Housing (Private Rented Dwellings) Bill, 1981: Second Stage.

Minister of State at the Department of the Environment (Mr. Creed)

I move:

"That the Bill be now read a Second Time".

As the Rent Restrictions (Temporary Provisions) (Continuation) Bill, 1981 and this Bill are connected, I shall discuss them together.

The need for the Housing (Private Rented Dwellings) Bill, 1981, arises out of the Government's commitment to protect tenants of dwellings which were formerly controlled under the Rent Restrictions Acts. The rights under these Acts, which many of the tenants have enjoyed for a lifetime, have come under threat as a result of the Supreme Court's decision that parts of the Acts were unconstitutional. In the absence of action by the Oireachtas, the tenants involved, who in many cases are elderly or among the poorer sections of the community, would be faced with major increases in rents and for demands by their landlords for possession of the dwelling. The Government recognise their duty to protect such persons.

Over the years the Rent Restrictions Acts have provided a rigid control on the level of rents of certain dwellings and considerable security of tenure for the tenants. The legislation was introduced as far back as 1915 but was not made permanent until the Rent Restrictions Act, 1960, which was, in turn, amended in 1967.

There can be no doubt that this legislation suffered from many faults. It provided no mechanism whereby the landlord could increase the rent to keep pace with inflation and no incentive for the landlord to maintain the property as he had little prospect of ever regaining possession of it. At the same time the tenant's interest in the property was such as to make it unlikely that the major repairs that this type of accommodation almost invariably required would be undertaken. The result over the years was wasteful deterioration in the standards of these dwellings to the stage that many of them became unfit for habitation. This is reflected in the substantial decline in the numbers of such dwellings since the Second World War which has left our major cities with a serious shortage of private rented accommodation. At the present moment there is likely to be no more than 30,000 controlled dwellings in existence, though this is only an estimate. At this stage, of course, the controlled sector is numerically much smaller than the non-controlled private sector of rented accommodation.

In retrospect it is scarcely surprising, therefore, that the constitutionality of the legislation would eventually be challenged in the courts and that this challenge would be successful. The Supreme Court, on 29 June last, gave a judgment which effectively struck down the main portions of the Rent Restrictions code. The court held that Parts II and IV of the 1960 Act, which controlled the level of rent and restricted the landlord's right to recover possession of controlled dwellings, were contrary to the provisions of Article 40.3 of the Constitution. That Article provides that: "The State shall, in particular, by its laws protect as best it may from unjust attack and, in the case of injustice done, vindicate the life, person, good name and property rights of every citizen".

Part II of the 1960 Act was adjudged to be an unjust attack on such rights, being both arbitrary and unfair, in that it restricted the rights of one group of citizens for the benefit of another, without compensation, without regard to the financial capacity or the financial needs of either group, with no limitation on the period of restriction and with no possibility of review. Part IV of the 1960 Act, which restricted the rights of a landlord to possession of a controlled dwelling, fell as a consequence of the decision on Part II as it did not have a viable statutory existence of its own.

In response to the court's decision and in view of the major social implications it had, the Government introduced and the Oireachtas passed a temporary measure to protect the interests of tenants until permanent legislation could be prepared to fill the statutory void left by the Supreme Court's decision. The permanent legislation would have to reconcile the interests of both parties, whether as landlords or tenants, so as best to subserve the common good. The temporary measure, the Rent Restrictions (Temporary Provisions) Act, 1981 as enacted is due to lapse on 25 January 1982 and the Housing (Private Rented Dwellings) Bill is intended to replace it. I will refer later to my reasons for asking the House for a further three months' extension of the temporary measure.

The main purpose of the Housing (Private Rented Dwellings) Bill is to provide, in accordance with the exigencies of the common good, a measure of security of tenure for tenants of controlled dwellings, a mechanism for the determining of rent where it is not agreed between the landlord and the tenant, a rebate on the rent payable by tenants over the first five years and a means for the registration of all rented dwellings.

Though it is not a lengthy Bill, the issues with which it deals are complex as the interests of landlords and tenants are often in conflict and are not easily reconciled. In addition the Bill raises constitutional questions on which advice has been provided by the Attorney General. Despite these difficulties I consider that the proposals in the Bill reflect a fair balance between the rights of the landlords and the tenants. Landlords stand to gain substantially over the position obtaining before the Supreme Court's decision and the Bill also seeks to mitigate the most serious effects on the tenants concerned within the confines set by the Supreme Court decision and the relevant Articles of the Constitution.

The Government have a duty under the Constitution to protect all the citizens of the State and are enjoined by Article 45 to direct their policy towards securing that: "the ownership and control of the material resources of the community may be so distributed amongst private individuals and the various classes as best to subserve the common good." The State acknowledges in Article 43 that while man has the natural right to the private ownership of external goods, "the exercise of the rights ... ought, in civil society, to be regulated by the principles of social justice". To this end the State may "as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good".

I think what I have so far said will leave Deputies in no doubt but that difficult constitutional questions are involved. The advice available to the Government is that the Bill is entirely in conformity with the Constitution. However, the Government have thought it prudent to plan for the eventuality that the President might refer the Bill to the Supreme Court in accordance with Article 26 of the Constitution. Indeed, one could see advantage in the constitutional questions raised by the Bill being settled once and for all. Of course, a referral to the Supreme Court is entirely a matter for the President after consultation with the Council of State. Because the President may decide to refer the Bill, the Rent Restrictions (Temporary Provisions) (Continuance) Bill, 1981, has been introduced to extend the life of the temporary measure for three months.

I turn now to the main provisions of the permanent Bill, the Housing (Private Rented Dwellings) Bill, 1981. Deputies will have an opportunity of debating the detail section by section on Committee Stage. At this time I shall confine myself to outlining the main provisions and the purposes which they are intended to serve.

The Bill ensures that existing tenants of controlled dwellings, their spouses and members of their families are given security of tenure. The tenant and his spouse are given the right to remain in possession for their lifetimes. A member of the tenant's family, bona fide residing with him, who succeeds to the tenancy will have a right to possession for the residue of 20 years from the commencement of the Act. The right to retain possession is not given indefinitely to members of the tenant's family so the landlord can expect to recover possession of the dwelling at some stage in the future.

One of the most criticised features of the rent restrictions legislation was that the landlord had no realistic prospect of ever regaining possession. Therefore, he had little or no interest in maintaining the property. This feature is removed from the proposed legislation without, at the same time, in any way affecting the rights of the existing tenant or his spouse to remain in possession of the dwelling.

The Bill encourages the landlord and the tenant to come to voluntary agreements about the terms of the new tenancy but recognises that this will not always be possible. A mechanism is being provided whereby the District Court will fix the terms of the tenancy, including the level of rent, in default of agreement between the parties concerned. The terms of a tenancy, whether agreed or fixed by the Court, must be set out in writing. While the guidelines the Bill provide where issues come before the court are not, generally speaking, being applied to agreements between the parties, the guidelines are likely to have an important influence on the terms of agreements. Even where the landlord and the tenant enter an agreement, there is provision in the Bill for either party, after a period of time, to apply to the court to set the terms of the tenancy.

The major issue which landlords and tenants must take into account in coming to voluntary agreements is the existence of a rebate on the rent payable in the initial years of the tenancy. The Bill provides that where a rent is fixed by the court a rebate shall operate to allow for the gradual increase in the level of rent due over a five-year period. The rent payable in the first year will be the existing rent together with 40 per cent of the difference between the existing rent and the rent as fixed by the court. This percentage will go up by 15 percentage points each year until the tenant is due to pay the full rent fixed by the court in the fifth and subsequent years.

