Residential Tenancies (Amendment) (No. 2) Bill 2021: Report and Final Stages

Before we commence, I remind Members that a Senator may speak only once on Report Stage, except the proposer of an amendment, who may reply to the discussion on it. Each non-Government amendment on Report Stage must be seconded.

Amendments Nos. 1 and 2 are related and may be discussed together. Is that agreed? Agreed.

I move amendment No. 1:

In page 5, between lines 31 and 32, to insert the following:

“(f) in subsection (5A)(a), by the deletion of subparagraph (ii).”.

I second the amendment.

These amendments are very practical. What they do is not just attempt to protect tenancies, which I know is the general goal of the legislation, but also to try to ensure the protection of tenancies is not placed at odds with other stated Government priorities, for example, in terms of retrofitting and, of course, in regard to the area which is not touched on as much, that of adaptation under the UN Convention on the Rights of Persons with Disabilities. These are issues we were discussing just this morning with the Minister of State, Deputy Rabbitte. We are at a point where we need a seismic period of new build but we also have a seismic project of retrofitting across the country. Alongside the urgency we have in regard to climate action and the role retrofitting plays in that, we also have related issues regarding situations where people may need to adapt living spaces because of a disability.

The fact is many people with a disability are renters, including many of those living in houses and apartments that are currently below the energy ratings and standards that we would wish. In many cases, there will be a fear that if, for example, a major retrofitting project is to happen in a house, flat or home, a person's security of tenure could be jeopardised. That is because retrofitting was explicitly excluded. It is important to mention that it was not part of the principal Act. Retrofitting was included in a list of renovations which qualify as sufficient major renovations to remove people's Part 4 protection and allow for them to be evicted. It was included in that list at subsection (5A), which was inserted as an element added to the Bill, although it is not a core element of the Bill.

Of course, its inclusion at that time was probably trying to cover what are "substantial renovations", but we have effectively created a perverse incentive against tenants seeking retrofitting by pressing their landlords to do it. There is also a jeopardy in regard to the social good of the retrofitting of houses. We must bear in mind it is important for warmth and in terms of energy poverty, the price of fuel and all of those issues, but it is also ultimately important in terms of reducing the emissions that we produce collectively as a nation towards our target of 1.5°C. Retrofitting is a great social good yet we are attaching an inequitable or negative outcome to it, which is a jeopardising of tenancies.

In amendment No. 1, I do it very neatly and specifically by seeking to delete subparagraph (ii). Again, I am not sure if that will cover adaptation for disability as that may be a separate issue. However, I should flag to the Minister of State, Deputy Noonan, that when I spoke to the Minister of State, Deputy Rabbitte, this morning, I signalled to her that one of the retrofitting options we should have on the table is retrofitting plus adaptation, that is, a retrofitting option which included that, as a home was being retrofitted for energy, it would also be adapted in terms of universal design and disability access. That is particularly important because we know that persons with a disability, in many cases, are more likely to spend more time in their homes and more likely to suffer from high fuel prices and energy poverty. There could be a win-win. I am highlighting this because I think it is a constructive amendment to highlight what could be a very positive measure, which is supporting retrofitting combinations between disability access and energy retrofitting, and also sending a very positive message on just transition and climate justice in terms of ensuring we have equity in how we approach our climate measures.

Amendment No. 1 simply removes retrofitting from the list that was added. Amendment No. 2 is a little more explicit in that it spells out specifically the measures in regard to improving the building energy rating, BER, or where the dwelling is being adapted to provide for access and use by a person with a disability within the meaning of the Disability Act. Amendment No. 1 is simply removing the disincentive or the negative element that is there at the moment, whereas amendment No. 2 is a little more proactive.

I am seeking to explicitly spell out areas that should not be considered as a renovation creating grounds for the ending of a part 4 tenancy. I ask the Minister of State to comment. These are constructive proposals and would bring us forward.

In the absence of colleagues, I ask the Minister of State to respond.

I cannot accept amendments Nos. 1 or 2. I am aware that there are similar motivations behind both.

Having listened to Senator Warfield yesterday and Senator Higgins today, there is probably a little confusion on the subject, so I will try to clarify matters. Section 19 of the Residential Tenancies Act provides for rent settings at the commencement and during a tenancy. The amendments proposed by Senators are to provisions dealing with exemptions from the rent pressure zone, RPZ, restrictions and do not relate to grounds for tenancy termination.

Amendment No. 2, as I understand it, proposes that where a landlord provides building energy rating, BER, improvements or disability access works, such provision cannot be used as a ground for terminating a tenancy under paragraph 5 of the table to section 34.

