Rent Controlled Lettings
The Rent Restriction Act was introduced as a temporary measure during the First World War. Various later Acts changed the scope of cover. By the mid-1960s, a significant proportion of all rented accommodation was subject to rent control. Legislation in 1960 and 1966 limited the scope of coverage for new lettings and some property was decontrolled. New leases after the stage, were subject to open market rent.
By the late 1970s, only dwellings below certain rateable valuation levels, let on certain conditions prior to certain dates, generally, 1960 and 1966, were restricted by the legislation. Following the enormous inflation of the 1970s, rents were commonly a fraction of the market value, perhaps no more than 10 or 20%. Lettings which were covered by the legislation were subject to rents, which were already frozen at controlled 1960s level.
In two related constitutional cases in 1980, Blake v AG and Madigan v AG, the Rent Restriction Acts then in force, were found unconstitutional. This was largely on account of the arbitrary effect of the legislation as it then applied. The principle of rent control in itself was not unconstitutional. Overnight, rent protected tenancies, lost both the security of tenure and low rents, on which the tenant had come to rely on.
An emergency Bill was passed by the Oireachtas, which provided, that during a five year period, the landlord would receive a percentage of the market rent. This Bill was referred by the President to the Supreme Court and found to be unconstitutional. A new act, the Housing (Private Rented Dwellings) Act 1982 was introduced. It was amended in 1983 to establish the Rent Tribunal in substitution for the District Court as the principal arbiter under the legislation.
Dwellings still controlled under the legislation are limited to certain tenancies which have been continuously let for almost 50 or more years and they accordingly represent a dwindling percentage of the entire housing stock. The tenants are often older, vulnerable persons.
Scope of Legislation
The Housing (Private Rented Dwelling) Act applies to properties which were protected and subject to rent control under the pre-existing legislation. The use must be residential. It covers a dwelling, which may be a house or flat. It includes the curtilage of the dwelling. The protection of the Acts does not apply if the tenant sublets or assigns the tenancy.
The house or flat must have been let as a separate dwelling. The tenant must have exclusive occupation of the property. The legislation also applies where facilities are shared with others.
The legislation applies to property built before 1941. It covers the conversion of existing premises after this date.
The dwelling must have been below certain rateable valuations, on certain dates. (Rates have applied to domestic residential properties before 1978 and each property was subject to rateable valuation. The rateable valuation figures varied slightly, between Dublin City and the rest of the country. There are different rateable valuation thresholds, depending on whether the unit is a house, a separate or self-contained flat or other dwellings.
Certain categories of letting are excluded from the legislation. Houses provided by the Local Authorities are excluded. The legislation does not apply where Housing Authorities takeover unfit houses following a repair notice, demolition notice or repair order.
Furnished lettings were removed from rent restriction in the 1960s. Also excluded were those where the rent included payment for services such as heating and electricity unless the part of the rent attributable to the dwelling was equal to our exceeded three-quarters of the total rent. Lettings in connection with any office, service or employment were excluded.
Security of Tenure
Where the legislation applies, the tenant is entitled to security of tenure, subject to payment of rent and compliance with the terms of his lease. The entitlement is generally personal to the original tenant. Persons residing with the original tenant were entitled to succeed to the tenancy during a 20 year period, commencing in 1982.
The landlord’s grounds of recovery of possession are extremely limited. The court may order possession if it determines that it is reasonable to do so, provided one of the limited potential grounds of recovery are available. Non-payment of rent or a material breach of the tenancy, are potential bases for recovery. Nuisance, deterioration of the condition of the property, due to the neglect and default of the tenant are also potential grounds. Unless the breach is serious and continuous, the court will not grant possession.
The landlord may seek possession of the property, if he bona fide requires it as a residence for himself or for a person residing with him or if it is required in the interest of good estate management. In these cases, the landlord must pay reasonable compensation to meet tenants’ expenses on leaving and a sum up to three years’ rent for alternative accommodation to meet the residential needs of the tenant, his spouse and family.
Prior to the Residential Tenancy Act 2004, residential tenants who did not qualify for protection under the 1982 Act, only qualified for protection after 20 continuous years of occupation as a tenant. In this case, they were entitled to new leases of between 5 and 25 years in much the same way as under a business lease (where a shorter five year qualification period applies). The 2004 Act provided that the right to claim a new lease ceased after five years (1st, September 2009).
Terms and Conditions of Tenancy
The terms and conditions of letting are set by the Rent Tribunal. Commonly, the Tribunal places responsibility for the structure on the landlord. This may be onerous, as the rent may not be at an economic level so that the landlord has little incentive to incur expenditure.
In default of agreement between landlord and tenant, either may apply to the Rent Tribunal to have the rent determined. This is a separate entity to the PRTB established under the Modern Residential Letting Legislation. The rent is not the market rent. It is the so-called “gross” rent, reduced by improvements.
The “gross” rent takes account of the means of the parties. It is defined as the just and proper rent, having regard to the
- nature character and location of the dwelling-house; the other terms of the tenancy
- the means of the landlord and tenant
- the date of purchase of the dwelling by the landlord
- the amount paid
- the length of the tenant’s occupancy and
- the number and ages of the tenant’s family.
An application may be made to the Rent Tribunal (now the Tenancy Tribunal) for rent review every four year nine months.
The effect of the legislation was to significantly increase the pre-existing rent levels. A special social welfare rent allowance scheme was introduced, which has subsisted since, for the benefit of a tenant. It is means tested, to a point. Broadly speaking, it covers the bulk of the increase relative to the 1979 rent, subject to a means test.
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