Landlords warned not to raise rents ahead of new law

Tenants express concern over price increases in advance of two-year fixed rent legislation

Minister for Finance Michael Noonan. Photograph: Dara Mac Dónaill

Minister for Finance Michael Noonan. Photograph: Dara Mac Dónaill

 

Landlords have been warned by the Private Residential Tenancies Board (PRTB) not to try to increase rents in advance of legislation that will fix rents for two years, if they have previously done so in the last 12 months.

Following calls yesterday from worried tenants, the PRTB said: “A landlord (or receiver) can only increase the rent once in any 12-month period, and cannot increase within 12 months of the commencement of the tenancy.”

“If a landlord intends increasing the rent, they must inform the tenant, in writing, of any increase in rent, 28 days before the increase is due to take effect,” said the agency, adding that it wanted to bring the law “to the attention” of landlords.

The proposal to only allow residential rent increases every two years will take effect before the end of the year, Minister for Finance Michael Noonan said yesterday.

He and Minister for the Environment Alan Kelly will bring the measure, part of their housing package, to Cabinet next Tuesday.

Start immediately

Mr Kelly said the plan will bring “some form of certainty”, while Fine Gael sources characterised it as “rent stability” rather than rent certainty.

Amid concerns that landlords may increase rents before the changes take effect, Mr Noonan told RTÉ’s News at One the measures would “kick in immediately” as a “November initiative”.

Mr Noonan also highlighted the “sunset clause”, which will see rent reviews return to the current 12-month norm within four years.

Landlords must give 28 days’ notice of a rent increase and it is expected the proposals can be stitched in to existing legislation before the Seanad and passed within a fortnight.

Other measures to increase tenant protection, such as extending the notice period for a rent increase, are also expected to be included in the overall package.

Vacant-site levy

A measure to abolish development levies for homes sold for less than €300,000 in certain areas will only apply for three years before vacant sites are subject to a charge, to discourage land speculation.

The move is designed to speed up house building in areas with acute shortages.

Sources said development levies on homes valued at €300,000 in Dublin and Cork will be abolished for only three years and that a vacant-site levy will then encourage builders to use sites.

The development levy changes will take effect from January at the latest.

However, there is an expiry date of 2019 on this initiative, the same date the previously announced vacant-site levy will take effect.

Vacant sites will be subject to a charge of 3 per cent of market value.

“The change in planning guidelines is expected to knock €20,000 off the cost of building the average new apartment,” a source said.

“Suspension of development contributions will reduce building costs by a further €6,000 to €8,000, on top of savings from reduced development contributions and Part V costs already legislated for.”

Dick Brady, head of housing at Dublin City Council, said public housing should be opened up beyond those on the social housing waiting list.