Rent Increase

ProudDUB

Crash Override wrote: »

I'm a little confused.

What I'm getting so far is that the Household charge cannot be applied to the rent as the rent is an agreed price in the lease and can't be changed for the duration of the lease, but, the landlord can still make you pay the charge in a different way as per which ever term in the contract/lease says so?

Is that correct?

No. The only amount that you have to pay to the landlord is the amount set out in the lease. End of story. If the lease has a specific clause that says that the tenant is on on the hook for additional owner expenses such as the NPPR tax or the household charge then yes, you are liable for them. Get out your lease contract and read it cover to cover. If there is no such clause (and I very much doubt that there is in it) you are good to go.

The household charge is just another expense that property owners have to pay, along with the NPPR tax, their mortgage, costs of maintaining the property, paying an estate agent to manage the tenancy etc etc. It is up to him to decide ahead of time how much rent he needs to ask for to cover these expenses and make a profit. Once he and the tenant agree to that amount and sign a lease that stipulates it, that is it. That is all the tenant has to pay. The landlord can not come in later on and demand additional monies to cover any additional expenses that he has.

Once the term of the lease is up & the current tenant leaves, he can try to increase the rent by as much as he wants to try to cover his additional expenses. Market forces and what properties similar to his own are renting for, will determine whether or not he can find tenants who will agree to the higher rent. Dividing the 100 euro household charge over the term of a 12 month lease is only 8 quid more a month. It's not much, but whether it is 8 quid or 800 quid, he has to include it in the original rental amount agreed to. He can't just demand it after the fact.

daltonmd

ProudDUB wrote: »

No. The only amount that you have to pay to the landlord is the amount set out in the lease. End of story. If the lease has a specific clause that says that the tenant is on on the hook for additional owner expenses such as the NPPR tax or the household charge then yes, you are liable for them. Get out your lease contract and read it cover to cover. If there is no such clause (and I very much doubt that there is in it) you are good to go. .

I think it should be clarified here that a standard lease says:

The Tenant agrees with the Landlord as follows:-
“To pay and discharge Rates in respect of the Premises and to pay and discharge all applicable charges in respect of any Services used or consumed on the Premises without prejudice to the foregoing to pay and discharge charges for any additional service whether specified in the definition of Services or not which is or which may be rendered by a local authority in respect of the premises and to indemnify the Landlord against any charges which are or which may be payable by him in respect of the premises during the period of the Lease".

It doesn't ahve to specify the exact name of the charge but the household charge is different from the NPPR. The NPPR is a definate tax on a property that is not the owners PPR. The Household charge is payable to a local authority for "services" such as Fire Brigade, Libraries and so on.

ProudDUB wrote: »

The household charge is just another expense that property owners have to pay, along with the NPPR tax, their mortgage, costs of maintaining the property, paying an estate agent to manage the tenancy etc etc. It is up to him to decide ahead of time how much rent he needs to ask for to cover these expenses and make a profit. Once he and the tenant agree to that amount and sign a lease that stipulates it, that is it. That is all the tenant has to pay. The landlord can not come in later on and demand additional monies to cover any additional expenses that he has..

My reading is that he can:

"which are or which may be payable by him in respect of the premises during the period of the Lease"

ProudDUB wrote: »

Once the term of the lease is up & the current tenant leaves, he can try to increase the rent by as much as he wants to try to cover his additional expenses. Market forces and what properties similar to his own are renting for, will determine whether or not he can find tenants who will agree to the higher rent. Dividing the 100 euro household charge over the term of a 12 month lease is only 8 quid more a month. It's not much, but whether it is 8 quid or 800 quid, he has to include it in the original rental amount agreed to. He can't just demand it after the fact..

No, it is not added onto the rent because as I have stated earlier, the landlord would have to pay tax on this. It's not "extra" rent - it's an extra charge payable to a local authority.

I think we should always be careful when "stating" things as "fact" when it comes to leases. As I have posted, there are "standard" leases that could be construed as making the tenant liable for this extra charge. It is up to each tenant to check their lease carefully and seek clarification from Threshold for example.

Pawwed Rig

daltonmd wrote: »

Why is it unfair to landlords? Well it's being touted as a charge payable to local authorities to provide services to the area - we (tenants) use these services.

You answered your own question. The landlord is not there to provide services for the tenant. He is there to have a rental agreement with the tenant. Tenants pay for their services such as bins, gas, electric etc. Why should other services be different. The landlord will also probably be paying the charge for hios own house for his services so it is effect a double tax on the landlord.

daltonmd wrote: »

Yes, but you used DAFT as your source - and DAFT use "asking" prices only. There's no way to know for sure until we see a database which clearly shows actual rents paid.

What source do you suggest? I would guess that you will dismiss every source. Unfortunately I don't have the resources to do a house to house survey for your benefit. AFAIK Daft are the only ones to produce this info which pretty much makes it the information of record unless you have an alternative?

daltonmd wrote: »

But it can't be used as a rental increase - I have said previously that if the landlord puts the charge onto the rent then he pays tax on it. It has to be an extra service charge agreed with the tenant.

