Rent freeze - 24 months or 27?

Fian

I have an appartment rented to good tenants since Feb 2015. The rent is below current market rents for the area.

I propose to review the rent. I am aware that under the 2015 amendments the rent review cannot take place before February 2017, 24 months after the tenancy commenced.

My query relates to section 22 of the residential tenancies act which now requires a notice of a new rent 90 days before it is to have effect. The question is - can that notice issue before the rent review takes place?

Essentially can I issue a notice in November (less than 24 months since tenancy commenced) that the rent review will take place in February (after 24 months from commencement) and consequently specify the new rent that will take effect from the first of March (more than 90 days after the notice issues)? I am aware of the other matters that the notice is required to contain as set out in the Act.

Have the PRTB or anyone else pronounced on this issue?

Michael D Not Higgins

The RTA 2004 states three steps in the process
1. The rent review
2. The notice period
3. The new rent

The rent review cannot happen in the first 24 months of a tenancy, the notice period of three months must follow the rent review before the new rent can be implemented. This may not be what the politicians/civil servants intended but it is what is written in the law, even if there is conflicting advice about the mechanics.

Pkiernan

Give notice of rent review at 21 months.

You are basing this on your interpretation of the rules.

To me the review is the rise and can happen on the 24 month anniversary of the last one once notice is given 3 months in advance. This is how the RTB appear to view it also as far as I know and from what I'm aware this is how LLs are currently doing things without difficultly.

Its only the chancers in threshold that are arguing the other way and I'd be inclined to believe the exact opposite of anything they say.

Fian

22.—(1) The setting of a rent (the “new rent”) pursuant to a review of the rent under a tenancy of a dwelling and which is otherwise lawful under this Part shall not have effect unless and until the condition specified in subsection (2) is satisfied.

(2) That condition is that, at least [90 days] before the date from which the new rent is to have effect, a notice [in the prescribed form] is served by the landlord on the tenant stating the amount of the new rent and the date from which it is to have effect [and the matters specified in subsection (2A)].

The legislation (relevant part is above) does not specifically require that the rent review needs to take place before the notice under section 22, instead it states that the rent decided under the review won't take effect unless a 90 day notice period has been given. Interestingly the three advertisements must be dated within four weeks before the notice issues though.

Even so I think you can still have a rent increase after 24 months, the rent increase cannot take effect until 90 days after a notice has issued, but the notice can issue prior to the expiration of 24 months.

You refer to conflicting advice - I have no interest in litigating this anyway for the sake of avoiding a 90 day delay - do you know whether the PRTB have interpreted the issue?

Michael D Not Higgins

The rent is reviewed when the new rent is set. This logically occurs before notice to the tenant. Maybe the intention is to allow 90 days notice before the new rent comes in and they call this changeover the review but that's not what's written in the law.

otwb1

There used to be a sample case on the RTB website which indicated that the 24 months is from review to review.

Can't find it at the moment to link to, but it was along the lines of, for example, review on 1st Jan 2014 took effect on 1st Feb 2014, review can then happen on 1st Jan 2016 and won't take effect for 90 days (Apr 2016)

bobo the clown

I have a question.

I am currently renting a property for 3 years and our lease ends in January. We are currently paying below market value and agreed verbally with our landlord last January that although he did not increase rent last year he would likely be doing it this year. (Thought we'd be moving on so were only happy to agree). He went back on other things that he verbally agreed. I anticipate it will be increased but I want to understand where I sit when discussing rent with the landlord.

Is all of the above moot if the landlord wants rid? Not that he does but he could just say so if he realises he will not get market value rent.

Michael D Not Higgins

bobo the clown wrote: »

I have a question.

I am currently renting a property for 3 years and our lease ends in January. We are currently paying below market value and agreed verbally with our landlord last January that although he did not increase rent last year he would likely be doing it this year. (Thought we'd be moving on so were only happy to agree). He went back on other things that he verbally agreed. I anticipate it will be increased but I want to understand where I sit when discussing rent with the landlord.

