Residential Tenancies (Amendment) (No. 2) Bill 2018: Committee Stage

Sections 1 to 5, inclusive, agreed to.
NEW SECTION

Amendments Nos. 1 and 26 are related and may be discussed together by agreement.

I move amendment No. 1:

In page 7, between lines 29 and 30, to insert the following:

“Amendment of section 12 of Act of 2004

6. Section 12 of the Principal Act (Obligations of landlords) is amended by inserting the following subsection:

“(6) A deposit (howsoever described, being money payable on entering into an agreement for the tenancy of a dwelling and intended to be held as security for the performance of any obligations, and the discharge of any liabilities, of the tenant under or in connection with the tenancy) shall not in any case exceed the monthly rent (or, if the rent is not payable monthly, the amount that the tenant pays in rent as calculated pro rata on a monthly basis) set under that tenancy.”.”.

The amendment speaks for itself. We are trying to ensure that a deposit does not exceed a month's rent. That was always the norm across Ireland and it is only of late that we have seen exceptional increases of up to six months. It is hard enough for people to find rental accommodation without having to face excessive deposits.

I welcome the Bill as it provides greater security and protections to the private rental sector and, for the first time, includes regulations for short-term lettings in Ireland. However, I object to the attempts to rush the Bill through the Seanad and I welcome the change made to the Order of Business.

There was no attempt to rush it through the House. There was agreement last week on this, so let us be fair.

Having tight timeframes means rushing it.

Let us have balance in the debate.

Senator Buttimer is being very sensitive and I have not even started yet.

I ask Senator Ruane not to be too provocative.

The Leader is mumbling under his breath. He should say what he wants to say a little bit louder.

He can say it when I give him permission to speak.

If Senator Buttimer had been here this morning, he may not have lost the vote.

Try not to be provocative, Senator Ruane.

My record of attendance is better than that of most people.

I am just telling Senator Buttimer that his side was short of numbers and it might have won if he had been here.

We are only on amendment Nos. 1 and 26 and we have to get through 26 in total. I ask for Senators to deal with the business.

I was doing so until I was interrupted. The Seanad debates in 2016 with the then Minister, Deputy Coveney, on the Government's last housing Bill were very productive and resulted in actual, tangible changes to the Bill. Many of the flaws in how rent pressure zones were designed, particularly the lack of definition of substantial change in the nature of property for the purposes of an exemption from rent controls, were raised in the Oireachtas at that time. I do not raise this to be party political but to point out that the Opposition has a role in this process too, and that should be recognised in the scheduling of debates.

Amendment No. 26 would require the Minister produce a report on the feasibility of a national deposit scheme and how best such a scheme could be implemented in the context of the Irish housing market. This report would be completed within six months and delivered to both Houses of the Oireachtas. It is an amended version of the amendment tabled by Deputy Darragh O'Brien in the Dáil, so we are hopeful for the support of Fianna Fáil for it today. This is not a new issue and both Fianna Fáil and the Labour Party discussed it extensively in the Dáil. This is an area in which bad landlords gouge tenants and use larger and larger deposit requirements to thin out the high number of people competing for tenancies. They are profiting from people's desperation, and this cannot be justified. It is bad enough for those with the necessary financial means and for whom two or three months' deposit is an annoying expense to compete on these grounds, but for people on lower incomes a two-month deposit requirement is enough to put any potential tenancy out of reach. It serves as a major bar for more vulnerable people competing in the private tenancy market, and those people need our support. We have heard examples from other countries where this works, and while I recognise that a large body of practical work will be needed to implement such a scheme, we need to get on with it.

I recognise that the Minister has committed to looking at this issue and that he plans to bring forward a Bill for pre-legislative scrutiny in the fourth quarter of 2019, but I am concerned by some of his remarks in the Dáil in which he labelled this area as no longer the priority it once was. The Minister has a large and very important brief and the Department works across many policy areas simultaneously. He said in the Dáil that the regulation of student accommodation was a higher priority. I am concerned that this crucial issue may struggle to compete with the other items in the Minister's brief, and I would be reassured if there was a report, with a legislatively mandated timeline, that supported the pre-legislative scrutiny process which the Minister has planned for later this year.

I have deliberately drafted the amendment to ensure that the process would match the policy development schedule that will be under way in the Department. I see this as an amendment that will work with the provisions of the Bill the Minister has set out and in a complementary way to his own work. It would provide major reassurance to us in this House and to Deputies in the Dáil, where this issue came up continually on Committee Stage and Report Stage, that something will definitely be done. Every attempt to provide for it legislatively in the Dáil was rejected because the Minister said he did not want to deal with it in isolation but comprehensively. If he cannot accept the amendment from the Labour Party, this amendment would support that policy development process. This is worth the Minister's acceptance.

I welcome the Minister to the House. The purpose of this Bill is to sort out some of the mess of residential tenancies. I agree with my colleague, Senator Humphreys. We saw the other night that couples today are paying €2,100 to rent a two-bedroom apartment in Sandyford which they could buy with a monthly mortgage payment of €1,350. We are seeing this all over the place. We are also getting reports from tenants that getting the deposit back when they vacate a property is proving to be a problem. My colleague, Senator Ruane, referred to the amount of money that is expected upfront when renting a property. It has gone from a month's rent to two or in some cases three months' rent. This is simply exploitation of people who are desperate to find homes. I am familiar with people who are paying relatively little rent compared with €2,100 in Sandyford. I know a couple who are paying €1,500 at the moment. They are just waiting to be told that the property is to be sold and they must leave. Then come the battles to get back deposits and things like that. My colleagues in the Labour Party have put forward a perfectly reasonable amendment. I support it fully and I ask the Minister to take it on board. Let us not divide the House over it. It is a fairly reasonable thing for which to ask.

Does Senator Buttimer wish to comment?

In the first instance I will address the idea of rushing legislation and the question of priorities. When we were originally drafting this legislation, I wanted to draft a Bill that would receive cross-party support so that we could move it efficiently, though not too quickly, through the Houses, given the changes we know we need to make in the rental sector. When I first introduced the Bill, we were talking about giving tenants who receive a notice to quit longer notice periods, trebling or in some circumstances quadrupling the time they have to find a new property to rent. Given the work students had done with all parties, we also knew that we wanted to bring student accommodation under the rent pressure zones to make sure students are not gouged by unfair rent increases.

We also knew that there were a couple of things happening in the rent pressure zones, RPZs, that should not have been. People were citing substantial refurbishments that did not really meet the definition but were just a lick of paint to enable them to step outside their obligations under the rent caps. As we proceeded with the Bill, I saw other priorities that needed to be addressed urgently. For example, under the current legislation, if we did not extend RPZs beyond December of this year, they would fall. In this Bill I have extended them to 2021. That is more important than a deposit protection scheme or defining deposits. I will come back to that piece of work in a moment. We have also changed the qualifying criteria for rent pressure zones and rent caps. Dublin was racing ahead, which meant that other parts of the country could not catch up even though they were seeing rent hyperinflation. By taking Dublin out of the accounting equation, we will now see rent caps extend geographically as well as in time, which is very important.

We have done something else which I do not think has got enough recognition. We are talking about large institutional landlords at the moment. Previously, if they brought new stock to market that would never be captured by a rent cap, they could increase the rent year in, year out, with new or existing tenants, and they would never have to abide by the rent caps. That changes now. For the first time we are bringing large landlords and new housing stock into the rent pressure zones. Tenants renting from them will be treated in the same way as tenants renting from an individual private landlord. That is very welcome and it is a priority. In addition to that we are bringing forward the regulation of short-term letting through a change to primary legislation and regulations which will be debated in this House.

Those are priorities. Unfortunately, our addition to the Bill meant that we could not accommodate other areas of work that need attention and there would be a delay. There was also a delay in the Oireachtas. We had built in time for more than enough scrutiny of this legislation by this House, as I pointed out last night on Second Stage. However, because as a minority Government we do not control the Dáil, we unfortunately lost time. We are now in a very unfortunate position, which we are not happy about at all. I am disappointed that the vote took place earlier today and I will tell the House why. The ban on the short-term letting of homes where rent pressure is most acute was meant to begin on 1 June. However, because of delays it is now set to come into force on 1 July. I worry that if I cannot get this legislation agreed by both Houses and signed into law along with the accompanying regulations, which must also come before both Houses and be signed into law before the end of this month, we will not be able to move to regulate short-term letting from 1 July. There are also weeks in June when other Government priorities need to be handled. We have seen this happen with the national children's hospital, Brexit debates and broadband. Things which we all agree are a priority get deprioritised because housing is at issue. This almost happened last week. I had to make an intervention in the Dáil to make sure we could sit until midnight or as late as possible to conclude the relevant Stages. The House accommodated that, which was a very good thing. I very much worry that if we miss a week, which is the outcome we face at the moment, we could miss a chance to regulate short-term letting at all in the immediate months because of the further knock-on delays. I recognise the very frustrating position in which this puts everyone in this House.

Last night I said that I have a second piece of legislation on rents that I want to bring forward in the fourth quarter of this year. I commit to commencing that legislation in this House so that Senators can do the heavy lifting on the further rent reforms we want to do. They pertain to tenancies of indefinite duration. That will provide much greater stability and security for long-term renters. The further reforms also pertain to tenants who find that the property they are renting is taken over by a bank or other financial institution. At the moment their rights are too ambiguous. I refer also to properties in receivership. We need to address all of these things as well as issues around deposits. I am sorry that the House is in this position. I am very sorry that the vote went the way that it did today. I am worried now, because there are things at work outside our control as individuals. If we do not act collectively, they could end up hurting the people who need us to bring these reforms through as quickly as possible. I am available to debate this all day and all night today and tomorrow. If it must be next week, I am absolutely willing to appear on Tuesday. I still have not secured agreement on my side that I can come into this House on Tuesday of next week. I am very worried about the risks that have been built into this process. I recognise my part in those risks. I will do everything I can to mitigate them.

Regarding the amendments themselves, we all agree that a deposit should only be one month's rent. That has always been the norm. There was talk recently of people charging a deposit of more than one month's rent. That was overstated, as we did not receive a huge number of complaints from tenants in that situation through the Residential Tenancies Board, RTB. In some circumstances we know that a deposit of more than one month's rent might be charged if a tenant is bringing pets into the property. That happens by agreement. There are issues around it which must be looked at carefully. As I said when it was initially put forward in the Dáil, the amendment is unfortunately incomplete in and of itself. Even if I accepted this amendment and put its definition of a deposit into the Bill, there are far too many ways of stepping around it. As we move to define a deposit, we have to ensure there is no way to demand one month's deposit and two months' rent up front or other things like that. There were recently reports in the news about viewing charges. Those reports turned out to be spurious, but if we are going to put protections in place, we might as well protect people in all these other areas as well. It makes sense to install those protections as one instrument.

Regarding a deposit protection scheme, not everything can be a priority. The things I listed as part of this Bill are more of a priority than a deposit protection scheme. According to what we hear from the RTB, this became less of a priority since it was initially debated in 2015. There has been some work on legislation for this, but it may be outdated now because the circumstances in the international financial markets have changed. Previously, a deposit protection scheme would wash its face in that the money on deposit would be more than enough to cover the administration of such a scheme. That is not the case now. If there is going to be a cost to running this, who is going to bear that cost? Should it be the landlords, the tenants or both? We are talking about a significant amount of money, potentially more than €300 million.

It potentially requires a new public bank because the RTB is not in a position today where it is able to manage that amount of money on deposit. We then have questions about the administration of that money, who releases it, how quickly they can release it and, where there is a dispute, what happens. The RTB already deals with disputes about deposits, but we are talking about something else entirely. We are talking about a mandatory obligation on everyone involved in renting - landlords and tenants. We, therefore, need to be very certain about exactly what we are doing if we are bringing in a scheme such as this.

When the amendment was tabled in the Lower House, it was withdrawn owing to an understanding of all of these complications and that a second piece of legislation was coming this year. It was withdrawn because of the commitment I gave that in the interim we would do work on this issue and produce a report, given the changed environment, to see how it would be possible to do some of this.

I do not like to speak from personal experience and rarely do as I think we should speak about facts and data. However, I know what it is like to lose a deposit and believe it is unfair because, like most of us, I have rented. For most of my adult life I have rented in many countries. I have seen how rental systems work in four cities. I want to build a more mature rental market and sector in this country. That involves doing things with deposits, which I recognise. That is to what the report will work. It will then be a matter for us, if the legislation commences its passage in this House, to work with it. I cannot accept the amendments.

