Rent increase megathread

Pixie89

I just called the RTB and they confirmed my rent cannot be increased until 24 months after my last increase so the earliest would be January 2018 and then it becomes a 12 month review

eddiem74

Paulw wrote: »

Seems that once notification was served correctly, then the increase would be valid (above the 4%). So, it would not be capped at 4%.

Is there anywhere that states this?

Michael D Not Higgins

eddiem74 wrote: »

Is there anywhere that states this?

The legislation itself. The new law only applies after the commencement date. If a review is done before this date and notice is given, it is under the remit of the old law which does not require a cap.

The law cannot retrospectively affect a review which is already completed. For the same reasons, reviews carried out in November 2015 were still valid with 28 days notice despite the new rent coming into force during the new regime of 24 month intervals and 90 days notice.

Edit: I've found the relevant section below.

(6) Where immediately before the relevant date a notice under section
22(2)—
(a) has been served on the tenant, or
(b) the rent review concerned has commenced,
then subsections (3) and (4) shall not apply to the new rent, referred to
in section 22(2), stated in that notice in accordance with that section.

Section 22(2) is written notice of new rent. If this has been served ahead of the commencement date or the rent review has already begun, the cap doesn't apply. What it doesn't specify is how you determine the rent review has commenced, as this doesn't usually involve the tenant but I guess if there's already discussion between the landlord and tenant on the level of the new rent that can be considered as the review having commenced.

Paulw

Paulw wrote: »

Nope, you are incorrect.

I'll try posting this again, maybe someone will actually look at it, and see it's very clear.

http://www.rtb.ie/dispute-resolution/dispute-resolution/rent-pressure-zones

Passive aggression aside, people are looking at it, and it's as clear as mud.

I would argue in the case of the poster you quoted, based on the formula from the RTB site, their rent can be increased by more than 4%, because it has been longer than 2 years.

If the rent had remained static for 10 years, the formula would be :

Old rent x [1+(0.04x{120/24})]
= old rent X 1.20
Or an increase of 20%

If that's incorrect, I'd like someone to show me how.

Edited to add:
My understanding is, If it's been one year since last increase, max is 4%
2 years is still 4%
3 = 6%
4 = 8%
5 = 10% etc

Vojera

Vojera wrote: »

Looking for clarification on this, please.

Our landlord sent an email last week saying our rent would be increasing by the minimum 4% from the end of April. That was fine, we accepted that and he acknowledged our acceptance.

Today he sent another email saying that his initial email was sent in error and that the 4% rise didn't count until next year, and that he would instead be increasing the rent by 14%.

Is this legal? I feel like we're being taken for a ride.

For the record, our last notice of increase was in March 2015 to take effect the end of April 2015.

I got confirmation from the RTB that 4% is the legal maximum our rent can be increased by. I sent this to our landlord who says that this isn't his interpretation of the law, and that if we don't agree to our 14% increase he'll give us our notice and rent it out for 35% more than our current rent.

First, doesn't the property have to be vacant for a minimum of two years before he can do this? And second, this higher rent would be well above market value anyway.

Is our only avenue here to open a dispute?

Michael D Not Higgins

Vojera wrote: »

I got confirmation from the RTB that 4% is the legal maximum our rent can be increased by. I sent this to our landlord who says that this isn't his interpretation of the law, and that if we don't agree to our 14% increase he'll give us our notice and rent it out for 35% more than our current rent.

First, doesn't the property have to be vacant for a minimum of two years before he can do this? And second, this higher rent would be well above market value anyway.

I just want a home to live in. I'm a good tenant, always pay in full in and on time, do minor repairs and painting etc myself, I've only needed to contact the landlord once in the past 18 months. Why the need for this illegal money-grab?

Time for a dispute with the RTB. He is obviously unwilling to comply with the law and won't listen to reason. You need to call his bluff with the RTB process.

varuka

Deleted User wrote: »

Passive aggression aside, people are looking at it, and it's as clear as mud.

I would argue in the case of the poster you quoted, based on the formula from the RTB site, their rent can be increased by more than 4%, because it has been longer than 2 years.

If the rent had remained static for 10 years, the formula would be :

Old rent x [1+(0.04x{120/24})]
= old rent X 1.20
Or an increase of 20%

If that's incorrect, I'd like someone to show me how.

