The recently announced reform to outdated rent laws aims to right an unconstitutional law that bars landlords, whose property has been rented out before June 1995, to refuse lease renewal or increase rent to reflect market rates. Claudia Calleja looks into what this reform – set to impact some 10,000 families – is promising.
‘My family own a property that has been rented out to tenants for decades for a pittance. Can I finally increase rent to reflect market prices? Alternatively, can I kick them out?’
The new reform allows landlords to increase the annual rent up to two per cent of the property’s market value. But, no, you cannot ask tenants to leave if they do not exceed the maximum thresholds set in the means-test regulations. While it protects the present tenants, protected rents will not be inherited and the properties will soon return to their owners. Heirs will have five years to find suitable accommodation. The Housing Authority offers various home-ownership schemes.
‘Who will decide how much rent I will have to pay?’
The amount of rent due will be established by the Rent Regulation Board, which will appoint an independent architect to value the property in question and ensure that the annual rent does not exceed two per cent of the property’s market value.
‘I have been renting a property for 40 years. Even though I work, I will not afford any increase in rent. Will I be kicked out if I can’t afford it?’
You are protected because a housing benefit will cover the largest share of the increase in rent up to €10,000 yearly. Since you are in gainful employment, you shall benefit from the rent subsidy issued by the Housing Authority ensuring you don’t fork out more than 25 per cent of your income on rent, with the difference between this amount and the new rental fee being covered by the subsidy.
‘The new reform says government will help by subsidising my rent. For how long will I receive this assistance?’
Under the reform, the government will continue subsidising your rent until the expiry of the lease arrangement or your death, whichever happens earlier.
Protected rents will not be inherited and the properties will soon return to their owners
‘I am a pensioner. I can’t afford any form of rent increase. What will happen to me?’
Pensioners are fully protected. Pensioners and social welfare beneficiaries will have any rent increase covered in full by the state up to a maximum of €10,000 per year, per family.
‘But what happens if the rent I owe now exceeds €10,000 yearly in state support? Will I lose my home?’
In these cases, you may continue renting the property despite the rent exceeding the maximum state subsidy capping if you feel you have the means to support this arrangement. Alternatively, you may decide to vacate the property and subsequently seek assistance from the Housing Authority.
‘I own a seafront property worth over €500,000 and I know my tenants will not afford to pay more rent. Can I ask them to leave?’
If your tenants does not exceed the maximum thresholds set in the means-testing regulations, the Rent Regulation Board will set a new rent which reflects the maximum value of two per cent of the property market value of the dwelling – in this case a maximum of €10,000 per year. However, if the tenants cannot afford to pay the fair price set by the board and default on their rental payments, you may petition the board. In such cases the government will help them find affordable accommodation within a reasonable period of time.
‘This is all so complicated. Where can I go for advice?’
As a start you can call freephone 153. However, you can also get assistance and free legal advice by visiting a new department to be set up within the Housing Authority.
‘When will the rent reform come into force?’
The rent reform was presented in parliament on March 1 and is expected to come into force in the latter half of this year. Government has said these amendments will ensure everyone has a decent roof over their head and that landlords receive a fair return.