Notice terminating lease on family home deemed invalid

A receiver’s notice terminating a family’s tenancy of the rented Co Dublin house where they had lived for ten years was not valid, the High Court has ruled.

The house was sold within weeks of expiry of the notice.

Ms Justice Marie Baker found, because the notice failed to specifically state the receiver intended to conclude a contract to sell the property within three months of termination, it did not meet the requirements of the Residential Tenancies Act 2004.

A mere intention to sell was not sufficient to terminate, she ruled.

On those grounds, she quashed the June 2015 finding of a tribunal of the Private Residential Tenancies Board (PRTB) that the notice served in June 2014 on Louis Hennessy for his tenancy to terminate in October 2014 was valid. Final orders in the case will be made later.

The notice related to a rented house at Capard, Bray Road, Cabinteely, which was home to Mr Hennessy, his wife and their children since 2006.

It was served by John McStay, appointed receiver in 2011 over certain assets of Durkan Homes (in receivership), including the Cabinteely property.

Ms Justice Baker noted the receiver previously in June 2012 served a notice of termination on Mr Hennessy stating he intended to sell the property.

A PRTB adjudicator found that notice invalid because it did not state the intention to sell within three months of termination.

Mr Hennessy entered into a new letting of the house in April 2013. A second termination notice was served in June 2014 in broadly identical terms to the first notice. After a PRTB tribunal upheld a PRTB adjudicator’s finding the second notice was valid, Mr Hennessy appealed to the High Court.

The judge said Mr Hennessy’s appeal involved a question of pure law – whether the disputed notice complied with relevant provisions of the 2004 Act.

She said a person holding a “Part 4” tenancy under the Act (a tenancy of more than six months ) cannot have their tenancy terminated unless the relevant reason is cited in the notice of termination.

In this case, the notice stated vacant possession was required as the receiver intended to sell the property, she said. The property was later sold in December 2014, she noted.

The judge said Section 62 of the 2004 Act means, where a tenancy exceeds six months, a termination notice must state the reason for termination. That reason must be one of the six reasons for termination identified in Section 34 of the Act, which reasons included intention to sell.

When a notice intends to terminate a Part 4 tenancy, it must comply both with Section 62 and 34, she stressed. Where a notice was being terminated because of intention to sell, that reason must be stated. The intention must also be to enter into a binding contract within three months of termination.

She did not consider the Oireachtas intended to permit termination of a Part 4 tenancy merely in anticipation of the commencement of the sale or advertising process, the judge said. While not saying there had to be an identified sale, there must be more than an intention to sell.

For those reasons, the PRTB tribunal’s decision was incorrect and she would allow the appeal, the judge ruled.