Landlords have threatened a revolt against Simon Coveney’s rent caps by introducing new charges for tenants and withdrawing from state-sponsored rental schemes.
The Irish Property Owners Association has said its members are “seriously considering” implementing a non-refundable key handover payment, service charges and registration and car parking fees in addition to asking renters to contribute to property tax. The IPOA, which has 5,000 members, has sought legal advice and claimed that introducing controls on rent was unconstitutional.
“Property owners are now contemplating their strategy for the future,” it said, before claiming that landlords were “the victims of the newest onslaught” on the housing sector.
After another chaotic day in Leinster House yesterday, the government just managed to get the rent control bill through the Dail before the Christmas break after working through 117 amendments. Mr Coveney, the housing minister, is anxious to pass the legislation quickly in a bid to prevent landlords from being able to raise prices in anticipation of any rent caps. It will go before the Seanad next week.
A 4 per cent yearly cap on increases is planned for Cork and Dublin. After terse talks with Fianna Fail put the bill in danger this week, Mr Coveney committed to an examination of whether Waterford, Limerick, Galway and the four commuter counties around Dublin could meet the criteria to become “rent pressure zones”, with high and rising rents, where the limit would also apply.
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New and substantially refurbished properties would be exempt from the cap, and the pressure zone designation could be lifted if market conditions improved. The Housing Agency, in consultation with the relevant local authority, would propose pressure zones and Mr Coveney would then ask the Residential Tenancies Board to prepare a report based on the local rent price data before the designation could be approved. The legislation was passed last night by 52 votes to 43, with Fianna Fail abstaining.
The IPOA said the measures were “so severe that rents will not cover costs and devaluation of property will be significant, all adding to the exit of the investor”.
“It is notable that the government and those demanding change are oblivious to the huge burden that all these measures will have on the tenants and the loss of supply,” the association added.
Fianna Fail called on Mr Coveney yesterday to meet the group as soon as possible and to consult with the Competition Authority on the IPOA’s plans to increase charges urgently.
In the Dail yesterday Thomas Byrne, the Fianna Fail TD for Meath East, questioned Mr Coveney on whether the legislation already covered increases to charges. “There are loopholes that have already been identified. Minister, these must be shut down as soon as possible,” he said.
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Mr Coveney acknowledged that landlords were not pleased with him. “A number of people have described this [bill] as some kind of pro-landlord strategy. It doesn’t look like the landlords are too happy to me. I’m not saying that as a good or a bad thing. I’m just saying we’re trying to get the balance right here,” he said.
The government had proposed an amendment which meant that when a commercial landlord wanted to sell at least 20 houses on one site, all of the existing tenants would have the right to remain in their homes. Fianna Fail had tried to reduce the number to 5, but last night Mr Coveney said he was setting the limit at 10 on legal advice.
The amendment has been referred to as the Tyrrelstown amendment after families in Cruise Park in Tyrrelstown were told to leave their homes after a fund owning a large section of the estate decided to sell.
The government faced embarrassment on Thursday after it was discovered that the original bill could allow landlords to increase rent by 8 per cent in certain circumstances. Mr Coveney had tried to quickly amend the bill on Thursday night but was criticised by Sinn Fein, who claimed that rushing the legislation was causing mistakes.
Officials from Mr Coveney’s department worked late on Thursday night to re-draft the legislation and sought the attorney-general’s advice before bringing a new amendment to the Dail yesterday.