Setting the rent in RPZ after buying an apartment

newb33

How does one set the rent correctly in a rent pressure zone, after buying an apartment?

Purely hypothetically, somebody might purchase a dwelling and then decide to rent it out. The rent pressure zones have plenty of rules, which are clear enough, on increasing the rent. An increase however requires a starting point. I'm not quite sure what to do when this starting point is completely unknown. Our hypothetical landlord didn't own the apartment yesterday, and has no idea about any previous rent agreements or lack thereof.

What does the landlord do, in order to set the rent correctly and in line with all rules? Are there restrictions apart from the "market rate" rule which require three similar rents in advertisements in the same area and for the same type of dwelling?

Is there any process or database to obtain knowledge about previous rents in the same apartment, and then apply the increase rules to that? If anything exists, would that be obligatory to use? I assume that the hypothetical landlord has little interest to limit the rent more than necessary.

Thanks for any hints.

If the property hasn’t been rented before, or hasn’t been rented within the last two years, set the rent as high as the market will bear, because you will only get one chance to do it. The rent you receive going forward will be based on this first rental price. You could check daft to see the rent for any first time rentals in the area, or just phone a local EA, they will know.

newb33

Thank you! So a recently purchased property counts as "not rented before", is that correct? The physical brick and mortar may have been rented before, but the new owner might not know.

when was it last rented?

DubCount

A change in ownership does not change the RPZ rules. Its the buyers responsibility to know when the last rent review was and the amount it was rented for. Its only if the property has not been rented in the last 2 years that a new owner can reset the rent to market rate…… well thats how it works today but who knows what rules they will have tomorrow.

DubCount

https://www.boards.ie/discussion/comment/122303814#Comment_122303814

No

SharkMX

If it hasnt been rented in 2 years and you cant get 3 examples of rent, rent it as high as you possibly think that you can rent it at and then come down in the unlikely event it doesnt rent.

Whatever the market rents for is now the market rent.

dennyk

https://www.boards.ie/discussion/comment/122303814#Comment_122303814

The RPZ restriction follows the property, not the landlord. If the property was the subject of a tenancy agreement at any time in the past two years, RPZ restrictions on the rent you can set will apply, based on the time the rent was last set for the property and the amount that was set. A change of ownership has no effect on that restriction.

arctictree

https://www.boards.ie/discussion/comment/122309123#Comment_122309123

So what if as the new owner you cant get that information? Is the seller obliged to tell you how much the previous rental was for?

SharkMX

https://www.boards.ie/discussion/comment/122309240#Comment_122309240

You might get it from the RTB.

arctictree

https://www.boards.ie/discussion/comment/122309251#Comment_122309251

From the RTB website:

• The RTB does not publish details of the landlord, tenants, rent levels, or tenancy commencement date.

Seller is obliged to provide it. Its a very standard question that the estate agent will likely know. Regardless it's on the documents exchanged between solicitors.

SharkMX

https://www.boards.ie/discussion/comment/122309464#Comment_122309464

Not talking about publishing them. Could you not ring them as the owner of a new property who wants to stay within the law and they tell you what to set your rent at?

But really thats even probably too much work for the RTB.

Marcusm

https://www.boards.ie/discussion/comment/122309240#Comment_122309240

if your solicitor did not establish whether it was a rental when you bought it and the rent payable then you might want to have a harsh word with them.

newb33

Thank you all for your answers! I'm pretty clear on the rules now. This makes the last rent quite the essential bit of information for any buyer of an apartment, unless they want to use it themselves. I can also contribute one piece of information. This was the response from RTB when emailed the original quesion (after asking for clarification twice because they didn't get the concept of not knowing the last rent…) anyways here it comes:

"Once you can prove ownership of the dwelling you can send this to RTB and request a copy of the 'entry to the register'. This will be information of past tenancies if the dwelling was registered. You will only receive this with proof of ownership."

So they don't publish it, yet you can get it from them, but not before you buy. So you have to get it from the agent or seller or solicitor, who ever tells you first. If you don't ask, your fault. You bought a place not knowing what it's actually worth.

Donald Trump

https://www.boards.ie/discussion/comment/122315773#Comment_122315773

If they didn't seek proof of ownership, then any nosey eejit could ring them up asking the rent for any rental property anywhere in the country.

newb33

https://www.boards.ie/discussion/comment/122315823#Comment_122315823

Correct! Hence you must get it from the agent/seller/solicitor…

3DataModem

I've viewed about 20 apartments in the last 3-4 months, and every time either (a) the last rent was part of the ad or (b) the agent provided it upon request.

If you've advised your solicitor that the purchase does not fall under the family home definition (which is a very specific declaration) then they should be establishing the rent from the vendor, and if the vendor says it is not in the RPZ then they should be seeking indemnity should it turn out to be under the RPZ.

Some people forget that the RTB is not the be-all and end-all… even if the place was "rented cash-in-hand from the previous owner's sister to their pal", then that undocumented arrangement can be cited by a future tenant as drawing that property into the RPZ rules, and causing havoc for a new owner.

dennyk

https://www.boards.ie/discussion/comment/122315823#Comment_122315823

Honestly that's the way it ought to be anyway.