Rent Pressure Zones – What It Means for You

A guide to the Rent Predictability Measures and Rent Pressure Zones introduced on 24th December 2016

 

This is to confirm a substantial amendment to the RTB legislation that was passed on 24/12/2016 regarding Rent Pressure Zones.

 

The RTB legislation enacted initially in 2004 governs the legal rights of landlords and tenants on a range of matters. These include rents, leases, notice periods, and other relevant areas.

 

The amendment passed on 24th December 2016 is addressed at imposing restrictions regarding rent increases. For landlords this means adhering to certain rules within certain defined areas.

 

IMPLICATIONS OF THE NEW RENT CONTROL LEGISLATION

The changes to the Residential Tenancies Act enacted on 24th December 2016 can be summarised as: A very clear piece of legislation which ensures that Landlords can only raise rents in designated rent pressure zones according to specific rules. The rent pressure zones (RPZs) are currently limited to Dublin and Cork cities. However other areas will be added over the coming months.

 

AM I IMPACTED BY THE NEW RULES?

You can determine if you are affected by this new legislation by clarifying which of the following categories apply to you.

 

  • If you have NEVER rented the property before you are NOT impacted. You can charge the current market rent.

 

  • Where it is a brand new property you are NOT impacted.

 

  • If your property has been vacant for the past 24 months then you are NOT impacted.

 

  • Where you have carried out a substantial refurbishment (new floors and painting wouldn’t qualify) then you are NOT impacted and you can charge market rents.

 

  • If you (or a previous owner) have received rents in the last 24 months THEN you ARE impacted and you ARE subject to the new rules.

 

APPLYING THE NEW RENTAL CONTROL RULES

If you fall into category 5 above then the following applies to your rental property as regards the rules for determining the rents that can be charged.

 

The key aspects of the new legislation applying to RPZs are:

 

  1. Rents cannot be increased by more than a certain amount (as determined by a formula on RTB website) from the most recent rent review within the last 24 months.
  2. In general the maximum permitted increase will be about 4% from the current rent in force. Rents set for longer periods than 24 months will result in higher permitted rent increases as determined by the formula.
  3. Rents may be reviewed every 12 months from 24 December 2016 unless the tenancy is still subject to the 24 month restriction.
  4. For new tenancies and lease renewals the lease must state the basis on which the rent was calculated. This must have regards to the new RPZ formula.

 

NON COMPLIANCE RISKS

In our view, the legislation is designed to ensure that it cannot be bypassed, even if landlords and tenants choose to do so, by agreeing rents which do not comply with the new rules.

 

If a landlord charges a rent higher than permitted, then he will have to put incorrect information on the lease.

 

This incorrect information can ALWAYS be challenged by the tenant at any time in the future. The risk is being forced to pay back the excess rent charged and possible penalties.

 

See the following example to illustrate:

Ø  Last rent was €1,200 set 12 months ago

Ø  Lawful increase is to €1,248

Ø  Market rent is €1,500

Ø  Landlord and tenant agree new rent will be €1,400

 

The lease has to state one of the following reasons as a basis for the new rent of €1,400:

  1. The property was not rented during the previous 24 months OR
  2. It is a brand new property OR
  3. It was never rented OR
  4. b)      Substantial refurbishment has taken place since the previous letting OR
  5. c)      The previous rent was €1,346 (therefore adding 4% gives €1,400)

 

All of these reasons are untrue, but one of them will have to be written into the lease as a basis for the rent calculation.

 

The risk is that a tenant agrees with a landlord to ignore the legislation and agree a higher rent because he is desperate to get the property. Subsequently, the tenant takes a dispute to the RTB because he is being charged more than the permitted 4% increase. The RTB has access to the declaration on the lease and the previous rent records. The likely outcome of the dispute is that the Landlord will have to repay all the rent paid above the legal maximum. Penalties may also be imposed on the landlord.

 

An overcharge of €150 per month adds up to €1,800 per annum and this could rise to a significant liability for the landlord.

 

It is essential that landlords adhere completely to the new legislation. The risk of not doing so could give rise to significant liabilities and penalties.

More detailed information about the new legislation and the formula to be used in calculating rents is available on the RTB website www.rtb.ie

 

Contact us now on 01-4953001 for further information.