In fixing a rent under this Act the court will take into account improvements, which add to the letting value of the dwelling, made by the tenant since 31 December 1960, the date of the coming into force of the Rent Restrictions Act, 1960. The gross rent, that is before reduction to allow for improvements, shall be what, in the opinion of the court, a willing lessee would give and a willing lessor would take for the dwelling on the basis of vacant possession and having regard to the other terms of the tenancy and the letting values of dwellings of a similar nature and in a comparable area. This formula is similar to that in the Landlord and Tenant (Amendment) Act, 1980. Either party may seek a review of the rent after five years and after each subsequent five years. This process of review meets another of the objections in the Supreme Court's judgment to the former system of control.

The manner in which rents are set is obviously central to the whole legislation. Considerable attention has been paid to the content of the Supreme Court judgment on this aspect. The advice to the Government is that the formula for fixing rents together with the rebate provisions is consistent with the Constitution and the Supreme Court decision. In addition, in cases where the financial circumstances of the landlord and tenant so warrant, the court, on application to it by the landlord, may increase the percentage in any year. This right to apply for a reduction in the rebate is restricted to those landlords who did not purchase the dwelling since 31 December 1960.

As I said earlier, the Bill provides security of tenure for the life of the tenant and his spouse and for a more restricted duration for other members of the family. At the same time and in accordance with the normal provisions of rent restrictions and landlord and tenant codes there are circumstances in which a landlord must reasonably be allowed to recover possession.

Section 12 entitles the landlord to regain possession in specified circumstances set out in the section. Examples are: non-payment of rent, a breach of tenancy obligation, the dwelling is required as a residence for the landlord, or other person living with him, or an employee, the carrying out of a scheme of property development for which there is planning approval and in the interests of good estate management. In certain circumstances where the grounds for possession are in the interests of the landlord as distinct from faults or failures of the tenant, the tenant will be entitled to compensation for moving and to pay for alternative accommodation.

In addition, on quitting, the tenant may obtain compensation for improvements which he, or his predecessor in title, carried out on the dwelling since 31 December 1960, which add to the letting value of the dwelling at the time of quitting. I should emphasise that repossession of a dwelling can be obtained only on foot of a court order, which the court may grant only if it is reasonable to do so and the other requirements are met.

The Bill empowers the Minister to make regulations for the registration and standards of all rented dwellings. It is my intention to have regulations for the registration of all controlled dwellings in operation from the commencement of this legislation. The registration requirements will be central to the operation of the procedures envisaged under the Bill since a new rent becomes payable only after registration. The regulations prescribing standards for rented dwellings are intended to replace by-laws under section 70 of the Housing Act, 1966, which are at present operated by some housing authorities.

The Bill before the House is, I consider, a balanced approach to a difficult legal area. It has been necessary to tread a very careful path between the conflicting demands of landlords and tenants and still remain within the parameters set by the Supreme Court decision. Although this is a complex Bill every effort has been made to ensure that its operation will be as straightforward as possible. Much of the burden of carrying out the legal requirements falls to the landlord and this I consider only proper, given the circumstances of many of the tenants involved. That there is a need for a number of legal requirements and procedures is, I am afraid, unavoidable if we are to ensure that the rights of all are protected adequately.

I would hope that various groups and persons concerned would study the Bill and the requirements and procedures it introduces before rushing to take action. Housing authorities, a number of voluntary organisations throughout the country who advise on landlord and tenant matters and who do such valuable work in this regard, and the State Legal Aid Centres, will, in due course, be able to provide information and assistance to the tenants and the landlords concerned.

I should like to deal with one further aspect of this matter which does not arise directly on the Bill, that is, the question of providing assistance to those tenants for whom, even with the rebates proposed, the payment of higher rents will create hardship. On a number of occasions already the Government have indicated that in such cases assistance will be provided. I would like now to reaffirm this commitment and assure Deputies that the Government will provide any necessary assistance to alleviate hardship to tenants on low incomes.

Finally, I want to refer briefly to the Government's longer term commitments to the private rented sector. The Bill before the House, with the exception of those sections dealing with registration and standards generally, is confined exclusively to the controlled sector. This is so because of the urgency of the matters arising out of the Supreme Court's decision, and the Government's determination to deal responsibly with an issue having far-reaching social implications.

I propose when the legislation to deal with the controlled area is operative, to examine the policy options open to the Government on the wider front. There are twin problems; first, how to improve matters in relation to existing accommodation and, second, how to increase the supply of private rented accommodation. Like many other features of the rented market, the two aspects I have mentioned pose possible conflicting resolutions and require a balanced approach. In particular, I will be looking at those undertakings in regard to the rented sector in the Programme for Government 1981-86, which are the responsiblity of the Department of the Environment. Before we can make headway on such longer term issues, however, it is necessary to deal with the urgent problems facing the controlled sector. To this end I commend these Bills to the House.

Mr. Raphael Burke

I appreciate the difficulties that faced the Government when they were drafting this legislation. The Minister of State said it had been necessary to tread a very careful path between the conflicting demands of landlords and tenants and still remain within the parameters set by the Supreme Court decision. It is open to question whether the Government have succeeded in treading that careful path. I am glad that in reply to questions by the Leader of the Opposition yesterday the Taoiseach referred to the constitutional problems raised by the Bill. Today, the Minister of State referred to the same matter.

I hope this Bill will be tested immediately in regard to its constitutionality so that we will not have a repetition of the situation that arose in the past. There is a strong body of legal opinion which says that the terms of the Bill are unconstitutional particularly in regard to the rebate element and to the postponing of the five-year period in regard to increases awarded by the courts. It is thought that these matters are totally contrary to the Supreme Court decision of 29 June last.

The Minister of State referred to the advice given to the Government that the formula for the fixing of the rents together with the rebate provisions is consistent with the Constitution and the Supreme Court decision. There is a strong body of legal opinion which would argue that point. I am not a lawyer and I do not intend to get into that. If we are to have some order in this very complex area of landlord and tenant legislation dealing with controlled tenancies for the benefit of the landlord and in particular for the benefit of the tenant, the sooner the constitutionality of this Bill is established the better.

To come to the contents of the Bill, the one area it attempts to tackle is the whole question of security of tenure. When the Minister of State is replying I should like him to clarify for me the benefit to a tenant in having a piece of paper guaranteeing security of tenure if, at the same time, the tenant is unable to pay the rent fixed by the court. At the end of his speech the Minister of State said assistance would be available to those in need. He did not spell out exactly the type of assistance, and the mechanism to be used. When he is replying he should go into greater detail on this matter. There is no point in giving people a piece of paper saying they are secure in their flat if, at the same time, they find themselves unable to pay the rent set by the court.

It is important to remember exactly what is included in the Bill for the setting of this rent. Section 6 (2) provides:

For the purposes of subsection (1), the gross rent shall be the rent which, in the opinion of the Court, a willing lessee not already in occupation would give and a willing lessor would take for the dwelling, in each case on the basis of vacant possession being given, and having regard to the other terms of the tenancy and to the letting values of dwellings of a similar character to the dwelling and situate in a comparable area.

In that situation we will see considerable increases in rents. A considerable number of tenants who will be affected by this legislation are old people, retired on pension, who will find it impossible to pay the increases in rent which will result from the court decision on the formula used in this Bill. The Minister must spell out to the House exactly how he envisages giving teeth to the security of tenure aspect. As it stands, the Bill will create difficulties and great problems for many tenants.

