In a development of interest to those owning and managing student accommodation, the Irish Government has recently announced its intention to introduce legislative changes aimed at “protecting” students from year-long leases.

Background to the announcement

The announcement was made by Simon Harris TD, then Minister for Further and Higher Education, Research, Innovation and Science, and Darragh O’Brien TD, Minister for Housing, Local Government and Heritage. They expressed the Government’s support for legislative amendments that would ensure student accommodation leases / licences align with the academic calendar.

This decision was prompted by concerns over situations where students had been required to take 51-week leases / licences. It is the view of Government that such long-term commitments are neither affordable nor practical for the majority of students, leading to a call for change.

Implications of the proposed changes

It is anticipated that the proposed changes will confine student-specific accommodation leases / licences to the duration of the academic year, or at least prevent providers from requiring a minimum 51-week lease where that is in excess of the particular student’s requirements.

The requisite amendments to the Residential Tenancies Acts are scheduled to be brought in before the summer recess, with the aim of having them in place for the upcoming academic year. The draft legislation has yet to be published and there is no definite timetable for its enactment. However it must be assumed that, as this initiative is sponsored by our now Taoiseach and is likely to have cross-party support, it will become law in advance of the next academic year as intended.

As the Government has yet to publish a draft of the relevant legislation, it is not possible at this point to provide any further detail regarding how the proposal will operate in practice. We will, however, provide further updates in due course.

For more information in the meantime, please contact Aoife Smyth, Knowledge Consultant, or any member of ALG’s Real Estate team.

A&L Goodbody is delighted to announce the return of its Construction, Planning and Procurement seminar on Wednesday 21 February 2024, 7.15am – 9.15am at the Banking Hall of the College Green Hotel (formerly the Westin).

Trying to plot a path through the challenges that the coming year might present, our breakfast seminar will address some important topics impacting our clients. The items for consideration will include:

  • Are we being hasty in abandoning the Public Works Contract in favour of NEC4.
  • Demolition-free zone; is the refurbishment of older building stock now the only game in town?
  • Ten years of BC(A)R – some issues that remain to be resolved.
  • The legal issues that may arise in refurbishing buildings.
  • The potential for increased regulatory scrutiny in 2024: bid-rigging, green procurement, and the Foreign Subsidies Regulation.

The seminar promises to be informative, practical and lively with insights being shared by leaders in their respective fields. The seminar also qualifies for Legal/General CPD with the Law Society of Ireland.

Breakfast and registration will be from 7.15am and the seminar will begin at 7.45am. As always there will be a Q&A session for our speakers at the end of the agenda items with a view to finishing up at 9.15am, or a little later if you would like to stay on and connect with some people who you may not have met for some time.

Please RSVP here by Wednesday 14 February. We look forward to seeing you.

The Joint Committee on Housing, Local Government and Heritage has just published its report (the Report) on its pre-legislative scrutiny of the General Scheme of the Residential Tenancies (Right to Purchase) Bill 2023 (the General Scheme).

Background

On 7 March 2023, the Government agreed in principle to the introduction of a new legislative measure giving tenants a “right of first refusal” in respect of their rented accommodation. The General Scheme is the product of that agreement in principle and essentially represents the draft workings of the officials at the Department of Housing, Local Government and Heritage (the Department) before the formal bill is prepared. It is therefore a very early draft and and its terms should be seen as subject to further revision, both in the initial legislative drafting process, and also during its subsequent journey through the Oireachtas.

Right of first refusal

Head 7 is the head which deals with the right of first refusal, referred to as an “invitation to bid”. In very basic terms, when serving a notice of termination on the ground of the sale of the property, the landlord will be required to simultaneously invite the tenant to make an offer to buy the property, which the tenant must do within 90 days. Note that, as presently drafted, this obligation only arises where the landlord is seeking to terminate on the grounds of the sale of the property. Consequently, notwithstanding the specific exclusions (more of which below), it will not be of relevance on the sale of a fully-tenanted investment where the expectation is that the tenants will remain in situ.

A landlord cannot contract to sell the dwelling to a party other than the tenant, a local authority, an AHB or the Housing Agency (any of which wish to acquire the dwelling for the continued occupation of the tenant), during the initial 90 day period. If a tenant makes one or more unsuccessful bids during the 90 day period and the landlord then proposes to contract at the end of that period with a third party for an amount equal to or lower than the tenant’s bid, the landlord must give a further invitation to bid to the tenant, giving the tenant a further 10 days within which to make a further (i.e. matching) bid.

