Banks may be forced to respect tenancy agreements on repossessed houses in proposals under consideration by the Attorney General’s office and the Department of Environment.

Minister of State Paschal Donohoe told the Dáil the State's legal advisor was considering the requirement that in repossession proceedings a court could instruct a lending institution to "respect the terms of any tenancy agreement in place and to assume the responsibility of the landlord in that tenancy agreement".

The change would be made in an amendment to the Residential Tenancies Bill, which has already been through the Dáil but has yet to go through the Seanad.

The provision is one of the measures sought by Sinn Féin finance spokesman Pearse Doherty in his Land and Conveyancing Law Reform (Amendment) Bill, but the Government has rejected the legislation.

Mr Doherty’s Bill aims to rebalance the rules to favour the protection of the family home. He said it was “not a free ride for anybody” but made repossession of the family home an option in only the most extreme cases.

The legislation seeks to rebalance “one of the most shameful measures taken by the Government” to deal with the Dunne High Court judgment which prevented home repossessions because of a loophole in the law.

Mr Doherty said the Land and Conveyancing Reform Act was a “brutal and cynical move with one purpose - to facilitate the repossession of family homes by lenders”.

The crux of his Bill “is about empowering the court to take in a broader understanding of a repossession and ultimately put the burden of proof on the lender”.

The Bill provides for the adjournment period in litigation to be extended to six months which would allow more time for the insolvency process to develop and would “prevent banks simply ignoring the personal insolvency process”.

And if the worst came to the worst families would be given at least six months to leave their home and nine months if they had children. The Bill also provides that tenants in a repossessed property would have their contracts fully respected.

Mr Doherty said the Dunne judgment was an unsustainable solution but “Fine Gael and Labour intentionally removed that safeguard, knowing well that they were not replacing it with any real protection for struggling families”.

But the Minister rejected his claims and said the Government had taken many measures to respond to the scale of the personal debt crisis and the vast strain it exerted on society. This included the implementation of personal insolvency legislation and the establishment of the Insolvency Service of Ireland. Mr Donohoe said he dealt in his constituency with families in financial trouble and was "absolutely conscious of the difficulties and strain" on families terrified of losing their home.

He also said the Government had a duty to “the huge number of taxpayers who have put in place measures to support the banking system”. And he said existing legislation gave the courts “a very broad margin of discretion” when dealing with repossession cases.

He added that some of the measures would “reduce the ability of courts to take account of the specific circumstances of the families and individuals in front of them”.