From an imagined post-2020 perspective, barrister and co-founder of New Beginning, Vincent P Martin, considers how the looming mortgage crisis in Ireland might result in major change to the law in respect to home ownership rights in the near future. In interview with James Heaney.
This is the second in a series of semi-serious articles which will see experts involved in different areas of Irish life contemplate how issues of current controversy might develop in ‘the coming times’.
ON THIS DAY in the year 2020, new legislation providing much-needed relief for Irish mortgage holders facing repossession proceedings on their family home was signed into law. The Principal Dwellings Protection Act 2020, stated that “the eviction of a person from their primary residence solely due to an inability to fulfil the financial terms of their mortgage contract was in breach of that individual’s right to privacy, respect, and safety, and was disproportionately cruel, and unenforceable.”
As a consequence, the vast majority of all new standard terms and conditions of mortgage agreements had to reflect this very different position and it is now only in exceptional circumstances that a borrower and lenders could ‘contract out’ to include an expressed provision for the right to repossess and sell a family home (solely as a result of genuine payment default). This new legislation represented a landmark in Irish and European law. For the first time, lenders were deprived from enforcing their heretofore ultimate legal sanction of family home eviction in cases where alternative suitable accommodation was not available.
The Principal Dwellings Protection Act came about in response to the Irish mortgage crisis of the preceding years, and resulted from the development of Irish caselaw, pressure from a range of advocacy groups and, finally, due to EU directives in the area of housing rights.
The politically explosive issue of repossessions
Following Ireland’s emergence from the EU/IMF bailout programme in late 2013, a number of economic commentators and regulatory bodies were warning that the country’s deepening mortgage crisis was threatening to derail its tentative economic recovery and raising serious questions about the health of its banks. As early as 2012 Taoiseach Enda Kenny TD had remarked that “There is probably no time, since the Land War, when the Irish people have felt so stressed, so anxious about their home and their family’s future security.”
The politically explosive issue of repossessions was at the heart of this crisis. In December 2013, the ratings agency Fitch reported that, based on the information being supplied by the Irish banks, it expected that up to 26,000 Irish houses could be repossessed in the coming years. In January 2014, a spokesperson from the advocacy group, New Beginning, suggested “bankruptcy petitons by Irish homeowners could reach as high as 15,000-20,000 in the next couple of years. The stigma associated with bankruptcy in Ireland is slowly but surely dissipating.” The New Beginning prediction, considered alarming by some at the time was, by 2018, shown to be conservative.
As part of its commitment to the Troika, the government set up an Expert Group on Repossessions to advise it on how it might make the legalities around repossessions of properties in arrears “more efficient and less frustrating for the parties” involved.
The sharp rise in house repossessions that occurred in Ireland following the implementation of the recommendations of this expert group, coupled with legislation which removed restrictions on the repossession of homes (following the Dunne Judgement of 2009), did not resolve the mortgage-crisis – indeed, many historians maintain it only served to exacerbate it.
As well as placing further strain on the already stretched social welfare resources of the State, and especially on housing waiting lists, which had topped 150,000 by 2015, it caused panic among householders struggling to continue to make repayments on their mortgages. The prospect of repossession is often cited as one of the main factors behind the avalanche of bankruptcies which the country witnessed between 2014 and 2017. Although the majority of persons adjudicated bankrupt managed to save their family homes, a significant number were not.
Resistance to the repossessions
The 2017-20 period saw a range of social, legal and political groupings come together to orchestrate effective resistance to the repossessions. The issue of homeownership came to dominate political discourse in the country, prompting a fundamental re-think of the concept of the house-ownership and the rights of home-owners.
This period also saw an increase in the kind of anti-eviction activism that first emerged in 2014. In September 2019, a bench warrant was issued for the arrest of prominent activist, Michelle Davitt BL who, it was ordered, should be brought before the High Court to answer claims that she was in contempt of court orders not to trespass, interfere, or occupy a range of dwellings which had had judgements made against them. In her defence, the unrepentant barrister described evictions (in the absence of alternative accommodation) as,
… the callous expression of the power of profit and of property over the right of a family to live a decent existence. It is social tyranny in its worst form, and a challenge to every human feeling. I say on my own behalf and on behalf of the Irish homeowners whom I represent, hopefully, confidently, fearlessly – Fiat justitia ruat caelum: Let justice be done though the heavens fall.
The Davitt contempt of court trial was overtaken by directives from the European Court of Human Rights. The European Court issued its directive on the 21 January 2020. Drawing on the findings of a report by the Irish law lecturer, Dr Pádraic McKenna (NUI Galway) into the effects of evictions across the EU, and the collision between market forces and the issue of housing rights in such cases, the Court ruled that the majority of evictions being carried out in Ireland under harsh repossession laws were inherently unjust and in violation of EU consumer protection laws, and the EU Charter of Fundamental Rights, article 34(3) of which states:
In order to combat social exclusion and poverty, the Union recognises and respects the right to social and housing assistance so as to ensure a decent existence for all those who lack sufficient resources.
It was this directive which led to the change of law in Ireland, and the passing into law of the landmark Principal Dwellings Protection Act of 2020.
Vincent P Martin is a barrister and co-founder of New Beginning, an advocacy group founded to campaign for Ireland’s recovery and seeks to find a fair and sustainable solution to the problem of over-indebtedness.