A General Guide To Rent Control In Bermuda

[Written by Consumer Affairs/Rent Commission]

Residential properties [single tenancy] with an annual rental value [ARV] of $22,800 or less fall under rent control and are regulated by the Rent Commission. Currently there are 17,077 valuation units that fall under rent control. This includes condominiums and townhouses.

Check your ARV to find out if your rental unit falls under rent control. The ARV of any premises may be found at www.landvaluation.bm or at your local post office.

If your property falls under rent control you are governed by The Rent Increases [Domestic Premises] Control Act 1978.

The Act requires a landlord to show that he has a lawful ground for terminating a tenancy and to prove in a court, if necessary, the just cause for serving a tenant a notice-to-quit [eviction notice]. Lawful grounds can be found under Part II Section 8 of the Act.

If a landlord wants to evict a tenant he must serve a ‘notice to quit’ on a tenant to leave the property based on one of the following reasons: failure to pay rent or a breach of any other condition of the rental agreement; if landlord requires the property as a residence for himself or for specific family members — his parents, an adult child or grandchild; where a landlord specifies that a tenant is undesirable and the landlord has given the tenant an opportunity to correct the matter complained of and the tenant has failed to do so; or if the landlord is carrying out major renovations.

An example of an undesirable tenant is one who is doing something illegal, playing loud music, damaging the property or bringing people of bad character onto the property.

When a landlord serves a notice-to-quit for either occupation or renovation, he or she is required to note that the tenant has the right, within 14 days, to serve a counter notice, disputing the right of the landlord to serve a notice to quit.

The Act also controls increases in rent and requires that the landlord applies to the Rent Commissioner for a rent increase for properties under rent control

If your property falls under Rent Control, please be aware of the following.

First, you do not divide the ARV by 12 and charge that amount or below as the rent; you must adhere to the Act. All Rent Controlled premises should have a legally registered rent with the Rent Commission.

A property rented for the first time [e.g. a newly-constructed unit], may be rented for any amount, even if the property falls under rent control. The landlord must submit to the Rent Commissioner the first signed rental lease establishing the rent.

Subsequent rent increases, whether to the same or to a different tenant, are restricted. In those cases, rent should not be higher than the rent charged to the first tenant of a rent-controlled property [even if by a previous owner/landlord] unless:

• The landlord and tenant have agreed an increase, following which the landlord has lodged notice with the Rent Commissioner, and the landlord holds a copy of such notice, duly endorsed by the Rent Commissioner, and

• The landlord has received the Rent Commissioner’s approval for an increase.

Where a landlord and tenant mutually agree to a rent increase, the landlord must lodge an RC/2 application in triplicate with the Rent Commissioner.

Where a tenant does not agree to a landlord’s proposal to increase the rent, the landlord must lodge an RC/8 application with the Rent Commissioner for approval to increase the rent.

A prospective tenant cannot agree to a rent increase. If a landlord wishes to charge a new tenant rent exceeding the maximum chargeable rent under the Act, the landlord must first lodge a RC/7 application with the Rent Commissioner for approval.

If a landlord is dissatisfied with the Rent Commissioner’s determination, they may lodge an application for review by the Rent Commissioner. In such a case, the Rent Commissioner shall consult the Rent Increases Advisory Panel and then make a final determination.

The Landlord must show a prospective tenant proof of the registered chargeable rent:

• A copy of the Rent Commissioner’s Certificate or Notice of an Agreed Increase of Rent signed by the Rent Commissioner or

• A statement, in writing, of the lawful rent charged to the last tenant; or

• A copy of a court order showing the lawful chargeable rent for the premises

A landlord can request that a tenant pay a deposit for a rental premise. However, the deposit should not exceed a half month’s [two weeks] rent.

The following residential units are exempted from the Rent Increases [Domestic Premises] Control Act 1978:

• Rental units that have an annual rental value higher than $22,800

• Premises in which the tenant is an employee of the landlord and the unit forms part of the employment contract

• Premises are normally occupied by a landlord who wishes to let them during his temporary absence from Bermuda for less than one year

• Boarding or lodging houses

• An individual that enjoys a life tenancy

• Premises that have a Vacation Rental Certificate granted by the Rent Commissioner

Properties that fall under Rent Control and wish to engage in a Vacation Rental must apply to Consumer Affairs for a Vacation Rental Certificate which exempts you [from Rent Control] for one year.

Contravention of rent control can result in criminal prosecution or in a tenant’s claim for up to two year’s rent paid in excess of the controlled rent.

The Rent Commission serves as a source of information, guidance, direct intervention, and referral for landlords, tenants, and the general public who may have concerns and issues relevant to landlord and tenant matters. Give us a call on 297-7700 if you have questions or need assistance.

For more information please visit here.

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