Proposed legislation requiring landlords to invite their tenants to place a bid on their property is unhelpful for both parties. 

That’s according to CEO of Property District Carol Tallon, who said the proposed legislation is some of “the least effective” she has ever seen. 

The First Right of Refusal legislation would require a landlord to invite a tenant to purchase the property within 90 days of issuing a notice to quit. 

Minister for Housing Darragh O’Brien is set to update Cabinet on the legislation, which was due to be in place by this summer but has been delayed to autumn. 

Ms Tallon told Newstalk Breakfast the legislation is “worse than tokenistic”. 

“It doesn't help or particularly hinder either the landlord or the renter because it will be full of exemptions that will make it effectively unworkable,” she said. 

Under the proposed legislation, the landlord is not required to sell their property to their tenant.

“If this was designed to genuinely help homebuyers, then the State could have given renters access to something like the First Home Scheme. 

“If the tenant can even raise up to 70% then the State could kick in 30% equity.”

First-time buyers

While the landlord is not required to sell the property to the tenant, certain rules make it more difficult for other interested buyers.

“When the sale price is agreed on the open market, the landlord must then go back to the tenant to provide them one last opportunity to purchase,” Ms Tallon explained. 

“Can you imagine if a first-time buyer has sale agreed the property after years of house hunting... only to be told we must go back and give the tenant one last opportunity to purchase.” 

The tenant might be able to avail of schemes that the first-time buyer can’t, putting them at a disadvantage. 

Gazumping

“The State is effectively trying to reintroduce gazumping, a practice that the market doesn’t like to see, despite some rhetoric out there,” Ms Tallon said. 

Gazumping occurs where there has been an informal agreement for the sale of a property. 

“That's not the kind of property market that anybody wants, whether they're a first-time buyer or somebody trading up or down or indeed a private investor,” Ms Tallon said. 

Couple purchasing a house. Image: Prathan Chorruangsak / Alamy Stock Photo

Ms Tallon said this legislation might only encourage more landlords to leave the rental market. 

“The State needs to stem the flow of landlords – both private and institutional – out of the marketplace or there will be no marketplace.” 

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