Can a tenant initiate a rent review?

Ms Doubtfire1

This is just something that came up in my head a few days back when chatting to a friend. She's renting in Longford and the rents in her area have dropped by about 20% (rural). Does she have the same right as the LL and can initiate a rent review downwards after 2 years?

Michael D Not Higgins

Yes

Ms Doubtfire1

Where can I find this in the tenancy act?

Michael D Not Higgins

Ms Doubtfire1 wrote: »

Where can I find this in the tenancy act?

The RTA doesn't proscribe one party or another as the instigator of a rent review, just the rules around how and when rent reviews can happen. Thus a tenant may request a rent review. As further evidence in section 21, it says:

"If the lease or tenancy agreement concerned does not provide for such a review or the tenancy concerned is an implied one, either party may, subject to section 20 , require a review of the rent under the tenancy to be carried out and a new rent, if appropriate, set on foot of that review."

KCross

Upward only rent reviews were only in the commercial sector AFAIK and they are trying to get rid of them. No reason why you cant review a house rent down.

However, since its a negotiation the LL could stick to his price. Just because the rent next door is 20% cheaper doesnt mean he has to accept that.
That leaves two possibilities:
- the tenant leaves and he has the hassle of getting another one at the lower market price anyway (or maybe not).
- the tenant stays

If the rent in the area has dropped 20% you need to prove it obviously, via like for like comparisons in the area on daft.

irlcncrk

Hi,
Before your friend contacts the LL about a downward review, would suggest they collect info about local rents 1st. Daft.ie is always a great indicator and I'd start there, if daft not showing much for their area check out one or two local estate agents.

Be sure to tell them to have a backup plan just in case!

Best of luck.

Michael D Not Higgins

KCross wrote: »

Upward only rent reviews were only in the commercial sector AFAIK and they are trying to get rid of them. No reason why you cant review a house rent down.

However, since its a negotiation the LL could stick to his price. Just because the rent next door is 20% cheaper doesnt mean he has to accept that.
That leaves two possibilities:
- the tenant leaves and he has the hassle of getting another one at the lower market price anyway (or maybe not).
- the tenant stays

If the rent in the area has dropped 20% you need to prove it obviously, via like for like comparisons in the area on daft.

Somewhat incorrect. The RTA does not allow setting of rent above market rate. If next door is 20% cheaper and is a comparable property and is shown with two other comparable examples as the market rate, he must lower the rent to this value.

pilly

I would try a friendly approach first. I know people who have been renting the same place for a long time and simply asked the LL would he consider lowering the rent and he did. Most reasonable people will to keep a good tenant.

Ms Doubtfire1

I don't think they are planning an unfriendly approach at all, but they did already collect the evidence.I will make sure to pass this advise on.
Thanks a million!

davo10

Michael D Not Higgins wrote: »

Somewhat incorrect. The RTA does not allow setting of rent above market rate. If next door is 20% cheaper and is a comparable property and is shown with two other comparable examples as the market rate, he must lower the rent to this value.

BS. Rent is agreed in the lease. Market rate sets the limit at which rent can be increased but that does not mean that LL is required to set it at that limit. Similarly the LL is not required to lower the rent from that agreed at the beginning of the tenancy nor to set is at any lower market limit. The terms of the lease agreement continue even when part 4 rights are gained by the tenant.

The op's friend should proceed with care, if the LL turns up at the rent review requested by the tenant with examples of three properties renting for higher than the current rate, not only will the tenant not get a reduction, the LL could actually increase it based on his/her 3 sample rates.

A tenant can contact a LL and ask about a reduction but it today's market where rents are increasing, a tenant requesting a formal rent review is like a turkey voting for Christmas.

Michael D Not Higgins

davo10 wrote: »

BS. Rent is agreed in the lease. Market rate sets the limit at which rent can be increased but that does not mean that LL is required to set it at that limit. Similarly the LL is not required to lower the rent from that agreed at the beginning of the tenancy nor to set is at any lower market limit. The terms of the lease agreement continue even when part 4 rights are gained by the tenant.

The op's friend should proceed with care, if the LL turns up at the rent review requested by the tenant with examples of three properties renting for higher than the current rate, not only will the tenant not get a reduction, the LL could actually increase it based on his/her 3 sample rates.

A tenant can contact a LL and ask about a reduction but it today's market where rents are increasing, a tenant requesting a formal rent review is like a turkey voting for Christmas.

