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Seanad Éireann debate -
Friday, 2 Jul 2004

Vol. 177 No. 9

Residential Tenancies Bill 2003: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

I thank the House for taking this debate today. When I was here on 10 December last, I referred to the Bill, which I had hoped to bring to this House before now. It has had a very lengthy passage through the Dáil and while it has been substantially amended in that process, it is the better for it. The reforms it will bring to the private rented sector remain true to the report of the commission on the private residential sector.

The Bill provides for a modern, efficient, user-friendly and largely litigation-free legal framework for the private rented sector. Key provisions relate to improved security of tenure, restriction of rent to market level, clarification of obligations of tenants and landlords, and the establishment of a private residential tenancies board to operate a State-subsidised statutory dispute resolution service, a new tenancy registration system and to undertake a number of other key functions and reform of certain legal provisions that have been problematic. It is a progressive measure that will benefit both landlords and tenants and will help to promote the development of the private rented sector and underpin an enhanced role for it in meeting housing needs in the future.

There were a large number of amendments to the Bill on Committee and Report Stages in the Dáil. Many of these were made in response to comments by interested parties subsequent to its publication and by Deputies during the various Stages in the Dáil. The changes have strengthened and improved the Bill by giving the provisions greater clarity and addressing concerns about some aspects of their operation. While progress has not been as fast as we would have liked, the passage of the Bill will make a real difference to many people's quality of life.

Apart from one exception, the amended Bill that Senators will consider implements the recommendations of the private rented sector commission as accepted by Government. I am aware of a document circulated to Members of the Oireachtas by the Irish Property Owners Association, and also of a recent media article by its chairman. Both of these allege that the Bill is imbalanced and inconsistent with the commission's recommendations, which is unfair and untrue. The Residential Tenancies Bill, like the commission report on which it is based, is balanced and contains provisions of benefit to both landlords and tenants. It sets out the respective obligations applying to both parties in a tenancy. It introduces a measure of security of tenure that provides greater protection for tenants while at the same time preserving a landlord's right to recover possession of his or her property should a reasonable need arise. The content of this Bill mirrors to a remarkable degree the chapter of the commission report containing its recommendations for reform of the sector. The Bill obviously has to be much more explicit in detailing how exactly the provisions will work in practice and that requirement has resulted in a rather lengthy piece of draft legislation containing 202 sections. While there is greater detail in the Bill, the substance of its content is exactly what was recommended by the commission for the sector. Therefore, not only does it reflect Government policy, but also the considered conclusions of the representative group of 18 people appointed to that commission for their expertise on the private rented sector. Notwithstanding that fact, the Opposition tabled a large number of amendments that sought to overturn some of the commission's recommendations, particularly on all aspects of the security of tenure measure.

Many commentators on the private rented sector would like to see legislation introduced that dramatically tilts the balance of advantage towards tenants. While I appreciate their motives and good intentions, such an approach does not take account of the bigger picture. First and foremost, the changes we make must be consistent with the Constitution. Second, they must benefit the sector as a whole. If the reforms deter investment or motivate existing providers to leave the business, there will be an inadequate supply of accommodation for renting and that is not in the interests of existing or future tenants. Therefore, I did not amend the Bill more substantially in favour of tenants because I believe that such a move would be detrimental to their long-term interests. The commission and this Bill have tried to find a balance between the two sides and I feel we have achieved it.

I intend to adhere to the commission's recommendations. That is why it is disappointing to see the misrepresentation recently put about by the IPOA which is well aware that this Bill, apart from the notice periods applying to tenants, is based on, and faithful to, the private rented sector commission's recommendations. I will outline the provisions of the Bill shortly and Senators will notice that it does not make any changes to the taxation code, which is another criticism of the IPOA. The commission recommendations on tax incentives accepted by the Government were implemented as far back as the Finance Acts 2001 and 2002. At the time it was felt that this legislation would be produced soon after that, but it has taken longer than we hoped. The prior implementation of those tax benefits, together with the fact that taxation measures are always dealt with in annual Finance Acts, is the reason no such measures are contained in this Bill. I know the IPOA has also raised the wider issue of the tax treatment of rental income as unearned income, but that is also outside the scope of this legislation.

I will now summarise the provisions of the Bill in sequence and outline briefly the main changes since its publication. Part 1 contains the standard preliminary and general provisions such as citation, commencement, offences and interpretation. Section 3 defines the scope of the Bill. It does not apply to social or owner occupied housing, formerly the rent controlled sector, long occupation equity tenancies, business or holiday lettings. It is my intention that all of the provisions of the Bill will be brought into operation at the earliest possible date. There will be a phased commencement over a period of approximately four months and I assure the House that this process will start soon after enactment and be front loaded as much as possible.

Part 2 outlines the minimum tenancy obligations applying to all landlords and tenants, regardless of whether there is a written tenancy agreement or lease. Regarding the maintenance of rented dwellings, it imposes an explicit requirement on landlords to maintain the structure and the interior to the standard that applied at the beginning of the letting. There is a corresponding responsibility on the tenant to remedy any disrepair, other than normal wear and tear, attributable to the tenant's acts or omissions. The obligations applying to tenants include a prohibition on anti-social behaviour. There is an explicit onus on landlords to enforce tenant obligations. Failure to do so will enable another party, who can show that he or she is adversely affected by a tenant's non-compliance with the tenancy obligations, to refer a complaint to the board concerning the landlord's failure to enforce.

Part 3 deals with rent setting and reviewing. As recommended by the commission, it provides that the rent may not be greater than the open market rate and may normally only be reviewed, upward or downward, once per annum. Making market rent the legal benchmark has been criticised by commentators representing tenants who would prefer a form of rent regulation or rent control introduced. I know that rent regulation versus market rent was the subject of intense debate within the commission. The overwhelming majority of the members considered market rent to be the most appropriate system having regard to the negative aspects of rent control, especially its impact on new supply, on the maintenance of existing rented stock and avoiding the front loading of rent increases on future tenants.

Rent control has been tried before, both here and elsewhere, and it has done more harm than good. Rent regulation also prevents tenants from capturing the benefits of falls in market rates. The Central Statistics Office recently released figures indicating that average rents have decreased by 7.5% since March 2002, while some estate agencies have reported a greater decline in rents. This fall can be attributed to the huge increase in housing supply generally and to the provision of tax incentives for investment in private rented accommodation to which I have referred. It is only right and proper that, as the policies pursued by this Government result in an increased supply of accommodation, tenants should reap the harvest of falling market rents.

Part 4 of the Bill provides for a new security of tenure regime based on four year cycles. The first cycle is called in the Bill a Part 4 tenancy and each subsequent one is called a further Part 4 tenancy. Once a tenancy has lasted six months, the landlord will only be able to terminate during the following three and a half years when one of the six grounds listed in section 34 applies. Those grounds are a failure by the tenant to comply with the obligations of the tenancy; the dwelling being no longer suited to the accommodation needs of the occupying household by reference to the number of bed spaces; the landlord intending to enter into a contract to sell the dwelling in the next three months; the landlord requiring the dwelling for own or family member occupation; the landlord intending to refurbish substantially the dwelling such that vacant possession would be required; and the landlord intending to change the business use of the dwelling.

Arising from commentators' concerns that the section 34 termination grounds as drafted were vulnerable to abuse by landlords, I expanded on the detail of the operation of three of the grounds as follows: need for occupation by landlord or a family member, change of use, and substantial refurbishment. This change merely requires a tenant, who keeps the landlord updated with his or her contact details, to be offered first refusal of the dwelling should it again become available for re-letting after refurbishment or within six months of a change of use or family member occupation. I emphasise that this expansion of the operational detail is not a departure from or dilution of the commission's recommendations as to what grounds should at all times entitle landlords to recover possession of their dwellings. These changes in the detail will, however, strengthen the provisions against possible abuse.

