New legislation called the Residential Tenancies (No.2) Act 2021 (RTA(2) 2021), signed into Law from 9th July 2021.
The RTA(2) 2021:
- extends the rent arrears protections in Part 3 (Residential Tenancies) of the Planning and Development, and Residential Tenancies, Act 2020 (PDRTA) until 12 January 2022;
- restricts any rent increase in an RPZ from exceeding general inflation, as recorded by Harmonised Index of the Consumer Price (HICP);
- limits the amount of rent in advance and/or a deposit that landlords can ask people to pay to secure a tenancy; and
- provides that students do not have to give more than 28 days’ notice to terminate their rental arrangement.
All provisions under this new Act, except for section 6, came into effect from 9th July 2021.
Section 6 deals with the new rent review changes linking rent increases to HICP. This will come into effect shortly.
What do landlords & tenants need to know?
- THERE ARE NEW RULES AS TO THE AMOUNT LANDLORDS CAN SEEK FOR A
DEPOSIT AND/OR ADVANCE RENT PAYMENTS TO SECURE A TENANCY.
• There are now limits on the amount landlords can require anyone to pay to
secure a tenancy:
o A deposit cannot exceed more than one month’s rent; and
o An advance payment of rent cannot exceed one month’s rent.
In other words, landlords cannot ask anyone to pay more than the equivalent
of 2 months’ rent in total to secure a tenancy.
• There is an exception to these new rules for students who occupy Student
Specific Accommodation (SSA). A student is defined as a person registered as a
student with a relevant provider (within the meaning of the Qualifications and
Quality Assurance (Education and Training) Act 2012). They may pay more than
one month’s rent in advance if they wish to do so and with the agreement of
the accommodation provider.
• If a landlord seeks from a person the payment of an amount which is more
than the equivalent of 2 month’s rent, that person can take a case to the RTB
for dispute resolution. Information on the RTB Dispute Resolution Service can
be found on [page 8] and on www.rtb.ie.
• During a tenancy, any advance rent payment cannot exceed an amount
equivalent to 1 month’s rent.
• The RTB has an Investigations and Sanctions unit dedicated to investigating
certain potential breaches of the Residential Tenancies Act 2004 by a landlord.
The breaches of the law that the RTB can investigate are referred to as
“Improper Conduct”. Improper conduct has been extended to include the
seeking by a landlord of an advance payment of an amount more than the
equivalent of 2 month’s rent.
• If it is found that a landlord has engaged in Improper Conduct, a sanction of a
written caution and/or a sanction of up to €15,000 and a further €15,000 in
costs can be imposed by an independent Decision Maker on the landlord. For
further information on what can be investigated and how to inform the RTB of
potential Improper Conduct please see https://www.rtb.ie/legislationchange/investigations-and-sanctions. - THERE ARE NEW RULES ON NOTICE PERIODS SPECIFIC TO STUDENT SPECIFIC
ACCOMODATION.
• Students who are residing at Student Specific Accommodation are only
required to give 28 days’ notice to the provider of Student Specific
Accommodation, if they want to terminate the tenancy arrangement. These
students may give a longer period of notice if they wish, but there is no
requirement in law to do so.
• Providers of Student Specific Accommodation must also provide a minimum of
28 days’ notice to end a tenancy agreement with a student tenant and are
obliged to provide longer notice periods in accordance with Table 1 of section
66 of the Residential Tenancies Act 2004, as amended, in respect of tenancies
of a longer duration than 6 months.
• Sample notices of termination for Student Specific Accommodation are
available on www.rtb.ie. - THERE IS A NEW METHOD FOR LANDLORDS TO CALCULATE HOW TO SET
RENTS IN A RENT PRESSURE ZONE (RPZ).
• Prior to the coming into operation of section 6 of the RTA (2) 2021, rents in
RPZs could not increase by more than 4% annually. Section 6 provides that any
rent increase in a RPZ cannot exceed general inflation, as recorded by
Harmonised Index of the Consumer Price (HICP) and to be published in the RTB
HICP Table on www.rtb.ie.
• The new ‘HICP rules’ under section 6 provide for any rent increase in an RPZ.
When reviewing a rent amount, a landlord is strongly advised to use the RTB
Rent Pressure Zone Calculator to ensure that any maximum rent increase
calculated is not exceeded.
• It is important to note that rent setting occurs on the date that the prescribed
notice of rent review is served on the tenant giving a minimum 90 days’ notice
of the date the rent will become payable. Further information and examples
can be found further below in this document or on www.rtb.ie.
• Section 6 requires, the RTB to establish and maintain a Rent Pressure Zone
Calculator and to publish a table of HICP values to assist both landlords and
tenants understand how to lawfully set rents in RPZs. The RTB has created an
easy-to-use Rent Pressure Zone Calculator to calculate any increase in rent in a
RPZ for display on www.rtb.ie.
• Calculations are based on the new Rent Pressure Zone Calculator calculating
the percentage increase in HICP values between the date the rent was last set
and the date the new rent is set and applying that percentage to the
current/most recent rent amount to produce the maximum permissible rent
increase, in line with any HICP inflation. The calculator may indicate that no
rent increase is allowed. Irrespective of the calculation made, there is no
obligation on a landlord to increase the current rent amount and there is no
legal obstacle to a rent reduction. Further information can be found in the FAQ
below.
• A landlord is not permitted to impose a rent increase that is greater than the
amount determined by the calculator.
• The RTB calculator will permit landlords to print off the calculations with a date
and time stamp included and a related table of HICP values. Calculations should
be confirmed and verified on the same date that the notice is served on the
tenant. For further information, please refer to the FAQ below.
• These new HICP rent setting rules and the use of the Rent Pressure Zone
Calculator apply to all private rented tenancies including tenancies and licenses
in Student Specific Accommodation (SSA).
• Where a landlord is relying on an exemption from the RPZ rent increase
restriction, he or she is required to send a notice to the RTB.
• All Local Electoral/Local Authority Areas that have been previously designated
as a Rent Pressure Zone (RPZ) remain designated until 31 December 2024.
• The administrative areas of Cork City Council, Dublin City Council, Dún
Laoghaire Rathdown County Council, Fingal County Council and South Dublin
County Council were due to expire as RPZs on 31 December 2024. This expiry is
now extended to 31 December 2024.
• The RTB has an Investigation and Sanctions unit dedicated to
investigating certain potential breaches by a landlord of the Residential
Tenancies Act 2004. The breaches of the Act that the RTB can investigate are
referred to as “Improper Conduct”. Improper conduct has been extended to
include where a landlord does not comply with the new RPZ rent increase
restriction linked to HICP inflation.
• The rules around the frequency that landlords can serve rent review notices
have been extended for a further 3 years until 31 December 2024. For
tenancies outside of RPZs, landlords can serve a rent review notice every 24
months from the date the rent was last set. For tenancies inside a RPZ, reviews
can occur every 12 months from the date the rent was last set.
