The Residential Tenancies and Valuation Act 2020 (the "Act") came into effect on the 1 August 2020 to replace the Emergency Measures in the Public Interest (COVID-19) Act 2020 ("Act of 2020"). The Act is to provide a new legal basis to oversee the moratorium on rent evictions and rent increases.
Tenants to Self-Declare
While the Act of 2020 saw a blanket ban on evictions and rental increases across the rental sector the primary focus of the Act is to give rental protection to a category of tenants who are at risk of eviction from their rental properties by reason of failure to pay their rent. In order to get the protection of the Act the tenant must serve a declaration in writing to the Residential Tenancies Board (RTB), with a true copy thereof to the Landlord. The tenant must declare that they are:
- A "relevant person"; and
- As a consequence thereof face a significant risk of their tenancy being terminated due to the non-payment of rent.
The qualifying criteria in order to be deemed a "relevant person" includes:
- Being unable or having been unable to work due to contracting COVID-19 without entitlement to be paid;
- Being in receipt of or entitlement to receive the temporary wage subsidy or supplementary welfare allowance; or
- Being in receipt of any other payment out of public moneys provided to alleviate the financial hardship resulting from COVID-19.
The tenant can claim protection from eviction during the "emergency period" as defined in the Act as being from the date of commencement of the Act up to 10 January 2021.
28 Days Arrears Notice Period
The Act also affords a greater protection period for tenants who are at risk of eviction as a result of the non-payment of rent. The Act extends the arrears notice to a 28 day arrears notice, previously 14 days. The 28 day arrears notice must be served by the landlord on the tenant and the RTB. The RTB must then provide information to the tenant to allow them obtain advice from the Money Advice and Budgeting Service ("MABS"). If the tenant fails to pay the rent after the 28 days then the Landlord can serve a 28 day notice of termination which also must be served on both the tenant and the RTB. The RTB must furnish details to the tenant of their entitlements from the Department of Employment Affairs and Social Protection and inform them of their right to refer a dispute of the notice of termination to an adjudicator in the RTB with an appeal to the tribunal. Regard must be had to the advice provided to the tenant in making any decision or determination. The Act extends the period of termination for a tenant who can seek the benefit of the Act to a period of 90 days after the service of the notice of termination or on the 11 January 2021 whichever is the later.
Prohibition on Rent Increases
Section 6 of the Act prohibits rent increases to 10 January 2021 unless it was an increase that came into effect prior to 27 March 2020. This section appears at odds with the intention of the Act which was to afford protection to tenants specifically affected by COVID-19. In the summary of the Bill from the Oireachtas it was noted that Section 6 was to apply to persons affected by that Part of the Act being "relevant persons". This was not carried over in the drafting of the legislation and instead of limiting the application of Section 6 to "relevant persons" being the persons defined in that Part of the Act it reads instead that it applies to all tenants. It appears from the advices being offered by the RTB that they have adopted their own view that Section 6 of the Act only applies to "relevant persons". Clarification is certainly required on this point.
Commercial Tenancies Outside Parameters of the Act
The Act clears up the ambiguity brought about by Section 5(7) of the Emergency Act 2020 in that it left open the interpretation of the section that a prohibition on evictions falling outside of the Residential Tenancies Acts also extended to commercial tenancies. The Act now removes this section and so it is no longer in effect which clears up any ambiguity that there might have been.
Conclusion – Landlord to Shoulder the Burden of the Economic Impact Of COVID-19?
The Act attempts to strike a balance for both the tenant and landlord by setting out a list of qualifying criteria that the tenant must meet to avail of the Act. The previous blanket ban on evictions meant that Landlords were left in a situation where they could not evict a tenant even in circumstances where there was no economic impact seen by a tenant as a result of COVID-19. A false or misleading self-declaration by a tenant is a criminal offence and is an attempt to prevent abuse of the Act . There does need to be clarification on the blanket ban on rent increases which seems at odds of what the Act set out to do which was to provide protection to "relevant persons".
While the Act provides a welcome reprieve to a tenant who has found themselves in difficulty as a direct result of COVID-19 it does leave some landlords in a precarious position of having to shoulder the economic burden of the consequences of the Act especially in such circumstances where previous moratoriums that were offered by banks to mortgagors are now coming to an end.
Originally published by BHSM, October 2020
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