Joint Committee on Housing, Local Government and Heritage díospóireacht -
Thursday, 7 Dec 2023

General Scheme of the Residential Tenancies (Right to Purchase) Bill: Discussion (Resumed)

An Cathaoirleach

We resume our pre-legislative scrutiny of the general scheme of the residential tenancies (right to purchase) Bill. I have received apologies from Senator Fitzpatrick. I welcome from the Department of Housing, Local Government and Heritage: Ms Catherine Comer, principal officer; and Mr. Liam Smyth, assistant principal. Their opening statement and the briefing were circulated to members.

I remind members of the constitutional requirement that they must be physically present within the confines of the place where the Parliament has chosen to sit, namely, Leinster House, in order to participate in public meetings. Witnesses attending in the committee room are protected by absolute privilege in respect of their contributions. This means they have an absolute defence against any defamation action for anything they say at the meeting. Members and witnesses are expected not to abuse the privilege they enjoy and it is my duty as Chair to ensure it is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.

Members and witnesses are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

The opening statement will be available on the committee website after the meeting. I invite Ms Comer to make the opening statement.

Ms Catherine Comer

I thank the Chairman and members for the opportunity to discuss the general scheme of the residential tenancies (right to purchase) Bill. I am accompanied by my colleague Liam Smyth. We both work in the rental market policy section of the Department of Housing, Local Government and Heritage.

Before outlining the main provisions of the Bill, I will provide some background and context to the proposed Bill. On 7 March 2023 the Government agreed that the Minister for Housing, Local Government and Heritage would develop a legislative-based first right of refusal. The Department developed this general scheme in consultation with the Office of the Attorney General. On 24 October the Government approved the scheme as a basis for priority legal drafting, which is now under way. The key provision is head 7, which requires a landlord who wishes to sell their rented dwelling to give to their tenant an invitation to bid - that is, the first right of refusal - and a further invitation to bid under certain conditions to purchase the rented home. Heads 5, 6, 8 and 25 also relate to the first right of refusal. The other heads in the Bill provide technical amendments to the Residential Tenancies Act to enhance its operation, the outcomes thereunder and the operational efficiencies of the Residential Tenancies Board, RTB.

I will provide a brief overview on how the first right of refusal is intended to operate. I assure the committee and the housing and rental sectors that the intention is to minimise interference in the bidding and conveyancing processes in the context of the sale of rental homes. It might be helpful to chronologically illustrate the sequence of events from the serving of the notice of termination to the closing of a sale in compliance with the requirements of the first right of refusal.

On day 1, the landlord serves a notice of termination on an eligible Part 4 tenant - in other words, they must be a tenant in situ for at least six months - in respect of an eligible rented dwelling. On that day, she or he is also required to give the tenant an invitation to bid. Both documents must be simultaneously copied to the RTB on day 1. If one or both documents are not so copied, the notice of termination can be invalidated by the RTB in a dispute resolution. The minimum periods to be given by a landlord to terminate a Part 4 tenancy are set out in table 1 to section 66 of the Residential Tenancies Act. They range from 152 to 224 days. The longer the tenancy has existed, the longer the minimum notice period to be given.

From day 1 to day 90, a tenant can make any number of bids on the property, which may or may not be accepted by the landlord. If the tenant cannot bid due to his or her financial status and is deemed at risk of homelessness by his or her local authority, a local authority, approved housing body or the Housing Agency can bid to buy the property so that the tenant can remain in situ, if appropriate. The interaction between the tenant and the local authority, etc., in this regard will operate administratively under the local authority tenant in situ scheme or under the cost rental tenant in situ scheme, which is currently administered by the Housing Agency, as appropriate to their means and social housing support eligibility. An enforceable agreement to transfer the dwelling - in other words, a sale - can only be entered by the landlord during this initial 90-day period with the tenant, a local authority, approved housing body or the Housing Agency, where the latter bodies are acting on the basis of keeping the tenant in the property. During this time, there is no prohibition on the landlord placing the rented dwelling on the open market, nor on bids being made on the dwelling by any party. The tenant could be asked by the landlord to facilitate viewings, etc.

From day 91 onwards, if an enforceable agreement to transfer has not been entered by the landlord during the initial 90-day period with the tenant, a local authority, approved housing body or the Housing Agency, the landlord can enter an enforceable agreement to transfer with a third party, subject to the new requirements. If the landlord receives and is willing to accept a bid on or after day 91 from a third party on the open market which is lower or equal to the highest bid made by the tenant during the initial 90-day period, he or she is obliged to give the tenant a further invitation to bid at a specified value that matches the bid from the third party.

The landlord must afford ten days to the tenant to match the third party bid. If the tenant does not make this further bid during the ten-day period, an enforceable agreement to transfer can be entered by the landlord with the third party.

These new provisions are likely to prompt the landlord to put the rented property on the open market at an earlier juncture, with any consequential bidding that occurs on the open market during the initial 90-day period, followed by the serving of the notice of termination, informing the landlord and the tenant as to the market value of the rental property in question.

I hope this opening statement has been of help to the committee. Mr. Smyth and I are happy to take any questions members may have.

Deputy Eoin Ó Broin

I have eight questions and might not get to all of them in the first round. Of the 26 heads of the Bill, only five relate to the title. That must be a new record. If I am correct, 80% of the heads of the Bill relate to other areas of reform of the Residential Tenancies Act. It is often the practice to throw in some non-consequential or semi-consequential amendments at the end of a Bill but 80% of a Bill not relating to the title is remarkable. I do not blame the officials for that. I know they act under the pleasure of the Minister.

An issue that caused significant confusion in the earlier session, to which the officials may have been paying attention, is what happens after the 90 days. The timeline provided by Ms Comer has answered some of the queries in that regard. There was confusion as to whether there is a second 90-day period, but she has made it clear there is no second 90-day period. What happens after the due date of the notice? Many landlords who issue a notice to quit on ground of sale want vacant possession because they believe they will get a higher price on the open market without a tenant in situ. If a tenant vacates on the due date and the landlord subsequently gets the same or lower price on the open market, does the landlord have to go back to the tenant who is no longer in situ and offer to purchase at the price originally offered by the tenant? If the answer to that question is "Yes", does a tenant who overholds and, strictly speaking, is in breach of the tenancy agreement not get that subsequent offer? What if a landlord does not want to put the property on the open market until it is vacant? The Bill seems silent on that point. Those are my first three questions.

Ms Catherine Comer

We have put in a query with the drafters regarding whether the title is appropriate. It is part of the drafting process. We will see what it returns as. I take the Deputy's point in that regard.

Deputy Eoin Ó Broin

It is more like a miscellaneous provisions Bill than anything else. I will not argue over that, however.

Ms Catherine Comer

As regards what happens after the 90 days, this comes under head 8 in circumstances where, for example, a tenant has put in a bid and the landlord is willing to accept it. We are cognisant, however, that although the offer can be made and a certain amount of work done in the 90 days, the final close can take longer. That is what head 8 caters for. There was a query about what head 8 does. It allows, similar to a reliance on the previous Bill during Covid, for there to be an agreement to preserve the Part 4 rights and the tenant to remain in the house as long as there was an agreement between the landlord and tenant. That makes sense if the sale is going through. If the landlord-----

Deputy Eoin Ó Broin

It is almost like a pause in the notice-to-quit, NTQ, timeline-----

Ms Catherine Comer

Exactly.

Deputy Eoin Ó Broin

-----if it is agreed by both sides.

Ms Catherine Comer

The notice of termination would continue but if the sale was going through, the tenant would not have to leave the house just to come back in at a later stage. We were cognisant of that.

As regards situations where the landlord does not put it on until later, the landlord still has to go back to the tenant.

Deputy Eoin Ó Broin

That is irrespective of the length of time. If I get six months' notice and move out at the end of six months and, within one, two or three months of my moving out, the landlord gets an offer that is the same as or lower than the offer, then, irrespective of the length of time, the landlord still has to offer it to me, as the tenant.

Ms Catherine Comer

Yes, the landlord must offer it.

Deputy Eoin Ó Broin

If the tenant is overholding, does that invalidate his or her right to purchase at the same-----

Mr. Liam Smyth

There are eligibility criteria relating to the tenant------

Deputy Eoin Ó Broin

Overholding would render the tenant ineligible.

Mr. Liam Smyth

Ineligible, yes.

Deputy Eoin Ó Broin

With respect to a landlord who wants to sell vacant and does not put the property on the market, the tenant still has the right to make the bid but would, in effect, be forced to move out on the due date because, otherwise, he or she would be ineligible to have the offer at any later stage.

Ms Catherine Comer

Yes, but if the property is not sold, it must be offered back to the tenant as a rental property. That is already in the Bill.

