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HOUSING MINISTER DARRAGH O’Brien has received government approval for the text of a bill that provides a legislative basis for tenants to have the first right of refusal when their landlord puts their rented home up for sale.
Where a notice of termination is served on the basis of that a landlord intends to sell the rented home, they are obliged under the legislation to invite the tenant to make a bid to purchase the property within 90 days.
After the 90-day period, the landlord will be obliged to invite any tenant who made an unsuccessful bid within that time to make a further bid to purchase the property at a price equal to the final sales price that the landlord is willing to agree with another party on the open market.
The landlord would be obliged to accept the matching bid from the tenant under this law.
The minister had previously promised to push the new tenant right to first refusal legislation through the Dáil last summer, having first made the commitment to bring in such rules at the time the government lifted the eviction ban.
The government said it is important to note tenants are already availing of opportunities to purchase or indeed to remain as long-term tenants in their home under the current measures which are in place such as the Tenant in Situ Scheme, the Cost Rental Tenant in Situ Scheme and the expanded First Home Scheme for Tenants who receive a Notice to Quit.
This legislation differs from the other schemes as it applies to tenants in private rented accommodation who do not receive housing supports. While other scheme largely relate to the sale of properties to local authorities.
In addition to the government approving the text of the Residential Tenancies (Amendment)(No.3) Bill 2024, the minister also published a review into the private rental sector.
Accelerating cost-rental homes
The report, published today, stated that the delivery of cost rental homes needs to be accelerated.
The review, which is a commitment under Housing for All, also recommends that government consider if Rent Pressure Zones (RPZ) should remain in place, be modified or removed.
Addressing the issue of affordability, the review found that more affordable rental solutions for households are needed.
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It noted that at present cost rental rents are set by reference to being at least 25% below market rents. However, as overall construction costs and market rents rise, the level of rents required for the scheme has risen.
“There is a need to ensure that there is a supply of cost rental properties that can continue to be accessed by households in income cohorts immediately above the income limits for social housing,” the report stated.
In most cases, cost rental accommodation is rarely below €1,000, with Sinn Féin’s Eoin Ó Broin criticising the cost of the rents, stating that they should not be dubbed ‘affordable’.
He said €1,390 for a 1-bed; €1,580 for a 2-bed; and €1,750 for a 3-bed “are not affordable rental”.
“Buying expensive turnkey units from developers is not cost rental,” he said.
The review said that there is a need to ensure lower rental costs can help recipient households access their tenure of choice, whether that means continuing to rent in the market or accruing a deposit and becoming homeowners.
Rent Pressure Zones
In addition, the review said that any examination of the RPZ system should consider whether it should remain, be modified or scrapped altogether before the scheme comes to its deadline at the end of 2025.
“A further consideration is whether the incomes of tenant households are growing relative to inflation in line with the 2% per annum cap on rent increases when HICP (Harmonised Index of Consumer Prices) is higher than this,” stated the report.
It stated it is “clear that the calibration of the Rent Pressure Zone system is imperfect in certain respects”.
The review also looked at the best balance of rights between tenants and landlords in respect of tenure security and evictions, the tax treatment of non-corporate landlords as well as the need to incentivise investment in the rental sector.
Mary Conway, chair of the Irish Property Owners Association said it rejects any proposal that tax reform for landlords should be contingent on energy upgrades or properties remaining in the market for a set time is another example of unfair, costly and conditional policies being put forward.
Further measures to provide security of tenure is also not welcomed by the association, with Conway stating that the “continuous infringement on the constitutional rights of property owners is inexcusable”.
The association welcomed the proposal that review of the RPZs should take place
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Unnecessary interference in the free market…if a tenant wants to buy the property they are renting they are welcome to make a bid. This will just delay the sales process and will just discourage landlords from selling
@Damien Leahy: you do realise that if less landlords sell properties then there will be less for potential owner occupiers to buy. Also as I mentioned in another comment if these scheme was in place when my wife and I were buying our apartment this could have delayed our purchase and cost in an additional 3k to continue renting our existing accommodation.
@Brian: knowing that it could delay the process by 3 months to begin with, then the winning bidder could lose out to the renter if the renter agrees to buy it. What happens then if the renter backs out of the purchase after all these additional delays? If a landlord was on the fence about selling this could absolutely discourage them. There is nothing stopping a tenant bidding as it is so what is the purpose of this?
