What happened to the Housing Minister’s crackdown on rent-control breaches?

In September 2021, as official figures showed a nationwide jump in new rents of 7 percent year on year, Housing Minister Darragh O’Brien seemed to come out swinging.

“[H]e has requested the Residential Tenancies Board (RTB) to initiate a targeted campaign to aggressively identify and pursue non-compliance with rent-setting responsibilities,” said a statement on his website.

But an RTB report on the subsequent campaign – the second phase of which was axed – shows how the agency had difficulty carrying that out based on the data it held, and the convoluted process it went through.

In response to O’Brien’s ask, the RTB – whose remit includes policing rent-control laws – posted 2,736 letters to landlords, who, based on its internal data, were suspected of breaches, shows a write-up of the subsequent campaign sent to the Department of Housing.

It first asked those landlords to check the registered rents.

But it wasn’t always certain that tenancies related to the same addresses, given data-entry errors and omissions, the report suggests. So, “the tone used in the letter was reflective of the uncertainty relating to the system-matched data”.

After that the RTB looked at how landlords responded, and parsed the data to take account of when the RTB got its investigation powers and changes in rent-control laws – and to strip out likely breaches where the rent increase was less than €50 per month.

Most landlords the RTB sent these letters – 56 percent – did not respond at all. The RTB recommended in its report that it follow up on these 1,556 cases.

It also recommended, in March 2022, that it look further into 79 cases and authorise a formal investigation for those considered “viable”.

A spokesperson for the RTB didn’t directly address a query as to the outcome of those 79 cases, and whether it had followed up on those 1,556 cases.

A spokesperson for the Department of Housing said: “The campaign was thorough and robust, as requested by the Minister.”

Social Democrats TD and housing spokesperson Cian O’Callaghan said that the way the campaign ran shows the difficulties that the RTB is having when it comes to using its data and enforcing compliance with rent-pressure-zone laws.

“It really shows they are struggling with it,” O’Callaghan said.

An RTB spokesperson said the body plans this year to review how its compliance activities are coordinated and managed, as part of its new regulatory risk framework.

“Including how information of all types (from internal and external sources, including media reports and other public bodies) is gathered, analysed, risk-rated, and used to inform timely compliance action,” they said.

It also intends to implement a revised compliance and enforcement policy this year, they said, with “revised processes, procedures and performance metrics”.

They didn’t, though, directly address a query as to whether its new online portal and data system, RTB360, is able to flag likely rent-increase breaches based on the rent data that landlords have to enter.

Rising Rents

Last week, the RTB put out data showing that the average rent in new tenancies rose 6.7 percent nationally between the third quarter of 2022 and the same point in the year previous.

For Dublin city, the rise was 5.8 percent.

Since December 2021, the law has capped annual rent increases within rent pressure zones like Dublin at 2 percent a year, or the rate of inflation, whichever is less.

From July until December 2021, the law had capped increases at the rate of inflation which up to July had been low and stable but then began to climb.

It is impossible to say how much of that annual 5.8 percent rise in rent in the city is down to landlords not complying with the rent-pressure-zone laws, and hiking rents more than allowed.

The RTB stresses when it puts out its rent index data that this is based on newly registered tenancies, rather than existing tenants. That includes properties let for the first time, those not let for two years and so exempt from rent-cap rules, and new tenancies in existing properties.

Rent-increase caps apply between tenancies in the same property so – unless a landlord is claiming an exemption – rental inflation in existing properties shouldn’t go above what is allowed under the law.

Properties not let for two years, and those let for the first time are likely to have higher rents and aren’t subject to the RPZ rules, and so weight the figures towards higher rent inflation, said O’Callaghan, the Social Democrats TD.

“That might explain some of the increase over and above 2 percent,” he said. “But it doesn’t explain the full increase.”

Zak Murtagh, a legal officer at Threshold, said that the housing charity is disappointed to continue to see rents exceeding what is permissible under the legislation.

“Our hope is that the RTB is adequately resourced and committed to using the full range of its powers to pursue those who do not comply,” he said.

Step One

According to the RTB’s report on its compliance campaign, it focused on a dataset of 2,900 records processed by ESRI for economic research

Because it was made for economic research, the dataset had limitations, says the report.

In its first step of the campaign, the RTB wrote to 2,736 landlords connected to potential breaches, which ranged from €2 a month to several hundred euro a month, the report says.

“The rationale for this was that a relatively small breach will compound over time and may result in significant overpayment by tenants,” says the report.

The letters asked landlords to check their records were correct and update any missed rent charges or registration on the RTB’s portal.

They also asked them to calculate the rent again to work out if it exceeded the allowed level. “If it did, they are either to follow the exemption procedure, if applicable, or arrange for the repayment of rent to their tenant.”

Landlords had until 31 January 2022 to take these steps.

Stage Two

Once the deadline was passed, the RTB checked who had made contact on foot of the campaign, and whether landlords had updated the details of their rents in their tenancy records.

“We also analysed the records where it appeared that no action had been taken by a landlord with a view to identifying potential and appropriate enforcement action in relation to potential breaches of RPZ requirements,” the report says.

