Update on the Residential Tenancies (Amendment) Act

September 2019

The Residential Tenancies (Amendment) Act 2019 (the “Act”) was signed into law on 24 May 2019 amending the Residential Tenancies Acts 2004 to 2016 (the Residential Tenancies Acts). Many of the provisions the Act have since come into effect.

The Act provides changes to rent control, termination of tenancies, registration of tenancies and dispute resolution. Certain provisions of the Residential Tenancies Acts, including those in respect of rent control, registration of tenancies and dispute resolution, by virtue of the Act, now apply to student accommodation let under licence by private sector or let under licence or tenancy by educational institutions.

Student accommodation

Previously, in the student accommodation sector, where licensing arrangements were typically used and those licences fell outside the application of the Residential Tenancies Acts. The Act shall now affect licences created on or after 1 month from commencement of the relevant section in respect of student accommodation provided by both public educational institutions and private providers for the purpose of housing students during academic term times and therefore has major implications for that sector as they will now be subject to the rent controls under the Act where located in Rent Pressure Zones (RPZ).

For the purposes of the relevant provision in the Act, the definition of ‘dwelling’ includes a ‘residential unit (whether or not self-contained)’. This is intended to capture communal and co-living student accommodation where a bedroom only is let or licensed to a student.

RPZ designations

The duration of current RPZ has been extended to 31 December 2021 and the criteria for designating RPZ outside Dublin has been changed.  Further details of those changes can be found on Residential Tenancies Board (RTB) website.

New Notice periods

The Act provides for new notice periods for landlords which provide further protection to tenants.

Notice periods for tenancy terminations by landlords have been lengthened as follows in the table below:

Duration of tenancy New Notice Periods
Less than 6 months 28 days (unchanged from prior notice periods)
6 or more months but less than 1 year 90 days (increased from prior notice periods)
1 year or more but less than 2 years 120 days (increased from prior notice periods)
2 years or more but less than 3 years 120 days (increased from prior notice periods)
3 years or more but less than 4 years 180 days (increased from prior notice periods)
4 years or more but less than 5 years 180 days (increased from prior notice periods)
5 or more but less than 6 years 180 days (increased from prior notice periods)
6 or more but less than 7 years 180 days (increased from prior notice periods)
7 or more but less than 8 years 196 days (unchanged from prior notice periods)
8 or more years 224 days (unchanged from prior notice periods)

Revised Termination Provisions

The Act includes additional requirements where terminating a tenancy, including on some of the grounds summarized as follows (i) on the grounds of a sale (ii) where the landlord requires the property for personal or family use and (iii) termination on the grounds of a substantial change and (iv) where the use of the property is to be changed.

Termination on the grounds of sale

The Act extends the period, where a tenancy is terminated because the landlord intends to sell the dwelling, within which a contract for sale must be signed has increased to 9 months (previously 3 months). However, if this does not occur, the landlord will be obliged to re-offer the property to the former tenant providing that the tenant has given the landlord their contact details.

Termination for reason of occupation by landlord or landlord’s family member

The Act provides that where a tenancy has been terminated on the basis that the landlord requires the property for their own occupation or that of a family member and where the landlord or family member then vacates the property within 1 year (previously 6 months), that property must be re-offered to the former tenant. Again, this is providing that the former tenant has given the landlord their contact details.

Termination on grounds of a substantial change to the property

The Act provides that where a tenancy has been terminated on the basis that the landlord intends to carry out a substantial change, the property must be offered back to the former tenant on completion of the renovation works if the property becomes available for reletting and providing that the former tenant has given the landlord their contact details.

Notices of termination, where the landlord intends to carry out a substantial change, must also contain or be accompanied by a certificate in writing of a registered professional (within the meaning of the Building Control Act 2007 as amended) stating that (i) the proposed refurbishment or renovation works would pose a threat to the health and safety of the occupants of the dwelling concerned and should not proceed while the dwelling is occupied, and (ii) such a risk is likely to exist for such period as is specified in the certificate which shall not be less than 3 weeks.

The meaning of what constitutes a “substantial change” has been clarified as this was not previously defined and was therefore open to broad interpretation. In order to qualify as a ‘substantial change’, the change must involve either (i) a permanent extension to the dwelling increasing the floor area by at least 25% or (ii) an improvement in the Building Energy Rating (BER) by seven or more ratings, or (iii) at least three of the following:

  • A permanent alteration to the internal layout;
  • An adaptation for use and access by persons with a disability;
  • A permanent increase in the number of rooms;
  • An improvement in the BER by three or more ratings, where the BER is D1 or lower; and
  • An improvement in the BER by two or more ratings, where the BER is C3 or higher.

In all cases, the works involved must not consist solely of works that a landlord is obliged to carry out in accordance with its repairing obligations under the Residential Tenancies Acts.

Some critics of the Act, have pointed out that it may not be possible for properties which are protected structures to avail of the “substantial change” exemption.

Termination on grounds that the use of the property is changing

A tenancy can be ended, if the landlord intends to change the use of the property, for example, the landlord intends to change from a residential use to commercial use. If a property becomes available for reletting within 12 months of the termination on grounds of change of use, a landlord will be obliged to offer the property back to the former tenant and providing that the former tenant has given the landlord their contact details.

Additional Requirement to serve a copy of the termination notice

Under the Act, Landlords are now obliged send a copy of the termination notice to the Residential Tenancies Board (RTB) no later than twenty-eight days after the expiration of the notice period.

RTB powers and Dispute resolution

The RTB has been granted extensive new powers, under the Act, empowering it to investigate and sanction landlords who engage in improper conduct. New offences for breaches of the new provisions have been provided along with a definition of “improper conduct” which includes:

  • failure by a landlord to comply with tenancy registration requirements;
  • failure to comply with rent increase restrictions in RPZ;
  • failure to offer back a dwelling to a tenant following termination of their tenancy; and
  • providing false or misleading reasons for terminating a tenancy.

NEW Sanctions – including criminal offenceS

New Sanctions for improper conduct can include a penalty of up to €15,000. Non-cooperation with the RTB or furnishing false or misleading information to the RTB in connection with an investigation constitutes a criminal offence which can lead to a fine of up to €50,000 and imprisonment for up to 5 years.

RTB fees

Additional fees including annual fees and additional filing requirements are due to come into effect in 2020.

Conclusion

This Act has been described by some as pro-tenant and the changes are in line with the Government’s long-term strategy to increase security of tenure for tenants and alleviate concerns surrounding the current housing crisis.

 

For further information please get in touch with your usual Whitney Moore contact, Barry Heslin or any member of our Real Estate team.

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