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2 December 1999 Edition

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Profiteering scandal in private housing


  The state and local authorities are acting to facilitate landlords in evading the law, earning enormous undeclared untaxed incomes from renting unsuitable and unfit housing to people who are too afraid of victimisation to do anything about it.  
Sinn Féin Councillor Larry O'Toole

``Where you live is where you have shelter from the rain and cold, where you sleep, where you eat and drink, where you wash, where you get warm and dry, where you keep your stuff, where you care for your kids, where your friends contact you, where you exist for the local school, doctor, social welfare, local community - the basic ingredients of life. Without a home, you have none of these things.'' So says Sasha.

Last month, the 26-County housing minister, Bobby Molloy, announced there were 39,176 households in need of social housing, including homeless persons. That means at least 100,000 people in the state need a home.

Sasha is technically not one of them. She and her six-year-old daughter are living in privately rented accommodation in Dublin. The Department of the Environment reckons there are about 100,000 private rented tenancies in the 26 Counties.

Rent increase of 30%

Last week, Sasha's landlord announced a rent increase from £600 per month to £800 per month. If she couldn't afford it, she could leave. According to a survey conducted by Threshold, a voluntary organisation working for justice on housing and homelessness, 30% increases in rent are now standard, and a growing number of tenants face rent increases of 40% or even 50% in a year.

Sasha's landlord had another house next door rented to students, who doubled up in each of the three bedrooms and a sitting room. That made at least six students in the house. The students thought they had a bargain at £30 per week each. In the end, he relented and only increased Sasha's rent to £700. Sasha and her daughter live in fear, fear that next year they will have to move, and there is nowhere to move to.

The landlord had bought the two houses, which left him with mortgage payments of some £300 per month on each house. With rents at £700 and £800, the landlord took home, untaxed, £10,800 profit per annum, for doing nothing whatever. It used to be called `unearned income'.

And `unearned' is exactly what it is. The back door was falling off, the walls were running with damp, the heating was by electric fire, the windows were falling out. All the windows were barred on the outside, with no escape in case of fire. When Sasha made a little garden at the back, he wanted to up the rent. After all, the property was improved.

He wasn't subject to tax because he wasn't registered, although the law requires that he should register. Sasha was far too afraid to report him. To claim her tax rebate on rent paid, she needed his RSI number. She felt she would certainly get evicted if she even suggested it.

Charter of Rights

A wide spectrum of legislation has passed on and off the statute books during the 1990s to guarantee the rights of tenants, and has succeeded in providing none. A series of measures, collectively known as the Charter for Rented Housing, have been introduced, piece-meal, since 1992, which purports, through the local authority, to provide for statutory minimum notice to quit, mandatory rent books, statutory minimum standard of rented accommodation, tax relief for tenants, and mandatory registration of rented dwellings and the abolition of the so-called remedy of distress, whereby a landlord was entitled to enforce payment of rent due by seizing, without recourse to the courts, the tenants' goods.

No security of Tenure

Housing policy is the responsibility of the Department of the Environment and Local Government (DoE), except for security of tenure, which remains within the jurisdiction of the Department of Justice, Equality and Law Reform. The government set up a working group to consider the tenure issue. A report was eventually drawn up, and presented in 1996. It remains unpublished. Nothing has been heard of it since.

Only the small category of rent-controlled dwellings, controlled by the still existing Rent Tribunal, are not covered by the charter legislation, and therefore have some security of tenure and fixity and fairness of rents.

The charter superceded the 1966 Housing Act, which had required local authorities to introduce bye-laws to ensure minimum standards and rights in rented houses. The Department of Environment and Local Government had produced a model set of bye-laws which it was intended that the 53 local authorities would introduce. But the act was repealed in 1994, in favour of the charter.

Regulations for enforcement

The DoE blithely declared in 1995 that the position of tenants in the private rented sector had improved considerably. All that remained was to introduce regulations requiring the registration of landlords, which would enable enforcement of the charter. These regulations, called the Housing Regulations of 1996, came into effect on 1 May 1996. According to Threshold, however, it is estimated that only some 25% of landlords have registered.

The regulations require that a landlord give details of each tenancy, his or her name and address, the address of the tenancy, a description of the premises and the rent reserved under the tenancy agreement. ``The register, which is to be kept and maintained by the housing authority, is available for inspection by any person during normal office hours,'' writes Aine Ryall, of the Law Department in UCC, reviewing housing legislation for Threshold in May 1998. The landlord has to pay a registration fee of £40.

Furthermore, under the 1992 Act (Section 34.1), if the landlord fails to provide a rent book (Section 17), observe minimum standards of rented accommodation (Section 18), or to register the tenancy (Section 20), he can be fined £1,000, and £100 per day thereafter where the contravention is continued.

