carmel Diskin has responsibility for registrations and the enforcement of registrations; Mr. Frank Gallagher has responsibility for disputes at mediation and adjudication stages; Ms Kathryn Ward has responsibility for tribunals, the enforcement of determination orders and judicial reviews and Ms Máire O'Mahony has responsibility for our finance, human resources and ICT sections.
The Private Residential Tenancies Board was established in September 2004 under the Residential Tenancies Act 2004. Its functions are to maintain a national register of private rental tenancies, provide a dispute resolution service, conduct research and advise the Minister on policy matters that impact on the sector.
It is important to recognise that the Private Residential Tenancies Board has replaced the courts for most landlord and tenant disputes. Prior to this, tenants very rarely had the financial means to take a landlord to court. The Residential Tenancies Act represented a significant change in the private rental sector in that it sought to strengthen the rights of tenants and support a more professional approach by landlords, resulting in a better developed and regulated private rental sector. For the first time the Act placed many aspects of the landlord and tenant relationship on a legal footing. In what had been a relatively unregulated sector the Act introduced a structured approach at a detailed level. For example, it introduced security of tenure for tenants, with the introduction of four-year tenancy cycles after an initial trial period of six months. It sets out a list of explicit obligations on both landlords and tenants. It regulates the circumstances in which tenancies may be terminated, sets out the notice periods which increase with the length of tenure that must be observed by both landlords and tenants and prescribes the format the notices take. It addresses the issue of security deposits and the circumstances in which they can be retained. All aspects of the functions of the board and its role in dispute resolution are set out in detail.
Given the fundamental change the Act has brought to the private rental sector, it is not surprising that the Private Residential Tenancies Board has faced considerable challenges in its first five years in operation. It has taken some time for both landlords and tenants to become familiar with their obligations. Demand for the board's services is increasing year on year.
I will take the committee briefly through each area of operation. At the end of the statement we will take any additional questions members may have on particular aspects of our work.
On registrations, as of the end of May, there were 217,276 tenancies registered with the Private Residential Tenancies Board. This figure represents 106,981 landlords and 373,975 tenants.
Extracts from the register are available on our website. A copy of the register is made available to each local authority twice yearly to assist them in their responsibilities with regard to inspections and to enforcement of minimum standards in rented accommodation.
The standard registration fee is €70. Landlords are given one month within which to register, after which time an additional late fee of €70 also applies. A composite fee of €300 is payable where multiple units in one building are being registered at the same time, within the time limit and by the one landlord. The fees have not changed in line with inflation since the PRTB was established in 2004.
Since April of 2009 four sevenths of the registration fees is retained by the PRTB to defray operating costs. Previously this was set at two sevenths. The remainder of the registration fee is allocated to the local authorities, on foot of specific payment directions by the Department of the Environment, Heritage and Local Government, to meet the cost of inspections of private rented accommodation. To date we have paid €10.6 million to local authorities and we understand, from the Department, that almost 48,000 inspections have been carried out since the PRTB was established. It should be noted that the PRTB has no policymaking or operational role in regard to the inspection of rental properties as this is a local authority function, as is the enforcement of the new building energy rating, BER, system.
The PRTB actively pursues landlords for non-registration, within the constraints of the resources available to us. We follow up on information received from a variety of sources including the Department of Social and Family Affairs, the local authorities, members of the public and elected representatives. The steps being taken by the PRTB are in accordance with the provisions of the Residential Tenancies Act 2004 and, in particular, sections 144 and 145. They include the obligation to issue notices to landlords of the dwellings in question, and the prosecution of offenders for non-compliance with the registration requirement. To date the board has issued more than 6,700 landlord first notices and 3,400 landlord second notices. A further 1,300 solicitors' letters were also issued and as this generally ensures compliance, we have had to proceed to prosecute in just one case.
The committee will be aware of some criticism of the length of time it takes to register a tenancy with the PRTB, at present 14 weeks. Registration is currently a manual process and is very labour intensive. The PRTB computer system does not have the technical capability at present to provide on-line registration and we have employed agency staff to manually input registration forms. A further difficulty is that up to 33% of registration forms which we receive are incomplete. Each of those forms must be followed up individually with the landlord, since the Act prescribes the information which we require.
The year 2008 was particularly challenging for registrations. Part 4 of the Residential Tenancies Act 2004 provides that tenancies must be re-registered where they have existed for four years. The first four-year cycle expired in August 2008, and to date the PRTB has issued more than 76,000 reminder letters to landlords reminding them of the need to re-register tenancies. This has resulted in a significant increase in the number of tenancy registration applications received. The volume of forms received by the PRTB tends to average about 500 per day. However, during the four months from September to the end of the year, the average volume of forms received each day increased substantially and reached more than 1,000 forms per day for some weeks. This very substantial increase in registration has placed a considerable burden on the staff in registrations and has increased backlogs significantly. It has also affected the rate at which the PRTB can lodge fee income.