Where a tenant is not in a position to exercise their right of first refusal, they can contact their local authority for assistance and any local authority, AHB or the Housing Authority (as appropriate) can make a bid on the property during the 90 day period where the tenant is deemed to be at risk of homelessness.

Application

Presently, the right of first refusal can only be availed of by:

  • a Part 4 tenant in situ in a rented dwelling as their principal private residence;
  • who does not own residential accommodation in Ireland;
  • who can provide to the landlord evidence (in a form to be prescribed by Ministerial regulation) of their financial capacity to meet their bid; and
  • who is not in breach of their obligations to pay rent, repair, not behave in an anti-social manner etc.

Exclusions

Under the General Scheme, the requirement to issue an invitation to bid to the tenant does not apply to:

  • student-specific accommodation;
  • dwellings within a build to rent development;
  • dwellings provided by approved housing bodies to social tenants;
  • cost-rental dwellings under the Affordable Housing Act;
  • a dwelling which is one of 2 or more dwellings comprised in the same property which the landlord intends to sell in its entirety (note the so-called “Tyrrellstown amendment” continues to apply and where 10 or more units are sold together the tenants of those units will remain in situ);
  • dwellings where the landlord lives in a separate self-contained dwelling within the same property, originally constructed as a single dwelling;
  • dwellings where the landlord wishes to gift, or partially gift, it to a third party;
  • the sale of a dwelling bequeathed to one or several beneficiaries by that beneficiary / those beneficiaries.

Build to rent

It is proposed that “build to rent development” will be defined as a development comprising purpose-built residential accommodation and associated amenities built specifically for long-term rental that is managed and serviced in an institutional manner by an institutional landlord.

The explanatory notes state that such accommodation may include houses, duplexes and apartments. It goes on to state that “In practice, the planning permission granted would specify that the development in question is ‘built to rent development’ – such development being a separate class of development. The development description on the planning application form, site notices and planning permission must have Build to Rent (BTR) as the proposed development description. A planning condition is applied to the permission stating that the development must be used as BTR.”

Recommendations

The Report makes a number of recommendations, as follows:

  • The title of the legislation be amended to reflect the intention of the legislation – i.e. a right of first refusal or invitation to bid, rather than a right to purchase.
  • FAQs should be developed by the Department to understand the various circumstances in which the legislation is to be applied.
  • The draft should be amended such that the 90 day period does not apply where the tenant submits in writing that they are not interested in bidding for the property.
  • There should be a standardised process set out to ensure that there is an official record of the tenant’s bid, for example by way of statutory declaration.
  • Safeguards should be incorporated into the conveyancing to ensure counteroffers are bona fide.
  • A mechanism should be set out in the legislation for a tenant to transfer their right to bid within the 90-day period to an eligible agency, such as a local authority or approved housing body.
  • Any new functions arising from the legislation should be evaluated for resource allocation to the relevant bodies.
  • Any discrepancies in language between landlord and tenant obligations should be reviewed.

Next steps

The next step in the legislative process is for the General Scheme to be converted into a formal bill, which will be considered and debated in both houses of the Oireachtas. It is therefore likely to be a number of months before we see these provisions (or further iterations thereof) become law.

Further elements

The General Scheme also proposes a number of technical amendments to the Residential Tenancies Act 2004, not related to the right of first refusal. We will provide further information on these proposed changes in a separate post.

Our Real Estate Team is tracking the legislation as it moves through the legislative process and will be providing further updates to this post.

For further information on this topic, please contact Aoife Smyth, Knowledge Consultant, or any member of A&L Goodbody’s Real Estate team.

On 21 November, the long awaited Planning and Development Bill 2023 (the Bill) was published by the Department of Housing, Local Government and Heritage. The original Heads of the Bill were released in January 2023 and went through pre-legislative scrutiny. This, considerably amended Bill was approved by Cabinet in early October but was only published on Tuesday night. As detailed in our previous article (here), the Bill seeks to restructure An Bord Pleanála (renamed An Coimisiún Pleanála) and to improve development consenting processes by  imposing strict time periods for planning decisions, as well as reforming the judicial review procedure.

