Rent increase with immediate effect

COH

Hi everyone

We just had a phone call from our landlords management company saying that the landlord wants a 4% rent increase with immediate effect and if we can ammend our standing order from the 1st of next month onwards.

Am I correct in assuming that they can not do this until 24 months after the inception of the lease (and with 90 days written notice)?

We've been here 18 months now and signed a lease when we moved in as usual. While we do love living here and dont want to be deliberately argumentative I dont feel like volunteering the extra few hundred quid if its not necessary (or legal).

Thanks!

.42.

https://www.boards.ie/discussion/2058213154/rent-increase-with-immediate-effect

Not sure about the 2 years. I think that is when you are renting and during that time the area is added to the RPZ

But the Management Company is wrong with calling you with with the sudden increase

You must get at least 90 days’ notice of a rent review. This means that the new rent cannot then apply until 90 days after the notice has been issued.

The landlord must also notify the RTB of the revised rent so that it can update the registration details of the tenancy.

https://www.citizensinformation.ie/en/housing/renting_a_home/rent_increases.html

check under Calculating allowable rent increases

MacDanger

https://www.boards.ie/discussion/2058213154/rent-increase-with-immediate-effect

Sounds like an invalid notice of rent review since it's not written and doesn't give the required 90 days notice. Have a look at the calculator in the previous post and it'll tell you what would be allowable (if anything given you're <24m into the lease).

.42.

I find it surprising that a company calling itself a " Management Company " is unaware about the rules in relation to rent increases.

rob316

https://www.boards.ie/discussion/comment/118020129#Comment_118020129

"Unaware" or chancing their arm?

.42.

https://www.boards.ie/discussion/comment/118020510#Comment_118020510

Most likely.

In that case OP you are within your right to continue to pay the usual amount until the “Management Company” figure out themselves the correct procedure in increasing rent. It’s not for you to tell them what they need to do.

mrslancaster

https://www.boards.ie/discussion/comment/118020510#Comment_118020510

I'd say there's a lot of individual landlords who still don't know all the rules. We were chatting to one recently, he's in his late 60's and htg he really hadn't a clue. The last tenants were there ten years on a low rent and they bought their own place and moved out during covid. The house has been empty for months and is being refurbished now.

He knows the market rent in the area is 2k+ but didnt know the rules about RPZ's and didn't know the rent increase rules changed a few months ago. He knew he had to register a new tenancy with rtb but didn't know about part4 rights, 90 day notices, or that he had to use specific forms and send a copy to rtb, rules about notices to vacate etc etc. He said "I never got any of that information from the RTB" and tbh I've no idea if the RTB send information about changes to landlords, they assume everyone can look up their website. He didn't even know he had to tell RTB when the last tenants left.

We suggested he contacted a letting agent and he's since told my MIL that he's thinking of selling because its all too complicated. Theres still a lot of chancers though...

JimmyVik

https://www.boards.ie/discussion/comment/118021896#Comment_118021896

Im surprised any landlord knows what going on. The legislation changes with the weather.

Then youl;l have a lot of landlords who just dont want to be dealing with all this red take and will just sell up instead of trying to keep of with the crossing of T's etc.

Mad_maxx

No excuse for a mistake like this , it's junior infants landlord knowledge.

DubCount

For OP. Assuming this is a tenancy (i.e. you are not renting a room in the LLs own house etc.). then as others have pointed out, the notice looks to be invalid on several grounds (not in writing, insufficient notice, not outlining basis of calculation etc.). I think though you need to decide if this is a fight you want to have. If you start pointing out legislation requirements and suggest going to the RTB etc., then you can stop the increase in the short term, but it may spook your LL out of the market all together. I think this is a fight you could win easily, but is it a fight you want to have?

MacDanger

I'd ignore the advice of previous poster OP, if your LL doesn't even know the most basic elements of the legislation governing their business then there'll be other issues with them in future if you just let this slide

COH

https://www.boards.ie/discussion/comment/118022527#Comment_118022527

I don't think its a fight at all to be honest - as far as I am concerned they can raise the rent as they see fit and we're happy to pay it as long as they play by the rules.