Amendment No. 1 provides, on the face of it, for the deletion of one of the criteria for the RPZ rent increase rent exemption to apply on foot of a substantial change in the nature of the accommodation provided under the tenancy, namely, where an improvement of seven BERs is achieved by the works carried out on the rental property. I think the intention of the amendment is different though, and its purpose relates to the carrying out of such work to not count as a ground for tenancy termination. It should be noted in the context of an RPZ rent increase restriction exemption that such works would only qualify on a once-off basis in the context of the first rent setting after such works. Thereafter, the RPZ rent restriction will apply. On the face of it, the amendment also proposes that to qualify for a RPZ rent increase exemption the following works will not suffice, namely, works that result in BER improvements, adaptations to provide for access and by use of a person with a disability within the meaning of the Disability Act 2005, or both.

The Residential Tenancies (Amendment) Act 2019 significantly strengthened the protections relating to the grounds for termination of a tenancy, especially in relation to paragraph 5 where the landlord intends to substantially refurbish or renovate a rental dwelling in a way that requires the dwelling to be vacated for the purpose. The notice of termination must contain, or be accompanied in writing by, a statement: specifying the nature of the intended works; that in the case where the planning permission has been obtained a copy of the planning permission is attached to the notice of statement; that planning permission is not required and specifying the name of the contractor, if any, employed to carry out intended works and the dates on which the intended works are to be carried out and the proposed duration of the period in which those works are to be carried out; and that the landlord is required to offer to the tenant a tenancy of the dwelling if the contact details requirement is complied with and the dwelling becomes available for reletting by reason of completion of the works or refurbishment or renovation.

The notice must contain or be accompanied by a certificate in writing of a registered professional within the meaning of the Building Control Act 2007 stating:

(I) the proposed refurbishment or renovation works would pose a risk to the health or safety of the occupants of the dwelling concerned and should not proceed while the dwelling is occupied, and

(II) such a risk is likely to exist for such period as is specified in the certificate which shall not be less than 3 weeks,”.

The substantial changes made in 2019 strengthened enforcement of tenancy termination protections, while respecting landlords’ constitutional rights regarding their property. A failure to make an offer of a relet to a former tenant who has provided contact details after the completion of refurbishment or renovation works is improper conduct by a landlord and can be subject to the imposition of a sanction of up to €30,000 by the Residential Tenancies Board, RTB.

Accordingly, I think there are significant protections already in place to address the Senators' concerns in this regard.

I welcome the clarity concerning the Disability Act. The proposals I have been discussing with the Minister of State, Deputy Rabbitte, for a combination retrofitting and adaptation grant is something I think would be very useful. We may still need more clarity on that but perhaps it would be covered by this. However, while I appreciate the placing may not work in that this applies to RPZs, the fundamental point I was talking about is not the matter of a tenant needing to leave for a period. It has always been the case with Part 4 that a tenant may need to leave but has the right to be offered a relet. The problem is that the price will change. As a result, this is about the rental pressures and the price change, and it is still a disincentive because a tenant may be offered a relet but not at the same rate, as I understand it. If there is an exemption to the limitations on the increase in rent under the rental pressure zone rules that is the problem. The Minister of State has described the planning permission and the fact it needs to be done by accredited persons. All of that is fine but it is still an issue if retrofitting or if a major energy rating overhaul of an apartment or house ends up effectively removing the rental protection and the rental rate protections a Part 4 tenant may have acquired or the protections they may have under the RPZ rules with respect to a limitation of potential increases in their rent. The key concern there is retrofitting as a social good. There is the named contractor and all of those elements, but it is still an issue if retrofitting creates a situation whereby the sustainability of somebody's tenancy and the price he or she is paying are placed in tension I urge the Minister of State to consider this, whether or not this placing is correct.

The RPZ section might be a good section to address this in. I framed it in terms of eviction where in fact it is not perhaps about eviction but a potential rise in rent to the point of a tenancy becoming unsustainable or unrenewable. This is an issue to be addressed because we need to have every positive measure towards retrofitting we possibly can.

With respect to the balancing of issues for landlords, the balance was different when this was inserted because now we are not just balancing the rights of a tenant and the rights of a landlord, we are balancing a social good and, indeed, a social cost if we do not retrofit as well as the rights of the tenant to energy security and home heating against the potential property rights or increased property prices of a landlord. The balance has shifted since these provisions were inserted and we need to reflect that in the policy.

On a general point, as I have outlined there are significant protections there within the RPZ. The Senator will appreciate bringing a property up to a significant BER as required under regulations would offer a greater level of thermal comfort for tenants and represent a cost saving for them with respect to their energy bills. As I have outlined there are significant protections there.

I thank the Minister of State and Senator Higgins. Does the Senator wish to press the amendment?

