The Residential Tenancies (Amendment) (No.2) Bill 2018 (the Bill) was passed by the Seanad on 21 May 2019. The Bill has now finished all stages in the Oireachtas and it is anticipated that it will be enacted shortly and commence on 1 July 2019.

An article by commercial property partner Fidelma McManus on an earlier version of the Bill was recently published in Housing Ireland 2019 magazine. Click here to read that article.

Overview

The Bill will extend the existing rent increase caps to the end of 2021 as well as amending the Rent Pressure Zones (RPZs) qualifying criteria in order to capture more areas experiencing high rent inflation. The Bill will also make it an offence for landlords within RPZs to raise the rent above the legally allowed 4% and gives the RTB powers to examine and enforce any breaches of the rent caps. In future, tenancy rights will apply to accommodation designed specifically for students and the Bill also includes measures to regulate short term tourist letting, such as is provided by Airbnb landlords.

Substantial Improvement

Currently, there exists an exemption to the rental cap where a landlord has carried out substantial improvement to the property since the last rent was set, which would give rise to a change in the market rent. The definition of "substantial improvement" has changed significantly between the earlier draft of the Bill and the final version of the Bill, by including additional provisions relating to BER rating improvement. A substantial improvement is now required to involve: a permanent extension which would increase the floor area by at least 25%; an improvement in the BER rating by seven or more ratings; or three or more of the following:

  • permanent alteration of the internal layout
  • alteration to provide access and use by a person with a disability within the meaning of the Disability Act 2005
  • A permanent increase in the number of rooms
  • BER improvement by at least 3 building energy ratings, where the property has a BER of D1 or lower
  • BER improvement by at least 2 building energy ratings, where the property has a BER of C3 or higher

The items in bold above highlight the changes to the definition. A further requirement is that the works must not have been carried out solely for the purpose of complying with repairing obligations under the Residential Tenancies Acts.

Security of tenure

The Bill also seeks to strengthen the security of tenure provisions for tenants by extending the current notice periods given by landlords set out in the 2004 Act. However, no amendment was made to the notice periods given by tenants. The Bill also strengthens the provisions relating to grounds for termination.

Pro-tenant

The measures introduced by the Bill address the key concerns in the rental sector and are distinctly pro tenant in order to protect people in housing insecurity.