This is about as simple as it gets. It is to provide for a certain degree of reassurance. The amendment relates to the deposit system in the way it has always operated in this country. The Minister is bringing forward unnecessary complications. I will be pressing the amendment.

The Chair will forgive me if I address the issue of the attempt made to take all Stages of the Bill today. I was the person who proposed we not proceed beyond Committee Stage. I understand the Minister's frustration and his need to get the Bill through the House. However, we have spent over 100 hours in this House debating a Bill that nobody wants. We have wasted time and changed that Bill, much to the credit of my colleague Senator McDowell, but at the end of the day, it is very important legislation that will impact on the lives of people.

They are filibustering on that Bill.

As I do not interrupt the Leader, I hope he will not interrupt me.

The Senator does.

No, I do not. Either I have the floor or I do not.

They are filibustering on that Bill, as the Senator knows.

I want to support the Minister. I have been a supporter of his, despite the stick he has been taking on social media and in the media in general. I have great sympathy for him in the job he is trying to do. However, I would not and could not stand over pushing all Stages of this Bill through the House today when people are emailing me and every Member of the House on both the tenant side and the landlord side about the issues they have with the Bill.

On the amendment brought forward by Senator Humphreys, I agree with the Minister that very few people are coming forward to complain about the fact that they are being asked for two or three months' rent. Why is that? It is because they are petrified to say anything. I have met too many of my children's young friends who are renting properties and will never see the day when they will be able to purchase a property. They are at the mercy of landlords who are telling them, "I am sorry; I am selling the property and you have to get out." Then, three months later, they find out he or she has not sold the property, but do they do anything about it? No, they do not because they really could not care less.

I am trying to deal with amendments Nos. 1 and 26.

The point I am making is that the amendment brought forward by Senator Humphreys would at least offer a degree of security to those who rent property. I do not accept the spurious argument that they do not complain. They do not because at this stage they are so beaten they cannot do so.

As there is no end time for the debate, we do not need to rush through the amendments.

I am not trying to rush through them. We are on amendments Nos. 1 and 26.

It feels as if we are.

I am just asking the Acting Chairman to slow down.

I am trying to get through the business efficiently, but I am equally conscious of the fact that there are 26 amendments and that we are to finish Committee Stage today.

That is what I am saying. We can keep going until we finish it.

On amendment No. 26, I completely accept the concerns the Minister raised about deposits in the Dáil and last night in this House on Second Stage. That is why the amendment looks for a report on the feasibility of a deposit scheme. It is not necessarily looking for report on how we would implement it. Given that the Minister has massive concerns about other amendments, I ask him to reconsider amendment No. 26.

I have been working with the Minister for three years and we have been to every housing committee meeting. I am glad to hear some of the Senators present saying they want change. While I know that the Bill does not deliver on everything, at least it is a start, given that there are changes that need to be made. In fairness to the Minister, he has given 100%, as has the Minister of State, Deputy English. When I hear the comments about the Bill being rushed through, I think to myself that in the housing committee we have been months trying to go through some of these issues. We do not always agree on everything - no better woman than myself to argue a point - and if I have an issue, I will say it to the Minister. We have been working on this legislation for months and have had different issues. However, I will give credit where it is due - the Minister has been working with us. Some of the comments made to him are very unfair. I wanted to make that point in the light of some of the amendments tabled, with some of which I agree and with which some of which I do not. In fairness to the Minister, he has been working with us for months on this legislation and we have been trying hard to do the best we can. There are so many regulations and so many things we cannot do, which is very annoying. I totally understand from where Members are coming, but we are in a situation where we need to make sure tenants are looked after and that there is the best possible outcome for them. There are some good landlords too, but we need to strike a balance-----

They voted today to slow it down. It is completely hypocritical.

I tried to protect the Senator when she was speaking. That equally applies to other Members. Senator Murnane O'Connor to continue, without interruption.

This is an important Bill and I am certainly not in a rush. We have been working on it for months. As someone who is a member of the housing committee and works with the different Departments involved, it is important we do the best we can today, strike a balance and make sure we represent everybody.

I am trying to keep to amendments Nos. 1 and 26.

On the last point, clearly, if the committee has been working on this issue for months, it is strange that committee members do not understand paying more than one month's deposit is repugnant to any young couple or person who is trying to rent an apartment. I am surprised committee did not pick up on this.

As the Senator has not attended any meeting, how does he know? I have not seen him at any meeting.

The debate is not being guillotined. I am absolutely at the disposal of the House and will be here until the early hours of morning to get through every issue in detail, if that is what Members. It is not a problem. On the timing, I do not want to be in this position with Members; as I said, I do not think it is fair on them. Senator Murnane O'Connor defends better and more eloquently than I could the amount of time that has already gone into this Bill and its scrutiny by the House.

To come to the point about deposits, it is not that anyone disagrees that it should only be a month's deposit. It is the recognition that this is the definition of a deposit that is incomplete. While we might pass it and think we have done a good job to protect tenants who are being done by landlords who are looking for more than a month's deposit, it will not protect them at all because landlords can step around it by charging them a month's deposit and two months' rent. Therefore, as we move to define what is meant by a deposit and consider a deposit protection scheme, issues to do with viewing money, even if it was perhaps a false concern, and key money can be looked at in their totality. While we could pass something to give us comfort in order that we could feel better that we had stood up for people and could believe a month's deposit was reflected in legislation, unless it will make a practical difference, I do not see the purpose in bringing it forward. It is not that anyone disagrees with the motivation behind the amendment; it is just that, on its own, it would not work. To go back to my earlier point, it is a political choice to say rent pressure zones, rent caps and short-term letting are greater priorities. Because we focused on them we were not able to focus on this issue at the same time in this legislation.

On Senator Murnane O'Connor's point about the report, from the point of view of what is good or bad legislation, it is not good legislative practice to insert into legislation phrases such as "a report will be produced in six months' time".

Legislation is the law of the land. This legislation relates to how we intend to regulate the rental sector. I am giving a commitment to get the report done because it needs to inform the next legislation in any case. That was recognised by Fianna Fáil when it withdrew the amendment it had proposed in the Lower House. I hope the Seanad can do the same.

I want to make it clear that at no stage did I say the Minister was rushing the Bill. There is a responsibility on this House to interrogate the legislation as it goes through. I believe this amendment will make a difference because it will set a public floor. It will make it clear that if someone tries to gain a deposit of more than one month's rent, to keep the money or to get two months' rent in advance, he or she will be clearly out of step with the spirit of the legislation. In fairness to the Minister, we can debate this around the houses. At this stage, people support it or they do not. We should do our business in an efficient manner today. I am not going to debate this amendment at length, although I will press it.

I am anxious not to go around the houses on this matter. The Minister is speaking in a very conciliatory mode today. If the problem is that we have not clearly defined the deposit issue in order that it can be ring-fenced with some of the issues that have been raised by the Minister, perhaps he will give an undertaking today that he will work with us between now and Report Stage, which I hope will take place next Tuesday, so that we will be in a position to define properly the amendment that is being put forward from the Department's perspective by my colleague from the Labour Party, Senator Humphreys. In such circumstances, I will be happy to sit back and wait to bring the amendment back on Report Stage, by which time the issue of a deposit will have been defined in a way that meets the Minister's requirements and might also copper-fasten the one-month period. I do not know how Senator Humphreys feels about that. I am anxious to facilitate the passage of this Bill through Committee Stage.

I want make a quick point about providing in legislation for reports to be drawn up. Sections 16(3)(a), 16(3)(b) and 16(3)(c) of this Bill make provision for a report to be drawn up under this legislation. I mention that to make the point that it is quite normal to provide in legislation for reports to be drawn up. In fact, such provision is made in a different section of this Bill.

I believe the public floor is already there. A one-month deposit is the norm in the vast majority of cases. I am not saying we do not need to legislate for it. This brings us back to Senator Craughwell's point that there is a great deal to do around the deposit area. There is a lot we need to do to make sure tenants are not being unfairly treated from a financial perspective in a number of areas that relate to, or run alongside, the issue of what a tenant is charged upfront when he or she goes to view, secure or rent a property.

All of these things need to be considered in the context of a deposit protection scheme. If and when we bring in such a scheme, it might have ramifications for the definition of a "deposit" and all of the other things we want to define in law. I do not think it would be helpful for tenants to bring forward a definition of "deposit", even if we could work on this one for the time being, without many other things being thought through at the same time. It might tell the public something, but it is something that already exists as a norm. It is something we already share as a view. It is something we are all committed to trying to do in the future, by which I mean the fourth quarter of this year.

I have given a commitment to start the work in this House so that Senators can do the heavy lifting before it comes back to the Dáil. I understand that Deputies have put work into their amendments. We are having a very thorough debate here today. I understand that people will want to call votes. I am just concerned about time. I am concerned about getting this done. It is not about rushing it, as Senator Humphreys has said. It is about giving it the proper scrutiny. We have plenty of time to do that today. I can come in and back as many times as possible. I believe we need to look at this area as a whole. There is no time to do that between now and next Tuesday. I hope all of this legislation can be concluded on Tuesday because of the time difficulties I have spoken about, particularly as they relate to short-term letting. The sooner we make this the law, the better protected people will be.

In 2014, the Cabinet approved the development of legislation providing for a deposit protection scheme. Senator Craughwell has made a generous offer that I would have been happy to go along with if the Minister had not clearly indicated that the Government is not prepared to work on a deposit scheme. Therefore, I will press this amendment.

Amendment put:
The Committee divided: Tá, 12; Níl, 19.

  • Black, Frances.
  • Conway-Walsh, Rose.
  • Craughwell, Gerard P.
  • Devine, Máire.
  • Gavan, Paul.
  • Humphreys, Kevin.
  • Mac Lochlainn, Pádraig.
  • Nash, Gerald.
  • Ó Donnghaile, Niall.
  • Ó Ríordáin, Aodhán.
  • Ruane, Lynn.
  • Warfield, Fintan.

Níl

  • Burke, Colm.
  • Burke, Paddy.
  • Buttimer, Jerry.
  • Coghlan, Paul.
  • Conway, Martin.
  • Feighan, Frank.
  • Hopkins, Maura.
  • Lawlor, Anthony.
  • Lombard, Tim.
  • Marshall, Ian.
  • Mulherin, Michelle.
  • Norris, David.
  • Ó Céidigh, Pádraig.
  • O'Donnell, Kieran.
  • O'Donnell, Marie-Louise.
  • O'Mahony, John.
  • O'Reilly, Joe.
  • Reilly, James.
  • Richmond, Neale.
Tellers: Tá, Deputies Kevin Humphreys and Gerard P. Craughwell; Níl, Deputies John O'Mahony and Kieran O'Donnell.
Amendment declared lost.

Amendments Nos. 2 to 5, inclusive, are related. No. 5 is consequential on No. 4. Amendments Nos. 2 to 5, inclusive, may be discussed together by agreement. Is that agreed? Agreed.

I move amendment No. 2:

In page 8, line 34, after “ratings” to insert “and to a minimum BER of not less than C1”.

I welcome section 3, which will define what a substantial change in the nature of the property means for the purposes of a landlord seeking to be exempted from the rent caps. The Bill will allow for an increase in energy efficiency, through the building energy rating, BER, as a ground for evading rent caps. I welcome the amendments that the Minister made on Committee Stage in the Dáil, such that phased increases will be needed depending on how low or high the original BER was. It is a superior approach to one where any increase in the BER would allow a landlord to evade the caps. We are proposing a minor change. It would, in effect, ensure that C1 would be set as a minimal eventual rating in all tenancies citing this section. Section 6(1)(c) of the Bill proposes the insertion of a new subsection (5A) after section 19(5) in the Residential Tenancies Act 2004, and the proposed subsection (5A)(a)(ii) states that a rating must be increased "by not less than 7 building energy ratings" to evade the caps. That in effect sets a minimum BER of C1. The proposed subsection (5A)(a)(iii)(V) states that if the BER is at C3 or higher, it must be "improved by not less than 2 building energy ratings", again setting the effective minimum BER to C1.

