Landlords could use retrofitting scheme to end tenancies, says tenancies board

The Government's new retrofitting scheme could become a "problem" as landlords may use it as a reason to end tenancies, the Residential Tenancies Board (RTB) has told the Dáil's Public Accounts Committee.

The Home Energy Upgrade Scheme, announced earlier this month, is to provide people with grants to improve the energy efficiency of their homes. The scheme, part of the State strategy to combat climate change, aims to retrofit 500,000 homes by 2030.

Landlords can end tenancies if they plan to carry out a “substantial refurbishment” of the property. There is also an exemption available from the rules limiting rent increases in rent pressure zones (RPZ) if the landlord plans to make a “substantial change” to the property, including substantially improving its Building Energy Rating.

Sinn Féin TD Imelda Munster raised the issue during Thursday's committee meeting and asked the RTB representatives if the new retrofit scheme will appeal to landlords as a means of circumventing RPZ regulations.

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RTB chairman Tom Dunne said it is a "very good question because clearly one of the reasons why you can ask a tenant to leave the accommodation is if the accommodation is in need of refurbishment".

He said: “If you give incentives to people who own property to bring the standards of insulation etc up. . . clearly a number of landlords may choose to undertake that work and in order to undertake it they may need to get the tenant out of the property. So that’s one of the issues that might arise because of that.”

Ms Munster suggested it could add to the crisis in the rental sector and asked if the RTB had come across this issue as a result of previous retrofitting schemes.

Mr Dunne said this had not been researched. “I don’t think there has been a scheme as extensive as this. There were always incentives from the sustainability organisations to incentivise people to insulate their houses. . . and I’ve never come across even anecdotally that being a problem. What I’m saying is it might become a problem now.”

Mr Dunne said the issue came up at a recent meeting with Minister for Housing Darragh O’Brien and “it is something that one needs to be thinking about”.

The RTB later told the Irish Times that landlords can end tenancies if they want to carry out significant refurbishment but they must satisfy a number of criteria.

These include stating if planning permission is required and the duration of the proposed works, and the notice of termination must contain a certificate from a registered professional stating that the proposed work poses a threat to a tenant’s health and safety.

It said that once the works are complete the landlord must offer the property back to the original tenant.

Senior officials from the RTB also faced questions over an information technology project - a tenancy management system - that was delayed and more than doubled in cost to €6.9 million.

Comptroller & Auditor General Séamus McCarthy outlined how the cost of the project at the end of 2020 was expected to be €5.2 million, which was some €1.9 million more than the originally budgeted €3.3 million. The project did not go live until last November, more than 18 months later than originally planned.

RTB’s head of finance Bryan Kelly later told the meeting the full cost would be around €6.9 million. He defended the development process but said there were technical complexities including issues in transferring the data from defunct technology to the new system that had not been expected.

Mr Dunne said the RTB's board was "very concerned" about the project and has commissioned a study to be done on it by Mazars.

Fianna Fáil TD Cormac Devlin challenged Mr Dunne on whether lessons had been learned on how to manage such large scale projects in future.

Mr Dunne replied: “It’s an understatement to say that those lessons have been learned.” He said one of the biggest is that “IT projects are troublesome to say the very least”.

The RTB said the new system is “performing well” and it is “confident it will accommodate the significant uplift in activity which the new Annual Registrations regime will introduce - expected to be a tripling of tenancy registration volumes”.