I will withdraw it.

Amendment, by leave, withdrawn.

I move amendment No. 2:

In page 5, between lines 31 and 32, to insert the following:

“(f) in subsection (5A)(a), by the deletion of subparagraph (ii),

(g) the insertion of the following subsection after subsection (5A):

“(5AA) For the purposes of paragraph (b) of subsection (5), a substantial change in the nature of the accommodation provided under the tenancy shall not be deemed to have taken place where the works carried out to the dwelling concerned result only in one or both of the following—

(a) in the case of a dwelling to which the European Union (Energy Performance of Buildings) Regulations 2012 (S.I. No. 243 of 2012) apply, the BER (within the meaning of those Regulations) being improved, or

(b) the dwelling being adapted to provide for access and use by a person with a disability, within the meaning of the Disability Act 2005.”,”.

I second the amendment.

I withdraw the amendment.

Amendment, by leave, withdrawn.

I move amendment No. 3:

In page 5, between lines 31 and 32, to insert the following:

“(f) by the insertion of the following subsection after subsection (5B):

“(5C) Notwithstanding subsection (5), in setting, at any particular time, the rent under a tenancy of a new dwelling in a rent pressure zone, where no tenancy in respect of that dwelling has previously subsisted, an amount of rent shall not be provided for that is greater than the amount determined by the formula—

RB_room x (1 + 0.02)

where—

RB_room is the median rent for the County Council area in which the dwelling is located, for a dwelling with the number of bedrooms, according to the most recent quarterly rent price data published by the Board.”,”.

I second the amendment.

Are amendments Nos. 3 and 4 grouped?

They are being taken separately.

Perfect. On amendment No. 3, again, with respect, while the protections are there, they are not working. I will not go back into the previous area but I really urge that it be examined. While a tenant may make long-term energy savings, most tenants do not have the upfront money to risk a rent increase. They may have the future energy savings over a ten-year period but if it means they might end up with a rent increase it is something they are going to be concerned about.

While the landlord has the benefit of an asset that is enhanced, they need to be clear on that. Sometimes there is a lack of acknowledgement of the benefits for the landlord of having enhanced their own asset.

This piece is an example of protections being in place but not working. The data of the Residential Tenancies Board show that there has been a 7% annual increase in the rent levels, which was indicated in the rent index for quarter 2 of 2021. We have rental pressure zones and a theoretical level of the kinds of increases that we expect to see in those zones but evidence shows that there has been a 7% annual increase. Amendments Nos. 3 and 4 deal with two halves of that. I mean two suggestions have been put forward. I will cite the Institute of Professional Auctioneers and Valuers, IPAV, again. The IPAV has indicated in newspaper reports that it suspects that landlords of new tenancies in rent pressure zones play a key role in driving up rents. For example, a landlord, a real estate investment trust, REIT, or a fund that buys a new unit tends to set the starting rent at a very high level. We have also seen reports of the following in the newspapers whereby they may set the rent very high then they may engage in informal rent reductions for certain clients while keeping the on-the-books rent extremely high. One of my concerns with this, which flows from a general flaw throughout our housing and property policies, is that we allow property to be treated as a commodity. For example, for anyone who has a large portfolio and wants his or her properties to change hands or to exchange them, then he or she wants the portfolio to have a high theoretical yield from the portfolio properties that they own even if the properties are vacant. As I live in the centre of Dublin city, I see the evidence of many apartments with extremely high ticket rent prices that are empty and have been empty throughout the pandemic. Let me explain the benefit. A person may have a whole suite of portfolio properties and he or she can say he or she has X number of properties where the rent is €3,000 a month. That is the product and it is not about the monthly rent.

I recognise that this is a tricky Bill to amend. I tabled an amendment on Report Stage in an attempt to discover how we can ensure, if we have designated an area a rental pressure zone for a reason, that we do not have such artificial inflation taking place, which also then creates a lot of pressure and incentive on landlords to seek to evict tenants who have rental protection and who may have long-standing tenancies. I propose that we set a cap on rental increases and a cap on the starting rent for new apartments of equivalent value. Again, the same formulas that were used for rent pressure zones and to cap increases can be used. These formulas may need to be reflected in new tenancies. I have proposed that rent would not be set 2% higher than the median rent. I do not mean the median rent in the area but the median rent for that type and category of property in the area. The restriction is reasonable. I cannot imagine that the Minister of State will be in a position to accept financial measures, and generally he might not be able to, but I hope that he might be able to respond in terms of how the issue will be addressed.

While acknowledging the intent of this amendment, I am not in a position to accept it.