The tenant will be free to terminate the tenancy at any time. There is no question of four year tenancies being forced on tenants nor does the Bill require all tenancies to be governed by a lease. The four year tenancies will repeat in successive cycles. Part 4 does not apply to section 50 student accommodation or to employment-related lettings. I acknowledge that the security of tenure provision might be considered relatively modest in the context of what is available in some other jurisdictions. However, it is a major advance on our present situation of virtually no protection for the majority of private sector tenancies.

In the Dáil, the Opposition tabled a large number of amendments to the security of tenure measure, including ones to reduce the six-month qualifying period to three months or one month, or to delete it entirely. Other amendments sought to delete some or most of the section 34 grounds for recovery of possession by the landlord and to delete the four-year cycles. I rejected those proposed changes, which would have totally undermined the system recommended by the commission. Part 4 still rigidly reflects the security of tenure measure as proposed by the commission. I have expressed the hope, however, that in time it will be possible to build on that measure as the new system becomes established and accepted.

Part 5 deals with the process of terminating a tenancy. In the future, except where a fixed-term tenancy expires, termination must always be by a formal notice, regardless of who is terminating or what is the reason. Section 66 details the notice periods that apply in two tables. Table 1 applies to landlords, and the notice period ranges from 28 days in the first six months to 112 days where the tenancy has lasted more than four years. Table 2 applies to tenants, and the period ranges from 28 days in the first six months to 56 days where the tenancy has lasted two or more years.

Originally the notice periods for landlords and tenants were the same as recommended by the commission. However, very strong arguments were advanced by all sides on Committee Stage in the Dáil against the longer periods applying to tenants, so I agreed to bring forward an amendment reducing the period for them. Once a decision to terminate the tenancy has been notified to the other party the Bill allows the parties to agree a shorter notice period. Shorter notice periods also apply in cases of failure to comply with tenancy obligations or serious anti-social behaviour by either party. A longer notice period may also be given but may not, in the case of a tenancy that has lasted less than six months, exceed 70 days. That limit was introduced to prevent possible abuse of long notice whereby landlords might be able to let accommodation for reasonably long periods without allowing tenants to qualify for four-year tenure.

The dispute resolution process is outlined in Part 6. Any dispute that arises between landlords and tenants covered by the Bill, including those arising from or relating to provisions of the Bill itself, will be dealt with by the private residential tenancies board established in Part 8. The overall limitations applying to the board's functions will be €20,000 in damages and, in the case of arrears of rent or other charges, twice the annual rent or €20,000, whichever is greater, but subject to an overall maximum of €60,000. Cases involving monetary amounts greater than those will still have to be taken through the courts. However, the board should be in a position to deal with the vast majority of disputes that may arise. The intention is to replace a court system that is frequently confrontational, expensive and difficult to access with a non-confrontational, affordable, user-friendly and accessible mechanism.

The dispute resolution process prescribed in Part 6 consists of two stages. Stage one is either mediation or adjudication, depending on the preference of the parties, and will be confidential. If the dispute is still unresolved, stage two is a public hearing by a tenancy tribunal of the board. Mediators and adjudicators with experience in landlord and tenant issues and a background or skills in conflict resolution will be appointed to panels and assigned to cases as they arise. Each tribunal will consist of three members drawn from the dispute resolution committee of the board. The final decision in respect of each dispute will be published in a determination order of the board. Those are binding, subject to appeal to the High Court on a point of law. The enforcement of determination orders that are not complied with will be through the Circuit Court in accordance with section 124. The interim board, which is currently constituted on a non-statutory basis, has made great progress in assembling a strong panel of mediators and adjudicators.

Part 7 contains the registration procedure that is replacing the 1996 registration regulations. Landlords are being required to register details of all tenancies with the private residential tenancies board instead of local authorities. The board needs those data for its information provision function and also to deal with certain aspects of tenancy disputes. The administrative burden imposed on landlords by that requirement is being kept as light as possible. The requirement to register arises only where a new tenancy is created, so in many cases that will mean registering no more frequently than every four years. While the rent amount must be updated in the register before a rent review takes effect, that notification will not require to be accompanied by a fee. Other relevant changes that occur in the details of the registered tenancy need only be notified as part of a rent review update.

Landlords will no longer be required to register their units with local authorities, since the relevant details will be transmitted by the board to the authorities. Chapter 7 deals with the exchange of registration data between the board, local authorities and the Minister for Social and Family Affairs and with the transfer of data from the board to the Revenue Commissioners in respect of a stated landlord. The registration fee is €70 per unit, and a composite fee of €300 is available where a number of units in one property are being registered at the same time. It will be revised in line with inflation. I provided for some exemptions from the fee requirement in section 134 on Committee and Report Stages in response to concerns voiced by the IPOA about fees. However, I see no scope to make any further concessions on what is a fully tax-allowable letting expense.

I am confident that a high rate of registrations will be achieved under the new system. Late registrations will attract a fee of €140 per unit, and compliance will be rigorously pursued by the board. Failure to register is an offence and will attract a fine of up to €3,000 on conviction. I hope and fully expect that landlords will comply with their legal obligation to register their tenancies with the board. There are benefits from doing so in that a registered landlord will have access to the board's dispute resolution service, and disputes about when a Part 4 tenancy commenced or concluded will be less likely to arise. Unregistered tenancies should come to the board's attention in a number of ways, including tenant dispute referrals, tenants querying non-receipt of a registration number from the board, lists of rent supplement recipients from the Minister for Social and Family Affairs, local authority inspections, etc.

I will be emphasising to the board the importance I attach to its achieving a high level of compliance with the registration requirement. Local authority functions under the standards and rent books regulations will continue. I am anxious to see a much more proactive approach by authorities to enforce those requirements. That will happen as disputes dealt with by the private residential tenancies board relating to sub-standard accommodation will be referred to the local authority. In addition, the distribution of funding to authorities from the registration fee income will be related to their level of enforcement activity in the previous year. More needs to be done in the area of rented accommodation standards, and when we get this legislation up and running I will be directing attention to the development of a strategic approach to eliminating sub-standard rental accommodation, including the formulation of good practice guidelines in the area.

Part 8 establishes the private residential tenancies board to perform the functions listed in section 151 relating to the resolution of disputes under Part 6, the registration of tenancies under Part 7, the provision of policy advice, review of the operation of the legislation, research and information provision regarding the sector. While many of the provisions in this part are standard and apply to most statutory bodies, there are also specific provisions arising from the board's dispute resolution role. An interim board has been in place for some time and has contributed to the development of this legislation, particularly as regards the dispute resolution process. I would like to record my gratitude for the work of the interim board members, and in particular, its chairman, Mr. Tom Dunne, who also did a marvellous job of chairing the commission on the private rented sector.

Part 9 contains a number of miscellaneous and consequential amending provisions to the housing Acts and the landlord and tenant Acts. A particularly important provision is the abolition in five years time of the entitlement to apply, for the first time, for a long occupation equity lease under the Landlord and Tenant (Amendment) Act 1980, with a renunciation option during that five-year period. It provides for injunctive-type applications for serious emergency disputes coming before the board, for example imminent danger to life, illegal evictions etc. Section 197, as amended on Report Stage in the Dáil, substantially strengthens the Housing (Miscellaneous Provisions) Act 1997 dealing with anti-social behaviour in local authority estates. It extends the excluding order powers of authorities to tenant purchased houses in these estates.

In summary, this Bill brings overdue protection for tenants in terms of rent reviews and much needed security of tenure and gives landlords and tenants an effective means of resolving disputes that arise between them. These measures should encourage greater investment and professionalism in the sector and should make renting a more attractive housing option so that the sector can play a greater role in meeting the housing needs of the State.

The Bill is the core element of the Government's programme of action to reform and develop the private rented housing sector. Other initiatives will be pursued to help develop the sector and enhance its role in meeting housing needs. For example, I expect that the Government will shortly decide on new arrangements to meet long-term housing needs involving direct engagement between local authorities and the private rented sector. The Bill will help this development by providing the legal framework for an efficient, vibrant and responsive private rented sector and by reforming aspects of landlord and tenant law that have been a deterrent to institutional investment.

