Landlord in arrears?

MistyCheese

Anyone know if a tennant can find out if their landlord is in arrears? Is this allowed? I'm thinking probably not because it's most likely private info between the bank and the person who has taken out the mortgage but where would the tennants stand in this scenario?

ABajaninCork

Of course it's not allowed! The landlord's financial affairs are none of your business. As long as neither tenant nor landlord have kept to the lease, then there's no reason for the tenant to know.

gaius c

ABajaninCork wrote: »

Of course it's not allowed! The landlord's financial affairs are none of your business. As long as neither tenant nor landlord have kept to the lease, then there's no reason for the tenant to know.

Yeah, the tenant could get turfed out of their home even if they have a lease and lose their deposit but sure, that's no business of theirs.

duffman13

gaius c wrote: »

Yeah, the tenant could get turfed out of their home even if they have a lease and lose their deposit but sure, that's no business of theirs.

Yeah that's how it happens, with no prior warning.

ted1

MistyCheese wrote: »

Anyone know if a tennant can find out if their landlord is in arrears? Is this allowed? I'm thinking probably not because it's most likely private info between the bank and the person who has taken out the mortgage but where would the tennants stand in this scenario?

It's of no relevance to you.

bpmurray

gaius c wrote: »

Yeah, the tenant could get turfed out of their home even if they have a lease and lose their deposit but sure, that's no business of theirs.

If they have a lease, whoever takes over the house takes over the lease.

ABajaninCork

bpmurray wrote: »

If they have a lease, whoever takes over the house takes over the lease.

Nope, unless it's a BTL. If the buyer has a regular mortgage, the bank will insist the property is sold with vacant possession. Therefore - sitting tenant has to leave.

ABajaninCork

gaius c wrote: »

Yeah, the tenant could get turfed out of their home even if they have a lease and lose their deposit but sure, that's no business of theirs.

Quite.

gaius c

bpmurray wrote: »

If they have a lease, whoever takes over the house takes over the lease.

Nope. Contract is between the tenant and the landlord. Bank takes the property over, they are not bound by that contract. It's a loophole in Irish law that our legislators don't seem to be in much of a hurry to fix.

In practice, banks appear to be quite reasonable in terms of notice periods for vacating but the fact remains that your lease isn't worth the paper it's printed on and that your deposit is being held by a person welshing on their other financial obligations.

Friends of mine were stunned to get a phone call from a friend advising them that the apartment they were renting was actually advertised for sale on myhome. Eventually, the landlord admitted that it was advertised to get the banks off his back and the reason he wanted the rent in cash became very clear.

sunshine and showers

ABajaninCork wrote: »

Nope, unless it's a BTL. If the buyer has a regular mortgage, the bank will insist the property is sold with vacant possession. Therefore - sitting tenant has to leave.

Bank can insist away, but tenant can legally insist on staying if they have a fixed term lease. If it's a Part 4 Tenancy they can be given notice to leave on the grounds the LL has to sell, but not of it's fixed term.

If LL has house taken over by bank, tenant in fixed term lease pays receiver.

the_syco

sunshine and showers wrote: »

If LL has house taken over by bank, tenant in fixed term lease pays receiver.

Sadly, they won't get their deposit back, as they have no record of it, they weren't paid it, etc, etc.

Eldarion

gaius c wrote: »

Nope. Contract is between the tenant and the landlord. Bank takes the property over, they are not bound by that contract. It's a loophole in Irish law that our legislators don't seem to be in much of a hurry to fix.

In practice, banks appear to be quite reasonable in terms of notice periods for vacating but the fact remains that your lease isn't worth the paper it's printed on and that your deposit is being held by a person welshing on their other financial obligations.

Can you provide any citation for these? I'd love to see some evidence of this loophole in effect.

IANAL but I would think that a lease has to be honored if a party is meeting their obligations. If they are and it's broken then the non breaking party is entitled to compensation. Is it that the tenant should then be chasing the previous Landlord for breach of contract if the bank seizes?

gaius c

Eldarion wrote: »

Can you provide any citation for these? I'd love to see some evidence of this loophole in effect.

IANAL but I would think that a lease has to be honored if a party is meeting their obligations. If they are and it's broken then the non breaking party is entitled to compensation. Is it that the tenant should then be chasing the previous Landlord for breach of contract if the bank seizes?

There was a link posted here before`to a discussion on RTE about it. Basically, the contract is between the landlord and the tenant so the bank are not legally obliged to be bound by the lease. It's a legal grey area and Threshold have said those tenants currently have no legal protection.

Can't find the original link because any googling brings me to links about rent, rather than mortgage arrears. It's discussed here on AAM.

Eldarion

gaius c wrote: »

Can't find the original link because any googling brings me to links about rent, rather than mortgage arrears. It's discussed here on AAM.

Ok but in that example that tenant did not even have a lease. The tenant specifies that they initially had a 6 month lease but have been in the property 18 months and so assumed they were under part 4.

Everything in the thread from then on is conjecture at best. None providing links to examples or legal reference at all.

