Renting A Private Property? Find Out About Rent Increases In Your Area

Feb 13, 2020

Carter Anhold Solicitors at Tullaghan

Landlords of private rented dwellings must follow certain procedures if they want to raise your rent.  The rules are set out in the Residential Tenancies Act 2004 and have been amended by the Residential Tenancies (Amendment) Act 2015, the Planning and Development (Housing) and Residential Tenancies Act 2016 and the Residential Tenancies (Amendment) Act 2019.

Different rules apply to properties in Rent Pressure Zones, and those outside these designated areas.

Rent Pressure Zones are areas where rents are high and are rising quickly.  An area must also meet certain criteria to become a Rent Pressure Zone.  Since 2016, a growing number of areas have become designated Rent Pressure Zones to include parts of Dublin, Louth, Meath, Laois, Carlow, Westmeath, Wicklow, Kildare, Wexford, Waterford, Kilkenny, Limerick, Cork and Galway.

On 18 December 2019, Strandhill in Co. Sligo was declared a Rent Pressure Zone.

The Residential Tenancies (Amendment) Act 2019 has extended Rent Pressure Zone designations until 31 December 2021.

RENT INCREASES AND REVIEWS IN RENT PRESSURE ZONES

  • New Tenancies

The Planning and Development (Housing) and Residential Tenancies Act 2016 has capped rent increases for new tenancies at 4% per year in Rent Pressure Zones.  This measure came into effect from the 24th of December 2016.

The Residential Tenancies Board provides a rent increase calculator on its website which you can use to check if your property is in a Rent Pressure Zone and to work out if the rent can be raised and, if so, by how much.

At the commencement of the tenancy, the landlord must give the tenant the following written information:

  • The amount of rent that was last set for the property under a tenancy.
  • The date the rent was last set for the property.
  • A statement as to how the rent for the property has been calculated having regard to the Rent Pressure Zone formula.
  • The rent set cannot be more than ‘market rents’ for similar properties in the area. The landlord must therefore provide three comparable examples for similar properties in the locality or similar areas.

It is important to note that commencing a new tenancy does not mean completing a rent review and setting a new rent. A rent review in a Rent Pressure Zone can only be undertaken every 12 months.

  • Existing Tenancies

For existing tenancies (commencing before the 24th of December 2016), the first rent review can only take place after 24 months from the start of the tenancy or 24 months from the date you were notified in writing of your last review.  The maximum rent increase is 4% and should not be more than the local ‘market rent’ for similar properties.  After an initial rent review, a landlord will be entitled to review the rent every 12 months and the Rent Pressure Zone rules will apply.

EXEMPTIONS FROM THE RENT PRESSURE ZONE REGULATIONS

Rent can only be increased above the maximum annual percentages for:

  • Properties that have not been in the previous two years.
  • Tenancies in protected structures or proposed protected structures that have not been let in the previous year.
  • Properties that have substantially changed.

The Residential Tenancies (Amendment) Act 2019 introduces a definition of what amounts to a substantial change. A substantial change is any of the following:

  • A permanent extension which increases the floor area of the dwelling by at least 25%
  • An improvement which increases the energy rating of the dwelling by at least seven building energy ratings
  • An improvement which is not required by existing legislation and consists of at least three of the following:
    • The internal layout of the dwelling is permanently altered.
    • The dwelling is adapted to provide for access and use by a person with a disability.
    • The number of rooms is permanently increased.
    • The BER rating is improved by at least three levels on the BER (building energy ratings) scale, in a dwelling that has a BER of D1 or lower.
    • The BER rating is improved by at least two levels on the BER scale, in a dwelling that has a BER of C3 or higher.

Even if a property qualifies for one of the exemptions listed above, the new rent set must still be in line with ‘market rent’ for similar properties in the area.

  • Need to notify the Residential Tenancies Board (RTB) of exemption

Since 1 July 2019, landlords must inform the RTB if they are relying on an exemption which means that they do not have to adhere to the Rent Pressure Zone formula. Landlords must complete a Rent Pressure Zone Exemption Form available on the RTB website, and send it to the RTB within one month of the new rent amount being set.

Under the Residential Tenancies (Amendment) Act 2019, there are sanctions for landlords who do not follow rent increase limits in Rent Pressure Zones, provide false information about an exemption in a Rent Pressure Zone area or fail to notify the RTB about availing of an exemption.

RENT INCREASES AND REVIEWS OUTSIDE RENT PRESSURE ZONES

The rent for properties outside Rent Pressure Zones can only be reviewed once every 24 months.  This rent certainty measure is in place until the 31st of December 2021.  A landlords attempt to increase rent before the 24 months have passed is invalid. Previously, rents could be reviewed every 12 months.

A landlord cannot charge more than the ‘market rent’, which is the going rate for similar accommodation in the area. To determine ‘market rent’, there are a number of sources that can be checked as follows: the RTB Rent Index, property websites and estate agents.

Before the rent can be increased, a landlord must provide at least 90 days’ notice of the new rent to the tenant.  This notice must state the amount of the new rent and the date the new rent will take effect.  From the 1st of July 2019, landlords must use the RTB’s Notice of Rent Review Form when issuing a rent review.

DISPUTE RESOLUTION

If there is a dispute about the amount of rent being proposed, either a landlord or tenant can refer the dispute to the Residential Tenancies Board (RTB).  If the landlord has given you a valid written notice of the rent increase, you must contact the RTB with your dispute before the date that the new rent comes into effect or within 28 days of receiving the notice.  You must continue to pay your current rent until your case is determined by the RTB.

Should you have any queries regarding the above, or any tenancy related issues you wish to discuss please do not hesitate to contact our office on 071 9162211 or email info@carteranhold.ie.

 

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