The established practice in the residential rental market, in accordance with section 19(1) of the principal Act, is for a landlord to set a rent that is no greater than the prevailing market rent for a particular tenancy. Section 24 of the principal Act defines market rent in terms of a tenancy of a dwelling to mean:

the rent which a willing tenant not already in occupation would give and a willing landlord would take for the dwelling, in each case on the basis of vacant possession being given, and having regard to—

(a) the other terms of the tenancy, and

(b) the letting values of dwellings of a similar size, type and character to the dwelling and situated in a comparable area to that in which it is situated.

It is a matter for the landlord to ensure that he or she does not exceed market rent. A tenant can refer a dispute on the amount of the rent set to the Residential Tenancies Board. In addition, a determination order can be made for the rent to be reduced and damages, to a maximum of €20,000, paid to the tenant.

Section 19(5) of the Residential Tenancies Act provides for an exemption from the RPZ controls only in relation to the first rent setting of a new tenancy where the dwelling is, or is in a protected structure or proposed protected structure within the meaning of the Planning and Development Act 2000 and has not been let in the previous 12 months, or no tenancy in respect of that dwelling subsisted during the period of two years immediately preceding the date on which the tenancy concerned commenced. These exemptions only apply to the first rent setting under the tenancy in a RPZ. Thereafter, rent increases are prohibited from exceeding general inflation, as recorded by the harmonised index of consumer prices or the proposed 2% cap per annum pro rata, whichever is lower. If accepted, this amendment would negatively impact on the investment in and supply of rental accommodation in the medium to longer term. I am sure that Senators will agree that this would be a very unwelcome and unintended consequence of the measure.

While affordability remains an issue, the introduction of RPZs in 2016, and their subsequent enhancement in 2019, in July of this year and proposed here in this Bill, have played and will play a key part in moderating rent increases. RPZs were a considered measure that balanced the needs of tenants with the legal rights of landlords and the imperative to ensure that rental housing supply was not adversely affected. We need to encourage landlords to provide much needed accommodation in the private rented sector. This measure would drive away investment from the sector. A landlord will need to be able to set a rent that he or she considers does not exceed the market rent.

The RTB's quarterly rent index report, that is produced in conjunction with the Economic and Social Research Institute, ESRI, captures the number of bedrooms in an individual rental property. However, due to the number of tenancies registered each quarter, this information is only reported at regional level. The RTB has considered providing this information at a county level but there were not a sufficient number of new registrations in each quarter to support this granular analysis. This matter will be reviewed after annual registration is introduced in quarter 1 of 2022, when the RTB expects to have between 60,000 and 70,000 renewals each quarter that may enable more granular reporting.

On the median rent amount, the quarterly rent index report does not currently include the median rent in an area. Again, this matter can be reviewed following the roll-out of the requirement for the annual registration of tenancies within the RTB.

The RTB's quarterly rent index report provides the standardised average rent both nationally and at regional levels, including local authority levels. The standardised average rent refers to the development of an average that is consistent over time to changes in different property types or characteristics of a tenancy that may evolve within the market. The standardised average rent can, therefore, be compared over time without concern for underlying changes in the data or sample.

I confirm that I cannot accept the amendment. I encourage any tenant who faces what appears to be an unlawful rent level to refer the dispute to the RTB for determination.

There are two fundamental issues there. First, with absolute respect and this is one of the flaws in much of the enforcement issues, the onus has been put on the tenant. Either somebody seeks to rent, because the nature of this is that these are new potential properties and new properties that are coming on stream, so one does not have a tenant who complains that the rent is too high because he or she is not in a position to be the tenant. Moreover, as I have just outlined, these properties remain empty in many cases.

Second, even if there is a tenant the power imbalance is quite substantial at the moment. The power imbalance between tenants and landlords is extremely skewed at the moment. By contrast, the power balance between the Government and landlords could be very different.

It worries me that the Government does not seem to think it has sufficient powers or a willingness to engage or press harder with landlords but it could. This is a choice made by the Government.

A pattern has emerged, and it is not an individual case or a bad story. There are cases. The Residential Tenancies Board, RTB, data shows that there are 7% annual increases in rents. The Institute for Professional Auctioneers and Valuers, IPAV, which actually sells houses, acknowledges this is anomalous and wrong. It states that the figures are inconsistent with what could be expected in those areas.

The onus should not be on tenants to report this. The onus is on the State to check that the measures are working properly. With great respect to the inadvertent consequences, the Government needs to look at the inadvertent consequences of some of its measures. For example, where a property has not been let in the last 12 months, is that an incentive for a 12-month vacancy period? Funds can afford that. If one looks at the difference between a 2% annual increase and a 7% annual increase, it is worth waiting 12 months and leaving the property vacant.

