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Real Estate

The Residential Tenancies and Valuation Act 2020 - New protections for tenants and new obligations for landlords in certain circumstances

By David Phelan and Mark Costello
06 August, 2020

Introduction

The Emergency Measures in the Public Interest (Covid-19) Act 2020 gave residential tenants broad protections against rent increases and termination of tenancies in all but exceptional cases during the emergency period. There was an initial three-month period during which the protections of that Act applied and it was extended, with the last extension by ministerial order expiring on 1 August 2020.

Further measures have now been enacted through the Residential Tenancies and Valuation Act 2020 (the “Act”) which was signed into law by the President on 1 August 2020.   

The Act defines "emergency period" to mean the period from the date of enactment to 10 January 2021. Its main provisions function to protect tenants at risk of eviction for rent arears who have suffered financial hardship due to the pandemic. Protections against termination are thus more limited than the previous blanket prohibition on the service of notices of termination.

The Act provides for new processes for both tenants and landlords in the event that a notice is being sent to a tenant due to rent arrears and extends the prohibition on rent increases to 10 January 2021.

Prohibition of Notices of Termination for Failure to Pay Rent  

The Act protects tenants from notices of termination where they are unable to pay rent due to financial hardship arising from the Covid-19 pandemic, who are at a significant risk of eviction and who self-declare and serve the declaration on the Residential Tenancy Board (“RTB”) and their landlord.

Specifically, a tenant will be protected if they are unable to pay rent due to circumstances connected to the pandemic such as availing of the temporary wage subsidy, supplementary welfare allowance or if they experience reductions in wages due to sick leave and as a consequence they are at risk that their tenancy will be terminated by their landlord. The protection further applies if a tenant is at risk of eviction and they have received any public money as a result of financial hardship due to Covid-19. Crucially, protection will apply if a tenant makes a self-declaration, although, it must be acknowledged it is an offence to make a false or misleading declaration.  

Self-Declarations

Section 4 of the Act provides that a tenant seeking to avail of the protections must serve a declaration on the RTB and a true copy on their landlord. It is specifically provided that it is a criminal offence to make such a declaration which is false or misleading.    

Increased Notice Periods for Failure to Pay Rent

If a tenant self-declares that they are a relevant person and the provisions apply, then the termination of the tenancy is governed by an extended period of time rather than the time periods given in the notice of termination. Tenants who are covered by the provisions of Section 4 of the Act and as such rent arrears are the basis for the service of a notice of termination by their landlord, a 90 day termination period will apply. In addition, notices cannot expire on a date earlier than 11 January 2021 such that the period will be the later of either the 90 day period or 11 January 2021.

Time Extension to Pay Rent Arrears

The Act provides that before a notice of termination for rent arrears can be served by a landlord, tenants must be served with a notice giving 28 days to discharge any rent arrears. In order to comply with this provision, a landlord must serve both the tenant and the RTB. The 28-day notice is effective from the later of the date of service on the tenant and date of service on the RTB.

Section 12 provides a new mechanism to inform tenants of their entitlements to refer the dispute to the RTB and also to provide a mechanism for the RTB to inform tenants of their entitlements to apply for assistance from the Department of Employment Affairs and Social Protection to meet any rent arrears. The RTB, on receiving the notice from the landlord must send the tenant details of their entitlement to refer the dispute to the RTB for adjudication. On receipt of a notice from the tenant seeking adjudication, the RTB must assist the tenant in obtaining advice on entitlements from the Department of Employment Affairs and Social Protection.

If a landlord does not comply with the new obligations to serve both the tenant and the RTB, the notice is deemed invalid. 

No Accrual of Security of Tenure

The Act further provides that where a tenant is benefitting from the additional periods of protection afforded by the Act, the tenant does not acquire any rights under Part 4 of the Residential Tenancies Acts.   

Prohibition on Rent Increases

The Act further prohibits any increase in rent due to take effect during the emergency period. However, any rent increases that came into effect before 27 March 2020 being the emergency period arising under the Emergency Measures in the Public Interest (Covid-19) Act 2020 are payable. Cumulatively therefore, rent which is governed by the Residential Tenancies Acts,  from 27 March 2020 to 11 January 2021 are effectively frozen as increases arising in that period do not take effect and are not payable.

Commercial tenancies

The Act relieves the confusion brought about by Section 5, subsection 7 of the Emergency Measures in the Public Interest (Covid-19) Act 2020. This subsection had created certain confusion in the commercial rental sector, as it was not clear whether the prohibition on evictions falling outside the realm of the Residential Tenancies Acts extended to commercial tenancies. This is resolved by the deletion of subsection 7. It is now clear that any protections afforded to tenants apply to tenants as defined by the Residential Tenancies Acts only and no additional protections are afforded to commercial tenants.

Conclusion

The Act provides for protections for residential tenants during an emergency period in circumstances where they have been economically impacted by the Covid-19 pandemic and are unable to pay rent. New time periods apply in that circumstance and a new regime also applies in the event that a landlord serves a notice of demand for rent arrears. In addition, rent increases do not take effect during the emergency period and any rent increases during this period are not payable.

Notices of termination that do not cite rent arrears as the grounds for termination are no longer prohibited. The clock will run again on any time periods remaining under notices of termination previously served for all other grounds unconnected to rent arrears.  

For more information on the content of this insight please contact:
David Phelan, Solicitor | E: david.phelan@rdj.ie | T: +353 1 6054205

 

 

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