Amendment No. 2 would be additional to the proposed subsection (5A)(a)(iii)(IV), which relates to properties with a rating of D1 or lower, to ensure that when a landlord is increasing the BER, the eventual minimum rating cannot be lower than C1. C1 is an objectively high energy efficiency standard and this amendment would align that subsection for lower-related properties with the provisions of the other sections. If this work is being carried out by landlords anyway, we should set objectively high standards for how the efficiency rating is improved. Energy wastage through energy-inefficient buildings is a significant contributor to greater reliance on fossil fuels. If Ireland is to stand any chance of hitting its international targets, we need to make substantial strides on energy efficiency. If a landlord wants to evade rent caps, it must be justifiable and the setting of objectively high energy efficiency standards will allow for that justification. I hope the Minister can accept that amendment.

Amendment No. 4 proposes that a landlord would not be able to cite a substantial change to the property as grounds to evade the rent caps in rent pressure zones without the Residential Tenancies Board, RTB, first carrying out a physical inspection of the property in question. Amendment No. 5 is a consequential amendment. While I recognise the increased regulatory burden this would place on the RTB, we are now in a position where the rent pressure zones are not working and we need to act. Rent increases, as demonstrated in the recent daft.ie report, far exceed the ostensible 4% cap and it is through the unfair and unjustified usage of these kinds of exemptions that landlords evade the caps. While I welcome the overall attempt to better define and regulate these exemptions, we are now in an emergency situation that calls for an en emergency measure. Good landlords would have nothing to fear from this amendment as a justified rent increase would be easily verified by the RTB. It would be a deterrent to bad landlords and would be so significant that in my estimation, it could fundamentally reform how rent pressure zones work for the better. I recognise that it could be difficult but the scale of the current crisis requires it. The increased penalties and detailed provisions on what substantial renovations actually are will mean nothing if bad landlords are not detected for illegal or unjustifiable rent increases. I hope that the Minister can accept these amendments.

I have tabled amendment No. 3, which states:

In page 8, between lines 39 and 40, to insert the following:

“(VI) refurbishment that meets a per square foot value investment as set by regulations published by the Minister,”.

This goes back to pre-1963 housing. We have all had phone calls about this today. Could this now be inserted? It is important and I want clarification on whether this can be done and, if not, why?

In certain cities, there are clearly houses from before 1960, including Georgian houses, that will find it difficult to reach the standards. We need a clear definition from the Department about what standards they have to reach and how they could go about reaching them. The local authorities and An Taisce only allow certain works to be carried out on a house in a conservation zone or Georgian quarter. There is a need for a clear guideline. I accept what the Senators are trying to achieve, in getting a very high standard of energy efficiency. We also have to consider the types of properties that we are trying to regulate in this area. I do not think the Minister can do it today but it would be helpful to have clear guidelines from the Department with regard to Georgian pre-1963 houses on how they can achieve the standards. We all want them to get there. The people who currently own them do not have a clear pathway to achieve those standards. The Department and local authority could assist in this area.

I thank Senators for their contributions and the amendments tabled. The daft.ie report was mentioned. This type of information is helpful but we have to recognise that these are the renting prices being asked, not agreed. It is a much smaller data set than actual rents agreed and registered with the RTB. It produces its index quarterly on what the state of rent is in different parts of the country. It is important that we always speak about the official data and about as big a set of data as we can. While it is easy to say that rent caps are not working, if that was the belief of this House, we would not be extending them to 2021 and changing the qualifying criteria to extend outside of Dublin, Cork and the other areas in which they operate, and we would not be seeking to improve them in the way that we are. If we want to cite information from reports such as that from daft.ie, we absolutely can. According to daft.ie, rents are at an all-time high. We know that they are too high. That same report states that rents are now growing at a slow pace that has not been seen since 2013, before the rental crisis. That is important because it tells us that rent caps are working. They are slowing rent inflation but they need to work harder. They have not brought it below 4% nationally because they do not apply nationally. They have not gone below 4% across Dublin because rent caps do not apply to new properties coming onto the market. Until we pass this legislation, they will not ever apply to those new properties. As rents are set each year for properties that came newly to the market in the last two years, they will go higher than 4%. That will increase the average inflation in an area such as Dublin. Until the legislation is changed, we will not see a more consistent level of rent inflation in line with the rent caps. The RTB has said that, from the data it has seen, rent caps are working. The purpose of legislation is to improve them.

These amendments speak to the complications that we have in everything that we try to do with housing. We are trying to make sure that landlords are not abusing the idea of refurbishing or renovating their apartment or house for rent to try to get out of rent caps. We hear anecdotal evidence that they are. We published guidance on what refurbishment would look like to be able to step outside of the rent caps. We recognised that we needed to put it in law. We have to find a balance and make sure that we do not make it so difficult that landlords then stop investing in their properties and that the standards of our stock then worsen as an unintended consequence. The primary purpose of this part of the legislation is to ensure that tenants' rights are not being abused by landlords applying a lick of paint and then saying there is a 10% rent increase, for example. We have sought to define what a substantial refurbishment is. Listening to the points made by other parties and people of no party on Committee Stage, we made a further set of amendments.

On substantial refurbishment and building energy rating, BER, the BER is important because if one improves the BER rating of a property, one significantly helps the tenant in terms of the affordability of the day-to-day light, heat and other utility bills because of the type of work we are doing to houses and how that is recognised in the BER rating. In addition, there will be a wider impact on the environment in terms of there being less of an impact on the climate. Everything I am trying to do in regard to the standard of buildings being built - things like near zero energy building or having minimum BER requirements for new builds - will be of significant help in the other big crisis we are facing, namely, climate change.

Two changes were made on Committee Stage to recognise the importance of BER and the points raised in regard to pre-1963 and other properties. Under one of the clauses, there are two separate BER grounds that can be invoked. If a property has a very low BER rating, a jump of three points will required because at a very low rating it is easy to jump two points with minimal work. If the property is at a higher rating, it must only jump two points, recognising that significant investment has already been made in the house to bring it up to an appropriate BER rating. If one goes two points higher on the scale in conjunction with other measures such as improving disability access and so on, one can step outside the rent caps.

The other change we have made is that if one brings the property up seven BER points, one may step outside the rent cap. That means bringing a property on the lowest point of the scale up to C2, or one on the second lowest point up to C1, for example. We must recognise that that will be very expensive to do in some properties and that a minimum BER rating for some very old properties could be very difficult to achieve, would be seen as too onerous on the landlord and may act as a disincentive to investment. That is the balance we tried to achieve. One of the amendments looked at in much detail on Committee Stage sought to link it to investment per square foot or square metre but, unfortunately, it was not possible to be certain that we could properly verify that the investment had taken place.

I know there is a particular issue around pre-1963 properties because I have met people on this issue. The solution we tried to reach on Committee Stage was the new allocation of seven BER ratings as a measure in and of itself that does not have to be combined with disability access, increasing the square footage of the property or other measures in the Bill. If one brings these very old buildings up seven points on the BER scale, that would be sufficient to step outside the rent caps. A commitment I give today on foot of the comments made is to publish the work done by the Department which demonstrates that, even in the case of a pre-1963 property with the different restrictions it has by virtue of the regulations already in effect, the system can be used to enable meaningful investment in the property and allow those landlords to step outside the rent caps because of the significant work done and the resultant significant improvements for the tenants moving into those properties.

On physical inspections, it is not always necessary to physically inspect the property to ensure it has met its requirements and obligations under the definition of substantial refurbishment. The documentation required and the fact that it must be certified is verification that the works have happened. However, if the RTB believes that is not enough or has a question mark, it has new powers for independent inspection and may inspect the property. In addition, it is now an offence backed by very serious sanctions to knowingly give false documentation or information to the RTB and a landlord cannot try to use one of the definitions or exemptions just to get around the rent caps. We have provided very strong legal provisions regarding what is allowed and that it is an offence if one does it inappropriately or misleads the RTB. We have given the RTB the powers to make inspections and we trust it to use its judgment as to what is an appropriate level of inspections and what properties should be inspected. Unfortunately, I cannot support the amendments because they have already been adequately captured in the legislation.

Amendment put and declared lost.

I move amendment No. 3:

In page 8, between lines 39 and 40, to insert the following:

“(VI) refurbishment that meets a per square foot value investment as set by regulations published by the Minister,”.

Amendment put and declared lost.

I move amendment No. 4:

In page 8, between lines 39 and 40, to insert the following:

“(b) the works carried out under paragraph (a) have been the subject of a physical inspection by the Board,”.

Amendment put and declared lost.
Amendment No. 5 not moved.
Section 6 agreed to.
Sections 7 and 8 agreed to.
NEW SECTION

Amendment No. 6 has been ruled out of order as it involves a potential charge on the Exchequer.

Amendment No. 6 not moved.
SECTION 9

Amendment No. 7 has been ruled out of order as it involves a potential charge on the Exchequer.

Amendment No. 7 not moved.
Question proposed: "That section 9 stand part of the Bill."

I acknowledge that amendments Nos. 6 and 7 have been ruled out of order, but I wish to highlight that amendment No. 8 has the same intention, namely, to extend rent pressure zones throughout the country for three years. We are in a crisis and it would be wise to support amendment No. 8 which has the same intentions as amendments Nos. 6 and 7. I am unsure why they were ruled out of order.

As the Senator is aware, I do not rule amendments out of order.

On section 9, obviously, people who are paying close attention to this, as all Senators present are, understand that the first designated rent pressure zones in Dublin and Cork were due to expire at the end of this year. Rather than waiting until the last minute to extend them, given the unforeseen delays which can occur in these Houses, as was discussed earlier, it is better to extend them now until 2021. It is interesting that the idea of rent controls or rent caps was unthinkable four years ago. Three years ago, we brought them in. We are now extending and improving them, which is a very important measure in the Bill. Tenants, landlords and those investing in the area for the first time will have certainty that we have these rent caps until 2021 at least. That will happen now regardless of when a designation was made for a rent pressure zone. Obviously, under the new qualifying criteria and in light of the high inflation in areas outside of Dublin, we expect that more areas will come into RPZs and they will all continue in operation until the end of 2021 at least.

I have the same concerns as Senator Ruane. As I stated to the Minister at housing meetings, the criteria are not right. I am concerned in that regard. In my home town of Carlow, which does not meet the criteria, there are two excellent third level education colleges which require student accommodation. There is significant lack of supply of housing and the cost of rent in towns such as mine is very high. I have grave concerns about this issue and stated to the Minister on several occasions that Carlow and other such areas not in the rent pressure zones should be included and not just the main cities. Smaller towns and areas are paying the price and that needs to be addressed.

I listened to the Senator at those meetings. The points she made were correct and we are changing the qualifying criteria. The calculation used involved rent being above the national average - which included and still includes Dublin - and having above 7% rent inflation in four of the past six quarters. We recognised that it was very unlikely that more areas would come into a rent pressure zone because even though rents there may be increasing at 10%, 11% or 12% per quarter, they would never catch the national average because Dublin rents were pushing it up so high. As a result, we are taking Dublin out of the equation when we look at the greater Dublin area, GDA, and other counties, and we are taking the GDA out of the equation for the other new qualifying criteria when looking at the remaining counties.

As a result of that, I anticipate, based on the inflation data that we have seen from the RTB, that more areas are going to be rent pressure zones, RPZs, which is very welcome. That will be a significant change emanating from this Bill. We have talked about the reforms in the Bill but it is important that the public understands exactly how sweeping it is and what that will mean for people who are not covered by these regulations and laws but who will now be covered and protected.

Question put and agreed to.
NEW SECTION

Amendment No. 8 has been ruled out of order as it imposes a potential charge on the Revenue.

Amendment No. 8 not moved.
SECTION 10

Amendments Nos. 9 to 11, inclusive, are related. Amendment No. 11 is consequential on amendment No. 10. Amendments Nos. 9 to 11, inclusive, may be discussed together by agreement. Is that agreed? Agreed.

I move amendment No. 9:

In page 11, between lines 13 and 14, to insert the following:

“(2) For the purposes of this section, the entirety of the Carrigaline local electoral area, shall be deemed to be a rent pressure zone.”.

