Minister for Housing announces further amendments to Rent Pressure Zone legislation in Ireland

The Government has announced that it intends on bringing forward measures to ensure that rent increases in rent pressure zones (RPZs) would be tied to inflation up to certain point before being capped.

RPZs are designated electoral areas where rents cannot be increased by more than general inflation, and are located in parts of the country where rents ae highest and rising, and where households have the greatest difficulty in finding affordable accommodation. RPZ designations were due to expire on 31 December 2021, but have been extended until 2024.
Previously it was the case that rent increases in RPZs could only increase by a maximum of 4 per cent a year. However, following recent data showing inflation rising to 3% in August 2021, the Government has come under pressure to introduce a limit on any increases in rent tied to inflation, which in the absence of such a limit rent could increase rent beyond the previous 4% annual cap.

According to the Residential Tenancies Board’s (RTB) Rent Index Report for Q2 2021 rent has grown nationally by 7% year-on year, with the national standardised average rent standing at €1,352.

Recent changes and campaigns
The Government recently legislated for the linking of rent reviews in RPZs to general inflation as recorded in the Harmonised Index of Consumer Prices, subject to the overriding provision that the rent cannot exceed the market rent. Outside of RPZs rent reviews can take place on a bi-annual basis until 31 December 2024, though while it is based on market rent no set limit applies.

Other recent changes include the imposition of a limit on landlords from requesting no more than the equivalent of 2 months’ rent in total from a tenant in order to secure a tenancy (i.e. one month’s deposit and one month’s advance rent payment), with certain exceptions for students occupying student specific accommodation. During the tenancy the maximum rent amount payable in advance is one month’s rent.

Separately, the Minister for Housing, Local Government and Heritage has requested the RTB to initiate a campaign to identify and pursue non-compliance by landlords with rent-setting responsibilities. This follows concerned raised by the Minister that the protections afforded to tenants by the Residential Tenancies Acts (2004-2021) are not being applied or enforced in the residential sector.

If a landlord is found to have breached the law in respect of RPZ caps, the RTB has the power to investigate and apply sanctions, with fines of up to €15,000 and/or costs up to €15,000.

COVID-19 and renting
Following the outbreak of COVID-19 a number of protections were put in place to support tenants who had been financially impacted by the pandemic. One such protection was a rent freeze, which will remain in place until 12 January 2022 for tenants who meet certain requirements including those being in receipt of financial supports such as the Pandemic Unemployment Payment or the wage subsidy scheme.

Conclusion
These measures form part of the Government’s efforts to protect tenants following soaring increases in the cost of renting in the past decade. It is envisaged that the new measures will be introduced before the end of the year.

For more information, please contact us at postmaster@vblaw.ie, or your usual contact at Vincent & Beatty LLP.