I welcome the fact that there will be more information in the next quarter. We need more information. I regret that the Minister for Finance, Deputy Donohoe, did not take more of an opportunity to get more information when the property tax was being rolled out. There was a clause in that which stated that information on vacancy would only be used statistically. However, that was an opportunity to have the information on vacancy. To be honest, the issue that I am trying to tackle here is a vacant property tax. A vacant property tax that looked into that 12-month period would address this even more effectively.

In the interim, however, we need to address the fact that there are products in the financial markets that are offering portfolios of empty buildings with theoretical rental prices. I do not mean to put this on the Minister of State but there seems to be a fundamental logic that what investment funds want and the needs of housing are the same thing and that the interests are aligned. They are not the same interests. In terms of giving investment funds every single thing they want, they are not running scared; they are very confident. We have all heard the interviews about how happy they are. They are not going to run out of the market if we show proper care in the way they deliver on housing. We cannot continue to treat portfolios of investments the same as housing provision and assume they are going to align. They have different goals based on market logic. They have shareholders and boards. The goal of those boards is to maximise profits. They will use every single element of our laws to do that. In fact, if there were good boards of governance, as there often are, we strengthen the hands of those who wish to deliver better practice because they would have that fiduciary duty to maximise their profit while also working within the laws and constraints. They would want better constraints and better laws, if they were genuine in their commitment to being part of the long-term housing solution in Ireland.

I know that the Minister of State cannot accept this amendment; I knew he would not be able to do so. However, I am signalling that the answers he has been given to give me about the tenants and the needs of investors are not adequate in dealing with this problem. We have flagged this. There was a 7% increase in the space of a year in areas where there is a desperate need for rental accommodation. This is not just a flag for tenants, but it is a flag for the State. I hope that if the Minister of State cannot do it in this Bill, he will take other measures to address it, possibly through a vacant property tax. That might be one of the most effective measures.

Would the Minister of State like to say a final word?

I recognise the points, which were well made by the Senator. It is difficult for the tenants. However, the RTB has powers to investigate and sanction landlords. The Minister’s intent in this Bill is to recalibrate the power imbalance the Senator is talking about between tenant and landlord. That is the intent here. The focus so far is on using their sanctioned power, rather than prosecuting landlords. The principal Act has enforcement powers given to the RTB. There have been significant changes in the rent pressure zones, RPZ, since they were introduced. I agree with the Senator wholeheartedly about the data. An annual registry will be established in the quarter 1 of 2022. It will take a certain amount of time, perhaps a year, to have sufficient data to be able to use it in that granular way that we are talking about. That data will be useful to us. Since last year, Government and the Minister, Deputy Darragh O’Brien, in particular, have been responding and evolving as needs be. That is what this particular Bill is doing.

Amendment, by leave, withdrawn.

I move amendment No. 4:

"In page 6, between lines 12 and 13, to insert the following:

5. The Principal Act is amended by the insertion of the following section after section 24C:

“Annual report on enforcement of rent pressure zones

24D. On an annual basis following the commencement of this section, the Minister shall cause a report to be laid before the House on the enforcement of rent increase restrictions in all rent pressure zones, including data which summarises—

(a) all rent increases deemed to be an offence under section 19(4),

(b) all fines issued to landlords for rent increases deemed to be an offence under section 19(4),

(c) any other measures taken to pursue landlords guilty of rent increases deemed to be an offence under section 19(4).”."

I second the amendment.

This amendment relates to the issues of the powers and protections and their enforcement. I am hopeful that the Minister of State might be able to accept this amendment. I hope it is possible. The amendment goes to the fact that while the Residential Tenancies Board has different powers, the investigation and sanctions unit of the Residential Tenancies Board only sanctioned 29 landlords in the last 12 months for breaching the residential pressure zone limits. We would all have to be extraordinarily naive to believe that only 29 landlords were in breach of the rules in the last 12 months. If there is a new cap of 2%, which is being brought in, it will need to be enforced. It will become meaningless if it is not enforced. Again, part of the problem is the onus placed on the tenant in regard to that process. That needs to be strengthened. We need to address patterns that emerge in a much stronger way. For example, if two, three or four concerns are brought through and a pattern emerges, then a number of landlords should be investigated in that regard. The other properties that landlord may have should also be investigated. There needs to be other things that trigger it, rather than placing all of the onus for the imperative of action, or so much of it, on the vulnerable person. I know that there are other ways that the RTB can act. Currently, however, the enforcement of protections is very much weighted towards an initiative taken by tenants. We are looking at 29 landlords who were sanctioned in the last 12 months. The introduction of the 2% cap is welcome, but the concern is that the previous cap has not been properly enforced. There are those loopholes. I mentioned the 12-month vacancy, which is a really concerning loophole. Is the 12-month vacancy being properly investigated? Are the situations that I described, for example, where there is an on-the-ticket-book price, but the actual price is different, being investigated? All of those kinds of patterns of loopholes and anomalies need to be investigated.

