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Ireland's Covid-19 Emergency Measures: A Property Perspective

Paddy Smyth
30/03/2020

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Ireland

The Emergency Measures in the Public Interest (Covid-19) Bill 2020 ("the Bill") has now completed all stages in both Houses of the Oireachtas and has been signed into law by the President. The Bill proposes a number of wide ranging emergency measures in an effort to ease the burdens facing those affected by the ongoing Covid-19 crisis and to tackle the far-reaching effects of the virus.

 
  1. Amendments to the Residential Tenancies Act 2004 ("the 2004 Act")
Ban on Evictions 
The Bill provides that a landlord cannot serve a notice to terminate a residential tenancy during the 'emergency period'.  The emergency period will be the period of 3 months commencing on the enactment date of the legislation.  The Government will be able to extend the emergency period as required in the public interest.

If a notice to terminate a residential lease was validly served prior to the emergency period then the termination date will be the period of notice that remains once the emergency period has ended.  This will mean that termination notice periods are effectively frozen until the expiration of the emergency period.  This provision will also apply to protect tenants with leases of less than 6 months duration.

A tenant who has already been served with a notice of termination and who has remained in occupation of the property from the expiration of the notice, will be entitled to remain in occupation of the dwelling until the expiration of the emergency period.

Commercial Tenants
Section 5(7)(a) of the Bill extends the prohibition on evictions to all tenancies as follows:

"…all proposed evictions in all tenancies in the State, including those not covered by the Act of 2004, are prohibited during the operation of the Emergency Measures in the Public Interest (Covid-19) Act 2020."

Although this section has been inserted as an amendment to the 2004 Act, the wording suggests that all commercial tenants will be entitled to benefit from the protection against evictions during the emergency period.

Rent Increases
No rent increases affecting residential dwellings will take effect during the emergency period.

Forbearance required from Landlords
The Minister for Housing, Eoghan Murphy, has asked that landlords "demonstrate forbearance" in dealing with their tenants during this difficult period.

The above measures will complement the emergency measures recently proposed by the banks in which a 3 month mortgage break was introduced to assist struggling borrowers. 'Buy to let' properties with impacted tenants will be able to take advantage of the mortgage break and it is anticipated that they will pass on the payment break to their tenants.

Tenants have been advised by the Department of Housing, Planning and Local Government to engage with their landlords as quickly as possible if facing difficulties. Rent Supplements and income supports will also be available from the Department of Employment Affairs and Social Protection to those who need assistance.

A copy of the Bill can be accessed here.

 
  1. Deferral of Commercial Rates
On Friday 20 March 2020, the Government formed an agreement with local authorities to defer commercial rates payments for businesses most immediately impacted by the Covid-19 crisis. The Department of Housing, Planning and Local Government has confirmed in its press release that this will include businesses primarily in the retail, hospitality, leisure and childcare sectors.

Short term cash flow support will be made available to local authorities to plug the gap created by the reduction in rates collection, which ordinarily contributes 1.5 billion euro to local authorities per annum. The Department has confirmed that local authorities will engage with rates payers at a local level and will keep the evolving situation under review. The press release confirms that while businesses directly affected will be the first in line for a rates respite, it acknowledges that as the situation develops, the financial impact on other businesses will also be taken into account.

Business owners whose operations have been directly affected as a result of Covid-19 have been advised by the Department to contact their local authority immediately in respect of rates falling due in the period to the end of May.

In these unprecedented times these emergency measures are certainly to be welcomed. The steps taken by Government will provide support not only to people facing eviction, but also assist businesses at risk of going under.  Whether or not the measures go far enough in the midst of an unfolding and rapidly escalating health and economic crisis, only time will tell. 

A copy of the press release in relation to these measures is available here.

Written by Adam Duggan and Aideen Farrelly in our Real Estate team

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