As was the case with the commission report on which it is based, this is a comprehensive, progressive, and well-balanced Bill. It balances the rights, responsibilities and interests of rented accommodation providers and of rented accommodation occupiers. Although it introduces a greater level of regulation of the sector, I am satisfied this is the minimum required to enable it to function efficiently and that unnecessary bureaucracy has been avoided. The Bill gives tenants a better deal, without making unreasonable demands on landlords — something that could depress new investment in the sector. It will promote greater stability in the private rented sector, which, according to the last census, accounts for over 141,000 households or some 11 % of total housing stock in the State. The Bill will be a platform on which future and further development of the sector can be built. I commend the Bill to the House.

I welcome the Minister here today for the debate on this long overdue and important Bill.

Following yesterday's guillotining of Report Stage in the Dáil and despite the amount of time given over to it, the Bill now appears before us with 37 Government amendments having been passed without debate. Most of these amendments are substantial and involve considerable additions and changes to the proposed legislation as originally introduced. The resulting Bill now contains approximately 11 additional pages, the provisions of which have not been debated by the Dáil. It is imperative that this House now prevents this Bill being rushed through or merely rubber stamped.

The well known saying, "An Irishman's home is his castle", presents a picture of permanence and prosperity. However, for many in the rental sector, accommodation is far from castle-like and they do not have security of tenure. In many cases they are subject to the whims and financial greed of unscrupulous landlords. Those at the mercy of the private rental sector have suffered the effects of a system in chaos, which is still not regulated 100 years after the rights of tenants on the land were first established.

Tenancy in Ireland is a concept fraught with emotion and bad memories. On a "better late than never" principle, it is imperative that measures are put in place to copper-fasten the rights of tenants while at the same time protecting those of property owners. While the rights of the tenant are highlighted, it is important that landlords are granted similar and equal legislative protection. If it is passed as well structured water-tight legislation, encompassing rights and responsibilities on both the tenant and landlord sides, this Bill could revitalise the private rented sector.

We could however, be forgiven for assuming that the tenancy Bill is not high on the Government's priority list given the three year delay since the 2000 commission on the private rented sector called for its reform, along with the unprecedented delay in bringing the legislation before this House. Government indifference to the problems of tenants in the private rented sector is allied to its disgraceful neglect of local authority housing. As the last five Celtic tiger years brought affluence for some, house prices and rents soared but the output of local authority housing remained static. Some 10 % of our population are housed in local authority dwellings compared to 28% in Northern Ireland.

Under existing legislation, tenants in the private rented sector were only given security of tenure when they had lived in a dwelling rented for a period of 20 years. This left them with a lack of security comparable to Victorian times and earlier. Rack-rents and absentee landlords are never far from our minds as history repeats itself.

In the period from 1946 to 1991, the years for which census data relating to housing are available, there was a steady decline in the number of households in the State availing or able to avail of private rented accommodation. In 1946 the number of households was 173,000; in 1961 it was 116,300; in 1971 it was 96,900; in 1981 it was 90,300; and in 1991 it was down to 81,400. Given these figures urgent action must be taken to ensure the growth of this sector, which has shown an overall increase over the past three years, to guarantee its future development through strict regulation.

The four main functions of the private rented sector are mainstream housing for those who have traditionally lived in private rented accommodation; housing for young, mobile, newly formed and reformed households; employment based accommodation; and as a residual tenure of last resort.

Demand in Ireland for rented housing is a product of the interaction of a range of factors, with demographics playing an important part. The demand for rented housing is influenced by household preferences, determined by household size, number of children etc., the price of rented as against owned accommodation and consumer income levels.

The last three years have seen a significant rise in demand for private rented dwellings but this has been accompanied by shrinking supply, with enormous rent inflation in areas such as Dublin and stiff competition for accommodation. This has in no small way been exacerbated by the Government's lamentable delay in implementing its proposals for decentralisation. Rents in Dublin have risen by an average of 15% per year since 1999 resulting in even the most basic of properties being out of the reach of low income groups.

In the UK, demand in the sector has been revitalised by government policies which facilitated deregulation, strengthened landlord rights, modified security of tenure for tenants and provided attractive investment opportunities through tax incentives. Throughout Europe, affordable private rented dwellings, particularly smaller housing units, are in short supply. There is a particular shortage of student accommodation with 13 out of 30 university towns in Sweden experiencing chronic shortages. This problem is mirrored every autumn in Dublin as students queue for scarce accommodation in a financially out of reach market.

As throughout Europe, young adults in Ireland are increasingly looking to their parents to provide their first independent home. Many young people anxious to buy their first homes have become locked into a vastly over priced rental sector and are unable to even save for a deposit on a house. Within this legislation, taking into consideration current trends, it is imperative that we define the respective rights and obligations of landlords and tenants. Security for tenants, rent setting practices and mechanisms for dispute resolution must also be copperfastened.

As published, the Bill ignores important factors essential to the proper regulation of the rented sector. The loopholes with regard to the payment of tax by landlords must be firmly closed. According to the tenants' rights group, Threshold, four out of five landlords are not registered for tax. If landlords are obliged to register all tenancies with the private residential tenancies board, the tax man must be able to access the board's records to close the net on tax evaders.

Is the Government planning to operate a tax amnesty for landlords and is it perhaps planning to rectify some problems in the private rented sector whilst turning a blind eye to others? As the register of landlords and tenancies will not be open to the public under the Freedom of Information Act it appears we will never know. So much for transparency and the law being seen to apply to all on an equal footing.

The Minister's plans to allow tenants who have been renting a property for more than six months to have the security of remaining there for four years whilst admirable in theory has an easy get-out clause for the landlord who will be entitled to recover possession for specified reasons. As I have stated in the past, this is open to abuse. I do not believe this legislation will guarantee security of tenure for tenants despite what the Minister of State said this morning.

This proposal is contrary to the substantial tenant demand for flexible leasing arrangements. The imposition of such rigid guidelines fails to recognise the complexity and variety of the residential letting market. A survey by Millward Brown IMS on behalf of the Irish Property Owners' Association in May 2002 states that 65% of tenants would prefer to negotiate individual flexible leasing arrangements. This legislation will, unfortunately, damage the sector it is purporting to support. Some of its proposals are welcome and long overdue but its preoccupation with centralised regulatory control could be its undoing.

The proposal for compulsory registration and deregistration of each tenancy will be a bureaucratic nightmare. Whilst local authorities should know the location of rented properties in their areas the proposed method of accountability is cumbersome and overly bureaucratic. If countries such as Germany, where 70% of accommodation is in the private rented sector, can function without such a system for the resolution of disputes, so too can Ireland.

The Government has, in this legislation, juggled the rights of tenants and landlords, perhaps benefiting nobody in reality but it has categorically failed to take the necessary steps to increase the supply of rental accommodation in Dublin. The Commission on the Private Rented Sector recommended that investors be treated in the same way as any other business for tax purposes. However, for whatever reason, the Government was not prepared to take this essential step. Bringing investors back into the housing market must be a priority if we are to increase the supply of rental properties in Dublin.

The Commission on the Private Rented Sector proposed several tax reforms on inheritance tax, CAT, pension provisions and other standard business relief. While the legislation goes beyond the commission's recommendations in many areas, we have yet to see any action on the tax reform proposals.

I welcome the Minister of State. This is one of the most important housing Bills to come before this House. While we have waited some time for this legislation, it is most welcome because it provides landlords and tenants with an effective means of resolving disputes, which arise between them. The Bill also addresses some of the long-standing deterrents to investing and residing in rented accommodation. I hope, as the Minister of State said, it will lead to greater professionalism within the sector.

