RPZ are areas where rents are highest and rising. In these areas rents can only increase by 4% unless they qualify for an exemption. The rent must also still be in line with local market rents for similar properties and 3 examples of comparable rents must be provided.
How often can the rent be reviewed in a Rent Pressure Zone?
If a tenancy in a Rent Pressure Zone began on or after the 24th of December 2016, the landlord can review the rent each year and it can only be increased by a maximum of 4%. The rent being set should not be more than local market rents for similar properties.
For tenancies in Rent Pressure Zones which began before the 24th of December 2016, the landlord can only review the rent 24 months (2 years) after the tenancy came into existence, or 24 months after the date the rent was last set.
When the next rent review is due, the landlord will apply the Rent Pressure Zone formula to determine the rent increase. The RPZ Rent calculator can assist landlords and tenants to calculate the maximum rent allowable for the property. The rent being set should not be more than that of local market rents for similar properties. After this, the landlord will be entitled to review the rent every 12 months.
It is important to remember that not all properties in Rent Pressure Zones are subject to the 4% rental cap. Exempt properties include those that are new to the rental market and have not been let at any time in the previous two years, and those that have undergone a 'substantial change in the nature of the accommodation'.
- A “substantial change in the nature of the accommodation” must be a significant change or improvement to the dwelling which results in increased market value of the tenancy and therefore adds to the letting value of the property. The substantial change must have resulted in the property increasing its letting value. For example, simple repainting or replacing white goods in the property would not be viewed as a substantial change.
Further details are provided in the Guidelines for good practice on the Substantial change exemption in Rent Pressure Zone Areas.
The tenants signed a one year lease in 1st March 2017, at a rate of €900 per month in an RPZ. They were worried that their landlord would increase the rent in 1ST March 2018 to €1,000 per month. As the property is in an RPZ [link] the landlord can only increase it by 4%, restricting the increase to €936.00 pm
A landlord reviews the rent of a dwelling on 1 December 2016 by serving a 90 day notice of rent review indicating that the change will take effect from the 1st March 2017. A subsequent Notice of Rent Review can not issue until 1 December 2018 and must also provide 90 days Notice prior to the change taking effect.
The tenants last rent review was in September 2013. The landlord can initiate a rent review at any time, as it is more than two years since their last rent review, and provided they give the required 90 days notice. Also, if the property is in an RPZ [link] then the landlord can review the rent annually.
A landlord is also required to tell the RTB of the revised rent so that the registration details are up to date.
Where a notice of a rent review has been served by the landlord than either party can submit a dispute to the RTB before the new rent starts or within 28 days of the tenant receiving the notice. For more information please click here