Real Estate
RESIDENTIAL LANDLORD AND TENANT
Rent Pressure Zone (RPZ) Designation
The following have been designated as RPZs under the Residential Tenancies Acts from 31 August 2023 to 31 December 2024:
· Local Electoral Area of Ennis (see S.I. No. 430 of 2023);
· Administrative Area of Kilkenny County Council (see S.I. No. 431 of 2023);
· Administrative Area of Limerick City and County Council (see S.I. No. 432 of 2023); and
· Administrative Area of Waterford City and County Council (see S.I. No. 433 of 2023).
Terminating Residential Tenancies on Anti-Social Behaviour Grounds
In Iyaba v Residential Tenancies Board [2023] IEHC 491, the High Court interpreted certain terms in the Residential Tenancies Acts in the context of the purported termination of a tenancy on the grounds of breach by the tenant of their obligation not to allow anti-social behaviour in the vicinity of the dwelling.
The judgment clarifies the circumstances in which a tenant can be said to have “allowed” anti-social behaviour to occur in the “vicinity” of the dwelling so as to justify termination of the tenancy.
In allowing the appeal, the High Court found that the Tenancy Tribunal had erred in its interpretation of the word “allow” in Section 16(h) RTA by equating “allow” with “not preventing the act in question”. Rather, the High Court held that the term “allow” presupposes that a tenant has “actual or constructive knowledge of behaviour of the other person”. Only then does the obligation arise for the tenant to take reasonable steps to prevent the occurrence of the anti-social behaviour.
By contrast, Simons J upheld the finding of the Tenancy Tribunal that the location of the incident in a house in the same housing estate as the tenant’s dwelling fell within the meaning of being “in the vicinity of” the dwelling. The High Court interpreted “in the vicinity of” as having the same meaning as “in the neighbourhood of”.
No RTB Jurisdiction to Determine if a Valid Tenancy Exists
In Anderson v Fitzgerald [2023] IEHC 309, the High Court held that the RTB does not have jurisdiction to determine whether a valid tenancy existed in possession proceedings and, as such, refused an application by a defendant to adjourn the proceedings until the RTB made a determination on the tenancy dispute.
Simons J pointed out that the RTB’s jurisdiction related only to matters concerning a valid tenancy. Accordingly, it is a pre-condition of the RTB’s jurisdiction that such a tenancy exists or has existed (so that the dispute relates to whether the valid tenancy was properly terminated).
The case involved consideration of the effect of a negative pledge clause in the mortgage deed, whether a tenancy by estoppel may have arisen and also involved the interests of third parties outside any landlord and tenant relationship, such as those of the lender. There was, therefore, no question of the High Court having to cede jurisdiction to the RTB and so no basis for adjourning the High Court proceedings.
“The Housing Agency is seeking proposals from interested parties for the provision of 1,000 homes through a Targeted Leasing Initiative with local authorities to provide accommodation for households eligible for social housing support. The objective is to deliver better value for money for the State than existing standard leasing.”
HOUSING
New Secure Tenancy Affordable Rental (STAR) Investment Scheme and New Income Eligibility Limits for Cost Rental Schemes
The Minister for Housing, Local Government and Heritage, Darragh O’Brien TD and the Chief Executive of The Housing Agency, Bob Jordan, launched the new Secure Tenancy Affordable Rental (STAR) investment scheme last month.
The Scheme aims to invest up to €750m in the delivery of over 4,000 cost rental homes, which will benefit from secure tenancies under cost rental housing legislation and will be let at a minimum of 25% below comparable market rental levels in high demand urban areas.
As part of the launch, new income eligibility limits for cost rental schemes took effect on 1 August 2023 (see: Affordable Housing Act 2021 (Cost Rental Eligibility) Regulations 2023 S.I. No.374 of 2023). The new limits will see those with net household income of €66,000 or less eligible for cost rental housing in Dublin while in the rest of the country the limit is €59,000. The new limits replace the former national net income limit of €53,000.
Housing Agency Social Housing Targeted Leasing Initiative
The Housing Agency is seeking proposals from interested parties for the provision of 1,000 homes through a Targeted Leasing Initiative with local authorities to provide accommodation for households eligible for social housing support. The expression of interest document is available here and it specifically states that amendments to the form of Agreement for Lease and Lease will not be accepted. There is no specific deadline for receipt of expressions of interest; it will remain open until 1,000 homes have been subscribed under the initiative. Proposals can be submitted for the three lots summarised below:
Lot 1
- Standard leasing with a maximum 25-year term.
- Minimum 17.5% discount on agreed open market rent.
- Minimum of 10 apartments and a maximum of 150 apartments (new builds) in any one proposal.
- Properties must be within one local authority area but properties in more than one location within the particular local authority area will be considered.
Lot 2
- Standard leasing with a maximum 25-year term.
- Minimum 17.5% discount on agreed open market rent.
- Properties should be existing one-bed, vacant at the time of submission.
- Minimum of 5 properties, with no more than 2 properties in any one development.
- Properties from more than one local authority area can be combined.
Lot 3
- Standard leasing with a maximum 25-year term.
- Minimum 17.5% discount on agreed open market rent.
- Properties should be existing apartments or houses, vacant at the time of submission or new build apartments or houses.
