Not All Short-Term Lets to Be Covered By Proposed Regulations

On Tuesday afternoon, it was quiet outside the Alexandra Walk and Adelaide Square apartment complexes on Wood Street, a short walk west from Aungier Street in the south inner-city.

There were 25 listings for one- and two-bed apartments in these blocks in Daft.ie’s short-term rentals adverts that same day, posted by Scandik, which offers luxury short-term serviced apartments in the city.

Prices ranged from between €700 and €1,025 a week for a one-bed apartment, to between €800 and €1,125 a week for a two-bed apartment.

Nobody at Scandik was available to talk about this postings. Scandik was contacted twice over the phone, and by email.

But these are just a few of the 286 listings in Daft.ie’s short-term rentals section at the time, many of which were pitched not simply as holiday lets but as short-term or mid-term residential and “corporate” lets – for those coming to the city on business, or to study, for example.

It’s hard to tease out at the moment, though, where these lettings – which some call corporate lettings – fall within both planning law, and laws that cover tenancies or licences.

“It sounds like this is an area that needs to be regulated. We have regulations for short-term lettings, we have regulations for long-term lettings,” says Labour Party Councillor Andrew Montague, head of Dublin City Council’s Planning Committee.

“This is kind of in between and it’s kind of avoiding any type of regulation in a very lucrative part of the market,” he said.

Waiting for Rules

Back in 2016, An Bord Pleanála ruled that someone using an apartment for short-term holiday lets in Temple Bar year-round needed planning permission to do that.

That was because it meant people coming and going, so there were concerns around the security of other residents, and because it was fully commercial, the order said.

Dublin City Council has taken that ruling to mean that “the continued operation of any apartment or residential unit exclusively for commercial short-term letting purposes on a year-round basis” requires planning permission, as Assistant Chief Executive Richard Shakespeare said in a recent report.

The council’s planning database shows no change of use applications for the Alexandra Walk and Adelaide Square apartment blocks on Wood Street, though.

Scandik is a member, alongside nine other companies, of the Corporate Housing Alliance, members of which “provide extended-stay accommodation to corporate clients in Ireland”.

When Housing Minister Eoghan Murphy announced an outline of future regulations for short-term lets in October last year, it said – among other provisos – the regulations would apply to rentals of 14 days or less.

So that means the new regulation would not apply to “extended-stay accommodation”, such those offered by Scandik and other members of the Corporate Housing Alliance.

Unless, that is, any individual letting is for less than two weeks at a time in which case planning permission would be needed for a change of use, a Department of Housing press release says.

It’s unclear how planning enforcement departments will be able to check both the length of stays and whether visitors are holiday-makers or those eligible to stay in “extended-letting accommodation”.

Scandik, for example, notes on its website that “serviced apartments are the smart alternative for the discerning business and leisure traveller”.

A Normal Tenancy?

Under a normal tenancy, a tenant has to be registered with the Residential Tenancies Board (RTB), given a certain amount of notice if they’re kicked out, and – in areas deemed rent-pressure zones – rents can only be hiked more than 4 percent a year in specials cases of, say, substantial changes to the property.

Tenants have slightly fewer rights within the first six months of a tenancy – a landlord need not give them a reason to evict them, for example.

After six months, what’s known as a Part IV tenancy kicks in, which lasts for six years, and in that case a tenant can only be evicted under certain circumstances, and with a notice period that depends on how long they’ve been there.

It is unclear whether companies that offer “extended-stay accommodation” on a short- to medium-term basis register people staying in the properties at the moment as tenancies with the RTB.

Several declined to comment, including: Embassy Estates, Adoor, Galvin Property, Vicky Marshall – Merrion Property Group. Mobhi Court Apartments said they were unavailable until later in the week to comment.

“Where the dwelling is the principle residence (as opposed to a holiday stay) of the person staying there and there is no legitimate license agreement in place and once the tenancy comes into existence then it falls under the remit of the Residential Tenancies Act and it must be registered,” says a spokesperson for the RTB.

The Corporate Housing Alliance, which has lobbied several TDs and Department of Housing officials in recent months in relation to short-term letting regulations, didn’t answer directly a query as to whether its members register stays with the RTB.