Padraig McGoldrick, who is the current director of the Residential Tenancies Board, has said that the board is aware of a level of non-compliance by landlords with the rent-setting regulations on restricting rent increases. Pat Davitt of the Institute of Professional Auctioneers and Valuers said the inference taken from the headline figure of 7% growth in rents is that large numbers of landlords are defying the RPZ rules. Both the Residential Tenancies Board and the Institute of Professional Auctioneers and Valuers are telling us that there is a failure in compliance.

This amendment seeks not just to ensure that the powers are there, but that they are enforced. At the moment, the only obligation in this Bill, with the 2% cap, would be that the Minister would do a once-off review between 12 and 15 months following commencement. However, what would give meaning and a sense of seriousness and weight to the proposals in the Bill would be if there was reporting on an annual basis on how the protections were being enforced.

That regular reporting would show us if it is being enforced, the pattern and type of enforcement, how many rent increases were deemed to be an offence, how many fines were issued to landlords for rent increases that were deemed to be an offence and what other measures might have been taken in terms of pursuing landlords guilty of rent increases that were an offence under section 19(4) of the Act. This would track the enforcement. It would also send a signal of intent in terms of enforcement to landlords. As a second part, we would have to ensure that the RTB has the appropriate resources to deliver that enforcement. Crucially, people should not have to issue a freedom of information request in respect of the RTB to get information about what is happening with regard to enforcement; it should be publicly available. There should be an annual check-in. It should be a matter of public concern if we are not having enforcement.

There are really good measures in this Bill, but we need to be sure that they are enforced. I was here at the time the rent pressure zones were initially introduced. I wish stronger enforcement clauses had been put in place then. I do not want us to be in a situation in two years' time where we are saying, unfortunately, this was not enforced. We know that the vacant site levy at council level was not being enforced. We need to have a culture whereby these measures carry weight.

I hope the Minister of State will be able to accept amendment No. 4.

Unfortunately, I cannot accept amendment No. 4. In addition to the new offences relating to unlawful rent setting in rent pressure zones, provided under the Residential Tenancies (Amendment) Act 2019, in respect of which the RTB can carry out prosecutions, the RTB was given additional functions in the form of its enhanced powers of investigation and sanctioning.

Part 7A of the Residential Tenancies Acts was introduced to facilitate the investigation of "improper conduct" and to provide for sanctions and costs, up to a total of €30,000, against landlords, should it be warranted.

The 2019 Act made it a criminal offence for landlords to implement rent increases that contravene the law in RPZs and gives powers to the RTB to investigate and administratively sanction landlords who engage in improper conduct, including non-compliance with the rent increase restriction in RPZs. Significantly, the investigation can now be triggered by the RTB in its own right rather than depending on a complaint or a referral for dispute resolution from the tenant. That is a good measure. Since then, the RTB has prioritised the investigation of breaches of RPZ rent setting rules under Part 7A on an administrative sanctioning basis rather than pursuing the criminal route. To date, no offences have been prosecuted by the RTB for a breach of section 19(4) of the Act. The focus is currently on using the RTB’s administrative sanctioning powers to their full extent rather than prosecuting landlords. Giving a landlord a criminal record is the last resort but the offences are there and the RTB has the power to prosecute in cases where an administrative sanction is not considered sufficient or appropriate.

During the first full year of operation in 2020, 92% of investigations related to a breach of RPZ requirements. To date, almost €260,000 has been refunded by landlords to current and former tenants as a direct result of the RTB investigation process into breach of rent setting rules. Of the decisions issued to landlords to date, more than 70% of decisions have resulted in a sanction, written caution and-or financial penalty. More than €24,000 has been paid to the Exchequer as fines under Part 7A of the principal from the first 29 RTB sanctions confirmed in the Circuit Court this year. The RTB expects more than 250 cases to be confirmed in 2022 as more cases come through the investigation pipeline, efficiencies in the investigation and sanctioning process develop and access to the Circuit Court returns to pre-Covid levels.

With regard to any specific queries for the RTB, the Clerk of the Dáil requested that arrangements be put in place to facilitate the provision of information by State bodies to Members of the Oireachtas. Following the issue of Circular LG (P)05/16 on 20 September 2016 from my Department, the RTB set up a dedicated email address for this purpose. The RTB may be contacted at: OireachtasMembersQueries@rtb.ie. I urge all Members of the Oireachtas to use this function.

