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2019 is likely to be another strong year for private rented sector (PRS) investment transactions, with market observers estimating that institutional funds are set to invest over €7bn in the Irish PRS market. Potential developers, investors and funders should be aware of the Government’s proposed changes to residential landlord and tenant law contained in the Residential Tenancies (Amendment) (No.2) Bill 2018.
The Bill is intended to give legislative underpinning to a number of actions outlined in the Government’s Strategy for the Rental Sector published in December 2016 and the review of Rebuilding Ireland conducted in late 2017. The Bill’s key provisions include:
- empowering the Residential Tenancies Board (RTB) to investigate, without the need for a complaint from the public, and sanction landlords who engage in improper conduct including the implementation of unlawful rent increases in rent pressure zones (RPZs);
- creating criminal offences for landlords connected with non-compliance with rent increase restrictions in RPZs and tenancy registration requirements, and non-cooperation with investigations;
lengthening notice periods for tenancy terminations by landlords (see table below);
- requiring the annual registration of tenancies with the RTB; and
- requiring the mandatory publication of RTB determination orders.
The Bill also includes a definition of what constitutes a “substantial change in the nature of accommodation provided under a tenancy”. Under existing legislation, such a change allows landlords to avoid the rent increase restrictions in RPZs. It is proposed that a substantial change in the nature of the accommodation provided under a tenancy will only take place where at least 50% of the floor area of the dwelling undergoes renovation and the works are structural.
The Minister has stated that he hopes to introduce Government amendments to the Bill dealing with:
- the publication of rental amounts on the RTB register;
- the extension of the application of certain provisions of the Residential Tenancies Acts to purpose built student accommodation; and
- amendments required to deal with the risk that rents might increase upon the expiry of the three-year designation of the Dublin local authority areas and Cork City as RPZs in December 2019.
Publication of rental amounts on the RTB register
The RTB currently publishes a tenancy register which includes information on the address of a tenancy and the number of bedrooms. When the Bill was published in December 2018, the Minister confirmed that the proposal to publish rental amounts on the RTB register was receiving due diligence by the Office of the Attorney General to ensure that any measure will be legally sound from a data protection perspective.
Extension of the application of certain provisions of the Residential Tenancies Acts to purpose built student accommodation
The Minister’s officials, as well as officials in the Department of Education and Skills and the Attorney General’s Office, are working on a proposed amendment to extend the application of certain provisions of the Residential Tenancies Acts, particularly those connected to rent setting, to purpose built student accommodation let under licence by private providers or let under licence or tenancy by public providers. This proposal could have significant implications for the student accommodation sector where licensing arrangements are the norm. Genuine licences, as well as dwellings let by or to public authorities (which includes recognised educational institutions), currently fall outside the application of the Residential Tenancies Acts.
When will the Bill be enacted?
The Bill has been referred to the Select Committee on Housing, Planning and Local Government where a detailed examination will be carried out and amendments may be made. In Dáil debates, the Minister stated that the Bill is intended to focus on priority proposals to facilitate quick passage through the Oireachtas with a further rent reform Bill to follow. Given the current focus on Brexit-related matters, it remains to be seen how quickly this Bill will be progressed.
Proposed extension of the minimum notice periods for termination of tenancies by landlords (extended notice periods in bold)
|Duration of Tenancy||Current Notice Period||Notice Period Proposed in Bill|
|Less than 6 months||28 days||28 days|
|6 or more months but less than 1 year||35 days||90 days|
|1 year or more but less than 2 years||42 days||120 days|
|2 years or more but less than 3 years||56 days||120 days|
|3 years or more but less than 4 years||84 days||120 days|
|4 years or more but less than 5 years||112 days||120 days|
|5 years or more but less than 6 years||140 days||140 days|
|6 years or more but less than 7 years||168 days||168 days|
|7 years or more but less than 8 years||196 days||196 days|
|8 or more years||224 days||224 days|