Procedure for issuing a rent increase?

zedman

Hi, Just wondering if anyone can offer me some advice.

I have a Tenant Who has been renting my house since February 2010 and has never had a rent review. I feel the rent is under valued and time for an increase.

How do I go about this? He is on a part 4 Tenancy agreement. So do I offer a new lease or just get him to sign agreeing to the new rent?

djimi

You are entitled to a rent review once a year. Write to them informing them that the rent is going to be up for review and that it will increase to x amount. They can either agree to it or leave the tenancy.

Just bear in mind that the rent cannot be increased to more than the rental market value of the property, ie you cannot increase the rent to more that what other similar properties in the area are renting for.

aN.Droid

zedman wrote: »

Hi, Just wondering if anyone can offer me some advice.

I have a Tenant Who has been renting my house since February 2010 and has never had a rent review. I feel the rent is under valued and time for an increase.

How do I go about this? He is on a part 4 Tenancy agreement. So do I offer a new lease or just get him to sign agreeing to the new rent?

In addition to what has been already said if he refuses and leaves you might be without rent for a few months which would cost more in the long run then just leaving the rent as it is.

Most rent values on daft.ie aren't what is actually paid. I would always try to get 10-20% off the rent depending on the property.

leonidas83

djimi wrote: »

You are entitled to a rent review once a year. Write to them informing them that the rent is going to be up for review and that it will increase to x amount. They can either agree to it or leave the tenancy.

Just bear in mind that the rent cannot be increased to more than the rental market value of the property, ie you cannot increase the rent to more that what other similar properties in the area are renting for.

Is the landlord under an obligation to prove this? Basically can a landlord say the rents are rising in an area because he/she just had a look on daft.ie

djimi

To be honest Im not entirely sure how rental market rate is calculated. I know the theory behind it is that the landlord cannot ask for more than similar properties in the area are going for, but how they determine what that figure is Im not sure. Daft isnt exactly reliable as most people would not be paying what the landlord originally asked for, but I suppose its a fair enough ballpark figure (especially when you consider there is probably some haggling room with the rent increase anyway).

MadsL

You have a reliable tenant since Feb 2010 and want to increase the rent in this economy.

Are you sure that is wise?

djimi

I didnt want to point that out but its a fair point! Unless the tenant is either paying well below what the place is worth or the rent is falling a long way short of how much the place is costing you then Id be inclined to leave well enough alone...

Of course I say that from the point of view of a renter so I am somewhat biased

zedman

MadsL wrote: »

You have a reliable tenant since Feb 2010 and want to increase the rent in this economy.

Are you sure that is wise?

I never said he was reliable! For the last year I have been collecting the rent from him in drips and drabs and this has gotten worse since his daughter moved in with her two kids.

He has been paying rent at under the market value as it is and now that there is 3 more bodies in the house and an extra income I feel he should be paying more.
To be honest If putting the rent up makes him decide to leave the Tenancy that would be fine by me. After numerous warnings over the rent not being paid in full and on time I have had enough.

I am aware that the rent has to be in line with market value and it will be I just want to do It the right way. I collect the rent in person and am due this months rent and some of last months at the end of the week. So do I type up an agreement for us both to sign on the day? And if he decides not to do I take that as a months notice?

aN.Droid

zedman wrote: »

I never said he was reliable! For the last year I have been collecting the rent from him in drips and drabs and this has gotten worse since his daughter moved in with her two kids.

He has been paying rent at under the market value as it is and now that there is 3 more bodies in the house and an extra income I feel he should be paying more.
To be honest If putting the rent up makes him decide to leave the Tenancy that would be fine by me. After numerous warnings over the rent not being paid in full and on time I have had enough.

I am aware that the rent has to be in line with market value and it will be I just want to do It the right way. I collect the rent in person and am due this months rent and some of last months at the end of the week. So do I type up an agreement for us both to sign on the day? And if he decides not to do I take that as a months notice?

If he refuses the rent increase then you will have to draft a valid termination of tenancy letter. Since he has been there 2 years you have to give 8 weeks (56 days) notice.

zedman

Limericks wrote: »

If he refuses the rent increase then you will have to draft a valid termination of tenancy letter. Since he has been there 2 years you have to give 8 weeks (56 days) notice.

Cheers, So do I make that up myself or any template I should follow?

aN.Droid

zedman wrote: »

Cheers, So do I make that up myself or any template I should follow?

http://www.irishlandlord.com/documents/Managing%20Tenants/Sample%20Notice%20of%20Termination.pdf

Make sure to send it by registered post so you have a record that it was received.

zedman

Limericks wrote: »

http://www.irishlandlord.com/documents/Managing%20Tenants/Sample%20Notice%20of%20Termination.pdf

Make sure to send it by registered post so you have a record that it was received.

Thank's for that. Also If they decide to stay on should't his daughter be put on the lease affectively creating a new lease?

MadsL

zedman wrote: »

now that there is 3 more bodies in the house and an extra income I feel he should be paying more.

Whatever about his reliability in terms of payments, the number of people in the house or his income has absolutely squat to do with it unless he is over-occupying the house.