This issue was raised with me by Councillor Michael Frick Murphy and by Deputy Ó Laoghaire. Rent pressure zones were applied to city council areas, some electoral areas and counties, including the Ballincollig-Carrigaline municipal district in Cork. Some of these electoral areas have since been revised. Last month, Deputy Ó Laoghaire asked the Minister for Foreign Affairs and Trade, Deputy Coveney, if the southern end of Carrigaline would fall under the new Carrigaline municipal district and become a rent pressure zone. He confirmed that it would. However, in response to a parliamentary question, the Minister for Housing, Planning and Local Government confirmed that, "The areas of Fountainstown, Myrtleville and Crosshaven will be contained in the Carrigaline LEA and will come under the remit of Cork County Council and as such will not become RPZs by virtue of the change to the boundary." It raises the bizarre situation that different rules apply within the same local electoral area, which is surely bad policy from an administrative point of view for landlords and tenants. One part of the LEA is not protected from spiralling rents while another part is. From my understanding the rents at the southern end of Carrigaline are high.

I was a bit jumbled when I was trying to explain amendment No. 7. It was amendment No. 9 I was referring to as having the same intention as amendment No. 7. I am not asking for Sinn Féin's amendment to be ruled out of order but I may resubmit amendments. What are the criteria for ruling ours out of order when its intention is exactly the same as amendment No. 9? I want to reserve the right to submit amendments on rent pressure zones on Report Stage.

Could the Leas-Cathaoirleach give us some guidance because there seems to be a contradiction in what is being ruled in or out of order? This is not aimed at the Sinn Féin amendment but the Labour amendment was more of a scalpel than a sledgehammer and would be similar except that we did not mention specific areas. That would be like Senator Murnane O'Connor submitting that Carlow-Kilkenny should be a rent pressure zone. There seems to be an anomaly in what is being ruled in and out of order. I reserve the right to resubmit those amendments because I question the ruling.

Unfortunately, I am only now reading the amendments that were ruled out of order. I do not have a say in the ruling in or out.

They are ruled out by the Chair.

It is an inconsistency. It is nothing to do with the Minister.

For the first time.

On the amendment, there might be some confusion and I will try to clarify it. Recognising the boundary change in Cork and the other legislation that came through this House extending the boundary of the city, that takes into account areas that were already RPZs. No area is going to lose its designation as an RPZ as a result of the boundary change. I have to read the parliamentary question the Senator refers to because I have not seen it. If the Senator has it to hand, I will check it to make sure there was not some confusion in the language. Even the amendments in the context of the Act can be confusing. No area will lose its designation or status as a result of the boundary change.

Is the Minister aware of any other LEAs half of which are in RPZs and half not?

Off the top of my head, I am not. I will have to look into that. When rent caps were brought in, people said it would create a two-tier rental sector. Some people’s rent would be controlled and people just outside the rent control area would be under pressure in respect of rent increases. One of the issues Senator Murnane O'Connor raised was that some people felt they were being left outside controls they should have been in because there was hyperinflation of their rents. Changing the qualifying criteria should work to address the anomaly that we have seen as it has spread beyond Dublin and the greater Dublin area, GDA. If that is occurring in an LEA but I cannot think of any this would work to address it.

Given the scale of what we have to do, I will not press the amendment. It would be helpful if the departmental officials could make themselves available to me and the councillors who will be elected in a few weeks. This situation seems to be unique in the State.

I appreciate that. The system by which an area is designated an RPZ is based on the most recent data we get on a quarterly basis from the RTB, which then consults with the Housing Agency and a recommendation for a new area is given to me to sign off on. Two areas were included in the final quarterly report of 2018. There is no flexibility on my part. In the legislation we are taking due care to make sure there are no unforeseen consequences and we think we have captured them in the previous changes. I appreciate what the Senator said on the matter.

I hope new candidates will be elected and if there is an opportunity to talk to them about how this aspect of government works in their area as they are learning the ropes I will make myself available.

Amendment, by leave, withdrawn.

I move amendment No. 10:

In page 11, between lines 13 and 14, to insert the following:

“(2) For the purposes of this section, where an electoral area, which was changed or created by the 2018 revision of local electoral areas, and contains areas which were previously in an electoral area which was a rent pressure zone, the new electoral area shall be deemed in its entirety a rent pressure zone, where the majority of the properties in the new electoral area were previously in the rent pressure zone. Where the majority of the new electoral area was not in a rent pressure zone previously, then the Minister shall initiate a review within 6 months of the passing of this Act, in order to determine whether an area should be included in the rent pressure zone or not.”.

Amendment put and declared lost.
Amendment No. 11 not moved.
Section 10 agreed to.
NEW SECTION

Amendments Nos. 12 to 16, inclusive, and 18 to 20, inclusive, are related and may be discussed together by agreement. Is that agreed? Agreed.

I move amendment No. 12:

In page 11, between lines 17 and 18, to insert the following:

Indefinite Tenancies

11. Section 28 of the Act of 2004 is amended in subsection (2)(a), by the substitution of “an indefinite period” for “the period of 6 years”.”.

Amendments Nos. 12 and 13 are similar in that they would both prohibit so-called no reason evictions and move Ireland to a residential tenancy model of indefinite tenancies in line with the commitments made in the 2016 Rebuilding Ireland plan. Amendment No. 12 would amend the Part 4 tenancy protections so that passage of time would be removed as a ground for terminating such tenancies without good reason. Currently the statutory protections afforded to Part 4 tenancies end after six years.

This would ensure that where a landlord is terminating a Part 4 tenancy, he or she must have proper legal standing to do so within the other provisions listed in the table to section 34 of the Residential Tenancies Act 2004. Amendment No. 13 deletes section 34(b) of the 2004 Act, which allows a landlord to terminate a Part 4 tenancy if the minimum statutory notice has been given. Again, there is no specific ground or reason for the tenancy to end. It is simply because the landlord wants the property back and he or she cannot justify it otherwise under the provisions in section 34. At a time of unbearably high levels of homelessness and a housing crisis in this State, we cannot allow a situation where a landlord can evict a family from a house without good reason. A no reason tenancy termination at this stage is morally wrong and should be illegal. Even beyond the immediate needs of the housing crisis, at a time of decreasing home ownership and increased reliance on the private sector for housing, we need to move to a model of tenancies of indefinite duration. Otherwise how can a family put down roots and plan for their lives and education of their children if their tenancy can be terminated after four or six years, depending on when it started? Families need certainty. They need to know that their child will be able to attend the same school without interruption, and without these amendments, families cannot have and will not get this certainty. No reason evictions need to end and they need to be part of this Bill. I hope the Minister can accept the amendments.

Amendment No. 14 would delete the attempt to extend the time period from three months to nine months in which a landlord has to sell the property after he or she has evicted the tenants. If a landlord wants to sell his or her house enough that he or she is willing to evict the tenants, he or she should have to sell as soon as possible and, as a result, we should not be looking to extend that time period. In terms of amendment No. 18, I thank Ms Sinéad Mercier and the Green Party as well as Focus Ireland for their help in drafting it. Amendment No. 18 seeks to ensure that where a property that was bought using an investment mortgage and is not a principal primary residence is sold, the landlord cannot use the sale itself as grounds for terminating the tenancy, allowing the tenants to remain in the property while it is being sold. It is common practice in many other countries for residential properties to be bought and sold by developers and individuals without evicting tenants, leaving them unaffected by any sale. Considering the scale of the housing crisis here and the degree by which the Irish property market is being used for investment opportunities by international funds, the absolute least we can do is ensure that the sale of a property that was never intended as a primary residence and that was bought with the express intention of being bought and sold for profit would not be grounds for evicting its tenants. It may be the case that properties with vacant possession are more attractive to potential investors. However, the fact is that to make a property vacant, a family may have to be evicted. We should not stand over a situation where this can happen and I hope the Minister will be able to accept that amendment.

In terms of amendment No 20, I welcome that the notice period required before a landlord can evict a tenant is being extended as set out in section 16. However, the notice periods are proportionately extended for all the different tenancy durations, apart from those under six months. I cannot imagine how this can be justified, where changes are made to all the other tenancy durations but not to those under six months, especially considering how disproportionately vulnerable tenants in that category are. We have proposed that the proportional increase afforded to every other duration simply be afforded to those in the six months category too. I recognise the Sinn Féin amendment which extends it to 90 days, whereas our amendment extends it to 60 days. I would be happy with either and I hope the Minister can accept one of the amendments.

I complement the Senators on the amendment because this gets to the nub of the problem with the rental sector, namely, the insecurity. I presume the Minister has had the same experiences where families have had to move three, four or five times and their children have had to shift schools. That brings a level of insecurity and the breakdown of friendships, so anything that gives a little bit more security to families has to be welcomed. I very much welcome the amendments because this will give more security to people in the private rental sector and, it is hoped, allow people to be a lot more comfortable in the rental sector. That is the reason there is major and understandable resistance on the part of families to taking up the housing assistance payment, HAP, because they feel very insecure in that rental sector because their experience of it has been very poor, and I gave the example of parents having to change the school their children attend on several occasions. This affects the children's educational outcomes because the different schools may be at a different points in the curriculum. I urge the Minister to look closely at these amendments and, if it at all possible, accept them.

Should I move amendments in my name?

We are dealing with amendment No. 12. We will come to them later.

I thank the Senators for tabling the amendments. Before we had a crisis in homelessness, before we had families in the numbers that they are in emergency accommodation, we had a problem, as Senator Humphreys referred to, with families not having the kind of tenancy security they needed to be able to live in an area as a renter and raise a family and have their kids in school. That had to be addressed, notwithstanding the very serious problem we now have in terms of families living with housing insecurity and those living in emergency accommodation.

As for the amendment that speaks to tenancies of indefinite duration, Government policy approves of that. We want to move to tenancies of indefinite duration. That is why the changes we have made in previous legislation about subsequent Part 4 tenancies is very important . That is why the changes we are making to notice to quit periods are very important. That is why it is going to be one of the central pillars of the next rent legislation that we are bringing forward. To bring this amendment as it stands on its own, without the much larger piece of work that needs to be done on tenancies of indefinite duration unfortunately risks unravelling that actual section of the Residential Tenancies Act of 2004, which for the first time in decades brought in protections that were not there at all. The 2004 Act was quite groundbreaking in that regard. It has been built upon in the Act that brought in rent caps, and we are building on it again today in this House, but there is a risk in how this amendment is worded and that it stands alone, not with the other things that we have agreed to do around tenancies of indefinite durations, that it could unravel that section of the Act.

I have done a great deal of work on the area of the intention to sell properties. What we would like to have is a healthy landlord market where one landlord sells their property to another landlord, where people are investing as landlords not for capital appreciation of the property which they one day sell and have a pension return but on the basis of a stable rent roll. It is a different type of operation. It is what we see in Europe, it is what people say they want, and it is what we are trying to build. One might be able to have that system because they have it in other countries. In those countries it is not necessary for the tenant to vacate the premises because it is being sold by the owner. However, there are a couple of things we have to look at here. In the first instance, I have been back and forth with the Attorney General on this and I have met the leading NGOs, as did the Taoiseach on a number of occasions. It is not constitutional. I am not just putting that down as if to shut a door, I am going to move beyond that argument but the first thing we were told is that it is not constitutional. We have tested that but we would not be able to proceed forward. Even if it were constitutional, it would not be retrospective, so it would not apply to existing leases. Therefore, even as a temporary solution for six months, as a sticking plaster to prevent any more families being served with notice to quit for these reasons and then potentially going into emergency accommodation, bringing in this measure would not have helped those people.

If we could overcome the constitutional issue and overcome retrospectivity, it must be asked whether it is a good policy decision to make given the given the type of rental sector we have today, rather than the one we want but do not have. A total of 70% of landlords own only one property, a number of whom are accidental landlords, who found themselves buying a rental property, losing their job subsequently and not being able to sustain it, or who bought a home, whose family circumstances changed, who rented another home and let out their own property. They do not want to be landlords and never meant to be landlords. They are coming to a point in time where, because of the increase in property prices, which is still 20% off peak and which has dramatically cooled, which we saw from evidence again today, they are now in a position where they might be able to sell that property. If they have to sell with tenants in situ, and we have evidence for this from cases that have been taken to the Residential Tenancies Board, RTB, it is likely that the property would sell at a value of 20% to 30% less. That is not 20% to 30% less profit but 20% to 30% less value of the home. While the intention would be to help the tenant in that situation, we could be forcing the person who owns the home into a situation of bankruptcy where he or she would not be able to meet his or her obligations with the banks on that property. In trying to help one person, we are hurting another. Again, when I talk about unintended consequences, that is what I mean. It is different in different countries where they have a different rental sector. The way our particular rental sector has developed and grown over the years means that people are exposed in this way.

