25 08 2021 Insights Real Estate

The Residential Tenancies (No. 2) Act 2021

Reading time: 3 mins

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President Higgins signed the Residential Tenancies (No.2) Act 2021 (the “2021 Act”) into law on 9 July 2021. The 2021 Act extends the temporary protection put in place to protect tenants who have been financially impacted by Covid-19 in addition to more significant and longer-term changes to landlord and tenant law.

Extension of Covid-19 protections

Section 2 of the 2021 Act extends the ‘emergency period’ as set out in the Planning and Development, and Residential Tenancies, Act 2020 (“PDRTA 2020”), by another six months until 12 January 2022. This will provide for enhanced protection for tenants financially impacted by Covid-19 from rent increases and tenancy terminations grounded on rent arrears.

Rent calculation and rent increases

Section 6 of the 2021 Act amends section 19 of the Residential Tenancies Act 2004 (the “2004 Act”) by replacing the 4% annual cap on rent increases within a Rent Pressure Zone (RPZ). Instead rent increases cannot now exceed general inflation as recorded by the Harmonized Index of Consumer Prices (HICP).

The 2021 Act provides that the Residential Tenancies Board (RTB) must establish and maintain a RPZ calculator to calculate any increase in rent. The RTB must also publish and keep up to date a table of HICP values published by the Central Statistics Office (CSO) on an ongoing basis. It is important to note that Section 6 of the 2021 Act entered into force on 16 July 2021, later than other sections of the Act, which means that any lease or licence agreements entered into from 16 July 2021 as well as any notices of a rent review issued from this date are subject to the new rules brought into effect under Section 6 of the 2021 Act.

In addition to these changes, Section 8 of the 2021 Act extends the current RPZ designation until 31 December 2024 by way of amendment to section 20 of the 2004 Act.

Deposits and advance rent payments

Section 7 of the 2021 Act amends the 2004 Act and seeks to address practices where tenants are charged excessive amounts when seeking to secure a tenancy.

There are now limits on the amount landlords can require anyone to pay to secure a tenancy:

  • A deposit cannot exceed more than one month’s rent; and
  • An advance payment of rent cannot exceed one month’s rent.

In other words, landlords cannot ask anyone to pay more than the equivalent of 2 months’ rent in total to secure a tenancy.

A tenant may, if they so wish and with the agreement of the landlord, make an advance payment of rent which exceeds one month’s rent but there is no obligation on the tenant to do so.

Notice Periods

Section 13 of the 2021 Act amends the 2004 Act such that tenants in student accommodation are only required to give 28 days’ notice to the landlord if they want to terminate their tenancy.

The notice periods required to be given by a landlord are unaffected by the 2021 Act.

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