Compliance Chart

A New Level of Complexity

Given recent experience in Ireland, the construction sector must operate to the highest of standards and be accountable for its actions.  Regulation of the sector is critical but revisions and additions to an already complex regulatory environment adds an additional level of complexity for compliance and dilemma for enforcement.  Appropriate regulation, with consistent application across the local authority areas, is fundamental to the development of a strong and sustainable construction sector.

Emissions from the construction industry reached the highest ever level in 2019. The use of fossil fuels (coal, oil and natural gas) for heating, lighting and cooking as well as an increasing energy demand for air-conditioner cooling with worsening extreme heat means that together, construction and building operations account for nearly 40% of global energy-related CO2 emissions. Addressing the industry’s CO2 emissions is crucial to delivering climate-action objectives.

As new construction is expected to double the worlds building stock by 2060, an increasing number of institutional investors are recognising that environmental, social, and governance (ESG) factors can materially affect a company’s performance and market value and are key to reducing risk. These socially conscious investors consider the ESG standards as the means to future-proof the value of investments.

The Irish Government’s current policy initiative, Project Ireland 2040, indicates that by 2040 an additional one million people will live in Ireland and an additional two-thirds of a million people will work here.  This means that an immediate priority is to increase the overall housing supply to between 30,000-35,000 housing units annually by 2027.  Private equity and Build-To-Rent (BTR) have a vital role to play in meeting these goals.  Partnering with international investors, an increasing number of Irish based developers are bringing BTR projects to market.

On the investment side, according to both CBRE and Savills, investors increasingly consider that ESG criteria have a role to play in successful residential development and are targeting investment opportunities which fulfil these criteria. The ESG strategy published by Hines and its Dutch joint-venture investment partner APG for the mixed-use development at Cherrywood in South County Dublin outlines the approach being taken to minimise construction and operational impacts on the environment and the ways in which energy efficiency, health & wellness and social inclusivity is being promoted within the development.

On the construction side, building green and decarbonising the construction sector should mitigate the worst effects of climate breakdown and there have been positive developments in the construction sector in Ireland. The Irish Green Building Council (IGBC), an organisation aligned with the World Green Building Council (WGBC), promotes the acceleration of building sustainable homes.  Its Home Performance Index (HPI), a new voluntary building code for home building in Ireland, is awarded based on the standard of a home’s design, construction, and environmental sustainability. Developers who set out to build new homes to this standard can also avail of loan discounts through Home Building Finance Ireland (HBFI).

Ireland's growing population, rising property prices and demand for long-term private residential accommodation are fundamental drivers for investment into the BTR sector and construction but revisions and additions to an already complex regulatory environment adds an additional level of complexity for compliance and dilemma for enforcement.

The question of who pays the additional costs associated with meeting new ESG targets in development, construction and living amenities remains for now unanswered.  While investors focus on the bottom line, tenants already challenged by high rental costs, seem unlikely to agree to any additional outlays.

Given recent experience in Ireland, the construction sector must operate to the highest of standards and be accountable for its actions. If managed correctly, the interconnectedness between building, rental, green and ESG standards could enhance accommodation standards overall. Regular inspection to independently verify standards along with enforcement where contraventions are identified should ensure the best outcome for all stakeholders.

RTB Rent Index

RTB/ESRI Q1 2021 Rent Index

The RTB/ESRI Q1 2021 Report produced by the Residential Tenancies Board and the Economic and Social Research Institute tracks price developments in the Irish rented housing market. The current Report is based on rents paid on 15,899 private tenancies registered with the RTB in Q1 2021 compared to the 16,235 tenancies registered in Q4 2020.

The decline in the number of tenancies registered with the RTB in this quarter is most likely linked to the increased Covid-19 restrictions in place during the first quarter of 2021. There were a higher number of tenancies registered in Q3 and Q4 of 2020 and a lower number of registrations in the first two quarters of 2020 compared to the same period in 2019. Renewal tenancies were not included in the sample used to generate Q1 2021 Report; tenancies that commenced before 24th December 2016, landlords were required to register a tenancy as a Part IV Renewal after 4 years. For tenancies that commenced after 24th December 2016 landlords are required to register the tenancy as a Part IV Renewal after 6 years. This change means that no Part IV Renewals will be registered until Q1 2023.