Based on the feeback above I simply asked the management company to confirm when the landlord expects this increase to take effect given that we have not been provided with formal notice. Radio silence. I expect we'll get a letter in the door over the next day or so.

If they get spooked/annoyed and decide to sell - thats entirely for them to decide as they own the place. Wouldnt begrudge them for doing so whatsoever given the current market.

Anyway I appreciate the contributions of all above, thanks everyone.

mrslancaster

https://www.boards.ie/discussion/comment/118022328#Comment_118022328

It is for some people but a similar thing happens with small businesses all the time around employment legislation, accounting & revenue rules, health & safety regs, company law, consumer law etc. Companies have HR and accounting staff to keep on top of it but mistakes still happen. People might think its pretty basic stuff but in my work I've seen some breaches that you wouldn't believe and most are simply because people don't know the rules but are happy to sort once they know.

GDPR for example had a big public information campaign for years before it came into effect. There hasnt been any amendments but the rules are still broken all the time even by large organisations and public bodies. Anyone who buys online also had issues with companies not knowing all the customs & vat rules since Brexit. It took years before every provider in the childcare sector was au-fait with the legislation when it was introduced and they still have issues. It is not unusual for mistakes to happen, but small landlords with no training are expected to be pitch-perfect all the time.

Everyone should keep the rules imo, but that's not always easy if they keep changing. Maybe the big professional landlord organisations are the way to go, they'll probably make a better job of ensuring the rules are kept by all parties...

Mad_maxx

https://www.boards.ie/discussion/comment/118023127#Comment_118023127

I've been out of the private landlord business since 2017 and I haven't forgotten the minimum ninety day rent review advanced notice

mrslancaster

https://www.boards.ie/discussion/comment/118023600#Comment_118023600

Agree completely - I've never been in it, and I know about it too, but I think there's likely a lot of small landlords who have not kept up with all the changes and could make mistakes. I'm not saying there isn't a lot of chancers in the rental market (on both sides) but that's not exclusive, there's dodgy people in every sector who think the rules don't apply to them - just think of all the cash in hand folk who are found all over the place, trades, professions, many many examples.

MacDanger

https://www.boards.ie/discussion/comment/118023721#Comment_118023721

TBF, that's potentially understandable for an individual LL who previously had the same tenants for many years but the mgmt company should be well up on the legislation, sounds like they're stealing a living from the LL

COH

Hi guys - a quick update (and a further question for you all)

As expected we recieved our official letter informing us of our rent review and proposed increase.

Now, on the phone 3 weeks ago the management company proposed a 4% increase.

We checked our address on the allowable rent increase calculator as linked above which suggested a permissable increase of 3.5%

However the letter wr recieved is now proposing a 7% rent increase.

I know we probably poked the hornets nest when we queried the management companies approach but am I right in assuming that rent increases beyond 4% are not permissable?

MacDanger

https://www.boards.ie/discussion/comment/118105516#Comment_118105516

I think the 4% rule is gone and it's now linked to inflation. The 7% doesn't sound right - have they given details of how they came to that figure?

C14N

The needing to wait 2 years before a rent increase is a common misconception. This was a temporary rule about 5 years ago as part of the initial RPZ rules, but once the initial period passed, any property could have the rent raised by up to 4% per year.

https://www.boards.ie/discussion/comment/118105516#Comment_118105516

7% should be completely illegal under new rules from what I can tell. Under the old rules, you could get a bigger jump if they waited longer than 12 months for the increase (although even then, for 18 months it should have been at most a 6% increase). In addition, my own landlord recently sent an email saying that reviewed rent can only come into effect 90 days after notice has been given, so it should not be able to take place starting in the next month.

COH

To be clear - the letter we recieved provided a 90 day notice as we had requested so there is no longer an issue with an immediate increase.

When the rent increase is now due to take effect (Feb 1st) we will have been living here for 21 months and the rent review proposes and increase of 7% using a calculation in the residential tenancies act (we were provided with a breakdown of this).

