The Minister for Housing, Local Government and Heritage, Darragh O’Brien TD, has noted the Residential Tenancies Board’s Rent Index Report for Q2 2021 (published today September 30th) which is produced in conjunction with the Economic and Social Research Institute. The Index is based on the actual rents being paid in the 13,884 private rented tenancies registered or renewed with the RTB in Q2 2021 (16,085 in Q1 2021).
However, in response to the national annual growth rate – which could indicate a concerning level of non-compliance with the legislation – the Minister has announced that he has requested the Residential Tenancies Board (RTB) to initiate a targeted campaign to aggressively identify and pursue non-compliance with rent-setting responsibilities.
The Minister has formally informed the RTB of his concerns and reiterated his absolute commitment to ensuring that the full protections for tenants provided for in the Residential Tenancies Act (2004-2021) are applied and enforced across the residential sector.
The Q2 2021 Rent Index shows that nationally rents grew by 7% year-on-year in this period. This is the highest national growth rate seen since Q1 2019. During Q2 2021, the national standardised average rent stood at €1,352. This is an increase of €32 in comparison to Q1 2021.
As the report highlights the economic context is critical to determining the drivers of rental inflation in Ireland. At present, economic developments remain tied to the spread of Covid-19, the associated restrictions on economic and social life and the changes in behaviour of households and enterprises in reaction to the pandemic. The period Q2 2021 was a quarter in which there was a phased reopening of the Irish economy and a general relaxation of the strict public health measures which had been in place in Q1 2021.
However, the Minister has deep concerns about the level of increase seen in Q2 2021 and the possibility of non-compliance in terms of rent-setting.
As a result the Minister has requested the RTB to escalate its response to non-compliance, given its extensive investigation and sanction capabilities. The Minister has further asked the RTB to instigate a campaign to identify and pursue non-compliance with rent-setting responsibilities.
Where landlords circumvent the legislation in relation to RPZ rent caps, the RTB has the power to investigate and apply sanctions, with fines of up to €15,000 and/or costs up to €15,000.
As of Q2 2021, more than a quarter of a million euro has been refunded to current and former tenants as a direct result of breaches of rent-setting rules.
Commenting on the findings, Minister O’Brien said: “Rent Pressure Zones are located in parts of the country where rents are highest and rising, and where households have the greatest difficulty finding affordable accommodation. They are an essential pillar of rental policy and the impact of not complying with these measures can have severe knock-on effects – it is essential that people understand that non-adherence to RPZ legislation is a serious offence.
“In this context, I have called upon the RTB ensure that their full powers and resources are brought to bear in initiating and executing a robust and thorough campaign to identify non-compliance and breaches in RPZ rent increase restrictions and related procedures, including those related to rent reviews and notification of exemptions from the restrictions.
“My officials and I intend to work intensively with the RTB to raise awareness of rent setting responsibilities and, indeed, the sanctions that can be imposed if those responsibilities are not adhered to.
“I am particularly concerned for any tenants who might be facing, or are already contending with, a rent increase because of their landlord’s non-compliance.
“I would encourage anyone seeking more information on rent pressure zones to visit the RTB website where a new rent pressure zone calculator is available to help landlords, letting agents and tenants understand if a rent increase is permissible and, if so, the upper limit allowed. This calculator takes account of the Harmonised Index of Consumer Prices (HICP) which is now being used to set and review rents in RPZs in Ireland and ensures that rents in an RPZ cannot be increased by more than general inflation. At the time of introducing the legislation to link rents to HICP I acknowledged that inflation was increasing and that we would keep the need for an overall cap under review. My Department is working on legislation in this regard,” he concluded.