We’ll Look After Your Rental Property the Right Way

In the ever changing, Irish rental market, it can be difficult to keep on top of the latest legislation surrounding tenancies.  Don’t let it get to you.  Rest easy knowing that your local property experts will do the right thing and advise you correctly throughout the letting process and make sure you’re not left open to penalties due to the new Rent Pressure Zones.  More information on these new Rent Certainty Measures can be found at RTB.ie.

With offices in both Rathfarnham and Sutton, we cover a large array of areas in Dublin.  Why not contact our experienced team of property specialists and let us take the hassle out of letting your property.  We pride ourselves on keeping up to date with the regulations set out by the RTB (Residential Tenancies Board), and aim to ensure you’re always guided  in this way.

if you would like more information on the new legislation, or to find out how we can help you, contact a member of our team today.

Get Your Rental Property Winter Ready

While the last number of weeks have been reasonably mild and dry, it appears winter is coming this week.  The huge storm working through Europe is due to hit us in Ireland later this week, so we need to be prepared.  We’ve compiled a few top tips to get your rental property ready to weather the storm.

Roof With high winds due to approach, it’s worth carrying out a visual of your roof.  Roofs should be inspected regularly as this will ensure there are no loose tiles.  Loose tiles may cause damage should they become dislodged.  Any concerns should be raised with a roofer.

Gutters & Drains It’s advisable to check drains and gutters in an attempt ensure there are no blockages, particularly if there are trees near the property.  If gutters and drains get blocked, water can be forced inside the property.  If this happens, water could cause a lot of damage to internal walls and ceilings.  Gutter guards can be installed on gutters to reduce build up, however, regular checking should reduce any flooding risk.

Pipes If your property has exposed external pipes which are prone to freezing, it’s a good idea to leave a tap dripping very slightly.  Even a slight water flow will keep water from sitting and freezing in pipes.  If your property has external taps or exposed pipes, it’s good practice to have them insulated.  If the external tap has its’ own separate water supply, it is best to have it turned off and the tap drained.

Chimneys If you have an open fire in your home that you use, the chimney should be swept every year.  An annual chimney sweep will ensure there are no blockages in the chimney that could cause smoke to be pushed back into a room.

Boilers Annual services should be carried out on heating system boilers.  These services will ensure your boiler is working as efficiently as it should and could alert engineers to any potential issues that could occur before they become major problems.  Always have a carbon monoxide alarm installed in any room containing a boiler and where fossil fuels are burnt.

Have you a property that you think would suit the rental market but you’re not sure where to start?  Why not contact us and our experienced team of property specialists would be happy to advise you.

Top 5 Things to do in Rathfarnham!

Castle in Rathfarnham

Thinking of moving?  Why not consider Rathfarnham.  Located at the foothills of the Dublin mountains, this Dublin suburb offers a number of excellent opportunities for those looking to rent, or indeed buy.  Rents are reasonable for the accommodation available and there are a host excellent transport links to both the city centre and areas further afield

When you have some down time and don’t feel like traveling, no need to worry, Rathfarnham has a number of things to keep you occupied during that precious free time. The five bestthings to do are:

  • Play golf – Pick up your clubs, gather your friends and get to one of Rathfarnham’s many golf clubs.  You have your choice of:
    • Grange
    • Edmondstown
    • Rathfarnham
    • Castle
    • Stackstown
  • Visit the Fairy Tree – Head down to Marlay park with the kids, the dog and a picnic.  First of all, enjoy a walk, go to the playground and then leave a note for the fairies.  Admire Marlay House or in the Summer enjoy one of the outdoor gigs
  • Tour the Pearse Museum – Follow the story of Patrick and William who were executed for their part in the 1916 Rising.
  • Have a pint or bite to eat – Rathfarnham has a huge variety of pubs and restaurants.  Why not try any or all of the following:
    • The Eden
    • The Old Orchard
    • Little Caesars
    • The Yellow House
    • Enigma Grill
  • Visit the Castle – Why not spend a relaxing afternoon having a coffee with friends.  Catch up in the grounds of Rathfarnham Castle.  See some architecture dating back to Elizabethan times and the archeological finds.

Have you got a property to rent in Rathfarnham or anywhere in Dublin?  Why not get a rental valuation.  Contact our experienced team on 01 495 3001.

Irish Residential Market Spring Review 2016

Download the full article (PDF)

A review of a variety of indicators point to a market which is still quite dysfunctional. On one level, the market is underpinned by a strong buoyant economy with notable demographic pressure driving demand. However, for a variety of reasons, such factors are not impacting the market as one would expect in a normal housing market. Continue reading “Irish Residential Market Spring Review 2016”