“I think your questions may be better directed to the Residential Landlords Association as CHA members are not landlords. They would have a lot more insight on relations with the RTB and can help you out,” they said.

Back in October last year, the CHA welcomed the proposals for short-term letting regulations that the Department of Housing had outlined.

“In essence, the Department has stated that the proposed changes will not affect the operation of longer-term flexible lettings which are provided for those coming to Ireland under employment contracts,” its release said.

“The extended-stay sector plays an important role in providing a positive environment for both indigenous businesses and FDI in Ireland and does not negatively impact housing supply,” it read.

Higher Rents

Many of the “extended-stay accommodations” list plush add-on services that most Dublin tenants would be unlikely to get: a weekly maid service, linen, towels and sometimes access to leisure facilities. But not all do.

They are also more expensive that the average rents for equivalent-sized apartments.

One two-bed onLeeson Street, offered by Adoor, a “premium serviced apartment provider” in Dublin, is currently available for €4,500 per month.

There is no data available for the two closest areas on the RTB’s average rents to Leeson Street – being Charlemont Street and Lower Mount Street – but average rent in the next closest area, Grand Canal Dock, was €2,355.98 per month in late 2018.

In Clontarf, a three-bedroom house named clontarf/rinn-na-mara-clontarf-dublin-1758708/”>Rinn na Mara is available for a “one month minimum, flexible thereafter” stay, advertised at €695 weekly – which multiplies out to €2,780 per month.

It’s unclear from the post what kinds of visitors are allowed to stay there – tourists, people coming for business, or both. A representative from Dublin 4 Lets, the company letting Rinn na Mara, declined to speak on the record about who stays there, and for how long.

According to the RTB’s quarterly average price index, average rent for a three-bedroom terraced house in Clontarf in late 2018 was €1,850.30.

In Dublin City Council’s Development Plan for 2016-2022, Rinn na Mara in Clontarf is zoned as a Z1, “to protect, provide and improve residential amenities”.

When an area is zoned for a specific purpose, says Workers’ Party Councillor Éilis Ryan, it needs to be used for that specific purpose.

“The whole of Stoneybatter is zoned as residential so you couldn’t set up a butchers on Oxmantown Road,” says Ryan.

“You wouldn’t be allowed because there is no zoning for commercial activity. It’s not solely about the individual building, it’s about the entire area and what that’s zoned as,” she says.

Is It a Licence?

Perhaps, those operating in the corporate letting industry consider those who stay there licensees, rather than tenants.

Licenses provide permission to occupy a dwelling in cases that fall short of exclusive possession or occupation.

“A typical license agreement is where a person stays in a hotel, hostel or guesthouse or a person sharing a house with the owner of that house,” said a spokesperson for the RTB.

Because properties offered in the corporate letting sector are “fully serviced”, does this mean that that they have a tenancy agreement with the property owner or a licence?

“That would be more indicative of a licence as obviously the tenant themselves aren’t organising someone else to come in and clean,” says Tricia Sheehy-Skeffington, a barrister with expertise in Landlord and Tenancy Law.

“I presume if they said ‘No we don’t want someone to come in and clean,’ they’d be told, ‘No well we’re going to have somebody,’” she said.

“So they are removing a facet of exclusive control there. Exclusive  possession is the main facet of whether something is a tenancy or not,” says Sheehy-Skeffington.

“If, however, the landlord didn’t exert that control and the person stayed in the one room, that would mean that a tenancy might now exist. The courts may say that you never exerted that control. You allowed the person to stay there as a tenant,” says Sheehy-Skeffington.

Tenancies give tenants certain rights not available to licensees, she says, and they mean that minimum standards apply to the property.

“If someone is doing a six-month short-term thing for a tech person coming over for six months or three months, is that commercial or is it just short-term residential? Because it’s not a typical Airbnb,” says Green Party Councillor Patrick Costello.

According to a Dublin City Council spokesperson, at present this is “determined on a case by case basis according to the specific circumstances pertaining to a property”.

UPDATE: This article was updated on 6 February at 11:50am, to correct some quotations from Tricia Sheehy-Skeffington to highlight that whether the courts may consider something a tenancy or a license is not always clear cut.