Social Housing, the Residential Tenancies Acts and COVID-19
15 June 2020
The Residential Tenancies Act 2004 sets out the rights and obligations of landlords and tenants and introduced detailed rules about residential tenancies. It introduced the concept of Part 4 rights, to provide security of tenure to tenants who are in a tenancy for between six months and six years.
Social housing support
Social housing support is provided in three main ways:
Allocations to Approved Housing Bodies (‘AHBs’)
Direct provision of accommodation by a local authority
Financial assistance in the private rented sector
The question of whether the Residential Tenancies Acts (‘RTAs’) apply to any particular tenancy depends on the type of social housing support provided.
The RTAs do not do not apply where a dwelling is let directly by a local authority. The RTAs do apply, however, where the landlord is an AHB. The RTAs apply even if the dwelling being leased by the AHB was provided to the AHB by a public authority.
We have set out a guide to the applicability of the RTAs to AHB tenancies.
None of the following provisions of the RTAs apply where an AHB is landlord:
The prohibition on setting rent above market rent
The RTAs’ rules on the frequency with which rent reviews may occur
The formula over which rent may not be increased in Rent Pressure Zones, which typically allows only a 4% increase
The rules on drafting notices of rent review
The provisions in the RTAs which allow landlords to recover arrears of rent do apply to lettings by AHBs.
As regards rent, the AHB will have to comply with rules deriving from the scheme from which the AHB receives its funding. The rental agreement between the AHB and the tenant should stipulate how the rent is to be calculated, for example whether this is the differential rent scheme, the economic rent or some other manner.
There are various other differences in application of the RTAs where the landlord is an AHB. These include:
Tenants of AHBs are restricted in sub-letting and assigning their tenancies
An AHB may not terminate a tenancy because it requires the dwelling for its own occupation
Licensees of an AHB tenant may not benefit from an existing Part 4 tenancy, which is the statutorily protected, ‘security of tenure’ tenancy
The rules on registration with the RTB including fees and penalties apply to AHB tenancies as they apply to other tenancies.
When the scope of the RTAs was extended to include AHB tenancies, the concept of a ‘transitional dwelling’ was introduced. A transitional dwelling is a dwelling let by an AHB and which does not benefit from the security of tenure given to other tenancies by the RTAs. For example, a tenancy of a transitional dwelling must still be terminated by a notice of termination, but that notice of termination may be served for any reason. Houses had to be registered as transitional dwellings before 6 April 2017.
In response to the Covid-19 crisis, there have been two main changes to residential tenancies law.
The first is the prohibition on evictions. This applies to all tenancies in the State. AHB landlords may not serve a notice of termination during a three month emergency period from 27 March 2020, which may be extended.
The second is the prohibition on rent increases taking effect during the emergency period. The legislation that prohibits rent increases refers directly to the RTAs. As the relevant rules on rent in the RTAs do not apply to AHBs, our view is that the Emergency Measures in the Public Interest (Covid-19) Act 2020 (“Covid Act”) does not stop an AHB landlord increasing the rent, but this remains unconfirmed and we are not yet aware of any decision (at the level of adjudication or higher) to that effect. In any event, we understand that the likelihood of an AHB landlord increasing rent during this time may be very remote.
Those investing in social housing should be aware that the applicability of the RTAs depends on the type of social housing support that is provided to the household.
While the RTAs apply to AHB tenancies, not all of the provisions of the RTAs apply. Most importantly, many of the provisions in the RTAs on rent do not apply to AHB tenancies.
AHB tenancies are affected by the Covid Act, and these tenancies may not be terminated during the emergency period.
For more information on successfully investing in social housing sector in Ireland, contact a member of our Real Estate team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.