I am fearlessly on the side of the tenant having been a tenant during my years as a student. The Minister of State mentioned student accommodation, an issue about which I would like to speak. I do not believe the matter is one which comes within the remit of the Department of the Environment, Heritage and Local Government alone. The lack of student accommodation in Galway city arises every year. I am sure other Members may speak of similar experiences in their counties. Students wishing to attend university or the institute of technology experience great difficulties trying to obtain accommodation. I welcome that under the Bill tenants will not be tied to a four year tenancy agreement. This problem is worsening every year. Perhaps the universities and institutes could get involved in assisting the student population.

Galway city is the most popular for students not only in Ireland but in Europe. There are many tracts of land in Galway city that could be used to provide more campus accommodation under the various lease-back arrangements or public private partnerships. Yet, students must queue for basic information on where they might get accommodation. It is also important we deal with the issue of substandard accommodation. Along with the large number of students attending university or the institutes in Galway, there is also a large student nursing population with overseas students constituting a large number in that regard. That issue has not up to now been discussed in the Dáil or Seanad.

Another issue, which arose on the doorsteps during the campaign on the local elections was that of absentee landlords. We can legislate until the cows come home about the responsibilities of landlords, but my experience in Galway has taught me that it is difficult to resolve disputes if one cannot find landlords.

The Minister of State's comments about the construction of houses were important. He mentioned that 58,000 houses were built in 2002 and he reminded the House that housing output increased last year. It is important that we provide housing in the rental sector. I ask the Government to examine places where there are long waiting lists. I am proud that 96 houses were built by the end of 2003 in Tuam, in my home county. The Minister of State knows about the houses in question, which are in the voluntary and social housing sectors. Such projects are of great benefit to those on the Tuam waiting list. I have seen figures which indicate that one might have to wait for three years to get a house on the east side of Galway city and four years to get a house on the west side of the city. It is clear that the city has grown. Despite the increases in housing output, people are finding it difficult to find somewhere to live. Students and people looking for employment face real difficulties because the waiting list in the city is so long. The housing situation has improved significantly in other parts of Galway.

I join the Minister of State in complimenting Mr. Tom Dunne, the chairman of the interim board that was put in place after the commission was established. The Minister of State spoke about the lack of information about the private rental sector, which is one of the issues that will be dealt with by the commission.

The Irish Property Owners' Association has made a ridiculous argument about the bureaucracy of registration. If people cannot register and pay the small fee of €70 per tenancy, they are avoiding the situation. The Minister of State said a small number of people has registered. According to figures from the Department of the Environment, Heritage and Local Government, 26,982 houses were registered in 2003. The 2002 census of population indicated the number of private rented dwellings almost doubled from 71,000 to 141,000 between 1991 and 2002. Just 20% of privately rented dwellings are registered, therefore. The board and the Department need to ensure we have a higher level of registration. The IPOA has said that the registration provisions are unnecessary bureaucracy. I do not know why it is afraid of registering properties at a cost of €70, or €300 for a multiple unit. When one takes into account the tax break, it amounts to 20 cent per week. There is no excuse for not registering the accommodation.

The board will also have to deal with the important issues of research, monitoring, policy, advice and information. I hope that will happen. The Minister of State mentioned the important role of dispute resolution. It would be unfortunate if matters had to go to court. The board has a major role in resolving certain issues by getting involved. The board will act like university and IT authorities, which give people lists of accommodation. We do not know enough about the private rented sector. The job done by universities in providing names and addresses of accommodation providers could be done usefully by the board.

I saw on "Oireachtas Report" last night that there is some difference of opinion about the six-month rule and the four-year cycle. I hope we can resolve the issue. It is important to state that tenants will not be tied into the four-year rule. The good balance we want to achieve in the Bill is provided by the period of grace of six months given to landlords. Property owners argue that there should be more flexibility. Perhaps I am fearlessly on the side of tenants, but I think there should be more flexibility and more investment. I agree with Senator Bannon, who said we need more investment to ensure more housing is provided in the rental sector or for people who want to purchase. I would hate people to be forced to purchase early because they are in rented accommodation.

This is a very welcome Bill and I hope it can be passed quickly. The establishment of the commission and the board by the Minister of State is a good move. We have time to deal with the issues that exist. I welcome the Bill's approach to the questions of early intervention and dispute resolution.

I welcome the Minister of State. I welcome the debate on the Bill in the Seanad, at long last. The Minister of State knows the Bill emerged from a report that was given to the Government in 2000.

It might have been 2001.

It took four years for the Bill to be brought to the House. The report, in turn, emerged from one of the three Bacon reports on housing in the late 1990s. It has been a slow process. I regret that it has taken so long to establish the private residential tenancies board. I welcome the fact that progress is finally being made.

Some speakers have suggested that many illegal and corrupt landlords are intent on making life hell for their tenants, but I do not buy into that argument. It is clear that a minority of people is bringing down the entire private rented sector. I am aware, however, that a significant number of people is buying property and renting it to others for reasons relating to pensions. A friend, who is a similar age to me, has two houses because he does not have a pension scheme. We have seen an explosion in the number of people buying houses and becoming landlords because many people do not have pensions. We should not come down heavily on such people.

Everyone had a defined pension scheme and an occupational pension scheme 20 years ago, but many people do not have such schemes anymore. They need to purchase second and third houses to fund their pensions. We should bear in mind that we are not talking about a massive wealthy class of people. Many of the people in question are in the market to make money for their retirement in 20 or 40 years time. They often make good landlords. I do not buy into the notion that the absentee landlord is the majority example. We all know there are terrible examples of landlords in the private rental sector, but we need to make distinctions.

The Government's acceptance of the first Bacon report was the worst thing to happen in the private rental sector. The effect of that decision was to remove the tax deductibility on mortgages in the sector. The Minister of State knows that rents shot up within a year and the Government had to do a U-turn. We need to ensure there is flexibility in the sector. Currently, one of the best ways to get value for money in the Dublin property market is to rent. We must encourage people to stay in the market and to be professional and committed to this as a business interest because the more people who come into it, the more rent costs are driven down. It is better value now to rent a property in Dublin than it was 12 months ago because there are more properties available to rent. We should not lose sight of that.

Approximately 10% of our total housing stock — the Minister of State may correct me if I am wrong — is in the private rented sector, approximately 10% is in the social sector through local authority housing departments, and 80% of houses are owner occupied. There must be a more rapid expansion of the private rented sector to provide options for people who want to save for a number of years to buy their own house, but they want some assurance in that regard.

The problem in the housing market, particularly in the private rented sector, is that leases have been available only on a year to year basis and not on a medium or long-term basis. One had to negotiate the lease for 12 months and re-negotiate it at the end of that period. In other western European countries, particularly Holland and Belgium, most people rent on a three or five year basis. That is reassuring for landlords because they know the rent they will get for that period, and they can factor inflation into that and so on. That is a more favourable system compared with the one here. If I rent in the business sector it is on a ten year basis. Why can we not have the same medium to long-term renting in the private sector? I welcome the provision for this in the Bill and that an arbitration procedure will be put in place in the new board which will sort out the cowboys and the messers on the tenant side. A significant number of tenants are messers, and that must be recognised in the course of this debate.

It must be remembered that not everyone wants to buy a house. It can be more tax efficient in the long term for someone to have less of their total disposable income caught up in paying a monthly mortgage. We must encourage this sector to be flexible and long-term in its thinking and to have mechanisms in place to deal with problems and conflict. I welcome the fact that we can now have longer-term leases in the private rented sector.

Another major problem is the lack of accountability on the part of landlords who are not registered. It is important that local authorities take their task seriously in that regard. In South Dublin County Council someone who is doing three other jobs is also charged with the responsibility of ensuring that the list is in place for the private rented sector. That is ridiculous for a county with perhaps 225,000 houses. The local authorities must get real on this issue. Each housing department should have a special section dealing with the private rented sector, compliance and registration. I ask the Minister if, in his discussions with the Dublin housing authorities, he would tell them to take their responsibilities more seriously than they have done to date in terms of coming down heavy on unregistered landlords. We all know that the reason landlords are not registered is because they are not paying their tax. In that regard we must ensure that landlords register.