Dublin and the Greater Dublin Area (GDA) accounted for 55.8 per cent of all tenancy agreements registered. In terms of property type, 60.4 per cent of the tenancies were for apartments. In Dublin, 77.2 per cent of tenancies were for apartments while it was 43.8 per cent and 50.6 per cent in the rest of the country and the GDA respectively.

On a quarterly basis, rents rose in all except 5 counties in Q1 2021, with 17 counties recording annual growth of more than 5 per cent in the first quarter of 2021. The highest standardised average rent was in Dublin at €1,820 per month while the lowest monthly rent was in Leitrim where the standardised average stood at €596 per month.

The national standardised average rent stood at €1,320 in Q1 2021 – an increase of just under €33 compared to Q4 2020.  On an annualised basis, rents grew by 4.5 per cent in the first quarter of 2021. This growth rate is higher than that of the previous quarter (3.3 per cent) and the highest since the 4.7 per cent annual growth recorded in Q1 2020.

The standardised average rent for houses was €1,304 per month in Q1 2021, a rise of 2.6 per cent on Q4 2020 and a rise of 7.0 per cent year-on-year. The standardised rent for different housing types varied between €1,121 per month for a one-bed house to €1,442 for a house with four or more bedrooms; inflationary pressures continue to be greatest (year-on-year) for houses with four or more bedrooms.

The standardised average rent for apartments stood at €1,351 per month in Q1 2021, an increase of 2.3 per cent on Q4 2020 and a rise of 2.2 per cent year-on-year. The standardised rent for different apartment types varied between €1,207 per month for a one-bed apartment, €1,374 for a two-bed apartment, and €1,574 for an apartment with three or more bedrooms. The year-on-year increase for two-bed apartments was 2.7 per cent while apartments with three or more bedrooms had the highest year-on-year growth at 4.9 per cent.

The economic context determines the drivers of rental inflation in Ireland. Having grown at 4.7 per cent per annum in Q1 2020, the national rate of inflation dropped to 1.6 per cent in the second quarter of 2020 as the Irish economy and society experienced various levels of restrictions.  In Q3 and Q4 of 2020, the annual inflation rate increased to 2.5 and 3.3 per cent remaining below the pre-pandemic level of inflation. The 4.5 per cent annual growth rate Q1 2021, similar to the rate recorded in late 2019, suggests a return to pre-pandemic levels of rental price inflation.

Dublin has seen a greater initial drop and slower rebound in rental price growth since the onset of the Covid-19 pandemic than elsewhere. This reflects the impact of Covid-19 on both the demand and supply sides of the market in the short term.

Highlight Rent in Context

The Wider Context

The more accurate information is at RTB tenancy registration, the more efficient the process is in the wider context of seeking to maintain the standard and safety of accommodation generally across the private rented sector.

The Residential Tenancies Board (RTB) was set up under the Residential Tenancies Act 2004 to deal with the regulation of private rented sector housing.

Registering a new tenancy with the RTB as required under the Residential Tenancies Amendment Act 2019 is not the last link in the chain for a landlord with a new tenancy. The RTB uses this information to maintain a publicly available property register as well as for a variety of intergovernmental requirements.  All landlords are responsible for registration and are expected to update the register when information about a tenancy changes.

At present, new tenancies must be registered with the RTB within a month of the start of the tenancy. Each new tenancy is allocated a Registered Tenancy (RT) number. When a tenancy has been in existence for 4 years or more, a new tenancy begins and the landlord must re-register this new tenancy with the RTB.  The basic rate for registering a private rented or Approved Housing Body (AHB) tenancy is €90 per tenancy. A late fee of €180 per tenancy applies if a registration is received more than a month after the tenancy commenced.

The introduction of annual registration is being floated as important to assist the RTB in monitoring and regulating the rental sector. Under the Act 2019, landlords will be required to register a tenancy annually, rather than simply registering a new tenancy when it commences or 4-years later. The Act creates a new fee structure, €170 for bulk registration, €40 for private rented tenancies, and €20 for AHB tenancies. Yet to be enacted, the RTB intend to roll-out a new tenancy management system (RTB360) to underpin the administration of the annual registration scheme.