Furthermore, even if we were to say that was okay, that we did not mind if potentially we could hurt that person on that side of the equation because we would protecting a tenant, we would then be moving the obligation for eviction to the person buying the home.

If a young couple are buying a home for the first time, and there are tenants in situ, they now have to evict those tenants. That is a very invidious position to put someone in, particularly if the people do not leave that house. That couple now has a mortgage on a house they cannot move into, and are also paying rent on the house they are currently in. They may be waiting six months, 12 months, or even longer to move in. I do not think it is fair to shift the burden of responsibility to the person buying the home. Even if we could get past the first barriers from a legal, legislative and constitutional point of view, I am not sure, given the landlord market and rental sector we have today, that it would even be good policy.

As regards section 34, which states the reasons people can invoke to serve a notice to quit, they cannot do that and break a lease agreement. If one has a three-year lease agreement with one's landlord, which is something we need to see far more of, it cannot be broken for any reason. One has to wait for it to expire before section 34 can kick in. People need to understand the importance of a lease agreement, and that one cannot just break the contractual agreement one has with one's landlord.

Notwithstanding that, we have greatly extended the periods of time for which a notice to quit period will be in force. For example, if one has rented a property and been there over 12 months, going into the 13th month, one is working on a month-by-month basis with the landlord, and there is no lease agreement any more. That person has 42 days' notice under the current law. After these changes he or she will have 120 days' notice, or four months. That is a big change. If someone has been there for the average tenancy length of two years or more, has stepped out of the lease agreement and is working month-to-month with his or her landlord, and wants to serve a notice to quit, the notice period today is 56 days. After this, it will be 120 days, and if the person is there three years it jumps from 84 days to 180 days, or six months. These are very long notice to quit periods, which give people more than enough time to find another property. Where they cannot, we know that early engagement with services helps prevent those people having to go into emergency accommodation. That is a really important change we are making in the legislation, and a really significant step.

In addition to that, when we talk about housing assistance payment, HAP, hundreds of thousands of people are renting in our rental sector today very successfully. More than 40,000 HAP tenancies have been created. Some people find themselves in difficulty in HAP, for reasons that are not to do with the operation of HAP itself, and so we try to put in place what other supports we can to help those people. It is unfair, based on some instances of insecurity, to draw wide conclusions around the rental sector as a whole. We know it is not functioning the way we want it to. We know it needs to be improved and reformed, and that is why we are bringing forward these reforms.

One of the amendments, which was not spoken to, seeks to change what we define as a family member and restrict it to just landlords themselves if they want to move back into a property. However, it is very important that we retain the right in law that if someone has a second property and another family member falls on hard times, they could then house that family member in that home. Landlords would take that responsibility on if they felt they could, rather than a family member having to go into State services unnecessarily. I do not think we should be changing the definition we have in the legislation under section 34 as to what constitutes a family member, because it is important that we protect that. I know it was not spoken to, and I am trying to see who is placing that amendment, but I do not think it would be a good amendment to accept. I do think the changes we have made here around tenancy protection, security for tenants and lengthening the notice to quit periods, are very important and strong.

As regards tenancies of indefinite duration, due to Government policy we could not put it into this Bill, but it will be in the next Bill which will commence in this House.

I thank the Minister. Did I misunderstand Senator Warfield? Does he wish to speak on amendments Nos. 15 and 16, or are we only talking about moving them?

Speak to them now, because they are included. I thought the Senator was talking about moving them.

I apologise, that was my mistake.

I will not rehash what Senator Ruane has articulated as we are largely coming from the same position, although with a different timeframe.

I am not sure what the Minister is saying about families. Of course one would seek to put one's extended family in need into that home, but not if it meant evicting another family. That home is still an asset one has and a source of income one could use to address the situation facing the extended family. I am not sure what problem the Minister has there.

I also do not see this as a constitutional issue when talking about retail or commercial properties. We see all the time that the tenant is not affected when retail units are for sale, so what is the difference between residential and commercial sales? Why can we not apply this to residential properties? I do not think there is a legal impediment on that front if it already exists in the sale of commercial properties and the existing tenant is not affected.

I will move amendment No. 15 largely due to what has been outlined by Senator Ruane. We hear time and again that we should keep people in their homes when they have them. The Dublin Region Homeless Executive's reported figures show that, of the 162 families that provided information on the reasons they vacated their homes, 87 were told it was because the landlord intended to sell, and Focus Ireland sees more than 20 families each month become homeless because their buy-to-let landlord has been forced to sell up.

I will move amendments Nos. 15, 16, and 19. Will I speak to amendment No. 16?

Yes, as it is included in this group.

While having a rental property and being able to use it to house a family member is a positive notion, there are certain tax relief measures on renting to family members already in statute. However, there should be no motivation to displace families, or tenants either. If the Minister is not willing to accept amendment No. 16, then amendment No. 17 could be a reasonable one.

Shall I speak to amendment No. 19?

Yes. It is in this group.

We welcome the extensions to notice to quit periods, however a proposed continuation of a 28-day notice to quit period for tenancies of six months or less is inadequate. Any Senator or Member of the other House who runs a constituency office will have come across families who have been given these notices and have 28 days to find suitable accommodation. I will leave it there, but I call on the Minister to consider this.

I suspected the contribution in terms of constitutionality. However, amendments Nos. 12 and 13 are just setting down the same legal provisions that exist for people in residencies under four or six years, depending on how long they are there. What I do not understand is the rationale that if people are in long-term residency and have built their lives in a certain community, a landlord would be able to evict them without reason. One would think that the legal protections would become stronger for families that are rooted within communities, that have a good track record with their landlord, and have lived their for four to six years. Why are we removing legal protections for them so that a landlord can just evict them, based on the fact that they are there four or six years? I do not understand why we are not giving them any legal protection as we are with other tenancies. I would like the Minister to explain the rationale as to why a landlord could evict somebody because he or she did not have the same legal protections as other tenants who have been there for much shorter periods of time.

I really do not understand the thinking behind it.

I thank the Senators for their contributions. I will address Senator Warfield's concerns first. The different amendments are all related in many ways.

On the data issue, the NGOs say that landlords selling properties is the main reason people end up in emergency accommodation. The Residential Tenancies Board, RTB, says that it is actually rent arrears, that is, people not paying rent. Let us assume for a moment that the RTB is correct. We would be making a much stronger intervention if we did something about rent arrears. A tenant might build up arrears that are small in the scheme of Government expenditure but large for the tenant if he or she cannot pay it and for the landlord because he or she lets in order to afford the cost of the property. It would be much more affordable for the State to make an intervention when the arrears start to build up, rather than at the point when the tenant is evicted. At that point the landlord may have had such a negative experience of letting that he or she will get out of the game entirely. The RTB tells us is this is what is actually happening. If that is the case, it would be much better to make an intervention on rent arrears. Doing so would mean that the property remains in the rental stock and the family or individual is kept in the home. Part of the interagency group I set up in September 2017 is now working with the Minister for Employment Affairs and Social Protection. It is examining approaches to rent arrears and to identifying people in need, who might be embarrassed about approaching social protection services, to help them long before they receive a notice to quit.

Notwithstanding that, the NGOs say that the RTB data are not a full picture because they only represent people who go to the RTB. Those NGOs are the front line. People tell them why they have come to emergency accommodation services. We did a bit of work on this in the first quarter of this year. The data collected were actually incomplete, as four out of ten respondents did not give a reason and we were blind to an extent to the totality of things. I have met the NGOs and they have met the RTB. We are now trying to get much better data to better inform what we are doing. A new study, independent of my Department, will be commissioned to try to track that more accurately. That is one of the issues the Attorney General flagged to me when we were bringing this forward. He said the data are not thorough enough to support the changes the Senator is looking for, which raises the question of whether they would pass the constitutionality test. However we did not stop there. We kept on pushing. I understand the motivation behind these amendments. We are working to get a more solid picture of why people are presenting and what the appropriate and best interventions might be.

Regarding the other points, it is absolutely the case that if a 20-year lease is signed in the commercial sector it cannot be broken. It is exactly the same in the residential sector. If a tenant rents a property and signs a five-year or ten-year lease, the landlord cannot break that. That is the lease agreement. The problem is that people are not doing that enough. We are trying to find ways to incentivise people to get into longer lease agreements. We have talked about the tax treatment of such leases. Perhaps we could put something into our tax laws to create more of an incentive for people to enter into these agreements. Those conversations are ongoing. They have not come to a conclusion. It would be in the interests of the tenant, as well as the landlord, to be able to do that.

We must recognise why this is done in the commercial sector. When a landlord makes an investment to rent out a business in a building, he or she is not doing it to own the building at the end of 20 years, sell it and make money from it. The landlord is not spending on capital appreciation. These buildings depreciate over time because of changing building standards, technology, etc. The landlord invests in that lease and keeps the tenant in situ because he or she wants the rent roll from that lease. Suppose I buy a leasehold where there is a takeaway restaurant. I am investing in that because I want the rent from the restaurant, which provides a steady yield every year. That is not why people become landlords in this country in the majority of cases. They do it for capital appreciation. They buy a second property on the understanding that its price will rise over 20 or 30 years. Despite the dips we have had, that is basically what has happened over the last 30 or 40 years. If an investor buys in the right area, the property value will rise. The owner takes a rent that will help with the upkeep of that property over that period and reinvests in it. He or she pays more than half of that rent in tax. This is done with the idea that when he or she retires 20 or 30 years later, he or she can sell the property and use that lump sum as a pension. Alternatively, because the mortgage on the property has been paid off, he or she may choose not to sell it and may use the rent as an additional income.

That is not really what we want in our rental sector. We do not want that kind of investment because it means a certain number of landlords always will be exiting the market because their personal circumstances determine that they should. That is why 70% of our landlords owning only one property leads to a much more volatile sector than in other European countries. We are trying to move away from that by having larger landlords come in and make their 20 or 30-year play within the regulations, which will be forthcoming under this legislation. They will be able to get a steady return, as they would if they took on rents for restaurants, takeaways etc. This will be a different type of rental sector to the one we have experienced. It was said that many landlords are operating on that basis but actually they are not. A small landlord does not necessarily have the disposable income to help a family member in need. That is why we believe that the need to move a family member into property is a good enough reason for a landlord to say to someone living in their second property that he or she has to go. This is connected to the reasons landlords invest in property. They may not be making a huge amount of money if they have invested on a capital appreciation basis. We also recognise that this means a smaller burden on the State. We do not want that to mean that the people living in those properties then find themselves in emergency accommodation. That is not what we want. We extended the notice periods to give people more time to vacate properties and find new accommodation. Looking at all these consequential amendments together shows how we can protect from those issues.

On another point that was questioned when I spoke, we also do not want to move the burden for servicing a notice to quit to someone who is not a landlord at all and has not been for 20 or 30 years. They might be a young couple who have bought a home and want to live in it and raise a family. All of a sudden they have to go through all these procedures with the RTB and potentially the courts. We do not want that to happen either. That is just shifting the problem to someone else. It is not solving it. That is why those amendments cannot be accepted.

We maintain that the 28-day period is fair for less than six months' renting. Tenants may want to exit an agreement as well. Would it be fair to say that tenants have to give six months' notice if they have only been in properties for 28 days? That will not work for anyone. Once a year has passed, someone outside a lease agreement will have four months to find a new place after only living there for 12 months. That is a very significant reform. I will come back to the point. If a tenant has a lease agreement it cannot be broken. If a tenant signs up to a two-year lease agreement, or if after a one-year lease agreement he or she signs another one-year lease agreement, he or she is protected. Such a tenant has more than four months.

Senator Ruane mentioned Part 4 tenancies, which were introduced under the 2004 Act. Once a tenant has been in a property for more than six months, he or she starts to accrue new rights. We have been discussing the notice-to-quit periods, but there are also others. A more recent change is that when a Part 4 tenancy termination expires, the tenant does not simply go back to zero with his or her landlord. Instead the tenant moves into a further Part 4 tenancy. A tenant is not treated less favourably than someone who has been living beside him or her for three years. We want tenancies of indefinite duration in order that tenants are not stepping in and out of Part 4 tenancies. In 2004 this type of protection was seen as enough. Since then it has been changed and improved but in reforming the sector, we recognise that we want people to move into indefinite tenancies of indefinite durations in order that their rights will always be there. The difficulty with the amendment as drafted is that it is not enough. Accepting it would unfortunately unravel the obligations under the 2004 Act without putting in enough for tenancies of indefinite duration to stand on their own two feet. We would take a step backwards by accepting the amendments. I know that is not Senator Ruane's intention. However I have worked in this job for the past two years and no aspect of it is ever as simple as, for example, defining a deposit as being one month's rent. There are always consequences which we must bear in mind to make sure we do not do more harm than good. It is not as easy as providing for indefinite durations or changing a part of the 2004 Act. We have to look at a lot around this. That is why it needs its own Bill. That is the next item of legislation that will come forward, subject to the support of this House.

