Protections needed for tenants ‘caught in the crossfire’ between landlords and banks

Thousands of families living in private rented accommodation face losing their homes when their landlords can no longer pay the mortgage, the housing charity Threshold has warned.

In a submission to the Joint Oireachtas Committee on Finance, the charity says an already volatile private rented sector is becoming more volatile as an increasing number of landlords go into receivership, with banks effectively becoming the landlords.

Tenants’ rights are insufficiently protected in this situation, says Threshold.

Tenants are unclear as to whom they should be paying the rent, who they should turn to when they need repairs and what their rights are when the banks increase rent or give them notice to quit.

Some 150,000 “buy-to-let” mortgages were issued during the boom years and about 40,000 of these are now in arrears.

Some 3,700 of these have gone into receivership with that figure likely to increase, says Bob Jordan, Threshold's director.

Legislative changes
Threshold is calling for legislative changes to protect such households, including that the Residential Tenancies Act be amended to recognise that when receivers step into the shoes of landlords they take on the responsibilities of landlords.

They are also calling for a code-of-conduct on buy-to-let mortgage arrears and the publication of quarterly data on the scale of buy-to-let receiverships and the number of tenancies impacted. This was “crucial”, said Mr Jordan. “The private rented sector is already very volatile. This is making it more volatile and yet no-one is keeping an eye on it. We need the data to begin to make an assessment of the impact of receiverships on tenants.”

Receivership
Threshold had dealt with over 140 households so far this year where their homes had gone into receivership, and over 400 last year. There were cases where the receiver increased the rent or where they would not accept rent allowance. When the receiver wants to get tenants out of a property, if the tenant had been there for more than four years they are entitled to 112 days' notice.

“They aren’t always getting that,” said Mr Jordan. “In the vast majority of cases these tenants have done nothing wrong, have been paying their rent on time and in many ways are ‘model tenants’. They are completely innocent victims of the housing crash.”

Mr Jordan said that increasingly, tenants were “being caught in the crossfire between financial institutions and landlords”.