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5 July 2021
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Minister For Housing Announces Significant Amendments To Rent Pressure Zone Legislation In Ireland

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The Minister for Housing, Local Government and Heritage, Darragh O'Brien TD, has announced significant changes to the operation of Rent Pressure Zones (RPZs) in Ireland.
Ireland Real Estate and Construction

The Minister for Housing, Local Government and Heritage, Darragh O'Brien TD, has announced significant changes to the operation of Rent Pressure Zones (RPZs) in Ireland.

The Minister confirmed in today's press release that he has received Government approval for the following measures:

  • extension of all RPZs to the end of 2024;
  • replacement of the 4% cap on rent increases in RPZs with an inflation-linked rent review model; and
  • extension of the provision for bi-annual rent reviews outside RPZs to 31 December 2024.

The changes will be implemented by way of amendment to the Residential Tenancies (No. 2) Bill 2021, which is currently before Seanad Éireann, and are expected to become law by 9 July 2021.

Extension of RPZs: RPZ designations were due to expire on 31 December 2021 but will be extended by another three years to the end of 2024.

Rent reviews: Rent reviews in RPZs will be linked to general inflation as recorded in the Harmonised Index of Consumer Prices (HICP) (subject to the overriding provision that the rent cannot exceed the market rent). This change could have a significant impact on the PRS sector given current inflation rates. Rent reviews outside RPZs will continue on a bi-annual basis until 31 December 2024 and will continue to be based on market rent.

Residential Tenancies (No.2) Bill 2021: Other measures being introduced by the Residential Tenancies (No.2) Bill 2021 include:

  • a prohibition on requiring tenants to pay more than two months' rent on the commencement of a tenancy, being one month's rent in advance and one month's rent in respect of the deposit;
  • a prohibition on requiring tenants to pay more than one month's rent in advance during the tenancy;
  • amendments to the period of notice to be given to terminate tenancies or licences of student accommodation; and
  • extending the current protections for tenants impacted by COVID-19 to 12 January 2022.

The advance rent payment measures will have a significant impact on student accommodation where the advance payment of rent/licence fees for one or two semesters is common. Tenants/licensees of student accommodation may, with the landlord's/licensor's agreement, pay more than one month's rent in advance, but they cannot be forced to do so.

When will the above measures come into effect? The Bill currently provides that measures in relation to the advance payment of rent and deposits will apply to tenancies created on or after the date which is one month after the passing of the Act, i.e. 9 August 2021, assuming the Act is passed on 9 July 2021. The remaining sections of the Bill will apply from the date the Act is passed. It remains to be seen if the new RPZ provisions will commence on 9 July also.

A further briefing will be published when the text of the proposed amendments is available.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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