The Residential Tenancies (Amendment) Act 2019 was signed into law on 24 May 2019 and is expected to come into legal effect in the coming months.

Minister Eoghan Murphy has described the Act as being the most significant rental sector reform in recent years. The Act introduces tougher tenant protections, extensive RTB investigative powers and sanctions for landlords, along with changes affecting short term lettings and student accommodation.

Landlords should be aware of the following key changes:

1. Termination of tenancies by landlords

1.1 Longer notice periods

Landlords will be required to comply with new notice periods when terminating a tenancy, with significantly longer notice periods required for tenancies lasting between 6 months and 7 years.

The following is a comparison of the old and new notice periods:

Duration of tenancy

Previous Notice Period

New Notice Period

Less than 6 months

28 days

28 days

6 or more months but less than 1 year

35 days

90 days

1 year or more but less than 2 years

42 days

120 days

2 years or more but less than 3 years

56 days

120 days

3 years or more but less than 4 years

84 days

180 days

4 years or more but less than 5 years

112 days

180 days

5 or more but less than 6 years

140 days

180 days

6 or more but less than 7 years

168 days

180 days

7 or more but less than 8 years

196 days

196 days

8 or more years

224 days

224 days

1.2 Requirement to serve a copy of the termination notice

Landlords must send a copy of the termination notice to the Residential Tenancies Board (RTB) no later than twenty eight days after the expiration of the notice period.

The rules relating to some of the termination grounds have also been revised further, as summarised below.

1.3 Termination for reason of sale

Where a landlord wishes to end a tenancy in order to sell the property, the landlord must enter into a contract for sale of the relevant property within 9 months of the termination date (extended from 3 months). If this does not happen, the landlord will be obliged to re-offer the property to a former tenant providing the tenant has given the landlord their contact details.

1.4 Termination for reason of occupation by landlord or landlord’s family member

The legislation provides that where a tenancy has been terminated on the basis that the landlord requires the property for their own occupation or that of a family member and where the landlord or family member then vacates the property within 1 year, that property must be re-offered to the former tenant. This is providing that the former tenant has given the landlord their contact details. While this obligation existed already, the Act has extended the relevant period from 6 months to 1 year.

1.5 Termination for reason of substantial refurbishment

The Act provides that where a tenancy has been terminated on the basis that the landlord intends to carry out substantial refurbishment, the property must be offered back to the former tenant on completion of the renovation works (this was previously limited to where the property became available for reletting within six months of the termination date). The Act also requires the landlord to produce an architect or surveyor’s certificate confirming that, for health and safety reasons, the tenants are required to vacate the property for a minimum of three weeks.

1.6 Termination on grounds of change of use

The Act has extended the time period where a tenancy is terminated on the grounds of change of use. If a property becomes available for reletting within 12 months of the termination date (previously 6 months), a landlord will be obliged to offer the property back to the tenant providing the tenant has given the landlord their contact details.

2. Rent controls

2.1 Designation of rent pressure zones

The Act provides that the existing RPZ designations will be extended to 2021. This will include Limerick City East and Navan which were recently designated as RPZs. The Act also introduces changes to how the average rent in the State is calculated for the purposes of RPZ designations, by excluding the average rents in the Dublin Area or the Greater Dublin Area from the calculation of the average rent. It is likely that this will result in further areas being designated as RPZs.

2.2 Exemptions from the RPZ rent restrictions

Properties not let within the previous two yearsThe Act removes the current exemption from the 4% annual cap for new properties within an RPZ. Prior to the Act, the rent restrictions did not apply to properties which had not been let at any time during the 2 years before the area was designated as an RPZ. Under the new legislation, the rent restrictions will not apply when the rent is first set in the case of a property that has not been let within 2 years before the tenancy concerned commences. However, the restrictions will apply to any subsequent settings of the rent.

Substantial change to the nature of the accommodation The Act also provides a new definition of what constitutes ‘substantial change in the nature of the accommodation provided’, which landlords must satisfy in order to qualify for an exemption from the RPZ rent restrictions.

Previously, the meaning of the phrase ‘substantial change’ had been unclear. The Act rectifies that position by introducing a new definition of what constitutes a ‘substantial change’.

In order to qualify as a ‘substantial change’, the change must involve either (i) a permanent extension to the dwelling increasing the floor area by at least 25% or (ii) an improvement in the Building Energy Rating (BER) by seven or more ratings, or (iii) at least three of the following:

  • A permanent alteration to the internal layout
  • An adaptation for use and access by persons with a disability
  • A permanent increase in the number of rooms
  • An improvement in the BER by three or more ratings, where the BER is D1 or lower
  • An improvement in the BER by two or more ratings, where the BER is C3 or higher

In all cases, the works involved must not consist solely of works that the landlord is obliged to carry out in accordance with their repairing obligations under the Residential Tenancies Acts.

Notably, the new ‘substantial change’ requirements will not apply to works already underway before the legislation comes into effect.

2.3 New notification requirements

Landlords relying on an exemption from the RPZ rent restrictions on the grounds that the property has not been let within the previous 2 years or on the ‘substantial change’ exemption will be required to serve a notice on the RTB within 1 month of setting the new rent. The notice, together with all relevant supporting documentation, must include the reasons why the exemption applies and must specify the amount of the new rent set and the last rent set.

