In October 2018 the Minister for Housing, Planning and Local Government announced new regulations for the short term letting and homesharing market which will have potentially far reaching implications for short term letting platforms and their users.

There has, in the last number of years, been a blurring of the lines between the practices of homesharing and short term letting.

What is homesharing?

Homesharing is where a private person rents out all or part of their home for a short period of time, often to tourists who are visiting the country. The option of homesharing is particularly attractive, for example, when a family are themselves on holiday as it is a means of generating income from, and securing, their home in their absence. However, as the demand for this particular form of short term letting has increased, it has also resulted in professional landlords eschewing long term leases in favour of the more lucrative option of short term lets.

Scope of new regulations

The regulations are aimed at curtailing this trend and increasing the amount of properties available on the long term rental market particularly in areas where there is high housing demand.

Critics of the proposed regulations argue that they will do relatively little to ease the current housing crisis in Ireland while causing unnecessary hardship to those who wish to boost their income through the short term letting of their homes.

Similar regulations have been introduced in other jurisdictions. In 2018 both Toronto and Vancouver introduced new rules stipulating that a person can only rent their home as a short term let if it is their principal residence. Investment properties cannot be let on a short term basis. Both cities also introduced licensing and registration requirements with city councils. In Vancouver, the introduction of new regulations resulted in a 43% decrease in the number of listings on AirBnB.

Proposed planning amendments

The proposed regulations are scheduled to come into effect on 1 June 2019 and, as indicated by the Minister in October 2018 will provide as follows:

• Homesharing will continue to be permissible where it is a person’s principal private residence.
• The short term letting of a room or rooms within a person’s home will not be restricted.
• The short term letting of an entire home will only be permitted for a period of 14 days or less at a time with a cumulative cap of 90 days per year.
• Where a person owns a second property and intends to let it on a short term basis, he or she must obtain planning permission from a local authority. In areas of high housing demand it is unlikely that permission will be granted.
• Licensed accommodation such as serviced apartments, guest houses, holiday homes, B&Bs and hotels will not be subject to the proposed regulations.
• All persons who intend to let their home or any other property must register with their local authority on an annual basis and provide details of their short term letting activity.
• Tenancy and management agreements which already prohibit or regulate short term lettings will not be affected by the proposed regulations nor will any “rent-a-room” schemes.

In February 2019 the Joint Committee on Housing, Planning and Local Government provided its view on the proposed legislative changes.

The Committee opined that the proposed legislation should also impact directly on short term letting platforms. In particular, the Committee recommended that short term letting platforms be under a positive obligation to notify hosts when they have exceeded the 90 day annual cap and that it be made an offence to advertise non-compliant hosts.

Enforcement and penalties

Any person not in compliance with the proposed legislation will risk criminal conviction under the Planning and Development Act (as amended). However, the Committee expressed some concern that the precise penalties and other consequences for breaches of the proposed legislation were not sufficiently clear. Once the position on sanctions is clarified, the Committee recommended that, in order to effectively implement the proposed regulations, the consequences of non-compliance should be disseminated through a widespread public information campaign.

Local planning authorities will be granted additional resources to oversee registrations and monitor enforcement of the proposed regulations. However, the magnitude of the challenge of implementing the new regulations should not be under estimated. The Committee noted that the experience of the enforcement challenges faced by the Residential Tenancies Board proved that meeting inspection targets will be a considerable undertaking in and of itself.

Timeline

The proposed regulations are expected to come into force on 1 June 2019 and will be enacted through amendments to the planning legislation, together with a short piece of complementary primary legislation. It is possible that, given the scale of the recommendations made by the Committee, the date of implementation will be delayed.

On 11 April 2019, the Minister for Housing, Planning and Local Government confirmed that “…the proposed planning reforms will come into effect on 1 July 2019 and the primary legislative provisions required to underpin the proposals are currently progressing through the Houses of the Oireachtas through the Residential Tenancies (Amendment) (No. 2) Bill 2018”.

The content of this article is provided for information purposes only and does not constitute legal or other advice.