Landlords in a Rent Pressure Zone (RPZ) cannot hike rents above prescribed thresholds after performing basic maintenance such as painting or appliance replacement, new guidelines have clarified.
Under the law, owners of properties in RPZ areas in counties such as Dublin, Kildare and Cork can only raise the rent by a maximum of four per cent a year, but they can be exempted from this if they have made a “substantial change” in the nature of the accommodation.
Similarly, landlords applying “substantial refurbishment” to properties can terminate a tenancy they would otherwise be unable to.
Guidelines published by the Residential Tenancies Board (RTB) clarify exactly what qualifies for both of these situations, helping settle potential disputes where tenants feel they are being wronged.
In cases where landlords claim to have made substantial changes to the nature of their properties, a series of questions can now be applied to assess whether or not they are exempt from rental controls.
These include whether the works merely bring the property up to minimum standards or are simply part of normal repairs and maintenance. Alternatively, is there evidence they have actually changed the letting value of the property (as opposed to simple market inflation), how much money was spent and what was the duration of the work carried out.
In order to circumvent the four per cent increase, works must be “out of the ordinary” and constitute a change in the nature of the accommodation being provided.
Examples given for what may constitute substantial changes to a property include the addition of bedrooms, an attic conversion or insulation, replacing a boiler, radiators, windows or doors.
Examples of non-substantial maintenance works that would not constitute a derogation from the four per cent rule include upgrades to rooms, addition of smoke alarms, painting, plastering, tiling, decorating, gardening or guttering.
Rent Pressure Zones were introduced a year ago to try and moderate increases in parts of the country where the prices were highest.
The RTB said they have received regular questions from both landlords and tenants as to what constitutes acceptable levels of change to a property.
While the new guidelines are focused on the RPZ areas, they have also released guidance on properties outside of those areas.
The guide also puts forward hypothetical scenarios including one involving landlord ‘Pat’ who plans to add a bathroom to his house and knock down a dividing wall, causing the tenant to vacate the property for two months.
Whereas these works would be considered substantial, the case of another landlord ‘Tom’ who wants to install a new cooker, replace a window, service the boiler and paint rooms would not, according to the guidelines.
"The key point for people to understand is that for the exemption to apply there needs to be a substantial change in the nature of the accommodation being provided, so it is not just about improving a property but [ rather ] about significant changes," said RTB director Rosalind Carroll.
Queries have also arisen where landlords have, or wish to cite a “substantial refurbishment” to a property in order to end an existing tenancy.
According to the law, “Part 4 tenancies” - where a tenant has been in situ for longer than six months - can only be terminated on specific grounds, including where an owner wishes to “substantially refurbish” to an extent that nobody could live in the property.
Once this has been done, the rent can be raised to reflect the changes. The criteria for assessing the bona fides of “substantial refurbishment” include whether they are of an extent that would require the tenant to move out; and that they are more substantial than merely bringing a property up to minimum standards, and not simply repair or maintenance jobs.
