2 questions on Rent Rules

P

p walsh

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Hi, 2 quick questions if ppl can help me please!

Have 2 bed apartment in Dublin rented out for €1400, which is below market rents of €1650, as tenants have been with me for 8 years. My current situation is that I need to increase the rents as much as possible for mortgage payments etc.

Last increase was to €1400 on 30th May 2016.

1. When can I give notice to tenants of increase, to maximize returns over the coming years? It's 4% increase right?

2. Is this new rental cap for 3 years only? What will happen after 3 years? Free to set whatever rents we want?

Many thanks
P
 
p walsh said:
1. When can I give notice to tenants of increase, to maximize returns over the coming years? It's 4% increase right?
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The earliest you can give (90 days) notice of a rent increase is 30 May 2018. Thereafter, you can review the rent on an annual basis. Yes, any increase is capped at 4% for as long as Dublin is determined to be a "rent pressure zone".

p walsh said:
2. Is this new rental cap for 3 years only? What will happen after 3 years? Free to set whatever rents we want?
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Rent certainty measures (i.e. the 4% cap) will continue to apply until the next rent review is due to be carried out. Thereafter, if Dublin is no longer determined to be a "rent pressure zone" you cannot increase the rent by more than the market rent (having given 90 days notice of the rent increase) having sought three comparable properties advertised within the previous four week period.
 
Thank you.

So when Dublin is no longer a pressure zone, can I increase it to market rate after showing comparable rents either Immediately upon the announcement, or would I have to wait till the end of that years contract with the tenant to put it up?
 
p walsh said:
Thank you.

So when Dublin is no longer a pressure zone, can I increase it to market rate after showing comparable rents either Immediately upon the announcement, or would I have to wait till the end of that years contract with the tenant to put it up?
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At this stage, I don't think anyone can answer that question with any certainty - what do we expect our politicians to be doing when we get to that point? One would expect that the temporary measure would be removed but who knows?
 
p walsh said:
So when Dublin is no longer a pressure zone, can I increase it to market rate after showing comparable rents either Immediately upon the announcement, or would I have to wait till the end of that years contract with the tenant to put it up?
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Well at that stage you can only review the rent once a year and you still have to give 90 days notice before any increase takes effect - the only thing that changes at that point is that the 4% cap falls away.

One interesting nuance in the legislation (at least how I read it) is that the two-year rent review cycle is retained if an area is never determined to be a "rent pressure zone", whereas it falls away at the end of the current cycle in a "rent pressure zone" (i.e. rents can be reviewed on an annual basis once the current two-year cycle is concluded). There doesn't appear to be any provision in the legislation to reinstate the two-year cycle once an area ceases to be a "rent pressure zone".

Of course, to rob oyle's point - this could all be changed again by that stage!
 
Thanks for all your help so far.

So when I give the tenants their new contract on 30th May, do i make it a 90 day contract? and then a 1-2 year contract once ive put the rent up?

also do i need to show the calculation to them of the 4% increase?

Really appreciate the help
 
Don't have any contract. Rental contracts do nothing to protect the landlord nowadays and are trump by the legislation. All a contract will do is tie your hands and yet your tenants are not tied to it at all.

Also never give anyone any more than you have to or they may use it as a stick to beat you with afterwards. So don't give them the workings of the rent calculation. Just give them the required notice stating what the new rent will be.

Also, you are aware that the cap on increase is per year since the last rent review right?
So if you haven't reviews the rent in 3 years it is 12% you can adjust it too and so on.
 
PaxmanK said:
Also never give anyone any more than you have to or they may use it as a stick to beat you with afterwards. So don't give them the workings of the rent calculation. Just give them the required notice stating what the new rent will be.
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There is a statutory obligation to include the calculation in the rent review notice as per the RPZ formula - fail to do so and the tenant could dispute the validity of the notice -

https://onestopshop.rtb.ie/images/uploads/general/RPZ_Rent_review_sample_notice.docx
 
The grey area that was pointed out to me was that the tenant has to complain about the rent being more then rise or 4% but when you register with the RTB do they do anything if the rent is more ???

I just went with the calculation. Renting at €350 below going rate :(
 
when i input my details, and don't include the 90 days noptice, it says i can increase the rent on 30th May 2018 , and doesnt say anytihng about giving 90 days notice. so should i just print off the calculations and increase the rent from 30th May, and not give 90 days notice?
 
gar32 said:
If your tenant agrees with it yes if they don't no.
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That is not correct.

A tenant cannot contract out of his statutory rights. So, he can always dispute the rent review notice at a later stage if the prescribed 90 day notice period was not observed.
 
p walsh said:
Thank you.

So when Dublin is no longer a pressure zone, can I increase it to market rate after showing comparable rents either Immediately upon the announcement, or would I have to wait till the end of that years contract with the tenant to put it up?
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In my opinion, if your rent is stated in the lease agreement (and it must be as your agreement acts as a rent book which is compulsory) then you cannot change the rent during the lease agreement.

IMHO, you would be best to use 1 year leases in case there are further changes in the rental laws which seem to come every few months. This way, you are only tying yourself to one year. Although you could have a two or3 year lease with a rent increase clause in it that the rent may be increased annually (with the 90 day notice period, obviously) in accordance with the rent laws at the time. But, again, IMHO this could be more difficult and you may need a solicitor to write a legal clause for you.
 
A landlord certainly can't unilaterally increase the rent stated in a letting agreement - no doubt about it.

I agree with @facetious that a landlord would be well-advised not to enter into a letting agreement for any longer than one year - and it is questionable at this stage whether a landlord should ever enter into a letting agreement as opposed to simply providing an old fashioned rent book.

That seems a shame to me. I would have thought that Government policy should be encouraging long-term residential letting agreements. Oh well...:(
 
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