In a community where 20% or 30% of the total housing stock is in the private rented sector, the people who bought houses and are committed to that area are peeved at the condition in which some landlords leave their houses and the way tenants behave, sometimes on a daily basis. We must assure those communities that they have a right to make a complaint to an authority about a house and that landlords should take some action in respect of that. The only way that can be done is to have a proper registration process. I am in favour of registration, regardless of the cost; the cost is secondary to the registration. It is important that people know who owns these houses and that the landlords take their obligations seriously.

I was listening to the Minister on the monitor in my office and I was interested to hear him talk about section 197, an amendment to the Housing (Miscellaneous Provisions) Bill 1997 introduced by the then Minister with responsibility for housing, Deputy McManus. I made the argument, and I am sure the Minister's constituency is similar to my own, that there is a major need in Dublin to enforce exclusion orders. As the Minister knows well, before 1997 landlords could not get rid of tenants who were causing havoc in the private rented sector. Decent people in local authority housing stock buying their houses, doing the best for their children and trying to make good of an area had to deal with problem tenants whom the council refused to acknowledge in terms of the hassle they were causing in a community.

I had not realised this was part of the Bill, and perhaps the Minister can explain it further, but section 197 seems to suggest that not only will local authority tenants come under this section, which refers to the original Act, but that anyone involved in a shared ownership, tenant purchase or affordable housing scheme will also come under it. I welcome that because we could shift people in our council housing stock but we could not shift those to whom we had given substantial grant aid in order to buy their own house.

They are not evictions but exclusion orders.

It is more or less the same. If the court makes an exclusion order, the tenant must leave the property. Does the Minister have information on the number of exclusion orders in Dublin since the Act came into force in 1997? I get a sense from some of the authorities that they are not taking their responsibility seriously. The most important function I can fulfil as a member of a housing authority or a council official is to give some security to decent, law-abiding citizens and one of the powers contained in the Bill is the right to exclude people who are causing untold harm in a community. Perhaps in the course of his reply or on Committee Stage the Minster will outline the number of exclusion orders that have been issued. I am glad he has extended in this section the right to exclude people to whom we have given subsidised housing because we must come down heavily on those who are making life a nightmare for decent people. The courts must be given the power to make those exclusion orders.

This is a long Bill. I hope we will have time to go through it in detail on Committee Stage. I welcome it, given that it is being brought forward four years late but better late than never. I wish the new tenancies board well. We must move to professionalise and incentivise this sector and to see it as a long-term business interest while at the same time ensuring tenants are given their rights. More people will see housing in the private rented sector as a longer-term option if it is a market that is well regulated and well run.

I, too, welcome the Minister of State and I warmly welcome the publication of this Bill, which has been a long time coming. The genesis of the Bill was the commitment given in Sustaining Progress to reform and develop the private rented sector. As a result of that the commission was set up, and it has done excellent work.

One word would sum up the Bill, and that is "balanced". It is balanced in that it takes into consideration the obligations on both sides of the landlord-tenant relationship. It is balanced in the duties of care put on both sides and in the effort it makes to sustain the private rented sector in encouraging people to become involved in it, either as tenants or investors. It must be remembered that it is the investors and the people renting out these properties who sustain the market and make premises available.

Most of us have spent a good deal of time in advice centres or clinics dealing with problems about tenant-landlord relations experienced by landlords and tenants alike.

I warmly welcome the Bill which updates and bolsters existing legislation. It protects both sides and gives an opportunity for disputes to be heard in a fair, impartial and expedient way. It also provides encouragement to people to become involved in the sector. I agree with Senator Brian Hayes that, in future, the rented sector will become more important and more relevant in terms of the population's housing needs. Although we are a country with a culture of home ownership we must examine the alternatives that are available. In most European countries the norm is for people to have long-term lease arrangements. The policies followed in recent years have provided an opportunity for people to own their homes. Banks of serviced land have been freed up and we have provided other incentives for people to buy their own homes.

A number of factors have influenced the property market. The current economic climate has led to an increased dependency on the rental market. Wider social issues must also be taken into consideration, such as what constitutes a family unit. Another factor is the increased mobility of people, particularly young people, in terms of employment and where they live. The population profile has changed enormously in recent times due to immigration and this has also had an impact on the provision of accommodation.

The Bill tackles a number of important areas, especially that of anti-social behaviour. As Senator Brian Hayes pointed out, section 197 deals comprehensively with this area. Dublin City Council is, perhaps, the biggest landlord in the country. I congratulate it on the improvements made in housing stock and how it deals with anti-social behaviour. Difficulties still remain in certain parts of the city. The legislation will provide local authorities with an opportunity to address particularly troublesome areas.

I also welcome the setting up of the private rented sector unit in the Department which will help to focus the minds of professionals on the implementation of the legislation, the allocation of resources, and draw on the expertise that is already available.

Senator Bannon's comments on the current housing position leads me to conclude that his scriptwriter is some two years out of date. The recent slowdown in the private rented sector is a direct result of the measures taken in recent years. As recently as this morning we had confirmation that the housing market has slowed down. This is due to decisions taken in the past two years by the Government. Supply has also increased which, in turn, has relieved pressure especially on first-time buyers who, because of previous high rents, had to move earlier than they would have wished. In some parts of Dublin the reduction in rents is as high as 20%. This has all contributed to the slowdown in the market. We must continue the implementation of such policies as these have proven to be effective.

Among other things, the Bill ensures security of tenure and puts obligations on both tenants and landlords regarding behaviour, the provision of adequate conditions and so on. The establishment of the board is welcome and the commission has done an excellent job. The Bill is closely based on its recommendations on which I congratulate Mr. Dunne and his team. The Department has also worked closely with the Attorney General's office and the Department of Justice, Equality and Law Reform on the Bill, which I am sure will prove to be most effective.

Any of the agencies working on the ground, and I have had dealings with Threshold, would say that when disputes arose between tenants and landlords there was no recourse other than to the courts, which, as we all know, is extremely confrontational and can prove to be an expensive business. At the end of the day, the only people who win in these cases are the lawyers. In addition to dispute resolution, the tenancies board will be responsible for matters such as research and the gathering of information.

I welcome the registration of rented accommodation. Absentee landlords have been a problem in every community in Dublin. Certain pockets of the north side of the city, such as the North Circular Road, have changed from being primarily owner-occupied to consisting almost totally of rented accommodation. The Bill will have greatest effect in areas such as this.

In addition to dispute resolution, the gathering of information in this area is crucial. The Department of Social and Family Affairs funds a significant number of rented dwellings in urban areas by means of the rent supplement. It is essential we have as much information as possible as, at the end of the day, taxpayers are paying these rents and it is crucial they get value for money.

Other welcome developments in the Bill include the minimum obligations imposed on both sides regarding issues such as maintenance, insurance and security of tenure. Insurance in the rented sector was always a problematic area. Anti-social behaviour is dealt with, as well as rent obligations, including rent reviews, arrears, and deposits. These matters are all dealt with comprehensively in the Bill.

In his opening remarks, the Minister of State, Deputy Noel Ahern, referred to the six week period in which a tenant can be asked to leave a rented premises for no reason. This is a fair and balanced provision. As other Members have said, the vast majority of landlords are ordinary, decent people. Due to the buoyant economy many ordinary families have invested in second properties, purely for investment purposes. The number of landlords owning one property has increased phenomenally in recent years. I do not agree that these properties have been bought for pension purposes. People now have the opportunity to invest to send their children to college and so on. We must keep control in this area.

The vast majority of people move into rented accommodation for a period of at least four years. Ten years ago we carried out a survey of apartments in Dublin city which showed that the average stay was just under two years. That has changed recently as apartment dwelling has become more accepted as a long-term option rather than a stopgap measure for a couple or young person who intend buying a house at a later stage. I consider a four year cycle for rent agreements to be appropriate.

I congratulate the Minister of State who has taken a particularly personal interest in the Bill. The experience he has gathered in the area he has served for many years is evident in the content of the legislation. I congratulate him on its introduction.