In May, the Joint Committee on Housing Local Government and Heritage published its report on pre-legislative scrutiny and made a number of recommendations, some of which have been carried through to the text of the Bill. The resulting text is said to have been refined to ensure consistency throughout the Bill and is accompanied by an explanatory memorandum – a welcome addition.

Judicial Review

Some key changes made to the Bill as drafted in January include more specific provisions on the operation of the judicial review system. These include allowing for unincorporated bodies to judicially review a decision in narrow circumstances and removing the strict procedural time limits set out in the draft heads of the Bill. In particular the 8 week deadline for delivery of a judgment has been replaced with an obligation on the Court to deal with the matter “as expeditiously as possible consistent with the administration of justice.” A welcome retention is the limitation that any appeal from the High Court can only go to the Supreme Court.

The Bill also provides for a scheme known as the “environmental legal costs financial assistance mechanism” whereby those taking a judicial review challenge can apply to the Department of the Environment for a “contribution” to their legal costs, to be paid whether or not they are successful. This is novel and will require detailed consideration.

Statutory time limits

The Bill also sets out mandatory time limits for determining planning applications as follows.

In respect of applications to local/planning authorities:

  • 8 weeks where no Appropriate Assessment (AA) or Environmental Impact Assessment (EIA) is required;
  • 12 weeks where AA or EIA is required;

In respect of appeals to An Coimisúin Pleanála:

  • 18 weeks where no AA or EIA is required, if an RFI is issued 6 further weeks from when the RFI is complied with or is required to be complied with;
  • 26 weeks where AA or EIA is required, if an RFI is issued 10 weeks further from when the RFI is complied with or is required to be complied with

Our Environmental and Planning Team is busy reviewing the Bill.  We will be updating this post and our website with further analysis pieces in the coming weeks.

For more information, please contact Alan Roberts, Partner, Jason Milne, Partner, Alison Fanagan, Consultant, or any member of ALG’s Environmental & Planning team.

As part of Budget 2024 the Minister for Finance announced a number of changes to the application of the Residential Zoned Land Tax (RZLT). On 19 October, the Finance (No.2) Bill 2023 (the Bill) was published which proposes two important changes to RZLT.

Liability date delayed

The Bill provides that the first liability date for RZLT will be delayed by one year, from 1 February 2024 to 1 February 2025. This means that applicable lands will now be valued for the purpose of RZLT on 1 February 2025 and no payment will be due to Revenue until after that date. Liability remains set at 3% of the market value of the land on that date.

Phased developments excluded

The Bill now excludes from the charge to RZLT residential land which is subject to phased development under a development plan or local area plan. This means that land zoned for residential or mixed residential use and subject to phased development requirements under a development plan or local area plan will not now be subjected to the RZLT, provided such restrictions were in force at the time the planning authority decided to include the lands in its RZLT Final Map.

If the Bill is passed as currently drafted, these proposed changes will benefit developers who may have faced a tax liability despite the inability to develop land due to restrictions imposed by a development plan or local area plan. The Bill is currently at the Third Stage before the Dáil and the Government has confirmed it aims to enact the Bill in December.

For more information please contact Alison Fanagan, Consultant and Joint Head of A&L Goodbody’s Environmental & Planning Group, Alanna Byrne, Solicitor, or any member of our Environmental & Planning Group.

We posted in May that the general scheme of the Planning and Development (Land Value Sharing and Urban Development Zones) Bill 2022 (the General Scheme) had been published by Government.

The Joint Committee on Housing, Local Government and Heritage (the Committee) has just published its report (the Report) on its Pre-Legislative Scrutiny of the General Scheme. The Report identifies a number of issues with the General Scheme and makes certain recommendations. These recommendations will now need to considered by the Office of the Parliamentary Counsel as it seeks to finalise the text of the draft bill.

As was the case with our May post, the focus of this post is on the land value sharing (LVS) elements of the General Scheme. However, it is important to note that the Report does also identify issues and make recommendations in respect of the proposed introduction of Urban Development Zones.

Issues identified

The Report identifies issues regarding the LVS proposals under 4 key areas, as follows:

Valuations

The Report questions the clarity and consistency of the definitions and methods for calculating the existing-use value and the market value of the land, which are the basis for determining the LVS contribution. It suggests that the valuations should be updated regularly and at the date of the planning application, rather than at the date of zoning, to reflect the current market conditions and transactions. The Report also raises concerns about the availability and capacity of valuation experts and the role of the Valuation Tribunal in resolving disputes.

