This Bill has been significantly amended in the Seanad to provide for (in addition to the items detailed in our previous post):
- a change in the calculation of rent increases within RPZs, moving from the 4% per annum model to a model which caps rent increases at the rate of inflation (if any) shown by the Harmonised Index of Consumer Prices;
- extension of RPZ designations for a further 3 years to end on 31 December 2024; and
- extension of the provision which allows for rent reviews outside of RPZs every 2 years only, again for a further 3 years to 31 December 2024.
The Bill returns to the Dáil tomorrow for final stages and there is a motion for early signature by the President before the Seanad on Friday. We would therefore expect all of these provisions to be law by next week, other than the change in calculation of rent increases for RPZs (i.e. the first bullet in this post) which will require further Ministerial order. Minister Darragh O’Brien has indicated that he intends to introduce this provision as soon as is possible.
From the point of view of how the new rent increase model will work in practice, see the following detail from Minister O’Brien’s speech in the Seanad on Monday:
“The RPZ calculator will calculate any permissible rent increase that may apply. That will be managed by the RTB itself. The user of the calculator shall input the following variables into the RPZ calculator: the date the rent was last set; and the amount of the rent last set. The calculator shall produce the amount of the maximum permissible rent increase, if any. The calculator may also indicate that no rent increase can apply. In this situation, a landlord may reduce the rent or keep it at the same level. Ultimately, the rent is agreed between the tenant and the landlord. The calculator will operate as follows. It will compare the HICP value in the HICP table published by the RTB on or most recently before the date that this rent was last set, with the HICP value contained in the table published by the RTB on or most recently before the date that any new rent increase is being determined. Any difference between the two aforementioned values shall be calculated as a percentage by the RPZ calculator. If that percentage is a positive value, that is, where there has been an increase in the HICP values over the period in question, it is applied by the calculator to the amount of the rent last set to produce an amount of permissible rent increase.”
For further information on this topic, please contact Aoife Smyth, Knowledge Lawyer or any member of A&L Goodbody’s Real Estate team.