Edited to add:
My understanding is, If it's been one year since last increase, max is 4%
2 years is still 4%
3 = 6%
4 = 8%
5 = 10% etc

Your calculations make sense so thanks for the calculations... Hope you're correct

eddiem74

Michael D Not Higgins wrote: »

The legislation itself. The new law only applies after the commencement date. If a review is done before this date and notice is given, it is under the remit of the old law which does not require a cap.

The law cannot retrospectively affect a review which is already completed. For the same reasons, reviews carried out in November 2015 were still valid with 28 days notice despite the new rent coming into force during the new regime of 24 month intervals and 90 days notice.

Edit: I've found the relevant section below.

(6) Where immediately before the relevant date a notice under section
22(2)—
(a) has been served on the tenant, or
(b) the rent review concerned has commenced,
then subsections (3) and (4) shall not apply to the new rent, referred to
in section 22(2), stated in that notice in accordance with that section.

Section 22(2) is written notice of new rent. If this has been served ahead of the commencement date or the rent review has already begun, the cap doesn't apply. What it doesn't specify is how you determine the rent review has commenced, as this doesn't usually involve the tenant but I guess if there's already discussion between the landlord and tenant on the level of the new rent that can be considered as the review having commenced.

Thanks for that.

4ensic15

MicktheMan wrote: »

Yes, but where both the landlord and tenant mutually agree to a rent higher than the 4% and document this fact in the lease, surely that's also within the law.

It is not possible to contract out of the provisions of the RTA.

MicktheMan

4ensic15 wrote: »

It is not possible to contract out of the provisions of the RTA.

I know, but (and I repeat) where both the landlord and tenant mutually agree then surely nothing is being contracted out of.
If I were to follow your line of thinking, then it would not be allowed for a landlord and tenant to mutually agree to a shorter notice period than that in the RTA when ending a tenancy.

DubCount

MicktheMan wrote: »

I know, but (and I repeat) where both the landlord and tenant mutually agree then surely nothing is being contracted out of.
If I were to follow your line of thinking, then it would not be allowed for a landlord and tenant to mutually agree to a shorter notice period than that in the RTA when ending a tenancy.

You can agree anything between parties. However, the legislation overrides whatever they agree. Even after a landlord and tenant agree a lease at above the 4% rate, there is nothing to stop the tenant bringing the landlord to the RTB and having the 4% rate enforced, even if they signed a lease for a higher rate.

This is not unusual in contract law. I might agree with my employer that I only need 5 days holidays per year. I might even sign up to that in a contract. It doesn't stop me later claiming statutory minimum holidays and a court will be happy to give me the extra holidays even when they are shown the signed contract.

MicktheMan

DubCount wrote: »

You can agree anything between parties. However, the legislation overrides whatever they agree. Even after a landlord and tenant agree a lease at above the 4% rate, there is nothing to stop the tenant bringing the landlord to the RTB and having the 4% rate enforced, even if they signed a lease for a higher rate.

This is not unusual in contract law. I might agree with my employer that I only need 5 days holidays per year. I might even sign up to that in a contract. It doesn't stop me later claiming statutory minimum holidays and a court will be happy to give me the extra holidays even when they are shown the signed contract.

So it only becomes an issue then if the tenant subsequently disputes it?

Paulw

MicktheMan wrote: »

I know, but (and I repeat) where both the landlord and tenant mutually agree then surely nothing is being contracted out of.

But, you cannot break the law by mutual agreement. Charging rent above the legal amount would be a breach of the law, by the landlord. Even if the tenant would be willing to pay, it would be illegal for the landlord to charge it.

With regards to notice periods, most are phrased around a minimum or maximum, not an exact, or have an exemption, by mutual agreement. The law around rent is not phrased like that.

Paulw

Paulw wrote: »

But, you cannot break the law by mutual agreement. Charging rent above the legal amount would be a breach of the law, by the landlord. Even if the tenant would be willing to pay, it would be illegal for the landlord to charge it.

With regards to notice periods, most are phrased around a minimum or maximum, not an exact, or have an exemption, by mutual agreement. The law around rent is not phrased like that.