- Properties should be appropriately designed and specified for disabled people, in line with the principles of universal design.
- Minimum of 5 properties.
- Properties from more than one local authority area can be combined.
All lettings will be based on the standard long-term leasing template with a maximum term of 25 years and a minimum discount of 17.5% on the agreed open market rent. Proposals must be accompanied by a rent valuation. The Agency will conduct a separate valuation and the lower of the two valuations with the discount applied will be the proposed rent. Rent review will be based on the Harmonised Index of Consumer Prices (HICP) and reviews will be at 36-month intervals. In respect of lots 1 and 3, if construction has not commenced, the proposals must have full planning permission.
The proposer will be responsible for all structural repairs and maintenance of the exterior of the property including the roof and the local authority (which will sub-let the properties to households eligible for social housing support) will be responsible for the upkeep and maintenance of the interior.
The Agency states that its objective is to deliver better value for money for the State than existing standard leasing. The long-term leasing scheme under the Government’s Housing for All Plan remains unchanged and is still being phased out over the lifetime of Housing for All to the end of 2025.
Government Encourages Applications to Local Authority Home Loan Schemes
The Minister for Housing, Local Government and Heritage has launched an information campaign encouraging those looking to purchase a new or second-hand home or build their own home to consider applying for a Local Authority Home Loan.
A Local Authority Home Loan is a Government backed mortgage for creditworthy first time buyers (or those making a fresh start after a divorce, separation or bankruptcy) and enables applicants to borrow up to 90% of the property value.
For further information, see: www.localauthorityhomeloan.ie
MORTGAGES AND MORTGAGEE SALES
Sale Overreaches Subsequent Statutory Charge
In Michelle Maher v Dublin City Council [2023] IEHC 408, on appeal from the Circuit Court, the High Court held that a sale by a mortgagee overreaches a subsequent statutory charge for unpaid levies created by the Derelict Sites Act 1990. Accordingly, on a sale by a mortgagee, it seems that the mortgagee need not discharge the levy, and the purchaser from the mortgagee will take clear of it.
BPFI Mortgage Switching Criteria Announced
In conjunction with the BPFI’s new Dealing with Mortgage Debt initiative, and following on from repeated encouragement from the Minister for Finance for mortgage switching to be made easier in an environment of rising interest rates, the three retail banks and three non-bank lenders (AIB, Bank of Ireland, Permanent TSB, Avant Money, Finance Ireland and ICS Mortgages) have agreed eligibility criteria on mortgage switching.
PROPERTY LEGISLATION
Land Value Sharing and Urban Development Zones Bill
The Law Society Taxation Committee has made a submission on the General Scheme of the Land Value Sharing and Urban Development Zones Bill 2022 to the Department of Housing, Local Government and Heritage, the Department of Finance and the Department of the Environment, Climate and Communications.
The submission proposes possible revisions to the transitional provisions to ensure that the new levy will not impact housing supply in relation to existing zoned land which is held by builders.
PROPERTY TAX
Revenue Tax and Duty Manual – Vacant Homes Tax (VHT)
Revenue has published a new Tax and Duty Manual on the Vacant Homes Tax. VHT (introduced by the Finance Act 2022):
- is an annual self-assessed and administered tax that aims to increase the supply of homes for rent or purchase to meet demand, rather than raise revenue;
- applies to residential properties in use as a dwelling for less than 30 days in a 12-month chargeable period (the first chargeable period is 1 November 2022 to 31 October 2023); and
- is charged at three times the base Local Property Tax (LPT) rate (the rate excluding any local adjustment factor) (in addition to the LPT charge itself).
The Manual outlines:
- when VHT applies;
- when properties are outside the scope of the tax;
- the obligations on chargeable persons;
- Revenue powers; and
- certain exemptions that can be claimed where property is temporarily vacant for “genuine reasons”, including properties recently sold or currently listed for sale or rent, properties vacant due to the occupier’s illness or long-term care and properties vacant as a result of significant refurbishment work.
VHT will not apply to derelict properties or properties unsuitable for use as a dwelling not captured under the LPT system.
Updated Revenue Tax and Duty Manual – Exemptions and Reliefs from Stamp Duty
In addition to a general update and refresh, Part 7 of Revenue’s manual has been updated to provide a summary of two new stamp duty reliefs, introduced in June 2023:
· Section 83DA – Repayment of stamp duty under Affordable Dwelling Purchase Arrangements,
· Section 83DB – Repayment of stamp duty in respect of certain residential units.
For further information see: Revenue eBrief No. 186/23.
CLIMATE CHANGE
Climate Change Advisory Council Annual Review
The Climate Change Advisory Council released its Annual Review/Draft Long Term Strategy on Greenhouse Gas Emissions on 25 July 2023. The Council’s recommendations for the built environment sector include bringing more urgency to actions needed to support district heating schemes; swifter BER upgrading of social housing and an increased rate of retrofits; and greater availability of green mortgage products. Note that it is important to consider such recommendations in light of existing legal obligations and entitlements as well as the expanded regulatory framework for district heating, soon to be made law in the Recast Renewable Energy Directive III.
District Heating
As referenced in the Construction section, the Government launched a report on the expansion of district heating to homes and businesses by 2030.