Some of the country’s biggest home builders have warned the Government its proposed rental sector reforms are unconstitutional and threatened legal action if they fail to engage with them on it.
The property developers warned Minister for Housing James Browne and Tánaiste Simon Harris that the Government’s proposed reforms are inconsistent with both the Irish Constitution and the European Convention on Human Rights (ECHR). They have held out the prospect of taking legal action should the Minister for Housing fail to engage with them prior to the legislation’s introduction on March 1st next.
In letters sent on January 8th and 23rd last, copies of which have been seen by The Irish Times, October Investments chief David Daly, a developer with more than 45 years’ experience in the residential and commercial property sectors, said the proposed reforms “pose significant constitutional issues, relating to proportionality, lawfulness and property rights”.
Warning of the potential consequences of a refusal by the Minister to have a “meaningful exchange and meeting” with him and his fellow developers in advance of the legislation’s introduction, Mr Daly said: “In the unlikely event that you refuse to engage with us, then quite obviously, it follows that we expressly reserve all of our rights. We trust this will not be necessary and look forward to engaging with you.”
Mr Daly’s letters to the Minister were sent with the support of Michael Stanley, chief executive of publicly listed home builder Cairn Homes, Ballymore Group founder and chairman Seán Mulryan, Marlet Property Group chief Pat Crean, and the veteran Dublin housebuilder Bernie Carroll.
Mr Daly wrote in the first instance to the Minister on January 8th to outline what he described as his and other developers’ “core concerns” in relation to the proposed rental sector reforms, and to seek a meeting to discuss these issues.
As part of that letter which he copied to Simon Harris, Mr Daly enclosed a legal opinion produced by his company’s legal advisers, Byrne Wallace Shields.
Referring to that legal advice, he said: “The legal paper outlines key observations as well as recommendations to ensure that any reforms are proportionate, lawful, and consistent with property rights under Bunreacht na hÉireann.”
Chief among the proposals causing concern to Mr Daly and his fellow developers are the proposed ban on no-fault evictions for “large landlords” (defined as those with more than four tenancies). The measure, which would not apply to landlords with three tenancies or fewer, would, according to Mr Daly’s legal advice, represent an “unjust attack” on a large landlord’s property rights under the Constitution. It would also be in breach of the right to property of Article 1 Protocol 1 of the ECHR, the advice states.
Commenting on the potential impact the Government’s current proposals would have on developers’ ability to finance the construction of residential units, he said: “From a strictly funding perspective it is imperative that banks, investors and foreign funds have a high degree of certainty and confidence around the valuation of their investments. It is our view that the proposals – particularly those concerning no-fault evictions in the event of a sale – will negatively impact on valuations.”
Mr Daly added that it was the view of the developers that the legislation represented “an unlawful and ostensible interference with constitutional property rights.”
He said he and his fellow developers were ready and willing to work with the Minister and his department to “assist in developing appropriate policy solutions that would fully preserve the intention of the proposals while not presenting a breach of constitutional rights under Bunreacht na hÉireann.”
While Mr Daly’s initial letter is understood to have been met with a pro-forma acknowledgment from the Minister’s department, he has yet to secure a meeting to discuss their concerns. He wrote again to both Mr Browne and the Tánaiste last week, asking the Minister to respond to his request for a meeting as “a matter of urgency and no later than five business days” from the date of his letter (January 23rd). The Irish Times understands he has yet to receive a response.
A Department of Housing spokesman said the legislation is “necessary to drive greater supply of properties to rent and to protect tenants”. He said it was drafted in coordination with the Attorney General and has as its “fundamental objective” a balancing of tenant and landlord rights. The Housing Agency undertook extensive engagement with industry and other stakeholders as part of its evaluation of the rent regulation, he added.