'Cheap' rents still subject to 4pc hike limit
Landlords who have previously given a good deal to tenants will be forced to charge the same amount - subject to a maximum 4pc increase - to new tenants.
The Department of Housing has confirmed rent certainty measures in the Government's 'Strategy for the Rented Sector' would effectively freeze rents once the legislation was passed.
Only where the property was being let for the first time, or subject to extensive refurbishments, could the market rent be charged.
"They (the landlord) are bound by the 4pc limit for the new tenant," the Department of Housing said. "So the rent for the new tenant can't be any more than 4pc higher than it was for the last tenant."
Housing expert Tom Dunne, from DIT, a former chair of the Residential Tenancies Board, said this effectively punished landlords who may have allowed tenants to pay a rent below the market rate.
"This system is going to punish good landlords who didn't bother their tenants," he said. "There's a load of landlords out there who made a decision not to increase rents because they knew the tenant was hard-pressed and there was a danger the tenant would be gone. Now, those people have been caught.
"If the property can only be rented at 4pc plus 90pc of the market rent, there will be big queues because you're getting a property being leased at a lower rent than the market rent."
It comes after housing charity Threshold said it had received reports from around 100 tenants in Dublin advising they had been asked to pay higher rents after the rent controls were announced this week.
Chairperson Aideen Hayden told RTÉ News in a "lot" of cases, landlords were attempting to pre-empt the legislation and put up rents in advance.
But the new rules state that in the so-called rent pressure zones of Dublin and Cork cities, to be followed by the cities of Galway, Limerick, Waterford and some commuter towns in mid-January, tenancies which commenced before the provisions come into force are subject to review every two years from the date they were signed, to be followed by annual reviews thereafter. When the tenancy begins after the new provision comes into force, the reviews are annual.