PRS landlords and student accommodation providers: what you need to know about recent residential tenancies legislation

26-07-2019

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Authors: Kenneth Egan, Brian O’Rourke and Dearbhla Considine

Potential developers, investors, funders and public and private student accommodation providers should be aware of the significant changes to residential landlord and tenant law effected by two recent Acts – the Residential Tenancies (Amendment) Act 2019 (the 2019 Act) and the Local Government Rates and other Matters Act 2019.

The key provisions of the Acts which have been commenced to date are set out below.

Student accommodation

Certain provisions of the Residential Tenancies Acts, including those connected to rent setting, registration of tenancies and dispute resolution, now apply to purpose built student accommodation let under licence by private providers or let under licence or tenancy by public providers (including recognised educational institutions). This has significant implications for the student accommodation sector where licensing arrangements are the norm. Prior to the commencement of the relevant sections of the 2019 Act, genuine licences, as well as dwellings let by or to public authorities (which included recognised educational institutions), fell outside the application of the Residential Tenancies Acts.

Substantial change exemption

The meaning of what constitutes a “substantial change in the nature of accommodation provided under a tenancy” has been clarified. Under existing legislation, such a change allows landlords to avoid the rent increase restrictions in rent pressure zones (RPZs). The term “substantial change” was not previously defined.

Unlet property exemption

The other exemption from rent increase restrictions in RPZs has been tightened to provide that it only applies where the dwelling concerned was not the subject of a tenancy in the 2 year period prior to the commencement of the tenancy concerned (rather than the 2 year period prior to the designation of the area in question as an RPZ). The Act also closes the loophole whereby new builds were entirely exempt from the rent increase restrictions in RPZs. The exemption is now confined to the rent first set under a tenancy of a newly constructed dwelling with the rent increase restrictions applying on any subsequent rent review.

Protected structures

The unlet property exemption has been amended in relation to protected structures in that restrictions on rent increases in RPZs do not apply to the rent first set under a tenancy of a protected structure or a proposed protected structure if the property was not let in the one year period immediately preceding the date the tenancy concerned commenced.

RPZ designations

The duration of current RPZs has been extended to 31 December 2021 and the criteria for designating RPZs outside Dublin has been amended.

Termination on grounds of sale

One change that landlords will appreciate is the extension of the period within which a contract for sale must be signed from 3 months to 9 months where a tenancy is terminated because the landlord intends to sell the dwelling.

Notice periods

Notice periods for tenancy terminations by landlords have been lengthened.

RTB powers

The Residential Tenancies Board (RTB) has extensive new powers empowering it to investigate, without the need for a complaint from the public, and sanction landlords who engage in improper conduct. Improper conduct includes:

(i) failure by a landlord to comply with tenancy registration requirements;
(ii) failure to comply with rent increase restrictions in RPZs;
(iii) failure to offer back a dwelling to a tenant following termination of their tenancy; and
(iv) providing false or misleading reasons for terminating a tenancy. Sanctions for improper conduct can include a penalty of up to €15,000 and a direction to pay up to €15,000 in respect of the RTB’s costs.

Criminal offence

Non-cooperation with the RTB or furnishing false or misleading information to the RTB in connection with an investigation constitutes a criminal offence which can lead to a fine of up to €50,000 and imprisonment for up to 5 years.

Dispute resolution

The publication of RTB determination orders is now mandatory.

According to the Minister, the sections of the 2019 Act requiring the annual registration of tenancies will be commenced in Q1 of 2020. Other sections relating to the amendment of tenancy registration fees and the preparation by the Minister of a report on rent levels based on information provided by the RTB have also yet to be commenced.

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