LVS rate

The Report challenges the rationale and evidence for setting the LVS contribution at 30% of the zoning value of the land, being the difference between the existing-use value and the market value. The Committee notes that this rate was informed by a third party economic appraisal on LVS (which appraisal has not been published) and that the rate does not take into account other existing charges and taxes on land and development, such as capital gains tax, development contributions, and Part V obligations. The Report also queries why the LVS rate is fixed and whether it would be preferable that it would be adjustable, where the Minister for Housing, Local Government and Heritage (the Minister) is of the view that this is necessary to support housing supply.

Viability

The Report expresses concern that the LVS contribution may affect the viability of development projects, especially in the context of rising interest rates, construction cost inflation, and market uncertainty. It warns that the LVS contribution may be passed on to the purchasers of housing units, or may discourage development altogether, if it cannot be absorbed by the landowners or developers. The Report also acknowledges criticism by certain stakeholders of the retrospective application of the LVS contribution, which may create tax instability and unfairness.

Exemptions

The Report examines the exemptions from the LVS contribution that are proposed in the General Scheme, such as for social and affordable housing, and for small-scale developments. It questions the justification and implications of these exemptions, and suggests that they may create a competitive advantage for certain types of development or tenure, or may encourage low-density development.

Recommendations

In light of the issues identified, the Committee make a number of recommendations, as follows:

Valuations

  • Considering the 10 year development plan cycles proposed under the Planning and Development Bill 2022, there should be regularity in reviewing existing-use value and market value on the valuation register.
  • Land should be valued at the date of the planning application, with the self-assessment being submitted with the planning application so that it is up-to-date and takes other transactions on other sites in the area into account.
  • Landowners should be contacted directly by the planning authority to complete the self-assessment, not just through newspaper or website notice.
  • The bill should provide that all applications are to be accompanied by a self-assessment of the existing-use value and market use value of the land.
  • LVS funds should be committed to the provision of infrastructure, with a ring-fencing model to be considered. Local authority elected members should also have an approval function over the use of the LVS contribution funds.
  • The delivery of infrastructure as a means of discharging the LVS contribution should be more explicitly provided for, outlining the timing of the delivery of such infrastructure and the preference for upfront delivery.

LVS rate

  • The third party report which informed the setting of the 30% rate should be published prior to publication of the bill, with the rationale underpinning the 30% figure to be set out.
  • The Minister should be empowered to reduce the LVS contribution amount to nil where the Minister is of the view that this is necessary to support housing supply.

Viability

  • The Department of Housing, Local Government and Heritage (the Department) should “take the appropriate time” to consider the impact LVS will have on the viability of projects and housing supply, through further engagement with industry and citizens prior to the publication of the bill.
  • Transitional arrangements should be reviewed to ensure the viability of projects is maintained post-implementation of LVS.
  • The Department should carefully consider and report on the cost impact of LVS on new home purchasers due to the retrospective nature of its application on lands purchased prior to 21 December 2021.

Exemptions

  • Exemptions for LVS and Part V processes should be aligned to create greater efficiencies for implementation.

Our Real Estate and Environmental and Planning Teams are tracking the legislation as it moves through the legislative process and will be providing further updates to this post.

For further information on this topic, please contact Aoife Smyth, Knowledge Consultant, or any member of A&L Goodbody’s Real Estate or Environmental and Planning teams.

In the five or so years prior to 2022, the market was abuzz with news of the latest forward-purchase or forward-fund transaction. With demand for high-quality commercial and residential real estate exceeding supply, certain cohorts of real-estate investors were willing to take greater risks in order to obtain higher yields – by entering into forward-fund or forward-purchase agreements for real-estate assets that had not yet been completed.

The key differences between the two approaches will be discussed below, but both require the purchaser to speculate upon the prevailing investment conditions when the asset will be completed. Given recent press releases from various stakeholders, it is clear that forward purchase arrangements are going to re-emerge in the residential sector as a prevalent means of acquiring residential units in order to address the current housing shortage. In that context, we explore the key issues and risks associated with this approach.

Forward-purchase and forward-fund transactions – what’s the difference?

It can sometimes appear that the terms ‘forward-purchase’ and ‘forward-fund’ refer to the same types of transaction, as the terms are sometimes used interchangeably. But they are not the same thing.

