The Residential Tenancies (Amendment) (No. 2) Bill, 2018 is described as being the most significant rental sector reform in recent years, according to Minister Eoghan Murphy. The Bill aims to provide enhanced protections for residential tenants. The Bill has been considered and amended at Committee Stage by the Select Committee on Housing, Planning and Local Government. It is not clear whether it will be enacted before the summer recess.

Landlords should be aware of the following proposed changes to 6 key areas:

Termination of Tenancy by Landlord

Revised notice periods

Landlords will be required to follow the revised notice periods. The most noticeable change is that for tenancies that have been in existence for between 3 and 7 years, 180 days’ notice will be required. Landlords must also send a copy of the termination notice to the Residential Tenancies Board and specific time periods will apply in respect of this requirement.

Duration of Tenancy

Notice Period

Less than 6 months

28 days

Not less than 6 months but less than one year

90 days

Not less than one year but less than 3 years

120 days

Not less than 3 years but less than 7 years

180 days

Not less than 7 years but less than 8 years

196 days

Not less than 8 years

224 days

The rules on when a landlord can validly serve such notice for the purpose of sale, occupation by a family member and for renovation purposes which are in the current legislation have also been revised further.

Termination for reason of sale

Where a landlord wishes to end a tenancy in order to sell the asset, there is a requirement that they must enter into a contract for sale of the relevant property within 9 months of the termination date. If this does not happen, the relevant landlord will be obliged to reoffer the property to a former tenant if the tenant has given the landlord their contact details. The Minister confirmed he had obtained advice from the Attorney General that if he had introduced legislation which totally prevented a landlord from terminating a tenancy for the purposes of sale, this would have been deemed unconstitutional.

Termination for reason of occupation by a family member

The new proposals state that where a tenancy has been terminated on the basis that the landlord required the property for occupation by a family member and where the property becomes vacant within one year by the family member, that property must be reoffered to the former tenant if that former tenant has given the landlord their contact details. This period is currently six months.

Termination for reason of renovations

The new proposals state that where a tenancy has been terminated on the basis that the landlord required the property for the carrying out of renovations, the property must be reoffered back to the former tenant on completion of the works. There is a further requirement for the landlord to have an architect or surveyor’s certificate to confirm that for health and safety reasons tenants are required to vacate for a minimum of three weeks.

Rent Controls

The Government has confirmed that the existing rent pressure zone designations (“RPZs”) will be extended to 2021. Limerick East and Navan have also recently been designated RPZs. Revisions on how the RPZ designations are devised have also been proposed. Landlords will be familiar with the current restrictions on rent increase of 4% per annum in an RPZ. The new proposals remove the current exemption to the 4% annual cap for new properties within an RPZ.

The Bill provides a new definition of what constitutes substantial change in the nature of the accommodation provided, which landlords must meet in order to qualify for an exemption to the RPZ rent restrictions. The change must be a permanent extension which increases the floor area by 25% or at least 3 of the following:

  1. Permanent alteration to the internal fit-out
  2. Adaptation for persons with a disability
  3. Permanent increase in the number of rooms
  4. An improvement in the BER rating by 2 or more ratings

Investigations, Sanctions and Offences

The Bill provides for new powers for authorised officers, decision makers and the Board to deal with complaints, carry out investigations, conduct oral hearings and impose sanctions on landlords. The Bill also introduces a new schedule of what constitutes improper conduct by a landlord.

A sanction for Improper Conduct is defined as one or all of the following:

  1. Payment of a financial penalty of not more that €15,000 to be paid to the Board
  2. Payment for costs to the Board of not more that €15,000 being all or part of the costs incurred by the Board
  3. A written caution to the landlord

Further appeals and applications may be brought to the Circuit Court and the decision of the Circuit Court can only be appealed to the High Court on a point of law. The Bill allows for a landlord to make an acknowledgement of the improper conduct and this will be taken into account in the level of sanction issued. The bill is clear that where criminal proceedings have been brought for the offence of improper conduct, a sanction under this legislation will not apply.

Residential Tenancies Board Registration and fees

Landlords will be required to register on the commencement of the tenancy and annually during the tenancy. The fee proposed is €40 on commencement and €40 annually. There is also the welcomed introduction of reduced registration fees for Approved Housing Bodies. The Minister expressed that it was anticipated include an online portal for registration which he indicated is expected by 2020.

Student - Specific Accommodation Sector

The Minister announced last month that it is also intended for certain provisions in the Bill to apply to students living in rental student-specific accommodation which is provided by both public education institutions and private accommodation providers. The Bill specifies that it applies to tenancy and licence agreements and shall apply to part-time and full-time students for the academic term. Interestingly, the Minister advised that the Bill will also apply to English language students.

The following shall apply to student-specific accommodation:

  1. 4% RPZ rent increase restriction
  2. New termination provisions
  3. PRB dispute resolution procedures
  4. Registration requirements
  5. Sanctions on landlords for improper conduct

The Minister noted that the legislation does not apply to “digs” where the landlord also resides.

Short-term letting/ home-share

The Bill also introduces proposed amendments to planning legislation in relation to change of use and are expressed to apply to properties located within RPZs only so that a landlord in an RPZ will precluded from letting a second property on a short-term basis.

Conclusion

This Bill is a further reform in the Government’s Strategy for the Rental Sector and has been described by some as radical. Landlords should be aware that these changes are in line with the Government’s long term strategy to move to tenancies of indefinite duration and to continue to enhance rental sector regulation and alleviate concerns surrounding the housing crisis.