I have been renting a 2-bed apartment in Cork City Centre for the past 10 years, I have had the same good tenants for the duration of the letting and never varied their rent. My tenants have recently bought their own property and will be vacating the apartment at the end of the month.
I am 50% below market rent for the area, I have two prospective new tenants willing to pay market rent – can I accept this offer of rent?
You cannot increase your rent to market rent despite being offered this by prospective tenants. Your property is located in a Rent Pressure Zone (RPZ) therefore you must comply with the rules for rent reviews within a RPZ.
Rent Pressure Zones are designated Local Electoral Areas where rents can only rise by up to 4% per annum, and the rent can be no more than market rent. The 4% maximum applies when rents are set at the start of a tenancy, both new and existing (further part 4) tenancies and applies when rents are reviewed during an ongoing existing tenancy.
The new rent must be determined in accordance with the Rent Pressure Zone Formula.
R x (1 + 0.04 x t/m)
R = The amount of rent last set under a tenancy for the dwelling (the current rent amount)
t = The number of months between the date the current rent came into effect and the date the new rent amount will come into effect.
m = the number of months since your last rent review – you must enter 24 OR 12
The rent set for the property must be in line with local market rents for similar properties.
The RTB provide an online calculator to assist in determining the rent – we suggest that you refer to it when conducting a rent review.
Click HERE to access the RTB Rent Pressure Zone Calculator
Click HERE to find out more.
Exemptions to Rent Pressure Zones :
There are exemptions to Rent Pressure Zones.
Exemption 1: The initial setting of the rent on a dwelling which had not been rented for a period of two years prior to the immediate tenancy commencement date. (If no tenancy has been in a property for two years immediately preceding, it can be rented out at market rent).
Exemption 2: A ‘substantial change’ in the nature of the accommodation has been defined in the legislation and will only be deemed to have taken place where specific criteria is met.