Information provided in a tenancy registration is used by the RTB to facilitate a variety of requirements under relevant legislation and where necessary the information provided at the point of registration can be shared between agencies such as the Revenue Commissioners, Department of Social Welfare, local authorities, and officers of the local authorities such as Inspex.

Most landlords already know the current minimum standards for all private rented accommodation are set out in the Housing (Standards for Rented Houses) Regulations 2019.  Our local authorities are responsible for checking and enforcing these minimum standards. Officers of the Housing Authority, such as Inspex, are authorised under section 18(2) of the Housing (Miscellaneous Provisions) Act 1992 to access rented properties for the purpose of rented house inspections.

Where contracts and data agreements exist, Local Authorities issue Inspex with a schedule of rented properties for inspection as registered with the RTB together with landlord and tenancy details as registered for the purpose of processing inspections of rented properties in accordance with Housing Standards.

With there being two types of business relationships – let-only/managed - between landlords and property agents, landlords should know registering precise information about a tenancy on the RTB portal is important.  The information registered is the foundation that ensures to avoid confusion and time wasted further down the line. Information should be accurate and timely if it is to be actioned efficiently.

A let-only service is for those landlords who wish to manage their rented properties day-to-day and collect rents while the letting agent finds the tenants, checks bonafides and prepares the legal documents including registering the tenancy with the RTB.   When these tenancy agreements are being registered on the RTB portal the details of the Agent should not be included as authorised to act on behalf of a landlord.

A letting agent that manages a property will perform the same services as let-only but will also take care of the general day to day running of a rented property and deal directly with the tenants. When these tenancy agreements are being registered on the RTB portal the details of the Agent should be included as authorised to act on behalf of a landlord.

Where bulk registrations are completed by an agent on behalf of several landlords, form fields relating to an agent’s details are automatically filed without user interaction.  This setting does cause problems further down the line.

Once local authority inspection activity recommences in July 2021, Inspex will be reviewing the data already received from the RTB and will be contacting landlords and agents again to arrange an inspection of rented properties as per Housing Standards.

With local authorities working to meet DHPLG targets for independent inspection of the rental stock and with Inspex working on behalf of several local authorities to deliver the targets, the more accurate information is at RTB tenancy registration, the more efficient the process is in the wider context of seeking to maintain the standard and safety of accommodation generally across the sector.

Rent Regulations, wooden blocks with the word Fair and a wooden house showing balance is needed

Rent Stabilisation Measures

Rent regulations take many forms, the most common of which are rules about how much landlords can increase rent or a cap on how much they can charge. In a time of a housing crisis, when rents are increasing rapidly, the inclination is to protect renters using rent stabilisation measures and impose restrictions on the capabilities of landlords to achieve open market rents.

While policy interference in the rental market may appear to protect tenants in the short term, over the longer term a ceiling on rents can reduce the quantity and quality of housing available as the opportunity for higher returns on investment are curtailed and landlords become disincentivised from improving or maintaining properties in good order. Policy measures to control rents can, some say, do more harm than good.

Governmental attempts to control rents is a contentious issue in many jurisdictions. Most recently in Germany the courts ruled against a state law in Berlin restricting rent increases and ruled in favour of private landlords who argued the law interfered too much in the private market. In New York, rent controls are considered to suppress supply and as and encouragement to set higher rents at the outset to ensure the desired rate of return over the lifetime of a tenancy can be achieved with the controls in place.

Historically rent control in Ireland, as in other European countries, has its roots in the legislation enacted following the end of the second world war. The legislation that limited rent increases, to protect tenants, was extended by various amendment acts until the Rent Restrictions Act 1960 brought most restrictions to an end. Any restrictions that did remain were terminated by the Supreme Court judgement in Blake v. The Attorney General [1982] I.R. 117 that determined rent restrictions constituted an “unjust attack on the property rights of certain landlords”

But history has a way of repeating itself and despite these rulings, rent control became a protagonist in the Irish Private Rented Sector (PRS) again under the Planning and Development (Housing) and Residential Tenancies Act 2016, with the introduction of the Rent Pressure Zones (RPZs). The measures aimed to “moderate the rate of rent increase” by imposing a 4% cap on permitted annual rent increases. Although these measures were described from the outset as ‘temporary’ and effective for a period of three years, their scope and longevity have since been extended to December 2021.