Can I respond?

Regardless of whether my amendments are sufficient, I wonder why the current legislation does not extend the same provisions in respect of a tenancy and having no-reason eviction. At present, if someone is in a house for six years, the landlord can ask him or her to leave without a reason, but if he or she is there for three years the landlord would have to meet a set of requirements. Ignoring my amendments for the moment, why does that stand in the current legislation from the Department? Where a tenant is in a place for six years a landlord can just ask him or her to leave without an adequate reason and there are no legal protections.

My other question is about a family member. Is there a monitoring system? I am not sure if it happens very often but if a family member moving into a house is a good enough reason to evict tenants, how can we monitor whether the family member only stays for the duration of a summer, for example? What if it is a decoy to put a family member in the house for a short time? When a house comes off the market like that, do officials look back at those tenancies in any way to find out if the family member stayed there for longer than two or three months and it was not just used as a way to get families out? What type of follow-up monitoring process is carried out when a family is evicted from a house for a particular reason?

On the second question, there are changes in the Bill which mean that where a notice to quit is served on a tenant, the landlord must furnish that notice to the RTB within 28 days of the notice to quit period expiring. That allows the RTB, which is being given new powers, to follow up and inspect whether it was served for the reasons that it purportedly had been served. If it was not, there are new obligations on the landlord to re-offer that property to the tenant who was evicted. Even in the case of a family member coming into the property for a couple of months, the RTB has the right to go to the landlord and tell him that he is in breach of obligations and that he must go back to the tenant and offer him or her the property to occupy again. It is recognising that some landlords unfortunately will try to game the system under section 34 and get a family member in just for the reason of getting somebody out. This is to allow the RTB to follow up where that happens, and the new sanctioning regime for improper conduct by a landlord gives it the power to fine and do more, if necessary, where that has occurred.

With regard to Part 4, the Senator is correct in identifying the gap. The gap exists and that is why we must move to tenancies of indefinite duration. The gap is a legacy of how the law was built up since 2004. The 2004 Act introduced the Part 4 and Part 6 obligations that provided for all the new protections for tenants in terms of notice-to-quit periods, which we are extending here. The law was amended subsequent to that. One could step into that Part 4 agreement again and there would be an opportunity for the landlord, if he or she wished, to serve a notice to quit with no grounds. There is only one opportunity every six years to do that. We talk about successive Part 4 tenancies with one opportunity every six years.

Looking back, it seems odd that this would be case. Why would the tenant's rights diminish for a period and then be re-established? I suppose it was recognising that we were moving then, for the first time, to these types of protections and it was to try to find a balance, which seemed fair at the time, to allow the landlord to have that point at which to step out. Now, as we move towards transforming our rental sector we want landlords coming in and making a 20 or 30-year play, so there would be no need for that. However, where it was the small individual landlord with one property I am speculating that the reason was to allow the landlord to step out without any reason every six years. If the landlord does not invoke that, he or she cannot do it again for another six years and must comply with section 34. Tenancies of indefinite duration will change that when they are introduced in legislation.

The RTB is doing a good job. Recently I have found that some landlords will not take HAP tenants. This will be the main issue in the future. They do not wish to take the HAP and due to lack of supply, that will become a serious issue. For example, there is a need for student accommodation in my area. People who are in the HAP scheme and looking for houses are finding it hard. They might go into a house that is unfit for purpose. There are not too many of them but they exist. What will be done in cases where many families are seeking accommodation and landlords will not accept HAP, as is their right?

Recently, people have come to my clinics to tell me that their landlord is selling the house. In fairness to landlords, they are well informed about their entitlements as well, as we are with regard to tenants. They say they are selling the house, give the tenants the six or seven months notice and it is all official. What the Minister is doing is good in a way, but I am finding that landlords are saying they will not take HAP. That is causing me concern. I find it very hard to get accommodation for families; it is extremely hard even to get flats or apartments. There are landlords who will take HAP but this legislation could have a slight knock-on effect on that, which is a concern.

We are creating at least 300 new HAP tenancies a week, which is staggering. Despite the crisis we have, 300 households are being supported each week under HAP for the first time. That is important. While recognising that, it can be difficult to secure HAP properties in certain areas for individuals. We rolled out place finders and made them available to every local authority, although not every authority availed of them. Where a local authority felt it needed a place finder it has taken on the service. Some have more than one place finder to help individuals and families to locate a property. Moreover, we have engaged with estate agents, who have a very good idea of what is happening in their area from a commercial point of view. We have engaged with estate agents to secure HAP tenancies through them before the properties even go on the market. There has been some negative coverage of that in the media but we are trying to help the people who are most vulnerable in this crisis. We are using every measure at our disposal to do that.

HAP homes must be inspected. The Senator referred to standards but there is a maximum time period within which the property must be inspected if it is being used for HAP. Tenants cannot be refused on the basis of using HAP. That is why the use of the place finder and estate agents is so important. It prevents that from being cited or used as a reason to refuse. We monitor this. The operation of HAP is done through an efficient system, which allows us to track what is happening in different parts of the country each week. If there are any concerns in an area about HAP tenancies not being completed or landlords withdrawing, that is notified to the local authority in question and, if necessary, can be escalated to me.

Amendment put and declared lost.
Section 11 agreed to.
SECTION 12

I move amendment No. 13:

In page 12, between lines 9 and 10, to insert the following:

“(2) Section 34 of the Act of 2004 is amended by the deletion of paragraph (b).”.

Amendment put and declared lost.

I move amendment No. 14:

In page 12, to delete line 11.

Amendment put and declared lost.
Section 12 agreed to.
NEW SECTIONS

I move amendment No. 15:

In page 12, between lines 21 and 22, to insert the following:

“Amendment of section 34 of Act of 2004

13. Section 34 of the Act of 2004 is amended by the deletion of paragraph 3 of the Table to that section.”.

I will withdraw the amendment and reserve the right to resubmit it on Report Stage.

Amendment, by leave, withdrawn.

I move amendment No. 16:

In page 12, between lines 21 and 22, to insert the following:

“Amendment of section 34 of Act of 2004

13. Section 34 of the Act of 2004 is amended in paragraph 4 of the Table to that section, by the deletion of “or for occupation by a member of his or her family and the notice of termination (the “notice”) contains or is accompanied by a statutory declaration”, and the substitution of “and the notice of termination (the “notice”) contains or is accompanied, in writing, by a statement.”.

I will withdraw the amendment and reserve the right to resubmit it on Report Stage.

Amendment, by leave, withdrawn.

Amendment No. 17 is out of order.

Amendment No. 17 not moved.

I move amendment No. 18:

In page 12, between lines 21 and 22, to insert the following:

“Further amendment of section 34 of Act of 2004

13. The Act of 2004 is amended by the insertion of the following section after section 34:

“Restriction on termination of tenancies in buy-to-let dwellings

34A. (1) A Part 4 tenancy may not be terminated by the landlord on the ground specified in paragraph 3 of the Table to section 34 where the dwelling or the property containing the dwelling is the subject of an existing investment mortgage.

(2) Subsection 1 shall apply to all Part 4 tenancies, including a tenancy created before the commencement of this section.

(3) Subsection 1 shall not apply to a Part 4 tenancy where a notice of termination was served to a tenant citing paragraph 3 of the Table to section 34 before the commencement of this section.

(4) In this section ‘investment mortgage’ means a mortgage taken out following the commencement of this section as a security in respect of a residential property that was not at the time of its purchase intended to serve as the principal private residence of the mortgagee.”.”.

Amendment put and declared lost.
Sections 13 to 15, inclusive, agreed to.
SECTION 16

I move amendment No. 19:

"

Less than 6 months

90 days

"

Amendment, by leave, withdrawn.

I move amendment No. 20:

"

Less than 6 months

60 days

"

Amendment put and declared lost.
Section 16 agreed to.
Sections 17 and 18 agreed to.
SECTION 19
Question proposed: "That section 19 stand part of the Bill."

We are opposing section 19 which allows the Residential Tenancies Board to begin charging for mediation services. I am aware from the Minister's contribution last night on Second Stage that it is an expensive service that needs to be paid for. I accept that, but it should not fall on vulnerable tenants to foot the cost in a property market that is so heavily weighted towards big landlords. The mediation process is one of the few ways by which tenants can exercise their rights under the 2004 Act. It cannot be justified that they should have to pay for a service which should be free. I hope the Minister will accept the proposed change.

I understand the motivation behind the amendment. We want people to continue to use the free mediation services of the RTB which has no intention of charging for them at any time in the near future. However, it is prudent to include this provision in the legislation in case it becomes necessary to use it at some point in the future, but no one is planning on invoking or using it following the changes we will make today. The advice is that it is important to have it in place for the RTB as part of the change management programme that is under way. At the beginning of September or October in 2017, having engaged with the RTB and others, a period of change began for the RTB to enable it to move from being a residential tenancies board to being a rent sector regulator to robustly defend the rights of tenants and landlords alike. When we look at the increase in funding in the budget for the RTB to hire more staff and inspectors, the legal changes to enable the RTB to make inspections independent of complaints being made, the new sanctioning regime that has been put in place to deal with some of the new abuses identified in Part 7A, they are all designed to move the RTB into the space where it can become a modern regulator in a modern rental sector. While it is not the intention of the RTB to charge a mediation service fee any time soon, it is part of the structural change we are trying to make to the RTB in looking ahead to what we may see in ten years' time or further on.

While I accept the Minister's good intentions, it is not acceptable to this House to give the power to charge a mediation service fee without coming back to this House first. If it is not the intention or the Minister does not foresee a need in the short to medium term to charge a fee for the mediation service and where he expresses the view that he hopes it will remain free of charge, if the RTB believes a fee has to be charged, the Minister should come back to this House to make the case for it. I am not in favour at this stage of giving the RTB the option of making a charge without the Minister having to come back to both Houses first.

I agree with Senator Humphreys. I have been a community worker for most of my life and still spend a certain amount of my time trying to find services for which people will not be charged because they cannot afford to pay for them. Some of these are vital services such as counselling and addiction services. Thought should be given to making sure a strong case would have to be made for why a fee would have to be charged. There is no mention of a waiver and there is nothing else in the legislation to protects the most vulnerable who already cannot pay for vital services. The fact that the RTB provides a free service means that it is one of the services they can access. Having a service to advocate for families who cannot advocate for themselves, face intergenerational poverty and educational inequality and are on low incomes is really positive. It is something the Government should continue to support, even if it is stating it is not going to happen in the short term. We do not know what Ireland will look like in three or five years' time or in what way the housing crisis will unfold in the next few years. We will have to make the decision on the charging of fees based on how things are at that time. It is not wise to make a decision to put that provision in place now which could take effect in a year or five or six years' time without knowing what society will look like at that time or understanding the situation in which tenants or vulnerable families will find themselves. If there is an important case to be made, there is no reason the Bill could not be amended at that time.

I agree with Senator Ruane. We do not want to be in a situation where we will have to come back here in six months' time when a fee has been introduced. Like other speakers, I deal with people who are constantly using their phones to ring the RTB. Overall, nothing should happen without any such proposal first being brought to this House. We do not want to hear in six months' time that a fee has been introduced and is being charged, particularly for those who are the most vulnerable. There should not be an opening to introduce a fee overnight.

No one is talking about introducing a fee overnight. The RTB offers free mediation services and we want them to continue. This is about the change management programme that is under way within the RTB to move it from being a board to a regulator and providing for all of the aspects that might be need to be addressed at some point in the future without the need to have to come back to the Houses to make legislative changes. If a mediation service fee was to be introduced at any point in the future, it would, of course, require further scrutiny because it would be quite a change for the RTB to make. The provision has regard to what we are trying to do in the rental sector. We are trying not just to increase supply and change the law for renters and landlords alike but also to have a more robust independent regulator. We are not sure what mediation services might be necessary in the future or how they might be structured, given some of the changes that are happening in the rental sector and what they might mean in terms of the burden on the RTB. The provision may never be used, but if it were to be used, it would require greater scrutiny by this House and the public. It is, however, considered prudent to include it in the legislation.