This Bill fails totally to honour the commitments made by the two parties now forming the Government before the general election. The only thing consistent about the Government is that in every measure they introduced in the Dáil, and in every decision they make outside the Dáil, they break commitments made in their election manifesto. I should like to read for the House exactly what the Fine Gael Party said in their election programme. Under the heading "Rented Accommodation" we read:

(a) A Fair Rents Tribunal will be established to set rents which will be fair, both to tenant and landlord. In the event of the present rent restriction legislation being held unconstitutional by the Supreme Court, Fine Gael will introduce legislation to ensure fixity of tenure for existing tenants, and where rents fixed in rent-controlled accommodation are beyond the means of the existing tenants a rent subsidy scheme will be introduced for tenants in possession.

(b) Fine Gael will give the right to a written lease: no rent will be payable until the landlord fulfils this requirement.

In this legislation there is no fair rents tribunal. At the end of his speech the Minister of State referred to the Government's intention to examine the longer-term commitment to the private rented sector. For five months the Government have had an opportunity of examining this whole area and this is the Bill we have before us today which provides that the fixing of rents will be done by the District Court. Where is the fair rents tribunal we heard so much about prior to the election?

In their document the Labour Party also promised to introduce a fair rents tribunal. The same commitment was made in the Gaiety Theatre Dublin. On Tuesday, 12 May last, we discussed a Private Members' Motion put down by the Fine Gael Party. As reported at column 2691, volume 328, of the Official Report, Deputy Keating now Minister of State at the Department of Education moved the following motion:

That Dáil Éireann, concerned about many inequities in the present situation offending against the best interests of both tenants and landlords, demands the setting up of independent tribunals to consider questions relating to rent and conditions, to which both landlord and tenant may have recourse.

In the course of his contribution to the debate, Deputy Keating went to considerable lengths to make firm commitments with regard to the action the Fine Gael Party would take if elected to office.

Deputy Keating had six proposals. Again I quote him, at columns 2701 and 2702 of the same volume when he said:

The sum total of those six central steps alone — although other reforms are also necessary — would bring about a major wind of change in the area of landlord and tenant legislation. I give an undertaking that our party in Government will introduce this kind of change, based on the principles to which I have referred. I would not feel so annoyed about all this if, firstly, I did not have the experience every week of meeting people presently living in intolerable and unbearable conditions about which we all know and, secondly, if this Government

—referring to Fianna Fáil

had not so cynically and so sickeningly given those undertakings.

— referring to the undertaking given prior to the 1977 election.

Deputy Keating spoke about the need for a fair rents tribunal. He asked for a completely new deal for tenants and landlords which would recognise any area housing between 300,000 and 400,000 people as being a legitimate and central part of the housing spectrum. He said also that there should be a substantial grants package of not less than £35 million available to owners of private rented accommodation conditional on their maintaining their property in accordance with proper standards, existing by-laws and depending on that property being registered; mind you, £35 million. I do not see any mention of that in the Bill or in the Minister's introductory remarks. Perhaps he is reserving it for his reply. On tribunals Deputy Keating had this to say:

An independent tribunal or tribunals should be set up, and will be if there is a change of Government, to oversee fair standards of rent, conditions and interpretation of general standards in this area. Both tenant and landlord should have recourse to these tribunals and they should not merely be about rent.

He spoke also of the difficulties of dealing with the courts and the problems to be faced by many tenants not used to dealing with them. He said in this respect:

It is no consolation to such people to have a very small rent or to be told as they were told on a previous occasion by Deputy Barrett that they have recourse to the courts. Anyone with any knowledge in this area knows that to refer the average tenant, perhaps a young married mother with two or three children, to the support of the courts which are in session now and again and of which many may not be in session when her need is greatest is nonsense and is completely unrealistic and naive.

The Bill before us is designed to legislate for this whole complex area of the relationship between landlord and tenant in controlled dwellings. All of the arrangements for adjudication of the problems arising between landlord and tenant are to be handled by the courts. How does the Minister of State envisage the District Court dealing with the extra burden that will be placed on it resulting from the passage of this Bill? We are all aware of the delays experienced at present within our courts system. I suggest to the Minister of State that the burden being placed on the District Court, in its present structure, is almost intolerable. We are talking here about 30,000 controlled tenancies. I would ask the House to consider the situation in which some 30,000 additional cases will come up for decision by the District Court. They will be complicated cases because they must take account of such things as improvements effected in the properties. Account will also have to be taken of the area in which the properties are situated, the other commercial rents available in the area and so on. Every one of these cases will be complex. Perhaps the Minister of State would tell us what arrangements the Government intend making for the handling of this extra burden being imposed on the District Court. It is vital to know exactly how the courts are to handle this extra load being imposed on them.

I might deal now with the question of rebates as laid down in section (1) 9 of the Bill which says:

9.—(1) Where the rent of a dwelling to which this Act applies is fixed by the Court—

(a) the rent payable by the tenant shall be an amount equal to the rent payable by him at the commencement of this Act together with—

(i) in the year 1982, 40 per cent of the difference between that rent and the rent fixed by the Court,

(ii) in the year 1983, 55 per cent of that difference,

(iii) in the year 1984, 70 per cent of that difference, and

(iv) in the year 1985, 85 per cent of that difference.

(b) in the year 1986 and in subsequent years, the rent payable by the tenant shall be the rent fixed by the Court.

Of course this raises the whole question of the constitutionality of this Bill to which I have referred already. Does the Minister of State not appreciate that the implementation of this type of sliding scale, asking tenants to pay an extra 40 per cent of the difference between their existing rent and that fixed by the court, will impose a savage burden on many people on fixed incomes, many of whom, as I said earlier, will be on pension. How do the Government intend coping with the social problems resulting from this savage imposition of the extra 40 per cent in the first year? It is vital that the Minister spell out the Government's proposals in this area.

In considering the Bill I wonder did the Government give consideration to the proposals made by the Private Tenants' Action Group, a group which operates from St. Francis Xavier's Church in Upper Gardiner Street. I am sure the Minister is aware of this organisation. They set out a proposed charter. For the information of the Minister and the House I might list what was included in that charter. It said (a) that tenants accept the basic principle that a fair rent should be paid by the tenant to the landlord and (b) that affected properties referred to in the 1981 Supreme Court decision should be taken over by the local authority and paid for through the issue of interest-bearing property bonds or land bonds.

Has the Minister given consideration to that proposal? I see considerable merit in it. There is a lot to be said for that proposition, the reasons for which are listed by the Private Tenants' Action Group. For example, the advantage to tenants would be that all affected tenants would thereby be brought into the position of other council tenants whose rent is fixed according to their ability to pay and who also enjoy security of tenure. Further the tenant is entitled under the Housing Act to exercise his option to purchase.

There is also an advantage to the public authority because the bond system, since it does not require initial heavy capital expenditure, avoids diverting badly-needed financial resources from already existing housing needs. On the other hand, should rents of affected tenants be allowed to rise to market value, the local authority would inevitably incur a heavy financial burden either through having to subsidise tenants or else in the case of evictions, having to rehouse them.

The Private Tenants' Action Group recognise the legitimate needs of landlords and there are advantages in their proposal for the landlord. They say it will give the landlord a return which, in most cases, will considerably exceed his present income from the affected property. It will also relieve him of the burden of keeping the property in good repair and help to preserve the stock of family housing. There is considerable merit in that proposal and I am anxious to hear the Minister's views on it.

This Government are already considering, as can be seen from the Housing Agency Bill, the bond system to raise money for new house construction and the purchase of new houses. Could the same bond system be used in the way proposed by the Private Tenants' Action Group?