I will be brief and confine myself to commenting on one or two sections of the Bill. My colleague, Senator Bannon, will deal with many of the technical provisions on Committee Stage.

I welcome the Bill, which is long overdue, and the establishment of the private residential tenancies board. I am glad the issue of registration is being dealt with in a significant way in the Bill. I raised this matter on many occasions during my period of service with my local authority. Surveys carried out throughout the country indicate that only 25% of rented properties are registered. That is absolutely disgraceful. When one is called to an area in one's constituency where anti-social behaviour is taking place or where there are properties which are in an appalling condition and when residents ask one to make representations to the local authority to discover who owns a particular property, in many instances the authority only takes action at that stage to uncover the identity of the owner.

Currently we do not have a proper registration system and I am glad this matter is being tackled in the Bill because action is long overdue. In areas in Waterford that are near to our wonderful institute of technology, many properties are let out as student accommodation. While some landlords are excellent in terms of the upkeep and maintenance of their properties, there are others whose properties one could pick out when canvassing during the recent election campaign because the grass was uncut or wheelie bins were just dumped anywhere. People who live near such properties are tying to keep their houses in good condition. That matter arose on many occasions on the recent canvass. One feels sorry for ordinary, decent people who have lived on estates for 20 or 30 years and who are now contemplating moving because of the condition of nearby houses. The properties to which I refer are in such condition because of the unscrupulous nature of the landlords who own them whose only motivation is greed. Decent landlords ensure their properties are kept in a proper way and well maintained.

Section 12 of the Bill deals with repairs to the interior and structure of properties. However, I am not satisfied that it is sufficiently strong in terms of obliging landlords to keep their properties in good condition and ensure that the grass in the garden is cut, that they are free of litter etc. Landlords must take more responsibility in this regard. I urge the Minister of State to give consideration to this matter.

We are all aware of the problem of anti-social behaviour on the part of some tenants. I refer to people who hold parties and have music blaring at all hours of the night. Gardaí are usually called to take action but the same thing happens night after night. These are the bread and butter issues in respect of which local representatives are called upon by residents of estates to see if something can be done. The Bill presents us with an ideal opportunity to take action in this area. I again urge the Minister of State to give consideration to this matter.

I welcome the provision dealing with the making of exclusion orders against council tenants to which Senator Brian Hayes referred. Will such orders also apply to the private rented sector? Senator Hayes referred to exclusion orders against council tenants and people in subsidised housing but will these orders apply to tenants in the private rented sector? If not, why?

The matters to which I have referred are those about which I am most interested in respect of the Bill. Decent, honest residents who look after their estates and who have worked for their communities are not impressed by the fact that some properties on those estates have been allowed to fall into a bad state of repair. From their point of view, their neighbourhoods are falling into disrepute as a result and the value of their own properties is being devalued.

I welcome the Bill and I hope the matters to which I refer will be copperfastened and strengthened. I also hope that the Minister of State will address my concerns in his reply.

I welcome the Minister of State and I congratulate him on taking time to draw up this legislation. He considered the position that applied four years ago when the Bacon report emerged, when there was an escalation in house prices and when many people were obliged to avail of rented accommodation. He looked at what was available during that period, a time when there was no standardisation and when landlords had a field day. I know many landlords who are fine people and who respect their obligations and responsibilities and tenants' rights. However, there is also a number of cowboys who feel no sense of obligation to their tenants or to resolving any difficulties which may arise.

There is nobody better placed than the Minister of State to deal with this matter. While a member of the city council some years ago, he saw the problems as they first arose. He is, therefore, aware of how this situation should be handled. In my view, any Minister or Minister of State charged with introducing legislation should have a background which will allow them to deal with problems as they arise. I am delighted that the Minister of State is guiding this Bill through the House.

Two of the main matters with which the Bill deals are those of security of tenure for tenants and the issuing of notices to quit. In the past, I lived in accommodation in Rathmines, Ranelagh and Ballsbridge. These areas were comprised of a maze of flats and appalling bedsits. There were beautiful old houses with four or five bedsits in one room. The conditions were appalling and tenants lived in squalor. The position was similar in other university cities throughout the country where the same sort of accommodation existed. There were no controls in place and landlords could charge as much for rent as they saw fit and dismiss people from their accommodation if they so wished. Whenever they were called upon to fix leaking pipes, for example, there was no question of this being done. The conditions to which I refer obtained until recent years. However, the situation is improving. Efforts have been made, even by landlords, to introduce fairness to the market. I welcome that sort of thinking, which is also incorporated in the Bill.

Rent increases used to depend on an ad hoc arrangement and depended on supply and demand. If one returned to Ranelagh or Rathmines in August after the summer holidays, one would see queues a mile long of people seeking accommodation. Landlords were, therefore, in a position to do what they liked. They could snap their fingers and decide to charge whatever amount of rent they desired.

The Bill provides for security of tenure for an initial period of six months up to three to four years. Some flexibility should be shown in this area, particularly after the experience of the elderly residents of the Mespil apartments. They were owned by an absentee landlord and when the apartment blocks were sold, many elderly residents on fixed rents were suddenly faced with colossal rents. Many public representatives got involved in the issue and I am glad it was resolved. Security of tenure is an important provision incorporated in the Bill.

Most of the apartments in my area are rented with only six owner occupiers who have been subjected to awful treatment and anti-social behaviour. The open spaces have not been maintained with overgrown trees blocking sunlight to the apartments. As the landlord is an absentee, he cannot be requested to cut back the trees. Tenants are also involved in anti-social behaviour, such as blowing their car horns at 3 a.m, while the owner occupiers can do nothing to seek recourse. I ask the Minister of State to reinforce the provisions, such as exclusion orders, for anti-social behaviour. How best can the system be improved to put exclusion orders on individuals in private as well as local authority accommodation, as Senator Brian Hayes pointed out?

The public must be informed of what the Government is doing through this legislation. I want to tell the people of the apartment block I referred to about the security of tenure and notice to quit provisions of the Bill. They are good provisions but I do not know if any of the media will carry reports on this legislation.

The Senator must have got rapped on the knuckles about this at the doorsteps recently.

It is on the printing presses as we speak.

The Minister of State must inform the public of the good work he is doing. The notice to quit provision should be more flexible. I recall one case of a woman with two children having to leave the family home. She moved into private accommodation and placed her children in the local school. However, as the landlord needed the house back for family reasons, the woman was given notice to quit, forcing her to change her children's school and environment. I ask the Minister of State to incorporate a more sensitive side to the landlord tenant relationship.

Is the Senator not happy with the Bill?

This is good legislation but the public needs to be informed. A new breed of young landlords see their properties as their pension schemes. Those landlords, as well as tenants, will welcome the various structures and boards provided for in the Bill. The legislation is balanced and very fair to all parties concerned.

I welcome the Minister of State and this legislation as it has been required for some time. One of the difficulties in legislating for this area is dealing with the competing interests of landlords and tenants. The welcome primary result and worthy objective of the Bill is preventing disputes winding up in the courts. Historically, property ownership is at the heart of the Irish family. I recently noted that EU statistics indicated that Irish owner occupier levels are higher than in the rest of the Union. This is clear from our history but it is changing rapidly as Irish society moves quickly to the European norm of tenancy of private dwellings. This highlights the urgent necessity for this Bill.

Private landlords provide a valuable function, as Senator Brian Hayes mentioned. A supply in volume of rented accommodation of a reasonable and required standard is essential and will be beneficial to economic performance and society in general. Members referred to the spectacular results for private houses in the building programme. Anything that can be done to encourage building for rent is desirable. Obviously, there is a taxation aspect to this and the Minister of State correctly pointed out that it would be better dealt with in the budget. He is correct that the Irish Property Owners' Association's concerns in this regard will be dealt with in the Finance Act.

