Tenants and landlords need to know their rights under new legislation

Galway Daily business Galway house prices increase 2.1%

RTB has called on tenants and landlords to know their rights following the designation of 19 new Rent Pressure Zones (RPZs) in 11 counties.

Among these new RPZs are the Local Electoral Areas (LEAs) of Athenry-Oranmore and Gort-Kinvara.

Co Galway now has five areas designated as RPZs: Galway City Central LEA, Galway City East LEA, Galway City West LEA, Athenry-Oranmore LEA and Gort-Kinvara LEA.

What does this mean for landlords and tenants?

Following their designation as an RPZ, rent in these areas cannot be increased by more than 4% each year.

This applies whether it is an existing tenancy or a new let.  There are some exceptions to this.

Properties exempt include; those that are new to the market and have not been let at any time in the previous two years, protected structures and properties that have undergone a substantial change in the nature of the accommodation.

A substantial change has been defined in the new legislation and will only be deemed to have taken place where specific criteria have been met.

How are RPZs designated?

On the 4th of June 2019, the Residential Tenancies (Amendment) Act 2019 introduced changes to the qualifying criteria to designate an RPZ.

These changes mean that a designation is now linked to more regionally appropriate average rents rather than a standard national average. For an area to be designated as an RPZ, it must meet the following criteria:

Criteria 1: The annual rate of rent inflation in the area must have been 7% or more in four of the last six quarters.

Criteria 2: The rent is above standardised average rent appropriate for that area.

Athenry-Oranmore LEA and Gort-Kinvara LEA have a standardised average rent of €975.21 and 975.20 per month respectively. This places their rent above the average rent for the ‘Rest of the Country (Outside Greater Dublin Area)’ which is €841.49.

The information on RPZs is published each quarter in the RTB’s Rent Index, which is compiled in conjunction with the ESRI, and is the authoritative guide to the Irish rental market.

The latest Rent Index was published on 2nd July 2019.

All RPZs are in effect until 31 December 2021.

Welcoming the latest designations, Rosalind Carroll, Director of the Residential Tenancies Board said: “The Rent Index is an important tool in helping understand and inform the sector, and it is clear that rising rents continue to put pressure on the market.

“However, following the release of our recent research study conducted by the ESRI, evidence shows that RPZ’s are having a moderating effect on the sector of 2.5%-3%.

“Therefore, I believe we should be able to see the same effects taking place within the next 12-18 months across these newly designated zones, and that is why it is so important both landlords and tenants know their rights and responsibilities, including setting the correct rent amounts in RPZs.

 We’re currently running a general awareness campaign about the new legislation across radio, outdoor, digital and social media, so we’re encouraging people to visit www.rtb.ie and get informed!”

The RTB has also been given new powers to address improper conduct by landlords under the Residential Tenancies Act.

The RTB can now directly investigate and sanction in cases where there are specific breaches of Residential Tenancy Law in relation to: Rent Pressure Zones; false or misleading notices of termination; and the non-registration of a tenancy.

Anyone found in breach of the legislation could face sanctions that range from a warning to a fine of up to €15,000.

The new legislation also requires that all notices of termination are copied to the RTB within 28 days of the tenancy ending.

Commenting on the RTB’s new powers, the RTB Director added: “We welcome these enhanced new powers that will help us more effectively regulate the rental sector.

“However, the ultimate goal of these new powers is not about the sanction, but to get compliance and ultimately have a more effective and well-functioning rental sector for all.”