“Other landlords may have used the self-service to rectify their information or satisfy themselves that their rent increase was, in fact, correct,” it says.

The RTB had around “800 contacts” as a result of the campaign, the report on the pilot says. It outlines the kinds of responses those were – but without any detailed breakdown of the frequency of each response.

Some landlords responded that they had availed of an exemption to the RPZ rent-increase limits, but they had done that before 1 July 2019, they hadn’t at the time had to file an exemption form with the RTB.

Other landlords submitted exemption forms, with substantial change in the property – which covers big renovations like changing the internal layout and minimum increases in the BER ratings – being the reason for the exemption in most of them, the report says.

Other landlords said they thought there hadn’t been any breach, due to misinterpreting data used in calculations, the report says. (The RTB didn’t respond to a query asking if this was the landlord misinterpreting, or the RTB.)

Others said they had already corrected the rent before they got the letter.

Landlords also said that they were unaware of the previous rent or acted as receivers.

Some said they had “erroneously entered charges payable on top of rent within the rent amount field or entered an incorrect rent amount on the registration”.

Meanwhile, some landlords said that the breach had now been remediated. “And most presented evidence to substantiate the statement,” the report says.

Checking What Happened

Once landlords had had a chance to update their records, the RTB honed in on particular potential cases of continued breaches.

It looked at cases where the previous tenancy had started on or after 1 July 2019, and the most up-to-date tenancy had started before 16 July 2021.

The RTB didn’t have powers to investigate breaches before July 2019. On 15 July 2021, the Housing Minister made changes to RPZ rules, linking rent increases to the rate of inflation.

Limiting the search to that period threw up 580 records, and found 161 cases where increases had breached the RPZ limits, the report says.

The RTB then trimmed down which of these cases to look at further, looking only at ones for which the increase in rent was more than €50 a month. That cut it down to 79 of the 161 records.

An RTB spokesperson didn’t address a query as to why it chose to only focus on cases for which the rent increase was more than €50 a month.

“The individual assessment of each of the 79 records will take place over the coming weeks. It will be followed by a recommendation to the Board to authorise investigation in viable cases,” the report from the end of March 2022 says.

Other recommended action was to “commence follow up with the landlords associated with the 1556 records where no recorded action was taken on the part of the Landlord,” the report says.

The RTB spokesperson didn’t respond to a query as to whether it had followed-up with these landlords, and if so, what the outcomes had been.

Since it got powers in July 2019, the RTB has published 65 cases of sanctions for violations of rent-pressure zone laws on its website.

Of those 65 cases, 16 involved sanctions dated since the end of March 2022, of which half were written cautions and the others monetary sanctions ranging from €331 to €2,500.

It’s unclear if those 16 cases stemmed from the campaign.

Not all of the cases that the RTB’s Sanctions and Investigations Unit pursues end up subject to sanctions, which have to be confirmed by the Circuit Court.

The RTB writes to the landlord, who has a chance to admit a breach if they are in the wrong or to counter the allegations. If they admit a breach, then the RTB takes that into account when deciding whether to impose a sanction or not.

If a landlord disputes the allegations, then an RTB officer investigates further and issues a draft report, which they give to the landlord who can respond, says an RTB guide to the process.

A decision maker then decides if any sanction should be levied. The sanctions have to be confirmed through the Circuit Court.

In October 2022, an RTB press release said that more than €338,000 in overcharged rent had been returned to tenants by landlords as a result of its investigations to date.

If the RTB’s Investigations and Sanctions Unit finds that a landlord has been overcharging a tenant, the RTB cannot force them to refund the tenant.

“But if not repaid, it would be a factor taken into account when RTB decides on any sanction to impose,” said a Department of Housing spokesperson.

A spokesperson for the RTB also said: “The investigations and sanctions unit cannot compel landlords to rectify any breaches in RPZ rules.”

“However rectification is encouraged and is considered by the decision maker when assessing the amount of the sanction to impose,” they said.

Dropping the Campaign

O’Callaghan, the Social Democrats TD, said that one question he would have is whether the new RTB360 system can easily flag breaches of rent-pressure-zone laws.

The RTB didn’t directly address a query about that.

A spokesperson for the Department of Housing said that RTB data systems are an operational matter for the RTB.

On 12 January 2022, in summary of the RTB’s approach, Department of Housing official Catherine Comer wrote that the RTB had committed to do a further round of the campaign based on tenancies registered since 31 March 2020.

“It is something they have committed to previously and I intend to ensure they do it,” wrote Comer to a colleague.

On 1 February, Lucia Crimmins, head of investigations and sanctions unit at the RTB, told a Department of Housing official that they had asked ESRI for a second tranche of data.

“We will see what we get back from that request and design the next campaign based on the learning that comes from the current campaign,” wrote Crimmins.

That second phase of the campaign never went ahead, though.

A spokesperson for the Department of Housing said: “A decision was made to integrate analysis of any future non-compliance in relation to RPZ’s into the new functionality of RTB 360. The data available from this new system will be greatly enhanced.”