With the difficulties for the Residential Tenancies Board (RTB) to adequately monitor and assess all PRS market activity, there is clear disagreement as to whether the RPZ measures have been successful in achieving the desired outcome.

With opportunities to circumvent the 4% cap either by valid exemption or deliberate non-compliance, it is reported that over 40% of tenants have been subject to annual rent increases of more than the 4% cap since the rules came into effect. Recent reports suggest that several of the large-scale landlords “distort” the market by restricting supply, foregoing new letting opportunities in the short term or by offering ‘rent-free’ periods on commencement of a new lease to reduce the pro-rata annual rent paid while keeping the higher headline rent intact.

When rent restrictions prevent the achievement of true market rates, landlords can be reluctant to make adequate investment for repairs or maintenance of a property. When controls begin to negatively impact the standard and quality of rented properties available and discourage tenants from speaking out about those shortcomings, the system designed to protect has become contradictory and capricious.

Despite the lack of evidence that rent controls have ever worked wherever they have been tried, a system of accountability must be maintained for all landlords to, at a minimum, provide accommodation that meets the Housing (Standards for Rented Houses) Regulations 2019, regardless of rent paid.

With its PRS regulatory expertise and many years of working with local authorities inspecting rented dwellings to ensure compliance with prescribed standards, Inspex is well positioned to continue delivering this aspect of the PRS regulatory programme.

Two People Sitting On Couch with Book Shelves Behind in Coliving Space showing PBSA and coliving developments are two recent earmarked change-makers in housing policies

Equity Brings Conformity

There are those who say that change is the only certainty in life. Reflecting on the array of housing policies that have come and gone or which have been remastered or redefined, it seems to ring true. But creating and maintaining a set of clear rules reduces ambiguity, eliminates confusion and establishes conformity.

Soaring demand for housing and lacklustre supply of housing following the 2008 financial crash continue to prevail. For over a decade since, powerful lobby groups continue to push agendas for desired modifications in certain sectors of the housing market while successive governments and ministers have grappled with how best to cater to them.

Purpose built student accommodation (PBSA) and co-living developments are two recent earmarked change-makers in the housing market identified as a potential means of relieving pressures.

To ease cost and supply pressures in the private rented sector (PRS), by effectively removing one cohort of renters, students, the National Student Accommodation Strategy was launched by government in July 2017.

By 2018 the Irish economy had, in effect, begun to recover from the preceding decade of financial ruin and in the wake of the launch of its 2016 ‘Rebuilding Ireland’ strategy, the government released the new Design Standards for new apartment construction (2018). These standards were to provide guidance to a growing build-to-rent sector and, for the first time referenced shared accommodation, co-living, and communal living which were regarded as “new and exciting ways to meet the housing needs”.

Within twelve months the Residential Tenancies (Amendment) Act 2019 brought Student Specific Accommodation (SSA) under the remit of the RTB, a move that affirmed student accommodation as a viable investment sector and a valid means of increasing supply.

Co-living is a new concept in Ireland, heralded by some as a legitimate means to ending the dearth of supply, and quickly. By others it is regarded as a political quick fix which can on the face of things provide relief but one which is likely to bring new problems and, in the end, substandard dwellings.

The 2018 design guidelines were among the first in Europe to specifically set out planning and design parameters for co-living accommodation. For supporters of the co-living concept, it was a short-lived progression, as the Minister for Housing announced at the end of 2020 a de-facto ban on co-living developments in Ireland, save for those already approved for planning or under construction. This decision breached the commitment set out two years earlier in the 2018 guidelines acknowledging a “need for stability in policy”.

No doubt, co-living has the potential to form a legitimate part of the PRS, but it should not be mistaken for an all-encompassing speedy solution to a lack of housing supply. To some this type of development is a welcome step towards a more diverse and plentiful market. To others it is regarded as an opportunity for investors to reap higher investment returns by over-developing schemes using lower design requirements such as space, light, aspect, etc.

In large cities where rents are high and there is the need for ease of social integration, co-living as a sustainable segment of the PRS seems achievable when schemes are developed to a high standard, fulfilling the requirements of those who ultimately choose to reside there. London schemes such as The Collective and New York based Common demonstrate how these quasi-shared living arrangements can operate in practice offering residents a particular lifestyle choice through stylish private living spaces and shared-living experiences.