@John K: Matters a fk whether the winning bidder loses out if the offer is matched by the tennant.. and winning bidders pull out for a whole host of reasons all the time .. It certainly is window dressing on behalf of this government in terms of ‘ action ‘ but my question was and still is why it would put off landlords selling.. the average time from going to market to sale agreed is 45 days anyway.. but you’re telling me that another 45 day’s on top of that.. in a process that takes on average 105 days to complete from sale agreed will put landlords off selling an asset worth hundreds of thousands/ million plus .. ? Nonsense
@John K: Yes,Thats exactly what I think…’ Will I sell my house that I’ve rented for years and make a killing in a property market now with all time high house prices? Ahhh no.. could be waiting an extra 45 days to cash in.. better not.’ Seriously? Yes its an extra layer of bureaucracy.. yes it’s a nonsense piece of legislation.. but personally, I don’t believe for one second it will put off any landlords selling. . Whether on this imaginary fence or not.. and putting it forward as a reason to be aggregious about this legislation doesn’t stack up for me.
@Brian: any piece of unnecessary interference in the market can have negative unforseen consequences, even when the intentions are good as they are in this case. If you’re unwilling to accept that one of those consequences is reduced supply they I can’t convince you. The market won’t always be at record highs, sellers won’t always be making a killing, the pros and cons of big financial decisions can often be finely balanced and these delays can influence the supply curve.
@John K: Ahhh would ya give over. You’ve clearly never owned property.. and you’re still talking nonsense at this stage. This is a measure that can be, and more than likely will be retracted in years to come. We’re talking about this housing crisis and this measure now. Don’t be waffling on about downturns in markets. You have done absolutely zero to advance your argument that this puts landlords off selling property now and for the foreseeable future. Tell me again how 45 days makes a difference in one’s financial decision to sell an asset worth possibly in excess of a million.. try not to use ‘curves’ this time..
@John K: the purpose is to stop landlords telling the tenant they’re selling, the tenant leaves, and then the sale “falls through” so the landlord puts it back up for rent, at a much higher rate.
This way, the tenant can call the landlord’s bluff. They can’t pretend to want to sell simply to get the tenant out. And if you don’t think that happens every day, I’ve a bridge to sell you.
@Cathal Murphy:
There is already a law to stop that.
If a landlord uses a wish to sell reason to vacate a house he/she has to sign an affidavit in front of a justice of the peace to say they will sell within 9 months, if the don’t the tenant is entitled to reclaim the property at the original rent.
This law will not improve a tenants position in any way
If a tenant wants to buy the house they are living in if it’s up for sale… Let them bid like everyone else.. that’s nothing new… Putting a 90 day clause just drags out the sale and discourages other prospective purchasers . What a waste of time and energy by the government underpinning this….
Just more political optics than will have almost zero affect on the housing situation.
I have been working in the rental sector on and off for 30 years and in that time I have come across one case of tenants approaching the landlord to buy the house.
They can fanny around with the regulations all they want the only thing that will make any difference is building more houses.
And that’s not going to happen because we don’t have the builders.
The housing crisis will last at least another decade probably more REGARDLESS of who is in government.
It wont solve the problem because it is not the cause of the problem.
The cause of the problem is that we have unlimited immigration from the EU.
That means that any of 500 odd million people can hop on a plane and come to live here, and do so within 24 hours.
Whereas it takes years to plan and deliver infrastructure.
Until such times as we can limit the number of people that can come to live here, there can never be proper planning on the first place.
We used to have this thing called a census, which informed the state of the numbers of people here, and the changes in demogrpahics which, in turn, allowed the state to plan.
To plan future needs for education, health care, transport, housing, and so on.
There is no possibility of being able to plan anything when you do not know how many people will be here next month, never mind next year, or in 5 years time.
@Tom O’ Donnell: Are you really trying to ignore what is the clear cause of the housing problem by claiming that any previous problems did not have the same cause, so that can’t be the cause this time?
That’s like saying that because a person didn’t have a heart condition that caused their previous health problem so it can’t be a heart conditions this time.
So instead of avoiding the obvious, instead of pretending that the sudden and continuous increase in population is the cause of our housing problem – now AND in the past – how about accepting the reality.
@ItWasLikeThatWhenIGotHere:
There most certainly is not plenty of builders, have you tried to get a plumber, electrician etc lately?
Or maybe you are a tradesman desperate to maintain the enormous jump in labour costs associated with building at the moment.
We are building 30,000 units per year at the moment, but we could build 90,000 20 years ago, how come? Because we imported 150,000 to 200,000 builders from eastern Europe.
The only way we could quickly solve the housing crisis would be massive immigration of builders from china, southeast Asia or Africa.
Not much chance of that I think you would agree.
So, everyone should just get used to rents of €3,000 per month in Dublin, it’s not going to change.
@P. J.: So you think we should increase the population more, in order to build more?
When that increase would require even more building to house them?
That’s a pyramid scheme.
Which always collapses.
The reason we had a housing bubble back in the 2000′s was that our population suddenly increased, and increased enormously, and we could not cope. So more builders came. Who needed more building, Which needed more builders…
We were fine until that sudden huge disproportionate population increase.
