Rent Pressure Zones are areas of the country where the government has set limits on how much landlords can increase rents by for private tenants. See details of the locations of these Rent Pressure Zones here
Overall – the aim of these RP Zones is to cap rent increases at 4% per annum – but there are slightly different calculations depending on when a tenancy began and how long the current rent has been running.
There is a formula for working out the new rent:
R *( 1 +0.04 * t/m)
R= current rent
t = Number of months the current rent will have been charged
m is either 12 or 24 (number of months between rent reviews)
Example 1 (new tenancy)
A new tenancy commenced in an RPZ on 28th December 2016; the landlord is entitled to serve a rent review notice on 28 December 2017 providing a minimum of 90 days notice. The new rent will come into effect on 5 April 2018.
R = €1300, the current rent amount
t = 15 months (28/12/16 to 5/04/2018)
m = 12 months, as this tenancy commenced after 24 December 2016 the landlord is entitled to review the rent annually.
So :- The new rent is : €1,300 x (1 + 0.04 x 15/12) = €1,365
An increase of 5%
Example 2 (future rent review)
The tenancy commenced in an RPZ on 2nd January 2015; the landlord served a rent review notice on 2nd January 2017, with the new rent coming into effect on 4 April 2017. The landlord will now be entitled to serve a new rent review notice on 2 January 2018 by serving a minimum 90 days notice of rent review indicating that the change will take effect from the 4 April 2018.
R = €1050, the current rent amount
t = 12 months (3/04/17 to 3/04/2018)
m = 12 months; as initial 24 month rent review had already taken place the landlord is now entitled to review the rent annually.
So: The New rent = 1050 x (1 +0.04 x 12/12) = €1092
An increase of 4%
The tenancy commenced in an RPZ on 1 November 2014, over 24 months ago. The landlord intends to serve a rent review notice on 1 January 2017, providing a minimum of 90 days notice and indicating that the change will take effect from the 3 April 2017.
R = €1,200.00 (the current rent amount)
t = 29 months (period between 1/11/14 to 3/04/2017)
m = 24 months, as the tenancy was already in existence prior to 24th December 2016 this landlord was only entitled to review the rent 24 months from the date the rent was previously set.
So New Rent is : 1200 x (1 + 0.04 x 29/24) = €1258
An increase of 4.33%
Landlords of a property in a Rent Pessure Zone must now provide certain information to a tenant where a tenancy commences on or after 24th December 2016 :
The landlord is obliged to provide in writing to the tenant
(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 predictability formula.
Where a prior tenancy existed the landlord is required to provide the information at (i) and (ii) above and also to provide a statement under (iii) relating to the rent predictability formula.
If a new tenancy comes into existence in an RPZ on or after 24 December 2016, the landlord will have to show that the rent applicable to this new tenancy complies with the maximum increase allowable under the legislation. As this is a new tenancy the information supplied will not be in the form of a rent review notice but it will be necessary for the landlord to show, in writing, how the new rent differs from the previous level.