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Heads of New Residential Tenancies (Amendment) Bill What ...

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Heads of New Residential Tenancies (Amendment) BillWhat Are the Implications?
By Pat Davitt FIPAV REV MMCEPICEO, IPAV
By Pat Davitt FIPAV REV MMCEPICEO, IPAV
to Date:
Key Changes & Provisions
Providing powers to theRTB to investigate and sanction landlordswho engage in improper conduct including non-compliance with the rent increase restriction in RPZs;A sanction could cost a landlord in breach up to €30,000 and a written caution (a financial penalty of up to €15,000; payment of RTB investigation costs of up to €15,000).Making it acriminal offencefor landlords to implement rent increases that contravene the law, that do not adhere to new definitions of a substantial change, failure to cooperate with an investigation, failure to register and update tenancies with the RTB.
Key Changes & Provisions
Allowing theRTB to initiate an investigation without the need for a complaintto be made; (by the tenant)Requiring theannual registrationof tenancies with the RTB; (€20-€90)Allowing thepublication of RTB determinationsin respect of any dispute;
Key Changes & Provisions
Providing a legal definition of‘substantial change in the nature of accommodation provided under tenancy’in the context of qualifying for an exemption from the rent increase restriction.Section 3 (pg6),(5A)(a) works carried out to the dwelling concerned —(i) requirerequire that at least 50 per cent of the floor area, within the meaning of Article 6 of the Building Regulations 1997 (S.I. No. 497 of 1997), of the dwelling undergoes renovation,
Key Changes & Provisions
An amendment to allow the RTB topublish rental amountsin its register. This proposed amendment is receiving due diligence by the Office of the Attorney General to ensure that any measure to be introduced will be legally sound. Enhanced rent transparency is a key goal.Significantlyextending the noticeperiods for tenancy terminations by landlords.
extension of the notice periods
The Minister’s Press Release:
“The key measures and reforms are designed to enhance enforcement powers for the RTB, provide greater security of tenure for tenants and further underpin the operation of the Rent Pressure Zone (RPZ) arrangements, along with some further targeted priority measures.”
The Minister’s Press Release:
Amendments to the Bill“I will also need to introduce Government amendments to the Bill as it makes its way through the legislative process in the Houses of the Oireachtas. I was keen to publish the Bill as soon as possible to let everyone in the sector know that Government is serious in its intent to stamp out any improper conduct by landlords, particularly with regard to flouting the rent increase restrictions.I hope to introduce an amendment to allow the RTB to publish rental amounts in its register. This proposal is receiving due diligence by the Office of the Attorney General. Enhanced rent transparency is our goal and an important one.”
The Minister’s Press Release:
Purpose Built Student Accommodation“Other significant proposed amendments to the Bill are being worked on by my officials and by officials in the Department of Education and Skills and in the Office of the Attorney General to possibly extend the application of certain provisions of the Residential Tenancies Acts, particularly those connected to rent setting, to purpose built student (specific) accommodation let under licence by private providers or let under licence/tenancy by public providers.”
The Minister’s Press Release:
General“The proposed new powers for the RTB are a crucial first step in expanding its overall role and function as part of a multi-annual change management programme to proactively enforce tenancy law within the rental sector, while also robustly defending the rights of tenants and landlords alike.”“The supply of new homes is increasing. As it increases we need to protect those who are renting while we also reform our rented sector. Not only will this help as we continue to address the crisis in homelessness, it will also deliver greater stability and transparency to the rental sector.”
IPAV’s Position:
Positive:To make it a criminal offence for landlords to implement a rent increase that contravenes the law and for failure to register a tenancy with the Residential Tenancies Board (RTB).(We would propose district court not circuit court (Cost) )Negative:To compel landlords to pay an annual registration fee to the RTB will drive more landlords from the market as the day-to-day costs of renting a residential unit and complying with the required regulations to go with it are currently very high.(For the purpose of their transparency rental index)
IPAV’s Main areas of concern:
Too manyanomalieswith the Rent Pressure Zones (RPZ)Unfair on landlords who have not ordid not keep increasing tenant’s rentas the market rent rose.Such landlords are penalised for their forbearance and cannot charge market rent when a new tenancy is created.All new unitscoming onto the market areexempt, as are units which have not been let for two years priorto the coming into the operation of the RPZs.
IPAV’s Main areas of concern:
UnderSection 19, these units are exempt forever, creating a clear two-tier system in RPZs, i.e. those which are subjected to the 4% increase and those which can permanently stay outside it.We believe from our members these units are some of the ones causing the rent increases above 4% we all read about in property reports, and the increases most property professionals cannot understand as there is a 4% RPZ freeze. We believe this to be grossly unfair and is also a reason for landlords deciding to sell out.
IPAV’s Main areas of concern:
Section 19;subsection below, 5 of S19, that has been interpreted to mean that all new properties in RPZs are exempted (S24A permits the Housing Agency to recommend an area for inclusion in a RPZ).  Because new units have not been rented in the previous two years, they are deemed exempt.(5) Subsection (4) does not apply—(a) where a dwelling has not at any time been the subject of a tenancy during the period of 2 years prior to the date the area is prescribed under section 24A as a rent pressure zone or deemed to be so prescribed;
A YIELD FOR YOUR PROPERTY:
If landlord (A) rents his property at (Market Rent) for €1,500 per month his rental income is €18,000 per annum.If landlord (A) sells that property at a 5% yield the property is worth €360,000.If landlord (B) rents his property (Below Market Rent) for €1,000 per month his rental income is €12,000 per annum.If landlord (B) sells that property at a 5% yield the property is worth €240,000.Rent and yield make up the value of ones property
IPAV Propose:
To make the entire country a single RPZSubject to review on a yearly basisTo include all residential propertiesAll properties being allowed to register at market rate in their own area. The average market rent for all properties can be reliably sourced from the RTB Quarterly Rent Index.
IPAV Propose:
The 4% annual increase should be reduced to 2% for the whole country.This proposal will also allow landlords to enter into long-term leases with rent reviews, as is the case in commercial markets.Landlords providing leases in excess of 6 years there should be an exemption from income tax on the first €4,000 rent as is the case with long-term agriculture leases.This would be an incentive for landlords to remain in the market place and give extra security to tenants instead of exiting it.While landlords exiting the rental market in the cities is regrettable, in the country it’s a whole different story as there are simply no replacements for them.
Thank YouIPAV“The Voice of Auctioneers and Valuers in Ireland”www.ipav.ie

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Heads of New Residential Tenancies (Amendment) Bill What ...