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Rent Arrears protections don’t go far enough

The Planning and Development, and Residential Tenancies, Act 2020 extended the moratorium on tenant evictions in certain circumstances, however the provisions disapplying this protection on the basis of arrears goes too far beyond what was intended and may result in unforeseen evictions.

In responding to suggested amendments on the legislation in Parliamentary Debates on the 17th December 2020, the Minister for Housing, Heritage and Local Government, Deputy Darragh O’Brien, stated that it was considered reasonable in line with advices from the Office of the Attorney General to limit Government interference with constitutionally protected property rights[1]. The Deputy went on to state:

“It is considered reasonable in the context of Covid-19 that rent arrears to the value of five months' rent should be the maximum protection that should apply to a tenant.”

But that’s not what the legislation says. Section 11(2)(b)(ii) disapplies the protections against evictions in the event that “any rent owed by the tenant in respect of the tenancy of the dwelling concerned is, on 10 January 2021, in arrears for (i) a period of 5 months or more, or (II) periods the aggregate of which is 5 months or more.” This may be interpreted as meaning that a tenant who fell into arrears six months ago, is making some payments each month but has not yet caught up, will not have the protection of the law should their landlord want to evict them.

This is not in line with the Minister’s own understanding of the legislation, but when it comes to the law, words matter. Proper legislative scrutiny is important.

Extent of the Problem – Clarity Needed

The full extent of the rent arrears problem is yet unknown. The Pandemic Unemployment Payment and Employee Wage Subsidy Scheme have provided crucial supports to many households, changes to direct supports like Rent Supplement have meant that they are easier to access (there were 19,700 recipients as at 31st January 2021[2]), and many landlords don’t want to evict tenants in the middle of a pandemic.

In August 2020, a new process was implemented by the Residential Tenancies and Valuation Act 2020 whereby the Residential Tenancies Board (RTB) must refer tenants in receipt of a 28 day warning letter from their landlord that their rent is in arrears to the Money Advice and Budgeting Service (MABS). According to one media report, between August and December 2020, 573 tenants sought protection from the RTB after receiving an eviction notice for rent arrears and a further 1,719 tenants sought protection having received a warning letter, 566 of those coming in the months of November and December[3].

In response to a Parliamentary Question on referrals to MABS from the RTB, the Minister for Employment Affairs and Social Protection responded that just 51 referrals had been made, 44 of which provided information. These 44 tenants were, on average, 4.5 months in arrears and the total value of arrears across the 44 cases was €213,000 – or just over €4,800 each[4].

Taking Minister O’Brien’s interpretation of the Planning and Development, and Residential Tenancies, Act 2020, of the 44 tenants who provided information, those who have less than five months’ worth of arrears will benefit from the protections of the legislation. Based on the actual wording of the Act, it is less than clear.

And what about the others? The 51 referrals received by MABS accounts for less than three per cent of the tenants who reportedly received a 28 day warning letter. The Act is clearer here, in that it disapplies the protections for tenants who fail to provide relevant information to the RTB or any other person (for example, MABS) who may reasonably require it for the purpose of giving advice[5].

Other Financial Pressures

Paying rent is a priority for most tenant households. By the time the rent falls into arrears, these households may have experienced other forms of deprivation and cost-cutting to try make ends meet.

According to the latest EU-SILC data on deprivation, in 2019 more than one in three (34.4 per cent) people living in rented accommodation were living in enforced deprivation, the largest increase across all demographic groups having increased from 27.4 per cent in 2018[6].

Another CSO publication, the Housing Finance and Consumption Survey 2018, released in June 2020[7] also found that the median net wealth for rented households was €6,500, compared to the €287,800 for owner occupier households. Data from that release also indicates that 13.7 per cent of households in rented or rent free accommodation were credit constrained compared to 5.5 per cent in owner occupied households. This is also supported by report by TASC, Exploring Household Debt in Ireland, further found that tenant households were more likely to be in debt[8]

Essentially, tenants experiencing an income shock may already be experiencing deprivation, be in debt and have little if any financial reserves.

Greater Protections Required

Social Justice Ireland have been calling for greater tenant protections for some time before the pandemic. Covid-19 has, however, highlighted the precarity inherent in the private rented sector as many low-paid workers lose their jobs and are unable to make ends meet. The income subsidies implemented by Government to support households are very welcome, yet may be masking the true extent of the personal financial crises experienced by many households. Social Justice Ireland therefore calls on Government to:

  • Once winding down pandemic-related supports, to taper them in favour of those who are most at risk.
  • Revise the current legislation and increase protections for tenants in the private rented sector generally.
  • Remove bureaucratic barriers to accessing support from the RTB and creating a “one stop shop” within the RTB to assist tenants.
 

[5] Section 11(2)

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