National housing charity Threshold has said that the sale by Permanent TSB and Ulster Bank of non-performing home loans is a matter of grave concern to the thousands of tenants who will be affected and threatens to exponentially increase pressure in the private rented sector. It understands that 4,000 buy-to-let properties are to be included in the PTSB sale alone, affecting up to 10,000 tenants, and threatening to dramatically escalate homelessness among tenants in these properties.
It is calling on the Government to:
- Legislate to ensure that receivers must ‘step into the shoes’ of the landlord and take on their obligations for renters in a receivership situation.
- Introduce a code of conduct on buy-to-let mortgage arrears, similar to the Code of Conduct for Mortgage Arrears (CCMA) for residential mortgages.
Commenting, Threshold CEO, John-Mark McCafferty said: “Threshold speaks to tenants on a daily basis who are suffering from the impacts of the current housing crisis, with security of tenure and the threat of eviction being the top issue. We call for any protection to mortgage holders who could be affected by the sale of the PTSB loan book to a vulture fund to be extended to tenants living in homes that are financed by distressed buy-to-let mortgages. While the loan may not be performing, the rent is still being paid by the tenants and without Government intervention, we will inevitably see homeless figures continue to rise once the vulture funds start to pursue aggressive repossession procedures on renters.”
Threshold is also highlighting the uncertainty for renters when their home is repossessed or goes into receivership. While a receiver is entitled to collect the rent, it does not have any obligations to the tenants. Tenants’ rights in relation to upkeep of the property, deposit return and adherence to the existing terms of the tenancy are often ignored by receivers when they are appointed or when lenders seek to repossess a mortgaged property that is being rented. Many properties that are subject to receivership are sold, which can result in tenants being evicted.
Mr McCafferty said: “At present tenants do not have an automatic right to be heard in the court proceedings relating to the repossession of their rented home, and the court is not required to have regard to the tenant’s rights or interests in making an order for possession and/or sale. A code for buy-to-let arrears, similar to the CCMA for residential mortgages, would introduce a transparent process for financial institutions, landlords and tenants; set out the required steps for engagement with the landlord and tenant and the forms of communication required; and ensure that financial institutions respect and uphold tenants’ rights.
He added: “It is unlikely that a tenant will know anything about the details of their landlord’s mortgage, so every tenant in the country will sleep a little less easy from now on, unsure of whether or not the mortgage on their home will soon be sold to a vulture fund. We have called in the past for the amendment of the Residential Tenancies Act 2004 to recognise the appointment of receivers and their right to collect rent in place of the landlord, and as a result, provide that receivers must ‘step into the shoes’ of the landlord and take on their obligations. Action on this issue was promised in December 2016 as part of the Rebuilding Ireland plan and was due in late 2017 but it just hasn’t happened.”
“In order to make the private rented sector a more viable long-term housing tenure, Threshold is reiterating its call for the Government to make changes to the law to provide greater long-term security of tenure for tenants. In particular, greater clarity needs to be established around landlords using the sale of a property as grounds for the termination of a tenancy.”
Threshold’s Tenancy Protection Service works to prevent families becoming homeless in the first place and is urging people and families who are renting and who are worried about losing their home to contact them, free of charge, on 1800 454 454, 9am to 9pm, Monday to Friday.
Mr McCafferty added: “We await evidence that Government is taking the matter of Buy-to-Let properties in the sale of bank loan books seriously, or that it has a strategy on this issue.”