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Coronavirus - Emergency Measures in the Public Interest (Covid-19) Act 2020 – Impact on Residential Tenancies - Ireland

  • Ireland
  • General

02-04-2020

The Emergency Measures in the Public Interest (Covid-19) Act 2020 (the “Act”) has been signed into law by the President. The Act includes exceptional provisions, made in the public interest having regard to the risks to human life and public health posed by Covid-19.

The Act amends existing legislation and includes provisions relating to:

• residential tenancies (Part 2 of the Act)

• planning and development (Part 3 of the Act)

• health and social care professionals (Part 4 of the Act)

• mental health (Part 5 of the Act)

• the defence forces (Part 6 of the Act)

• wage subsidies and redundancy payments (Parts 7 and 8 of the Act)

• civil registrations (Part 9 of the Act)

This briefing focuses on Part 2 of the Act which affects the operation of the Residential Tenancies Act 2004 (as amended) (the “2004 Act”). Not only has the Government’s overarching policy objective been to further protect tenants and licensees, but also to provide support to landlords. The Government has been tasked with balancing these interests, while protecting and maintaining tenants in their rental properties.

The Act introduces emergency measures to prevent the service of termination notices and rent increases during an emergency period of three months from 27 March 2020, which is subject to extension at the request of the Minister for Housing, Planning and Local Government (the “Emergency Period”1). The provisions of the Act affecting residential tenancies are summarised below. The provisions also include licence agreements within the meaning of section 37 of the Residential Tenancies (Amendment) Act 2019 which includes student accommodation. Therefore, all references to tenancies below include licence agreements.

1. NOTICES OF TERMINATION

Section 5(1)(a) of the Act provides that landlords shall not serve notices of termination in relation to tenancies of dwellings during the Emergency Period. Therefore, notices of termination cannot be served during the Emergency Period. Notably, a tenant will not acquire any Part 4 rights under the 2004 Act by virtue of this provision2.

Where a notice of termination was served before the Emergency Period in respect of a tenant’s failure to comply with any of their obligations in respect of the tenancy3 and that notice of termination specified a termination date during the Emergency Period, the specified termination date will be of no effect4. A revised termination date will arise on the expiration of the Emergency Period and the expiration of the period of notice that remained unexpired on the commencement of the Emergency Period (ie 27 March 2020). Therefore, any days that fall within the Emergency Period do not count towards the calculation of the required notice period.

If a notice of termination, which was served before the commencement of the Emergency Period and the notice period expired before the commencement of the Emergency Period, is referred to the Residential Tenancies Board for resolution, the “revised termination date” referred to above will cease to have effect:

(i) 10 days after the making of a determination by an adjudicator; or

(ii) upon the making of a determination by a Tribunal (where the determination of the adjudicator has been appealed5) .

Tenants who received termination notices before the beginning of the Emergency Period and who have remained in occupation of a dwelling beyond the expiration of the notice period, will be entitled to continue in occupation until the end of the Emergency Period unless a determination of an adjudicator or Tribunal (on appeal) finds that they must vacate. Therefore, it is open to a landlord to lodge a dispute resolution case with the Residential Tenancies Board if a tenant remains in occupation beyond the expiration of their notice period (based on the assumption that the notice period expired before the commencement of the Emergency Period ie 27 March 2020).

The Act also provides for situations in which a notice of termination was served before the commencement of the Emergency Period, relating to a tenancy of dwelling of less than six months’ duration, where the specified termination date falls during the Emergency Period. Again, the specified termination date shall have no effect and a revised termination date will arise on the expiration of the Emergency Period and the expiration of the period of notice that remained unexpired on the commencement of the Emergency Period6. Notably however, a tenant will not acquire any Part 4 rights under the 2004 Act by virtue of this provision7.

While the Act prohibits the service of a notice of termination during the Emergency Period, it does not preclude a landlord from serving a rent arrears warning notice8. However, section 5(5) of the Act amends section 67(3) of the 2004 Act by substituting 14 days with 28 days. Therefore, a tenant has 28 days to rectify the rent arrears. We expect the intention behind this provision is to allow a tenant sufficient time to seek income support if required.