It's illegal for a LL to ask a tenant to move out before the required notice period but it's perfectly acceptable for a tenant and LL to mutually agree an earlier move out date and it is in fact common that it happens. By your reckoning this is breaking the law by mutual agreement but in reality it's not. What's the difference between this and mutually agreeing a higher rent?

4ensic15

Noelle Most Tang wrote: »

It's illegal for a LL to ask a tenant to move out before the required notice period but it's perfectly acceptable for a tenant and LL to mutually agree an earlier move out date and it is in fact common that it happens. By your reckoning this is breaking the law by mutual agreement but in reality it's not. What's the difference between this and mutually agreeing a higher rent?

Because the Act prescribes maximum notice periods unless agreed otherwise. It is thus not a breach to agree otherwise. There is no such saver for excessive rent increases.

Samuel T. Cogley

MicktheMan wrote: »

So it only becomes an issue then if the tenant subsequently disputes it?

Paulw wrote: »

But, you cannot break the law by mutual agreement. Charging rent above the legal amount would be a breach of the law, by the landlord. Even if the tenant would be willing to pay, it would be illegal for the landlord to charge it.

With regards to notice periods, most are phrased around a minimum or maximum, not an exact, or have an exemption, by mutual agreement. The law around rent is not phrased like that.

You might want to open a separate discussion in Legal Discussions. While it's certainly the aim of legislation and unenforceable because of the legislation I'd argue that's a subtly different point to the legislation preventing such an agreement while the parties agree to it. One I suspect will be eventually litigated - it's an interesting point to keep an eye on.

Edit: Took the liberty of doing it myself here, need a distraction at work today!

Paulw

Noelle Most Tang wrote: »

It's illegal for a LL to ask a tenant to move out before the required notice period but it's perfectly acceptable for a tenant and LL to mutually agree an earlier move out date and it is in fact common that it happens. By your reckoning this is breaking the law by mutual agreement but in reality it's not.

No, for notice periods, I said by mutual agreement is not breaking the law. It's accepted in law.

Michael D Not Higgins

Paulw wrote: »

No, for notice periods, I said by mutual agreement is not breaking the law. It's accepted in law.

To expand on this, it is specifically granted within the Residential Tenancies Act 2004, as below. Agreeing to higher rent is not specifically allowed.

69.—(1) Subject to subsection (2), the landlord or tenant may agree to a lesser period of notice being given than that required by a preceding provision of this Chapter and such lesser period of notice may be given accordingly.

(2) Such an agreement to a lesser period of notice being given may only be entered into at, or after, the time it is indicated to the tenant or landlord (as appropriate) by the other party that he or she intends to terminate the tenancy.

(3) For the avoidance of doubt, a term of a lease or tenancy agreement cannot constitute such an agreement.

testaccount123

Libertarian Kant wrote: »

You might want to open a separate discussion in Legal Discussions. While it's certainly the aim of legislation and unenforceable because of the legislation I'd argue that's a subtly different point to the legislation preventing such an agreement while the parties agree to it. One I suspect will be eventually litigated - it's an interesting point to keep an eye on.

Edit: Took the liberty of doing it myself here, need a distraction at work today!

What would be the point in introducing rent controls only to allow people to ignore it when it suits them? Thats not rent control then is it?

oppenheimer1

newacc2015 wrote: »

OP would have let this property previously in the middle of the recession. Unemployment was huge, there a lot of vacant property and he properly let it for a fraction of what he would get today. If I was him, I would not be "happy" with that. He had no choice but to let it at a low rent in the middle of the recession.

I think it is quite funny the fact you say he should be happy with the rent and yet you acknowledge it probably doesnt even cover his mortgage... Who would be happy with the rent on a loss making property when you can increase the rent to reduce those losses? But the landlord, tries covers his losses like any other businessman he is suddenly greedy?

I would love for you to speak to a Landlord who lost his properties to the banks and tell them it was a low risk investment. Or speak to any landlord about 'how low risk' the industry is. How can you say it is low risk industry when every year the tax code and rules governing it change. There was massive changes to the rules of being a landlord at christmas and then a month later AAA-PBP tried changing the laws massively again. The fact you can't even see the rules coming a month down the line makes it a high risk industry.

If people are outraged with private sector landlords, then call your TDs and demand more social housing. Don't endorse rules and regs, you know are fundamentally wrong and will only make the rental crisis worse in a few years. But you condone it, as it is easy to think all Landlords are greedy, yet you have no issue with any other business increasing their prices while operating a profit...