I am a member of the All-Party Oireachtas Committee on the Constitution that recently published a report on property rights. It did not deal with all the issues raised in this Bill. However, one issue covered was the need for transparency in property dealing. A record of house sales transactions is essential to know where prices stand. The committee undertook a study of the Australian market where there is more transparency in property dealing and auctioneers are regulated. Senator Brady made the point that rent and house prices need to be known. The Minister of State gave a figure on the reduction of private rent levels in the last two years which is confirmed by auctioneers and estate agents. How can this figure be verified when the registration system is not properly enforced and statistics are not available? When passing legislation, we hope it will have beneficial results but its enforcement does not match our expectation.

I remember there were great expectations at the time that the registration of properties with local authorities would lead to much more transparency and meaningful control of landlords. That did not occur and we intend to rectify that, but the legislation is only as good as its backup and enforcement. It is essential that we have an arbitration system to avoid the need to go to court.

The issue of anti-social behaviour, raised by Senator Cummins and others, is important. The tenancies are arising in well established estates where the owner occupiers are dying or going into nursing homes. Families are forced to rent their accommodation to fund the nursing home costs and that again raises the issue of property being treated as a pension fund. Difficulties arise in such settled areas where young people move in, who might like to party, stay up late and play music loudly, and although there is nothing wrong with those activities, the effects on elderly neighbours can be very disturbing. The degree to which regulation can be applied in that area is questionable but the issue needs to be addressed.

The Minister of State rejected the proposition of rent control and I agree with him. It is for the market to decide and the market level is the one which should operate. The experience in the past two years, during which rents decreased, underlines that point. Rent control can be a two-edged sword and where it has been used in the past, the experience has not been happy. The system of reviewing rents is important and in the event of a dispute there should be some reference points or arbitration system. Such a system is well established in England with regard to agricultural tenancies and I have some experience in that regard. It is possible there to resolve disputes through arbitration. Allowing the market to decide, and not establishing rent control, would solve the problem Senator Cummins raised regarding the standard of some accommodation. He spoke of how when canvassing he could readily identify, as we all can, some of the rented accommodation within housing estates. If the market is operating well and the supply is good, that problem will be solved. If there is competition, landlords will be required to keep their properties in a reasonable state and the same will apply to tenants.

I wish the private residential tenancies board well. It is a step in the right direction and I applaud it. I note what was said earlier about Mr. Dunne and I acknowledge the work he has done in this area. The question has arisen of imposing an administrative burden on landlords. It is reasonable and not unduly rigorous to expect people who are deriving an economic gain to be required to keep certain records. Marine legislation was before the House in the past few days and it was suggested that leisure boats should be registered. If such boats are to be registered, surely houses should be registered, as a minimum requirement.

Senator Ormonde raised an important issue regarding long-term tenants. I accept that there should be a type of apprenticeship period, which is allowed for in the Bill, where after six months it should be possible to continue the tenancy for a further three and a half years and that there should be mechanisms there to terminate those tenancies on either side if necessary. There is, however, a difficulty with people in very long-term tenancies, elderly people who have looked after a property very well over an extended period, have always paid their rent on time and who, because the property is about to be sold, find they are out on the street, so to speak. That is not acceptable. I do not underestimate the difficulty of dealing with this issue but I know from agricultural practice in England that certain safeguards have been built in to ensure that very long-term tenants enjoy certain rights. That arrangement is worth considering.

I also welcome the new arrangements proposed regarding the long-term needs of the sector and the partnerships between the local authorities and the private rented sector. There are benefits to be gained there. It is easy to say that local authority housing has reduced and thankfully it has because at least the economic performance of the country has allowed a great many people to buy out the houses in which they were previously tenants. Many local authority houses which initially had tenants are now owned privately and the estates where they are situated have benefited as a result.

This is a good Bill, for which I applaud the Minister. I hope it will have the desired effects. The fact that it was greatly amended is to be welcomed. It is a measure of the flexibility of the Minister and the ability of the Government to listen to reasoned argument and improve the legislation accordingly.

I thank the speakers for their comments and general support for the measures. It is clear that most people support the general thrust of the Bill and its general objectives. People will naturally take different points of view on the issues involved in this legislation. We have tried to achieve an agreed balance, which is difficult. I do not know if the Bill is perfect — there is probably no perfection in the world — but it is a major advance from where we currently stand. Before taking a step in any direction, one must consider one's current position. We all know that the rented sector situation in Ireland is not as good as it is in many European countries.

The Bill is also part of an ongoing process rather than a once-off measure. The legal aspects of the private rented sector will not be allowed to stagnate as happened in the past because the board is now there with a specific remit to observe and report back on several aspects of the legislation, especially if it believes any part of it is not working out as intended or is being manipulated by one side or the other. We are conscious of the need to take a balanced approach and to bring all sides with us. That is what we have been trying to do.

When drafting legislation one cannot foresee every eventuality. It is only when it comes into effect that one sees how things will work out. If refinements or changes are needed, they can be made. Many of the issues raised by Senator Bannon, such as security of tenure, are addressed in the Bill. Some of his other points related to rental information which may have been a little out of date. He referred to the decline in the private rented sector up to 1991 but he did not mention that in the past couple of years there has been a substantial increase.

Due to tax changes.

Yes, and there are many new landlords, of whom Senator Brian Hayes spoke. The Senator said there has been a shrinkage in supply and inflation of rents. However, figures from the Central Statistics Office and the auctioneering profession indicate that the opposite is the case. Senator Dardis asked where do we get our information. Much of our information has been received voluntarily from different groups in the sector. The board will have a responsibility to monitor, control and report on the issue in a more formal way. We receive much good information, but it is given voluntarily rather than because of legal necessity.

Senator Bannon said that four out of five landlords are not registered for tax. This relates to registration with local authorities and not to tax. I accept that the registration system with local authorities, which was introduced in the mid-1990s, has not been satisfactory. Under this legislation, the board will deal with the issue. I was a member of a local authority when the measure was introduced. I thought it was good legislation at the time, even though it was introduced by the Opposition which was in Government at the time. I thought local authorities would have actively followed through on the measure because it would have raised money. However, they have been very tardy and did not allocate sufficient staff to deal with the matter. They followed up on complaints.

Senator Cummins said that much of the management, control and enforcement is done at local level, which will continue. Up to now, and in the future, if houses in Waterford or anywhere else are registered but are not conforming to the standards or regulations, local authorities will be responsible for enforcement of them. However, they will not be responsible for registration. Much of this enforcement can only take place at local level. It is up to people to make complaints. In future, the board may be able to deal with many complaints and work with local authorities, who will be driven by the board rather than being left to their own devices.

There is no question of the board hiding data from the Revenue Commissioners. I am aware there is a perception that landlords do not pay tax. In recent years, tenants could claim tax credits. Co-operation between the different agencies has improved greatly. One hears the same stories about people receiving rent allowances and so on. It is not our job to chase landlords for tax. That is the job of the Revenue Commissioners, who have done marvellous work in recent years on several other fronts. We will co-operate fully with Revenue if they seek information in this regard.

Senator Bannon referred to clauses allowing landlords to take possession of houses. We have tightened the possibilities in this regard. All landlords do not have 50 houses. Many of them have just one house which they may need to get back for personal or family use. There must be a clause in place to allow them to do so. However, we have tightened the regulations in case landlords might use the excuse that they need the house for their daughter, which was not the case. We have tried to tighten the regulation whereby if the landlord does not house his daughter or son, the original tenant would have first refusal if the house goes back on the market.

Senators referred to anti-social behaviour. A standard regulation in the private rented sector is that tenants must conform to proper behaviour. If one does not do so, he or she can be evicted. The landlord can make a complaint to the board. The board will then issue a determination order and, if found guilty, the tenant will have to go. This was always possible but one had to go through the courts. It was an expensive, slow and cumbersome process which was not satisfactory, particularly for elderly landlords.

Can the local authority housing department now take action in court against a tenant in the private rented sector just as it can against someone in its own housing stock?

