Rent Pressure Zones

Do you know what a Rent Pressure Zone is? We’ve put together the nine important things you need to know if a tenancy is located in a Rent Pressure Zone.

1. WHAT IS 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 16th July 2021, the 4% formula was replaced by the HICP. More information on HICP can be found 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.  

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2. WHAT IS THE HARMONISED INDEX OF THE CONSUMER PRICE (HICP)?

Since 16th 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 16th 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 Rent Pressure Zone calculator will permit landlords to print off the calculations with a date 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 Rent pressure Zone calculator apply to all private rented tenancies including tenancies and licenses in Student Specific Accommodation (SSA). 

The RTB maintains and publishes a table of HICP values here

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3. HOW DO I FIND OUT IF I LIVE IN A RENT PRESSURE ZONE?

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. 

Click here to access the Rent Pressure Zone Calculator to check if your rental property is in a RPZ.  

Outlined below is the list of the Local Authority (LA) areas and Local Electoral Areas (LEAs) that have been designated as Rent Pressure Zones and the dates they were designated. All of the RPZs listed below will remain designated as a RPZ until 31 December 2024.  

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4. HOW IS AN AREA DESIGNATED AS A RENT PRESSURE ZONE?

For an area to be designated a Rent Pressure Zone, the following criteria is used: 

  • The average rent in the previous quarter must be above the average national rent in the quarter; and 
  • The annual rate of rent inflation in the area must have been 7% or more in four of the last six quarters. 

There are three different standardized averages rents to be used when assessing an area: 

  • Dublin areas will remain compared to the national standardized average rent. 
  • The 'Greater Dublin Area' (Kildare, Meath, Wicklow) - excluding Dublin - will be compared to a new criteria which is the national standardized average rent excluding Dublin. 
  • The rest of the country - areas outside the 'Greater Dublin Area' and Dublin - will be compared to an outside GDA standardised average rent.  

Landlords should note that if their tenancy was already in existence when the area was designated, they remain under the current rent certainty measures (rent review once every 24 months) for the purpose of the next rent review. Every review thereafter will be permitted annually.  


5. HOW TO SET THE RENT FOR A NEW TENANCY IN AN RPZ?

From 16th July 2021, where a new tenancy commences in an RPZ, a landlord is required to set the rent in accordance with the Harmonised Index of the Consumer Price (HICP), or the ’HICP rules’, 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.  

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 property having regard to the RTB Rent Pressure Zone calculator which reflects the latest HICP inflation. Landlords can use the print option from the calculator to present this information.  

If a landlord is setting the rent in a Rent Pressure Zone, the amount cannot be a) greater than market rent, and b) greater than general inflation as per the HICP. The  Rent Pressure Zone calculator will permit landlords to print off the calculations with a date stamp included. Calculations should be confirmed and verified on the same date that the information on how the rent is set is served on the tenant. 

A link to the Rent Pressure Zone calculator can be found here.

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6. RENT REVIEWS FOR EXISTING TENANCIES IN RENT PRESSURE ZONES

Landlords must ensure they familiarise themselves with Rent Pressure Zone designation dates as these will inform if the tenancy was in existence at the point of designation and the rent review rules that must be followed. 

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 rent review notice before serving a further rent review.  

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 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.  

After an initial rent review, the landlord will be entitled to review the rent every 12 months.  

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7. RENT REVIEWS FOR NEW TENANCIES IN RENT PRESSURE ZONES

For tenancies that begin after an area is designated as a 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 Notice of 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


8. EXEMPTIONS

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,  

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, result in the BER (within the meaning of those Regulations) being improved by not less than 7 building energy ratings, 

or 

  1. the internal layout of the dwelling being permanently altered; 
  2. the dwelling being adapted to provide for access and use by a person with a disability, within the meaning of the Disability Act 2005; 
  3. a permanent increase in the number of rooms in the dwelling;  
  4. 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 
  5. 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 Restriction, attach relevant supporting documentation to the form and send it to the RTB within one month of the rent setting taking place.  

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9. DISPUTE RESOLUTION & INVESTIGATIONS AND SANCTIONS

The RTB encourages tenants and landlords to discuss problems promptly, keep lines of communication open and respect each other’s positions. If the problem cannot be resolved registered landlords and all tenants can apply to the RTB for dispute resolution.  

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

Investigations and Sanctions  

The RTB has an Investigations and Sanctions unit dedicated to investigating certain potential breaches of the Residential Tenancies Act 2004 by a landlord. The breaches of the law that the RTB can investigate are referred to as an “Improper Conduct”. The new legislation has expanded the types of Improper Conducts that the RTB can investigate, to include where a landlord does not comply with the new RPZ rent increase restriction. If it is found that a landlord has engaged in Improper Conduct, a sanction of a written caution and/or a sanction of up to €15,000 and a further €15,000 in costs can be imposed by an independent Decision Maker on the landlord. 

For further information on what can be investigated and how to inform the RTB of potential Improper Conduct please click here.  

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