Rent fixing against the law, claim landlords

Government efforts to fix rents amid escalating rates in Dublin and elsewhere have been declared “unconstitutional” and an “attack on the property rights” of landlords, TDs and senators have been told.

Landlords are also threatening to withdraw co-operation with social housing tenants and those on rent supplement schemes if rent control measures are introduced.

Amid a rift between members of the coalition on whether to introduce “rent certainty” for a number of years, property owners have now contacted politicians directly outlining legal objections to such a move.

Stephen Faughnan, the Irish Property Owners Association (IPOA) chairman, circulated arguments against rent certainty and data showing existing costs for property investors to all parliamentary members.

The intervention comes as Environment Minister Alan Kelly continues to insist he will still bring rent certainty plans to the Cabinet as soon as possible, despite Taoiseach Enda Kenny telling the Dáil this week that “interference in the market, to its detriment, is not something we should do”.

In its email yesterday to TDs and senators, the IPOA said: “In the current climate of political unrest, we must advise extreme caution, to prevent any short-term moves (which may appear to be politically popular) in the long-term interest of society. We cannot be left with a situation of a mass exodus from the sector.”

Mr Faughnan pointed out that the Supreme Court in 1982 had ruled that legislation which restricted the amount of rents payable to landlords was invalid, “unconstitutional”, and an “unjust attack on the property rights of certain landlords”.

The association pointed to research last year by the economic consultants DKM which, it said, argued that rent regulation would have negative impacts. These include black market transactions, lower-quality housing, and a negative impact on the supply of housing, it said.

The research claimed that 71% of landlords had insufficient income from their rental property to cover loans and that 84% of landlords have not increased rents for over 12 months.

The research also claimed potentially between 52,000 and 89,000 rental properties could exit the sector over time due to the impact on net yields for landlords, a situation that Fine Gael TDs privately warn could happen.

But the IPOA has told politicians, including Mr Kelly, that landlords will refuse to deal with social housing tenants and those on rent supplement schemes if rent controls are introduced.

Mr Kelly’s spokesman last night said it was still the minister’s intention to bring in rent control measures.

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