I don't follow your logic. If there is a rent review, it cannot be set at the same level as before if that level is shown to be above market rate. This is what the legislation says.

Edit: although it's unlikely to above market rate since Longford rents are increasing 15% per year according to Daft, so it's likely the scenario you pose at the end could happen.

davo10

Michael D Not Higgins wrote: »

I don't follow your logic. If there is a rent review, it cannot be set at the same level as before if that level is shown to be above market rate. This is what the legislation says.

Edit: although it's unlikely to above market rate since Longford rents are increasing 15% per year according to Daft, so it's likely the scenario you pose at the end could happen.

"Market rate" sets the limit at which a rent CAN be set if it is reviewed and changed, but there is no requirement for the landlord to actually change the rent after 2 years (landlords don't have to put the rate up, and if they do, they don't have to put it up all the way to market rate) It can continue at the rate agreed in the lease. A tenant can't turn up with examples of 3 lower rental properties and demand to be given a reduction, the LL will just point to the lease agreed and the rate on the lease or, the rate agreed at the last review.

Michael D Not Higgins

davo10 wrote: »

"Market rate" sets the limit at which a rent CAN be set if it is reviewed and changed, but there is no requirement for the landlord to actually change the rent after 2 years (landlords don't have to put the rate up, and if they do, they don't have to put it up all the way to market rate) It can continue at the rate agreed in the lease. A tenant can't turn up with examples of 3 lower rental properties and demand to be given a reduction, the LL will just point to the lease agreed and the rate on the lease or, the rate agreed at the last review.

The RTA 2004 (amended 2015) allows for a rent review after 24 months. If at that time the rent is shown to be above market rent, why would section 19 of the Act not apply? The wording doesn't require setting at the market rate, just that the rent can't be above the market rate.

CIARAN_BOYLE

davo10 wrote: »

"Market rate" sets the limit at which a rent CAN be set if it is reviewed and changed, but there is no requirement for the landlord to actually change the rent after 2 years (landlords don't have to put the rate up, and if they do, they don't have to put it up all the way to market rate) It can continue at the rate agreed in the lease. A tenant can't turn up with examples of 3 lower rental properties and demand to be given a reduction, the LL will just point to the lease agreed and the rate on the lease or, the rate agreed at the last review.

Under Section 21 of the RTA; a rent review may be instigated by either party.

Under section 19 of the RTA; rent cannot be set above market rate. market rate refers to initial setting of rent and setting of rent after a rent review.

Bear in mind that the 3 advertisements on daft is only a crude approximation of market rate.

pilly

davo10 wrote: »

BS. Rent is agreed in the lease. Market rate sets the limit at which rent can be increased but that does not mean that LL is required to set it at that limit. Similarly the LL is not required to lower the rent from that agreed at the beginning of the tenancy nor to set is at any lower market limit. The terms of the lease agreement continue even when part 4 rights are gained by the tenant.

The op's friend should proceed with care, if the LL turns up at the rent review requested by the tenant with examples of three properties renting for higher than the current rate, not only will the tenant not get a reduction, the LL could actually increase it based on his/her 3 sample rates.

A tenant can contact a LL and ask about a reduction but it today's market where rents are increasing, a tenant requesting a formal rent review is like a turkey voting for Christmas.

You'd be surprised, there's a lot to be said for a good tenant and I speak here from the point of view of a LL and tenant. If my current tenants asked for a slight reduction I might give it to them given that I don't want the hassle of taking a chance and getting nightmare tenants again.

davo10

Michael D Not Higgins wrote: »

The RTA 2004 (amended 2015) allows for a rent review after 24 months. If at that time the rent is shown to be above market rent, why would section 19 of the Act not apply? The wording doesn't require setting at the market rate, just that the rent can't be above the market rate.

The RTA does not require that the rent be changed at all from that agreed in the lease. There is no requirement for the landlord to agree to a lower rent.

If you can link to the terms of the RTA that requires landlords to lower rents for current tenants, I'd like to see it.

davo10

pilly wrote: »

You'd be surprised, there's a lot to be said for a good tenant and I speak here from the point of view of a LL and tenant. If my current tenants asked for a slight reduction I might give it to them given that I don't want the hassle of taking a chance and getting nightmare tenants again.

I totally agree and in the past I have given rent reductions at the request of the tenant but MDH is stating that the LL is required to reduce the rent below that agreed in the lease, the LL is not.

