Banks may face duty of care over evictions in buy-to-lets

Concern mounts over role of repossessions in contributing to advancing homeless crisis

Legislation to ensure banks and receivers, moving to repossess buy-to-lets, do not evict tenants into homelessness is being explored by Government.

Senior sources in the Department of the Environment have confirmed officials are discussing "duty-of-care" legislation with regard to banks and lenders, with their counterparts in the Department of Finance.

The proposed legislation would prohibit a sitting tenant’s eviction if they had no alternative accommodation.

“Some will argue legislation like this would interfere with a bank’s right to seek vacant possession of a property, may interfere with their fiduciary duties, but in the context of the current housing crisis all factors that are contributing to it have to be looked at. Tenants are often the last to know when their home is being repossessed,” said a Department of the Environment spokesman.


“With all types of legislation like this, of course there’s a danger it could be abused,” he added. “It is conceivable that a tenant could decide they were just going to sit tight, refuse to move and not make any effort to seek alternative accommodation. So there would have to be some kind of proof from the tenant that they were looking for alternative accommodation.”

With the rate of repossession orders continuing to accelerate, their role in contributing to the homelessness crisis is of mounting concern to housing officials.

In the first six months of this year, 284 repossession orders were granted on buy-to-let properties or for ‘other/unknowns’ which may include buy-to-lets, across the 26 circuit courts. This compares with 46 in the first six months of last year. Some 606 orders were granted for primary homes between January and June this year.

While the numbers are lower with regard to buy-to-lets, tenants in properties subject to repossession orders have fewer rights than other tenants in the private rented sector. For instance, when a dwelling becomes the subject of a repossession order sitting tenants cannot refer a dispute to the Private Residential Tenancies Board.

Since late 2012 the housing charity Threshold has helped over 1,200 households in the private rented sector whose homes have became the subject of repossession actions from banks, or have had receivers appointed to them.

"Tenants generally only become aware of the situation very late in the day and usually after there has already been a court hearing," said the charity's chief executive, Bob Jordan. In many cases, tenants are given very limited notice to find a new home. They have a right to between 28 and 112 days' notice, depending on how long they have been there but sometimes, when a bank or receiver has taken over management of the property, they get just a few days.


“In some extreme cases, tenants have come home to find their locks changed, effectively making them homeless.”

The charity has long called for a tightening up of regulations under the Residential Tenancies Act to ensure that when a financial institution or receiver take over a rental property they are compelled to take on the responsibilities of a landlord – that they continue to carry out repairs, they return the tenant’s deposit once a property is vacated and they give adequate notice to quit.

Kitty Holland

Kitty Holland

Kitty Holland is Social Affairs Correspondent of The Irish Times