It is great to hear that more than 240 cases are to be confirmed but only 29 have been confirmed thus far. The monetary amounts may be large, but that only raises the alarm in terms of the money that has been potentially wrongfully taken from tenants. If that monetary amount is attached to only 29 cases, there is a really serious concern. It is good to hear that there are 250 cases in the pipeline. That is a positive story. Why not have those figures publicly available? With respect, as an Oireachtas Member I may have access to the aforementioned channel, but this is about the public. The public should not have to go through Oireachtas Members to find out this information. It is public information and it should be publicly available. It should be publicly published and in that way it can be used. We all seek to help people, but we do not want a type of clientelist relationship around how you access this or that information.

If there is an increase in administrative sanction that is a positive story, in particular if there is potential for a tenfold increase next year. Why not publish this information? Why not provide it by way of an annual report? Is it not a good story to tell? It has the added benefit of sending that signal that the State is taking these issues seriously. I know the Minister of State cannot accept the amendment, but I would encourage him to consider an annual report in regard to enforcement and its publication. That could be positive. It could have a number of positive consequences and help restore confidence in those who may well not wish to challenge a landlord unless they see what is happening, and they may well not reach out to any Member of the Oireachtas. I propose to press this amendment as I believe it is useful, constructive amendment.

Amendment put and declared lost.
Government amendment No. 5:
In page 7, between lines 15 and 16, to insert the following:
"(a) in section 3, by the insertion, in subsection (3), of "(other than a Part 4 tenancy)" after "does not include a tenancy",".

Amendment No. 5 is a consequential technical amendment to section 3(3) of the principal Act to ensure that tenancies of unlimited duration fall within the scope of the Act. In practice, such tenancies could be longer than 35 years in duration. In all circumstances, tenancies of unlimited duration which are included in the updated definition of a "Part 4 tenancy" under section 29 of the principal Act, as substituted by section 6 of this Bill, will fall within scope of the principal Act.

Amendment agreed to.

Amendments Nos. 6 and 7 are related and may be discussed together by agreement. Is that agreed? Agreed.

I move amendment No. 6:

In page 8, between lines 32 and 33, to insert the following:

“Long Tenure notice period

7. Section 33 of the Principal Act is amended by the insertion of the following after “section 34”:

“, and subject to a variable notice period determined by the duration of the tenancy. For a tenancy of more than two years duration, each additional year of duration shall increase the relevant notice period by thirty days, granting additional tenancy protection to the tenant, and a longer notice period known as a Long Tenure notice period.”.”.

I second the amendment.

In these amendments, I am trying to address an issue of lengthy tenancies. Some people rent for their whole life. For persons who may have been renting for 15 or 20 years and older people there is a particular vulnerability for older people who may be trying to seek housing in a new market and may either have a very limited fixed income in terms of pension or, sometimes, a very insecure employment or partial employment, which can cause real difficulties. I refer to the classic phrase "young professionals" which is often used by landlords. The amendments seek an increase in the notice periods to increase the protection for persons. Currently, our schedule taps out at eight years. I want it to address those who have been renting for ten, 15 or 20 years and to further increase their protections.

However, I believe there is an anomaly in my amendment. Four to seven years is a single category on the current schedule, and in my system of calculations of two-year periods, those with a six-year tenancy might randomly slightly decrease their period of notice, even though everybody in pretty much every other year would benefit. In that regard, I am minded to withdraw the amendment. I urge the Minister of State to address the issue of longer tenancies, not just by looking at the eight-year period but by having a longer period of notice for those who have been in very long tenancies and who could, in many cases, be especially vulnerable in re-entering the rental market.

I meant to respond to the Senator's last point regarding the previous amendment. She made a very good point about making information available, which I acknowledge.

In this case, I cannot accept amendments Nos. 6 or 7, which propose to introduce the concept of a long tenure notice period to provide for an additional 30 days notice for each additional year of duration of a tenancy beyond two years. Chapter 2 of Part 5 of the Residential Tenancies Act, which deals with tenancy terminations and notice periods and other procedural requirements, sets out the procedures for serving a valid notice of termination. Chapter 3 provides for the period of notice to be given when serving a notice of termination. The periods of notice to be given by a landlord, in accordance with table 1 of section 66 of the Principal Act, when serving a notice of termination to a tenant were substantially increased as part of the Residential Tenancies (Amendment) Act 2019 to up to 224 days where a tenant has been in occupation for eight years or more. That was done in consultation with the NGOs from the homeless sector.