Michael D Not Higgins

davo10 wrote: »

The RTA does not require that the rent be changed at all from that agreed in the lease. There is no requirement for the landlord to agree to a lower rent.

Yes there is, section 19. You still haven't answered why it doesn't apply.

davo10

Michael D Not Higgins wrote: »

Yes there is, section 19. You still haven't answered why it doesn't apply.

Because the tenancy agreement sets the rate at which the tenant rents the property from the outset. There is restrictions on how high the rent can be put up but no requirement to put it up/down, a landlord does not have to increase nor decrease the rent if they do not want to. In you are wondering why a tenant would request a review, in a rising rental market the rent at review today may be a lot less than they will be in 6-12 months.

I'd like to see your link to the requirement for landlords to reduce rent, that isn't it. The tenancy agreement allows for rent to continue at the rate agreed when tenancy began.

Michael D Not Higgins

davo10 wrote: »

Because the tenancy agreement sets the rate at which the tenant rents the property from the outset. There is restrictions on how high the rent can be put up but no requirement to put it up/down, a landlord does not have to increase nor decrease the rent if they do not want to. In you are wondering why a tenant would request a review, in a rising rental market the rent at review today may be a lot less than they will be in 6-12 months.

I'd like to see your link to the requirement for landlords to reduce rent, that isn't it. The tenancy agreement allows for rent to continue at the rate agreed when tenancy began.

If the tenancy agreement was the be all and end all of the rate that can be charged then you can't even have a rent review. Can you explain how a rent review can lead to an increase in rent but not a decrease with references to the Act.

pilly

Michael did, I think you're way out voted on this one. No way can a LL be forced to put rent down. Have you ever heard of it happening? No. Because it just can't. Someone signs a lease, they agree to pay the rent at that rate. Full stop.

davo10

Michael D Not Higgins wrote: »

If the tenancy agreement was the be all and end all of the rate that can be charged then you can't even have a rent review. Can you explain how a rent review can lead to an increase in rent but not a decrease with references to the Act.

The tenancy agreement is the be all and end all of rental rate as long as the term of that agreement applies. Beyond that, (part 4) after two years a rent review can be initiated by either landlord or tenant, but the landlord is not required to increase or decrease the rent from that agreed in the lease. If the landlord wants to rent for 20 years at the initial rate, he/she can do so. If a review is undertaken, then the maximum the landlord can charge if the rent is changed, is the market rate, but the LL does not have to change from the initial agreed rent (if you can provide a link to show a landlord is REQUIRED to change the rate from the lease agreed rate, I'd like to see it).

Michael D Not Higgins

pilly wrote: »

Michael did, I think you're way out voted on this one. No way can a LL be forced to put rent down. Have you ever heard of it happening? No. Because it just can't. Someone signs a lease, they agree to pay the rent at that rate. Full stop.

There were wholesale rent reductions in the late 2000s. It hasn't happened recently since the whole market has been rising since about 2011.

davo10 wrote: »

The tenancy agreement is the be all and end all of rental rate as long as the term of that agreement applies. Beyond that, (part 4) after two years a rent review can be initiated by either landlord or tenant, but the landlord is not required to increase or decrease the rent from that agreed in the lease. If the landlord wants to rent for 20 years at the initial rate, he/she can do so. If a review is undertaken, then the maximum the landlord can charge if the rent is changed, is the market rate, but the LL does not have to change from the initial agreed rent (if you can provide a link to show a landlord is REQUIRED to change the rate from the lease agreed rate, I'd like to see it).

I've already provided section 19 which does not allow setting of the rent above market rate. There are also references in section 24 to reducing the rent:

"(2) References in this Part to a review of a rent include references to—

(a) any procedure (however it is described) for determining whether, and to what extent, a reduction or increase in the amount of the rent for the time being payable under the tenancy concerned ought to have effect,"

pilly

Michael D Not Higgins wrote: »

There were wholesale rent reductions in the late 2000s. It hasn't happened recently since the whole market has been rising since about 2011.



I've already provided section 19 which does not allow setting of the rent above market rate. There are also references in section 24 to reducing the rent:

"(2) References in this Part to a review of a rent include references to—

(a) any procedure (however it is described) for determining whether, and to what extent, a reduction or increase in the amount of the rent for the time being payable under the tenancy concerned ought to have effect,"

There may well have been wholesale rent reductions but there was no legislation that forced to reduce the rent. They may have had to do it to get tenants but they certainly didn't do it because the RTB made them.

