One point though, evasion of the rent caps may not be as common is thought. From reading landlords’ forums, they don’t seem to increase the rent for ‘good’ sitting tenants. It is too much hassle, annoys the tenant and the increase is hardly worthwhile anyway (rent of €2,000 x 2% = €40 gross, €20 net after tax).
Therefore, they increase the rent when the tenant leaves and are entitled to backdate it. This works as follows:
1. Tenant has been in situ for three years (average length of leases, apparently) and leaves
2. Rent not increased during that period
3. Landlord now entitled to impose a 6% increase on the new tenant
4. This then seems to come across in the statistics as a 6% increase on a new tenancy– it is not, it is a backdated 2% per annum increase
Now I’ve no idea how frequent this practice is and there is nothing stopping the landlord in the above example taking the 6% which he or she is entitled to and lumping a further 20% on top of that. All I am saying is that both the RTB and the Daft.ie statistics may not be granular enough to work out exactly what is going on – some of the increase may be this ‘backdating’.
Hi Rose, sorry for the delayed response. Thanks for pointing this out, that is a very interesting example of the complexity of analysing the non-compliance issue. The ESRI use property level micro-data to analysis the impact of RPZs, and even then they discuss how it is very hard to identify non-compliance with any degree of certainty.
Thanks again for your excellent post.
One point though, evasion of the rent caps may not be as common is thought. From reading landlords’ forums, they don’t seem to increase the rent for ‘good’ sitting tenants. It is too much hassle, annoys the tenant and the increase is hardly worthwhile anyway (rent of €2,000 x 2% = €40 gross, €20 net after tax).
Therefore, they increase the rent when the tenant leaves and are entitled to backdate it. This works as follows:
1. Tenant has been in situ for three years (average length of leases, apparently) and leaves
2. Rent not increased during that period
3. Landlord now entitled to impose a 6% increase on the new tenant
4. This then seems to come across in the statistics as a 6% increase on a new tenancy– it is not, it is a backdated 2% per annum increase
Now I’ve no idea how frequent this practice is and there is nothing stopping the landlord in the above example taking the 6% which he or she is entitled to and lumping a further 20% on top of that. All I am saying is that both the RTB and the Daft.ie statistics may not be granular enough to work out exactly what is going on – some of the increase may be this ‘backdating’.
Hi Rose, sorry for the delayed response. Thanks for pointing this out, that is a very interesting example of the complexity of analysing the non-compliance issue. The ESRI use property level micro-data to analysis the impact of RPZs, and even then they discuss how it is very hard to identify non-compliance with any degree of certainty.