Rent certainty and the new landlord and tenant law

New residential tenancy legislation, partly aimed at addressing the housing crisis in Ireland, introduces what has been called “rent certainty” for tenants. Tenants should know their rights and landlords should be aware of the rent review and termination changes which have already taken effect.

The main changes to the law are:

• Rent cannot be increased more often than every 2 years. Until now a rent review could be done every year but this has been changed and the minimum frequency of rent reviews is now two years. This will only apply for four years, when the law will go back to allowing rent reviews annually. Any tenant threatened with a rent review should check to see when their tenancy began as the two year period runs from the beginning of the tenancy or the last rent review. So, if you rented a property over two years ago and there has been no rent review since an increase might still be possible. Landlords must now give 90 days’ notice of a rent review, up from the previous 28 days.
• Tenants must get a rent review notice. The landlord must give tenants this notice which must include details of the new rent and the tenant’s rights to dispute the increase by referring it to the Private Residential Tenancies Board. The notice must also contain details on the reasonableness of the new rent with reference to the market rent for similar properties in comparable areas.
• Extra termination notice periods have been introduced. The notice periods for termination of protected tenancies up to 4 years remain the same but new, longer termination periods have been introduced landlords of tenancies longer than 4 years. The maximum notice is 224 days for a tenancy of 8 years or more. Tenants need to give 112 days’ notice of a tenancy of 8 years or more.

The changes are contained in the Residential Tenancies (Amendment) (No. 2) Act 2015 which is lengthy and contains a range of complex changes to existing residential tenancy law. Only the parts of the Act which deal with rent reviews and termination notice periods have been commenced (on 4 December 2015) and the other provisions are expected to be commenced in January 2016.

• Landlords must send deposits to the PRTB. Previously, landlords were required to return deposits but could hold them in the meantime. The 2015 Act requires that when a deposit is paid by a tenant the landlord must forward it to the PRTB.
• There are new compliance obligations on landlords when terminating. The law allows landlords to terminate protected tenancies in certain circumstances, such as when they are selling or renovating the property. However, landlords will now have to provide further documentation when relying on these termination grounds. For example, if terminating to carry out renovations the landlord will have to provide either a copy of the relevant planning permission or, if permission is not needed, the name of the contractor carrying out the works and the duration of the works.

This new law does strengthen the position of tenants, although the so-called “rent certainty” measure is temporary and it is not clear why it was not introduced on a permanent basis or instead scheduled for review in 4 years. The implications of the 2015 Act are quite significant for landlords who will have to be aware of the information and compliance requirements and will have to take particular care when terminating a protected tenancy.