I live and currently have a property in Dublin that is let to long-term tenants. My daughter may be moving to Dublin next year and certainly I would plan to live there for at least half the year following my retirement in four years’ time, but I am a bit concerned about potential changes in housing policies if there is a change of Government that would make retaking possession of my house difficult.
Should I sell now, before the next election, invest in a smaller property in the future to guarantee I will have somewhere to live when I retire?
Ms B.F.
I’m slightly confused about your situation. You say you live and also have a property in Dublin that is let to long-term tenants. You then worry about getting possession of this house in the future. I am going to assume that, for whatever reason, you have let out the one property you own and that you are renting elsewhere.
You also have two separate and distinct looming issues. First your daughter may be coming to Dublin next year with, presumably, a need for accommodation. Second, when you retire in a number of years time, you would like to live in this property for at least some of the year.
Your decision not to live in this property at the moment appears to be by choice rather than economic necessity, not least because you feel you will be able to afford the costs involved in occupying the property in retirement even though you might spend up to half of the year elsewhere. That’s not a judgment but it does suggest you have more discretion in the choice you make about this property than other people in similar circumstances might have.
As the property is in Dublin, you are constrained by Rent Pressure Zone rules to increase the annual rent by no more than the lower of the current rate of inflation or 2 per cent. Given the current rate of inflation is a multiple of the alternative, you are limited to annual increases in rent of just 2 per cent.
And given the tenants are, by your own description, long term occupants of the property, they properly have rights.
I’m assuming your tenants moved in before June 10th last year, in which case they have the right to stay in occupation for six years except in limited circumstances. For those who moved in after June 10th last, the rules have changed and, after the first six months of the tenancy, they have an indefinite right to live there outside the limited grounds for termination.
[ What happens if we refuse to pay our rent?Opens in new window ]
Those grounds, as we have mentioned recently, include you needing the property to house yourself or a family member – such as your daughter.
Other grounds to ask your tenants to leave include that you plan to sell the property over the following nine months, that you plan to substantially refurbish the property, that the tenants are not meeting their obligations – for instance, by not paying the rent, that it no longer suits their needs perhaps because they are a growing family, or that you plan to change the use of the property.
Government is coming under pressure to extend the ban, especially for those who might be vulnerable from March, with homeless activists such Fr Peter McVerry looking for it to be extended for two or three years
In your case, assuming these are good tenants, you appear to be relying on family use or intention to sell as the reasons to end a tenancy.
There is a strict protocol for issuing notice of termination. The notice must be in writing and copied to the Residential Tenancies Board (RTB). It must give the termination date (subject to the notice periods below), clarify that they have the entirety of that 24-hour period to vacate, state the grounds for termination and be signed by yourself or your agent. It also must include the date the notice is issued.
Depending on the grounds relied on, there may be other specific information required: for instance, if you want the property back to house yourself or your daughter you will to say so and include your/her name in the notice.
Finally, you’ll need to let them know they have 90 days to contest the validity of the notice with the RTB.
The amount of notice you’re required to give depends on how long the tenant has been in situ. After the more flexible initial six month period, it jumps to 152 days – essentially five months. If the tenants are there more than a year, that jumps to 180 days (six months) and to 196 days after seven years. If they have been in your property for over eight years, you’ll need to give 224 days notice – so, somewhere between five and seven and a half months notice depending on the length of their tenancy.
Of perhaps greater concern to you is the current ban on evictions. Alongside the tighter rent controls – where potential rent increases are now just a fraction of the rate of inflation – this has put the wind up many landlords. Recent figures from the Society of Chartered Surveyors Ireland said that landlords selling properties accounted for 40 per cent of Irish home sales towards the end of last year. And we all know the difficulty in finding a property to rent with few available at the moment.
As of now you can still issue notices of termination but they will only take effect once the winter eviction ban that was introduced last October runs out.
The ban was put in place under unusual temporary legislation – the Residential Tenancies (Deferment of Termination Dates of Certain Tenancies) Act 2022 – which the Government enacted due to what it recognised as “ongoing, acute supply constraints in the residential rental sector” and an expected increase in homelessness presentations over the winter. It came into force on October 29th.
The length of the ban depends on the length of tenancy and when any notice of termination was issued but in some cases, it runs to mid-June.
Unsurprisingly, with continuing high figures for people who are homeless, the Government is coming under pressure to extend the ban, especially for those who might be vulnerable from March, with homeless activists such Fr Peter McVerry looking for it to be extended for two or three years.
If the current Government accepts the necessity for limited eviction bans, the next Government is likely, if anything, to be more open to the use of such social policy instruments
While the Irish Constitution does expressly protect the right to private property, Article 43.2 does accept that it can be regulated in the principles of social just and provides that “the State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good”.
Of course, the current ban comes shortly after a similar ban on evictions on public health grounds during the Covid pandemic.
With a general election looming in 2025 and the real prospect on the basis of current opinion polls of a significant change of Government, it is easy to see why landlords might be nervous. Sinn Féin have been vocal in calling for more dramatic measures to address the Irish housing crisis.
What will they do? That’s impossible to say at this remove but if they do form part of the next Government as polls suggest, it is more likely to be in Coalition which means a necessary blunting on individual party policies.
But the current and recent eviction bans do give some insight into political thinking. If the current Government accepts the necessity for limited eviction bans, the next Government is likely, if anything, to be more open to the use of such social policy instruments. While the Covid pandemic was a once in a generation event, the more recent eviction ban is down to the continuing failure of housing policy to deliver sufficient accommodation for the varying needs of a growing population. That has made a precedent of the existing eviction ban, making any repeat of such policy in the future an easier ask for Government.
As we know from existing housing completions against expected housing need – and more worryingly falling planning applications and commencements – the current housing crisis looks set to continue into the lifetime of the next Government at least.
Legal interpretation of the Constitutional position and eviction bans has, to date, suggested that such policies would survive legal challenge because of their temporary nature. But we do not know for sure because no case has yet been taken.
I would expect repeated eviction bans will inevitably see such a challenge materialise, especially is the length of such “temporary bans” is extended significantly. Only then will we get some sense on the limits to such Government policy. In the meantime, I think you will have to accept that further eviction bans are possible, even likely.
From your own perspective, as best as I can ascertain, you have decided to let out this property because it is too big for you living by yourself and it can generate regular income for you that more than meets the cost of renting elsewhere even after all taxes and expenses.
If so, to some degree that answers your initial question. If it gives you greater peace of mind and if you are likely to need access to the property as early as next year for your daughter or within four years for yourself, now seems to be the right time to consider what your longer-term housing requirements are, not least as finding the sort of property that would suit you in any decision to downsize will take time.
You can dip a toe in that water and see what is out there in areas where you want to live before making a final decision. The logic of any decision to downsize would be for you to live there as owner occupier from the outset rather than simply replacing your current property and renting the new one out, as that would simply leave you in the same position as now.
