Tenancy | Terry Gorry & Co. Solicitors

The obligations of a landlord in a residential letting or tenancy
A landlord’s obligations in a residential tenancy and letting can be very onerous. A good working knowledge of your rights and obligations can be very important.

The governing legislation is the Residential Tenancies Act 2004.

The residential tenancies act 2004

The Residential Tenancies Act 2004 applies to every dwelling which is the subject of a tenancy.

There are some limited exceptions where the residential tenancies act will not apply but this report is intended for the vast majority of residential lettings which have arisen over the last 10 years in Ireland.

Part 4 Tenancy

One of the most important effects of the residential tenancies act is that where a person has been in occupation, under a tenancy, for a continuous period of 6 months then, provided no notice of termination has been served, then the tenancy will continue for 4 years.

This right of the tenant is of huge significance for many landlords and this tenancy is then called a Part 4 tenancy.

Landlord and Tenant’s obligations

All of these obligations are set out in the act and are incorporated in the standard letting agreement which is used by most solicitors in Ireland.

You can see this agreement at www.dsba.ie (Dublin Solicitors Bar Association) so if you are unsure as to your obligations as a landlord or tenant have a look there first or consult your existing agreement if you are currently a landlord/tenant.

Rent/Rent review

Rent may not be set at an amount greater than the market rent for the tenancy in question and any disputes can be referred to the Tenancy Tribunal of the Private Residential Tenancies Board (www.prtb.ie)

Termination of Residential Tenancies

Tenants of fixed term tenancies ie the standard 12 month letting agreement common in Ireland have security of tenure from the word go as a result of their 12 month agreement.

Termination of a residential letting by the Landlord

A landlord can terminate a Part 4 tenancy prematurely on one of 6 grounds laid down by the legislation and only then when he serves a notice of termination stating the ground and has served the notice in accordance with the notice periods laid down by the act.

The 6 grounds for premature termination of a Part 4 tenancy by the landlord are

1.The tenant has failed to comply with their obligations. However the landlord has to notify them of their failure and give them a reasonable time to remedy the failure.
2. The property is no longer suitable for the tenant.
3. The landlord intends entering into an agreement within 3 months to sell the property.
4.The landlord requires the property for his own use or for a family member (but he must specify who he needs it for and for how long)
5. The landlord intends refurbishing or renovating the property.
6. The landlord intends changing the use of the property to some other use.

If the landlord uses one of these grounds dishonestly then the tenant can make a complaint to PRTB and they can award compensation to the tenant.
PRTB awarded over €5,000 to a tenant who had been illegally evicted in Galway in 2006.

Termination of a residential letting by the tenant

The tenant may terminate by giving a notice of termination to the landlord with the required notice period.

Unlike the landlord the tenant can bring a Part 4 tenancy to an end without giving a reason.
The first 6 months
A landlord can terminate a tenancy, provided it is not a fixed term tenancy, within the first 6 months without giving a reason.

However he must give the statutory notice period.

12 month fixed term tenancy

The right to terminate prematurely in this instance is limited to situations where either party is in breach of the agreement or in breach of their statutory obligations.

Landlords need to be careful here as the fixed term tenancy gives more protection to the tenant than they would have if they only had a Part 4 tenancy as this can be terminated in the first 6 months without giving a reason.

Further Part 4 tenancies

Where a tenancy continues to the end of the 4 years of the part 4 tenancy and neither party serves notice of termination then a further Part 4 tenancy will arise and will last for 4 more years.

Multiple Occupants
Security of tenure applies to any premises occupied by multiple tenants from the earliest date at which any of them has 6 months occupation clocked up.

Contracting out

You can not contract out of Part 4 of the act which means no matter what you want to agree with the tenant he has his statutory entitlement to a Part 4 tenancy.

Notices

Notice must be served to terminate in all cases. The periods are different for tenants and landlords.

Termination notice
This must

Be written
Signed by the landlord/tenant
Specify the date of service
If the tenancy is for more than 6 months state the reason
The date of termination
Notice Periods
Where the landlord wants to terminate where the tenant is in breach the period depends on the default-anti social behaviour requires only 7 days notice.

For any other reason the period is 28 days and if it is non payment of rent then the landlord must first notify the tenant in writing that the rent is overdue. He must wait 14 days and then serve the notice of termination of 28 days.