It was just that when I queried the rent increase on the rtb calculator it said that the increase 'should' be ~3.5% so I'm not sure which is correct or if we should be contesting the 7% increase.

Just to reiterate - we have no problem paying increased rent as long as everyones playing by the rules.

MacDanger

https://www.boards.ie/discussion/comment/118105936#Comment_118105936

I'd say double check that you've filled out the calculator correctly first; if you have, then ring the agency and tell them that when you fill out the calculator, it's showing 3.5% and ask them why their calc is different

COH

https://www.boards.ie/discussion/comment/118105841#Comment_118105841

Rent x (1 + 0.04 x 21/12) = new rent (7%)

Where 21 is the total number between when the existing rent was set and the new rent increase is to take effect, and 12 'is to be inserted in respect of any rent review in an RPZ in respect of a tenancy that commenced on or after the date the area in question became an RPZ'.

C14N

https://www.boards.ie/discussion/comment/118105936#Comment_118105936

Under the old rules, a 7% increase would be allowed after 21 months. The calculation for this would be

4% per year * ( 21 / 12 ) = 7%

However, this was phased out in July 2021, months before your latest increase, and replaced with the current inflation-linked increases. Under this, you should only have to pay the 3.5% that the RTB calculator shows. From what I can see, you should not have to pay the 7% you're being asked to and the LL is either chancing their arm trying to get you to work on the old system, or they aren't even aware of what the new rules are. To double check though, you can talk to the RTB about it. There is a chat in the bottom-left corner of the page you've linked, and more contact details under: https://www.rtb.ie/contact-us

MacDanger

https://www.boards.ie/discussion/comment/118105974#Comment_118105974

I don't think that formula applies anymore - it's lnked to the Consumer Price Index. I'd definitely be ringing them to clarify - say that you get a different allowable increase when you use the RTB calculator.

Here's the calculator: RPZ Calculator (rtb.ie)

houseyhouse

Your landlord may have used the old calculator? Or the calculation may have changed with inflation - there is a warning on the new calculator that amounts can change daily. In fairness, it’s hard to understand how to use the new calculator. On the old one you put in the date rent was last set and the date the new rent will take effect. That doesn’t work with an inflation-based calculator because we don’t know inflation 3 months in advance (and ll has to give 3 months notice of change) so it seems to be the date the rent was last set to the date you review the rent using the calculator. Effectively this means rent can’t go up for 15 months from start of the tenancy compared to 12 months before but it doesn’t explain that anywhere. What a confusing mess!

If you’re looking at May 2019 to now, I can’t see how they’re getting 7% on the new calculator, though that is what it would be on the old one (4% x 1.75 years)

XVII

There is something wrong with both 3.5% and 7%, so check your calculator again.

I've checked my place recently on rtb and under the new rules (the ones based on inflation) my landlord can only increase about 4 euro per month. And well that's the reason why this place is up for sale now :/

spaceHopper

https://www.boards.ie/discussion/comment/118105974#Comment_118105974

My understanding is this,

You should have gotten written notice of the increase, it should be based on a template from the RTB site and it should inform you that you have 28 days to challenge it.

I can't say for certain but 7% sounds wrong, I'd say it RTB calculator is correct.

If I were you I'd go back to the management company and ask them if the 7% is correct based on the RTB calculator it should not be more than 3.5%. If that is the case can they please re issue the notices by x date. Also remind them that unless it is on the correct RTB template it's not valid.

COH

https://www.boards.ie/discussion/comment/118106105#Comment_118106105

You are correct, thank you - the allowable increase as per the RTB calculator is actually 2.6%

mrslancaster

The new formula is based on the Consumer Price Index rate on the day the tenancy started/ date the last rent was set and the CPI rate on the day the new rent is being set. If the OP's tenancy started in May2020 it was 101.1 and if it was reviewed today for instance it would be the current CPI at Sep2021 is 104.6.

The increase in rent can't be more than the difference between those two rates, so 104.6 - 101.1 = so 3.5% with a 90 day notice.

YFlyer

https://www.boards.ie/discussion/comment/118105993#Comment_118105993

How long does that 7% last for? Definitely need an Excel sheet of amount per month.