While forward-fund and forward-purchase transactions can both offer attractive means of acquiring real-estate assets, the key differences of which an investor needs to be aware are set out below.

The focus of this article is forward-purchase transactions, which we look at in more detail below.

Why enter into a forward-purchase agreement?

Developer perspective

There are many advantages for a developer in entering into a forward-purchase agreement, including:

  1. Speculative building: Entering a forward-purchase agreement can eliminate the speculation risk for the developer as the future purchase price for the development has been determined in advance.
  2. Exit: The agreement provides a clear exit strategy for the developer.
  3. Finance: Having certainty of exit will give the developer a greater chance of securing construction finance, and of securing more favourable terms for that finance. Financing can be repaid on receipt of the funds from the purchaser.
  4. Hold period: With the land and the development transferring to the purchaser on completion, the developer avoids incurring the cost and time associated with the usual post-completion marketing and bidding processes, and can avoid accruing interest liabilities on its financing during that period.
  5. Rate of return: The developer will likely see an increased RoR given the short hold period following completion. We are typically seeing a closing period of 15 working days following practical completion.
  6. Future projects: With prior knowledge of the return expected for the development, the developer can look for future projects sooner and can minimise any period of stagnation between developments.

Forward-purchaser perspective

There are also advantages for purchasers, including:

  1. Expertise: While a forward-purchaser may desire to undertake the development itself, it simply may not have the capacity or the expertise to do so. By entering into a forward-purchase agreement, the purchaser will be able to rely on the expertise of the developer’s team.
  2. Shovel-ready: Typically, but not always, a forward-purchased project will have planning in place, and will have the developer’s design team and contractor appointed and ready to start on site. This permits the purchaser to avoid a lengthy design-stage delay prior to works commencing on the site. Perhaps more importantly in the current market, it permits the purchaser to avoid the risk of planning-stage delays.
  3. Specification of the development: As the purchaser is involved in the development from an early stage it will have a far better understanding of the development and the capacity to select the primary materials used, the particular systems installed, etc..
  4. Purchase price: The development will be purchased for a locked-in purchase price. While the purchaser will have paid a deposit (which is refundable in certain instances) the remainder of the purchase price will not have to be paid until the development has been completed. The price is subject to the forward-purchase agreement, but it is generally only adjusted in limited scenarios, e.g. where the purchaser utilises a right to vary the development specification during construction.
  5. Finance: The developer retains responsibility for funding the project during the construction stage, and therefore generally bears construction-related risk. A purchaser will be in a better position to obtain financing where it is only drawing down funds for a completed development – after construction risks have largely been eliminated.
  6. Competitive purchase: By entering into the forward-purchase agreement the purchaser avoids having to participate in a typical bidding process with other prospective purchasers of a completed development.

The importance of good drafting

This is where the lawyers get the chance to add their value to the transaction. Having a team of lawyers experienced in a transaction that involves a yet-to-be-completed asset is imperative for both parties – to ensure the proper allocation of risk, the smooth running of the construction phase, and the successful completion of the sale of the completed development.

Key Drafting Points to Consider

  1. The asset: The agreement must accurately capture the expectations of both parties as to what the completed development will look like. Appending a pre-agreed specification to the agreement will provide certainty in this regard.
  2. Variations: Whilst a specification may have been agreed, an agreement should still allow for some flexibility, including:
    • a change in the market or a change in purchaser strategy may lead the purchaser to want to seek certain changes to the development (although this may add to the agreed purchase price). It is in the interests of both parties that the forward-purchase agreement should include clear drafting around this issue;
    • permitting a change to an agreed material where the specified material is no longer readily available – something that has become far more common in recent years; and
    • changes in legislation may also require the developer to make certain changes to the agreed development and specification.
  3. Monitoring: The ability to attend and access the site at regular intervals will be essential for the majority of forward-purchasers. For the benefit of the project and the developer, however, such access should be subject to reasonable limits.
  4. Delays: No matter what steps are taken to avoid a delay on a construction project, it is very rare that a project will entirely avoid delay. The forward-purchase agreement should therefore seek to prioritise the effective management of delays. It is essential that the agreement clearly allocates to each party the risk of different classes of delay, and specifies the steps to be followed by the parties where a delay event occurs.
  5. Long-stop: Whilst delay of some nature may be unavoidable, the impact of delay on the project should be controlled by the agreement. Where the development has been unduly delayed for an extended period, there comes a point where one or both parties may need, or want, to walk away from the forward-purchase agreement. It may therefore be necessary to specify a pre-agreed long-stop date, by which point one or both parties can terminate the agreement if the development has not been completed.
  6. Practical completion: The works will need to be practically completed before the sale of the development can be completed pursuant to the forward-purchase agreement. The agreement should clearly specify how the parties should determine whether or not the development has been practically completed. This is especially important in a changeable market. A good agreement should also specify how the parties will resolve a dispute regarding whether or not practical completion has occurred.
  7. Completion: A clear understanding of the completion deliverables will benefit both parties by eliminating uncertainty at completion – the developer should know what it has to provide and the purchaser should know what it is entitled to receive.
  8. Future strategy: The purchaser will need to be mindful of its future strategy for the development when negotiating the forward-purchase agreement. Will the development be rented to one entity or numerous entities? Will the asset be sold shortly after completion? The agreement should be tailored to reflect the forward-purchaser’s plans, and the risk that those plans will change.
  9. Residual defects risk: The agreement should specify which of the parties bears the risk of latent defects in the development and, where the parties agree it is necessary, make provision for latent defects insurance.