Deputy Eoin Ó Broin

What is the rationale for the exclusion of tenancies other than Part 4 tenancies?

Ms Catherine Comer

We are cognisant that once a tenancy becomes a Part 4 tenancy, the tenant has increased tenancy protections. That is the way the Bill is structured. Part of it is that the right of first refusal will come in when that happens. From a practical point of view, we are giving 90 days. If it is not a Part 4 tenancy, that 90 days is the maximum timeframe in respect of a notice of termination on the basis of sale. It does not happen before that.

Deputy Eoin Ó Broin

Perfect.

Deputy Emer Higgins

I thank our guests for being here to discuss the proposed Bill. Concerns were raised at a meeting earlier this week and it is great to have the opportunity to put those concerns to Ms Comer and Mr. Smyth. I thank them for their time. I am very supportive of the principle of the proposed Bill. When I was a tenant, I was offered the opportunity to purchase from my landlord. This does happen and it is good practice that it happens. I wish to ensure that when this comes into law, it does so in a way that is as user-friendly as possible and does not create delays when it comes to purchases and sales.

My question relates to eligibility criteria. I ask the witnesses to talk us through the eligibility criteria from the perspective of a tenant and then from the perspective of a landlord, in terms of exemptions. An issue raised in that regard related to properties that are not going on the open market but are being transferred to a family member. I ask the witnesses to provide clarity on those two points.

Ms Catherine Comer

Rather than looking at eligibility, it might be easier to go through the exemptions. The requirements will apply to tenants in certain circumstances that are set out. They need to be a Part 4 tenant in situ. We have gone through why that is the case. This relates to homelessness prevention measures. We are saying the Part 4 tenant cannot own residential accommodation in Ireland. We believe that is an important piece to include in the Bill. The Part 4 tenant must be in a position to prove he or she has the funds to proceed with the purchase. In addition, the Part 4 tenancy cannot be in breach of the tenant obligations. That is on the tenant's side of it.

As regards where the proposal will not apply, it will not apply in respect of student-specific accommodation. I believe that is a reasonable approach. In the context of dwellings provided by an approved housing body to a social tenant, it will not apply in the case of cost-rental dwellings. It will not apply to build-to-rent properties. That was included as there are particular planning restrictions on build-to-rent properties. It will not apply if the property is one of two or more dwellings in the same property, which the landlord intends to sell in its entirety.

I suppose that is effectively a block of apartments that are currently rental apartments. From a practical point of view, if they were being sold individually to tenants-----

Deputy Emer Higgins

Is that limited to apartments? If the landlord owns, say, three houses in the one housing development, would that kick in?

Ms Catherine Comer

No, this is specifically if it was one or two dwellings in the same property. A house is different. This is within a particular property. Another case is where one dwelling is divided in two, where the landlord might reside in one part.

The other one is where a property is subject to an enforcement agreement. I know there were some questions about partial and full consideration. I might get my colleague, Mr. Smyth, to look at that. This is the benefit of the drafting process. We were trying to cater for certain gifting requirements and then, when we talked to the drafters, we were trying to be as comprehensive as we could be during the preparation of the scheme. However, as we go through it, we see that some things are not required. I might let Mr. Smyth comment further.

Mr. Liam Smyth

To take a step backwards, what we are looking at is where a notice of termination is served on the basis of sale. This is where this new right would kick in. We were looking at what happens if someone gifts, but in that circumstance, there is no notice of termination issued, so there would be no right to accompany it. While we had thought we needed head 5, we are removing that. If someone is gifting the property, they are gifting with the tenant in situ and it would not be a ground to terminate the tenancy. Whether that is between family members or one company setting up another company to gift it in order to find a reason to terminate a tenancy, that is originally why it was there in the Act. You would not have a transfer without a sale and use that as an excuse for getting around a termination.

Deputy Emer Higgins

If, for example, Mary wanted to provide her apartment to her son, John, that can only happen with the tenant in situ.

Mr. Liam Smyth

As a sale, but she would have another ground under the Act in that she can ask John to move in and then sort out the transfer of deeds afterwards, in the situation mentioned by the Deputy.

Deputy Emer Higgins

In that situation, Mary would provide notice to quit for a family member to move in in advance of a sale.

Mr. Liam Smyth

Or she can transfer and leave the tenants in situ.

Deputy Emer Higgins

But if John wanted to move in and that was the basis of him getting this apartment-----

Mr. Liam Smyth

Under the Act, John could move in under ground 4 as a family member. Once John is there, he needs to be there for 12 months and the transfer can happen during that 12 months.

Ms Catherine Comer

What we are trying to prevent is that if, instead of a sale, you are just gifting it to someone; in that case, the tenant remains in situ.

Deputy Emer Higgins

I am sorry if this is a silly question. What is the difference between a sale and a gift in this situation? If there is money changing hands, that is a sale.

Mr. Liam Smyth

That is a sale, yes.

Deputy Emer Higgins

In that situation, Mary would first provide her tenant with 90 days notice. There is no family exemption.

Ms Catherine Comer

No. If the family member needs to move in, that is already catered for in the Act. If it is about selling it or gifting it to a family member, they need to keep the tenant in situ. If they are gifting it to a family member and they need it for themselves, in that case, they do not go to sell it with the tenant in situ and they use the exemption that is already there for family.

Deputy Emer Higgins

That could slow down a familial purchase by a minimum of a year. Is that right?

Mr. Liam Smyth

No.

Deputy Emer Higgins

It would, would it not? If Mary wants to sell to John-----

Mr. Liam Smyth

If Mary wants to sell to John, she can terminate the tenancy or she need not terminate the tenancy and can have the transfer done.

Deputy Emer Higgins

But John cannot move in.

Mr. Liam Smyth

John could move in under the family ground.

Deputy Emer Higgins

A year in advance of purchase.

Mr. Liam Smyth

At any time.

Deputy Emer Higgins

Mr. Smyth might explain that to me because it sounds different.

Mr. Liam Smyth

If Mary owned a house and either Mary or John wanted to move in, there is a ground under the Act to end the tenancy and they need to give notice, which could be up to 224 days.

Deputy Emer Higgins

What if Mary's intention is to sell to John?

Ms Catherine Comer

In that case, if Mary's intention is to sell it to John, then she needs to sell it. There is a tenant in place. She needs to sell with the tenant in situ.

Deputy Emer Higgins

So there is no familial exemption.

Ms Catherine Comer

No, but there is another ground. If you need it for a family member to move in, that is already catered for and you can already do that under the Act. This does not give additional benefit to the family because it is not required. Obviously, if the family member wants to move in, that is the case, and they can sell it to the family member.

Deputy Emer Higgins

A year after they move in.

Ms Catherine Comer

No, you can sell it but the tenant stays in situ. You would not be able to sell it with vacant possession.

Deputy Emer Higgins

That is quite different from what we heard on Tuesday, when there were concerns about some section of the Act dealing with it and some section of the Act not dealing with it. The witnesses are saying that the section has been removed in its entirety.

Mr. Liam Smyth

Exactly. Head 5 is gone. By also removing head 7(5)(c)(vii)-----

An Cathaoirleach

Mr. Smyth is referring to head 8.

Mr. Liam Smyth

It is head 7(5)(c)(vii).

Deputy Emer Higgins

To be clear, the rationale is that the Department is a little concerned that having the tenant who is in situ provided with the opportunity to purchase might become problematic. Why is that head being removed?

Mr. Liam Smyth

You only get this right if you are selling. The exemption that we were talking about concerned gifting, which is not selling, so this exemption is not needed. In a gifting scenario, you would not be serving a notice of termination based on sale.

Deputy Emer Higgins

I wonder what proportion of the property market is gifted. We are probably more likely to be talking about sales, realistically, and that is not covered in this situation.

Mr. Liam Smyth

For any sale, people will be required to give this invitation.

Deputy Emer Higgins

There are no eligibility criteria or exemptions for familial sale.

Mr. Liam Smyth

Not for family, but there is another separate ground entirely to help people if it is a transfer between family that they want to achieve.

An Cathaoirleach

Thank you. I point out to members that the clock is not working but I am timing the contributions. Deputy Ó Broin cut himself a bit short on his last contribution. I call Deputy McAuliffe.

Deputy Paul McAuliffe

There is an interaction between the notice periods, the restriction which we put on where a landlord can sell and this right. I suppose that is where the interactions we have just had are useful in this phase of the process. I wonder if FAQs might be developed, even at a draft stage, that would help us to understand some of the implications of the legislation. The previous round of questions is probably a good example of that.