I cannot accept the argument the Minister has made. It would be prudent to provide that the RTB would have to come back to this House to make the argument for the charging of a fee. The position may change in the future, but it is not acceptable at this stage to give that power to the RTB. It is a free service and it should remain free, unless there is a strong case to be made for charging for it. I fear the Minister is commercialising it in the sense that the RTB may have to fund itself, be self-sufficient or "wipe its face", to use all of the catchphrases. The House must reserve the power in legislation where a fee for a service is to be charged. Such a proposal must be brought to this House and the argument in favour of it made strongly. Until then it would be prudent for the legislators to maintain in legislation that the service will be provided free.

To be clear, any change in this area would not be made without the RTB first coming to me and the Houses to discuss it. It is not even on its horizon to charge for the service. I am looking ahead to a landscape on which there will more larger landlords and when there may be a case to advise a group of tenants involved in a dispute with a large landlord to go through the RTB mediation service. In that situation the RTB might want - I am speculating - to impose a fee on the landlord, not on the tenants, because of the amount of time it might take to resolve the issue or because of the services rendered. It might be of the view that the landlord - we are moving towards having more institutional landlords, although they now account for a small percentage - would easily be able to carry the costs.

Now that we are moving to more institutional landlords, who account for a small percentage of all landlords, they feel that the landlord would easily be able to carry costs that they might have had to have borne if they were in a legal situation, which they are not. It is about thinking ahead to the far future. I think it is prudent in light of the changes we are making at the moment for the RTB. That is why it is in the legislation. There is nothing on the horizon that involves charging for mediation. No such proposal would come forward without me coming to the House to debate it. I would respond to the point made by Senator Ruane by reminding her that we have a free mediation service to make sure tenants who are in difficult circumstances as they try to find resolutions do not face an additional financial burden. That is not going to change.

In no way am I questioning the Minister's intention to give the nod to a fee in the coming year or so. However, we cannot put that into legislation. We need something that will apply to whoever succeeds the Minister. It is proposed to include in the legislation a wide reference to cutting the fee. It does not mention that the burden of that fee would fall on the landlord. It does not mention anything about the affordability of the fee, or means testing the fee. There is no actual nuance in it to protect those who will be affected by this provision after the Minister has left office, regardless of who is in government, who is within the Department or who is making the decisions. It is too open. It would be better if there were nuance in it, but that is not the case. Landlords are not mentioned. There is no reference to the fee being means-tested. I do not think we can future-proof something in this way, given that we do not know what position the Minister will be in after the next general election. We do not know whether he will be in this role again. I do not think it is feasible to accept that the Minister's intention will be carried through when other Governments are in office.

All I can say to allay the Senator's concern is that if this is to happen, it must have the consent of the Minister, regardless of who the Minister is. The Minister of the day will always be accountable to both Houses of the Oireachtas. I cannot know what the outcome of the next general election will be. If I were betting, I would bet that it will be another minority Government. When we are working in a minority Government, as we are doing at the moment, the vast majority of what we do is done with the consent of the House. The way in which this legislation has progressed since it was commenced is an example of that. I refer to the new provisions that are now included in it. Amendments were tabled, debated and accepted. All of this was done with the consent of Deputies of all parties and none. This is a very good example of how that works. It works well because of the great reforms we are making. That type of burden would also fall to a Minister in a future Government. If the RTB were to propose such a change, the Minister of the day would have to consent to it. I repeat that such a change is not being proposed. This is about thinking into the future. The example I have given relates to circumstances in which there might be a balance of power differential between a large landlord and a number of tenants. It is a question of what the RTB may or may not seek to do at some point in the future.

There is no provision within the legislation that says the consent of the Minister would be needed. If that already exists outside of the Minister giving consent to it, nothing in the legislation will require the Minister to liaise with either House before giving that consent. The removal of the section which provides that this should be free means that a Minister will be able to give his or her consent without a conversation having to take place in either House. That requirement does not stand in the legislation, so it might never come back for a discussion. It will just be at the whim of whoever is making the decision at the time.

I accept the Minister's good intentions. He may be right when he predicts that the next Government will be a minority Government. The Government after that could be a majority Government. All we can deal with is the way the legislation in front of us is framed. We cannot take a punt on the composition of the next Government in 2020 or 2028. The manner in which this Bill is framed will allow the RTB to get the consent of the Minister for the introduction of fees. All we will be able to do in such an eventuality will be to have a row in the House. The power to introduce fees is being surrendered to the RTB and the Minister. I am not prepared to go that far. I accept the good intentions behind what the Minister is saying. He is asking us to take a punt on future Ministers. I am not prepared to do that today.

We seem to be going around in circles.

I will respond for a final time on this section. I am not asking anyone to "take a punt". The RTB is not looking to do this. We are trying to manage a change management programme for the RTB to make it a robust regulator for landlords and tenants alike. We are trying to build a new rental sector that is more mature and more European. I have looked at every aspect of everything that may or may not be needed down the line, including the potential for us to have to come back and change the law. It is right that the legislative process is a lengthy one. When laws are made and changed, they have implications outside this House that can reverberate for a number of years. This is not necessarily the kind of issue on which one wants to have to come back to the House if there is support for something that needs to be done. The provision that is being put in is one that the RTB would have at its disposal at a future date if it wanted to avail of it. If it decides to do so, it will need to obtain the consent of the Minister. It is appropriate that such a check or balance is there, because it will prevent the RTB from going off and doing this on its own.

Is the section agreed?

No, we are opposing it.

Question put:
The Committee divided: Tá, 15; Níl, 12.

  • Burke, Colm.
  • Burke, Paddy.
  • Buttimer, Jerry.
  • Coghlan, Paul.
  • Feighan, Frank.
  • Hopkins, Maura.
  • Lawlor, Anthony.
  • Lombard, Tim.
  • Mulherin, Michelle.
  • O'Donnell, Kieran.
  • O'Donnell, Marie-Louise.
  • O'Mahony, John.
  • O'Reilly, Joe.
  • Reilly, James.
  • Richmond, Neale.

Níl

  • Black, Frances.
  • Conway-Walsh, Rose.
  • Devine, Máire.
  • Gavan, Paul.
  • Humphreys, Kevin.
  • Mac Lochlainn, Pádraig.
  • Marshall, Ian.
  • Nash, Gerald.
  • Norris, David.
  • Ó Donnghaile, Niall.
  • Ruane, Lynn.
  • Warfield, Fintan.
Tellers: Tá, Deputies John O'Mahony and Michelle Mulherin; Níl, Deputies Lynn Ruane and Frances Black.
Question declared carried.
Sections 20 and 21 agreed to.
NEW SECTION

I move amendment No. 21:

In page 17, between lines 6 and 7, to insert the following:

“Private residential tenancies register: publication of certain details

22. Section 128 of the Act of 2004 is amended by substituting the following for subsection (4):

“(4) The published register—

(a) shall not contain any information, as respects a particular dwelling, that discloses or could reasonably lead to the disclosure of the identity of the landlord or the tenant of the dwelling,

(b) shall disclose, as respects every dwelling, the amount of the rent payable under the tenancy of that dwelling.”.”.

I will not press the amendment but we reserve the right to reintroduce it on Report Stage.

Amendment, by leave, withdrawn.
SECTION 22

I move amendment No. 22:

In page 17, line 13, after “tenancy” to insert “with the exception of tenancies under an approved housing body”.

I was somewhat surprised by section 22(1), which I am seeking to amend because, as the Minister will be aware, my understanding is that no more local authority housing is being or will be built. The State rarely builds houses. Rather, it is using the various agencies such as Tinteán, Clúíd, Respond, Tuath, Co-operative Housing Ireland-----

The Senator should come to Cork to see what is happening there.

I am addressing the Minister. As he will be aware, various housing bodies work with local authorities. If Túath, for example, has ten vacant houses, its get the names of persons on the housing list from the local authorities and they all work together. Housing bodies such as Tinteán, Clúid and Respond go to the local authority, such as Carlow County Council, which puts forward the names to the agencies. That is how it has always worked. I know from dealing with the groups that they are doing an excellent job. Some have managers on site who check and talk to the agencies. They should not be subject to the requirement for annual registration with the RTB because they are doing a good job and have their own identity. The Minister needs to focus on there being more communication between the agencies, local authority tenants and local authorities and that there is a direct line to the various agency groups. The social housing that has been built recently has been built through these housing groups. They are the ones providing housing. Could this provision be excluded? If not, why not?

I thank the Senator for her contribution. I understand the reasons behind the amendment. It was gone through previously on Committee Stage when the Bill was progressing through the Dáil. On her first point, local authorities are building more houses than housing bodies. I do not wish to delay the House.

Essentially, the provision of social housing was reduced almost exclusively to one stream, namely Part V delivery, that is, the delivery of social housing homes on private land, in most cases by private developers. The private housing sector collapsed and, as a result, no social housing was being built. In addition, several local authorities were out of the practice of building social housing for far too long. Under Rebuilding Ireland, we have an ambition to increase the social housing stock by 50,000 and have several ways to achieve that such that the State and its citizens will no longer be exposed to one of our delivery mechanisms failing and, as a result, people not having a house in which to live. That is why we are providing social housing built by local authorities on local authority sites and local authorities are contracting and building social housing on private sites where the land is in an area in which people wish to live. Housing bodies are building social housing with State support and taking people off the housing lists. Local authorities and housing bodies are undertaking long-term leasing in situations where it makes more financial sense to lease the house than to build or buy it and it is far quicker than building it. In certain parts of the country, they are acquiring or buying homes where such are readily available and the second hand market is far cheaper than building a home. In addition, we have Part V, which is a small part of the overall. We have dramatically changed how we provide social housing such that if any one of those streams was to fail, it would not mean that social housing would cease to be built. That is how the landscape has changed.

A frustration I have is that in the discussion of social housing some academics, commentators, politicians and others only want to look at one stream and declare that it is real social housing but the rest is not. The Iveagh Trust has been providing social housing since before this State was founded and it does so very well, as do several other bodies. It is incorrect to state that what they provide is not social housing. We need to have an informed debate when we talk about the provision of social housing. Housing bodies are building thousands of homes, but local authorities are doing more. As Minister, I have been getting them to work together, even insofar as ensuring that housing bodies building on local authority land is part of the overall solution in the delivery of social housing.

In this section of the Bill we are trying to move to an annual registration of tenancies such that the RTB can have a modern and up-to-date picture of exactly what is happening in our rental sector - what rents are being charged, who is living where, the duration of tenancies are and everything else it will need to police the rental sector, including housing bodies as well. Currently, one only registers a tenancy at the commencement thereof and pays €90 per tenancy. The tenancy may last one or five years. Most tenancies last an average of two years. However, circumstances may change within the tenancy and we are not capturing that on an annual basis. We are recognising that by making annual registration the new law from 1 January 2020 without putting an additional burden on the landlord. We are reducing the charge for registering a tenancy from €90 to €40. It will be even less for housing bodies, which will face a charge of €20. Further, if one is registering more than ten tenancies, it is €8.50 per tenancy. From a financial perspective, €8.50 per year for each tenancy year is not too much of a financial burden, even for the smallest AHBs. Of course, there is an administrative burden but we will make this as easy as possible such that it falls in the first year of the tenancy. The tenants in most AHB tenancies are there for a long duration. The administrative details will not really change year in, year out. We want to build a system whereby, rather that having to resubmit all of the forms each year, there will be a simple online submission. It is not too much of an administrative or financial burden.

The annual registration is necessary to build the new type of RTB which I discussed. It will allow it to move to the annual registration of tenancies and not lose the registration fee, which is one risk. In recognition of the fact that we are moving to annual registrations, we are reducing the fee by more than halving it for ordinary landlords and, for AHBs bringing it right down, particularly if they have more than ten tenants. It is fair.