KCross

I didnt think the LL was required to reduce either but having read it again maybe they are. Maybe it requires a solicitor to parse it but it seems concrete enough to me that a rent review cannot exceed market rate.


19.—(1) In setting, at any particular time, the rent under the tenancy of a dwelling, an amount of rent shall not be provided for that is greater than the amount of the market rent for that tenancy at that time.

(2) The reference in this section to the setting of the rent under a tenancy is a reference to—

(a) the initial setting of the rent under the tenancy, and

(b) any subsequent setting of the rent under the tenancy by way of a review of that rent.


@davo10.... doesnt that suggest you are wrong. It clearly says that a rent review cannot exceed market rate. It doesnt say your lease can trump it.

pilly

KCross wrote: »

I didnt think the LL was required to reduce either but having read it again maybe they are. Maybe it requires a solicitor to parse it but it seems concrete enough to me that a rent review cannot exceed market rate.


19.—(1) In setting, at any particular time, the rent under the tenancy of a dwelling, an amount of rent shall not be provided for that is greater than the amount of the market rent for that tenancy at that time.

(2) The reference in this section to the setting of the rent under a tenancy is a reference to—

(a) the initial setting of the rent under the tenancy, and

(b) any subsequent setting of the rent under the tenancy by way of a review of that rent.


@davo10.... doesnt that suggest you are wrong. It clearly says that a rent review cannot exceed market rate. It doesnt say your lease can trump it.

Yes but the whole point is the tenant is requesting a rent review. If it's shorter than 2 years ago since they rented then the LL has no obligation to give them one.

KCross

pilly wrote: »

Yes but the whole point is the tenant is requesting a rent review. If it's shorter than 2 years ago since they rented then the LL has no obligation to give them one.

Thats a different argument though. That 2yr rule applies to both LL and tenant around calling a rent review.

There are rules around how often a rent review can be called but once it is legitimately called then a decrease in rent is required if the tenant can prove the "market rate" is lower, regardless of what the rate on the lease says.

Do you agree that a reduction is required/forced on the LL at that point?

Graham

Michael D Not Higgins wrote: »

Edit: although it's unlikely to above market rate since Longford rents are increasing 15% per year according to Daft, so it's likely the scenario you pose at the end could happen.

This.

Rents in Longford have leapt up considerably in the last 6 months alone. Apartments that would have let for €350-€400/mth at the start of the year are now in the €600/mth region. They're not staying on the market long either.

pilly

KCross wrote: »

Thats a different argument though. That 2yr rule applies to both LL and tenant around calling a rent review.

There are rules around how often a rent review can be called but once it is legitimately called then a decrease in rent is required if the tenant can prove the "market rate" is lower, regardless of what the rate on the lease says.

Do you agree that a reduction is required/forced on the LL at that point?

No I wouldn't agree and maybe I'm wrong but I've never heard of it happening for the reason of legislation. If someone can provide me an example when it worked I'd be very happy to agree.

KCross

pilly wrote: »

No I wouldn't agree and maybe I'm wrong but I've never heard of it happening for the reason of legislation. If someone can provide me an example when it worked I'd be very happy to agree.

Why dont you agree if its in the legislation in black and white?
You cant say its not true just because you havent heard of it.

Graham

KCross wrote: »

Why dont you agree if its in the legislation in black and white?

Link?

I've never come across the case where the RTA has been used to force a rent to track the market rates between rent reviews. Would be interested in seeing how it would work.

KCross

Graham wrote: »

Link?

I've never come across the case where the RTA has been used to force a rent to track the market rates between rent reviews. Would be interested in seeing how it would work.

http://www.irishstatutebook.ie/eli/2004/act/27/section/19/enacted/en/html#sec19

pilly

KCross wrote: »

Why dont you agree if its in the legislation in black and white?
You cant say its not true just because you havent heard of it.

Look, simple fact is there are 100's of pages of legislation everywhere on any subject you want to quote. They literally aren't worth the paper their written on unless enforced. This has never been enforced. I'm not saying it won't in the future but up to now it hasn't been.

