Rent Certainty Proposals and Increased Housing Supports
Minister for the Environment, Community and Local Government, Alan Kelly, has today (November 10th) announced a series of major reforms to the private rental sector in Ireland to provide rent certainty for both tenants and landlords.
A New Deal for Tenants which provides for rent certainty measures will include increasing the rent review period from one to two years, increased notice periods for rent reviews and much greater protections for tenants. The increase in rent review periods will mean that anybody who has faced a rent increase in 2015, will now not have a rent review until 2017. Legislation will require 24 months between all rent reviews, in what is among the most significant overhaul of tenants’ rights in the state.
“With one in five families renting in the state and home ownership declining, long-term renting will become an option for more and more people and the regulatory environment has to catch up with this. People in rented accommodation need greater security and certainty in their lease and these measures will provide that.”
“For families who were facing a rent increase next year, the longer distance between rent reviews will delay such increases for a year and ease the pressures on many families that are currently facing homelessness due to the shortage of supply.”
“Tenants do not have enough knowledge of their rights. Now that there will be a legal obligation on landlords to notify them as to how to dispute excessive rent increases, tenants will now be more empowered and landlords have a disincentive to aim for the highest rent possible – as they could face a dispute which will delay their rents,” said Minister Kelly.
The Residential Tenancies Amendment Bill will also provide for the creation of a deposit protection scheme where deposits are lodged with the PRTB as opposed to the landlord with consent of both parties required to draw it down on completion of a tenancy.
The measures will also oblige landlords to provide more evidence that rent increases are in line with the local market rate and will legally oblige them to inform tenants of their rights and how to dispute future rent increases with the PRTB.
Landlords who intend to sell their property or terminate a tenancy in order for a family member to use it will have to supply a ‘statutory declaration’ to a tenant of their intent to sell and could be liable for a fine if it does not materialise. The measure is designed to prevent abuse of procedures in order to terminate a tenancy.
There will also be a new procedure to deal with rent arrears cases with the PRTB and determination orders concerning terminations will now be dealt with at the District Court level as opposed to Circuit Court, making it easier and cheaper for landlords, or the PRTB, to deal with unscrupulous tenants. While minor errors in Notices of Termination will no longer cause entire proceedings against problem tenants to fail, as is currently the case.
“Many low income families rely on the private rental sector and rents were escalating far higher than people’s incomes because of the housing shortage and the growth in employment. Landlords will be able to sell their properties or allow a family member to use them, but they will now have to provide a legal declaration that this is the case. Furthermore, it will become easier for landlords to deal with problem tenants through the PRTB and District Court as opposed to the more costly procedure of the Circuit Court.”
In addition to rent certainty measures, the Housing Assistance Payment limits are being increased in Cork, Galway, Kildare and Meath where flexibility allows for a 20% payment above rent supplement thresholds. For families in emergency accommodation in Dublin City, HAP payments will be allowed for 50% above rent supplement levels.
“These increases are vital to alleviate the threat of homelessness and to house people who are currently homeless. For a variety of reasons our housing market is not functioning properly at the moment, increasing this funding is part of the solution to get people out of emergency accommodation and back into functioning family units again.”
There will also be a tax relief measure introduced in the Finance Act to allow landlords who lease to tenants in receipt of social housing supports such as rent supplement or the Housing Assistance Payment (HAP), to avail of 100% mortgage interest relief on their borrowings where they commit to accommodating tenants in receipt of the above payments for a minimum period of 3 years.
“Overall these measures put some stability into what is a highly volatile marketplace that suits neither tenant nor landlord currently. While rent regulation does not in and of itself correct an undersupply in the marketplace, these measures will provide relief for families on the brink and prevent further families from becoming homeless.”
Click here to view the package to deliver Rent Certainty and Housing Supply.