This is merely a selection of some of the key elements that should be captured in a well-drafted forward-purchase agreement.

Summary

Forward-purchase transactions remain popular in the residential market, and have many benefits for both developers and purchasers.  In order to protect both parties, however, forward-purchase agreements need to foresee and cater for the risks that arise at the various stages of the forward-purchased development: transaction, construction, practical completion, and lease or onward-sale.

A&L Goodbody has market-leading lawyers in our construction and real estate departments who are highly experienced in collaborating upon forward-purchase and forward-fund transactions, on both developer and purchaser-side mandates.

For further information in relation to such transactions or any related matter, please contact Conor Owens (Partner, Construction & Engineering), Jamie Rattigan (Partner, Construction & Engineering), Ger O’Toole (Partner, Real Estate), Jack Kennedy (Senior Associate, Construction and Engineering) or any member of A&L Goodbody’s Construction & Engineering or Real Estate teams.

With the continuing impact of factors such as Brexit, the war in Ukraine and the COVID-19 pandemic, construction costs have and indeed continue to rise significantly. This has led to all stakeholders in the construction industry becoming far more acutely aware of the impact of inflation on project delivery than has traditionally been the case in the past.

Up until recently, inflationary risk was considered to be within the remit of the contractor and therefore would not be considered in great detail. However with the onset of inflationary pressures, it has become a hotly negotiated point within contract agreements as contractors are no longer willing to (or simply can’t afford to) solely take the burden of the potentially significant rise in cost.

The sorts of approaches to inflation that we have seen include:

  • Negotiation on inflation risk on a product by product basis; with detailed due diligence on the supply chain and greater use of open book price recording;
  • Incorporation of various indices into the contract and a risk share mechanism;
  • Employer’s expressly buying out the inflation risk for an agreed sum;
  • Inflation risk being assumed by the contractor up to a specific value or up to a specific point in time, after which point the inflation risk is shared between the parties;
  • Different approaches to inflation being taken on materials as compared to labour;
  • Employer’s simply having to take the inflation risk in its entirety.

One thing for certain is that the old approach of simply deleting Clause 36 of the RIAI (which was the clause that allowed contractors to recover inflation costs) is no longer acceptable on the vast majority of projects.

In that vein, it is worth noting that on those projects where inflation risk has not been properly considered and allocated, it is often the case that the parties have to deal with inflation at a subsequent point in time as it is simply not practical for contractors to bear all of the risk. This does increase the likelihood of disputes arising.

It had been hoped that issues with inflation would have eased by now. However, that has not happened. In fact, the problems with inflation have become so pronounced that the public works forms of contract are being further amended to allow contractors greater relief for inflation. The amendments to the public works forms of contract are due to be published shortly and these will, no doubt, be influential when negotiating private sector contracts.

For further information in relation to this topic or any related matter, please contact Conor Owens, Partner or Siomha Connolly, Solicitor or your usual contact on the Construction & Engineering Team.

Speed Read

In North Great George’s Street Preservation Society v An Bord Pleanála Mr Justice Humphreys refused to quash planning permission for shared accommodation developments at Hill Street and North Great George’s Street.