I want to clear up an issue that was put to us at the last meeting. Currently, in order for a landlord or owner of a property who rents it out to secure the value of that home, they have to give the full notice period to get vacant possession and then put it on the market for it to be sold. Senator Cummins put the point to both parties that this provides an accelerated method of sale to do it within 90 days. Therefore, while it is an additional right for the tenant, it is equally an accelerated form of sale within that notice period for landlords and, therefore, in some cases makes it a more advantageous method of sale. The reading of the position by Senator Cummins, Deputy Ó Broin and many of us was that this is permitted and it does provide for sale within the 90 days, rather than within the full notice period. Is that correct?

Ms Catherine Comer

Yes, that is correct. As we were saying, there is no restriction on the landlord advertising it in that first 90 days.

It might give both the landlord and tenant a better idea of what the market value is, and to make sure that if one intends to offer it, that is possibly-----

Deputy Paul McAuliffe

There is nothing in the Bill that stops the landlord from achieving the full market value. There is nothing in it that forces them to wait until the other end of the notice period. In fact, we are providing a period before. That is really important. I think it was the Chair that indicated the last time that there was a perception being sent out that this was another burden on landlords. In fact, there is one portion of it that is more advantageous to landlords because it allows them, if perhaps they are in a very difficult financial situation, to secure the real value of that property at a faster rate, while also keeping the tenant in place.

Second, some points were made that I thought were understandable points. In order to achieve full market value, we have all heard about estate agents telling people to bake bread in their ovens, have the place clean and all the rest. If a tenant is in a property, they may, vexatiously, be trying to prevent the sale. If there is not good access to the property and it is not in good condition, it might be difficult to realise as much as the market value as one might expect. Does the Department accept that is an issue when the tenant is in situ?

Ms Catherine Comer

Yes, it is a reality but we also know the vast majority of landlords and tenants are reasonable people. Although it may be that a tenant might be asked to allow viewings, that is a reasonable request oftentimes.

Deputy Paul McAuliffe

Sometimes though, we deal with the unreasonable and the extreme.

Ms Catherine Comer

Yes.

Deputy Paul McAuliffe

There should be some obligation on the tenant, whether that is dealt with in legislation or elsewhere, to ensure that viewings are appropriately dealt with and that there is not an attempt to frustrate a process. We are extending a right to a tenant here, and in those cases it is not unreasonable that we might also extend an obligation. The Department should reflect on that to see how it could be best done within the overall process. It might not be in the legislation. I also think that achieving market value, especially in the current market, is about the bricks, mortar and the location, and much of the other stuff is the smaller end of the value of any property. I do not discount it but it was a reasonable suggestion.

The concern I have is that at the moment, for example, there will be tenants who will want to avail of the first home scheme by virtue of it being a second-hand property. It is an incredibly valuable offering for somebody who gets their notice period and is able to avail of the first home scheme. They can only do it on that property as it is a second-hand home but they would not able to do it to purchase the property next door, or next door to that. I would be worried that the administration of the first home scheme would also work in line with the timelines provided in the Bill. If they are going to use that scheme then we have to make sure that the scheme matches the timelines within. I ask the witnesses to point to that. It is not a legislative issue perhaps but it is an issue between the two.

The final scenario then is the issue of the tenant in situ scheme and the cost-rental backstop. I cannot remember what we call it now but they are effectively two versions of the tenant in situ scheme. What elements of this scheme transfer from what is a voluntary scheme at the moment to the council being able to exercise the right to purchase on behalf of a tenant? Was consideration given to that?

Ms Catherine Comer

Regarding obligations for viewings, it is something we can look at it but it might be beyond the scope of this. If a tenant is not necessarily in a position where they intend to buy their home or want to buy the house, it serves their own best interests to be amenable to viewings, etc. because it might be another landlord buying it. However, I take the Deputy's point on that.

On the first home scheme, tenants in situ and cost rental, this right goes to the tenant first but the tenant can then approach the local authority. It works in tandem and obviously, our colleagues in the Department on that side of the house are very aware that this is coming. I know they are prioritising cases that have a notice of termination on the basis of sale for those schemes, and making sure things like that are moving very quickly. We are working on that. It is separate to this legislation but our colleagues are very aware, on that side of it.

Deputy Paul McAuliffe

That is currently a voluntary process between the owner, the tenant and the city council. The right to purchase is now being extended to being more a voluntary arrangement, in that there is an option to purchase.

Ms Catherine Comer

Yes but at the same time we need to be cognisant that maybe the local authority does not have to do it. Maybe an AHB-----

Deputy Paul McAuliffe

Can the local authority exercise the first option in exchange of or on behalf of the tenant?

Ms Catherine Comer

This allows that in that first 90 days, the local authority, AHB or the Housing Agency can act as long as the tenant is staying in the property and it is let to the tenant.

An Cathaoirleach

It is my slot next. I want to continue on that, and it probably comes under head 7, the invitation to bid. That invitation to bid is given to the tenant. The landlord has to submit the invitation to bid and the notice of termination to the RTB at the exact same time. That starts the plot on both of those processes. I want to ask about the tenant's ability to transfer that right to the local authority, the Housing Agency or an AHB, as the case may be. It might be the local authority with regard to certain income thresholds. It might be the Housing Agency for cost rental on another income threshold, or it can be the local authority for a threshold above that as well. If that tenant is unable to borrow or get the funding for a purchase, can they transfer that right to the local authority? I know the local authority can aid but how do we make sure that process is addressed?

Mr. Liam Smyth

It will be provided for in the legislation that the only entity other than the tenant that can buy, as the Chair said, is a local authority or an approved housing body. There are administrative arrangements in place for a local authority to help a tenant if they want to avail of the tenant in situ scheme. It will the be the same with the Housing Agency and maybe approved housing bodies in the future. That liaison between the tenant sand them getting help will happen outside of this legislation.

We have mentioned that there will be guidance available for tenants, and information on both of those schemes will be available, more than likely, on the RTB website. We have guidance that we can update for tenants in receipt of notice of termination.

An Cathaoirleach

In this situation, we are setting up the legislation so that the tenant gets the first right to bid on it. They may realise that they just cannot achieve that, and that they cannot get the money together for it. I would like to see a mechanism in place where that tenant can then transfer that right, rather than telling them there is guidance out there. It is a very difficult time for a tenant to have to start looking up which one they slot into, and who they contact. I appreciate that there will be guidance documents on the RTB and Housing Agency websites. However, I think there should be an ability for the tenant to transfer that right, so that there is a clear line of responsibility.

Mr. Liam Smyth

It is almost by default that if the only entities that can buy are a local authority or the approved housing bodies, and no one else can come in for the first 90 days, then that right to buy is essentially there, fair and square, with the local authority. In the background, there will obviously have to be a liaison with the tenant who is in receipt of the notice of termination. However, the right is there for the local authority to step in where the tenant steps out.

An Cathaoirleach

It may, or it can, or it should but will the legislation contain that ability for the tenant, who was received the notice to quit and the right to bid, to then transfer that right to the local authority, the Housing Agency, or the approved housing body as it might be?

Ms Catherine Comer

I am not sure I understand how the word "transfer" is used in this context but it is our intention that in the legislation, it will be the tenant or the local authority, AHB or the Housing Agency acting on behalf of that tenant to offer.

An Cathaoirleach

Yes, I accept that. It can only be the tenant or those three, or some other housing body. What I want to know is how we establish that relationship so that is certain.

I know it says they are the only ones who can but where is it said and how does that then become the approved housing body not the tenant that now deals with the landlord? How does that transfer of responsibility and operations happen?

Ms Catherine Comer

Currently how it happens, and it will facilitate an extension, is the local authority assesses the person in terms of homelessness and then it is done through the local authority which then passes on to the Housing Agency. Then it depends; we did not want to restrict it so much that if schemes change outside of this it could not be facilitated. I am not sure if we should be too prescriptive in this legislation on how to do it but we do state that the intention is that it can interact administratively with whatever scheme is there.

An Cathaoirleach

We could have something within the legislation to say that the tenant can transfer to an eligible agency to further engage with the landlord on the right to purchase. I get that the Department does not want to be too prescriptive in its lists, saying a local authority, the Housing Agency or a housing body, HB; an eligible agency could in this case be those three but it could get bigger or smaller. The Housing Agency may not be dealing with cost-rental in future, it may be the local authority, but we do not know that. I would like to see something in there to say a nice clean-cut straightforward way for a tenant to transfer that right to bid within those 90 days to an eligible agency. I thank Ms Comer. Senator Moynihan is next.

Senator Rebecca Moynihan

I have two main questions and then I have another question which I think is interesting and a key issue that arose from the committee hearings on Tuesday that Senator Cummins will address.

Senator John Cummins

I will try.

