Rent Setting in a Rent Pressure Zone
A Rent Pressure Zone (RPZ) is a designated area where rents cannot be increased by more than general inflation, as recorded by the Harmonised Index of the Consumer Price (HICP). This applies to new and existing tenancies (unless an exemption is being applied). Previously, RPZs could not see an increase in rent of more than 4% annually. Since 16 July 2021, the 4% formula was replaced by the HICP.
Rent Pressure Zones are located in parts of the country where rents are highest and rising, and where households have the greatest difficulty finding affordable accommodation. They are intended to moderate the rise in rents in these areas and create a stable and sustainable rental market that allows landlord and tenants to plan financially for their future.
The Rent Pressure Zone Calculator can be used to find out if a property is located in a Rent Pressure Zone by inputting the address or Eircode. It can also be used to calculate the maximum rent increase permitted, if any, for the tenancy.
From 16 July 2021, where a new tenancy commences in a RPZ, a landlord is required to set the rent in accordance with the Harmonised Index of the Consumer Price (HICP), unless the property is exempt from rental restrictions. Some landlords and tenants believe that when one tenancy ends, and another begins, they can set the new rent to market rent levels as opposed to using the Rent Pressure Zone calculator. This is not the case. When a new tenancy commences, landlords must use the Rent Pressure Zone calculator to ensure the rent is set at legally permitted levels.
On the commencement of a new tenancy in a Rent Pressure Zone, a landlord is required to provide the tenant, in writing, with the following information:
- The amount of rent that was last set, which is the rent amount the previous tenant was paying in the rental dwelling.
- The date the rent was last set, which is the date that the tenancy commenced or the date the landlord previously set and served the notice of rent review.
- A statement as to how the rent was set in the rental dwelling having regard to the RTB Rent Pressure Zone calculator which reflects the latest HICP.
Rent Review in a Rent Pressure Zone
Following the designation of a Rent Pressure Zone, all existing tenants at the relevant date of designation are still covered by the 24 month rent certainty laws. Therefore, a landlord must wait 24 months from the tenancy commencing or 24 months from the service of the last valid rent review notice before serving a further rent review.
A tenant must be informed of any review to the rent with at least 90 days’ notice in writing of a change in rent (an email or text is not considered appropriate notice of a rent review). The rent cannot be increased by more than general inflation, as recorded by the Harmonised Index of the Consumer Price (HICP), and the rent being sought should not be more than local market rents for similar properties. After this, the landlord will be entitled to review the rent every 12 months.
All landlords must serve a notice of rent review ensuring that they follow the Notice of Rent Review. The Notice of Rent Review must be followed closely, and landlords should not deviate from the wording used therein, change the format of the notice, or delete information from same as doing so could invalidate the Notice of Rent Review in full.
Once a rent review has been carried out and the new rent has commenced, the landlord should notify the RTB that the rent amount has changed, via our online facility or by using a Tenancy Update Form. This should be submitted to the RTB within one month following the date when the new rent amount applies. The landlord must be in receipt of the new rent amount before an update to the rent amount can be applied to the registration.
The information required to ensure that you fill out the form in full and correctly are:
- Part A: Tenant(s) name. Please add an additional page if there are more than 4 tenants.
- Part B: Registered Tenancy (RT) number, Rented dwelling address.
- Part C: Landlord /Authorised Agent name and address.
- Part D: Previous rent amount, date last rent review was served, new rent amount, date which new rent becomes payable. (For tenancies in RPZs, please use the Rent Pressure Zone calculator to determine the maximum rent increase, if any, that can apply. Please print off or save a copy of the relevant calculation provided by the calculator for your records.)
- Part E: The address and rent amount sought for 3 dwellings of similar size, type and character to the dwelling subject to tenancy and situated in a comparable area that have been advertised within the previous 4 weeks of the date of service of the notice. 3 comparables must be provided, if less are provided the notice of rent review will be deemed invalid. Comparable properties do not have to be in the exact same town or geographical location. Landlords can look for similar properties in similar towns nationwide.
Rent Review in a Rent Pressure Zone where Landlord is Relying on an Exemption
It is important to remember that not all properties in RPZs are restricted by the rule that rent cannot be increased by more than general inflation, as recorded by the Harmonised Index of the Consumer Price (HICP). Exempt properties include properties that have not been rented for a period of two years prior to the immediate tenancy commencement date, and those that have undergone a 'substantial change in the nature of the accommodation'.
There have been recent changes to the legislation surrounding the exemption rules and criteria, detailed information on the exemptions can be found here.
Exemption 1: The initial setting of the rent on a dwelling which had not been rented for a period of two years prior to the immediate tenancy commencement date. All rent reviews thereafter must adhere to the RPZ HICP rules.
Exemption 2: A dwelling which is, or is in, a protected or proposed protected structure that has not been rented for a period of 12 months prior to the immediate tenancy commencement date. All reviews thereafter must adhere to the RPZ HICP rules.
Exemption 3: A 'substantial change' in the nature of the accommodation has been defined and will only be deemed to have taken place where strict criteria is met.
All landlords must serve a notice of rent review ensuring that they follow the sample notice. The sample notice of rent review must be followed closely, and landlords should not deviate from the wording used therein, change the format of the notice, or delete information from same as doing so could invalidate the notice of rent review in full.
Obligation on Landlords to Notify the RTB of their Reliance on an Exemption
Landlords must inform the RTB that they are relying on an exemption which means that they do not have to adhere to the increase permitted by the Rent Pressure Zone calculator. Landlords must fill out an RPZ Exemption Form with all the correct relevant information and send it to the RTB within one month following the date when the new rent amount applies.
The information required to ensure that you fill out the form in full correctly are:
- Registered Tenancy (RT) number
- Address of rented dwelling
- Tenancy commencement date
- Previous rent amount, if applicable.
- Date previous rent set, if applicable.
- New amount of rent being sought
- Date new rent is set
- You will then tick the appropriate exemption that applies to you.
- Landlords must provide documents that support the exemption relied upon. This may include for example, the old and new BER certificates or a letter of certification confirming the nature of any structural changes from an architect, chartered surveyor, chartered engineer and/or related planning permission.
Approved Housing Bodies
For Approved Housing Bodies, the setting and reviewing of rent should be set out in the lease/contract provided to the tenant at the start of the tenancy. The use of comparable market rent in setting/reviewing the rent does not apply to Approved Housing Bodies. Click here for further information on Approved Housing Bodies Rent Reviews.