03/12/2015

Govt Passes Rent Reform Bill

Ireland's Residential Tenancies Bill has passed all stages of the Dáil and Seanad, it has been announced. The Bill is now expected to be signed into law by the president as soon as possible.

The Bill will bring a number of major reforms to the private rental sector in Ireland, providing rent certainty and safeguards for both tenants and landlords.

Measures will include increasing the rent review period from one to two years, increased notice periods for rent reviews and greater protections for tenants. The increase in rent review periods means that anyone who has faced a rent increase in 2015 will now not have a rent review until 2017. Legislation will require two years between all rent reviews.

The Residential Tenancies Amendment Bill also provides for the creation of a deposit protection scheme where deposits are lodged with the PRTB as opposed to the landlord with consent of both parties required to draw it down on completion of a tenancy. Almost 25% of all disputes dealt with by the (PRTB) Private Residential Tenancies Board are related to deposits.

The measures also oblige landlords to provide more evidence that rent increases are in line with the local market rate and will legally oblige them to inform tenants of their rights and how to dispute future rent increases with the PRTB.

Elsewhere, landlords who intend to sell their property or terminate a tenancy in order for a family member to use it will have to supply a 'statutory declaration' to a tenant of their intent to sell and could be liable for a fine if it does not materialise. The measure is designed to prevent abuse of procedures in order to terminate a tenancy.

This legislation will extend the reach of the Act to the not-for-profit Approved Housing Body, or AHB sector. The AHB sector plays a key role in the provision of social housing for many groups with specific needs.

There will also be a new procedure to deal with rent arrears cases with the PRTB and determination orders concerning terminations will now be dealt with at the District Court level as opposed to Circuit Court, making it easier and cheaper for landlords, or the PRTB, to deal with unscrupulous tenants. While minor errors in Notices of Termination will no longer cause entire proceedings against problem tenants to fail, as is currently the case.

The Housing Assistance Payment limits are also being increased in Cork, Galway, Kildare and Meath where flexibility allows for a 20% payment above rent supplement thresholds. For families in emergency accommodation in Dublin City, HAP payments will be allowed for 50% above rent supplement levels. More than 5,000 families have already benefited from increases in rent supplement limits and this has allowed them to stay in their homes.

There will also be a tax relief measure introduced in the Finance Act to allow landlords who lease to tenants in receipt of social housing supports, such as rent supplement or the Housing Assistance Payment (HAP), to avail of 100% mortgage interest relief on their borrowings where they commit to accommodating tenants in receipt of the above payments for at least three years.

Minister for the Environment, Community and Local Government, Alan Kelly, said: "The housing market at the moment is dysfunctional and this presents many challenges for our Government. Many low income families rely on the private rental sector and rents are escalating far higher than people's incomes because of the housing shortage and the growth in employment.

"Some 20% of families are renting in the state and home ownership is reducing, long-term renting will become an option for more and more people and the regulatory environment must be modernised to reflect this. People in rented accommodation need greater security and certainty in their lease and these measures will provide for that.

"For families who were facing a rent increase next year, the longer distance between rent reviews will delay such increases for a year and ease the pressures on many families that are currently facing uncertainty due to the shortage of supply."

He added: "Research indicates that many tenants are not aware of their rights. This legislation will now place a legal obligation on landlords to notify them on how to process a dispute on excessive rent increases, tenants will now be more empowered and landlords have a disincentive to aim for the highest rent possible – as they could face a dispute which will delay their rents. This bill also gives much greater security of tenure to families in rental accommodation."

(JP/LM)

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