If the rent doesn't cover the mortgage it does not necessarily mean the landlord is making a loss. If a landlord has to top up the rent to say €200 per month to meet the mortgage and other costs. After 20 years that property sold for €250k.

Many people here would seem to think that this landlord was a fool, making a continuous loss, when in fact he made a 400%+ profit on his investment of €48k.

What people are saying here is that the landlord is only making a profit when the full mortgage is paid for him? Nonsense.

TheChizler

oppenheimer1 wrote: »

Many people here would seem to think that this landlord was a fool, making a continuous loss, when in fact he made a 400%+ profit on his investment of €48k.

A lot of people seem to forget this. The LL has a very sellable asset at the end of the process.

The_Conductor

TheChizler wrote: »

A lot of people seem to forget this. The LL has a very sellable asset at the end of the process.

The landlord has a very sellable asset at the end of the process- if he doesn't have a tenancy associated with the dwelling (thanks to the new legislation). Their property is essentially unsaleable thanks to the new legislation- unless they legitimately end the tenancy somehow- and keep the property vacant for a period of at least 2 years, before they attempt to sell it.

.......

This post has been deleted.

Michael D Not Higgins

....... wrote: »

This post has been deleted.

It limits its potential return so effectively removes the property from an investor perspective and depending on the type of property may not attract attention from PPR buyers.

pedrohbaron

I have a question regarding rent increase I hope you guys can help me out on this:

If the landlord (in this case one of the big vultures) wants to increase your rent by 25% can they use the other apartments they own on the building as an example of properties that are being rented at that specific price?

They are the owners of the all block of apartments that are being rented on diferent prices.

Michael D Not Higgins

pedrohbaron wrote: »

I have a question regarding rent increase I hope you guys can help me out on this:

If the landlord (in this case one of the big vultures) wants to increase your rent by 25% can they use the other apartments they own on the building as an example of properties that are being rented at that specific price?

They are the owners of the all block of apartments that are being rented on diferent prices.

If you are outside of the rent pressure zones or your notice of rent review was before 23rd December in a rent pressure zone, you are not covered by the new 4% cap.

There's nothing to stop them using their other apartments as the benchmark as long as they're of the same quality as your apartment (e.g. you can't use a 2 bed to determine the price of a 1 bed). The market rate is defined in the legislation as that which a willing renter not already in occupation would pay. If they are advertised for a certain amount and get rented at this amount then it is the market rate.

The other side of the coin would be if they were specifically referencing properties advertised above market rate which would be easy to determine if there are more reasonably priced ones available.

pedrohbaron

Got it.

I don't think the 4% rule apply for this apartment as it was a brand new development when it was rented almost 2 years ago.

Thanks!

Michael D Not Higgins

pedrohbaron wrote: »

Got it.

I don't think the 4% rule apply for this apartment as it was a brand new development when it was rented almost 2 years ago.

Thanks!

If it's in a rent pressure zone it being a new development 2 years ago shouldn't affect the 4% cap, unless it was empty for the previous two years.

Have you had a notice of increase, when was it delivered and where are you situated? You could still be covered by the cap.

pedrohbaron

Michael D Not Higgins wrote: »

If it's in a rent pressure zone it being a new development 2 years ago shouldn't affect the 4% cap, unless it was empty for the previous two years.

Have you had a notice of increase, when was it delivered and where are you situated? You could still be covered by the cap.

The block of apartments are in Tallaght but since the apartments were bought from Nama and were unoccupied years before that I think that will rule out the 4% cap. No notice of increase has been given yet but the apartments are being advertised on Daft for 25% more of what I'm paying.

Just thinking in advance so I can make plans, contract is due to be reviewed in July.

Paulw

pedrohbaron wrote: »

The block of apartments are in Tallaght but since the apartments were bought from Nama and were unoccupied years before that I think that will rule out the 4% cap. No notice of increase has been given yet but the apartments are being advertised on Daft for 25% more of what I'm paying.

Just thinking in advance so I can make plans, contract is due to be reviewed in July.

If you're currently renting there, then the rent increase can't be more than 4%. It doesn't matter what other units are bring rented out for.