The Act confirms that all proposed evictions in all tenancies in the State, including those not covered by the Act, are prohibited during the operation of the Act. We understand that the intention behind this provision is to address tenancies which are not captured by the 2004 Act and which for example come under the “rent a room scheme” and other alternative types of accommodation arrangements. Therefore, there will be no evictions during the Emergency Period other than in the limited and exceptional circumstance of a breach of tenant obligations with a supporting determination order from the Residential Tenancies Board.

The Act also provides that Travellers who are currently resident in any location should not, during the crisis, be evicted except where movement is required to ameliorate hardship and provide protection, subject to consultation with the Travellers involved.

Finally, section 5(7)(b) of the Act clarifies that the section applies to all Local Authority and Approved Housing Body dwellings.

What does this mean in practice?

• A landlord may not serve a notice of termination during the Emergency Period – this also applies to all Local Authority and Approved Housing Body dwellings as well as student accommodation.

• A landlord may serve a rent arrears warning notice during the Emergency Period but 28 days must lapse from receipt of the notice before service of a notice of termination – while a notice of termination may not be served during the Emergency Period, a landlord may take the first step towards remedying the issue by issuing the rent arrears warning notice.

• Any notices of termination served before the commencement of the Emergency Period which specified a termination date during the Emergency Period will not take effect and a revised termination date will arise – the provisions “stop the clock”.

• Any notices of termination served before the commencement of the Emergency Period which specified a termination date before the commencement of the Emergency Period are not impacted by the Act. If a tenant remains in occupation beyond the expiration of their notice period, it is open to a landlord to lodge a dispute resolution case with the Residential Tenancies Board.

• The Residential Tenancies Board will have jurisdiction to deal with complaints (insofar as possible) relating to notices of termination and breach of tenant obligations during the Emergency Period.

2. RENT INCREASES

The Act prohibits rent increases during the Emergency Period but rent decreases can be implemented9. While the Act does not preclude a landlord from serving a rent review notice during the Emergency Period, section 6 of the Act should be read in conjunction with sections 20 and 22 of the 2004 Act. For a rent review to be valid the time period set out in section 20 of the 2004 Act (ie 12 months) must have expired.

If a landlord was entitled to serve a rent review notice before the Act was signed (ie before 27 March 2020) they may still do so. However, if the requisite time period had not elapsed before the commencement of the Act, then it may follow that any rent review which is served will be invalid as section 6 of the Act effectively stops the clock. In addition, rent review notices will also need to comply with the requirements of section 22 of the 2004 Act – it is possible that a notice could be served which will include a date that falls during the Emergency Period (ie if the Emergency Period lasts longer than 90 days). If that occurs, the date on the notice cannot be taken as the effective date for the rent increase. Instead, the intention of the Act appears to be that the effective date is the day after the expiry of the Emergency Period.

It is also noteworthy that the provisions of the Act relating to rent reviews are retrospective in nature. If a rent increase (following service of a valid rent review notice before the commencement of the Emergency Period) would take effect during the Emergency Period, then it will not be effective and a landlord will not be entitled to rely on it for the duration of the Emergency Period. Instead and as mentioned above, the intention of the Act appears to be that the effective date is the day after the expiry of the Emergency Period.

In addition, rent increases which should have commenced during the Emergency Period cannot be backdated – in other words, any attempts made by landlords to recover monies for rent increases which would have taken effect during the Emergency Period will have no effect.

What does this mean in practice?

• Any rent review notices served before the commencement of the Emergency Period will not take effect until the Emergency Period ends – a notice could be served which will include a date that falls during the Emergency Period (ie if the Emergency Period lasts longer than 90 days). If that occurs, the date on the notice cannot be taken as the effective date for the rent increase. Instead, the intention of the Act appears to be that the effective date is the day after the expiry of the Emergency Period.

• When considering whether or not to issue a rent review notice during the Emergency Period, landlords should ensure the rent review notice complies with section 20 and section 22 of the 2004 Act. Both the Act and the 2004 Act must be read together.

• The RTB may continue to deal with rent review complaints during the Emergency Period but rent increases will not take “effect” during the Emergency Period.

• A landlord may not recover monies for rent increases that should have taken effect during the Emergency Period – there is no entitlement for a landlord to “clawback” the rent increases.

3. HEARINGS IN PUBLIC

In line with directions for physical distancing, the RTB is considering arrangements for alternative methods of proceeding with dispute resolution, otherwise than in person.

