knowledge | 11 January 2021 |
COVID-19: New Measures for Residential Tenancies aim to protect both Tenants and Landlords
A new protection regime for tenants who self-declare themselves to be at risk of losing their tenancy takes effect from 11 January 2021 under Part 3 of the Planning and Development, and Residential Tenancies Act 2020 (the “new Act”).
The provisions of the Residential Tenancies and Valuation Act 2020 (the “RTVA”), which have provided protection for this category of “at risk tenants” to date, expire on 10 January 2021. The new Act continues to provide protection from termination and rent increases for at risk tenants from 11 January 2021 to 12 April 2021 (the new “emergency period”), but with some modifications. Notably, the protections are disapplied in certain circumstances, including where rent arrears have built up, or the tenant does not co-operate with the processes required under the new Act, or the protections cause undue financial hardship to the landlord.
What are the specific protections for at risk tenants under the new Act?
The protections for qualifying tenants under the new Act are substantively the same as those under the RTVA, except that they apply for the new emergency period:
- The protection against termination only applies where the reason for the termination is non-payment of rent. Terminations for other reasons may take effect in accordance with the relevant tenancy agreement and the residential tenancies legislation.
- Notices for termination may be served but must give at least 90 days’ notice, rather than the usual 28 days, and must not specify a termination date earlier than 13 April 2021. The termination date for any tenant who made a declaration under the RTVA and who continues to enjoy the protection of the PDRTA will move out to 13 April 2021 at the earliest also.
- No rent increase can take effect during the new emergency period and no increase in rent will be payable in respect of any time during that period.
How does a tenant qualify for the protections under the new Act?
In the same way as required under the RTVA, to qualify for the protections:
- a tenant must be in receipt of COVID-related or other financial supports as specified in the new Act, but the qualifying date starts to run from 1 August 2020; and:
- serve a written declaration on the Residential Tenancies Board (“RTB”) (with a true copy to the landlord) that he or she is unable to pay rent due to COVID-19 and is at risk of losing his or her tenancy.
However, in addition, under the new Act a tenant must also:
- include with the written declaration served on the RTB, a request for assistance in obtaining advice of the type provided by the Money and Advice and Budgeting Service (“financial advice”); and
- within 5 days of making his or her declaration, serve a notice on his or her landlord seeking a consultation to make rent payment arrangements.
Any tenant who had made a declaration under the RTVA and, so qualified for protection under the RTVA on 10 January 2021, also qualifies for continued protection under the new Act provided (unless equivalent steps have already been taken) that they also take the additional steps under the new Act to request assistance in obtaining financial advice through the RTB and to set up a rent payment consultation with their landlord.
New provision for disapplication of the tenant protections
Unlike under the RTVA, the protections under the new Act do not apply where:
- the tenant declaration of risk is not also accompanied by the request of the RTB for assistance in obtaining financial advice; or
- on 10 January 2021 any rent has been in arrears for 5 months or more (whether or not consecutively).
The protections will also cease to apply where:
- the tenant doesn’t provide sufficient information or documentation reasonably required to facilitate the financial advice envisaged under the Act on time or at all; or
- the tenant doesn’t comply with a rent payment arrangement agreed with the landlord; or
- the landlord serves a written declaration on the RTB (with a true copy on the tenant), stating that:
- any rent has been in arrears for 5 months or more (whether or not consecutively);
- the tenant hasn’t provided sufficient information or documentation reasonably required to facilitate the financial advice envisaged under the Act on time or at all;
- the tenant hasn’t complied with a rent payment arrangement agreed with the landlord; or
- the application of the protections to the tenant would cause undue financial hardship to the landlord.
The new Act goes on to determine that undue financial hardship would be caused to a landlord where:
- like the tenant, the landlord is a person in receipt of COVID-related or other financial supports as specified in the new Act;
- the rent concerned is the landlord’s sole or main income; or
- the dwelling concerned is subject to a mortgage and the landlord is unlikely to be able to comply with his or her obligations in relation to the mortgage if the rent remains unpaid for the emergency period.
Under the new Act it is an offence for either the landlord or the tenant to make a declaration that is false or misleading.
Is the “Level 5” protection from termination affected?
The Residential Tenancies Act 2020 (the “RTA 2020”), which restricts residential tenancy terminations generally (but not rent increases) in those areas and during those periods of the pandemic when a 5km restriction applies to people’s movements, remains in place but the interaction between the two protection regimes is different since the enactment of the new Act in place of the RTVA. Any at risk tenant, who qualifies for and claims protection from termination and rent increase under the new Act, will attract both the protections in the new Act, and the separate protection from termination on the terms of the RTA 2020, where that applies. See our separate briefing here on the Residential Tenancies Act 2020.
The State’s response to the financial difficulties caused by COVID-19 for residential tenants continues to evolve. The stated aim of this new Act is to further assist tenants financially impacted by Covid-19, while recognising and balancing the constitutionally protected property rights of landlords. In keeping with that, the protections for tenants in the new Act are not absolute. Tenants with rent arrears for five months or more are not protected, and tenants who are, must actively engage with both financial advice services and with landlords towards meeting rent payments. Landlords will also, now, have an opportunity to serve a declaration asserting their rights under the new Act.
This briefing is for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.