Q. A couple have been renting my one bedroom apartment for about two and a half years. I know I am entitled to raise their rent, as similar apartments in the same complex are on the market now for much more.
The apartment is in a very sought after area in Dublin 4. I’m currently renting the apartment to them at €1,150 and have seen similar one bedrooms apartment in that area being let for €1,450 and more. Since they have been good tenants and pay on time, I will ask for an increase of €200 a month, bringing their rent up to €1,350.
Is it necessary that I go through the process of giving proof of the comparable rents since it is so well known that they are paying below market price? If so, where would I get this information? I don’t think it is allowed to use asking prices listed on websites? Can you let me know the full procedure I should adhere to when raising the rent?
A. You are correct in charging the sitting tenants below the going rent, firstly because the advertised rents are not necessarily achieved and secondly tenants who have track record with you are much better then tenants with none. I would always take the view that the quality of the tenant is more important than maximising rent.
The answer to your question is yes, you will have to send out notices of rent increase in a predetermined fashion.
In December 2014 there were amendments made to the 2004 Tenancies Act and you have to serve a prescribed notice that sets out precise details of the rent increase.
This can be found on the Residential Tenancies Board (RTB) website. The said form is self-explanatory. At the foot of this notice you will see “ ‘amount of rent sought’ means the amount of rent specified for the letting of a dwelling in an advertisement the date of which falls within the period of four weeks immediately preceding the date on which this notice is served”.
In said notice you are legally obliged to state that “in your opinion the new rent is not greater than the market rent, having regard to the other terms of the tenancy and letting values of dwellings of a similar size, type and character to the dwelling that is subject to the tenancy and situated in a comparable area to that in which the dwelling the subject of your tenancy is situated”. These words are taken directly from the prescribed form.
The rent used as a benchmark is the rent quoted on advertisements and not the actual rents that are being achieved. This is one of many ironies, if not deficiencies to be found in the recent amendments.
Kersten Mehl, Chartered Residential Agency Surveyor and member of the Society of Chartered Surveyors Ireland, scsi.ie
