The Government yesterday announced a series of major reforms to the private rental sector in to provide rent certainty for both tenants and landlords.
After weeks of differences and leaks, Minister for the Environment, Community and Local Government Alan Kelly and Minister for Finance Michael Noonan today revealed their plan ‘A New Deal for Tenants’.
The plan provides for rent certainty measures will include increasing the rent review period from one to two years, increased notice periods for rent reviews and much greater protections for tenants.
The increase in rent review periods will mean that anybody who has faced a rent increase in 2015, will now not have a rent review until 2017.
Legislation will require 24 months between all rent reviews, in what is among the most significant overhaul of tenants’ rights in the state.
Mr Kelly has said legislation will be introduced as quickly as possible, adding that he expects it will be in place by next week.
He told RTÉ’s Six One the law is there to protect tenants and that rents cannot be increased “draconianly” by landlords.
“There is legislation; there are laws there,” he said. “If someone isn’t due a rent review, they can’t just dramatically have one, but it’s important to say this: If you’ve had a rent review this year, you will not have another rent review for two years.”
Mr Kelly encouraged tenants to go to the Private Residential Tenancies Board if they have concerns. He said the Government needed to be sensible when looking at rent supplements.
“We didn’t want a situation where there’s just a flatline of rent supplement, meaning that landlords pocket the money, that wouldn’t help anyone,” he said.
He said developers now have flexibility in their construction proposals, saying that the Government needs development quick.
The Residential Tenancies Amendment Bill will also provide 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.
The measures will 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.
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.
Speaking at the announcement, Mr Kelly said: “Many low-income families rely on the private rental sector and rents were escalating far higher than people’s incomes because of the housing shortage and the growth in employment.
“Landlords will be able to sell their properties or allow a family member to use them, but they will now have to provide a legal declaration that this is the case.”
In addition to rent certainty measures, the Housing Assistance Payment limits are 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.
“These increases are vital to alleviate the threat of homelessness and to house people who are currently homeless,” he said.
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, to avail of 100% mortgage interest relief on their borrowings where they commit to accommodating tenants in receipt of the above payments for a minimum period of three years.
Mr Noonan said: “In terms of the rental market, the measures will promote greater stability for tenants, but are time-bound in order to prevent any negative impact on supply.”
He added: “Taken together, these targeted measures will have a positive impact on the housing market, and I am confident that we will see a significant stream of additional housing units in the near future. This is in all of our interests.”