Rent Pressure Zones

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

1. WHAT ARE RENT PRESSURE ZONES?

Rent Pressure Zones are designated areas where rent can only be increased up to 4% a year.

Rent Pressure Zones are located in parts of the country where rents are highest and rising, and where households have the greatest difficulty finding accommodation they can afford. They are intended to moderate the rise in rents in these areas and create a stable and sustainable rental market.

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2. WHERE ARE RENT PRESSURE ZONES?

There are 5 Local Authority areas and 16 Local Electoral Areas which have been designated as Rent Pressure Zones:

  • Cobh, Co. Cork
  • Ballincollig – Carrigaline, Co. Cork
  • Cork City Council
  • Dublin City Council
  • South Dublin County Council
  • Dun Laoghaire/Rathdown County Council
  • Fingal County Council
  • Galway City Council
  • Galway City East
  • Galway City West
  • Maynooth, Co. Kildare
  • Celbridge-Leixlip, Co. Kildare
  • Naas, Co. Kildare
  • Newbridge, Co. Kildare
  • Ashbourne, Co. Meath
  • Laytown-Bettystown, Co. Meath
  • Ratoath, Co. Meath
  • Bray, Co. Wicklow
  • Wicklow, Co. Wicklow
  • Drogheda, Co. Louth
  • Greystones, Co Wicklow

The RPZ Rent 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 amount for the tenancy.

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3. RENT SETTING FOR NEW TENANCIES

In the case of a new tenancy in a Rent Pressure Zone, unless the property is exempt from the rental restrictions, a landlord is required to provide the tenant, in writing, with the following information at the beginning of the tenancy:

  • The amount of rent that was last set under a tenancy for the dwelling
  • The date the rent was last set under a tenancy for the dwelling 
  • A statement as to how the rent was set under the tenancy of the dwelling having regard to the Rent Pressure Zone formula. Landlords can use the print option from the RPZ calculator to present this information. 

Additionally, the rent cannot be set above the local market rents for similar properties and three examples for similar properties in the locality, or a comparable area, must be presented to demonstrate this. 

The RPZ Rent Calculator is a useful took to assist landlords in supplying this information to the tenant before the tenancy is agreed and can be useful in helping to prevent disputes. 

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4. RENT REVIEWS FOR EXISTING TENANCIES IN RENT PRESSURE ZONES

A tenant must be informed of any review to the rent with at least 90 days’ notice in writing (an email or text is not considered appropriate notice of a rent review) of a change in rent. These sample notices of rent review can be used to create a rent review notice.

If a tenancy in a Rent Pressure Zone began on or after the 24 December 2016, a landlord can review the rent each year and it can only be increased up to 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 24 December 2016, a landlord can only review the rent 24 months after the tenancy came into existence, or 24 months after the date the rent was last set and when the next rent review is due, the landlord must apply the Rent Pressure Zone formula to determine the rent increase.

The RPZ Rent Calculator can assist in calculating 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.

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5. THE RENT PRESSURE ZONE FORMULA

The RPZ Rent Calculator is a useful tool to calculate the maximum allowable rent in a Rent Pressure Zone. 

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 the amount determined by the formula below:

R x (1 + 0.04 x t/m)

  • R = The amount of rent last set under a tenancy for the dwelling (the current rent amount)
  • t = The number of months between the date the current rent came in to effect and the date the new rent amount will come in to effect.
  • m = you must enter 24 OR 12
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6. EXEMPTIONS

It is important to remember that not all properties in Rent Pressure Zones are subject to the 4% restriction. 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' 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. For example, simple repainting or replacement of white goods would not be sufficient.

The RTB have prepared a guideline for good practice on the application of the Substantial Change Exemption in Rent Pressure Zone Areas which can be found here.

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7. SECURITY OF TENURE

For tenancies that began before the 24 December 2016, after a six-month probationary period, the tenant secures the right to remain in the property for a further three and a half years. This is known as a ‘Part 4 Tenancy’.

For tenancies that began after the 24 December 2016, security of tenure has increased, and after a six-month probationary period, the tenant secures the right to remain in the property for a further five and a half years.

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8. DISPUTES AND PENALTIES

A dispute in relation to rent setting or rent reviews can be submitted to the RTB. It is encouraged that disputes in relation to rent setting and rent reviews are made as soon as possible.

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.

Where an increase in the rent is found to be above 4% the landlord may be required to return the rent to the correct amount, and may also be required to pay damages to the tenant affected.

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