Landlords in "rent-pressure zones" (RPZs) – where rents may increase only by up to 4 per cent a year – are "getting around" legislation by describing minimal maintenance work, like repainting or new carpets, as "substantial" renovations, according to the housing charity Threshold.
This new trend "directly correlates" with the introduction of RPZs by the former housing minister, Simon Coveney, in 2016, and is being used as a way of increasing rents by up to 10 times the permissible rate, said the charity.
A RPZ-designation is intended to moderate rent increases in areas of very high housing demand. The measure is included in the 2016 Planning, Development and Residential Tenancies Act.
Landlords in a RPZ can, however, increase the rent by more if a “substantial change” has been made to the property that would increase its market value. They may also terminate a lease if they plan substantial renovations.
Dr Aideen Hayden, chairwoman of Threshold, also warned that whole communities of poorer households were being priced out of areas where they had always lived. Landlords, she said, were finding ways to "weed out" poorer families. This "gentrification" could see whole areas "taking on completely new social profiles" and was an attack on equality.
Pre-budget submission
She was speaking at the publication of Threshold’s pre-budget submission on Thursday which is calling for significantly increased rights for private sector tenants – particularly the poorest households – as well as measures to help smaller landlords remain in the sector.The charity says smaller landlords are far more likely to provide housing to poorer households than large-scale investment trusts are.
Last month Threshold conducted a “flash survey” of 100 calls about tenancy termination to its helpline over a two-week period. Some 85 per cent were from tenants, while 15 per cent were from landlords.
While the most common reason landlords gave for termination was sale of the property (41 per cent), followed by the fact that they or family were moving in (19 per cent), a new reason was “renovations” (12.5 per cent).
Threshold has recently seen tenancies terminated on this ground, minimal works carried out and then the same property re-let at a significantly increased rent. In other cases landlords have demanded substantial rent increases of up to 40 per cent on the basis of minimal works.
“We have serious concerns that the exemptions to the RPZ legislation are not being adequately policed.”
The charity gave an example of a tenant in Cork who was told their rent was increasing by 30 per cent, from €850 to €1,100 per month as the carpet had been replaced and the property repainted.
In another case, in Dublin, a landlord sought an illegal rent increase, from €2,500 to €3,200 per month. When the tenant challenged it the landlord said there would be “substantial renovations”. These were maintenance rather than renovation, said Threshold, consisting of a new boiler and repainting.
Back door
“Obviously [this clause] is being used as a back door around the legislation,” said Dr Hayden. “It really does need a robust clarification. Substantial renovations have usually been interpreted to mean renovation where you’re required to have planning permission. Really it’s about avoidance. It’s a scam.”
Rents looked likely to continue increasing for a number of years, and Dr Hayden said this risked poorer families being pushed out of communities where they had always lived. In the main evictions now were "economic", she said.
“It is the most vulnerable who are most at risk. We have never had so many homeless children in this country, I think since Famine times. A fair society protects the most vulnerable.”
