Earlier this year, we summarised the key points in Rebuilding Ireland, the Government’s Action Plan on Housing and Homelessness published in July 2016.
Two cornerstones of the Action Plan are the promotion of strategic housing development and also the security and stability of the rental sector, and these are the main focus of the Government’s Planning and Development (Housing) and Residential Tenancies Bill 2016 passed by the Dail on 20 December.
Security and Stability of the Rental Sector
Much of the public interest in the proposed legislation has centred around the tenant security and rent predictability aspects in particular and these are certainly significant. Dublin and Cork city are initially designated as rent pressure zones, where the setting and review of rents, subject to limited exceptions only, are effectively capped at 4% of rent previously paid in respect of the dwelling.
Significantly, while the market has always been allowed to dictate the level of the rent as first set for a new tenancy, this now only remains the case for properties that are let for the first time in more than 2 years. Landlords are also under an obligation to show compliance with their rent setting obligations by setting out the detail around the calculation of the rent in the relevant notices required by the legislation.
Rents agreed with new tenants or as a result of a review in process prior to the coming into effect of the new legislation will not be specifically affected by the legislation, but existing tenancies do otherwise fall within its terms.
In terms of providing greater security of tenure to tenants, the Bill contains a trio of amendments:
- extending the four year protection period for tenants during which a tenancy can only be terminated by a landlord on certain limited grounds, to six years;
- removing the mechanism whereby a landlord could potentially terminate a tenancy on a “no fault” and “no limitation” basis during the first six months of the fifth year of a tenant’s occupation; and
- the “Tyrrellstown amendment” restricting a landlord’s right to terminate ten or more tenancies, within the same development scheme within a period of 6 months on the ground that it is selling the properties. This restriction does not apply where the notice for sale is served before the commencement of the legislation or if the landlord can satisfy the Residential Tenancies Board that the difference in market value between the dwelling subject to the tenancy and with vacant possession is more than 20% and that the application of the restriction would be unduly onerous or cause undue hardship to the landlord.
Strategic Housing Development
In its strategic housing development proposals as promised in the Action Plan, the Bill introduces, most notably:
- a fast-track planning procedure for residential developments of 100 units or more and large-scale student accommodation projects;
- a streamlining of existing arrangements for approval by local authorities of their own development proposals, including proposals for social housing projects and infrastructure servicing both public and private development; and
- new parameters for extending the duration of extant permissions.