Slick property investors know loopholes are nothing like buses: miss one and another one arrives along almost immediately

Well. Honest to God.

What is the world coming to?

We found it hard to believe what we were hearing in the Dáil about property companies finding loopholes in legislation designed to stop them slinging people from their homes in the name of business.

Nobody, but nobody, thought when the Government banned landlords from evicting tenants en masse to flip on entire developments with vacant possession that the well briefed corporates would immediately start looking for a way around the new law.

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But this is what has happened. We weren’t expecting that. It’s a shock.

Labour leader, Ivana Bacik, broke the news on Wednesday. And she was immediately and vociferously backed up by People Before Profit’s Richard Boyd Barrett.

Ivana was able to furnish two examples of the many long-standing tenants facing eviction in apartment blocks in Rathmines and Kilmainham because the companies that own them are using “what can only be described as a legal loophole in section 35A of the Residential Tenancies Act to take these families and individuals homes away from them”.

That’s the thing about loopholes. As slick investors know, they are nothing like buses: there is never a shortage – miss one and another one arrives along almost immediately. In this case, according to Ivana and Richard, the 35A takes a detour around the Tyrellstown Amendment (introduced to protect tenants) and returns landlords to lucrative Square One.

Richard went one better. Not only did he mention the developments but he also brought in the tenants. They were sitting above in the public gallery, should the Taoiseach care to look up at them.

Micheál Martin was disappointed to hear about this 35A turn-up for the books. The very healthy books of the property companies, it unsurprisingly transpires.

He believes the housing law tweak introduced in January 2017 after a property company attempted to terminate multiple tenancies in a private development in West Dublin was “well balanced” and had effectively given extra protection to many tenants. As for the specific cases that had just been outlined to him, he suggested aspects of them could be challenged in the courts.

The Government will look into this situation and also examine whether more needs to be done to “rebalance” the legislation.

“Or if it’s being exploited in a way that’s wrong, basically, we will have to deal with that.”

Basically.

Deputy Bacik laid bare the latest loophole.

It wasn’t particularly hard to find. When the rules were tightened to curb multiple evictions in the wake of the infamous Tyrellstown incident, law firms and property companies detailed the changes on their websites, highlighting the two exceptions to the new rule for clients so they could always do the decent thing and keep on the right side of the law.

Marching orders can only be issued across the board if the price of a property sold with sitting tenants is 20% lower than what it would fetch with vacant possession and if enforcing the rule “caused hardship” to the owner.

And guess what happened with those blocks mentioned in the Dáil?

In the Rathmines one, “the company says the sale of the property would drop by 20% of its market value were the tenants kept in place and the landlord would endure undue hardship if that were the case,” explained the Labour leader. “According to reports, the landlord in this case owns 70 apartments across the city and the most recent figures available show the company owned, in total, more than €20 million of investment property in 2019.”

What about Tathony House in Kilmainham, where over 100 residents have been served eviction notices?

“Again, the landlord there has invoked section 35A.”

God love them. It’s a hand-to-mouth existence.

“Undue hardship, indeed,” marvelled Ivana.

Why is the undue hardship of a property company more important that the undue hardship or tenants and families, she asked? “How can we stand over this as legislators?”

Richard Boyd Barrett is no stranger to arguing and advocating on behalf of renters facing eviction. Wednesday’s Leaders’ Questions wasn’t the first time he felt it necessary to introduce the national parliament to the people behind the stories he tells on their behalf. Nor was it his first time to complain about fancy footwork around the implementation of the Tyrellstown Amendment.

In September 2019, it was roughly the same story but with a different Taoiseach.

He drew Leo Varadkar’s attention to the public gallery and pointed out a large crowd of residents from developments in three different parts of Dublin. They were facing eviction, he told the then Taoiseach, by commercial entities that “have absolutely no concern for the welfare of those tenants but seek to evict them in order to drive up the value of the property assets they have purchased”.

The amendment restricts evictions if more than 10 tenants are involved.

“So what do these vulture funds do?” Boyd Barrett wondered aloud in 2019. “They evict eight of the 11 tenants and then, in nine months’ time, they can evict the other three.” Depending on the amount they need to get rid of, they slowly whittle down the numbers “through insecurity, fear and anxiety”.

Now there is another loophole of choice.

“What, Taoiseach, are you going to do?” he asked Leo three years ago.

Three years on and he’s saying to Micheál: “Just look those people in the eyes. There has to be a solution. They have done nothing wrong. They paid their rent, they worked, they paid their taxes and you can’t say because of this legislative shortcoming or that legislative loophole, there may not be an answer.”

The People Before Profit TD for Dún Laoghaire pleaded with the Taoiseach to use some of the €500m in unspent housing funds to purchase the properties. “There is no reason” it can’t be spent “to prevent these people being driven into homelessness.”

But it isn’t that simple. There has to be a cost threshold when the State gets involved, said the Taoiseach, otherwise they would end up buying everything for everyone.

As he told deputy Bacik, he will see if anything further can be done to deal with “what you are describing as a loophole.” But one politician’s loophole might be another’s legal dilemma. While framing the Tyrellstown amendment, Micheál explained, the Government had to find “a balance to make sure we don’t get it wrong from a constitutional perspective.”

But rest assured, the Government will follow up on the two cases mentioned to try to protect the tenants.

Those being renters whose anxieties already figure many times in the Dáil record and who, for half an hour or so in the public gallery above the Dáil chamber, became real people as opposed to anonymous “tenants”.