Senator Rebecca Moynihan

Yes. Threshold raised two issues with the committee and I would like to know what the thinking behind them is. One is the exclusion of non-Part 4 tenancies from this and the other is the exclusion of Tyrrelstown amendment tenancies from this where a number of people are selling a whole apartment block and it is subject to the Tyrrelstown amendment that they cannot. What was the thinking behind this from the Department's perspective? I would be interested to hear that. I do not really see a rationale for it but I would be interested to hear if there is a valid reason I have not thought about.

The second is termination in the case of transfers. One of the other issues Threshold raised with the committee is that it would be fearful this would add another ground of termination that does not currently exist. Let us say I own an apartment and then decide to transfer it to my wife and that creates a ground for termination. That has the potential to happen if it is a corporate landlord that might own a couple of companies and transfer it to another company. I know that the likelihood of it happening in general is small enough but if it were a corporate landlord one could imagine some of that happening. Is that just language that we need to tighten up when it comes forward?

Ms Catherine Comer

With regard to the Part 4 tenancies we mentioned earlier there is a different relationship between before one is a Part 4 and when one is a Part 4 tenant. We also looked at the 90 days as to how it would work from a practical point of view. This is also a notice of a termination on the basis of sale and such grounds might not be used before it is a Part 4 tenancy.

On Tyrrelstown tenancies in the main if it is a whole apartment block, for example a build-to-rent block or something like that, the planning permission is that they are rental properties not private properties. Ultimately we do not want to be in a position where, if planning permission is given for a rental property they become private properties and if that happened a significant basis of that would not be appropriate either.

With regard to the transfer, and gifting in that case, this is on the basis of sale. If it is on the basis of the sale of a property if it is being gifted to someone, during the last couple of weeks when we started drafting, we found that under head 5 we do not require that - and the drafters told us that - so we will not have it in the Bill.

Senator Rebecca Moynihan

I will follow up on the Tyrrelstown amendment. Build-to-rent comes out of the most recent guidelines but an awful lot of apartment blocks would be owned by a corporate landlord or by one landlord who is pre- the current guidelines. Even pre-'63 there might have been a number of different units that would meet the criteria of the Tyrrelstown amendment. I am thinking about one area in my own area of Dublin 8 where the Tyrrelstown amendment applied and where the landlord was trying to evict everybody. I kind of understand what Ms Comer is saying in terms of whether something is built to rent but that would potentially apply to very few. Is there another reason and rationale for excluding those apartments where the Tyrrelstown amendment might apply? There are situations where a landlord might own ten apartments in a block they have invested in. They do not own the whole block but they have bought them, or are small-scale investors, or what they would consider small-scale investors.

Mr. Liam Smyth

Just to be clear I know that Threshold is referring to Tyrrelstown. The Department is absolutely not changing anything in the Tyrrelstown amendment.

Senator Rebecca Moynihan

They will not have the right to buy or to try to club together. They will not have the right of refusal to buy.

Mr. Liam Smyth

If they are big rental apartment blocks, they will not. If somebody invests in a full apartment block for rental, in their mind, whether it was granted build-to-rent or whether those conditions apply-----

Senator Rebecca Moynihan

What if somebody has just ten apartments they have bought in a block? There are situations where that does arise. Even if somebody has three big '63 houses right beside each other and then decides to sell all of them and markets them specifically as investment properties, what about that? Why would this not apply there?

Mr. Liam Smyth

The concern is that better value would be achieved if it was ten apartments that would be sold. Whether it goes into rental or owner occupation one person could buy all ten apartments and sell them off individually afterwards. The option would be there for the owner to now sell as a full block and the thinking is that it is more valuable if it is vacant possession. If we give this right for one tenant to get in the middle of that-----

Senator Rebecca Moynihan

Not with the Tyrrelstown amendment, they have to prove they suffered significant-----

Mr. Liam Smyth

That is ten or more okay, well if it was nine that is arguably more valuable to be able to sell it as vacant possession.

Senator Rebecca Moynihan

Therefore there is no real reason it does not apply to people who fall under that criteria that they would have the right to buy their individual apartments.

Ms Catherine Comer

If it was, for example, one of those pre-'63 and there were eight units and the landlord wanted to sell the block of eight units. It is partly from a practical point of view if one tenant wanted it but the other seven did not then the landlord would be trying to sell seven units and who manages the other one or maybe two if two were sold and then six were not.

Senator Rebecca Moynihan

I absolutely get that from an investor's perspective in terms of managing it but there is no real reason they are considered differently from being a tenant who has the right to purchase, except for that.

Ms Catherine Comer

That is what it is and it was from a practicality point of view. Obviously, if it is ten or more units the Tyrrelstown amendment definitely kicks in, yes.

Senator Rebecca Moynihan

Okay, that is grand.

Deputy Cian O'Callaghan

I just want to ask about a couple of the other heads, heads 16 and 20 around Residential Tenancies Board, RTB, hearings and tribunals and whether they take place in public. Will the witnesses talk us through what these changes are and also around the special circumstances that are mentioned in these heads?

What special circumstances would apply for something not to be in public? Reference is made to where this is used by the Workplace Relations Commission. In an RTB context what special circumstances might apply?

Mr. Liam Smyth

Deputy O'Callaghan knows the background. At present justice needs to be administered in public. The Supreme Court case was clear in outlining the provisions of the Constitution whereby bodies such as the Workplace Relations Commission should carry out their work in public. At that time it did not hold its adjudication hearings in public. The RTB is keen to have it clearly provided in law that it will now do its adjudication in public. There will be extra transparency there. Its intention is to publish adjudication reports for the first time. It is a great advance for the entire sector. The goal and principle is that they will all be in public but that there are special circumstances provided for in the Constitution. The WRC has set out procedures for its operation and the RTB hopes the Minister will consent to draw up procedures for it to give guidance to which adjudicators will have regard. We will not put this in the law defining it. We have not nailed down our thinking. For the WRC, if there are medical conditions or sensitive information that should not be public, it would be down to the adjudicator as to whether it was appropriate to be in public. It is not the intention that this would be a way to close down transparency. It is the absolute opposite. It will open up for the first time adjudication hearings to the public for scrutiny. This could be a benefit with regard to consistency in the rulings of adjudicators.

Deputy Cian O'Callaghan

With regard to sensitive information, is the intention that an entire hearing would not be in public or that certain sensitive information from the hearing or adjudication could be redacted? Are both an option?

Mr. Liam Smyth

It could be both. We do not want to tie the hands of adjudicators. We will try to guide them as best we can with what is drawn up by the executive and the RTB subject to ministerial consent. The Department will help and possibly draw on the experience of the Workplace Relations Commission or other quasi-judicial bodies. Transparency is absolutely what we are trying to achieve rather than closing anything.

Deputy Cian O'Callaghan

Head 22 is the extension of the slip rule with regard to slips and omissions. Threshold is very concerned about this. It is strongly of the view that strict compliance with the formalities of ending a tenancy is the least a tenant can expect when being evicted from their home. There are issues with this. Where did this proposal come from? What are its origins? What is the rationale or evidence for it? Has the Department looked at what impact it might have on homelessness, for example? When people get notices to quit in the private rental sector, usually a key part of the very first homeless prevention work done by whatever organisation is supporting them is to check whether the notice to quit is valid. If it is not, it sometimes buys the tenant invaluable time, which means they are able to find somewhere new to live and do not become homeless. Is there anything that might impact on this? Is there analysis on how this might impact on people becoming homeless? What is the rationale and evidence for it?

Mr. Liam Smyth

The RTB itself has proposed it and we hope to bring it through the Houses. The rationale is fairness. As it is, the slip rule is used very rarely when it comes to notices of termination. There have been cases that have been invalidated by adjudicators because similar slips occurred in documents that are required to accompany a notice of termination, such as statements, declarations and rent arrears warning notices. We want to tie this together and have each one looked at fairly. It will go to an adjudicator to decide what is immaterial to validity. As it is, we could have a situation where a case is referred on day 90 and it has to go through the RTB dispute resolution mechanism. Quite an amount of time then goes by for a landlord who has genuinely tried to follow the law and made one slip. Fairness is what it is trying to achieve.

Deputy Cian O'Callaghan

Do we have statistics on how very rarely used it is? Will the Department share these with the committee?

Ms Catherine Comer

We have sample numbers from the RTB where the slip rule was used in notices of termination. It is still working through the figures. These samples are nine cases from 2023 and six from 2022. We can definitely come up with more statistics and send them on to the committee as soon as we have them.

Deputy Cian O'Callaghan

I thank Ms Comer. This would help to give us context to what we are speaking about. The RTB has made proposals in recent years on enforcement powers and legislative changes required so it can be more proactive in terms of enforcing regulations. Are these in the Bill?