The PRTB's ICT strategy provides for web-based, on-line applications to register and on-line payment of fees. The necessary legislation to allow the PRTB to introduce on-line registration has been included as part of the Housing (Miscellaneous Provisions) Bill. Our request for tender is published on the eGovernment website. We hope that on-line registration, when introduced in early 2010, will provide the solution to the current problems in the registration area.
The Private Residential Tenancies Board replaces the courts in the majority of landlord and tenant disputes. Any registered landlord, and all tenants, whether registered or not, can apply to have a dispute processed by the PRTB. We offer three dispute resolution mechanisms. After mediation or adjudication the outcome can be appealed to a three-person tribunal. After a tribunal has reached a determination the outcome can only be appealed on a point of law to the High Court. The fee is €25 for mediation or adjudication and €40 on appeal to a tribunal.
However, as we offer a quasi-judicial service and since our orders must ultimately be enforced through the courts, we must adhere to the same standards as the courts in terms of fair procedures. The Residential Tenancies Act 2004 is quite complex and very prescriptive in terms of the procedures to be followed in our dispute resolution service in regard to respecting parties' rights regarding 21 days' notice of hearings, submitting evidence, allowing adjournments in special circumstances, allowing 21 days to appeal and so on. We must ensure that our staff and our adjudicators adhere strictly to, and do not exceed, the powers which the Oireachtas has granted us. We may be subject to judicial review in any case.
Another daily challenge we face is tracing respondent parties to a dispute, either tenants who have moved on or landlords who are operating through agents. If we do not have a current address we cannot serve the case papers on the parties. The board of the PRTB is seeking legislative changes to facilitate greater data exchange with other State bodies on address details and to require greater co-operation by agents in providing landlord details.
Demand for our adjudication services has grown from 899 applications in 2005 to 1,646 in 2008. Last year 69% of cases were referred by the tenant, 28% by the landlord and the remainder by third parties. The three largest categories of cases are deposit retention at 43%, invalid notices of termination at 15% — both of which involve complaints by tenants — and complaints relating to rent arrears by landlords at 19%.
Deposit retention complaints have consistently been the single largest category of cases submitted to the PRTB for resolution. Deposit cases increased from 35% to 43% of all cases between 2007 and 2008 and represented nearly 61% of tenants' cases during 2008. In 76% of such cases during 2008, it was determined that landlords should refund to the tenant part or all of the deposits which they had retained.
The PRTB has emphasised repeatedly that deposits are the property of tenants and not landlords and must be returned to tenants in a timely manner. Deposits should only be retained, either fully or partially, where rent or utilities are owing or for damage which is in excess of normal wear and tear. The PRTB is concerned at the serious consequences for tenants, particularly for those on low incomes, of landlords not refunding deposits. Deposit retention cases also contribute to the workload of the PRTB. If landlords returned deposits in a timely manner, significant PRTB resources would be freed up to process other categories of cases.
The PRTB management has recently written to our independent adjudicators reminding them of their discretion to award damages to tenants in addition to ordering the return of wrongfully withheld deposits. Equally, tenants are required under the Act to pay their rent in full and on time, even if there is an ongoing dispute with their landlord. However, the PRTB is aware that some tenants may exploit delays in the PRTB's dispute resolution mechanisms to remain in rental accommodation where they were not paying rent. Earlier this year the board of the PRTB authorised management to prioritise for hearing all cases where it was alleged a tenant remained in a property without paying rent after being served with a valid notice of termination, which amount to 5% of all cases. The board also authorises the prioritisation of alleged cases of illegal eviction and serious anti-social behaviour for early hearing.
Unfortunately, backlogs of cases awaiting hearing developed during the earlier years of the PRTB's existence due to insufficient staffing to meet the emerging work demands at the time. Adjudication processing times have generally improved over the past year from 12 to 18 months to six to 12 months. Up to the end of May 2009 we have set up 624 cases for hearing, an increase of 65% over the same period in 2008. In addition, a significant number of cases are being settled and withdrawn prior to adjudication hearing. However, we appreciate that our processing times are still not satisfactory from our clients' perspective.
We have introduced a range of measures to improve processing times including requiring adjudicators to hear three cases per day for the same daily fee, increased initial screening of disputes applications and earlier contact with case respondents to encourage parties to settle. We have also introduced the ongoing streamlining of internal procedures and processes, including processing targets for staff, a pilot scheme using paper-based adjudications, where appropriate, and a phone queries management system to allow staff to focus on the core work of setting up cases for hearing.