Until the amendment to the Residential Tenancies 2019 act, student accommodation was not subject to the rigours of the minimum standards, as were other segments of the PRS. This change put PBSA on the regulatory map and aimed to ensure that it, like traditional private rented dwellings, was safeguarded by the provisions of the Housing (Standards for Rented Houses) Regulations 2019.

The move to bring PBSA housing in line with minimum accommodation standards clearly demonstrates it is possible to mould outliers / newcomers to the housing market. The ongoing controversy with co-living development in Ireland would seem to be the legislative failure to bring such schemes in line with reasonable design guidelines and the minimum standards for rented accommodation.

Having a set of clear rules describing how things need to happen brings compliance and conformity. Standardisation reduces ambiguity and eliminates confusion.

Equity in the application of rental accommodation standards is worthwhile because no cohort of renters should be negatively impacted by virtue of tenancy type. The minimum standards should apply equally to all sectors of PRS and rented properties should be inspected on a rolling basis to independently verify those accommodation standards.

Smiling women sitting at laptop on video call prompting customer to book our virtual consultation service

Virtual Consultation Service

From the comfort of your home or office, let’s talk

Some consider Ireland’s private rented sector as well-regulated and others as overly regulated. Whichever your opinion, there are challenges that come with being a landlord, large or small, a multitude of laws to be familiar with and regulations to be followed.

Regulations and standards are important to protect investment in housing and to safeguard both landlord and tenant interests. Our local authorities are responsible for checking and enforcing standards while landlords are responsible for ensuring their rented properties meet these standards.

With so much information available, cutting through the red tape can be a challenge but the experience we’ve gained over years of working with our local authorities makes us a valuable resource at your disposal.

One of our expert team will meet you online at a specified date and time where we can discuss the findings of a Housing (Standards for Rented Houses) Regulations 2019 inspection or legislation that applies to your rented properties.

€60 – 30 Minutes

Inspex Cancellation Policy
While this may be difficult to hear, this policy has been put in place to safeguard the service. Once you have booked an appointment with us it means we have reserved time in our schedule exclusively for you. When a session is cancelled without adequate notice, we may be unable to fill this time slot by offering it to somebody else. Because of this we do not give full refunds unless there are exceptional circumstances. Appointments can be rescheduled up to 48 hours before. But cannot be rescheduled after 48 hours.
If you must cancel your appointment, we require 48 hours’ notice. For cancellations made with more than 48 hours’ notice, the fee paid can be used for a future appointment or refunded. Refunds can take up to 10 business days to process depending on the bank. Any cancellation or reschedule made less than 48 hours from the scheduled appointment will result in a cancellation fee. The amount of the fee will be equal to 50% of the reserved services or €30 whichever is more. If you are more than 15 minutes late or do not show for your appointment, we may not be able to accommodate you. In this case, the full fee will apply.

Housing coin stacks, each one bigger then the last with last one showing coronavirus and a questions mark representing the uncertainty in the housing sector during the Covid-19 pandemic

Into the Unknown

Ireland had a target of around 35,000 new homes to be delivered in 2020, aiming for supply to catch up with steadily growing demand. With the spread of Covid-19, its classification as a global pandemic and subsequent national restrictions to curb the spread, construction slowed. The pandemic had a marked impact on the housing sector with measures such as restrictions in the rental market helping tenants, even if only in the short-term.

Demand and supply of housing stock in Ireland remains a key obstacle to achieving balance in the sector, throughout the pandemic and beyond.

The stunted progress of the Irish construction sector in delivering more stock during 2020 began with the onset of government restrictions in March. Construction sites were required to cease operating by the end of March 2020 and did not recommence operations until the latter part of May 2020.

The number of completions in Q3-2020 indicates that the sector was able to make up some of the ground lost during Q2. The CSO indicates that total new dwelling completions for the third quarter of 2020 were 5,118, representing a decrease of 9.4 per cent on the same period in 2019. It does however represent an increase of 55 per cent on Q2-2020, confirming completions were dramatically affected by Covid-19 and the associated restrictions. With the worst effects demonstrated in Q2-2020 completion numbers, the sector began to catch up again in Q3.

