The Keeping People in their Homes Bill was introduced to the Dáil on 23 February 2017 by Kevin “Boxer” Moran (an Independent Alliance TD).
The Bill purports to create a statutory basis for the Courts to conduct proportionality assessments in deciding whether or not to grant an order for possession. In order to achieve this, the Bill seeks to amend section 97 of the Land and Conveyancing Law Reform Act 2009 so that certain factors must be considered by a Court before an order for possession is granted.
The proposed amendments will oblige a Court to consider, for example, whether the order being sought “pursues a legitimate aim” or is justifiable by reference to a “pressing social need”. Courts would also be obliged to consider the likely impact of such an order on the human rights of the borrower by reference to the rights which they have pursuant to the European Convention on Human Rights or the EU Charter of Fundamental Rights.
In cases where the underlying loan has been sold by the financial institution which first granted the loan, Courts would also have to consider the question of proportionality having regard to a range of factors. These factors include the amount paid to acquire the loan and the availability of tax relief to the loan acquirer in relation to the non-performing loan.
The Bill has just passed the first stage of the legislative process but it is likely that the Bill will have to be significantly amended if it is to progress much further. Certain sections of the Bill are very general in nature and a number of key terms are not defined. If the Bill were to be enacted in its current format, the uncertainty that would surround the ability to enforce security would fundamentally change the residential mortgage market.
The Government appears to be moving in a different direction in any event in respect of households in long-term and unsustainable mortgage arrears. The recent announcement of an expansion of the mortgage-to-rent scheme appears to be a more workable solution and it achieves the same objective of the Bill in allowing households with unsustainable mortgages to achieve certainty of occupancy.