Landlords ordered to withdraw threat of extra charges as rent cap comes in
Landlords have been slapped down by the Competition and Consumer Protection Commission (CCPC) after threatening to hike tenants' charges in lieu of raising rents.
The Irish Property Owners Association (IPOA) has been ordered to retract a press statement issued in December where members threatened to withdraw from State-sponsored rental schemes, impose service charges and registration fees and ask tenants to contribute to the Local Property Tax, which must be paid by owners.
The threat came after the Government introduced limits on rental increases in so-called 'rent pressure zones' aimed at tackling the high cost of renting a home.
Areas where rents can only be increased by 4pc a year are those where the average rent is above the national average, and prices must have increased by 7pc in four of the previous six quarters.
The IPOA's statement prompted the CCPC investigation which launched in December. It said that competition "expressly forbids" a trade association from co-ordinating the business conduct of its members, including the terms and conditions under which they are prepared to supply a product or service.
The IPOA has been told to make no further reference to the statement, either publicly or among its 5,000 members; to inform members that it has been retracted and to introduce a competition law compliance training programme.
CCPC chairperson Isolde Goggin said: "The CCPC views any attempt to co-ordinate business conduct very seriously as invariably consumers will suffer. Following the release of the IPOA's media statement in December 2016, we opened an investigation and we have worked with the IPOA to bring about an effective and efficient resolution. The commitments provided by the IPOA allow for a swift conclusion of our investigation and importantly, ensure the IPOA's commitment to fostering a culture of competition law compliance within its organisation and membership."
Under competition law, pricing and the setting of rent and other charges is a matter for each individual landlord.
In 2011, the Competition Authority, a legacy organisation of the CCPC, intervened following the IPOA's recommendation to its members that they should pass on the Household and Non Principal Private Residence (NPPR) Charges to tenants.
Afterwards, the IPOA withdrew its recommendation and issued a clarification stating pricing is a matter for individual landlords and their tenants.