Ms Catherine Comer

I do not think there are additional enforcement powers. The Department is constantly working with the RTB to ensure it uses the enforcement powers it has as effectively as possible. Some of these are being reviewed. This is ongoing work between the RTB and the Department to ensure it is using its powers.

Deputy Cian O'Callaghan

I am trying to get a sense of it. Many proposals have been made by the RTB in recent years on legislative changes that are potentially needed. I am trying to get a sense of which ones made it into the Bill and which did not.

Ms Catherine Comer

As we said earlier, there are a quite a number of heads in the Bill. Many of them are on small things and many of them are aligning timelines. As the Deputy said, a number of them are related to the Zalewski case. We work with the RTB on many of its requests on this and it is catered for.

Deputy Cian O'Callaghan

I want to follow Senator Moynihan's questions on several apartments or homes being sold and the exemption in the Bill. In such a case a renter does not get the first right to make a bid, or however we want to put it, that is available in the Bill. Is there a concern about the Bill being discriminatory or arbitrary in giving different rights to different people? This is with regard to landlords and renters. It will be arbitrary based simply on the number of homes a landlord owns together. I can see there is a logic if 100 apartments in one block are being sold en masse, but if there is simply a group of homes or apartments being sold, would this not be potentially difficult legal grounds for us? There would be a different set of rights arbitrarily based on the number of homes someone owns.

Mr. Liam Smyth

When we look at introducing tenant rights and liaising with the Office of the Attorney General, there are always the constitutionally protected property rights of landlords. To balance rights between landlords and tenants, we always wind up finding exemptions. This is an exemption that it was felt was required to protect people who may have invested in, let us say, nine properties purely as rental and they want to sell them on. They do not want to sell them with one tenant in one of them. They want to sell them vacant and get the best price possible. If we gave one tenant this right, it would reduce the value of the overall nine properties of the landlord.

Deputy Cian O'Callaghan

This very same argument was put to us a couple of days ago about individual properties. Is this not potentially the legislation being discriminatory with regard to a set of rights and obligations? Somehow, because someone owns nine properties, they will be in a better position in society because they have larger ownership. They will be conferred with a better position just by virtue of the fact they have more resources than a person who owns one property.

Mr. Liam Smyth

If somebody has one property, they are not giving a right to somebody to live in one room. They are selling it vacant. If someone owns an apartment block of nine units and they want to sell it with the nine vacant, then having somebody in No. 8 could potentially devalue it.

Deputy Cian O'Callaghan

Yes, but you could still sell eight and then sell that other one to the individual. Even before this issue arose and before the eviction ban and all of the discussion after it, I was quite aware of this exact situation. The apartments of long-term tenants, perhaps in apartment blocks, who had been renting for years, could be sold and they were never given the opportunity or chance to buy. In fact, they could be cut out more than those whose home was being sold individually because such people have a better chance of getting an offer in. I will conclude here, but I do wonder whether the legal basis for conferring different rights on people by virtue of their owning more is questionable.

Senator John Cummins

I missed the outset of the meeting but I know Deputy Ó Broin took up where I left off on Tuesday. I had a back and forth with IPAV and the IPOA on Tuesday. To be very clear, there is nothing to obligate the owner of a property to go back to the tenant if the offer is higher. That is very clear. That puts a lot of the concerns raised on Tuesday to rest. I asked would those bodies whether they would be relatively satisfied if that was the case and the answer was "Yes".

I will take up a few other points. On another issue I raised last week, mention was made of PRSA requirements for registering a bid. However, that might not necessarily apply in this scenario because an agent might not be in the mix at that particular point. If tenants are given 90 days to give their best price, an agent may not be involved at all. Given the penalties that apply, I am worried that somebody may come back after the fact and say that he or she offered €350,000 when, in reality, he or she only offered €300,000. What provisions will be included in the legislation to protect the owner of the property from somebody coming back after the fact and saying that a bid was, in fact, higher when it was not?

Ms Catherine Comer

I thank the Senator for his feedback at the briefing the other day. It would be important for a landlord to record that and ensure that-----

Senator John Cummins

Are we going to require that in the legislation?

Mr. Liam Smyth

We can definitely look at that.

Ms Catherine Comer

We can definitely look at getting a written-----

Senator John Cummins

The officials also said they would look at it during last week's briefing but, to be perfectly honest, I want them to go further than that because it has to be there. There has to be a protection mechanism built into the eventual legislation in order that somebody cannot come back after the fact.

Mr. Liam Smyth

To look at it the other way, the tenant would also want to be sure that he or she has a record of the bid being made and that there is no wrongdoing on the part of the landlord.

Senator John Cummins

I do not want to leave this to chance. In 95% of scenarios, that will absolutely be the case and the landlord will look for it in writing. However, where is that obligation set down? It has to be clear. If we are attaching penalties of up to €20,000 for a transaction going through after the fact, there is a potential liability on the owner of the property. There needs to be very clear protection in the legislation.

Mr. Liam Smyth

That could probably be satisfied if we defined what constitutes a written bid. It is probably just stitching-----

Senator John Cummins

I am not telling Mr. Smyth how to draft it; I am telling him what needs to be in it. This absolutely needs to be there. That is my strong view in this regard. I certainly hope, when the Bill comes to both Houses, that will be the case.

On the auction piece, which was also teased out, an assertion was made that this would essentially end any provision for an auction because of the fear of having to go back if the bid was lower. Is the Department's view the same as mine, which is that the tenant's bid could be the reserve price at an auction so that, if somebody bids €1 higher than that, there would be no obligation to go back to the tenant subsequently?

Ms Catherine Comer

That is correct.

Mr. Liam Smyth

That is correct. The tenant could also be at the auction.

Senator John Cummins

Of course, the tenant could absolutely be at the auction and engage in that process. To continue from where my colleague, Deputy Higgins, left off with regard to the transfer or gift of a property, the Department says that head 5 is being removed. I want to tease that out a little bit further. To be clear, the Department is saying it does not want to introduce the transfer or gift of the property to a family member as grounds for termination. I understand that because that would be new grounds. On the 12 months that were referred to, let us take the example of Mary and John. John is moving into the property. The notice period of 120 days has been served out and the tenant moves out. John moves into the property but the Mary wants to conclude a sale process for that property. Interfamily transfers are not always done at market price. It could be done at a lower price. My concern is that, for a further six months, there is an obligation to offer that property to the previous tenant if it was being transferred at a price below what he or she offered.

Mr. Liam Smyth

I probably created that confusion. When I was talking about 12 months in respect of the grounds under paragraph 4, I talked about a son, John, moving into Mary's house. If he moved out within 12 months, there would be an obligation on the landlord to let it back to the previous tenant. That is where the 12 months come in. To be honest, I do not think it helped to mention it.

Senator John Cummins

That is the case if he moved out within the 12-month period but let us tease out the sale piece. Let us say the tenant of the property bids €300,000 for the property within the 90-day period.

Mr. Liam Smyth

In that case, the owner would not have used sale as grounds for termination of sale but the fact of a family member moving in. This right would not come into it at all.

Senator John Cummins

I understand what Mr. Smyth is saying. That would not be the case, so the sale could proceed subsequently. If John moved into the property, of course, the sale could go through at a lower value because it was not done on a-----

Ms Catherine Comer

It would be outside the Residential Tenancies Act.

Mr. Liam Smyth

The tenancy is over.

For example, John moves into it because John is Mary's son. The previous tenancy ended after the six-month notice period and John subsequently wants to buy the property from the family member at a price agreed between the two of them. Is that correct?

Mr. Liam Smyth

Yes, that is it.

Ms Catherine Comer

Yes, that is it.

Mr. Liam Smyth

There are completely separate grounds. There is the grounds of a family member moving in. If that person is going to buy it, they will be there in 12 months' time, so there is no question of having to re-offer it to the former tenant. The sale or transfer occurs after the person moves in and the tenancy is over.

Senator John Cummins

Will Mr. Smyth tease out the 12-month piece? What happens if John moves into the property and subsequently buys it from the family member and then decides to sell it himself?

Mr. Liam Smyth

If he is a family member and wants to sell it afterwards, there is no issue. It is not a rental property at that stage.

Senator John Cummins

It is not a rental property, so that is fine.

Mr. Liam Smyth

Yes.

Deputy Eoin Ó Broin

Senator Cummins has highlighted a potential loophole that could be open to abuse.

Senator John Cummins

I can come in on that, but carry on.

