# RPZ regime extended to the end of 2024 and increases limited to inflation



## Sarenco (1 Jul 2021)

The RPZ regime is to be extended to the end of 2024 and rent can only be raised in line with inflation (HICP).




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						Minister O’Brien receives Government approval for significant changes to RPZs
					






					www.gov.ie
				



This is really bad news for anybody renting out a property at less than market rent.


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## Brendan Burgess (1 Jul 2021)

And the main response from the political parties will be 

"this does not go far enough. There should be a complete freeze on rents and it should be extended to all tenancies and not just those in RPZs".

We need a new political party.

Brendan


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## aristotle (1 Jul 2021)

Yeah it really is another kick to individual landlords like myself who have rented out at below market rates. At least the 4% was slowly getting the rent up but tied to inflation that means the max increase might be <2%.

It would be fairer (to the landlord) if below market rents could be brought up as a once off and then carry on from there with inflation based increases.


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## Sir Bob Paisley (1 Jul 2021)

My contract with my tenant end 30th September . I’m dropping in the rent review form today with an 8% increase as per the present legislation(no increase in 24 months). Will I get this increase or will the incoming legislation apply?


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## Sarenco (1 Jul 2021)

Sir Bob Paisley said:


> Will I get this increase or will the incoming legislation apply?


Well, the legislation won’t apply retrospectively so you should be fine.


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## NoRegretsCoyote (1 Jul 2021)

I can see merit in CPI for existing tenants but *permanently linking rents on new tenancies to prior rents is too much*. Particularly because it is already impossible to end a tenancy just because you hope to get a better rent from a new tenant.

For a landlord stuck at 70% of market rent by linking to CPI you are basically saying they will be stuck there forever.

Landlords will just continue to leave the market.


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## Thirsty (1 Jul 2021)

We don't have legislation to prevent homeowners from selling their home at the market value; so why is it ok for rents?


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## Brendan Burgess (1 Jul 2021)

Thirsty said:


> We don't have legislation to prevent homeowners from selling their home at the market value; so why is it ok for rents?



Thirsty

Don't be giving them ideas!  



Brendan


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## NoRegretsCoyote (1 Jul 2021)

Thirsty said:


> so why is it ok for rents?


Because it's reasonable to have some kind of certainty as part of a contract. If market rents explode it's fair to give sitting tenants some kind of short-term protection as they may not have the income to pay more.

But I think rents for sitting tenants should be allowed to catch up with market rents over (say) 5 years.

*No one should be allowed to permanently to live above their means at their landlord's expense.*


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## noproblem (1 Jul 2021)

Is there any agenda by the goverment to get so called landlords (individuals) out of the market? It sure looks like it, and looks like they're going to succeed. Very soon, if someone wants to rent a property they'll be dealing with big business. Be interesting to see how renters get on with late payments and negligence dealing with these boys.


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## Thirsty (1 Jul 2021)

> Because it's reasonable to have some kind of certainty as part of a contract.


Don't have a problem with that; and again to draw a correlation with a home owner, they have the ability to fix their mortgage rate to get that certainty.

But if a tenant leaves / contract ends, it's reasonable to review the rent in line with the market. 

Ultimately it all comes down to supply and demand.


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## Thirsty (1 Jul 2021)

Brendan Burgess said:


> Thirsty
> 
> Don't be giving them ideas!
> 
> ...


for what it's worth in Sweden (and there are many things we should import from there re home purchasing and selling, but I digress); if you don't use the profit from selling your PPR towards a new PPR in Sweden or the EU you have to pay tax on it.


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## misemoi (1 Jul 2021)

But in theory should this not trickle down, ie market rents will fall so that there won't be huge variances in rents apart from variances related to the rental product offered? The current rents are not sustainable.  This is not good for anyone.  If we price out the lower paid out of living in cities then cities will not be nice places to live.


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## Sarenco (1 Jul 2021)

misemoi said:


> But in theory should this not trickle down, ie market rents will fall so that there won't be huge variances in rents apart from variances related to the rental product offered?


Why would it trickle down?  If anything, rent controls of this nature are likely to have the opposite effect.

If I'm renting out an apartment for the first time, rationally I will try to achieve the highest rent that the market will bear.  

I wouldn't care that another apartment owner is prevented from renting his apartment at the market rate.


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## NoRegretsCoyote (1 Jul 2021)

misemoi said:


> The current rents are not sustainable.  This is not good for anyone.  If we price out the lower paid out of living in cities then cities will not be nice places to live.


"That pub is too crowded. No one goes there anymore."


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## Delmer (1 Jul 2021)

I have a property that is vacant. Under current RPZ rules I can put the rent up to a certain level for the new tenants. What happens if I get the new tenant after the new rules come into force? Is the calculation based entirely on the new rules or a combination of both new and old rules?