Is the household charge deductible as a letting expense? I know the NPPR is not.

Zamboni

Old Tom wrote: »

And so I was saying here a couple of years ago, but once it comes to proving that the prices are going down, all the scaremongers, "wait 18 months" and "multiply income by X to know the real price" types do not hesitate to use it.

Comfortable.

I take your point.
I would not like to see it used a source for indicating either direction.
Whilst there may be a lot of accurate data within the site stats there is simply too much room for error, manipulation and no facility to enter agreed rent (and even if that was a facility it could still be manipulated).

Whatever about a new property database detailing sales and prices, I don't believe there is any scope for dealing with the rental market.
And as such, the uneducated (think joe public), the incompentent (think lazy journo), and the malevolent (think EA and/or any VI) will use DAFT stats in the absence of, well, anything better.

daltonmd

Pawwed Rig wrote: »

You answered your own question. The landlord is not there to provide services for the tenant. He is there to have a rental agreement with the tenant. Tenants pay for their services such as bins, gas, electric etc. Why should other services be different. The landlord will also probably be paying the charge for hios own house for his services so it is effect a double tax on the landlord.

I'm a little confused : ). I didn't ask a question, I agreed with you when you said the charge was unfair to landlords, you asked me why and I gave you my reasons. You're actually saying exactly what I said when I said that the charge is being touted for services in the area - services which tenants use.

Pawwed Rig wrote: »

What source do you suggest? I would guess that you will dismiss every source. Unfortunately I don't have the resources to do a house to house survey for your benefit. AFAIK Daft are the only ones to produce this info which pretty much makes it the information of record unless you have an alternative?

I didn't suggest any source - I said it is hard to tell whether rents are falling or rising because of the lack of a credible database.

You are using a source that relies only on asking prices - I've agreed with you insofar as when we talk about supply, demand, good properties in good locations etc, that landlords could ask for higher prices, but it's whether the tenants can pay it that is the real question.
Tenants do not have an infinite amount of money to pay housing costs - the upside of renting is that you can move to reduce your rent. If rents are rising to a level where it pushes people out of these areas, then there would be rises showing there as well.

Pawwed Rig wrote: »

Is the household charge deductible as a letting expense? I know the NPPR is not.

Whether it is or not is not really the point here - if the landlord adds it to the rent then it is rental income which is taxed. If a landlord has a standard lease which has the clause above in it then the tenant may find themselves with a landlord who is demanding payment. The issue here is that the government hae expressly stated that homeowners, not tenants are liable.
I would say we will see a PRTB hearing in due course.

daltonmd

Duggys Housemate wrote: »

if the household charge becomes a tenant tax then the tenants will have to declare where they reside, and pay the charge depending on where they move to. Like in the UK. In france there is also a property tax. In the former case it has nothing to do with the landlord, the councils know where you are and charge the renters.

I believe that is the ultimate aim of the government and why they are so insistent on getting this through asap - create the database for owners, then apply the household charge to tenants which will capture everybody.

Pawwed Rig

daltonmd wrote: »

I'm a little confused : ). I didn't ask a question, I agreed with you when you said the charge was unfair to landlords, you asked me why and I gave you my reasons. You're actually saying exactly what I said when I said that the charge is being touted for services in the area - services which tenants use.

Ah I see what happened there
I said - Also the landlord already has to pay the NPPR so it is hardly fair to lob another charge onto them.
You said -No it's not, but here's my theory on the reasoning
Presuming you meant No it's not fair rather than what I understood as you contradicting the fairness of it.

daltonmd wrote: »

Whether it is or not is not really the point here - if the landlord adds it to the rent then it is rental income which is taxed. If a landlord has a standard lease which has the clause above in it then the tenant may find themselves with a landlord who is demanding payment. The issue here is that the government hae expressly stated that homeowners, not tenants are liable.
I would say we will see a PRTB hearing in due course.

Was asked out of interest more than making a point. As I said it would be a dumb landlord that explicity states to a tenant that they should pay the charge

daltonmd

Pawwed Rig wrote: »

Ah I see what happened there
I said - Also the landlord already has to pay the NPPR so it is hardly fair to lob another charge onto them.
You said -No it's not, but here's my theory on the reasoning
Presuming you meant No it's not fair rather than what I understood as you contradicting the fairness of it.

Lol - I said - no it's not in response to you saying "so it is hardly fair to lob another charge onto them"!!

Pawwed Rig wrote: »

Was asked out of interest more than making a point. As I said it would be a dumb landlord that explicity states to a tenant that they should pay the charge

I know but I was trying to clarify the whole issue of people saying that landlords will put the charge onto the rent.

Some landlords may feel entitled to if it's in their lease. It really is another cock up by this government - they should have said it was a pre property taxc which will eventually be used for local services, or it's a household charge payable by everyone.

To many exemptions though - it is hitting property owners unfairly.