Rents Go Up – But Could They Also Come Down?

Lasma Rasimes has little or no money left after she pays her rent and electricity bill.

The former shop worker, who suffers from serious back pain so can’t work, gets €220 a week on an invalidity pension – so, €880 most months.

She lives in a privately owned apartment, and her rent is subsidised through the government’s Homeless Housing Assistance Payment (HAP) scheme, which pays €990 a month.

Each year her rent has gone up by the 4 percent allowed by legislation that designated Dublin as a “rent pressure zone”.

She was already struggling before last December, when her landlord hiked the rent up to €1,690 a month.

That left Rasimes topping up the €990 the council pays with €700 of her own money – while also paying the council €25 a week, leaving a little for electricity.

Not all the tenants in her neighbourhood are paying so much rent. Recent online adverts for one-bedroom apartments that look the same size as hers, she says, in the complex next door show rents of €1,300 to €1,400.

Rasimes can’t easily move to a cheaper apartment, though, because she will only be entitled to a lower rent subsidy – the regular HAP rate, rather than Homeless HAP this time – if she does.

But those lower adverts do raise the question of whether she could approach her landlord for a downward rent review later this year, if they indicate a lower, or falling, market rents.

What Is the Market Rent?

Across Dublin city as a whole, rents for one-bed and two-bed apartments fell slightly between the middle and end of last year, shows the RTB’s rent index – although they were still up slightly compared to the same period the previous year.

It’s unclear what the trend has been since then. The next quarter of figures aren’t yet out.

Four recent online adverts show asking rents of between €1,300 and €1,400 for apartments similar to Rasimes’ one-bed and right by hers.

If her rent dropped to that, it would make a massive difference – leaving her with as much as €390 after paying rent each month, rather than the less than €100 she has left over now.

Rasimes gets most of her food from charity-run food centres, like the Capuchin Centre in Smithfield.

In her 50s, Rasimes’ main concern is avoiding homelessness. “I am just happy I have a roof over my head,” she says. “I don’t want to go into a homeless shelter.”

She wasn’t aware she could challenge the rent herself, but now that she knows, she is thinking about taking a case to the RTB, she says.

Within rent pressure zones like Dublin, there are rules around how rents can be set.

“The rent set for the property, including any proposed increase, must not be greater than local market rents for comparable properties,” says a spokesperson for the Residential Tenancies Board (RTB).

To establish the market rent in an area, “landlords must show three comparable properties which have been advertised for rent in the previous four weeks of them serving the notice of rent review”, she says.

When disputes around rent reviews go before the RTB, parties often offer three online adverts as evidence of the market rent.

“If someone, landlord or tenant, does not believe the rent review is in line with market rent, they can apply for dispute resolution with the RTB, and an independent adjudicator will determine whether the three comparables are valid and in line with market rent,” says the RTB spokesperson.

The spokesperson didn’t say what criteria the adjudicator would use to assess this, if say, both parties could produce adverts showing different asking rents in an area.

Rasimes didn’t fight the rent increase last December. It was in line with the rule that rent increases can be no more than 4 percent a year in rent pressure zones.

She didn’t know that the resulting rent also had to be in line with market rents in her area too, she says.

She may not be the only one, according to John-Mark McCafferty, chief executive of the housing advice charity Threshold.

“It may be the case that landlords and tenants do not realise that the rent increase in a RPZ must still be reflective of market rent,” he said.

Can Tenants Bring Rent Reviews?

By law, if the lease doesn’t provide for a rent review “either party may, subject to section 20, require a review of the rent”.

Section 20 stipulates that a rent review can’t happen more than once every 12 months.

There’s little information on the RTB website, though, as to how tenants who want to prompt a rent review, can do it.

“A rent review is a process where a landlord or tenant seeks to change the amount of rent being charged to a property,” it says.

All the information about rent reviews on the RTB website assumes that the review is being brought by the landlord.

A spokesperson for the RTB says that tenants can push for rent reviews, but it is the landlord that has to do the review.

McCafferty, of Threshold, says a tenant can bring a rent review, “Subject to the same time limits as landlords”.

“While tenants rarely seek rent reviews, there is nothing to prevent them from doing so,” he said.

“If a tenant is thinking about seeking a downward rent review, they can ring Threshold to speak to an advisor about their individual circumstances, as each tenancy has its own merits.”

Disputing Rent Increases

Just as tenants seeking downward rent reviews may be very uncommon, so too are cases of tenants going to the RTB to dispute rent increases they say are excessive.

Tenants can dispute rent increases if they are more than the market rent, says the RTB spokesperson.

But not many do. According to the 2019 RTB annual report, the issue was raised 168 times, accounting for 3 percent of the disputes that year.

But tenants can challenge rent increases if the rent asked is too high compared to other similar properties.

They can demonstrate this using online adverts to show what the market rate is, says the RTB spokesperson.

The landlord has to give 90 days’ notice of the rent review and the tenant should challenge the increase within that time, she says.

What’s listed in adverts on Daft.ie can be higher than the actual rent, though – as the prices given on Daft can include not only the rent, but also fees for things such as car parking.

Peter Dooley, who runs the Dublin Renters Union, says the legislation requires additional clarity around determining what the market rent is.

Even with that clarity, though, there’s still the power imbalance to reckon with.

Most tenants don’t challenge rent increases even when they know the increase exceeds the going rate in their area, Dooley says, because they are scared.

“It is like a black mark against you if you challenge your landlord,” he says. “People need references to move on.”

McCafferty, of Threshold, also said tenants tend to try to avoid disputes with their landlords.

“Tenants can be fearful of entering into disputes with a landlord as they do not feel secure in their tenancy and believe it can be ended,” he said.

That’s according to research conducted by Michael Byrne and Rachel McArdle, academics at University College Dublin, in partnership with the charity.

“Tenants’ agency is limited by the absence of security of tenure and a lack of available alternative accommodation,” says McCafferty.

Some tenants fear that their landlord will penalise them if they bring a case to the RTB, he says.

“The report findings suggest that this fear is to some degree grounded, with a third of our sample experiencing retaliatory or penalizing action from their landlord,” says McCafferty.

Still, while they are rare, Dooley says he has seen cases where tenants successfully disputed rent increases at the RTB.