You would be forgiven for thinking that Rent Certainty has had a positive impact on the rental market. Well the truth is that it has had the opposite effect and helped fuel rental increases.
To recap, Rent Certainty was brought in by the then power hungry minister Alan Kelly to give security to tenants. An election was looming, votes where there to be bought and the spin doctors were working overtime. Every Landlord was a rogue Landlord providing sub standard accommodation. Landlords were only interested in generating as much income as possible even if it meant making tenants homeless. Tenants were the good guys and could do no wrong.
The reality is there are some really bad Tenants and equally bad Landlords out there providing accommodation that’s not fit for animals and Tenants acting like animals in what were beautiful properties. Thankfully this type of Landlord and Tenant is in the minority. So, if it is only a minority of Landlords who are greedy then how has there been nearly double digit increases each year over the last number of years and a 9% increase (daft report) since the introduction of rent certainly? Well, you know the answer and the dogs on the street know the answer…supply, supply, supply. Demand far outstrips supply and this has been the case for the last number of years.
Pre Rent Certainty a typical Landlord was happy to sign a 12 month or longer lease with a Tenant, having reviews every 12 months. While reviews did take place, rents were sometimes left unchanged, marginally increased or they reflected the market rent. Rents below the market rent were not unusual. Landlords knew the value of having a good tenant and a rent below the market level can be more profitable than a market rent as there tends to be less void periods and reduced maintenance costs.
With the introduction of rent certainty a landlord is now forced into making a decision that he or she may not be comfortable with. Rent can now only be reviewed every 24 months and 90 days notice must be given to the tenant; therefore rent can only be increased every 27 months (give or take a few days). In the past a landlord had the ability to budget every 12 months and allow for decreases/increases in costs such as maintenance, mortgage payments, insurance, property tax, etc. Rent Certainty now means that a landlord has to factor in costs that may or may not materialise in the future, ultimately resulting in a higher then required rent increase.
Blame for rent increases should not be placed on Landlords. The Government must take ownership of the crisis, provide proactive solutions, build more properties, encourage investment in the industry, offer incentives for landlords so there are enough properties for tenants to live in and call their home.
Tenant Ready – No Let, No Fee, No RTB Fee, Simple.