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## Sarenco (1 Jul 2021)

Delmer said:


> I have a property that is vacant. Under current RPZ rules I can put the rent up to a certain level for the new tenants. What happens if I get the new tenant after the new rules come into force? Is the calculation based entirely on the new rules or a combination of both new and old rules?


Interesting question.

If you get new tenants after the new rules come into effect, I would assume that the new rules would apply.  So I presume you could only charge rent equivalent to the rent charged to your previous tenants, as increased in proportion to any changes to the HICP in the intervening period.

Mind you, it gets very messy if you advertised the property at a rent calculated under the current rules.

I guess we'll to wait to see the legislation to know for sure.


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## NoRegretsCoyote (1 Jul 2021)

Sarenco said:


> Mind you, it gets very messy if you advertised the property at a rent calculated under the current rules.


This exists already to some extent. You sometimes see properties advertised for odd amounts like €1,768. 

It makes more sense when you realise it's €1,700 plus 4%.


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## Sarenco (1 Jul 2021)

NoRegretsCoyote said:


> This exists already to some extent. You sometimes see properties advertised for odd amounts like €1,768.


Sure but what happens if the property is advertised at €1,768 (the maximum rent that can be charged under current rules) but the maximum amount that can be charged is (say) €1,738 when calculated under the new rules?

I guess a lot of ads will have to changed on the implementation date, unless there is some sort of transitional arrangement in the legislation.


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## aristotle (1 Jul 2021)

NoRegretsCoyote said:


> This exists already to some extent. You sometimes see properties advertised for odd amounts like €1,768.
> 
> It makes more sense when you realise it's €1,700 plus 4%.



Well the rent I charge will be to two decimal places, need to squeeze out every last cent now


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## Thirsty (1 Jul 2021)

Question - is the "substantive renovation" clause still in place?

So if property undergoes significant improvement / renovation since previous tenant, you can let it out at market rate?


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## Sarenco (1 Jul 2021)

Thirsty said:


> Question - is the "substantive renovation" clause still in place?


The "substantial change" exemption is still in place but it has now been defined very narrowly (e.g. an extension that adds at least 25% to the floor area of the property, the renovations result in the BER being improved by at least 7 building energy ratings, etc.).


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## odyssey06 (1 Jul 2021)

Sarenco said:


> The "substantial change" exemption is still in place but it has now been defined very narrowly (e.g. an extension that adds at least 25% to the floor area of the property, the renovations result in the BER being improved by at least 7 building energy ratings, etc.).


It would be very challenging to meet one of those conditions in an apartment I think.


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## Thirsty (1 Jul 2021)

Sarenco said:


> The "substantial change" exemption is still in place but it has now been defined very narrowly (e.g. an extension that adds at least 25% to the floor area of the property, the renovations result in the BER being improved by at least 7 building energy ratings, etc.).


There's a few ways you can meet the conditions.

The alternative is not to rent it for two years; depends how behind the market rent you are if thats worth doing.

No matter how you add it up, it really looks like the aim is to remove rental properties from the market.


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## galway_blow_in (3 Jul 2021)

Sarenco said:


> Well, the legislation won’t apply retrospectively so you should be fine.



if a landlord manages to issue a rent review notice prior to the new " inflation based " rent increase legislation kicking in , what is to stop a tenant saying they did not receive said notification on time ?

Been four years since i was a private landlord so forgive my rusty memory  but the RTB dont hear about new rents until they kick in ? , I.E , ninety days minimum after rent review notification is issued , by the time the RTB are aware of a new rent , the new legislation is several months in place

perhaps you can notify the RTB of a rent review issuance at the same time as the tenant and its on the record  ?


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## galway_blow_in (3 Jul 2021)

Thirsty said:


> There's a few ways you can meet the conditions.
> 
> The alternative is not to rent it for two years; depends how behind the market rent you are if thats worth doing.
> 
> No matter how you add it up, it really looks like the aim is to remove rental properties from the market.



You give the government far too much credit , the policies are purely about trying to keep up with the populism of SF and also try and fend of endless media criticism , hating landlords is an article of faith in public discourse here and the government must keep kicking landlords despite such actions only exacerbating the rental market situation


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## Thirsty (3 Jul 2021)

galway_blow_in said:


> if a landlord manages to issue a rent review notice prior to the new " inflation based " rent increase legislation kicking in , what is to stop a tenant saying they did not receive said notification on time ?
> 
> Been four years since i was a private landlord so forgive my rusty memory  but the RTB dont hear about new rents until they kick in ? , I.E , ninety days minimum after rent review notification is issued , by the time the RTB are aware of a new rent , the new legislation is several months in place
> 
> perhaps you can notify the RTB of a rent review issuance at the same time as the tenant and its on the record  ?


Recorded delivery & email soft copy.


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## galway_blow_in (3 Jul 2021)

Thirsty said:


> Recorded delivery & email soft copy.



you mean a registered letter ?


