Commenting on the measures approved by cabinet Minister Murphy said:
These reforms are the most significant rental sector reforms in recent years. They will bring greater affordability and security for people who are renting.
Not only are we now extending rent controls out to the end of 2021, we are also changing the criteria to capture more areas experiencing high rent inflation, and closing down avenues that allowed some landlords to escape rent controls.
In addition, we are strengthening security of tenure provisions for tenants, and also extending notice to quit periods. This will help those in housing insecurity while also giving more time for people to find new accommodation where necessary.
Rebuilding Ireland is working to dramatically increase the supply of new homes, to rent and to buy, which is the fundamental problem in our housing sector. As supply increases, we can do more to protect people in housing insecurity, to protect renters against unaffordable rents, and in doing both, prevent more people from having to enter emergency accommodation.
It’s a time of significant change as we develop a more mature and stable rental sector in this country. This isn’t easy while there is a supply challenge, but it is necessary. Many of these new reforms are being made following a series of engagements between the Taoiseach and I and the leading NGOs in the area of homelessness. I want to thank them for their very constructive proposals. And while not all of them could be adopted in full, in particular that of banning tenancy terminations for reason of sale, because it was deemed unlawful, these changes will help people who are struggling most to keep a roof over their heads.
Provisions relating to rent setting and rent reviews inside and outside of Rent Pressure Zones (RPZs):
- The designation of existing RPZs will be extended to the end of 2021.
- The exemptions from the 4% p.a. rent increase restriction in RPZs have been revised so to apply only to the first rent setting, rather than every rent setting, during the period of RPZ designation in respect of a new rental property, including a property that had not be rented in the 2 year period prior to any RPZ designation.
- Also, a definition is proposed to illustrate the type of works that qualify for the exemption from the rent increase restriction in respect of a substantial change in the nature of the rental property – such works shall consist of either a permanent extension increasing the floor area by 25% or at least 3 of the following; (a) a permanent alteration of the internal layout, (b) adaptations for persons with a disability, (c) a permanent increase in the number of rooms, (d) an improvement in the BER by 2 or more ratings.
- For fairness across the country, revisions are proposed in respect of the average rent qualifying criterion for RPZ designation. Using RTB data, (i) the rent of a dwelling in the Greater Dublin Area (Kildare, Wicklow and Meath) will now be compared to the average rent across the country, excluding Dublin rents; and (ii) the rent of a dwelling outside of the Greater Dublin Area will be compared to the average rent across the country, excluding the Greater Dublin Area rents.
- Outside of RPZ’s, the requirement for bi-annual rent review cycles, rather than annual, will continue to the end of 2021.
Provisions relating to tenancy termination under the Act:
- the new RTB sanctioning regime will apply to improper conduct by a landlord who contravenes the tenancy termination provisions;
- landlords will be required to copy a tenancy termination notice to the RTB;
- where a landlord terminates a tenancy because he/she intends to sell the property, he/she must enter into a contract for sale within 9 months of the termination date and if not, must offer to re-let to a former tenant who provides their contact details;
- where a landlord terminates a tenancy because he/she needs the property for his/her own occupation or for a family member, that property must be offered back to the former tenant who provides their contact details where it again becomes vacant within 1 year, rather than 6 months (as currently provided for in the Act), of the termination date;
- where a landlord terminates a tenancy because he/she needs to substantially refurbish/renovate the property, that property must be offered back to the former tenant who provides their contact details, upon completion of the works;
- Also a certificate from an architect or surveyor will be required to the effect that the proposed substantial refurbishment/renovation works in question would pose a health and safety risk requiring vacation by the tenants and would require at least 3 weeks to complete;
- 180 days (approx. 6 months) notice period to be provided by landlords who terminate a tenancy of between 3 and 7 years’ duration.
Duration of Tenancy | Notice Period – Residential Tenancies Act 2004 (as amended in 2015) | Proposed Notice Period – Committee Stage Amendment |
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 | 180 days |
4 years or more but less than 5 years | 112 days | 180 days |
5 years or more but less than 6 years | 140 days | 180 days |
6 years or more but less than 7 years | 168 days | 180 days |
7 years or more but less than 8 years | 196 days | 196 days |
8 or more years | 224 days | 224 days |
Student-specific accommodation
Amendments to the Bill provide for relevant obligations and rights under residential tenancies legislation to apply to tenancy and licence agreements in student-specific accommodation, provided by public educational institutions or by private accommodation providers to both part-time and full-time students. For example, the 4% p.a. rent increase restriction in Rent Pressure Zones, relevant termination provisions, the Residential Tenancies Board (RTB) dispute resolution procedures, tenancy and licence registration requirements and the new RTB sanctioning regime for improper conduct by landlords will apply to student-specific accommodation.
Short-term letting / Homesharing
Amendments to the Planning and Development Act 2000 (as amended) to provide for the regulation of short-term letting of residential accommodation through the planning code in urban centres of high housing demand.
The amendments will essentially allow the Minster to make regulations to allow homesharing, while restricting the letting of second properties on a short term basis in high demand areas. Holiday homes and executive letting will not be impacted.
These amendments and regulations are in keeping with the decision made by the Minister last year, and as communicated in draft form to the Joint Oireachtas Committee previously. The specific regulations will be debated and laid before the House shortly.