2.4 Frequency of rent reviews

The restriction on rent reviews to every two years, which applies to properties outside RPZs, was due to expire in December 2019. This has been extended to the end of 2021.

3. Investigations, sanctions and offences

3.1 New offences

It will be an offence for landlords to:

  • Fail to comply with the RPZ rent restrictions
  • Knowingly or recklessly provide materially false or misleading information to the RTB in connection with a notice of reliance on an exemption from the RPZ rent restrictions, as set out in paragraph 2.3 above
  • Fail to comply with the notice requirements, as set out in paragraph 2.3 above, and
  • Fail to comply with a notice from the RTB to update rent information on the RTB register after a rent alteration

3.2 Investigative powers and power to impose sanctions

The Act provides for new powers for authorised officers, decision makers and the RTB to deal with complaints, carry out investigations, conduct oral hearings and impose sanctions on landlords for ‘improper conduct’. ‘Improper conduct’ is defined as including:

  • A breach by the landlord of the RPZ rent restrictions
  • Failing to notify the RTB that the landlord is relying on an exemption from the RPZ rent restrictions
  • Failing to register a tenancy
  • Failing to notify the RTB of an alteration in the rent set under a tenancy
  • Attempting to rely on an exemption from the RPZ rent restrictions where an exemption does not apply
  • Citing a reason for termination that the landlord knows to be materially false or misleading
  • Failing to re-offer a dwelling for letting to a former tenant where any of the circumstances outlined at paragraphs 1.3 to 1.6 above apply.

It will be a criminal offence for a person to withhold, destroy, conceal or refuse to provide any information or records for the purposes of any investigation, to fail or refuse to comply with any requirement of an authorised officer or to otherwise obstruct an authorised officer in the performance of his/her functions.

Sanctions for improper conduct by a landlord include any one or all of the following:

  • Payment of a financial penalty of up to €15,000 to the RTB
  • Payment of the costs of the RTB of up to €15,000
  • A written caution to the landlord

Further appeals and applications may be brought to the Circuit Court and the decision of the Circuit Court can only be appealed to the High Court on a point of law. The Act allows for a landlord to make an acknowledgement of the improper conduct and this will be taken into account in the level of sanction issued. Where separate criminal proceedings have been brought for an offence which is also a form of improper conduct, an additional sanction under the legislation will not apply. In other words, landlords will not be doubly penalised.

4. Residential Tenancies Board registration and fees

The Act introduces a new annual registration requirement. Landlords will be required to register on the commencement of the tenancy and annually during the tenancy. The registration fee for a single registration application will be €40 on commencement and €40 annually or €170 in the case of a bulk registration of up to 10 properties. Approved Housing Bodies will be subject to reduced registration fees of €20 in respect of single applications or €85 for bulk registrations.

The new annual registration requirements will place an increased cost and administrative burden on landlords, particularly those with multiple properties. The Minister has indicated that the RTB is developing an online portal for registrations aimed at easing the administrative burden.

5. Student accommodation

The Act extends the scope of the residential tenancies legislation to student accommodation, even if granted under licence. These laws will affect accommodation provided by both public education institutions and private accommodation providers for the sole purpose of housing students during academic term times. This would include purpose built student accommodation. The residential tenancies legislation will apply even if the accommodation is used for any other purpose outside of term times, or even where any students are permitted to reside there outside those times. The legislation will also apply if any person other than a student resides there once the purpose of the person residing there serves the purpose of providing student accommodation.

The legislation will affect tenancies/licences created on or after 1 month from commencement of the relevant section. For the purposes of the relevant provision, the definition of ‘dwelling’ includes a ‘residential unit (whether or not self-contained)’. This would capture communal/co-living set-ups where a bedroom only is let or licensed to a student.

Properties where landlords also reside are excluded, so the likes of “digs” would not be captured by the legislation.

As a result of the Act, student accommodation will be subject to the RPZ rent restrictions, to the registration requirements and to the RTB dispute resolution procedures even if the student occupies under a licence.

There are a number of provisions that will not apply to student lettings/licences, most notably the Part 4 security of tenure provisions and a number of provisions relating to sublettings as students will not be permitted to sublet.

If the residential tenancies legislation already applied to a letting of student accommodation before the commencement of the new legislation, then that position is not affected. The residential tenancies legislation will continue to apply to such dwelling in the same manner that it applied before.

6. Short-term lettings

The Act introduces new rules to regulate short-term lettings of residential accommodation. The Act amends planning legislation so that a landlord of a property in an RPZ will be precluded from letting it on a short-term basis (lettings of up to 14 days). Such lettings will be considered a material change of use for planning purposes. These restrictions are designed to restrict ‘Airbnb’ style lettings in RPZs.

Conclusion

This Act is a further reform in the Government’s Strategy for the Rental Sector and has been described by some as radical. Landlords should be aware that these changes are in line with the Government’s long term strategy to move to tenancies of indefinite duration and to continue to enhance rental sector regulation and alleviate concerns surrounding the housing crisis.

The Act will be commenced by Ministerial Order and the Minister has indicated that he anticipates that 1 July 2019 will be the commencement date.