We use Google Analytics to see which pages are read and how the site is used, so we know what to improve. This only runs if you accept. See our privacy notice for details.

Dáil
‹ Ceisteanna ó Cheannairí - Leaders' Questions

Fair Deal and rental reform

Summary

Deputy O'Flynn said rental reforms and the Fair Deal scheme could create unintended consequences for family homes and vacant properties. Minister Burke said the issue should be considered under Fair Deal legislation and stressed that policy should not undermine vacancy and dereliction incentives.

The stated purpose of the Government rental reform package, including a six-year minimum tenancy to give tenants security and certainty, is something that we in Independent Ireland very much support. However, these measures now have produced seriously undermining consequences for families dealing with homes tied up in the fair deal nursing home scheme. Under the fair deal scheme, a loan secured on the family home generally has to be repaid within a one-year process. That would be the standard up and down the country dealing with nursing homes and the fair deal scheme in general. The practice is often required that they have to sell the property to pay for the bills that are there for the fair deal patient.

The new requirements under the new laws that the Government has brought in that offer a six-year tenancy directly conflict on some occasions with the obligations placed on the executors and executrices of these wills. It puts them in impossible illegal and legal positions. The executors have a duty to repay debts, administer estates promptly and protect asset values for the benefit of the beneficiaries. While it is technically possible to sell those properties that have a tenant in situ in that timeframe, it often reduces the sale price of the property and undermines the duty of, and conflicts with the burden that is on, the executor or executrix. The Government has accepted that these reforms will change landlord behaviour. We welcome that but, in these cases, there is probably something that we did not look at or did not think about.

In the case of families who are having to choose, they are in a situation where they are leaving the homes vacant rather than renting them out, which runs against the entire housing supply goals. These are the goals that were set up by the Government. Will the Government commit to reviewing the conflict and providing a targeted exemption or flexibility where property must be sold or repaid under a fair deal loan and settlement to allow the executors and executrices of those estates to administer within the law?

Comment on this

I thank the Deputy for raising this very important matter. It is a priority of the Government to get as many rentals as possible, cost rental and indeed in the private rental market, particularly those mom and pop landlords who have one and two houses, of whom there are about 85% in terms of those who have the market share. It is critical for a functioning economy that we bring in further supply into rental accommodation which is so important. That is why we have also been supporting renters by increasing the rental tax credit. This is critical to assist them and ensure that 320,000 people who are renting get that key support. If renters are jointly assessed, they get €2,000. It is so important that would continue.

In relation to the changes that the Deputy mentioned, I understand that the Bill is coming before the House shortly. It is critical that if there are any issues or unintended consequences, we can put forward amendments in relation to that. The pre-legislative scrutiny report has concluded. That is being presented to the Minister and the Department. They will take into consideration some of the issues that have been raised by the Deputy and at the committee. It is important that we look at how we can get more rental properties into the market. That has to be the first objective here. Second, how do we protect those who are vulnerable and renting in our economy and ensure that we have and continue to have the security of tenure that we have done over this current Government? This is key to ensure that people have that certainty in the rental market. That is why there are so many forms of cost rental of rental options now which are critical for renters.

As the Bill comes forward, it will be up to the House to scrutinise it. The pre-legislative scrutiny report from the Oireachtas joint committee will also provide recommendations to the Minister. The Minister of State, Deputy Cummins, is working very hard on it. There was strong collaboration with all the bodies in this sector in trying to ensure that there are no unintended consequences and that we get those key rental properties into the marketplace. This has been a challenge, if we are being honest, over the past number of years because of either the regulatory burden or the supply issue. That is what we are committed to resolving.

Comment on this

I thank the Minister for his reply. It is fair. There was no intention from anyone in any place to say that this was just overlooked. We in Independent Ireland will be tabling a couple of amendments when the legislation hits the floor. I am quite happy to meet with the Minister of State, Deputy Cummins, about this and bring to him a small delegation who have a number of concerns about the fair deal scheme. There are an awful lot of houses in Ireland that are sitting idle at the moment under the fair deal scheme that people are not renting out because of the situation. They are anticipating situations like this that are not currently being looked at in the legislation. Roughly 8,000 houses around the country are currently vacant due to the fair deal scheme.

Comment on this

The fair deal scheme has its own primary legislation that underpins it. Any unintended consequences can be looked at through that prism. We absolutely do not want any policy that would go against the Government's incentivisation with regard to dereliction and vacancy. One can see the very significant moves we have made by bringing 20,000 homes back into use, supported by the vacant property refurbishment grant. We can see the extensions of that, particularly for over-the-shop living and through the croí cónaithe scheme where people can get a grant to bring a derelict property back into use, as well as grants from the SEAI. There is €100,000 collectively between both grants to bring derelict properties back into use. For those who are in a situation where they are embarking on drawing down the fair deal scheme, we will also have to look and ensure that we do not see properties vacant for a long time. We have to respect the wishes of relatives too. This is very important in that process. We will work with the House in the context of the pre-legislative scrutiny report and when the legislation comes before the Dáil.

Comment on this