Failing the proposals already outlined, the Private Tenants' Action Group come up with a second alternative — that a fair rent tribunal be established to investigate all cases and fix a current rent which would be based on the tenant's ability to pay and that every year rent increases would be fixed in relation to the cost of living.

When this Government were in opposition they spoke a great deal about a fair rents tribunal but now that they are in Government and are introducing legislation, there is no mention of such a tribunal. The Minister referred to the need for long-term commitments and examination of the problems in the rented sector but did not mention a fair rents tribunal. I suggest it is cynical for this Government to have included such a tribunal in their election plans. A week or two before the general election was called they put down a Private Members' motion calling for a fair rents tribunal. Now they have the opportunity, after five months in power, to introduce this Bill but they are not mentioning that tribunal.

I would like to refer to the family and security of tenure. I am talking in particular about dependent relatives. There is a very wide definition of "dependent relatives" in section 1 (2). As the Bill is drafted there could be grounds for an accusation of unfairness to relatives For example, take a member of a family who might have supported a dependent relative for many years and now finds himself in possession of the premises with only one year to go before the expiration of the 20-year period. It might be difficult for him to find alternative accommodation at that stage. He might have put down roots and become attached to the home. I am not committing myself at this stage but I have been considering an amendment to paragraph 3(3) (b) to read as follows:

in this subsection "relevant period" means the period of 20 years beginning on the commencement of this Act, or five years from the death of the tenant or the tenant's spouse, whichever period shall last expire.

I think that would be fairer and would improve the situation.

I welcome the section dealing with registration. This was also to be included in our Bill which was being drafted prior to the change of Government. It is important that this register should exist and I am glad it will not be only for controlled tenancies but for all rented accommodation.

When legislation of this type is being drafted, while the sympathy of the House and the thrust of the arguments would be for greater protection for the tenants, it must be remembered that the landlords also have rights. We should not pass legislation which will damage the legitimate rights of the landlord. It is important to have an adequate supply of private rented accommodation. In our last budget and Finance Bill we included specific tax incentives for landlords to get involved in the construction of private rented accommodation. We recognised as a Government the importance of having an adequate supply of private rented accommodation. This is for the benefit not only of the landlord but it is also important for those anxious to live in rented accommodation. The law of supply and demand would mean that the more flats and rented accommodation available, the lower the rents would be for tenants. In discussing this legislation we must recognise the legitimate rights of the landlord as well as those of the tenants.

The legislation has raised as many problems as it attempts to solve. It raises a problem as to its constitutionality and a problem with regard to the commitment of security of tenure. While on the one hand security of tenure will be written on a piece of paper, on the other hand there is the difficulty that rents will be set, and even with the system of rebates there will in most cases be considerable increases in the rents to be paid. In the event of the tenant not being in a position to pay the rent he or she will be liable to eviction no matter how good the intentions are with regard to security of tenure. The legislation also raises problems with regard to the whole District Court process and how the District Court, as presently constituted, will handle the massive number of cases that will be brought before it. Many complex questions will have to be decided by the District Court.

Finally, the Bill does not meet the commitments made by the two parties in Government in their election promises and in the period prior to the election. There is no reference whatever to the fair rents tribunal to which both parties committed themselves. The Labour Party at the time of the election spoke of only one element dealing with the whole landlord and tenant area and that was the setting up of a fair rents tribunal. There was not anything else in their election programme about this matter and surely they at least would attempt to honour that commitment. We will be going into the Bill in greater detail on Committee Stage when the House will be asked to consider amendments to improve it.

Mr. B. Allen

Before I go into the details of the Bill I should like to remind the House of one point that must be considered in connection with its introduction. The Bill was not introduced by choice by the Government but forced on them by a Supreme Court decision of 29 July last. The problems raised are ones that have existed for generations and have arisen because at present we have 30,000 controlled tenancies. In approaching the problem raised by the Supreme Court decision the Government had to tread very carefully. The Government had to strike a very fine balance between what the tenant required, what the landlord considered necessary and the constitutional position. Since the Supreme Court decision I have asked people in my constituency for their views and I found it brought hope to landlords and deep despair, fear and anxiety to many tenants. A lot of the tenants had reared families in bad and overcrowded conditions and later had improved their homes but now found themselves facing the prospect of having to pay a huge increase in rent or, failing that, eviction.

The Government in drafting the legislation had to attain three objectives. They had to attain the objective of security of tenure for the tenant, cater for the constitutional rights of landlords and they had to frame a Bill which would pass a constitutional test at some stage. The Government were placed in a Solomon position and the Bill they drafted has all the wisdom of a Solomonite decision. Nobody would be foolish enough to believe that the Bill will satisfy everybody. The tenants I have met in the course of my business are disappointed with some aspects of it and landlords I have spoken to are also disappointed. However, the opposing parties in this problem area should forget about the pound of flesh syndrome and accept the Bill as a genuine attempt to bring rights into the area of landlord and tenant affairs.

Listening to Deputy Burke replying to the Minister's excellent presentation I scribbled down some notes complimenting him on his constructive approach to the Bill. I was pleasantly surprised with the manner of his reply at the outset. I noted that it was probably the first time since I became a Member that the Opposition had embarked upon a constructive approach to a very serious issue. However, his approach took a subsequent nose-dive and the remainder of his speech was purely political footballing of a very serious nature. I was very disappointed with his attitude from there on. I will reply later to some of the points raised by him. For too long the fears, the prejudices and the anxieties of the public have been exploited in this House and I am hoping that the Bill will be looked upon as a genuine attempt to get out of a serious problem and will not become a political football.

In my constituency a number of areas have been affected by this problem. I have met many people and discussed this problem with them since the Supreme Court decision. I found that 75 per cent of the people affected are over 60 years of age. Many of the people concerned are widows and 60 per cent of them are in receipt of some form of social welfare payments, while 19 out of 20 of those who are employed are in badly paid jobs. In other words, those tenants are very vulnerable and must depend on Government agencies to help them overcome the problem created by the new situation. In many cases the tenants have been in the dwellings for many years. From time to time lukewarm approaches have been made by landlords for increased rents but these were not successful. In the majority of cases the properties were allowed to run down so that many of them are now in a very bad condition. The implementation of this legislation will cost the State many millions of pounds each year.

I am glad to note that there is reference in the Minister's brief to State aid for people who will be in distress in the new situation. There are 30,000 controlled tenancies and, consequently, the problem is a major one. There are two sides to the controlled tenancy situation. First, the tenant finds it impossible to have repairs carried out while on the other hand the landlord is not in a position to keep the property in proper repair because of the low rents involved. Very often there is a bad relationship between himself and the tenant. There has been known frequently to be harrassment of the tenant by the landlord and in some instances there have been evictions, legal or otherwise. These properties are often ones that were inherited by the landlords who were not in a position to maintain them properly. Very often tenants were forced to leave their accommodation because of the condition of the property and this forced them to apply for local authority housing which had to be provided at the expense of the State. Because of all the problems involved, the housing stock diminished but I am confident that this legislation will lead to a big improvement in that situation.

Deputy Burke expressed serious reservations about the District Court procedures that are to be used in the arbitration of disputes between landlords and tenants and he reminded us about the Fine Gael commitment in their election manifesto concerning the setting up of rent tribunals. Deputy Burke should know very well that the setting up of such a system is a complex process and requires a lot more time than the mere five months we have been in office. There was no attempt to set up any such process in the many years of Fianna Fáil Government. This Government were faced with an emergency situation that had to be resolved before the middle of next month. Fortunately, the Minister and his Minister of State set about their task in a way that I am confident will solve the problem.

