Are You In A Rent Pressure Zone? Know How To Conduct A Rent Review.

Rent Pressure Zones were introduced in Ireland in 2016.

  • In Rent Pressure Zones rents can only rise by up to 4% annually. This applies when rents are set at the start of a tenancy and when rents are reviewed during an ongoing tenancy.
  • A landlord must tell the tenant what the amount of rent that was last set under the tenancy for the dwelling.
  • A landlord must provide the date the rent was last set under a tenancy for the dwelling.
  • A landlord must provide a statement as to how the rent set under the tenancy of the dwelling has been calculated having regard to the Rent Pressure Zone formula.

Click HERE for Notice of Rent Increase within a Rent Pressure Zone

 

How often can a Landlord increase the rent in a Rent Pressure Zone?

This is dependent on when Rent Pressure Zones were introduced in your area.

In Dublin, for example Rent Pressure Zone were introduced on the 24th December 2016.  Therefore:

If a tenancy in a Rent Pressure Zone began on or after the 24th of December 2016, the landlord can review the rent each year.

For tenancies in Rent Pressure Zones which began before the 24th of December 2016, the landlord could only review the rent 24 months (2 years) after the tenancy came into existence, or 24 months after the date the rent was last set.

Please ensure you are aware of the date when rent control was introduced in your area.

How much can a Landlord increase the rent?

In Rent Pressure Zones rents can only rise by up to 4% annually.

How is the rent increase calculated in a Rent Pressure Zone?

Rent must be determined in accordance with the Rent Pressure Zone Formula.

R x (1 + 0.04 x t/m)

  • = The amount of rent last set under a tenancy for the dwelling (the current rent amount)
  • = The number of months between the date the current rent came in to effect and the date the new rent amount will come in to effect.
  • = 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, and three examples of rents for comparable properties must be used to show this.

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

Is your property in a Rent pressure Zone?

Click HERE for a list of current Rent Pressure Zone.

Are there any exemptions to the Rent Pressure Zones?

Yes, the following exemptions may be applied by landlords:

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 the below criteria is met:

The definition is as follows: 

A substantial change in the nature of the accommodation provided under the tenancy shall only have taken place where—

(a) the works carried out to the dwelling concerned—

(i) consist of a permanent extension to the dwelling that increases the floor area (within the meaning of Article 6 of the Building Regulations 1997 (S.I. No. 497 of 1997)) of the dwelling by an amount equal to not less than 25 per cent of the floor area (within such meaning) of the dwelling as it stood immediately before the commencement of those works,

(ii) in the case of a dwelling to which the European Union (Energy Performance of Buildings) Regulations 2012 (S.I. No. 243 of 2012) apply, result in the BER (within the meaning of those Regulations) being improved by not less than 7 building energy ratings,

or

(iii) result in any 3 or more of the following:

(I) the internal layout of the dwelling being permanently altered;

(II) the dwelling being adapted to provide for access and use by a person with a disability, within the meaning of the Disability Act 2005;

(III) a permanent increase in the number of rooms in the dwelling;

(IV) in the case of a dwelling to which the European Union (Energy Performance of Buildings) Regulations 2012 (S.I. No. 243 of 2012) apply and that has a BER of D1 or lower, the BER (within the meaning of those Regulations) being improved by not less than 3 building energy ratings; or

(V) in the case of a dwelling to which the European Union (Energy Performance of Buildings) Regulations 2012 (S.I. No. 243 of 2012) apply and that has a BER of C3 or higher, the BER (within the meaning of those Regulations) being improved by not less than 2 building energy ratings.

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Do you have a query regarding a Rent Increase?  Contact us now@ info@ipoa.ie / 01-8276000

Categories: First Time Landlord, Landlord Legislation, Property Management, Rent Increases, and Rent Pressure Zone.