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Real Estate Update: New Short-Term Letting Regulations and Rent Control Areas Expanded

03 July 2019

Short-term letting regulations in areas designated as rent pressure zones (RPZs) came into operation on 1 July 2019. These rules aim to increase the number of long-term rental properties available in RPZs and to reduce the number of short-term lettings in those areas, namely lettings or licences for any period not exceeding 14 days. The effect of the new regulations is that short-term lettings in RPZs will be deemed a material change of use and require planning permission, with some exceptions.

This is of particular note given that 19 new areas have been designated as RPZs with effect from 2 July 2019. The total number of RPZs in Ireland now stands at 42 and a full list can be viewed here

The new regulations are contained in Section 38 of the Residential Tenancies (Amendment) Act 2019 and supplementary regulations called the 'Planning and Development Act 2000 (Exempted Development) (No. 2) Regulations 2019'.

The new regulations state that short-term lettings or licences of up to 14 days of a house or apartment (or parts of them) in an RPZ will now be deemed to be a material change of use for planning purposes and will therefore require planning permission. The regulations apply unless one of the exemptions listed below can be availed of.

Exemptions

The new regulations do not affect:

  1. Properties outside the RPZs
  2. Lettings of houses or apartments for 15 days or more
  3. Lettings under the rent-a-room scheme, or
  4. Properties that already have planning permission for short-term lettings, e.g. holiday accommodation, corporate/executive short-term lettings

The new supplemental regulations make the following exempt from the requirement to obtain planning permission in an RPZ:

  1. Short-term home sharing / letting of up to 4 bedrooms, with no more than 4 people to occupy each bedroom, in a house or apartment that is the principal private residence of the landlord
  2. Short-term letting of a property that is a landlord’s principal private residence for up to 14 days at a time, with a cumulative maximum of 90 days in a year. Above 90 days will require planning permission for change of use

Landlords and home owners will not be able to avail of the exemptions if they have breached any condition attached to a planning permission granted for the property including any requirement to use the property for a specified use.

Landlords and home owners seeking to avail of these exemptions must notify the local planning authority in advance by submitting the relevant forms and complying with the reporting requirements within the prescribed timeframes.

Enforcement

Local planning authorities will be tasked with enforcing and implementing the new laws to target unauthorised short-term letting activity. Sanctions on landlords and homeowners for non-compliance include criminal prosecution and the maximum penalty is €5,000 and / or 6 months imprisonment. If the non-compliance continues after a conviction, it will be deemed a further offence on every day on which the breach continues and for each offence the landlord or home owner may be liable on conviction to a fine of up to €1,500.

Commentary

The short-term letting provisions will apply for as long as areas are designated as RPZs. These designations have recently been extended until 31 December 2021 but may be further extended if there is still a shortage of rental accommodation in 2021. 

Landlords seeking to provide short-term lettings in RPZs should review the regulations and all relevant planning permissions to ensure they will not need to make an application for planning permission for change of use. If the property is subject to a charge, loan documents should be checked to establish if short-term letting is prohibited or if lender consent is required. If the landlord owns the property by way of a long lease, they should also review their lease to check there is no covenant prohibiting short-term letting or if any consent is required.

Local authorities assessing applications for change of use will base their review on guidance issued by the Department of Housing, Planning and Local Government. It is not expected that planning permission will be granted for short-term lettings while housing demand remains high in RPZs.

If you have any queries on how this may affect your business, contact a member of our Real Estate team. 


The content of this article is provided for information purposes only and does not constitute legal or other advice.

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