knowledge 27 January 2016 |

The Residential Tenancies (Amendment) Act 2015 - A New Lease of Life for the Housing Rental Market?

One aspect of the Act, which came into effect immediately on 4 December 2015, is the much publicised extension of the restriction of the entitlement of a landlord to conduct a rent review to once every two years (from the pre-existing entitlement, which was once every year).

The restriction is temporary in that it applies until 3 December 2019 when rent reviews may once again be conducted once every 12 months.

The extended restriction is also retrospective, in that it applies not just to new, but to all existing tenancies. For existing tenancies, the two year period for the first rent review since the introduction of the extended restriction, is counted from the later of (i) the commencement of the tenancy (where no rent review had taken place prior to 4 December 2015) and (ii) the most recent rent review date. The extent of the initial reprieve afforded to tenants, and the initial restriction on landlords, under the Act will therefore very much depend on when the tenancy was entered into and the date of the most recent rent review.

To complement the rent review restriction, again with effect from 4 December 2015, the notice period to which a tenant is entitled before a new rent can take effect has been increased from 28 days to 90 days.

The notice periods for the termination of tenancies have also been expanded. For tenancies of four years or longer the notice period for termination by a tenant remains at 84 days save for tenancies of eight years or more where 112 days notice is required, whereas the notice periods for landlords increase with every additional year of the tenancy culminating with a notice period of 224 days for tenancies of eight years or more.

Some of the key provisions of the Act yet to be commenced, and so due to come into operation at a later stage include:

• the expansion of the remit of the Residential Tenancies Board to tenancies created by not-for-profit Approved Housing Bodies involved in the provision of social housing;
• the renaming of the “Private Residential Tenancies Board” as the “Residential Tenancies Board”;
• very detailed changes to the treatment of deposits including the introduction of a deposit protection scheme where deposits are lodged with the Residential Tenancies Board as opposed to the landlord;
• a requirement for landlords to include in a notice for increase of rent, certain evidence that proposed rent increases are appropriate and in line with the local market rate and to inform tenants of their rights to challenge rent increases; and
• a requirement for landlords to include with a notice for termination of a tenancy, certain evidence of the grounds for termination.

There are also new provisions governing disputes and provision for determination orders concerning terminations of tenancies to be dealt with by the District Court as opposed to Circuit Court, with a view to reducing the time and cost involved in the resolution of disputes.

The new rent review provisions contained in the Act aim to curb the rapidly increasing cost of rented accommodation, a dominant issue across the social and political landscapes. It is too early as yet to predict whether this aim will be achieved by the Act alone. However, the various other headline provisions of the Act will be expected to create a more transparent regime for both landlords and tenants of residential property in Ireland.