Increase rent for new tenancy

Aye Bosun

Just a quick one, my tenants in private rented house, have informed they are moving at the end of the year.

House is in RPZ, this tenancy started in March 2016, so by the end the tenancy it will be about 20months not quite 2 years.

My questions is for the new tenancy, am I allow increase the rent by 4% or as it has not been 2 years since the last rent was set must I proceed with rent as it is set now for the current tenancy?

Fian

You can set it at:

old rent + (20/12*4)% = old rent + 6.66%

As this will be a new tenancy it is not a tenancy to which section 24C(1) applies so you do not have to use 24 months for the first increase as you would have had to do if your existing tenants remained. So the figures above are correct, it would have been a lower increase if your sitting tenants had remained in situ.

Edit - replace the 20 in the formula above with then number of months since the last rent was set until the new rent comes into forceif it turns out not to be 20 months as you currently expect.

murphaph

The RTB has a calculator on their website too, where you can plug in exact dates.

DubCount

I think its 20/24 x 4% = 3.33%

Michael D Not Higgins

DubCount wrote: »

I think its 20/24 x 4% = 3.33%

It's 20/12 for a new tenancy. Refer to the RPZ calculator on the RTB's website.

gizmo81

Then you must provide the new tenants with the following:

Additional Requirement for New Tenancies in Rent Pressure Zone
In the case of a new tenancy in a rent pressure zone, a landlord is required to furnish the tenant, in writing, with the following information at the commencement of the tenancy:
(i) The amount of rent that was last set under a tenancy for the dwelling;
(ii) The date the rent was last set under a tenancy for the dwelling;
(iii) A statement as to how the rent set under the tenancy of the dwelling has been calculated having regard to the rent pressure zone formula.

https://www.rtb.ie/rent-pressure-zones/rent-pressure-zones

Aye Bosun

Thanks for all the info everyone, basically it's still subject to the start date of the current tenancy and the increase is on a pro rata bases.

Worked it out on the RTB calculator. Thanks for the links!

Got to say I think this RPZ is counter productive, it forces a landlord to increase the rent every 2 years even if they are happy with the tenant and would have in the past been happy to keep rent at same level as a reward for looking after the place but with this now if the landlord doesn't apply an increase they get left behind the market rate with no way of bring back up..crazy!

Fian

Aye Bosun wrote: »

Thanks for all the info everyone, basically it's still subject to the start date of the current tenancy and the increase is on a pro rata bases.

Worked it out on the RTB calculator. Thanks for the links!

Got to say I think this RPZ is counter productive, it forces a landlord to increase the rent every 2 years even if they are happy with the tenant and would have in the past been happy to keep rent at same level as a reward for looking after the place but with this now if the landlord doesn't apply an increase they get left behind the market rate with no way of bring back up..crazy!

Not really - after the first increase. You need to increase the rent asap after the the rent caps come in because for an existing tenancy the rent increase is limited to 2% per annum for the first increase. After that it doesn't matter really in the long term - you can increase by 4% after one further year or 8% after two further years. The formula involves putting in the number of months since the last increase - so you are not forced to increase every year.

Of course if the rent is below market rate (which essentially all rents are likely to be as a consequence of the controls) you are likely to want to increase asap anyway - at 4% per annum each year on the anniversary.