I understand the points made by the Minister and I am glad he explained the rationale behind the proposal. However, private builders and AHBs provide the bulk of housing in my area. I can provide the list to the Minister, which I have given to Ms Mary Hurley of his Department. I am aware that a certain number of local authority houses are being built, but that is not happening in my area. I am not stating that the same situation pertains across the country. I understand from where the Minister is coming with the proposal and it may be as well to leave it in and see how it works.

It is important to recognise that the model of delivery of housing is changing. In 2018, 8,422 additional homes were provided by the Department of Housing, Planning and Local Government. That resulted from local authorities, housing bodies and housing agencies working together and was funded by the Department. In the debate on housing, I wish to make two points. First, it is important to recognise that there is no silver bullet, as I stated yesterday. Second, considerable investment is being made.

I was with the Minister of State, Deputy English, in Cork two weeks ago when we engaged in a listening operation. Perhaps some of the problem is that misinformation is being put out to suit a political or other particular narrative. People should look at the budget allocated to housing, homelessness and the provision of housing. I invite Senator Murnane-O'Connor to visit Cork - her dear leader would love to have her - and look at the housing projects being built from the ground up under Rebuilding Ireland. The houses are not being acquired or bought but, rather, being built with bricks and mortar. People are being assessed by the local authority to go into new build properties. I will bring her to meet the people who live in the new houses on Tramore Road and many other parts of Cork city and who are delighted with the opportunity given to them.

They take great pride in owning a new home in the area.

I was complimenting-----

Please, Senator, with all due respect, when the Minister responded, he had to accepted it, and now the Senator has evoked it again, so she wants to continue this debate as long as possible.

We have two Ministers on this side.

I complimented the approved housing bodies, AHBs, on the great job they were doing to work with local authorities. I said it looks as if we are not building as many local authorities anymore, and we are not. In my area, we are not. That is all I said. I did not say they were not doing a good job. They are excellent. All of them are working with the local authority. I complimented them and I did not go against them. I do not understand where this is coming from.

The Senator-----

No. Before the Leader came in Senator Murnane O'Connor had suggested that as things stood she was prepared to move on with this Bill.

Does the Leader want the debate to move on or not?

No, I have not disagreed.

It is a case of how I see it up here.

Senator Murnane O'Connor has said that with reluctance she is prepared to withdraw her amendment.

No, I will press it now.

Amendment put and declared lost.
Section 22 agreed to.
Sections 23 to 27, inclusive, agreed to.
SECTION 28

I move amendment No. 23:

In page 33, to delete lines 16 to 31.

The amendment proposes to delete the requirement for sanctions to be confirmed by the Circuit Court. This requirement only leads to a backlog. It also creates an unnecessary administrative burden on the Residential Tenancies Board, RTB, and the courts. Last night we discussed the delays and possible consequences and scenarios where there is a dispute over a deposit, and how we can ensure that there are not delays in results and decisions being made because delays have financial consequences. I also asserted last night that we need to build confidence in the RTB to a point where tenants know their rights, that they feel confident in asserting them in full, and that they are not inhibited by feelings that they are lucky to have a place at all and should accept violations of their rights as tenants. That is not acceptable. If we consider that the average time for an illegal eviction case with the RTB is five months from the application to the determination order then we should strongly consider the possible effect of adding another layer of delays. I ask the Minister to support amendment No. 23 and I will be pushing it.

I thank the Senator for putting forward the amendment. In the first instance, removing the Circuit Court from the confirmation process is unconstitutional. I will explain why, even if it were constitutional, I believe it would be necessary to have the provision in place. I do not like just to say it is unconstitutional and shut down debate. If the Senator does not mind, I will take a couple of minutes to talk through it.

One of the things that we are trying to do with the Bill is to give greater powers to the RTB to act independently of tenants. Where a tenant is in a bad situation with a landlord, at the moment the RTB cannot investigate unless the tenant makes a complaint, which puts that tenant in a very difficult position. The balance of power is unfair in that instance. If the tenant were to make a complaint, then all of a sudden the landlord's behaviour, which the tenant thinks or perceives to be unfair, could get even worse. We want to provide that the RTB can investigate its own inspections based on the work its inspectors will do, these being the new inspectors and authorising officers whom we are providing to it, and for people to make anonymous complaints and everything else. Once the RTB decides to make an inspection, we have to make sure it has a process whereby it can sanction the landlord for bad behaviour.

We have done two things in the Bill in this regard. We have introduced new criminal sanctions for landlords. It is wrong and unfair on other landlords to call the people in these cases landlords where human rights are being abused by putting people in unsuitable, unsafe and overcrowded accommodation, the types of things that are more akin to what people do when they are human trafficking. There are new criminal offences that will act as a strong deterrent to landlords from behaving in that way, but where they are, the RTB and the courts can properly go at them.

(Interruptions).

Separate from that, for lesser offences where a landlord has acted offside, we have a new administrative sanctioning process in this Bill and new offences concerning improper conduct. For example, we talked about section 34 notices to quit being served. Where a landlord serves such a notice, asks the tenant to vacate the premises because it is going to be done up to such an extent that the tenant cannot live there, the tenant leaves and later observes, as he or she walks by the property, that the landlord has only given the property a lick of paint and has tried to relet it, the tenant can then make a complaint to the RTB and the board can go straight to the landlord, saying it has received a complaint. The RTB can appoint an officer to investigate and, through the new sanctioning regime, engage with the landlord and compile a report listing the breaches he or she has committed under the law. The landlord can then comply and admit that he or she has made a mistake. He or she will have to relet the property to the tenant who was evicted and, potentially, pay compensation that can be agreed between the landlord and the RTB, or the landlord can go through other processes to make good on the offences he or she has committed. If the landlord does not accede, we need to be able to proceed with the proper sanctioning of him or her which could, in certain cases because of the changes we are making, result in fines of up to €30,000, time in prison, and the publication of the landlord's name as an offender, all of which we are doing in different parts of the Bill. We must allow due process to take its course as well. We cannot move to that point without having a court in land actually confirm that this happened and this is what the result will be.

In the vast majority of cases, having the power alone is enough because we are a law-abiding nation. We do not need the laws to be enforced to a degree to stop us from breaking them. For most of us in most instances, we do not breach them. Where they are broken, we need to know that action can be taken, and taken strongly. That is why Circuit Court confirmation is necessary at the end of that period. I have a diagram that we provided on Committee Stage that shows all of the different areas where mediation can step in, where another part can happen in terms of the process, and where agreement can be reached without having to go to the Circuit Court. Ultimately, the Circuit Court has to be there as the ultimate decider in terms of the rights of both people in a case if it is a tenant and a landlord or if it is the RTB and a landlord. However, we have provided a number of opportunities for the landlord to make good in instances where he or she is caught and will happen in a much shorter period than the one outlined in the Senator's contribution. We believe this is a new robust sanction regime and powers for the RTB, and we have to provide the Circuit Court confirmation at the end of that process.

What resources will the RTB receive?

In the budget for this year we increased Exchequer funding by 67% for the RTB to allow for inspections to be done by the RTB and local authorities. Under the Bill, we are bringing about this new concept of an authorised officer and a decision-maker. The RTB will be able to hire people to be investigators, essentially, and we provided money in the budget for the board to do that. A lot of the work that is done between me and the RTB, which will not necessarily be seen, involves trying to work with the board as part of a change management programme. One of my first engagements when I took up this office was with the RTB, asking the board what it needed to police the sector properly. Since then we have worked both from a budgetary and a policy point of views to try to give all of those resources to the board. The RTB has the funding and authorisation to hire people. This will be the new system in which it will be working. This is something that is going to continue into future budgets to make sure that the RTB, as we give it more powers, can fund the resources it needs to do this work. I cannot recall whether the new positions have been advertised. All of those things are being worked on to make sure that the RTB can spend the money it has been given.

Is the Senator pressing the amendment?

I withdraw the amendment but reserve the right to resubmit on Report Stage.

The Senator is withdrawing the amendment and obviously has the right to resubmit.

Amendment, by leave, withdrawn.
Section 28 agreed to.
Sections 29 to 37, inclusive, agreed to.
SECTION 38

Amendments Nos. 24 and 25 are related and may be discussed together by agreement. Is that agreed? Agreed.

I move amendment No. 24:

In page 42, line 28, after “regulations” to insert the following:

“(which shall include but is not limited to persons, whether established in the State or otherwise, who provide for consideration advertising, agency or management services in respect of short-term lettings)”.

We plan to withdraw the amendment with a view to resubmitting it on Report Stage. Deputy Humphreys is particularly concerned about this aspect of practice in the housing sector. He is anxious to liaise with the Minister and his officials on this, if that is in order, before we resubmit the amendment on Report Stage. If the Minister could consider that and if contract could be made with the Senator on that, that would be appreciated.

I very much respect the work that Senator Humphreys has done on short-term letting. We had some conversations around this. When we conclude this legislation, I will then have to commence this section of and I will have to bring forward the regulations under these legislative changes. The meat for the regulation of short-term letting is in the regulations. The legislative changes are more about enabling me to make regulations and then regulate this activity in regard to short-term letting. I will lay those before both Houses, and there will be an opportunity for me to come back into this House with respect to the regulations, which is where the meat of the matter lies.

Between now and Report Stage, if Senator Humphreys wants to engage with my office, he can do so. I know he wants to talk about enforcement issues. When we were taking this legislation previously, I said that powers to regulate short-term letting fall to the tourism sector. I do not have powers in my Department to do that. I recognise as the Minister with responsibility for housing that long-term rental stock is being lost to the short-term rental sector. I have powers under the planning law where I can get that stock back.

This is an important change we are making for the first time in law based on a new economic activity in areas where rent pressures are highest and supply and demand are not yet at equilibrium. It is important that we make these changes. As I said previously, they were to come in on 1 June and due to delays they will come in on 1 July. I hope there will be no more delays that will prevent us from bringing them in on 1 July given their importance. It is also important to recognise that, in doing this, this will make an important change regarding short-term letting but after that we will need to bring in proper regulation of the sector, which will include the platforms themselves. I am not empowered to do that but it is something we as a Government need to do.

If Senator Humphreys would like to engage with my office between now and Report Stage, my officials and I can talk to him about some of the details of what we are proposing to do through regulation and through the local authorities when it comes to enforcement.

Amendment, by leave, withdrawn.

I move amendment No. 25:

In page 42, between lines 31 and 32, to insert the following:

“(3) Upon the request in writing of the Revenue Commissioners, a planning authority shall furnish to the Revenue Commissioners any particulars, in respect of a person or a dwelling specified in the request, that were provided to the authority under regulations made under subsection (2).”.

Amendment, by leave, withdrawn.
Section 38 agreed to.
NEW SECTION

Amendment No. 26 is in the names of Senators Ruane, Higgins and others. It is a new section already discussed with amendment No. 1 and therefore it cannot be discussed again.

I move amendment No. 26:

In page 43, after line 11, to insert the following:

“National Deposit Scheme Report

39. The Minister shall—

(a) not later than 6 months after the enactment of this Act prepare a report on the feasibility of the establishment of a national deposit scheme,

(b) make recommendations on how best to implement such a scheme in the Irish context,

(c) cause a copy of the report and recommendations referred to in paragraph (a) and (b) to be laid before each House of the Oireachtas.”.

Is the amendment being pressed?

Amendment put:
The Committee divided: Tá, 8; Níl, 18.

  • Black, Frances.
  • Conway-Walsh, Rose.
  • Devine, Máire.
  • Gavan, Paul.
  • Higgins, Alice-Mary.
  • Norris, David.
  • Ruane, Lynn.
  • Warfield, Fintan.

Níl

  • Burke, Colm.
  • Burke, Paddy.
  • Buttimer, Jerry.
  • Coghlan, Paul.
  • Conway, Martin.
  • Feighan, Frank.
  • Hopkins, Maura.
  • Lawlor, Anthony.
  • Lombard, Tim.
  • Marshall, Ian.
  • Mulherin, Michelle.
  • Mullen, Rónán.
  • Nash, Gerald.
  • O'Donnell, Kieran.
  • O'Mahony, John.
  • O'Reilly, Joe.
  • Reilly, James.
  • Richmond, Neale.
Tellers: Tá, Deputies Lynn Ruane and Frances Black; Níl, Deputies John O'Mahony and Neale Richmond.
Amendment declared lost.
Title agreed to.
Bill reported without amendment.

When is it proposed to take Report Stage?

Dé Máirt seo chugainn.

Report Stage ordered for Tuesday, 21 May 2019.