Is all of the above moot if the landlord wants rid? Not that he does but he could just say so if he realises he will not get market value rent.

The rent can be increased to market rent. He cannot give notice of termination while a fixed term lease is in effect or while you have part 4 tenancy rights (except for the specified reasons within the RTA or for no reason during the first 6 months of the further part 4 tenancy which starts 4 years after the start of the first tenancy).

Fian

Michael D Not Higgins wrote: »

The rent is reviewed when the new rent is set. This logically occurs before notice to the tenant. Maybe the intention is to allow 90 days notice before the new rent comes in and they call this changeover the review but that's not what's written in the law.

There is little merit in our debating this back and forth.

However the legislation does allow 90 days notice before the new rent comes into effect, not 90 days after the rent review.

It is clear from section 19(2)(b) that the rent is set pursuant to a rent review review. It can be set at a new rate after 24 months. That will not be lawful unless the tenant is given 90 days notice prior to the new rent coming into effect.

If a notice were given after 21 months, then it is possible rents would fall in the interim so that the rent notified would be above the market rent set at the rent review. In that event a new notice would inevitably be required. However in the current market that is very unlikely to occur.

One could also argue that as a matter of logic the new rent cannot be notified before it is set. I would not have any interest in litigating the issue, there is clearly some ambiguity and tbh there is no way I would risk high court legal costs (in a Judicial Review of the PRTB) over 90 days of rent increase even if i was certain the legal issue was a slam dunk (which I am far from believing.)

Anyway as I say there is little merit in our debating this point, and tbh I would not have asked the question if the issue was not open to debate, but what I am really asking for is whether the PRTB have adopted a position on this issue or not? Does anyone know?

bobo the clown

bobo the clown wrote: »

Is all of the above moot if the landlord wants rid? Not that he does but he could just say so if he realises he will not get market value rent.

Well he cannot decide that he wants you to leave himself but if he wants to rise the rent to what is the fair market value and you aren't willing to pay that and he isn't willing to negotiate then yes he would be entitled to ask you to leave or more so you would be obliged to move out.

otwb1

Fian wrote:

Anyway as I say there is little merit in our debating this point, and tbh I would not have asked the question if the issue was not open to debate, but what I am really asking for is whether the PRTB have adopted a position on this issue or not? Does anyone know?

See my reply on post#7

The RTB interpretation is set out on their 'rent review' page.

Fian

Thanks that page is pretty clear.

http://www.prtb.ie/dispute-resolution/dispute-resolution/the-three-stages-of-a-tenancy/rent-reviews

PRTB appear to be of the view that the 90 day notice must be served after the rent review:

2. A landlord has reviewed the rent of a dwelling on 3 December 2015 (prior to the commencement of the new legislative changes), and served a 28 day notice that the rent was to increase on 1 January 2016. The next rent review notice can not issue until 3 December 2017 and would additionally have to provide 90 days notice prior to the change taking effect, which would be 4 March 2018.

Kenjataimu

Fian wrote: »

Thanks that page is pretty clear.

http://www.prtb.ie/dispute-resolution/dispute-resolution/the-three-stages-of-a-tenancy/rent-reviews

PRTB appear to be of the view that the 90 day notice must be served after the rent review:

2. A landlord has reviewed the rent of a dwelling on 3 December 2015 (prior to the commencement of the new legislative changes), and served a 28 day notice that the rent was to increase on 1 January 2016. The next rent review notice can not issue until 3 December 2017 and would additionally have to provide 90 days notice prior to the change taking effect, which would be 4 March 2018.

So would that be the same if you moved in the 3rd of December?

Fian

Kenjataimu wrote: »

So would that be the same if you moved in the 3rd of December?

Yes - according to this example 24 months after tenancy commenced for the first rent review with a subsequent 90 day notice period.