Look it's no skin of my nose or in fact any LL's or tenants nose because reality is that it won't happen until the market takes a nose dive.

pilly

KCross wrote: »

http://www.irishstatutebook.ie/eli/2004/act/27/section/19/enacted/en/html#sec19

You keep quoting the same section of the act. That's not what Graham asked.

athtrasna

Mod note

This is derailing the thread, please stop the to and fro, it is off putting to other posters who may want to contribute. Thanks

Graham

KCross wrote: »

http://www.irishstatutebook.ie/eli/2004/act/27/section/19/enacted/en/html#sec19

19.—(1) In setting, at any particular time, the rent under the tenancy of a dwelling, an amount of rent shall not be provided for that is greater than the amount of the market rent for that tenancy at that time.

(2) The reference in this section to the setting of the rent under a tenancy is a reference to—

(a) the initial setting of the rent under the tenancy, and

(b) any subsequent setting of the rent under the tenancy by way of a review of that rent.

There's nothing in that section that suggests market rent should be considered between the "setting of the rent" i.e. initially and at rent review time.

KCross

pilly wrote: »

You keep quoting the same section of the act. That's not what Graham asked.

Well what did Graham ask for then?
He said "Link?". I provided the one relating to that part of the act that we are talking about?

Dont shoot the messenger here guys.

I dont know how enforceable it is but the RTB are supposed to uphold the act. Thats their job. it seems clear to me that a reduction is possible in the context of what the OP asked. You havent put any arguments forward other than "I've never heard of it"

@Graham, I agree its not possible to reduce rent between reviews. It can only happen on initial setting or at rent review time. The OP asked if the rent could be force reduced after 2yrs at rent review time. That seems possible(but unlikely in current market) based on the RTA.

Graham

KCross wrote: »

The OP asked if the rent could be force reduced after 2yrs at rent review time. That seems possible(but unlikely in current market) based on the RTA.

Thanks, I missed the 'at rent review time' bit

It might not be in the tenants interest to initiate a rent review at the moment, it's quite likely this would result in an increase in rent.

On the other hand, a rent review now would lock out potentially larger increases in the next 2 years. Something I wouldn't rule out given the upward trajectory of rents in the county.

CIARAN_BOYLE

Graham wrote: »

There's nothing in that section that suggests market rent should be considered between the "setting of the rent" i.e. initially and at rent review time.

Section 21 or 22 says either the landlord or the tenant can initiate a rent review.

Section 19 says that rent cannot be set above market rate.

Section 19 also says that a rent review is considered setting a new rent.

Therefore a tenant can initiate a rent review after which the rent cannot be above market rate.

At least this is my theoretical understanding of the argument. I doubt that this has been enforced at any stage on this line of thinking.

Ms Doubtfire1

CIARAN_BOYLE wrote: »

Graham wrote: »

There's nothing in that section that suggests market rent should be considered between the "setting of the rent" i.e. initially and at rent review time.

Section 21 or 22 says either the landlord or the tenant can initiate a rent review.

Section 19 says that rent cannot be set above market rate.

Section 19 also says that a rent review is considered setting a new rent.

Therefore a tenant can initiate a rent review after which the rent cannot be above market rate.

At least this is my theoretical understanding of the argument. I doubt that this has been enforced at any stage on this line of thinking.

Thats why I asked. I would presume that, if the Tenant can prove that the rents in the area (on for this specific very rural area (really - middle of no where) this is true - are dropping, they should be able to initiate a rent review at the 2 year mark - just like the landlord. It seems like a logic step. Glad to see there seems to be some legislation to back this up.

KCross

Ms Doubtfire1 wrote: »

Thats why I asked. I would presume that, if the Tenant can prove that the rents in the area (on for this specific very rural area (really - middle of no where) this is true - are dropping, they should be able to initiate a rent review at the 2 year mark - just like the landlord. It seems like a logic step. Glad to see there seems to be some legislation to back this up.

The issue really is proving the "market rate" is indeed 20% lower.

It will require multiple recent examples for comparable property. You mentioned "middle of no where" so enough examples might not be there to prove it. Anecdotal evidence or examples from another town/village wont cut it.

As others have said, your friend would want to be very confident of their examples before they go to the LL.

CIARAN_BOYLE

Ms Doubtfire1 wrote: »

Thats why I asked. I would presume that, if the Tenant can prove that the rents in the area (on for this specific very rural area (really - middle of no where) this is true - are dropping, they should be able to initiate a rent review at the 2 year mark - just like the landlord. It seems like a logic step. Glad to see there seems to be some legislation to back this up.

While an interesting legal discussion has been had here in practicality remember the landlord can decide he will take the market rent by seeking to get another tenant in.