Deputy Eoin Ó Broin

It is very clear, so I am not disputing the point. Let us take an example. I want to sell my rental property to my son and I want to do so at below market value. If I issue a notice of termination on grounds of sale, I will not be allowed to do that because the rules of the scheme mean I have to sell it to the tenant, if the tenant makes a higher bid. What has just been outlined is that if my real intention is to sell the property to my son at a lower price, I cannot do this through the scheme, but I can use the grounds of a notice of termination for use of a family member. That then allows me to move my son into the property. Because it is a rental within the family, it is no longer within the remit of the Residential Tenancies Act 2004 and then I can it sell on. It is mechanism by which somebody who wants to sell to a family member at a lower price can get around the provisions of this legislation. I am sure that is not the intention, but it is clear that it is possible.

Regarding AHBs and local authorities, in this Bill they are not acquiring the same right to buy as the tenant. Is that correct?

Ms Catherine Comer

Yes.

Deputy Eoin Ó Broin

They can bid as per the normal process. Is that correct?

Ms Catherine Comer

They can bid on the property on the basis that the tenant who is currently there will remain.

Deputy Eoin Ó Broin

However, the rule which means the landlord has to sell to the tenant at the price they have set, unless they get an offer higher than that, does not apply to local a authority or AHB. Is that correct? For example, if somebody wanted to sell the property at a lower price, there would be nothing stopping them from taking that lower price rather than selling to the AHB or the local authority. Is that correct? The question arises as to why someone would sell at a lower price. A person might argue that the conveyancing is taking too long with a local authority and they want to sell more quickly. If the offer from the AHB or the local authority is higher than the subsequent market offer, does it have to be sold to the local authority or the AHB?

Ms Catherine Comer

It follows the same logic. If the local authority, acting on behalf of the tenant, offers €200,000, for example, and the landlord subsequently gets an offer of €190,000-----

Deputy Eoin Ó Broin

They cannot accept that. They still have to-----

Mr. Liam Smyth

It is the tenant who gets the invitation to bid and only they will get the further invitation to bid.

Deputy Eoin Ó Broin

Okay. In the case of a tenant in situ acquisition by a local authority or AHB, the tenant is not buying the property. The offer to purchase the property comes from the local authority or the AHB to the estate agent or the landlord. Explain to me as clearly as possible what it means if the tenant does not have the money to buy the property, but they engage with the tenant in situ scheme? Are we saying in that case, it is the tenant who makes the offer on behalf of the local authority?

Mr. Liam Smyth

It is not. The tenant contacts the local authority and informs them that they have 90 days from the date on the notice of termination and may be in danger of becoming homeless. The local authority will make a bid and if that is not considered by the landlord, they continue to bid on day 91 and subsequent days.

Deputy Eoin Ó Broin

Okay, but that is not my question. I want to clarify this point. Let us say the local authority or the AHB makes a bid and the owner of the property decides he wants a quick sale. We heard from estate agents and landlords that this is common enough. The owner takes the view that if he goes for the local authority bid he might get a few thousand euro more, but he needs a quick sale. He goes on the open market and has a cash buyer who will pay €10,000 less than the AHB or the local authority but will buy immediately. There is nothing in this legislation which obliges the seller of the property to go back to the AHB or the local authority to inform them of that. They can sell it to the cash buyer who is buying at lower price. Is that correct?

Mr. Liam Smyth

Yes, from day 91 onwards.

Deputy Eoin Ó Broin

Is Mr. Smyth saying that up to day 90, they would have to go back to the local authority or AHB? In fact, at any point in the process, can they sell to a cash buyer?

Mr. Liam Smyth

If the local authority was interested in buying the house within the 90 days and it makes one unsuccessful bid, logically, it would make another bid to seek to secure the property.

Deputy Eoin Ó Broin

I fully understand that. However, I want to be absolutely clear on this. There is a particular "right" the tenant is getting here that stretches right to the end of the notice period and right up to the 12-month period after they vacate the property from the due date, where if another bid comes in from the private sector the owner has to go back to the tenant. Is that correct?

Mr. Liam Smyth

If they are willing to accept. It is only the bid they are willing to accept to finalise.

Deputy Eoin Ó Broin

Yes, but that does not apply to the AHB or the local authority. They can make a bid for sure, but at any stage in the process landlord could accept a lower bid for a cash sale, for example, or for any other reason. There is nothing to oblige them to accept the higher bid from the local authority or the AHB. Is that correct? I am not saying that is good or bad; I just want to be clear on the import of the legislation.

Mr. Liam Smyth

Yes, that is correct.

Ms Catherine Comer

It would not be at any stage, only after day 90.

Deputy Eoin Ó Broin

Ms Comer is saying that in the first 90 days-----

Ms Catherine Comer

Only the tenant, local authority or AHB----

Deputy Eoin Ó Broin

Nobody else can actually make an offer within 90 days.

Ms Catherine Comer

Sorry, yes, they can make an offer, but they cannot conclude the sale.

Deputy Eoin Ó Broin

I understand, but can they conclude the sale on day 91.

Ms Catherine Comer

Yes.

Deputy Eoin Ó Broin

Okay, I understand that. It is not that there is any obligation on them to accept a higher offer from the AHB or the local authority within the 90 days, they just cannot conclude the sale within the 90 days - that has to expire first. However, if they get an offer for a lower price from a cash buyer, they can wait until day 91 and then just sell on to that person. Is that correct?

Mr. Liam Smyth

Yes, but there is nothing to stop them concluding the sale with the local authority within the 90 days.

Deputy Eoin Ó Broin

Their only problem might be that they might talk to other landlords about the conveyancing process. For example, even after they go sale agreed it can take three months or more at the moment in many local authorities, including my own. They may just make a decision that for the sake of €5,000 or €10,000 of a difference they do not want to go through that hassle. The point has been clarified.

Mr. Liam Smyth

There would be certainty if the local authority was State funding rather than making cash bids.

Deputy Eoin Ó Broin

Yes. Again, I am not making a case for or against, I just want to be clear.

I want to mention a couple of things on the Tyrrelstown amendment. First of all, the value of the properties are determined by the rental yield, if they are investment properties. The rental yield is determined by whether they are inside a rent pressure zone, RPZ, or not. If those properties are inside RPZs, then vacant possession does not really make an awful lot of difference if the RPZ rules are going to be applied. In that sense, selling with the tenant in situ is a very marginal difference.

It could be the case that a large institutional investor owns a portion of a development – 10%, 20%, 30% or 40% – and individual owners own the remainder. We have such developments all over the city. Some of the remainder are owner-occupied, some are small institutional or investment landlords. If I was a single-property investment landlord or had fewer than ten properties and I was selling, I would be obligated to sell in accordance with this scheme, but someone who owned ten properties or more would not be obligated. Am I correct in that?

Mr. Liam Smyth

Yes. Build-to-rent properties are exempt.

Deputy Eoin Ó Broin

Forget about build to rent. In some sense, build to rent no longer exists on the planning guidelines. We have a great deal of rental stock that pre-exists build to rent, particularly in this city and less so elsewhere. Build to rent does not capture everything the witnesses are discussing because there are pre-build-to-rent properties. Build to rent only came in in 2018. Many of the build-to-rent planning permissions did not use the build-to-rent design standards. Build to rent is a design standard, as per the ministerial guidelines of 2018. The planning permission is the design. More than 50% of approved build-to-rent planning applications did not use the build-to-rent design standards because the developers were hedging their bets, smartly enough, in case they did not get institutional investors and had to sell them off individually. How do we capture the various types of property? A multi-unit development can include pre-build-to-rent properties, build-to-rent properties with the build-to-rent design standards and build-to-rent properties without the build-to-rent design standards. The nature of ownership within those blocks could be different, depending on when they were built. There could be a situation where, in a multi-unit development, one landlord owns X number of properties and another landlord owns Y number of properties and they could have different sets of obligations under this Bill. Some would be forced – I do not mean “forced”, as that sounds like I am against the idea – or obligated to offer the tenants the chance to purchase while others would not, depending on the number of properties they own in that development. Is that not the case?

Mr. Liam Smyth

When we said “same property”, what was under the one roof was what was in our minds.

Deputy Eoin Ó Broin

A multi-unit development. We are talking about an apartment block. I am not arguing about whether this is right or wrong, as I will have that argument with the Minister on Second Stage, but I am trying to understand this. It could be the case that, in a multi-unit development or single apartment block, one landlord is not obligated by the conditions of this scheme because he or she owns a sufficient number of properties whereas another landlord with a different number of properties is obligated.

Mr. Liam Smyth

Regarding the first exemption, it applies when the landlord is selling one of two or more dwellings within the meaning, that is-----

Deputy Eoin Ó Broin

Mr. Smyth might call out the page number so that I can read along with him. My apologies.