To ensure physical distancing and directions are adhered to, the Act suspends section 106 of the 2004 Act10. This means that Tribunal hearings shall not be required to be held in public for the duration of the Emergency Period.

As the RTB is in the process of making arrangements, we will need to await further information regarding the alternative methods of proceeding with dispute resolution. Our public and administrative law team will provide further information as this becomes available.

4. ENTITLEMENT TO REMAIN IN OCCUPATION OF A DWELLING

The Act provides that tenants who were served with notices of termination before the commencement of the Emergency Period, who have remained in occupation of a dwelling from the expiration of the notice period until the date of commencement of the Emergency Period11, are entitled to remain in occupation of the dwelling until the expiration of the Emergency Period. Crucially, this provision applies with or without the consent of the landlord concerned. Tenants will be entitled to remain in the rented dwelling on the same terms and conditions that applied in respect of the tenancy before the service of the notice of termination.

This provision will not apply where a tenant is required to vacate the dwelling in accordance with a determination of an adjudicator12 or in accordance with a determination of a Tribunal13 (made upon appeal of a determination of an adjudicator). This means that a tenant is not entitled to remain in a rented dwelling on the same terms and conditions if a dispute has already been determined by an adjudicator or Tribunal.

While maintaining tenants in their rental properties, this provision will have a significant impact on landlords. It is open to a landlord to consider initiating enforcement proceedings for non-compliance with the Determination Order in the District Court. Tenants will not acquire any Part 4 rights by virtue of this provision14.

What does this mean in practice?

• Tenants will be entitled to remain in rental properties during the Emergency Period.

• Tenants who were served with notices of termination before the commencement of the Emergency Period, who have remained in occupation of a dwelling from the expiration of the notice period until the date of commencement of the Emergency Period, are entitled to remain in occupation of the dwelling until the expiration of the Emergency Period on the same terms and conditions that applied in respect of the tenancy before the service of the notice of termination.

• Tenants who are required to vacate the dwelling in accordance with a determination of an adjudicator or in accordance with a determination of a Tribunal do not have an entitlement to remain in occupation of the dwelling. If a tenant remains in occupation beyond the expiration of their notice period, it is open to a landlord to lodge a dispute resolution case with the Residential Tenancies Board.

• Tenants are still obliged to pay their rent and to comply with the provisions regarding tenant obligations under section 16 of the 2004 Act. Similarly, landlords must also comply with their obligations pursuant to section 12 of the 2004 Act.

For support on legal issues facing your business in light of the outbreak of Covid-19, please visit our Coronavirus hub to get our latest information and guidance.

How Eversheds Sutherland can help

We remain fully operational during these difficult times and all our lawyers are readily available and contactable at their usual email addresses or telephone numbers.

For further information about any aspect of this briefing please get in touch with your usual Eversheds Sutherland contact or a member of our Dispute Resolution & Litigation team acting as legal advisors to the Residential Tenancies Board:

Pamela O’Neill, Partner and Head of Dispute Resolution & Litigation - PamelaONeill@eversheds-sutherland.ie  - +353 1 6644 241

Eoin Mac Aodha, Partner - EoinMacAodha@eversheds-sutherland.ie - +353 1 6644 947

Ciara Geraghty, Associate - CiaraGeraghty@eversheds-sutherland.ie - +353 1 6644 336

Aishlinn Maria Gannon, Associate - AishlinnMariaGannon@eversheds-sutherland.ie - +353 1 6644 271

1 Section 4 of the Act provides that the Government “may extend the Emergency Period for such period as they consider appropriate if they are satisfied that, having regard to (i) the threat to public health presented by Covid-19, (ii) the highly contagious nature of the disease and (iii) the need to restrict movement of persons in order to prevent the spread of the disease among the population, the making of such an order is in the public interest.”

2 Section 5(1)(b) of the Act

3 Paragraph 1 of the Table to Section 34 of the 2004 Act

4 Section 5(2)(a) of the Act

5 Section 5(2)(b) of the Act

6 Section 5(4)(a) of the Act

7 Section 5(4)(b) of the Act

8 Paragraph 1 of the Table to Section 34 of the 2004 Act

9 Section 6 of the Act

10 Section 7 of the Act

11 Section 8 of the Act

12 Section 8(1)(i) of the Act

13 Section 8(1)(ii) of the Act

14 Section 8(2) of the Act

Disclaimer

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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