To be frank, the household income is none of your damn business.

zedman

MadsL wrote: »

Whatever about his reliability in terms of payments, the number of people in the house or his income has absolutely squat to do with it unless he is over-occupying the house.

To be frank, the household income is none of your damn business.

So I am the big bad Land Lord am I? I think it is my business when the rent is not being paid to me in full and on time and I get excuses like oh I had a Christening at the weekend.. Like seriously?? The rent is well below market value as it is and I struggle to make up the rest to cover the mortgage.

He signed a lease on his own, One man alone in the house. It's not my business that there are three extra tenants not originally on the lease?

MadsL

zedman wrote: »

So I am the big bad Land Lord am I? I think it is my business when the rent is not being paid to me in full and on time and I get excuses like oh I had a Christening at the weekend.. Like seriously?? The rent is well below market value as it is and I struggle to make up the rest to cover the mortgage.

He signed a lease on his own, One man alone in the house. It's not my business that there are three extra tenants not originally on the lease?

Calm down.

You are entitled to be annoyed about the rent being paid on time.

The point I'm making is that his household income is irrelevant to the rent being paid. The rent amount is not a percentage of his income. If he choses to share the house then that is up to him (within reason) and doesn't give you some moral right to a rent increase.

Avns1s

MadsL wrote: »

Calm down.

You are entitled to be annoyed about the rent being paid on time.

The point I'm making is that his household income is irrelevant to the rent being paid. The rent amount is not a percentage of his income. If he choses to share the house then that is up to him (within reason) and doesn't give you some moral right to a rent increase.

This part is incorrect. A normal tenancy will have a clause in it that states something along the lines of "The tenant shall not assign, part with, sub-let or share ......." and perhaps finish with "without the prior written consent of the landlord".

zedman

MadsL wrote: »

Calm down.

You are entitled to be annoyed about the rent being paid on time.

The point I'm making is that his household income is irrelevant to the rent being paid. The rent amount is not a percentage of his income. If he choses to share the house then that is up to him (within reason) and doesn't give you some moral right to a rent increase.

Fair enough mate, It just came across as you wanting to pick out certain points for an argument. Only I know the full situation and am not going to start explaining myself on here.
I know what I want/need to do and am entitled to do so. I just want to do it in the correct manner hence why I came on here for some advice.

MadsL

Avns1s wrote: »

This part is incorrect. A normal tenancy will have a clause in it that states something along the lines of "The tenant shall not assign, part with, sub-let or share ......." and perhaps finish with "without the prior written consent of the landlord".

And it would generally be unreasonable for a landlord to refuse to allow someone to share with a relative.

Point I'm making is that even if the relative is a millionaire there is no right for the landlord to increase the rent because he knows this.

The rent is based on the market rate not the income of the tenant.

Avns1s

MadsL wrote: »

And it would generally be unreasonable for a landlord to refuse to allow someone to share with a relative.

Point I'm making is that even if the relative is a millionaire there is no right for the landlord to increase the rent because he knows this.

The rent is based on the market rate not the income of the tenant.

The clause would not make any allowance for sharing with a relative as opposed to anyone else.

If it were my house, I would be reserving the right to know who it was being shared with, regardless of whether they were related or not.

If someone leased your property for themselves and then moved 19 more members of their family into the spare bedroom, would you consider it appropriate or acceptable?

A bit extreme in terms of an example but that's where these things can end up.

zedman

MadsL wrote: »

And it would generally be unreasonable for a landlord to refuse to allow someone to share with a relative.

Point I'm making is that even if the relative is a millionaire there is no right for the landlord to increase the rent because he knows this.

The rent is based on the market rate not the income of the tenant.

So the "Millionaire" Should reside there with the rent at below market value or does this become the straw that brakes the camels back and the landlord decides it's high time the rent was brought into line.
It's getting to the stage were he is taking the mick so why should I carry on charging a reduced rate? What is in it for me?

MadsL

zedman wrote: »

So the "Millionaire" Should reside there with the rent at below market value or does this become the straw that brakes the camels back and the landlord decides it's high time the rent was brought into line.
It's getting to the stage were he is taking the mick so why should I carry on charging a reduced rate? What is in it for me?

You are missing what I am saying. You have issues with your tenant and you have recourse, although from what you say he is not seriously in arrears.

The point I'm making is that the household total income is none of the landlord's business, so for instance, in my view, it is not justified to hike the rent when your tenant gets a pay rise.

Do you have a clause in your tenancy agreement about who can live in the house?

djimi

Would you not be better advised to deal with the fact that he doesnt pay the rent on time, rather than trying to put the rent up which could only make matters worse? If he doesnt want to pay the current rent then why do you think increasing the rent will make things better?

If you want rid of him then send a warning letter and start the eviction process. That way he either cops on and starts paying on time, or else he leaves; but either way youre rid of him.

zedman

djimi wrote: »

Would you not be better advised to deal with the fact that he doesnt pay the rent on time, rather than trying to put the rent up which could only make matters worse? If he doesnt want to pay the current rent then why do you think increasing the rent will make things better?