Mr. Liam Smyth

Page 16 of the general scheme, under subsection (c)(v). It relates to one of two or more dwellings within the meaning of the Bill comprising the same property where the landlord wishes to sell the property in its entirety. For example, there could be eight apartments under the one roof and the landlord wanted to sell all eight.

Deputy Eoin Ó Broin

That would also apply to a landlord in the block who just owns one property.

Ms Catherine Comer

No, we do not believe so.

Mr. Liam Smyth

That would not be the property in its entirety, though. That would only be the apartment.

Senator John Cummins

I am sorry for cutting across Deputy Ó Broin, but the Department is classifying the property as the building.

Ms Catherine Comer

Yes.

Senator John Cummins

If we use that terminology, it will be clearer.

Deputy Eoin Ó Broin

I am just teasing this out. Regarding the provision on one of two or more dwellings within the meaning of subsection (1), would that include a situation where I as a landlord owned a duplex, with a single ground-storey property and a two-storey property above,-----

Mr. Liam Smyth

If the Deputy owned both and wanted to sell both at the same time.

Deputy Eoin Ó Broin

Yes. It would be captured by this provision.

Mr. Liam Smyth

It would be comprehended.

Deputy Eoin Ó Broin

If I owned a single apartment in a building with 20 apartments, though, it would not be captured by this provision.

Ms Catherine Comer

No.

Deputy Eoin Ó Broin

How does the Tyrrelstown amendment interact with this, or does it at all?

Ms Catherine Comer

If the Deputy were selling ten or more, he would be selling them with the tenants in situ.

Deputy Eoin Ó Broin

Under the terms of the Tyrrelstown amendment.

Ms Catherine Comer

Exactly. The Deputy’s example does not come into this.

Deputy Eoin Ó Broin

In a sense, the Tyrrelstown amendment would act as a protection for a landlord who wanted to sell the block. The landlord would have to sell it to another landlord with the tenants in situ.

Ms Catherine Comer

If it comprised ten or more units.

Mr. Liam Smyth

In that case, the landlord would not serve notices of termination. The tenancies would continue and this right would not come into it.

Deputy Eoin Ó Broin

Does that mean that, if Senator Cummins and I were co-investors in an apartment block in Waterford and we owned-----

Senator John Cummins

It is good to know the Deputy is opening to investing.

Deputy Eoin Ó Broin

I do not even own a residential home, let alone have the money to invest.

Senator John Cummins

Nor do I.

Deputy Eoin Ó Broin

Let us say that we own an apartment block. Senator Cummins owns half the units and I own the other half. I want to sell my half. Am I captured by subsection (c)(v)? Senator Cummins is happy to continue renting out his apartments, but I am in financial difficulty and want to sell on.

Mr. Liam Smyth

At this stage, probably not.

Deputy Eoin Ó Broin

Even it that was a development where we had four, eight or ten apartments each, subsection (c)(v) would only kick in if I were selling the entire building. If I was a part owner of the building and was selling units therein, I would have to offer them to the tenants.

Ms Catherine Comer

Yes.

Deputy Eoin Ó Broin

That would really only apply in cases of fewer than ten units because the Tyrrelstown amendment would kick in anyway.

Ms Catherine Comer

Yes.

Deputy Eoin Ó Broin

It would only apply to smaller apartment blocks, of which there are quite a number in Senator Cummins’s constituency, for example. Someone mentioned pre-1965 buildings. Would it apply to those? If someone had a residential home but had entered into four separate tenancy agreements – not licence agreements – in respect of it and was now selling the home, the subsection would apply in that case because there were, strictly speaking, four dwellings.

Mr. Liam Smyth

Is the Deputy talking about bedrooms or separate self-contained units?

Deputy Eoin Ó Broin

In the first instance, I was talking about bedrooms in a house with shared facilities where each occupant had a free-standing tenancy agreement.

Mr. Liam Smyth

There could be tenancies, but the Residential Tenancies Act does not apply where the landlord lives.

Deputy Eoin Ó Broin

I do not mean where the landlord lives. If a landlord has a house in Dublin – it has a kitchen, two bathrooms and four bedrooms – with four separate tenancy agreements and the landlord is selling, the landlord issues four notices of termination on grounds of sale.

Ms Catherine Comer

The landlord would be selling the building-----

Deputy Eoin Ó Broin

My point is not for or against. In that instance, would subsection (c)(v) not apply?

Ms Catherine Comer

I believe it would.

Mr. Liam Smyth

That case would fit into that provision.

Senator John Cummins

Is that part of it?

Deputy Eoin Ó Broin

The point is, it provides an exemption. I am not arguing for or against it. I just want to be clear on the circumstances. Such tenancies would be exempt from the provisions of this Bill.

Ms Catherine Comer

Yes.

Deputy Eoin Ó Broin

I will make two final points. I thank the Cathaoirleach for his indulgence. It was good to hear the data on the number of cases in which the slip rule had been applied. If the witnesses were in a position to share it with the committee, that would be useful. I understand the logic of the rule, but a statutory declaration is of a different order than a letter. If the Department is going to go down this line, a bit of me wonders whether it provides clear guidance, particularly about what would be acceptable in the application of the slip rule in a document that was essentially a legal witnessing of an act.

Such a document is of a higher order and, therefore, the threshold of what is an acceptable slip should surely be higher, should it not?

Ms Catherine Comer

A slip cannot be anything material to the declaration. We talked about the types of slips that might be an example. Say, for example, if instead of "Patrick Murphy", the name was "Paddy Murphy".

Deputy Eoin Ó Broin

Let me give an example. This is why the affidavit or statutory declaration is important. A slip on a notice of termination could relate to a signature, but a signature on a statutory declaration is different. For example, I do not think the slip rule should be applied to the absence of a signature on a statutory declaration because that is one of the most important parts of the document to demonstrate the legal witness. That is the kind of guidance in which I am interested. There may be certain categories of slip that are, on the balance of probabilities, reasonable in a letter but that would not be reasonable in a statutory declaration. Does Ms Comer see that?

Ms Catherine Comer

I absolutely do and completely agree with the Deputy, particularly in respect of the likes of signatures. The people in the RTB are adjudicators. It is about giving clear guidance. I agree with the Deputy. However, we do not necessarily want to be prescriptive in the legislation.

Deputy Eoin Ó Broin

Sure.

Ms Catherine Comer

I completely agree with the Deputy.

Deputy Eoin Ó Broin

My final question relates to the Supreme Court judgment. I appreciate the RTB is asking the Department to deal with this issue. When we get the explanatory memorandum to the legislation, that will be a valuable place to highlight the kinds of things we are talking about. The RTB must conduct its business in a manner that is constitutionally appropriate and in line with Supreme Court judgments. I am not qualified to read this stuff properly but if, for example, we are going to move to a position whereby the RTB at an adjudicator level, even with guidance from the Department, can decide to redact or hold hearings in camera, and there may be such circumstances, we must have a sense from the legislation of what that might look like. That would need clear written guidance from the Department were it to be implemented. All sorts of questions could arise in that regard. We do not want to go too far in the application of the interpretation of the Supreme Court ruling and then have a party to an adjudication bring a legal challenge because that would mean we would be here in another couple of years with another Supreme Court ruling reversing some of these decisions. There is a question of balance here that is important.

Ms Catherine Comer

I absolutely agree.

Senator John Cummins

We have focused on the main thrust of the Bill. There are other heads of the Bill. Perhaps we could touch on heads 16, 18 and 19. Head 18 deals with efficiencies and reduces the requirement for 21 days' notice of a hearing to ten days' notice. The Institute of Professional Auctioneers and Valuers, IPAV, and the Irish Property Owners' Association, IPO, have contributed. We, as Members of the Oireachtas, engage with landlords and tenants on a variety of issues, as do local councillors, in the course of our duties on a daily basis. One of the key points that comes across from both sides is the slowness of the process. Given we are bringing forward this legislation, are there other opportunities to ensure that terminations are implemented quickly? Do we have the ability to do more in that respect in the context of the legislation we have here? The decision-making or dispute resolution system is slow and the committee has questioned representatives of the RTB about that. They have said they are working on efficiencies and so on and so forth. Even more of a bugbear is that at the other side of a determination, one could still be waiting for 12 months for that determination to be implemented. A landlord could be without rent for that entire period of time, as well as for the period of the dispute when he or she was unable to get back the property. Given that this is a residential tenancies Bill, are we doing enough? Is there scope to do more in that respect?

Mr. Liam Smyth

If we were to ask that question of a landlord, I imagine the answer would be that there is scope. We can probably go back to the RTB to see what, if anything, we could do to speed things up. However, some of the delay would be a matter for the Courts Service as it relates to the court enforcement part of matters and the requirement for the sheriff to activate enforcement orders, as required. There is a point where the RTB's role stops.