The main argument appears to be that one could assume the mortgage holder did not have permission to legally lease the property in the first place and so the fixed lease is invalid. Which is a different tack altogether.

The_Morrigan

Citizens Advice has updated their tenancy pages in relation to receivership.

http://www.citizensinformation.ie/en/housing/renting_a_home/tenants_rights_and_obligations.html

Private tenancies and receivership
If your landlord’s mortgage is in arrears and the mortgage lender has appointed a receiver, you must pay the rent to the receiver, but it is the landlord who remains legally responsible for matters such as returning your deposits. The receiver may arrange for repairs to be carried out, but it is unclear whether the receiver is required to do this or whether the receiver takes on any of the responsibilities of a landlord.

Possible changes to the law are being explored in order to provide more clarity for private tenants whose homes are put into receivership.

Read more in Banking and Payments Federation Ireland’s Residential Tenant’s Guide to Receivership and in Threshold’s tips for tenants when a property is in receivership (pdf).

MarkAnthony

Eldarion wrote: »

Can you provide any citation for these? I'd love to see some evidence of this loophole in effect.

IANAL but I would think that a lease has to be honored if a party is meeting their obligations. If they are and it's broken then the non breaking party is entitled to compensation. Is it that the tenant should then be chasing the previous Landlord for breach of contract if the bank seizes?

It's not a loophole but the odd 'design' of the law around receivers.

Receivers are appointed by the debenture holder (in this case a bank with a mortgage) but act on behalf of the property owner. This works much better with bone fide companies but, of course, where it's Paddy and his investment up in the 'big smoke' no one cooperates.

The landlord would remain liable but in reality just as when the sofa shop goes bust you're down your cash and have no sofa; in this case because the LL is probably broke. In all honesty the LL should have the protection of limited liability, just like the sofa shop enjoys, by virtue of letting is a business. That said he could have chose to set up a limited liability company and did not, but that said how many do?

Really it's a case of the wrong tool for the wrong job. If it was me I'd withhold my rent in a separate bank account and wait until I was evicted and the PRTB had made a determination including the matter of my deposit and repairs I had made out of the money I was withholding; of course I'd also cooperate fully with the receiver in other respects.

It's a counterintuitive system that doesn't really work properly in the context it's being applied too. One argument for the OP's position is if I'm buying a car I can get documents that are public record from the CRO and see if the company are in trouble (to some degree), there is no such scheme in relation to LLs, but yet receivers are still being appointed.

Eldarion

MarkAnthony wrote: »

It's not a loophole but the odd 'design' of the law around receivers.

Receivers are appointed by the debenture holder (in this case a bank with a mortgage) but act on behalf of the property owner. This works much better with bone fide companies but, of course, where it's Paddy and his investment up in the 'big smoke' no one cooperates.

The landlord would remain liable but in reality just as when the sofa shop goes bust you're down your cash and have no sofa; in this case because the LL is probably broke. In all honesty the LL should have the protection of limited liability, just like the sofa shop enjoys, by virtue of letting is a business. That said he could have chose to set up a limited liability company and did not, but that said how many do?

Really it's a case of the wrong tool for the wrong job. If it was me I'd withhold my rent in a separate bank account and wait until I was evicted and the PRTB had made a determination including the matter of my deposit and repairs I had made out of the money I was withholding; of course I'd also cooperate fully with the receiver in other respects.

It's a counterintuitive system that doesn't really work properly in the context it's being applied too. One argument for the OP's position is if I'm buying a car I can get documents that are public record from the CRO and see if the company are in trouble (to some degree), there is no such scheme in relation to LLs, but yet receivers are still being appointed.

Thanks for this. Not to push the legal aspect too much but how above board is it to withhold rent in a separate bank account in this situation? I've heard anecdotally it's been relatively well received if the tenant proves the rent has been sanctioned off each month while awaiting determination.

Should the tenant expect to be slapped with a hefty fine as a result of withholding?

MarkAnthony

Eldarion wrote: »

Thanks for this. Not to push the legal aspect too much but how above board is it to withhold rent in a separate bank account in this situation? I've heard anecdotally it's been relatively well received if the tenant proves the rent has been sanctioned off each month while awaiting determination.

Should the tenant expect to be slapped with a hefty fine as a result of withholding?

It's wrong but it's a civil matter. One would expect to pay interest and penalties contained within the contract. The other side is a tenant having to move and potentially losing a deposit.

I makes this statement as a particularly crap law student, so it should be taken with a pinch of salt, but I believe that courts would be slow to make a tenant pay any kind of onerous penalty in the situation. If anyone take that as any sort of legal advice they're a moron! :pac: I mention it for the sake of conversation.

The_Morrigan

I think another aspect to this is that it hasn't been tested legally.

We know if a tenant doesn't pay their landlord rent they are in breach of the RTA.
We know that a landlord can go to the PRTB to make a claim if a tenant breaches their obligations.

What hasn't been tested is where the receiver sits legally within the RTA because there are different roles for the receiver. They really need to tie down the proposed laws.