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Residential Tenancies (No. 2) Bill 2021 – Further protections for tenants

Paddy Smyth
21/07/2021

Locations

Ireland

The Residential Tenancies (No. 2) Act 2021 (the "the 2021 Act") was signed into law by the President on Friday, 16 July 2021.

The 2021 Act amends the Residential Tenancies Act 2004, particularly with regard to Rent Pressure Zones ("RPZs"). Rent reviews for residential tenancies in RPZs had been restricted to increases of 4% per annum, translating to 8% over two years. Under the new legislation, rents in RPZs will be restricted to the rate of inflation as recorded in the Harmonised Index of Consumer Prices ("HICP").

This will require landlords to restrict rent increases in line with general inflation, which is currently below 2%. The current RPZs have also been extended to the end of 2024.

For properties located outside RPZs, rent reviews may continue to take place once every two years until 31 December 2024.

Other measures introduced include:
  • The extension of the rent increase and eviction protections for ‘relevant person’ tenants until 12 January 2022. This includes those financially impacted by COVID-19 who are in arrears and at risk of losing their tenancy.
  • A restriction on upfront payments of rent or deposit required by landlords on signing a residential lease to a total of two months’ rent (one month’s rent in advance and one month’s rent as a deposit).
  • A restriction on any advance payments of rent a tenant is required to pay during a tenancy to one month’s rent. There is an exception for students living in student specific accommodation in that they may choose to pay a greater amount of rent if they so choose. They cannot be required to do so however.
  • Provides that students do not have to give more than 28 days' notice to terminate a lease for student specific accommodation.
The 2021 Act stands to have a major impact on the Private Rented Sector in Ireland. It comes in light of concerns that landlords would seek to impose rent increases of up to 8% on tenants once the temporary ban on evictions and a rent freeze set during the height of the Covid-19 pandemic came to an end.

It is important to note that the 2021 Act only comes into operation as of Friday, 16 July and as such, any valid notice of rent review served prior to this date may seek an increase of the previous limit of 4%. Tenants who did not receive a review in the last three years may face an increase of up to 8% and in the last three years may face a 12% increase.

You can view the 2021 Act here

Written by Paddy Smyth and Matthew Skelly. 

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