A similar narrative unfolded globally with a slowdown in construction productivity during the initial phase of Covid-19-related restrictions in Q2-2020. In the UK construction output fell by 40 per cent in April 2020 and in the US, it fell by 30 per cent in the same period. There is evidence that as countries implemented ‘lockdown’ procedures during the year, real estate activity fell including rentals and appraisals / inspections.

Unfortunately, 2021 is already off to a shaky start with the recent announcement that construction must once again cease at least until the end of January 2021. This could hamper the industry’s attempts to make up some of the ground lost during 2020 closures and reduced capacity due to social distancing requirements on site.

With progress set to be curtailed in January with Government announcing all non-essential construction is to cease, there are some exceptions including what is described as social housing projects or “designated as essential sites by Local Authorities”.

Although the sector could not deliver as much as anticipated during 2020, it did surpass earlier pessimistic outlooks for the year. Prices held more firm than initially anticipated. The month-on-month change in the house price index shows a slight fall in the month from January to February (-0.1 per cent) and from March to April (-0.1 per cent). Although prices picked up month-on-month from May onwards, overall prices decreased by 0.4 per cent nationally in the year to October 2020.

The cost of renting also rose for another consistent year to the end of Q3-2020 marking a year-on-year rise of 1.2 per cent overall. There was a notable fall in rents in the month from March to April 2020 (down 2.1 per cent) and although they recovered considerably during the remaining months to October 2020, the rate of growth during 2020 was at a slower pace than the previous year overall. Additionally, for the first time in almost a decade, rents fell in Dublin. Rental prices reached their peak in September but began to fall back again in October (-0.8 per cent).

Covid-19 brought with it a myriad of complexities and with each wave of new infections, new restrictions including the moratorium on evictions extended from Q2 2020 offering some protection for tenants but likely to create some difficulties for landlords.

With the Government encouraging people to stay at home, limit movement and interaction with others, and to work from home where possible, people were forced to spend more time than ever before in their properties. Homeowners could take the opportunity to renovate where they had the time and money, but renters generally rely on landlords to identify and facilitate such projects.

The Housing (Standards for Rented Houses) Regulations 2019 stipulate a prescribed set of minimum standards for rented accommodation in a range of categories including structural, ventilation, and fire safety, among others. They represent not only a chance for renters to enjoy a minimum standard of safety and comfort in their rented homes, but also a statutory obligation for landlords to provide this.

Fire safety is an area of consistently high non-compliance across the regulations. A sample of over 1,000 rented dwellings inspected by Inspex on behalf of Local Authorities in 2020 shows that less than 1 per cent were compliant with Regulation 10 (Fire Safety) at the first inspection stage. However, a cumulation of follow-up inspection data shows that after the follow-up stage it is observed that almost 49 per cent of properties are compliant with fire safety requirements.

Although it is encouraging to witness safety standards improve throughout the inspection process, fire safety does remain a concern and requires careful monitoring through the Local Authority PRS inspection process.

The construction sector in Ireland proved during the tumult of 2020 its ability to adapt quickly to new health & safety guidelines and restrictions to limit and contain Covid-19 spread. Data pertaining to Regulation 10 compliance, as outlined above, shows that landlords in the rented sector are similarly capable of complying with regulatory requirements when inadequacies are highlighted.

Unlike the construction sector in 2020 that was subjected to the rapid introduction of several new industry requirements requiring quick adaptation, the Housing (Standards for Rented Houses) Regulations 2019 represent a long-term and consistent standard. This consistency gives PRS landlords the opportunity to familiarise themselves and, ultimately, to comply.

Local Authority inspections are a necessary and reliable means of determining vulnerabilities that might exist in rented accommodation. In some cases, failure to comply with the regulations can be due to any number of factors. For the most part landlords appear keen to comply and upon receiving the summary of non-compliant areas set about rectifying problems where required.

National and sectoral responses to Covid-19 globally have shown how Government measures can impact individuals and industries. The additional problems brought on by Covid-19 highlights the importance of consistent checks of properties to ensure compliance, as landlords are statutorily obliged to do.

For Rent sign represents Residential Tenancies Act 2020 introduced new rental protections for tenants who face rent arrears and, as a result, are at risk of their tenancy ending

Residential Tenancies Act 2020

The Covid-19 2020 Act was introduced on 27th March 2020 and banned all rent increases and tenancy terminations, with limited exceptions, during the Covid-19 emergency period. This emergency period expired on 1st August 2020. From 1st August 2020, when the Residential Tenancies and Valuation Act 2020 came into force, new rental protections applied to tenants who face rent arrears and, as a result, are at risk of their tenancy ending.

