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. More information on HICP can be found further below.
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.
How do I review the rent in a Rent Pressure Zone (RPZ)?
On 16 July 2021, the HICP values are now being used to set and review rents in RPZs in Ireland. This means that rents in an RPZ cannot be increased by more than general inflation.
From 16 July 2021, rent calculations are now based on a new Rent Pressure Zone calculator which produces a percentage increase in HICP values between the date the rent was last set and the date the new rent is set. It applies that percentage to the most recent rent amount to produce the maximum permissible rent increase, in line with any HICP inflation. The calculator may also indicate that no rent increase is allowed.
Irrespective of the calculation made, there is no obligation on a landlord to increase the current rent amount and there is no legal obstacle to a rent reduction.
The law requires that ‘in setting, at any particular time, the rent under the tenancy of a dwelling, an amount of rent shall not be provided for that is greater than the amount of the market rent for that tenancy at that time’.
The Rent Pressure Zone calculator will permit landlords to print off the calculations with a date and time stamp included. Calculations should be confirmed and verified on the same date that the notice of rent review is served on the tenant.
These new HICP rent setting rules and the use of the RTB Rent pressure Zone calculator apply to all private rented tenancies including tenancies and licences in Student Specific Accommodation (SSA).
The RTB maintains and publishes a table of HICP values here.
Rent Reviews for New Tenancies in Rent Pressure Zones
For tenancies that begin after an area is designated as Rent Pressure Zone the rent can be reviewed each year but cannot be increased by more than inflation, (as outlined in the RTB RPZ Calculator which uses HICP values). The rent amount being set should not be more than that of local market rents for similar properties.
In order for a rent review to be valid, landlords must give tenants at least 90 days’ notice and use the prescribed Rent Review Form to serve it on the tenant. The rent cannot be increased by more than inflation (as outlined in the RTB Rent Pressure Zone Calculator which uses HICP values), and the rent being sought should not be more than local market rents for similar properties. Landlords are strongly advised to serve the notice of rent review on the tenant on the same day as they use the Rent Pressure Zone calculator to avoid any potential invalidation of their rent review, as calculations can vary from day-to-day in line with any change in HICP values.
The calculator can be found here.
It is important to remember that not all properties in Rent Pressure Zones are subject to the HICP inflation restrictions. Exempt properties include properties that have not been rented for a period of two years prior to the immediate tenancy commencement date, a new tenancy in a protected structure that has not been let out in the previous 12 months and those properties that have undergone a 'substantial change in the nature of the accommodation'.
The RPZ exemption rules and criteria:
Exemption 1: The initial setting of the rent on a dwelling which has 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 formula.
Exemption 2: The 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.
Exemption 3: A 'substantial change' in the nature of the accommodation has been defined and will only be deemed to have taken place where the below criteria is met:
“the works carried out to the dwelling concerned -
consist of a permanent extension to the dwelling that increases the floor area (within the meaning of Article 6 of the Building Regulations 1997 (S.I. No. 497 of 1997)) of the dwelling by the amount equal to not less than 25% of the floor area (within such meaning) of the dwelling as it stood immediately before the commencement of those works,
in the case of a dwelling to which the European Union (Energy Performance of Buildings) Regulations 2012 (S.I. No. 243 of 2012) apply, result in the BER (within the meaning of those Regulations) being improved by not less than 7 building energy ratings,
- the internal layout of the dwelling being permanently altered;
- the dwelling being adapted to provide for access and use by a person with a disability, within the meaning of the Disability Act 2005;
- a permanent increase in the number of rooms in the dwelling;
- in the case of a dwelling to which the European Union (Energy Performance of Buildings) Regulations 2012 (S.I. No. 243 of 2012) apply and that has BER of D1 or lower; the BER (within the meaning of those Regulations) being improved by not less than 3 building energy ratings; or
- in the case of a dwelling to which the European Union (Energy Performance of Buildings) Regulations 2012 (S.I. No 243 of 2012) apply and that has a BER of C3 or higher, the BER (within the meaning of those Regulations) being improved by not less than 2 building energy ratings.
If a landlord meets the above criteria, they can be exempt from using the HICP rules when setting and reviewing the rent in an RPZ.
If a landlord wants to rely on one of these exemptions, he or she must use the prescribed Notice of Exemption from RPZ Rent Restrictions, attach relevant supporting documentation to the form and send it to the RTB within one month of the rent setting taking place.
Dispute Resolution Services
The RTB encourages tenants and landlords to discuss problems promptly, keep lines of communication open and respect each other’s positions. Where a notice of a rent review has been served by the landlord then either party can submit a dispute to the RTB before the new rent amount is due to commence or within 28 days of the tenant receiving the notice. If the problem cannot be resolved registered landlords and all tenants can apply to the RTB for dispute resolution.
Mediation is a free service offered by the RTB that allows two or more disputing parties to resolve their conflict in a mutually agreeable way with the help of a neutral third party, a mediator. Mediation is usually done by telephone, which is a faster and more convenient option. The aim of mediation is to give landlords and tenants a shared understanding of the issue, so they can work towards reaching a mutually satisfactory outcome and agreement. It is confidential, and the outcomes are not published on the RTB website. The key benefit of this resolution type is that case parties do not have to leave their home and they do not have to interact physically with other case parties. Over 70% of cases which enter Telephone Mediation result in an agreement.
A further service offered by the RTB is Adjudication. The fee for adjudication is €15 for an online application and €25 for a paper application. This involves a hearing before an independent adjudicator, where both the landlord and tenant present their evidence and the adjudicator makes a binding decision. Adjudication hearings are currently taking place virtually via MS Teams. Although adjudication proceedings and the adjudicator’s report are confidential, it is important to remember that the Determination Order will be published on the RTB website and will list the names of the case parties and the rental property address.
For more information on the RTB dispute resolution service, please visit the RTB website here.
Where a notice of a rent review has been served by the landlord then either party can submit a dispute to the RTB before the new rent amount is due to commence or within 28 days of the tenant receiving the notice. For more information please click here.
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.