On my first reading of the Bill I was somewhat concerned about the references to the District Court procedures but on re-reading it I realised the protection that was being provided for tenants in this way. They will be allowed costs because if a landlord opts to take a case to court he will have to pay the legal costs of the tenant.

I welcome the powers being given to the Minister to set up a register of uncontrolled tenancies. This is long overdue. I welcome the Bill but I have some reservations about the District Court procedures. However, I am sure that given sympathetic handling, the problems can be overcome. I appeal to other Members not to say anything that might increase the anxieties and fears of those tenants who are under pressure because of the changed situation. We could make a political football of this issue but I am confident that the Bill will be accepted in the spirit in which it was presented. It is a Bill that had to be brought before the House in a very short time.

Mr. Fitzpatrick

(Dublin South-Central): I intend my contribution to be a balanced contribution taking into account the situation of both the landlords and the tenants concerned. The Minister tells us that the Bill represents a balanced approach to a difficult legal problem. I appreciate fully the legal implications involved for the draftsmen and the Government in view of the Supreme Court decision. I say that having due regard for the judgement of the Supreme Court. However, that judgment has caused much distress and anxiety to many people particularly since those affected are among the most vulnerable in the community.

There is a fundamental issue involved here and it will affect the lives of between 70,000 and 80,000 people. I would have preferred if more time had been available for the interested parties in particular to study the Bill and to make further recommendations to the Minister. Undoubtedly, though, the Minister has had many representations on the matter but more time should have been made available for further representations. However, I realise that the Bill had to be finalised before the end of January and this created an urgency having regard to the Christmas Recess.

The Government knew the urgency of this Bill and I believe if greater effort had been made the Bill could have been circulated a month ago. This would have given us a better chance to study it and see if it could be improved. About 35,000 tenants will be affected by the Bill. I do not have to tell the House that those people differ considerably from the people who live in uncontrolled rented accommodation. The people we are dealing with in this Bill have been living in their houses for a minimum of 20 years. Many of them have been living in those houses for 40 years and their families have been living in them for 100 years. They never considered themselves in the same position as people living in uncontrolled rented accommodation.

It has always been the ambition of people living in uncontrolled rented accommodation to move out of that accommodation and buy houses of their own. We know that the majority of those people live in uncontrolled rented accommodation for three or four years in different parts of the city. They get married and then start buying houses of their own. They never set down roots in any part of the city. But we are speaking of a different group of people who will be affected by this Bill. Their fathers and grandfathers lived in those dwellings, I know many of them. The majority of the dwellings I am speaking about are in the large urban areas. Many of those dwellings go back to the pre-forties. Those families have been in those houses since the start of the century. Their grandfathers and fathers were there before them and they became part of the community. Their children went to school in the local schools, they participated actively in the local community and they always looked on those dwellings as their homes, although they lived in rented accommodation. As they had a fixity of tenure they never considered they would be put in the situation they are in today.

The courts will have to take into consideration many aspects in deciding the rent which those people will have to pay and also the length of the tenancy. Many of the people living in those dwellings are old. I am sure the Minister has got a survey from the private tenants' association outlining in detail the different categories of the people living in controlled rented accommodation, their standard of living, where they are working and their age groups. I am sure it has been pointed out to the Minister that those people are the most vulnerable section of the community. I can only speak for this city but I am sure the same can be said for the other cities.

The most important effect this Bill will have is that the people living in controlled rented accommodation will now know they have not a completely guaranteed tenancy. I know the guaranteed tenancy will be there for the present tenants but it will not be there for the family who succeed the parents. The son or daughter is living with the parents in many of those dwellings. Those people will now find that when the rented period has elapsed — I know 20 years is specified but it can elapse shortly after the present tenants die — they have not guaranteed tenancy. We can visualise the present tenants in many of those houses now aged about 50 years who could live for another 20 years so that when those people die their successors could get a notice to quit the following week because the period named in the Bill will have elapsed. That section of the Bill will cause stress to the people I am referring to.

When we look at the effect of the Rent Restrictions Act it is quite obvious that it is the tenant who will suffer in the long run. I know there were certain anomalies as far as the landlord was concerned, but it is obvious to me that if we look back over the history of the tenancy of those people we realise that many of the people who occupy those dwellings today would be in a better position if there was no control. Those people would possibly be housed by local authorities. They would have been moved out into local authority houses but because of the protection they had they stayed on in those houses. Many of those houses are in very bad condition but those people remained in them hoping that at some time they would be able to buy them at a reasonable price. Those who remained on in those houses will find they can only buy their houses now if they pay the market price. Many of those people who remained in those houses would not have been able to remain in them if market values had obtained over the past 30 to 40 years. They would have been moved out to subsidised units in local authority areas. Many of the other families who moved out to local authority houses 25 years ago bought their houses from the local authorities at reduced rates. I know people in the Crumlin and Drimnagh areas who purchased local authority houses for £1,200 and £2,000. If rent control never existed quite a substantial number of the people living in controlled rented accommodation now would have moved out of those houses 20 years ago. They would now be in local authority houses which they had bought and they would have a guaranteed tenancy. Rent restrictions, which many people thought was an advantage, is now proving a disadvantage. The people in controlled rented accommodation now find themselves at the other end of the scale. This has a fundamental bearing on the type of people we are dealing with in this Bill. Those people have my sympathy.

The Bill is quite specific in relation to rent and the ability to pay. It is left to the District Court to adjudicate on the rent. It deems that a house is a vacant house and it is valued accordingly. The section does not make a difference between a person whose family has occupied a house for 100 years and a person who has occupied it for three or four years. The courts are not allowed any discretion in the matter. Provision should be made to take account of the length of tenancy when the district justice is adjudicating on the rent. As I have stated, in many instances families have been in occupation of premises for nearly 100 years and regard should be had to this.

I presume that the decision of the District Court will be that rents should be fixed at market value because that court will have to consider the ruling of the Supreme Court. If rents are to be based on market value, the Government will have to take positive steps to subsidise the rents. I presume the private tenants' association sent details of a survey to the Minister with regard to this matter. Several surveys were taken in the Dublin area but I am sure that what holds for the city of Dublin would also apply to the rest of the country. One survey showed that on average 50 per cent of tenants were over 66 years, that 27 per cent were between the ages of 51 and 60 years, that just 10 per cent were under 50 years, that 62 per cent were females, the majority of whom were single people or widows, and that 67 per cent of people living alone were more than 60 years. It is obvious that if the courts decide that the rent should be based on market value there is no way the majority of those people can afford to pay it.

The previous speaker said the Minister was trying to get a fair balance between security of tenure and the constitutional rights of the landlord and I am sure that is what he was trying to do. However, he has not adopted a positive approach with regard to helping these people. We have had nothing from the Minister other than a brief statement of his intentions but he did not spell them out. He did not do anything to allay the fears of the 30,000 people who are concerned about this problem. He did not say how he proposed to alleviate the hardship that will be imposed on them when this Bill comes into operation.

We have not been told how this measure will be operated. Will it be done through the health boards, the Department of Social Welfare or the local authorities? All we have had is a vague reference about the Minister's concern in the matter but that is not good enough. A vulnerable section of the community are worried that they may be evicted because of their inability to pay the rents that will be fixed when this Bill comes into operation.

Those of us who have bought a house in the past 15 years are aware of how house prices have spiralled. In any given year house prices have far exceeded inflation or the CPI. In the past five years these prices have exceeded the rate of inflation by 10 or 15 per cent. What guidelines will be used? Will the CPI or the market value be the main criterion for deciding the value? If market value is the criterion, I pity the personnel in the District Courts who will have to adjudicate on these cases.