This new legislation introduces temporary restrictions which provide that tenants are not required to vacate their rental properties during an Emergency Period, except in limited circumstances relating to specific breaches of tenant obligations.

The Act seeks to recognise the impact that the rise in unemployment and reduced working hours associated with the pandemic has had on the rental sector, and the challenges that this presents for tenants in meeting their obligation to pay rent. The Act brings in temporary restrictions on ending tenancies when restrictions on travel outside a 5km radius of a person’s home are in place. Currently, this is in place for six weeks from 21st October 2020.

Rent increases already served will be effective on some tenancies but not on others. Tenants whose income was adversely affected by Covid-19 may be protected from increases.

Not that all tenants in arrears are protected by the changes in the legislation, but the Residential Tenancies Act 2020 does set out new protections and obligations for tenants in financial difficulty as a result of Covid-19 and increased obligations on the service of documentation around rent arrears on all tenancies.

A tenant who follows the procedures and provides a landlord with a self-declaration form relating to an inability to pay rent due to Covid-19, cannot be made to leave the rented accommodation before 11th January 2021, and do not have to pay any increases in rent until after 10th January 2021.

Where a self-declaration form is given to a landlord from a tenant highlighting a tenant’s inability to pay rent due to Covid-19, a tenancy cannot be ended before 11th January 2021 and the tenant must be given a minimum 90-day notice period to vacate.

In normal times, a tenant is required to pay rent in full and on time until the tenancy ends even where a dispute arises between the parties. If the rent is not paid it is a breach of a Tenancy Agreement.

If a landlord wants to end a tenancy due to rent arrears, a landlord must issue a tenant and the RTB with a written Rent Arrears Warning Notice providing a minimum of 28 days for the rent arrears to be paid in full. The 28-day warning notice period only begins to count down when both the tenant and the RTB have received the Warning Notice. Warning Notices must always be in writing as a text message or email is not considered suitable.

A Notice of Termination (NoT) is the official document which ends a tenancy. Landlords and tenants can serve a NoT as usual during an Emergency Period, subject to certain exceptions, but the notice period cannot begin to count until an Emergency Period is lifted.

Covid-19 has had a significant impact on jobs and incomes across Ireland. Since March 2020, there have been a series of new rules and requirements regarding tenancy terminations and rent increases that affect both landlords and tenants. Either party misunderstanding their obligations is best avoided.

Two men on pedestal, one much higher then the other looking down showing an imbalance. A strong and balanced rental sector is a key component in any healthy housing market

Striking A Balance

This emergency period has presented significant challenges that few could have imagined and its full impact on the rental sector has yet to be realised. That said, it’s time for something completely different….

A strong and balanced private rented sector (PRS) is a key component in any healthy housing market. The successful provision of rented housing is considered of such importance it formed one of the five pillars of Rebuilding Ireland published in July 2016.

Historically the PRS in Ireland was a residual sector seen as a temporary arrangement on the way to owning a home or accessing social housing. The sector was virtually unregulated until the introduction of the Residential Tenancies Act 2004 that set out the rights and obligations of landlords and tenants and detailed rules around residential tenancies.

Over the last number of years, there has been considerable change to the sector’s regulatory framework with the Residential Tenancies (Amendment) Act 2015, Planning and Development (Housing) & Residential Tenancies Act 2016 and the Residential Tenancies (Amendment) Act 2019. The sector has seen an expansion of the Residential Tenancies Board’s (RTB) regulatory role, introduction of rent pressures zones, security of tenure protections, introduction and enforcement of minimum accommodation standards along with many other measures.

Buy-To-Let (BTL), where a property is specifically purchased to rent to tenants rather than lived in by the purchaser, used to be all the rage. Historically, most of the investment in the Irish rental sector came from these small-scale investors where a poorly regulated sector, with little or no limit on rental growth, made for an attractive investment and required little investor knowledge. Most were diligent landlords, but some were rogue.

Build-To-Rent (BTR) describes the practice of delivering purpose-built residential rental accommodation and associated amenity space for the purpose of being used as long-term rental accommodation. This new sector provides larger scale purpose-built apartment blocks that benefit from professional management, flexible tenure and the long-term, low-risk, steady growth requirements of the institutional investor.

