The Residential Tenancies Act ( RTA ) is not easy to navigate. There have been succesive amendments to the RTA since it's enactment in 2004, the most recent in 2019. It is only this year in 2020 that a consolidated version of the RTA has been published.
Opinion on the RTA still varies throughout the industry and those who have contacted the RTB for advice on the RTA can testify that they have received different answers to the same question depending on the day. This is a measure of the complexities involved.
In addition to the RTB, the RTA created a juducial system that deals with disputes. At the time of writing, Adjudicators and Tribunals could not be guided by the RTB in their judgements, which in some cases have been conflicting with prior judgements about the same issue.
As software developers we have to provide a lease administration system to the industry. To provide a system you need to understand the rules under which that system can operate. We have been guided in most of our analysis of the RTA by Tribunal Judgements. The Tribunal is the highest authority before the High Court ( which is seldom accessed for Residential Tenancy disputes ). Where necessary we have written to the RTB for their opinion on a Tribunal Judgement.
An example of this was after a huge decision was reached by the Tribunal in 2016 in a dispute over a rent review. In a technical reading of the original RTA 2004, the Tribunal decided that a change of rent could only occur after 12 months and 90 days from the start of the tenancy in the case of RPZ properties and after 24 months and 90 days from the start of the tenancy in the case of non RPZ properties. The rent review and the change of rent were not the same thing. This was a complete split with the Industry's understanding that a rent review and a change of rent were the same and it is still is not understood by many landlords and tenants today.
Our Tenancy Administration Strategy is discussed below. A larger analysis of the Residential Tenancies Acts is discussed in another blog.
Lease Administration Strategy
The single most important factor that has required the changes to Lease Administration in Ireland and Letman, is the confirmation that the ‘rent review’ and the ‘change in rent’ are not the same. A change of rent takes place after the Landlord has undertaken an exercise to ascertain the appropriate rent ( a rent review ) and serves the Notice of Rent Review. The sequence is .. a Rent Review, A Notice of Rent Review and then the Change of Rent. The Change of Rent cannot be "agreed" by a new lease, the change of rent can only happen on foot of the Notice of Rent Review.
The change of rent, when and by how much is subject to legislation and a Notice of Rent Review ( rent review notice ), NOT the lease.
This single factor makes it impossible for the administration of consecutive traditional 12 month "leases" or "lease renewals" that attempt to set the rent every 12 months.
The Residential Tenancy Acts establishes amongst other things the minimum in Security of Tenure. After six months, you can only give a tenant notice to vacate under certain conditions. Anyone involved in the letting of a residential property must accept the potential of tenancy that simply continues.
The lease confirms the Tenancy Commmencement Date ( TCD ) and the initial rent ( and if in an RPZ, how it is set ). You can also add Terms and Conditions to a Tenancy and this has always been done through the Lease. These terms and conditions continue for the life of a tenancy and only change by amendment.
The Fixed Term
That leaves us with the concept of the Fixed Term, and ‘the landlord wants to let the property for 12 months’. The Landlord can’t really do this as they must accept that the Tenancy can simply continue. We have also advised that another Fixed Term Lease cannot confirm or set the new rent. That is subject to Legislation and a separate ‘Notice of Rent Review’. That leaves only one other possible reason to agreeing a Fixed Term of say 12 months which is to increase the security of tenure for the period. The Fixed Term then, is just another term / condition of the Lease, nothing to do with rent, and can only serve to confirm the tenant can not up and leave for that period ( and probably, the landlord cannot exercise the conditions to regain possession ).
- The minimum of Security of Tenure is guaranteed under Law. A tenancy may exist without a lease.
- A change of rent is on foot of a Notice of Rent Review and not on foot of a new lease agreement.
- The purpose of the Fixed Term Clause can only therefore be to agree greater security of tenure for the landlord and the tenant within a tenancy. A tenancy can exist with or without a Fixed Term Clause in the Lease Agreement.
The basis of our logic and a history of the legislation with reference to Tribunal Reports and correspondence is contained in our synopsis of the Residential Tenancies Legislation.