Much of this situation has developed because of our approach to rented accommodation. We should have taken positive steps years ago to provide more rented accommodation. We should not have adopted the concept that everybody should own a house. If more rented accommodation were available it would reduce house prices because if there was not such competition many houses would not cost the peak prices now obtaining. Unfortunately we did little about the rented accommodation sector. We know what happens when the universities and colleges re-open each year. There is an influx of thousands of students trying to get rented accommodation and we know how impossible that is for them. We know also that the rents they pay are much more than they can afford. We should take positive steps to rectify the situation. I am especially concerned about the value that will be placed on these rents.

The Private Tenants' Action Group submitted their case to the Minister and they stated as follows:

Current market rents are spoken of frequently as the obvious and the most equitable rent that such tenants should be asked to pay. We disagree. In the section dealing with the tenant-right, it was stated that the tenant had a basic right to continue undisturbed in possession provided that the rent was paid, which would have been presumed to have been a market-rent at the time when the contract between landlord and tenant was first entered into. One must presume that since both freely entered upon this contract, it was considered more or less equitable by both sides. Now since the tenant has paid the contracted rent, he must still be considered to be the rightful tenant. In other words, he is not the same as a person who is entering upon a completely new tenancy.

The Supreme Court decision points in effect to the right of the landlord not to be made the sole victim of the massive inflation of the last twenty years. It follows therefore that he was entitled to a rent commensurate with the increase in the cost of living, so that his original contract with the tenant would have maintained its value. Had government action been taken to ensure this, it is hard to see how the present crisis could have arisen; it is hard to see how the original rent, controlled so that it kept pace with the cost of living, could have been unjust to the landlord. Had this been done, the landlord would have no possible ground for complaint; and (what is more important to note now) the tenant would not be made the victim of a property-inflation that far outpaces the overall increase in the cost of living.

It should be faced squarely that if the new rent to be paid is full market rent, then the tenant is victimised financially, just as the landlord was prior to 1981. Whether the tenant can pay a current market rent is not at issue, be it noted. He is still unfairly and exclusively (in relation to the landlord and in comparison with owner-occupied houses) singled out to bear the burden of the contemporary house-property inflation.

It should be clear, therefore, that to set a new rent at full market value level would be to victimise the tenant. Furthermore, it would amount to treating the tenant as though he were entering upon a totally new tenancy, and therefore it would be ignoring the tenant's basic rights as tenant: viz. the right to continue undisturbed as tenant provided he paid a rent which would have been a market rent at the outset of the tenancy.

The only equitable solution to the problem of fixing new rents for the affected tenants is to take the original rent agreed upon by the landlord and tenant and work out (through reference to the CPI) what that rent would amount to in 1981 figures. Note that this would presume that every year, from the inauguration of the tenancy to 1981, the landlord received the full increases that he could have received, had rent been tied to CPI increases.

This is probably the fairest way of dealing with this section. Some landlords may have owned property for many years but others have purchased during the past four or five years hoping that something like this would happen. Some landlords have, on the other hand, been victimised by rent control and I hope the District Court will take into consideration the different situations of landlords who purchased houses in recent years and those who have owned property all their lives. It will be interesting to see what decisions the court will make.

I am disappointed that the Government are reneging on their promise to establish a rents tribunal. The previous speaker said that it would take a long time to establish it but there was no indication or promise in the Minister's speech to establish a rents tribunal. The Minister simply looked at the 1941 Act and decided to ask the District Court to deal with this matter. Enormous problems will be created when an avalanche of applications descends on the District Court. I do not believe the court have the personnel or the expertise to deal with thousands of applications. All landlords have a right to seek redress and will apply immediately and there will be many disputes regarding the input of tenants. Of course, tenants will dispute the claims of the landlords and vice versa. A proper rents tribunal should be established by the Government side by side with this legislation.

I disagree with bringing old people into the courts. Many of them have never stood in a court in their lives and that environment is not suitable for thrashing out arguments between old age pensioners and landlords. For many of these old people the thought of appearing in court is shattering. Under the present system they can be picked at random to serve on a jury and I have had to approach the registrar on numerous occasions to gain exemptions for widows and old age pensioners. This is an example of how they view the courts.

We should have a different environment altogether for old people. There is no doubt that the landlords will be able to claim the increase without facing the court. I hope that we will have a different format that will make it easier for the tenant to tell the judge or whoever would be presiding at the tribunal exactly his or her side of the story. It is important that the tenant give evidence before the respective courts. Some of the Ministers now on those benches gave an undertaking that that would be the case. The Government have reneged on that undertaking. Certainly confusion will arise in the District Court when this avalanche of applications comes before them. I cannot see how they will be handled.

The Taoiseach mentioned yesterday that he expected this Bill to go to the Supreme Court. I would like to put on record that I know the implications of it and I know also the difficulties of drafting a Bill which tries to guarantee certain rights to tenants and the constitutional rights of landlords. It is not easy. Where the rights of landlords are enshrined as they are in this Bill, the Government must be charged with the solemn obligation of protecting other people who will be affected. I am not making a case for those who can afford the increases, I am making a case for those who cannot afford to pay the rent increases which will be imposed, the old age pensioners, widows, old people living alone. In many cases in these old dwellings the mother and father have died and the last member of the family has stayed on in the house. Many such people are not married, the majority are in the lower income group and many suffer ill-health. I hope the Minister will spell out here this evening what provisions he intends to make to allay the fears of these people who are really worried about what their position will be when this Bill comes into effect. They are realists and they know what their incomes are. Many of them are on social welfare, long disability benefit and assistance. They know what they can pay, and they know that their rents will be increased substantially. That will worry them every hour of every day until the Minister comes forward with some positive proposal to relieve that situation. I am disappointed that such is not mentioned in the Bill. The Minister must appreciate fully that such people cannot meet rents at present day values. Everyone realises that, but the Minister here this morning made only a vague reference to it without spelling out what he is going to do. I would have thought that the proper course would be to let the rent tribunal handle all these matters. They would be in a position to investigate the means of each applicant and to direct the local authorities, health boards, corporations and so on as to what subvention or subsidy should be given to a tenant. They would have the machinery. Here we have merely a fragmented statement from the Minister with no firm commitment as to what he is going to do. That is lacking in this Bill.

I have already mentioned tenancy during the life of a tenant and his spouse. If he has that guarantee and the Minister comes in with complete subsidisation that is all right. However, I am not happy about the relative period which obtains in the Bill especially if a son or daughter has married and settled in that house. If the husband or wife dies in maybe 20 years' time that person will have only a year or even less to get out of the house because the relative period will have elapsed. An investigation may be worth while to see if that can be remedied.

A submission from the private tenants' association suggests that local authorities should consider whether it is reasonable to allow tenants to purchase these houses. The Government will have to make up their minds that many of these tenants will not be in a position to pay and they will have to be housed by the local authorities. Local authority houses recently built in the centre of the city cost something in the region of £30,000. I am referring to the Coombe, the markets and places like that. The Minister can work out for himself what the rents of such houses will be. The Minister should look at this matter to see if this is practicable and wise for people to purchase many of these houses. A look at the CPI and inflation over the past 20 or 30 years may reveal that the cost is not as high in relative terms as it might seem. I hope that he will look at it to see if there is a possibility of these houses being bought by the occupants.

Section 9 of the Housing (Private Rented Dwellings) Bill, 1981, refers to a phasing-in operation from 40 per cent, 55 per cent, 70 per cent, 85 per cent, moving into the full amount in 1986. This year the tenant will have to carry a 40 per cent increase. Unfortunately the full impact of the increase will become operative in 1986 and in that year also the incomes will be due for review because the five years will have elapsed. Therefore, the income review and the impact of the full rent will come together. That will create hardship in 1986.