Termination by landlord

Length of tenancy Notice period

Less than 6 months 28 days

>6 months and <12 months 35 days Between 1 and 2 years 42 days Termination by tenant Length of tenancy Notice period Less than 6 months 28 days >6 months and <12 months 35 days

Between 1 and 2 years 42 days

Time limit for disputing a notice of termination

Must be referred to PRTB within 28 days of receipt of the notice.
Residential Letting Agreement Template

The Landlord and Tenant Act 1980 which was amended by Landlord and Tenant Act 1994 provide statutory entitlements to tenants in a landlord/tenant relationship.

The reliefs apply where the property that is the subject of the agreement is a tenement which is a legal description but has been interpreted fairly generously. It includes buildings which are not permanent and can include sheds erected without planning permission.

To qualify for the statutory entitlements the main purpose/use must attach to the buildings. If there is land involved then the land must be subsidiary and ancillary to the main use of the buildings.

Section 16 of Landlord and Tenant Act 1980 provides that a tenant will be entitled to a new tenancy at the expiry of his existing lease if he can prove one of the following equities

* Business equity-if the tenant was in occupation for 5 years continously and was using the premises/tenement for business purposes (this period used to be 3 years); temporary breaks can be disregarded by the courts. The five year period only applies to tenancies/leases which commence after 10 August 1994 and the tenant must occupy the tenement for the entire period

* Long possession equity-this applies to both residential and business property and states that if the person was in occupation for 20 years then he/she was entitled to a new lease

* Improvements equity-this also applies to both residential and commercial property and states that if the tenant would be entitled to compensation for improvements and they accounted for half or more than half of the letting value of the tenement when the notice of intention to claim statutory relief, then the tenant has an improvements equity

Terms of a new tenancy

These terms are to be agreed between landlord and tenant and failing that will be fixed by the court. If the tenant is entitled to a new lease based on business equity the new term shall be fixed at 20 years or such time as the tenant may nominate, provided it is over 5 years.

If the right to a new tenancy is based on long possession or improvements the term of the new tenancy will be 35 years or a lesser term that the tenant can nominate.

Rent

This will be fixed by the court at open market value if the landlord and tenant can not agree on a new rent.

Restrictions on a right to a new tenancy

Section 85 of the act prevented any provision contracting out of the Act. However this was changed re the tenant of an office premises who could contract out of his right if he took independent legal advice and signed a renunciation under sect 4of his right and this had to be done before the commencement of the tenancy.

Other restrictions include the situation where the tenant is in breach of the lease in respect of payment of rent.

Furthermore where the landlord intends to pull the building down in order to redevelop the building/site then he can refuse to grant a new tenancy. However if this occurs and the tenant would have been entitled to a new tenancy otherwise, then the tenant is entitled to disturbance compensation which is a right of both residential and commercial tenants.

How to claim a new tenancy

The forms required are set out in Landlord and Tenant Regulations, 1980. This notice must be served before the end of the tenancy or within 3 months of the end. (The courts have discretion to extend these time limits in limited circumstances)

Compensation for improvements

This is available to both residential and business premises. Where a tenant quits a tenement because of the termination of the tenancy he is entitled to be paid compensation for every improvement by him or any predecessors in title which adds to the letting value of the premises.

However he will not be entitled to compensation if he has surrendered the lease or the termination is for non-payment of rent.

Improvement noticeWhere a tenant proposes to make improvements to the tenement he may serve an improvement notice on his landlord.

If the latter ignores it then the tenant can go ahead with the works and is entitled to compensation. However the landlord can then himself serve an improvement undertaking notice on the tenant and execute the works himself. Or he can object to the improvement notice and the tenant can then withdraw his notice or apply to court which can allow the tenant to make the improvement or reject his claim based on the fact that he has not been in occupation for 5 years and is consequently not entitled to a new lease.

Any covenants in the lease which prohibit the selling of the building or the change of use of the building will be interpreted as only prohibiting this to occur without the landlord’s consent, and this consent must not be unreasonably witheld.

A similar interpretation will apply to any covenant in the lease prohibiting the making of improvements.

Update

The Civil Law Act 2008 has made some changes to Landlord and Tenant legislation. Previously only the occupier of an office lease could contract out of his right to a new lease as outlined above.

The Civil Law Act 2008 now allows any business user to renounce his right and furthermore allows him to renounce not just prior to the commencement of the lease but at any time. He must still receive independent legal advice.

Residential Letting Agreements-Landlord’s Obligations