Tenants in Ireland have, by virtue of Part 4 of the Residential Tenancies Act 2004 (the 2004 Act), been protected from termination of their tenancy subject to certain conditions. Prior to 2004 tenants could avail of a new tenancy, subject to compliance with certain statutory definitions, based on either 20 years’ continuous occupation of the premises or an improvement carried out by the tenant which doubled the letting value of the property.
The 2004 Act ushered in a new way of thinking and allowed for new tenancies based on 4 year cycles. A tenant who is continuous occupation for a total of 6 months is entitled to remain in the property for a further 3 years and 6 months. It should be noted that nothing will prevent parties from mutually agreeing a termination at any stage during the tenancy.
The ‘Part 4 tenancy’ is subject to six grounds, outlined in Section 34 of the 2004 Act. These include, inter alia, where a tenant is notified of a failure to remedy an obligation under the tenancy and then fails to remedy said failure; where the accommodation is no longer suitable for the needs of the tenant; where the landlord wishes to substantially refurbish or redevelop the property; and where the landlord notifies the tenant of its intention to transfer its whole interest in the property for full consideration by virtue of an enforceable agreement to another within three months of the termination of the tenancy.
A recent High Court ruling considered the final ground above. Ms. Justice Marie Baker considered a Private Residential Tenancies Board (PRBT) tribunal ruling which upheld a PRTB adjudicator’s decision that a notice to terminate the tenancy by reason of intention to sell was valid notwithstanding no stated intention to sell within 3 months of termination.
This decision related to a rented family home in Cabinteely which had been served notice by Mr. John McStay, receiver over certain assets of Durkan Homes. The court held that where a notice is served on a tenant it must comply with both section 34 and section 62 of the 2004 Act. The intention to sell must be stated as well as the intention to enter into a binding contract within three months of the termination. It was the court’s opinion that the Oireachtas, when drafting the legislation, did not envisage that terminations could be grounded on the hope or expectation that an enforceable sale would arise.
It would seem prudent, given the ruling, that practitioners should take care when serving notices on rented family homes that the precise reasons for serving such notices and clearly outlined and that thorough research of the prevailing sales market is undertaken.
NOTE: The notice periods for termination of a tenancy by either landlord or tenant have recently been revised and can be found at http://www.prtb.ie/dispute-resolution/disputes/the-three-stages-of-a-tenancy/notice-periods-for-notice-of-termination
If you have a query regarding any aspect of the Residential Tenancies Act 2004, please contact Miriam O’Connor, Partner for expert legal advice
on 061-414355 or [email protected].