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## Thirsty (3 Jul 2021)

You can do a registered letter if you wish, but recorded delivery is handier I think if you feel you need a record.

Your online orders for example are recorded delivery.

I opt for sending a scanned copy by email with a 'this is the post to you today' message.

The only other problem with a registered letter (if you have a tenant who is really acting the maggot) is that the recipient can refuse to sign & then it makes its slow way back to you.

Mind you, if that's the sort of tenant you have, rent increases are the least of your worries.


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## galway_blow_in (3 Jul 2021)

Thirsty said:


> You can do a registered letter if you wish, but recorded delivery is handier I think if you feel you need a record.
> 
> Your online orders for example are recorded delivery.
> 
> ...



what is " recorded delivery " ?

never heard of it


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## Thirsty (3 Jul 2021)

When you send something via say UPS - there is a record of the delivery.

Post Office used to do it once upon a time, but these days I think they only offer registered delivery.

Sometimes you'll hear people use the term interchangably, but you only get a recipient signature with registered delivery.

(All pre-COVID of course - doorbell ring seems to suffice these days!)


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## galway_blow_in (3 Jul 2021)

Thirsty said:


> When you send something via say UPS - there is a record of the delivery.
> 
> Post Office used to do it once upon a time, but these days I think they only offer registered delivery.
> 
> ...



can you send letters domestically  with the likes of UPS ? , imagine them or Fed Ex are pricey for that ?


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## Thirsty (3 Jul 2021)

galway_blow_in said:


> can you send letters domestically  with the likes of UPS ? , imagine them or Fed Ex are pricey for that ?


Regular post is a lot cheaper!


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## galway_blow_in (4 Jul 2021)

Thirsty said:


> Regular post is a lot cheaper!



of course but your mentioned UPS ?


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## Thirsty (4 Jul 2021)

galway_blow_in said:


> of course but your mentioned UPS ?


It was as an example, there's plenty of similar companies.

As I say, for notifications to tenants, posted letter & email are fine for me. But if you have a concern tenant would try to claim non-receipt, you might prefer to have a record.


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## galway_blow_in (4 Jul 2021)

Thirsty said:


> It was as an example, there's plenty of similar companies.
> 
> As I say, for notifications to tenants, posted letter & email are fine for me. But if you have a concern tenant would try to claim non-receipt, you might prefer to have a record.



Thanks, doesn't effect me as I'm not in that game now but always curious


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## MugsGame (4 Jul 2021)

Sarenco said:


> Well, the legislation won’t apply retrospectively so you should be fine.


Is it that clear cut in the situation being queried i.e. where the notice of increase went out before the implementation date for the new rules, but the increase is due to start after? How was this handled when RPZs were introduced originally? 

Tenants have the option to appeal increase notices to the RTB up to the point the increase takes effect, and an increase above the current allowed % seems like reasonable grounds.


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## Sarenco (4 Jul 2021)

Thirsty said:


> Recorded delivery & email soft copy.


An email doesn’t constitute proper notice.  

Registered post is the safest option.  Whether the addressee signs for the letter is irrelevant - it still constitutes valid notice


MugsGame said:


> How was this handled when RPZs were introduced originally?


Lawful notices issued prior to the introduction of the RPZ regime were entirely valid.  

The problem was that there was a 2-year ban on increasing rents in place at the time so a lot of landlords got shafted.


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## Thirsty (4 Jul 2021)

Email is in addition to hard copy, not instead of.

If recipient refuses to accept / collect at post office registered letter will be returned to sender (eventually).  

Note: this is pre-COVID experience.


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## NoRegretsCoyote (4 Jul 2021)

What I do:

Write a letter, sign it, make a scanned pdf;
Email the scanned pdf immediately to tenant;
Take a picture of the stamped, addressed envelope;
Post the letter to tenant;
Highly unlikely a tenant could credibly claim they were not informed with this level of proof. If someone is acting the maggot they can refuse registered post anyway.


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## NY_Resident (7 Jul 2021)

Anybody know if the proposed new RPZ rent increase cap is still on track to become law on Friday 9th? Coincidentally, I am concluding a new tenancy and can negotiate the lease commencement date to 8th, but don’t want to subsequently find out that our dear government has exceeded expectations on implementation timeline (which I doubt they will!)…..as I could also try push a commencement date for later today…..but don’t want to.


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## NY_Resident (10 Jul 2021)

The President signed the Bill yesterday evening (Friday), but from my reading of the Act, the section dealing with rent increases in RPZs only comes into operation on or after the Minister for Housing signs an order to do so. I heard an interview he did on Newstalk which suggests “next week”.


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## Lisboa (16 Jul 2021)

The new RPZ rent increase legislation officially came into effect from today (July 16th). 

The new calculator and HICP Index Table are all on the one page here - https://www.rtb.ie/calculator/rpz


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