The threat by a group of builders to bring a legal challenge to the Government’s rent reforms on the eve of their introduction will be unwelcome for Minister for Housing James Browne.
Already a High Court case has been brought against another of their reforms – a move to change apartment design standards last year, which is being challenged by a group of local politicians and author and former Irish Times journalist Frank McDonald.
As regards the builders’ complaints, it should be pointed out that this is, for now, just a threat of action as opposed to a full-blown High Court case.
But even threats can sometimes have a chilling effect, with investors jittery about sinking money into developments while a risk remains of an adverse legal finding down the road.
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The legislation aims to protect tenants by ending most no-fault evictions and mandating longer tenancies. It also allows landlords to reset rents between tenancies.
Constitutional law experts are sceptical, however, of the legal strategy advanced by the builders, who argue the proposed reforms “pose significant constitutional issues relating to proportionality, lawfulness and property rights”.
Prof David Kenny, of Trinity Law School, told The Irish Times that although any legal challenge depended on the facts, circumstances and the arguments made, his view was that this one “faces significant obstacles to success”.
“While the legislative measures restrict constitutional property rights, these rights are heavily qualified in the interests of social justice and the common good,” he said.
Prof Kenny argued there was little in recent case law to suggest the Irish courts were defending private property rights in a way that indicated these measures would be found to be disproportionate.
He said while the Constitution enshrined property rights, the constitutionality of interventions that curtailed these rights were measured more broadly, including against the common good.
“Property rights were very severely restricted during the financial crisis without constitutional issue, and common good interest in addressing the housing crisis suggests that rights-restrictive measures could be justified,” Prof Kenny said.
Dr Laura Cahillane, of the University of Limerick school of law, said: “Issues like this always raise questions of constitutional rights, since our constitution contains very strong protection for property rights.
“However, the Constitution also allows for these rights to be regulated and limited in accordance with the principles of social justice and the common good.
“It is the job of the Oireachtas to decide when such rights should be limited in this way, and the courts will only interfere if the limitations imposed are disproportionate.”
The builders argue that the Government’s proposed reforms are an unjust attack on property rights as the measures restrict large landlords’ ability to use their properties as they wish. Such landlords are classified as those having four or more tenancies.
Dr Cahillane, however, said the case was “somewhat overstated”.
“The restrictions are targeted and qualified in that the proposal only applies to large landlords, it only applies to future tenancies, and all landlords can still end tenancies where the tenant is failing to meet their obligations,” she said.
The builders’ legal advice also points out that advice in recent years from previous attorneys general has held that such a step would be unconstitutional. However, Dr Cahillane said such advice was not binding law and did not create precedent.
“It is advisory and tailored to the specific legislative proposals then under consideration. Different legislative contexts, policy objectives and evidential foundations can justify different advice. The courts assess legislation independently, not by comparing it to earlier AG opinions,” she said.
Professor Rachael Walsh, who teaches and researches in property and constitutional law at Trinity College Dublin, said the State often introduced laws that interfered with how a property was used or how an individual could profit from their property.
The Constitution, she said, guarded against a property being taken from someone outright as opposed to “the ordinary running of the regulatory state”.
Prof Walsh, who recently consulted with a civil society group on a submission it made to the Government on security of tenure reforms, said landlords had a choice not to rent their property to begin with.
“Also, when you’re engaged in a profitmaking activity in the context of a regulated market, your use of the property is going to be cabined [confined] and curtailed by the market,” she said.