Section 16(3) of the 2019 Act provides that:

The Minister shall-

(a) not earlier than 2 years and not later than 3 years after the coming into operation of subsection (1), commence a review of the operation of the amendments of section 66 effected by that subsection,

(b) not later than 6 months after the commencement of the review, prepare a report in writing of the findings of the Minister resulting from the review and his or her conclusions drawn from the findings, and

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

Section 16 of the 2019 Act was commenced on 4 June 2019. Accordingly, the Minister is obliged to conduct a review of the extended notice periods before 4 June 2022. The Senator's proposed amendments will be taken into account in that context. While I appreciate the intent of these amendments, as currently drafted, they may present difficulties and have unintended consequences. These increased notice periods could equally apply to tenants as well as landlords.

The amendment does not state what the standard notice period is, but if we were to assume 120 days, as is currently the notice period where a tenant has been in occupation for a period of two years, this would not be fair to landlords. The requirement for 28 days' notice to be served during the initial six months of a tenancy by both a landlord and a tenant under the Principal Act is in recognition of the fact that the landlord and tenant are generally strangers to each other at the early stage of a tenancy. Both should be afforded the opportunity to exit a tenancy without undue delay, if that is their wish. Unfortunately, scenarios can arise at very early stages that make it clear that a long-term tenancy is not in prospect.

Once the six-month period has elapsed and a Part 4 tenancy commences, the notice period applicable to the tenant was increased under the Residential Tenancies (Amendment) Act 2019 from 28 days to 90 days. After one year, 120 days' notice are to be given. A landlord may have a tenant who pays one month's rent in advance and a deposit equal to one month's rent and thereafter the landlord may not receive any more rent. We must safeguard against rent arrears. A shorter termination notice period for tenancies of less than six months' duration is fair and it applies to both landlords and tenants.

We must also remember that some urgency might apply to a landlord's ground for termination. For example, for financial or personal reasons, he or she might need to sell the property as soon as possible or might need to move into it. We must recognise that 70% of landlords own just one rental property and 86% own either one or two rental properties. Landlords' circumstances are likely to change over time and the Principal Act currently provides lengthy termination notice periods, as I have said, up to 224 days. The 2019 Act substantially extended the notice periods required where a landlord intends to terminate a tenancy. The aim is to provide greater time for tenants to source alternative accommodation in a market that has limited supply. The extended notice periods take into account consultation with the six main housing and homelessness NGOs. There is a commitment that the proposed amendments will be reviewed in that context.

I might just flip that around and say that 18% of landlords own a vast amount of rental property. The Minister of State referred to the majority of landlords only owning one or two properties, but a small number of landlords own huge amounts of property. This proposal is appropriate. Such landlords will not be stuck in these circumstances. Sometimes the small landlord gets pushed out, yet at the same time we are talking about large-scale investment funds and what they want. They have lobbyists.

The argument can be a little bit disingenuous. If separate measures need to be put in place for small landlords, then they should be included, but that scenario should not be used to create protections for very large investment funds that have vast portfolios of property and are also benefiting from interesting tax incentives and other measures from which the small landlord might not benefit. They get both sets of benefits. They get all the extra benefits and they also get protection by using smaller landlords as cover. That is a general point.

I am happy to withdraw the amendment, but I hope the Minister of State will engage with interested Members of the Oireachtas in respect of the review he mentioned that is coming up to June. There are measures within it that must be examined for long-term tenants, especially older tenants. In the city of Dublin, people in their 60s and 70s who are renting could be very insecure in that regard. That is who I have in mind - those who would have been in bedsits in the past, some of whom are long-term tenants. They are people who may find themselves far down a housing list if they lose their current tenure, so they need a period of time to give them a chance in that regard.

I will withdraw the amendment and I will engage constructively with the Department in advance of the review. Other Senators across this House, for example, Senators Fitzpatrick and Moynihan, have spoken about this matter. There is a lot of expertise in this House. I thank Senator Gavan for all of his support for my amendments today. Many Senators were previously members of local authorities and have expertise in these matters. I hope the Minister of State will engage with the Oireachtas on the review.

The Minister of State clearly gave that commitment.

Yes. I thank Senators for their engagement on the issue. The commitment is there in respect of the review of the extended notice periods. Senator Higgins made a very valid point that requires consideration.

Amendment, by leave, withdrawn.
Amendment No. 7 not moved.
Bill, as amended, received for final consideration.

When is it proposed to take the next Stage?

Is that agreed? Agreed.

Question proposed: "That the Bill do now pass."

I thank the House for its careful consideration and courtesy during the passage of this important Bill.

I thank the Minister of State for his thorough engagement.

Question put and agreed to.

When is it proposed to sit again?

Next Tuesday at 12 noon.

The Seanad adjourned at 3.30 p.m. until 12 noon on Tuesday, 30 November 2021.