Is it advisable to have a five-year rent review at all? I know that in commercial business reviews occur all the time and there can be huge jumps, perhaps in the region of 70 or 80 per cent in the rents of many commercial businesses in the city today. Commercial businesses can deal with that situation. Provision is made during the three or four years leading up to it, in the course of their costings in anticipation of this review and they are better able for the impact than a private dweller. A gradual process would make things much easier for the tenant. A five year review creates problems for the weaker section of the community. The review could preferably have been phased in the drafting of the Bill, avoiding the sudden impact of a five year review. A CPI of 15 per cent or, worse still, the 20 per cent inflation rate which we have been experiencing, would involve a doubling of rent over that period.

Section 12 deals with a landlord's power to recover buildings under certain conditions for family reasons and so forth. This complete section is contained in the 1941 Bill. A condition is Section 12 (e) of the present Bill is that the landlord requires vacant possession to carry out a scheme of development of property which includes the dwelling and has planning permission for the scheme. I know of a case at present where a landlord who has a scheme of development has acquired three houses over the past four or five years, but in between two of these houses there is one house occupied by a widow and her two children. Two of his houses have been de-tenanted and he has allowed them to go into complete disrepair. In this section, in respect of recovery of possession under paragraphs (d) and (e) the landlord must pay such sums as the court considers reasonable to meet the expenses incurred by the tenants in quitting the dwelling, together with a sum not exceeding two years' rent of alternative accommodation which is reasonable and suited to the residential need. What will this widow's situation be? Will it be the duty and obligation of the landlord to purchase a house suitable to her requirements? What obligation would that section place on the landlord?

There was a case to be made for the landlord's point of view, but this Bill has caused frustration on all sides. It was a difficult Bill to draft. Those affected by it have been caused the greatest amount of mental anguish. I hope that within the next week the Minister will be able to allay the fears of thousands of people affected. He must spell out his intentions, as he did not do in his ambiguous and brief statement today. He should spell out, on this very sensitive issue, how he intends to subsidise these tenants. The quicker that is done the better. Otherwise many of these people will have a very unhappy Christmas in consequence of this Bill. Having enjoyed protection of tenancy during their father's and grandfather's time, they will find their rights being taken away and be completely unable to meet the conditions which will be imposed upon them. The Minister must show a proper commitment by indicating in plain language his intention to ensure the protection of these people. When the Bill goes through the House next week I hope we will not have to spend Christmas explaining to these people merely that the Minister envisages certain reliefs as regards certain things and nothing more. That is not good enough. Having brought the Bill to the House, the Minister must fulfil his obligations to these people.

An Leas-Cheann Comhairle

The Chair is happy to launch Deputy Toddy O'Sullivan on his maiden speech.

Mr. O'Sullivan

First and foremost, I welcome this Bill and compliment the Minister on the introduction of the Temporary Rent Restriction Bill which enables people to assess the whole situation. Nonetheless, I would be less than honest if I did not say that I have some reservations and it is for that purpose that I rise to my feet. The mechanism by which these reservations can be met is available.

This Bill would afford tenants, particularly older tenants of long standing in the private sector, some measure of security which they now see threatened. I do not on this occasion wish to become involved in a personal attack on Members of the Opposition, but if they criticise legislation it behoves them and everyone else to offer a reasonable alternative. I have not heard any reasonable alternative to date.

I am mainly concerned about section 9 of the Bill, where scales could be introduced over a period of five years. I intend to move an amendment before the Bill is finally passed. There could be a situation where, within this period of five years, the rent could be increased by 100 per cent. This would be unacceptable to people on a fixed income, social welfare recipients, pensioners who would not have the benefit of clauses to insure against inflation. For that reason it should be set down that 10 per cent or 15 per cent of their income — and I would be opposed to anything higher than that— should be the maximum that they would have to pay in rent. An amendment of this nature would go a good way towards allaying the fears of people who now feel threatened. It is significant that of the few people we have here today, three on the Government side are from the Cork constituency. This gives an idea of the magnitude of the problem in this area. People are facing Christmas in a very worried frame of mind. I have no doubt that the Minister will respond to the pleas made on their behalf. Some of them have lived up to 70 years in these dwellings, some having been born in them. Some have spent their life savings in upgrading them and making them more comfortable. I know of many such cases. There are some dangers in section 6 which provides for the fixing of new rents by the courts. It creates an open-ended situation which could very easily be abused. So I would like to see some amendment to that section.

It is stated in the explanatory memorandum that the Bill is founded on important principles in the Constitution, particularly the rights of private property. I feel that the Bill leans a little too much towards the interests of private property. I accept that in the past property has been allowed to run down because of the very low rents paid by some tenants. Consequently local authorities were expected to pick up the slack by housing people who were living in very poor conditions in the private sector. Over all I welcome this measure. I appreciate that the Minister has had very little time to come up with something that would be acceptable to both sides. But I have no doubt that he will listen and respond to the needs of the weaker sections of our community.

Criticism has been levelled at the Coalition partners that we have reneged. That is a rather emotive term in this context of dealing with a very sensitive area. It does not become Members of this House to speak in this manner because many of the people we are dealing with are old and, in many cases, infirm. There is a need for both sides to put their heads together and come up with an acceptable solution. There has been no reneging on the part of the Labour Party. I admit that I was one of the people who opposed entering into a Coalition. But from my experience to date I have found that our partners have behaved in an honourable manner and I expect them to continue to do so. At the end of the day I sincerely hope that we will come up with something that will be acceptable to both landlord and tenant. If we can do that we can say that justice has prevailed.

Mr. Connolly

This is the most complex legislation that has been brought before the House for some time. It is complex because of the Supreme Court ruling and because of the terms of reference laid down in the Bill. We on this side of the House gave an undertaking that we would not hold up the Bill unduly. Therefore we are not in a position to go into it in as much detail as we would like.

First, I am not happy about the fixing of rents by the District Court because the people in the courts are legal people who generally deal with law and not rented accommodation and different types of accommodation. This is a very broad area. There are many types of accommodation, luxury accommodation, grade A accommodation, grades B and C and so on down the scale. In addition the landlords will probably be in a position to hire the necessary legal people to look after their interests, whereas the tenants, which include pensioners and people on low incomes, may not be in that position. Such people have probably never been in a District Court at any type of hearing before and will be reluctant to go to court, but will have no alternative if they are not happy with their position. I do not wish to cast aspersions on the courts, but I am not happy that the legal people and the Judiciary will be able to handle a situation like this. This legislation is new; it is on a new issue — accommodation, where people live.

Are the courts in a position to judge what is a fair rent? I believe that a tribunal with the necessary qualified people might be a way around that. If it is left to the courts there will be an avalanche of cases before them and they will become bogged down and other essential matters before the courts may not be dealt with as urgently as will be required. There may be anything up to 30,000 cases before the courts in any one year. It is difficult to know what the actual number will be but, judging by the backlog of other work, we will be putting an extra burden on the courts and that is something that must be looked into. I have grave reservations in this matter. I have explained the reasons for my reservations in detail. I believe the courts may not be able to cope with the situation.

It is easy for people to accuse this side of the House of not putting forward alternatives. When a Bill is introduced every Member has an obligation to examine the measure to see exactly what is involved. We may be asked later by constituents why we put this extra expense on the taxpayer because any legislation passed here can be contested in the courts and it is our duty to ensure that we do the very best we can to see that everyone gets fair play. In the case of those on low incomes the Minister said some kind of help would be given. He did not spell out from whence that help would come, whether from the health boards, the local authorities or through social welfare. There are many on low incomes, such as old age pensioners and others, and as a result of the court decision they are faced with an increase in the first year of almost 40 per cent. When the Minister comes to reply I hope he will tell those on low incomes what financial help will be forthcoming to enable them to meet this increased burden.