If you want rid of him then send a warning letter and start the eviction process. That way he either cops on and starts paying on time, or else he leaves; but either way youre rid of him.

Good points there. I guess I am hoping putting the rent up will force the issue as an eviction process could get messy leaving me even more out of pocket. I feel if I put the rent up it will also show him I am not prepared to be a soft touch any more and if he wants to stay there he will have to cop on as you say.

He is on Rent Allowance so if I put it up just over his threshold it should in fact force the issue I'll tell him I can no longer afford to cover the mortgage with the rent as it is and it doesn't help matters chasing up for bits of rent all the time.
Its either that or eviction route and I don't fancy that path right now.

zedman

MadsL wrote: »

You are missing what I am saying. You have issues with your tenant and you have recourse, although from what you say he is not seriously in arrears.

The point I'm making is that the household total income is none of the landlord's business, so for instance, in my view, it is not justified to hike the rent when your tenant gets a pay rise.

Do you have a clause in your tenancy agreement about who can live in the house?

Yea you are right it is none of my business if he gets a pay rise. But you are missing my point and making an entire different issue here to argue about.

Adrian Kennedy should be starting about now if you fancy an argument or you might probably find one in the mirror.

mood

MadsL wrote: »

You have a reliable tenant since Feb 2010 and want to increase the rent in this economy.

Are you sure that is wise?

Chances are if you increase the rent they will move out and you could be without tenants for months. People have less and less money so increasing rent is crazy. I have seen rooms in shared properties on daft of over a year now! I'n sure it the same for houses and apts.

I just noticed he doesn't pay rent on time so you are right to want him out. I think a written warning is the way to go. To be honest I can't see how he can rent a full house on his own while on rent allowance!

zedman

mood wrote: »

Chances are if you increase the rent they will move out and you could be without tenants for months. People have less and less money so increasing rent is crazy. I have seen rooms in shared properties on daft of over a year now! I'n sure it the same for houses and apts.

There actually seems to be a shortage of rentals in this town believe it or not and it just seems crazy to be putting up with this crap. He's getting a good deal and if he cant be bothered to prioritise his rent and pay it in full and on time then why should he get the same deal?

If he paid on time there wouldn't be a problem and I would hold the rent as it is. But he has to play ball stand by his obligations.

I'm just fed up with it at this stage and would rather he did move on now.

borderlinemeath

mood wrote: »

Chances are if you increase the rent they will move out and you could be without tenants for months. People have less and less money so increasing rent is crazy. I have seen rooms in shared properties on daft of over a year now! I'n sure it the same for houses and apts.

Completely depends on the house and the area and local demand. At the minute there is demand in a lot of areas, far more so than back in 2010 when the OP let the house.

I had to re-let my house this year after 7 years. I was dreading it, that there would be no interest or nobody would pay the rent. How wrong I was. The phone didn't stop ringing and I had to take the ad down after a day as I had my pick of tenants to choose from.

OP if you want to force the issue then by all means increase the rent to market value. Have a look on daft, see also how many similar properties are to let in your area. However, as you have stated if you move it above the rent allowance threshold you will be taking a lot of potential renters out of the running.

MadsL

zedman wrote: »

Yea you are right it is none of my business if he gets a pay rise. But you are missing my point and making an entire different issue here to argue about.

Adrian Kennedy should be starting about now if you fancy an argument or you might probably find one in the mirror.

So OP comes on for advice, it transpires that they just want the guy out so are raising the rent and want advice how to do it so the tenant will leave.

They have the fact that the tenants income is none of their business pointed out to them and then start hurling insults around.

Charming.

ted1

Your some bit of work.

I've never heard of a landlord upping rent.

He'll move out you'll lose rent and spend time doing up house for next tenant. You may get a bad tenant or one who will move out or not pay rent.

borderlinemeath

ted1 wrote: »

Your some bit of work.

I've never heard of a landlord upping rent.

Happens all the time. My fiance had a tenant move during the summer who was paying €1050 for three years. She wanted a further reduction and he refused. Pretty similar situation to the OP, was rent allowance, getting paid part cheque and dribs and drabs and moaning about being broke. Now he's getting €1200.

He'll move out you'll lose rent and spend time doing up house for next tenant. You may get a bad tenant or one who will move out or not pay rent.

He already has a tenant that he has to continually chase for rent, he may get a good tenant that actually pays on time?

djimi

ted1 wrote: »

Your some bit of work.

I've never heard of a landlord upping rent.

Theres nothing to say that the OP cannot raise the rent in fairness, so long as it is in line with the market rent for the area. Legally a landlord is entitled to review the rent once in a 12 month period. If rental prices have generally risen in an area over a period of time why shouldnt a landlord expect the tenant to pay more?

Its only somewhat unusual these days because most landlords would prefer not to rock the boat with good tenants and are quite prepared to take a bit of a financial hit on the rent if it means keeping a steady troublefree income. In the case of the OP it sounds like they are not particularly bothered about losing this tenant.