No. I will come to that point. We are talking about the private rented sector at present. If a tenant is unruly or guilty of anti-social behaviour, the complaint will go to the board. If the board finds the tenant guilty, it can ask him or her to leave. Senator Hayes will be aware that very often the problem in local authority estates was that local authorities had the power to follow up and chase tenants. Since the mid-1990s, they had powers to issue exclusion orders and so on. I do not have the statistics on how many of them worked. I have seen cases being dealt with satisfactorily in the courts. However, some local authority officials who pursued cases through the courts have been frustrated as a result of exclusion orders which may exclude Joe Soap for 300 yards, which may be meaningless. One needs to be excluded from, for example, Clondalkin, Finglas, Tallaght or wherever. The regulation is working well, but there is frustration that some of the judgments have not been sensible.

There has been a problem with people who claimed to be tenant-purchasers whom we could not touch. I have been examining this aspect to see what could be done. The matter has been examined by the Attorney General and his ruling is included in the section, which extends the interim excluding order provisions of the 1997 Act to occupants of tenant purchase houses. It also extends the local authority's power to refuse to sell a house to persons likely to engage in anti-social behaviour under the affordable and shared ownership scheme. It is not as satisfactory as we might have expected. It allows local authorities to pursue and take out exclusion orders against occupants of a tenant purchase house, not the owner. The father and mother might be the owners, but the occupants could be anyone else in the house, including adult sons or daughters, visitors or friends. It allows exclusion orders to be extended to the occupants of tenant purchase houses. It does not relate to affordable and shared ownership houses; it just allows local authorities to refuse to sell affordable or shared ownership houses to these people.

There is one proviso. We are talking about estates, which include a mix of local authority rented houses and tenant purchase houses. The local authority must have some interest in rented local authority houses in the estate. This power cannot be used in estates in places like Tallaght, which was developed in the late 1960s, where everyone has bought out the houses. The local authority must have an involvement with some rented accommodation. I am pleased with the advances that have been made. Ownership confers certain rights but it gives local authorities the right to bring in tenant purchasers and put them on notice. Up to now local authorities believed they could do nothing about tenant purchasers. They could have a chat with them, but if they told the local authority to go to hell, it could do nothing about it.

Can ordinary citizens complain directly to the board?

The Senator will have an opportunity to put such questions on Committee Stage.

The answer is yes in the context of private rental. A neighbour could make a complaint about a landlord or tenant even if there was no complaint from the landlord or tenant. The complaint might be about the tenant but would suggest that the landlord is not enforcing the regulations by controlling his or her tenant. Third parties can complain to the board, which might apply most in regard to blocks of apartments.

Does that apply to upkeep?

Upkeep comes under standards which are still the responsibility of the local authority. Following the passage of the Bill, I will reconsider the issue of standards regulations. However, to be fair, different aspects of the housing market have been under huge pressure in recent years. The census completed just before the general election in 2002 showed that the population had increased by 8% over a six year period, an enormous increase of approximately 270,000. I do not think another country could be found with such a significant population increase. Despite the booming Celtic tiger, this has a knock-on effect and puts pressure on all aspects of the housing market. Some landlords have availed of this and rented out accommodation which, in the normal course of events, tenants would not have accepted.

The best cure for low standards is increased supply, which is being achieved. If better supply is available, tenants will not rent bad accommodation but will be choosy and take better accommodation. In some respects, the amount paid in rent allowance is too high and should be more focused and targeted. Good accommodation might be had for €1,000 in one area but for only €500 in another. We are inclined to give out too much rent allowance without it being measured, controlled and focused on standards. However, the best cure for problems with standards is supply, which will be achieved if the level of production can be maintained. Some 78,000 houses were built last year, some of which were bought to provide pensions in the future, as noted by Senator Brian Hayes.

Reference was made to tax incentives, which will be dealt with in the Finance Act. Senator Kitt raised the issue of student accommodation and I accept there is a problem with this every year. I listened to a radio programme from Galway last year on which complaints were made. Some people hyped up the issue which played into the hands of landlords who felt that parents were coming from the country with plenty of money, as have all those from the country.

From those God-awful towns.

I will leave such comments to the Labour Party. However, on the same programme accommodation officers stated there was absolutely no problem and thousands of accommodation places were on their lists. They admitted they could not house everyone on the same morning but asked people to calm down. While representatives of the Union of Students in Ireland sometimes lock themselves to gates or otherwise, this is simply to hype up an issue and allow landlords to put up rents. There is no need for most of the hype and people should calm down as recent tax measures have allowed for many on and off-campus sites, although these would still be at a low level compared to other countries.

The lack of local authority accommodation was referred to by Senators, although I did not fully grasp the point made by Senator Bannon. It is not necessarily bad that there are fewer people in local authority accommodation if that means they are buying out the accommodation previously let to them under the various sales schemes. This is good because they are putting down roots. Whether in regard to a student who will be a high flying consultant in a few years or a person living in a local authority house, accommodation is looked after better if it is owned rather than rented. Counties Longford and Galway were on the list, although I do not have the figures with me. I recently visited some innovative housing estates in Galway which were a mix of social, affordable and voluntary housing. We must compare what local authorities stated they would achieve during their four year multi-annual programmes with the actual housing out-turn. Some have performed marvellously, with increases of up to 130%.

Ours was very good also because the council has been controlled by Fine Gael for the past five years.

It is all about control.

Other authorities have not performed so well and have not reached 50% of what they said they would produce. This was not because we would not give them the money. Some local authority members are very good at criticising the Government and the Minister in the Custom House. However, the results of the four year programmes of some local authorities do not cover them with glory.

Some interesting cases have arisen recently in regard to rent allowances which suggest that rent allowance works towards keeping rents high in parts of Dublin. For example, a person entitled to rent allowance might be charged €1,100 per month in west Dublin whereas a private tenant might get accommodation for €950. In some cases, rent allowance tenants command a higher price. The Minister for Social and Family Affairs had complaints levelled against her because she did not increase the guideline figures for the past two years. However, although I am not telling the Minister what to do, there is an argument for reducing the guideline figures because, in some areas, they are the cause of rents staying up, which was not the intention. Rents should increase and decrease as the market dictates. It is strange that the current information suggests rent allowance is keeping rents high in certain areas. It does not make sense that landlords should seek tenants on rent allowance because they can be charged a higher rent.

I apologise if I must jump over certain points. I referred to exclusion orders. On elderly tenants, the principle of the four year cycle is that they will have security of tenure for four years. While I understand the points made, the landlord has the right to end any agreement at the end of each four your period. If the landlord has an elderly tenant, why would he or she want to end the agreement? Landlords are in the business of making money. If an older tenant has proved him or herself over a number of years to be a good tenant, looking after the property and not causing anti-social behaviour, why would a landlord want to have him or her evicted? The landlord is getting the market rent and will not get any more from a new tenant. Why get rid of a good tenant who is causing no hassle and bring in an unknown quantity?

The old system meant that a tenant had property rights after 20 years. We have moved away from this because landlords would not commit themselves and make the investment. It is a fine balance but, in general and with more supply in the market, there is no need for landlords to rush to get good tenants out. It might take a couple of months to get new tenants in with a loss of rent for that period.

What if a landlord wanted to sell a house?

If they want to sell the house, that right is always there even during the four years, for certain stated reasons. We tightened the regulations to stop the landlord who claims he wants to sell the house or allow his daughter to rent it, but does neither.

What if the person is there for 20 years?

The Minister without interruption.

They receive security of tenure on a four year basis. At the end of that four years, they will start again. Each four year period is a cycle in itself. One does not have any rights at the end of the four years. That is the balance. If we mature as a society and do something better in five or ten years' time, then so be it. Right now, one has no property rights at the end of the four year period, but regains them from four to eight years. It then ends again. No matter how long someone is there, they do not retain property rights.

I hope I have answered the main questions on this issue. I thank the Senators for their general comments and will try to tease out other issues next week on Committee Stage.

Question put and agreed to.
Committee Stage ordered for Tuesday, 6 July 2004.

When is it proposed to sit again?

Next Tuesday, 6 July at 10.30 a.m.