The Court was critical of the Applicants, where they contended that an archway located at the front of 36a North Great George’s Street should be afforded the protection of a “protected structure” but had not raised this point at any stage before taking the judicial review. The Court also analysed the Board’s application of the Department of Housing’s Sustainable Urban Housing: Design Standards for New Apartments Guidelines for Planning Authorities (the Guidelines), and considered the manner in which these can be challenged.

Gaslighting the decision maker

As part of the planning application, the Applicants had made a submission to Dublin City Council in which they stated that the development would “have a seriously detrimental effect on the adjoining protected structures” on North Great George’s Street. Judge Humphreys found that the Board could not have known that the Applicants were contending that there was a protected structure within the proposed development site itself. He viewed this as a “case of gaslighting the decision maker”, where the Applicants had failed to make a point and then subsequently sought to challenge the Board’s decision based on their failure to consider this same point. The Court found that requiring the Board to inquire into a multitude of hypothetical factual assertions would be “unworkable”.

Incorrect decision permissible in circumstances

The Applicants attempted to argue that if the archway formed part of a protected structure, it would follow that the permission granted was void from the beginning as the Board did not have jurisdiction to deal with it under the Planning and Development Regulations 2001. The Court disagreed and clarified that in some situations, the Board can “permissibly make an incorrect decision”. If an issue has not been raised before the Board, and it would not have been apparent to the Board from the materials put before it, the Courts will examine whether the Board acted lawfully rather than reasonably in order to determine whether the decision should be quashed.

While the Board is legally required to take a view on whether they are dealing with a protected structure in an application, any laxity in the implementation of this requirement will not automatically be fatal to its decision if this did not or would not have had any impact on their decision.

Challenging the Guidelines

The permission in this case was granted subject to a condition that the shared accommodation units be for single occupancy only and operate in accordance with the definition of Build-to-Rent developments, as set out in the Guidelines. The Applicants argued that this condition should be void for vagueness and uncertainty. The Court viewed this as an “attack” on the Guidelines. Judge Humphreys found that the Applicants should have challenged the Guidelines themselves rather than the Board’s application of these Guidelines.

The Court dismissed the Applicants’ case and refused to quash the permissions. The key messages arising from this decision are that objectors:

  1. Cannot raise new issues for the first time in judicial review proceedings in circumstances where those issues have not already been put before the Board; and
  2. Are precluded from challenging planning conditions that stem from policy documents or guidelines, as this is viewed as a collateral attack on the relevant policy documents or guidelines. Instead, objectors should have challenged those documents/guidelines themselves.

For more information please contact Alison Fanagan, Consultant, Jason Milne, Partner, or any member of our Environmental and Planning team.

The Department of Housing has this month launched a consultation process on the role of the Private Rental Sector (PRS) in Government’s housing policy and the wider economy. The Department’s press release and the consultation paper can be found here. Some of the key points noted in the consultation paper are as follows:

  1. The importance of the PRS sector within the wider housing system in providing flexible tenure accommodation, in particular for international workers, students, young adults and social housing supply.
  2. The important role institutional investment plays in the PRS sector, including the provision of capital for purpose-built, high-quality units in urban areas, the supply impact, a steady source of construction activity and the professionalisation of landlord functions.
  3. The increase of institutional investment in PRS stock is in line with many of Ireland’s peer economies where institutional investors such as pension funds and insurance companies own considerable proportions of the private rented stock.

The consultation paper also poses a number of questions, such as:

  • whether there are any strategies or policy measures which could be deployed by Government to attract more domestic capital toward sustainable, long-term investments in the residential rental market;
  • which rental policies and policy measures used in other countries ought to be considered for Ireland;
  • whether measures can be taken to specifically incentivise further supply of high-quality units by institutional investors with a long-term commitment to urban rental markets, and if so what form such measures should take.
  • if there are measures which should be taken to have a more structured and well-funded approach to the provision of rental accommodation for students
  • if there are any policy mechanisms available which can protect the long-term interests of tenants and investors alike, such as subsidies or tax measures which apply solely to long-term leases.

The Department is welcoming participation in the consultation process by interested parties. Any views/opinions on the questions posed in the paper should be submitted by way of submission form (available via the above link) emailed to rentalstrategy@housing.gov.ie by 26 July 2023.

For further information on this topic, please contact David Fitzgerald, Partner, or any member of A&L Goodbody’s Real Estate team.