As a result of these initiatives, the PRTB's dispute resolution service has, for the first time, been able to process more than the 30 to 40 new cases it receives each week. We should be able to achieve significant reductions in case processing times and backlogs over the next year, if current staffing levels are maintained. We currently have a backlog of 1,157 dispute cases awaiting hearing. We anticipate that it will take 18 months to work this down to the stage where we will process cases within the five to six month processing time we aim for in the corporate plan.
On tribunals and enforcement, it must be emphasised that cases will take longer to process if either party exercises their automatic right of appeal to a PRTB tribunal. Cases that proceed to tribunal can often be quite complex and it is the client's last opportunity to seek a satisfactory resolution of the dispute. Following the tribunal, parties can only appeal on a point of law to the High Court. The demand for tribunals has also greatly increased. There were 156 appeals to tribunal in the first six months of 2009 compared with 106 for all of 2008. Processing times for tribunals are now approximately two to three months, down from five to eight months, of which 21 days is a statutory notice period.
It is the policy of the PRTB to enforce all of our determination orders. Sections 9 and 126 of the Residential Tenancies Act empower the board to initiate a criminal prosecution in the District Court against a party who fails to comply with determination orders made by the PRTB. Section 124 of the Act permits the initiation of civil proceedings in the Circuit Court to obtain an order directing the non-compliant party to comply with the terms of a determination order.
When we are informed that there has been a failure to comply with a determination order, the PRTB's policy, in the majority of such instances, is to pursue a criminal prosecution against the non-compliant party. It is our experience that the parties are most likely to comply before court proceedings are necessary. However, for over-holding cases, civil proceedings are taken to allow the landlord to regain possession of the property.
From 2005 to date the PRTB has initiated 456 enforcement cases. We have secured in excess of 48 criminal convictions and 46 settlement agreements with 38 civil convictions. A number of cases are still pending. To date we have had 20 judicial reviews in respect of our operational procedures and have been successful in all cases defended. Demand for enforcement has increased substantially in the past year. To date in 2009 we have had 140 enforcement applications, compared with 99 for 2008. Unfortunately, in a small number of cases enforcement can be prolonged where, for example, a tenant remains in a property in spite of a determination order to vacate. Both a court order and the services of the sheriff are required to effect the eviction in such circumstances. Delays of this nature are unfortunately outside the control of the PRTB.
The PRTB has 40 permanent members of staff. This was increased from 26 last year because the PRTB took over responsibility for functions such as ICT, finance, HR and corporate services. At present we also employ 25 staff members from an agency and these staff members are mainly engaged in work relating to the registration process.
We published a corporate plan for 2009 to 2011 last autumn. Each section prepared work programmes for 2009 which were approved by the board of directors. Performance management was formally introduced in January for all staff members and they have all signed up to individual targets. The PRTB has been proactive in engaging with our stakeholders. We have quarterly meetings with tenant and landlord associations and have addressed a number of public meetings of both.
ICT is critical to the future success of the PRTB. At present we do not have on-line facilities, all evidence submitted is maintained on paper files and we do not have a case management system. There is no ICT linkage between the areas. We published an ICT strategy in October 2008. We recruited a very experienced ICT manager from within our core staff of 40 people in December. We have just gone out to tender on the procurement of the new system. The ICT steering committee is chaired by a principal officer from the Department of the Environment, Heritage and Local Government and its membership includes experienced ICT experts from the Revenue Commissioners, the Local Government Computer Services Board, LGCSB, and the National Treasury Management Agency, NTMA. The NTMA has also provided us with independent peer reviews of our process re-engineering and our RFT, free of charge. The LGCSB is providing us with disaster recovery and we are also negotiating other support from it. We hope to provide on-line registration in early 2010 and on-line dispute applications and case management in mid-2010.
The review of the Residential Tenancies Act, which is the responsibility of the Department of the Environment, Heritage and Local Government, will also be extremely important in terms of learning from the experience of the past five years and streamlining our processes. The current position is that the board of the PRTB has been invited by the Minister of State with responsibility for housing and local services, Deputy Finneran, to give its views on potential changes to the Act. The board is currently considering this and will be making proposals to the Minister by 10 July. We understand that the Department hopes to have preliminary outcomes from this review by the autumn of this year, at which point it will commence the legislative process, as necessary, following on from that review.
That concludes our statement. I thank the members for the opportunity to address the committee and we will now take any questions they may have on the operation of the PRTB.