Senator John Cummins

There is a determination, which is then followed by applying for an enforcement order.

Mr. Liam Smyth

That is the case. The RTB has a role in helping-----

Senator John Cummins

It has. That is where it all falls down and breaks down. The RTB is not a court but it is a quasi-judicial process that is entered into. In my view, there should not be longer than a three-month period from a determination to enforcement. That could be brought forward in this legislation. This issue has an interaction with the Department of Justice, of course. Has there been any engagement with the Department of Justice on this? In my mind, whatever about the period of a determination, the process that follows is unacceptable. For all parties, both tenants and landlords, it would restore faith in the process. It would give landlords, who we need in the market, confidence. We all know there are no issues with 96% of tenancies but where an issue arises, they are generally big issues and big problems that involve a significant loss of money.

Mr. Liam Smyth

It is something we can explore with the RTB and the Courts Service. We are looking at things we did not advance to fit into this Bill. I am not sure that what we were looking at would necessarily have worked.

Senator John Cummins

We are touching on these issues in heads 16, 18 and 19. We are moving into that space. My view is that we need to go further. Head 18 relates to efficiency measures proposed by the RTB to reduce the period of notice to be given to parties to a dispute of the holding of a hearing of a tribunal from 21 days to ten days. That is being done to try to bring about more efficiency and to speed up the process. To be quite frank, that is worthless because how long the follow-on piece will take is anyone's guess. I would be delighted with the reduction of the notice period if there was a guarantee of a three-month process on the other side of the hearing. That would be great. Let us do what is proposed in head 18. However, we need to follow on from that. Between now and the legislation being enacted, I would like that issue to be teased out with the Department of Justice. I appreciate it is a matter for both Departments. It is a relatively quick process.

When it ultimately does get in front of a court, it does not take up a huge amount of court time. It is generally a rubber-stamping exercise that is carried out but it might take 12 months to get there.

Deputy Eoin Ó Broin

I have a lot of sympathy for what Senator Cummins is saying. This is something that would benefit both good landlords and good tenants. I am of the view that RTB determinations should be enforceable, particularly up to a certain level of value. I know that Attorneys General over a number of Governments would probably disagree but the real issue here is whether there are certain levels of determination where the successful party to that determination can apply to the RTB for immediate enforcement. If the other party then wants to take the matter to the courts to block it, that is fine. The other party should still have that right. The problem at the moment is that it is the wronged party, which could be the tenant as much as the landlord, who is forced to go for court enforcement. That is a very specific issue and then there is the separate issue of the length of time it is taking to hold adjudications and tribunals. It is taking too long but that is a staffing and resourcing issue. We need to deal with that because it is not fair on everybody.

The Government should look at whether certain categories of RTB determinations could be enforceable on foot of the determination of the request of the successful party. I suspect, at a minimum, that the unsuccessful party would still have to have the right to challenge that in the courts. I know that would not satisfy Senator Cummins but legally we would require that. It is wholly unfair that the wronged party who is successful in an RTB determination is, in all instances, forced to go to the courts where the guilty party does not live up to his or her side of the determination. That seems to be a very unfair system. This is the grey area of where administrative justice is allowed to stop or extend. I suspect that the Office of the Attorney General would be interested to see it extended further. I deal with both landlords and tenants who have had very significant determinations made in their favour but if they do not have the money to go to court, they cannot vindicate the determination of the RTB. That is the issue that needs to be looked at. Could we have RTB determinations that are automatically enforceable without the successful party having to go for court enforcement? This something that would protect the innocent party, irrespective of whether than party is a landlord or a tenant. This is not a pro-landlord or pro-tenant issue. This is about protecting the parties that win determinations and not forcing them into expensive court action.

Mr. Liam Smyth

The RTB has funding to help parties in exactly that situation.

Deputy Eoin Ó Broin

Yes, but they still have to go to court and that can take 12 months.

Senator John Cummins

I agree that it does not go as far as I would like but given that the Attorney General is significantly across this Bill, for obvious reasons, there is an opportunity in that space to explore what Deputy Ó Broin and I are both saying here.

Deputy Eoin Ó Broin

I suspect the Minister might take a different view but that is a separate matter.

An Cathaoirleach

Our guests have taken note of those comments. Just before we finish I want to go back to something I spoke about earlier regarding the notice to quit and the invitation to bid. There is a set procedure for that, we know what it is and everyone has to comply with it. In regulations attaching to this Bill there should be a standardised process for the proof of offer. There should be a proof offer form that the landlord and tenant both sign, a duplicate form. We should make this as simple as possible. It is a very stressful time when somebody gets a notice to quit and then has to go into a mortgage application or purchase arrangement.

Deputy Eoin Ó Broin

A statutory declaration would do that.

An Cathaoirleach

Yes, whatever it might be, as long as it makes the process simple. Everybody at this committee was of the view at our last meeting that we are not going to see a deluge of these cases. It is one of those measures that we are introducing which is another tenants' right. Along along with all of the other tenants rights we have brought in, it is an important one but there is a still a grey area here with regard to the relationship between the landlord and the tenant in the context of the invitation to bid and the 90 days. Where a tenant becomes aware that he or she is not going to be able to get the money to bid, it is unclear where he or she goes then or how he or she transfers that right. That needs to be set out in the regulations. I know the Department does not want to be prescriptive about whether that is a local authority or approved housing body but we could set that out in regulations and refer to eligible agencies. Would measures like that bring clarity and conciseness to this process? Is it something the Department can take away and look at?

Ms Catherine Comer

It is definitely something we can look at, yes. No matter what happens and what way we approach it, we need to have very clear communication set down with the RTB and other organisations, including Threshold, which along with others is always very keen and supportive of doing that as well. That has to be done in tandem but it is definitely something we can look at.

An Cathaoirleach

We have all dealt with landlords and tenants who experience difficulty getting through to the local authority. If people feel they cannot raise the funds, they might put their head in the sand about it but if they know they can fill out a form and transfer their right to bid to the local authority, it gives them another go at being able to stay in their home as a local authority tenant or a cost-rental tenant. If the officials could take that away with them, I would really appreciate it. I thank Ms Comer and Mr. Smyth for their attendance today. The committee will put together its pre-legislative scrutiny report on the basis of this meeting, our engagement with witnesses last Tuesday and a number of written submissions that we received. Hopefully we will be in a position to submit it to the Department before Christmas.

Senator John Cummins

Before we finish, I seek clarity about Tuesday. I thought the LDA was due to come before us on Tuesday.

An Cathaoirleach

I said last Tuesday.

Senator John Cummins

What about next Tuesday?

An Cathaoirleach

We are going to do our pre-legislative scrutiny report on this-----

Senator John Cummins

Why is the LDA not coming before us next Tuesday?

An Cathaoirleach

The LDA has written to us to say its representatives are unavailable on Tuesday, 12 December.

Senator John Cummins

What has the agency said regarding another date?

An Cathaoirleach

The email was circulated to members.

Senator John Cummins

I am sorry but I missed that.

An Cathaoirleach

I cannot remember it word for word but it has been circulated to members.

Senator John Cummins

Is the LDA coming in on Thursday instead of Tuesday?

An Cathaoirleach

No.

Senator John Cummins

To be perfectly honest, that is really unacceptable. The LDA was supposed to be in with us last month but that was deferred until next Tuesday to allow additional time and now the agency is saying its representatives are not coming before us at all. I urge the Chairman to write back to the LDA and ask them to come before us next Thursday. The LDA has been given ample time. We were all very firm on this in our private sessions.

An Cathaoirleach

Senator Cummins was quite insistent-----

Senator John Cummins

No, we all were-----

Deputy Eoin Ó Broin

In fairness to Senator Cummins, before the meeting started we had a discussion about this when we were told the LDA was not coming in. I very much share Senator Cummins's views but just to share what I said earlier, we should write back to the LDA and make it very clear that as a committee we are deeply disappointed. We should insist that they come in next week-----

Senator John Cummins

On Thursday; if they are not available on Tuesday they can come in next Thursday.

Deputy Eoin Ó Broin

The tenor of the letter suggests they are available but do not want to come in, for whatever reason. We need to send as strong as possible a communication this week to make it very clear that we want them in next week. I can see no reason they cannot come in on Tuesday. There are other reasons they will not come in but we need to write to them as a matter of urgency. I share Senator Cummins's view that we have given the LDA plenty of time and we have a lot of questions for the agency. I ask the Cathaoirleach to do that.

An Cathaoirleach

Okay. I thank our witnesses.

The joint committee adjourned at 3.29 p.m. until 1.30 p.m. on Thursday, 14 December 2023.