Saturday 22 September 2018

Know your rights on rent hikes as landlords dodge control rules

Tenants are still being hit with increases well in excess of the Rent Pressure Zone caps as some ignore or find ways around law

It's just over a year since the Government introduced rent controls
It's just over a year since the Government introduced rent controls
Louise McBride

Louise McBride

Some landlords are getting around rent controls by introducing fees for parking and bins, according to housing charity Threshold. As a result, a number of tenants are facing rent hikes well in excess of the increases allowed under the rent control rules.

"Some landlords are circumnavigating the rent-control legislation by charging for parking spaces," said Stephen Large, Dublin services manager with Threshold. "There have also been cases where landlords have passed on additional charges, such as apartment management charges and service charges, to tenants."

The charity's concerns mirror those expressed during a discussion on RTE's 'Liveline' a few weeks before Christmas. One caller to the show explained how her landlord had recently introduced waste charges of €25 a month and a parking charge of €100 per month per car. These charges, which had previously been included in the tenant's rent, meant she was facing a hike in her rent of more than 12pc - which was much higher than the increase allowed under the rent control rules.

It's just over a year since the Government introduced rent controls. Under those rules, landlords can only increase rent by up to 4pc a year and by no more than the market rent - if the property is in a rent pressure zone (RPZ). These zones include different parts of Galway city, Greystones and Bray in Wicklow and all four local authority areas in Dublin. "Tenants are still facing substantial rent increases far in excess of the rent control rules," said Large.

The latest rental report by property experts Daft suggests this is indeed the case. In Dublin city centre (one of the RPZs), rents were on average 15.5pc higher in September 2017 than they were the previous September, according to that report.

"People are desperate for somewhere to live and where people are vulnerable, they don't have the luxury of challenging rent increases," said Large.

Tenants should get in touch with the Residential Tenancies Board (RTB) - which helps resolve disputes between landlords and tenants - if they believe their landlord is increasing the rent by more than they are allowed to under the rent control rules, or if they feel their landlord is trying to get around the rent caps by charging for parking spaces or other services. "At the outset of a tenancy, all charges are agreed either in writing or orally, and cannot be unilaterally changed or added to during the course of the tenancy," said a spokesman for the RTB. "Therefore, for example, if a car parking space was made available and a charge [for the parking] was not included or agreed at the start of the tenancy, then a charge should not be included at a later stage."

Hike after upgrades

Another issue which has become a thorny one is an exemption which allows landlords to seek a higher rent increase than is allowed under the RPZ rent control rules. Known as the 'substantial change' exemption, there have been concerns that some landlords were incorrectly using it to get around the rent control rules - by, for example, using minor or cosmetic work on a rented property to justify an increase above the annual 4pc cap.

There has been confusion about the 'substantial change' exemption - with landlords and tenants alike unsure as to what exactly constitutes a substantial change. The RTB published guidelines on the exemption last November to clarify when exactly it can be used.

These guidelines state that a higher rent increase may be warranted if the nature of the rented property has changed following renovations - for example, through structural changes. The renovations must however do more than merely bring the standards of the rented property up to the minimum required by law, and should go beyond the ongoing maintenance and repairs expected of a landlord. The changes in the rented accommodation should also improve the letting value of the property - and this improvement should not simply be down to market inflation. The amount of money spent on the renovations, as well as the time it takes for the work to be completed, also comes into play.

The guidelines add that improvements to a property do not necessarily change the nature of the accommodation - and so not all improvements will allow a landlord to claim the 'substantial change' exemption. For example, "while improving the property", the replacement of appliances or furniture "does not constitute a change in the nature of the accommodation being provided", according to the guidelines. "The works must be out of the ordinary and not usual works which would be carried out to maintain the accommodation."

So were a landlord to add an extension or attic conversion and increase the number of bedrooms in the property as a result, this work is likely to be deemed a 'substantial change' and the landlord is likely to be entitled to seek a higher rent increase than that allowed under the RPZ rent control rules, according to the guidelines. So too should changes such as the rewiring of an entire house, and the installation of insulation or of new triple-glazed windows. However, the installation of a new cooker, the servicing of a boiler, the replacement of one of the windows, the painting of every room in the house, and the repair of items which have been damaged by normal wear and tear, are unlikely to be considered substantial changes.

Tenants who feel that a landlord has incorrectly claimed 'substantial change' should first get in touch with their landlord and point out that they feel the exemption doesn't apply. The landlord should be given a chance to explain why they have used the exemption - and to resolve the matter. If the matter cannot be resolved however, the dispute can be referred to the RTB. This could lead to a tenant being awarded damages - or the rent being backdated..

Evictions

One of the main reasons a tenant may be reluctant to challenge a rent increase is the fear of getting kicked out. A tenant can be evicted for refusing to pay the rent - but a tenant cannot be evicted for refusing to agree to an unlawful rent increase. So should you believe that your landlord has incorrectly increased the rent, you are entitled to continue to pay your rent at the old rate and to stay in the property - as long as you refer the dispute to the RTB and comply with any ruling issued by the RTB (which might be a rent increase) after it has looked into the case.

Remember, landlords have rights too and landlords often seek rent increases to help cover the costs of renting out a property (such as the tax on rental income, mortgage repayments, and the cost of repairs). "If there is a dispute about a rent increase, then a tenant can bring a case [to the RTB] but continue to pay the uncontested amount of rent," said a spokesman for the RTB. "Tenants should always continue to pay their rent."

There are rules around evictions and a landlord could have to pay damages of up to €20,000 for the wrongful eviction of a tenant. An illegal eviction is where a landlord uses force, intimidation or other tactics (such as the changing of locks or cutting off the electricity or heating supply) to get a tenant out of a property.

"A landlord found by the RTB to have carried out an unlawful termination may be directed to allow the tenant re-entry into the dwelling and may be required to pay substantial damages to the tenant - depending on the circumstances of the case," said the RTB spokesman. "Landlords are urged to seek recourse though the RTB rather than taking the law into their own hands."

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