The Fine Gael Party in their manifesto said they would bring in a fair rents tribunal and introduce a new tax credit for private tenancies up to a maximum of £1,000 rent. It seems now that has gone out the door as well. It is no longer on. I do not know what the position of the Labour Party is in all this. They are in coalition and therefore they must share some of the blame. Fine Gael have backed away completely from that manifesto promise.

The introduction of a register by local authorities is a good idea. I welcome it. Provision is made for that in this Bill. The fixing of rents is a very difficult matter. I appreciate the position but I know there are many people in rented accommodation for a number of years who are very worried about all this. They fear they will not be able to meet this commitment. They do not even know what the extra sum will be.

According to the Bill it is the District Court which will deal with these cases. Landlords will be in a position to avail of the best legal brains. It is also very difficult to visualise the kind of rents because they will very from county to county. They will also vary from the point of view of the actual accommodation. Of course with the introduction of the register by local authorities we will know exactly who has accommodation and what type of accommodation it is. I believe that when this Bill becomes law certain sections of it will be brought to the courts for decision and I am glad that that will be the case. But if that is to be the case it should be cleared up as quickly as possible and the matter put right.

I should like to have spelled out also the amount of subsidy that will apply to tenants and the categories that will be involved. This is an involved matter. Many tenants will be in need of financial help and a good case can be made for all of them. They will need help to pay their rents, whether that help will be from the Department of Social Welfare, the health boards or local authorities.

Before we left office the legislation we brought in was in the form of an enabling Bill. I hope that the legislation now before us will spell out exactly what is involved. I hope some of the anomalies I have referred to will be ironed out. What will be the position after five years if rents are to be increased, and I have no doubt they will be? Should such increases not be part of the CPI? When the Bill goes into Committee I suggest an amendment should be introduced fixing future rents and the affected tenants should be told what to expect in the future.

Another matter to be considered is the variety of types of accommodation. In Dublin a lot of the rented accommodation will be grade A luxury apartments. In other parts of the country, however, the accommodation will not be so good. Will there be scales of rents to correspond with the types of accommodation? I have reservations about the ability of the District Court to deal with this. Without meaning disrespect to that court, I do not think it will be competent to deal with the many complex situations that will arise under the Bill. The court will have to deal with constitutional matters among other things.

Another problem will be in regard to tenants. Many old people who will be affected have never been in the District Court and would hate the thought of having to be. Many tenants will be old age pensioners and the cost of these proceedings will be high, the cost of getting legal advice and of being represented in court. Another vital matter arises from that. Those people will be in the low income bracket. Will they have the right to free legal aid? I hope the Minister will make this clear when he is replying. I have looked through the Bill and I do not see any provision for free legal aid. I have not much sympathy for the owners or landlords who will be well able to pay legal people to represent them. As I said at the beginning, this Bill involves many complex matters, particularly because of the Supreme Court ruling. The rights of both tenants and landlords must be looked after and we must ensure that the Bill which we pass will be fair to the underprivileged particularly, people who are not in a position to enter into major financial commitments. Therefore, their position in the future will have to be spelled out in the Bill. If not, there could be different interpretations of how it should be done. Legal people will put up all kinds of arguments. They are very good at that.

Those are some of the points I wished to raise. I am not knocking the Bill in any way. I understand fully that the necessary legislation had to be introduced to protect people in rented accommodation. Between now and next week we may be able to put down amendments to make the Bill more workable. We want the Bill to work and to be fair. We will not oppose for the sake of opposition. If we see something wrong we will oppose it, and we approve of the good provisions in the Bill.

Mr. L. Burke

I will be very brief. I am very glad to have this opportunity to speak in support of this Bill. As the Minister pointed out quite rightly, the rent restrictions legislation had many faults, not least of which was that it did little to encourage growth and development in the private rented sector which is the important part of our national housing stock. The Bill, which deals almost exclusively with the controlled sector, provides a right balance between the interests of landlords and tenants. On the one hand, landlords are assured of a reasonable return on their investment. On the other hand, tenants are provided with protection against unscrupulous landlords seeking exorbitant rent increases for the purpose of regaining possession. The terms of the tenancy can be agreed between the landlord and the tenant, or set by the court in default of agreement.

The security of tenure provision in the Bill will do much to relieve the anxieties of tenants of controlled dwellings especially in the Power Street and Dillon's Cross area of my constituency in Cork city. It is noticeable from the news reports that the Bill has not found favour with the landlord or tenant organisations. This may be a good indication that the Government have struck the right balance between the conflicting interests of the two groups.

As the Minister pointed out, this Bill raises a number of complex constitutional questions. He may be right in saying there would be value in having the matter decided once and for all by the Supreme Court. From what has been said, it seems that reference to the Supreme Court is a matter for the President, so we will have to wait and see what happens.

I note the Minister's commitment to provide assistance for tenants suffering hardship following rent increases, and I welcome the rebate provision in the Bill. These are very important indications of the Government's approach in this area. Many tenants of controlled dwellings are poor and will need help. It is reassuring to know the Government have the interests of these people at heart and that they will be helped where help is needed. The rebate provision will go some way towards cushioning tenants against the immediate effects of higher rents.

Having regard to the rebate provision and the assistance to be provided by the Government, I am happy that the proposals we are debating are a fair and reasonable solution to what we all agree is a complex and difficult area with far-reaching implications for the welfare of the large body of tenants involved.

Mr. Coughlan

I should like to compliment the Minister and the Minister of State on the introduction of this important Bill. I wish them both success in their endeavours in a very difficult and complex sphere. My concern is directed to the implications in the Bill for people in my constituency. When the Minister is replying I should like him to give us whatever statistics he can in relation to the figure of 30,000 dwellings mentioned. I may be misquoting the figure.

There is also the question of the degree of involvement of the local authorities in formulating and tabulating an assessment of the register contained in the Bill. I am disappointed that the Government did not adhere to the promise in their election manifesto to establish a fair rents tribunal. Many people, particularly the old and the less well off, have not got great legal minds and they may have difficulty in understanding the implications of the Bill. A previous speaker welcomed the attempt in the Bill to alleviate anxiety. A large number of elderly people will be very anxious about its implications. The Minister should endeavour to allay those fears and anxieties by providing well documented and easily understandable information for these people.

I am disappointed that the tribunal is not the operative factor in the rent assessment and that it has been handed over to the courts. I am not casting aspersions on the courts, but there are those who would say that this legislation is being given into the hands of people who will have a vested interest in its financial aspects. The implications for elderly people who are not legally minded and even for the general public could be frightening in some instances. Since the decision has been taken to refer the assessment to the courts, I would ask the Minister to assist these people in every possible way. There will be degrees of difficulty. There will be those who will be in a position financially to obtain professional advice and aid, but there will be a large number of people who will not be in a position to do so.

This gives rise to the question of the ability of the courts to handle this matter. There is also an encroachment on what is accepted at present as a very slow-moving machine. What additional personnel will be involved? Earlier somebody raised the question of the ability of a judge to assess rents.

Debate adjourned.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.

Dáil Éireann díospóireacht - Wednesday, 9 Dec 1981

Housing (Private Rented Dwellings) Bill, 1981: Second Stage.

Dáil Éireann díospóireacht -
Wednesday, 9 Dec 1981