And yes, there are plenty of builders, if we could control immigration.
When we cannot control immigration, then we can have a situation where there can never be enough builders. For we can never know how many will be here next year, or in 2 years time, or any time.
All this immigration suits business interests. It increases demand for their products and services, which pushes prices up, which increases profits.
It suits business interests because it puts downward pressure on wages, increasing profits.
This suits right-wing business-first governments and political parties.
But those here – both Irish born and immigrant – suffer as a result.
Not least because of the housing crisis, but also because of the effects on education, health care, transport and all other infrastructure related areas.
And you’re right – this will not change. There will be another bust out of this boom.
And the people that remain here will have to pick up the tab again. And pay yet again in much pain and suffering.
On top of the pain and suffering we are experiencing now.
It will not change, unless and until we gain control on immigration levels.
Unless we can limit immigration to levels that out infrastructure can support, and we can get back to a situation where we can actually plan infrastructure again.
Like we used to do.
When we had no crises in housing, in education…
There are plenty of builders here.
But only if we put controls back on immigration until our infrastructure has caught up with the numbers here.
If we do not put controls back on immigration, there will never be enough builders.
@ItWasLikeThatWhenIGotHere: when was this glorious time when education and health were not under pressure?
In the 70s, there were 40 kids in my class in primary. Several classes were housed in prefabs – for years. 80s: unemployment and crime were rife – house breakings, joy riding. 90s: massive A&E waiting times and GP lists full. No minimum wage. Institutional child abuse. Church oppression. Widespread political corruption. Mother and baby homes. Smog. Acceptance of marital rape.
I don’t remember this Utopia you speak of.
Property prices aside, almost everything is better for almost everyone, now, despite all the crying from some.
@Dominic Leleu: What ??? Vote for a party that wants to spend 20 Billion a year for united Ireland that only they want… No one else wants the shite that goes on up there…..
Prioritise homeownership, not landlordism. End redistribution of wealth with tenants paying for the landlords’ mortgage but the house get transferred to an idle landlord.
@9QRixo8H: renting suits people in certain situations. Me and my wife were more than happy to rent an apartment as we were living in a new city. In 2019 we were then fortunate to be in a position to buy another apartment to live in, this new legislation could have delayed the process 3 months and cost us an additional 3k to continue renting if we had to wait for the existing tenants to s##t or get off the pot.
Doubtful it’s a problem to vast majority who are struggling to keep paying the rent never mind trying to attempt to even buy it. I personally know of someone who’s about to not have they’re lease renewed with 2 kids working full time terrified of what lies ahead can’t get anywhere to rent whatsoever.
Landlord just claim property for yourself first, let tenant move on, then sell to highest bidder without asking a tenant to top it. What an unnessary nonsense.
@smatrix mantra:
In order to claim it back for themselves a landlord has to sign a legal affidavit that they, or their family members are going to live in it for at least 12 months.
Any attempt to sell it in that time would allow the original tenant the right to reclaim the tenancy, or thousands in compensation along with fines from the RTB
These “epileptic corpse” policies have to stop, this is another underpants on the balcony/tenants right to have a pet nonsense. Anyone not completely disabled between the ages of 18 – 60 should be mobilised, up skilled and paid to build houses and work in building supply manufacturing. Anyone that’s not been employed for more than five years should be housed outside of the major city and large towns. According to certain elements in Coolock were about to have 500 able bodied men shagging they’re women (like these lads haven’t suffered enough). Use the labour.
@Mark Anthony Savage: This was extremely effective in America in the past. Large numbers of workers were imported, forced to live in cramped, shared conditions, and made to perform unpaid labour while not being allowed to get a job or home. It was a very fast way of making a lot of money from sugar plantations, and as everyone knows, it was completely okay because the people were brown so they didn’t really deserve any better.
@S C.: The only difference being here that they’d be paid, free to not work and not be paid and free to go home whenever they chose. Apart from that it’s completely the same.
@Oliver Cleary: If the tenant was in a position to buy they’d have done it. It’s highly unlikely that anyone in the situation of pending eviction that “oh yeah I forgot to apply for a mortgage!” This needs to backed up with a state mortgage scheme for lower income households the banks won’t touch.
It’s a muck for brains rule written in a kneejerk space by someone with no grasp of commercial reality. As it stands, If the tenant wants to buy and has proof of funds, they can. Just bid the same as anyone else. This rule will make a mess of the sales process. Buyers who are not the tenant won’t know where they stand and will shy away from these scenarios effectively reducing the value of the properties affected. (Taking value from the property owner by legislation. Constituional??) It’s yet another dumb move that disincentvises anyone with funds from buying a property and supplying our under supplied rental sector.
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