`Unpopular' with landlords

The only trouble is that none of this has been enforced. It has been held up in the courts.

Registration of landlords is the lynchpin of enforcement of the charter, a point accepted by the DoE. The DoE takes the view that it is a matter for the local authorities to ensure the enforcement of the regulations throughout their areas. According to a DoE Circular (HRT 8/97, November 19, 1997), the department requires the local authority to put in place procedures designed to ensure ``prompt and effective follow-up action in relation to enquiries, complaints or breaches of the regulations''.

However, the regulations proved `unpopular' with landlords, who were reluctant to make `sensitive' information available to the housing authorities. `Sensitive' because registration would leave landlords liable for tax on rental earnings. In 1996, Cabinet Properties contested the legislation in a case against the DoE and the Attorney General. The judge granted leave to seek a judicial Review. Amazingly, three years down the road, that is where the matter rests. The judicial review still has not happened.

Furthermore, in several cases which arose in Ennis district court 18 months ago, the judge found that although the local authority is entitled to levy the annual registration fee, the local authority is not entitled under the legislation to prosecute in cases of failure to pay the fee. The registration regulations, therefore, need to be redrafted. Yet this has not been done. ``It leaves the question of whether it is by design or default,'' comments Brian Stanley, a Sinn Féin Councillor in Portlaoise, where, as in the rest of the state, conditions in the private sector have ``gone quite out of control''.

Tenants' Rights in Europe

Whatever the answer, the charter of rights remains unenforcable. Tenants in the private rented sector, unlike their European counterparts, are left without rights.

For example in the Netherlands, Austria, Portugal, Sweden, Belgium, Denmark, Spain and France, there is rent control, a limit on rent increases, and rents are set in relation to quality of accommodation provided, rent increases relate to improvement to the property. Tenants have security of tenure, where due reason has to be provided before a tenants can be evicted, and time allowed to find alternative accommodation.

In Ireland, unless a tenant can get their landlord to register, the rights set out in the charter are useless. Tenants' rights to a rent book, statement of the tenancy, fair rents, return of deposits, minimum standard of accommodation, rights to privacy, right to claim tenants income tax relief, all require that the landlord be registered. On average, only some 25% of landlords register, most likely those who take Social Welfare Allowance (SWA) tenants.

Councillors register landlords

Several Sinn Féin Councillors have gone to great lengths to try to get local landlords to register, but they have hardly met co-operation from local authorities, whose job it is to register and inspect privately rented accommodation in the area. It took Councillor Cionnaith O Súilleabháin three months to even gain access to the list of local properties registered in Clonakilty, County Cork. Then there were no landlords' names and only a bare 25% of the rented accommodation which he knew of in the town, Ireland's tidiest town, was registered.

Most tenants are afraid to report their landlord. Tenants can be evicted quite within the law, with no fault, with a month's notice. In all probability, eviction means homelessness. With kids, eviction means at best B&B accommodation, where tenants must tramp the streets between vacating the rooms in early morning and returning to appalling overcrowded, shared accommodation, without facilities, in the evening. School, friends, security and stable home life go by the board.

``What chance has a child brought up in such circumstances?'' asks Marie Keane, an advice worker with Christy Burke. ``I could tell you stories of appalling conditions in which people are living, no adequate heating, no access to showers or private toilets, no separate rooms for children of different sexes, damp running down the walls, electric meters rigged, no fire escapes.''

State aid to landlords

``Landlords get away with it, even in the case where, because their tenants are on social welfare allowances, they have had to register,'' says Dublin Sinn Féin Councillor Larry O'Toole. ``The tenant daren't complain for fear of eviction. The local authority, which has the responsibility to monitor the accommodation, turns a blind eye and claims a shortage of staff to carry out inspections. The health boards, which pay the rent subsidy, keep SWA tenants in this accommodation by refusing to pay subsidies on accommodation which is more expensive and in better condition, thereby subsidising landlords to let appalling accommodation at exorbitant rents.

``The state and local authorities are acting to facilitate landlords in evading the law, earning enormous undeclared untaxed incomes from renting unsuitable and unfit housing to people who are too afraid of victimisation to do anything about it. The local authorities have statutory responsibility to correct this, to register all landlords, to inspect properties. It is down to councillors to ensure that this is done,'' says O'Toole.

A spokesperson for the DoE gave his views on the possibility in this situation of imposing rent controls. ``It wouldn't work'', he said. ``Its like prohibition in the United States, the market must find its own level, regulated by supply and demand. There is a housing shortage. It has to work itself out.''

The argument is exactly comparable to that used during the Great Hunger, when the market, deprived by trade of available food, had to find its own level. The population fell from around 8.5 million to around 6 million, through death, starvation and emigration.

An Phoblacht
44 Parnell Sq.
Dublin 1