To confront the problem of distressed assets in a post-2008-crash context, the system was encouraged to sell off assets and large portfolios to financial institutions, private equity firms, hedge funds, real estate investment trusts (REIT) and vulture funds. Property tax incentives introduced by the Government during the economic downturn, has been the target of criticism. Supporters believe these policies encouraged capital back into the Irish market at a time when it was much needed and bolstered the subsequent growth in FDI and our economic recovery.

While private institutional capital (investment funds and REITs) have been major purchasers of residential units in the Irish market, public capital in the form of Part V acquisitions, AHBs and local authorities are also significant buyers of residential property.

While turnover in the BTR sector more than doubled last year to €2.54 billion, many believe the Government’s encouragement of institutional investment away from the BTL sector and into the BTR sector has been costly for generation rent.

With increasing insurance, maintenance, management costs and less tax relief to be claimed, BTL investors are struggling to compete with BTR institutional investors. The tax and regulatory frameworks of the residential rental market are two of the disincentivising factors for smaller landlords, while institutional investors enjoy the benefits of organisational structure, economies of scale and stronger equity.

Even though investment funds have had the capacity to pay the high construction costs of apartment blocks in urban areas while satisfying the Government’s requirement to deliver scale in a demanding housing market, others believe some of the larger landlords are of now of sufficient scale to influence government policy as well as possessing rent setting powers in certain locations.

According to the RTB, some 40,000 smaller landlords have left the sector since 2012, while the sector has become increasingly attractive to large scale investors and corporate residential landlords. The market has expanded to include 340,000 tenants, 714,000 occupants and 174,000 landlords. But as it has expanded it has also become more expensive with rents rising by 40 per cent between 2007 and 2019, almost double the EU average.

The provision of rental housing is of such importance that an over-reliance on a limited number of third parties is a risk we shouldn’t take and one that can only be mitigated by ensuring we have a balanced mix of PRS housing providers.

Balance between money and housing, the extraordinary legislative measures to somehow contain the impact on housing provision during Covid19 pandemic

Containing the Impact

The speed with which the pandemic has struck left our policy makers with no option but to implement extraordinary legislative measures to somehow contain the impact on housing provision.

Self-isolation confirmed medical diagnosis and/or a reduction in working hours or loss of employment are likely to present significant financial challenges for both landlords and tenants over the coming months.

With effect from 27 March 2020, emergency measures were introduced into law, to protect tenants during the Covid-19 emergency period.  The Act provides for amendments to the Residential Tenancies Act 2004 – 2019 that are expected to last for a period of 3 months but may be extended if the Government considers it necessary.

The legislation ensures that tenants cannot be forced to leave their rental accommodation, other than in exceptional circumstances, during the emergency period. A notice of termination cannot be served and where a notice of termination was served before the 27/03/2020, it cannot take effect until the emergency period has ended. For tenancies of less than 6 months duration, a tenant now has 28 days, increased from 14 days, to pay rent arrears due.  If the tenant and landlord are unable to agree an approach to arrears, the landlord cannot issue a notice of termination during the emergency period. Rent increases are prohibited during the period but rent decreases can be implemented.

Landlord obligations in relation to the property and the tenant remain unchanged and tenants are obliged to continue to pay rent during the emergency period.

Some of the country's largest landlords and institutional property investors have said they will support government efforts to protect tenants who are impacted by the disruption caused by the pandemic through measures such as deferral of rent payments and payment plans.

The trickle-down effect of rents not being paid would be devastating leaving some landlords unable to make mortgage payments, meet insurance costs and pay their own bills.

Smaller landlords facing potential difficulties in making loan repayments are being advised that certain banks, retail credit and credit servicing firms have introduced 3-month payment breaks on mortgages.

While tenants are expected to pay rent during this period, income support and rent supplement provided by the Department of Employment Affairs and Social Protection is available to those struggling to do so. Any rent arrears built up during the period will be payable.

Tenants are advised to contact their landlords as soon as they can to talk through delayed or partial payment options.

The legislative changes are temporary in nature, lasting for the duration of the Covid-19 crisis, after which point residential tenancies will revert to the current legislative arrangements.