Rent rule flaws exposed as State-backed landlord hikes tenants' rent by 6pc
Landlord uses exemption to beat 4pc cap in pressure zones
Serious flaws in the State's housing policy have been exposed after a State-backed landlord hiked tenants' rent by 6pc.
The apartment block is located inside one of the country's so-called rent pressure zones, where landlords must cap rent increases at 4pc per annum, and is funded by the State's Ireland Strategic Investment Fund (ISIF).
In addition, the landlord of the New Bancroft Centre in Tallaght, Dublin, has admitted breaching legislation by carrying out rent reviews too early.
The landlord is an entity called the DAD Property fund. The State has invested €8m via an entity known as the ISIF - formerly the National Pensions Reserve Fund.
The landlord is using an exemption in the legislation to impose 6pc rent hikes on tenants. The landlord says it is entitled to do this because the property is a new-build development.
The law says that a property that is new to the rental market and has not been let in the two years prior to the tenancy can be exempt from the 4pc cap.
In addition to the 6pc hike, the landlord issued a rent review notice outlining the increase less than a year into people's tenancies. It has admitted now that this was wrong.
"The timing of renewal notices has been raised with us and is already being addressed. Our legal advice was that rent reviews could be issued 90 days before the one-year anniversary of the lease," a spokesperson for the DAD property fund said.
"We were recently made aware the Residential Tenancies Board's interpretation of the legislation is that rent reviews are to be issued at the one-year anniversary. We welcome this clarification and are writing to all tenants who were issued rent reviews to acknowledge the required change."
A spokesman for the ISIF - the State vehicle which invested in the landlord - said it expected all the companies it invests in to comply with their legal and regulatory obligations. The spokesman said ISIF was "raising this matter with this fund".
The Residential Tenancies Board (RTB) - the body responsible for resolving disputes between landlords and tenants - said it could not comment on the details of individual cases.
But it added that last year 77pc of all notices of rent review that it made a determination on were invalid.
The RTB said it would encourage "any existing, or new tenants, who are faced with increases over and above the 4pc cap to refer a dispute to the RTB, and the same applies to tenants entering a new tenancy.
"Even if a tenant has agreed to a rent in excess of the limit and signed a tenancy agreement, they are still protected under the law; they cannot contract out their rights. If a landlord has been found to have not adhered to the limits, it can have significant consequences and damages of up to €20,000 can be awarded as well as repayment of the additional rent."
A third issue with the rent review notices related to a legal requirement to provide rents levied on similar properties.
The law states rent review notices "shall" provide rent details of three properties of a similar type, situated in a comparable area. A notice seen by this newspaper provides details for two properties - with the third property described as "not available at this time".
The landlord said: "Only two examples of rents for dwellings of a similar size were provided because there were no other appropriate benchmarks available in the area at the time the letter was being issued."
It said it was "committed to delivering well-managed accommodation to our tenants with whom we aim to build long-term relationships".