Rent and housing measures to go before Cabinet

Eugene Norman

_Kaiser_ wrote: »

I think we all know the answer to that one!

The bottom line is the State (more accurately a handful of vote-hungry politicians) should only "interfere" enough to ensure that there are minimum standards for rental properties, legally-binding obligations on both sides, and a swift and independent appeals process in the event of a dispute.

What they've done here (as usual with this current Government) is take a half-assed, not fully thought out, sledgehammer approach to the current rental/homelessness problem, the real effects of which won't be really felt for another 2 years.... but which are likely to exacerbate the problem!

... but that's OK, because the real point is to try and convince the electorate that they've done SOMETHING so that it'll get them a few more votes, and you have to admit "rents to be frozen for 2 years" is a nice populist headline, and the hope is we'll forget that they've done nothing about the problem for the last 4 years!

Plenty of States intervene in rental property price fixing. It works. They don't have boom and bust

Ireland believes in a housing free market until the banks need a bailout, a state owned property ownership company owns vast swathes of the market, and the state owned banks effectively don't pursue defaulters.

Otherwise though we all agree, the government should stay out.

murphaph

It doesn't always work, eg Stockholm.

machiavellianme

Why is it ok to impose limits on landlords and how much they can charge or when they can increase prices but when Sky or Virgin Media or ESB or Tesco etc. do it year on year, there's nothing about it from the government?

April 73

I hate to be a cynic but this will lead to people being asked to leave their rented property. Talk all you like about Part IV tenancy rights but the reality could be this:
Boot tenants out claiming you are going to sell. Put property on the market at an inflated asking price, pay €300 in advertising fees for EA, take property off the market one month later claiming no interest. You have proof that you tried to sell. Rent the property again at an increased rent to new tenants.

This would be well worth doing for anyone currently renting below market rates as it looks like they will be locked into below market rates. I know it's not in the spirit of the rules but there are landlords who will do this.

The goverent didn't protect landlords when rents fell. Then they reduced mortgage interest relief & increased costs and taxes & have now capped rents in a rising market. No wonder landlords are exiting the market.

matrim

April 73 wrote: »

I hate to be a cynic but this will lead to people being asked to leave their rented property. Talk all you like about Part IV tenancy rights but the reality could be this:
Boot tenants out claiming you are going to sell. Put property on the market at an inflated asking price, pay €300 in advertising fees for EA, take property off the market one month later claiming no interest. You have proof that you tried to sell. Rent the property again at an increased rent to new tenants.

This would be well worth doing for anyone currently renting below market rates as it looks like they will be locked into below market rates. I know it's not in the spirit of the rules but there are landlords who will do this.

The goverent didn't protect landlords when rents fell. Then they reduced mortgage interest relief & increased costs and taxes & have now capped rents in a rising market. No wonder landlords are exiting the market.

You then have to offer the tenant the chance to move back in. I'm not sure if that is at the same rent as before or different

copacetic

Not sure how well this will work, but we are being forced into accidental landlords this week and had to set a rent today. Agent and ourselves decided to go right at higher end basically because this change forces you to do so when renting for the first time, or between tenants I guess.

April 73

matrim wrote: »

You then have to offer the tenant the chance to move back in. I'm not sure if that is at the same rent as before or different

Where does it say that? "Intends" is surely open to interpretation.

3. The landlord intends, within 3 months after the termination of the tenancy under this section, to enter into an enforceable agreement for the transfer to another, for full consideration, of the whole of his or her interest in the dwelling or the property containing the dwelling.

Electric Sheep

Lux23 wrote: »

I was evicted by two landlords who used the family clause as an excuse, both had new tenants in a few weeks later. If you think tenants are genuinely protected by that then you are really naive. I know that we were asked to leave because we were looking for much needed repairs.

I have no trouble believing you on that - how many posts have we seen in this forum by landlords whose definition of a good tenant is one who does not complain? Many landlords seem to think that expecting the landlord to do the legally required maintenance to a rental is being a bad tenant.

CollyFlower

Electric Sheep wrote: »

I have no trouble believing you on that - how many posts have we seen in this forum by landlords whose definition of a good tenant is one who does not complain? Many landlords seem to think that expecting the landlord to do the legally required maintenance to a rental is being a bad tenant.

That seems to be the way it is, I know a tenent who's look after their rental, ie, replacing furniture carpets, etc and the landlord hasn't increased the rent for about 5 years, they're only paying 70 a week for their flat...and that's In the D4 area.

Jaketherake

I think there will be a sharp spike in rents this month, and then a slow but large increase over the next two years.

Anyone renting now or due a rent review will see the sharp increase straight away because landlords know that when this comes in they have two years of static rent. So up we go to market rate and higher with new market rates set.

But there will be people who have been renting on the now active 1 year freeze and got a review in say March this year. I think that what it will mean is that those rents are stuck for 1 year because that was the criteria for that rent increase in the first place. And then on their one year anniversary the landlord will raise to the max possible (because he knows that raise will be stuck for the two years after that), maybe even slightly more than the market rate, creating a new higher market rate.

So, rents are going to shoot up quickly and they wont be settling down now.

They should have left it alone, but the govern,ment just cant help interfering with and then wrecking markets

Eugene Norman

Jaketherake wrote: »

I think there will be a sharp spike in rents this month, and then a slow but large increase over the next two years.

Anyone renting now or due a rent review will see the sharp increase straight away because landlords know that when this comes in they have two years of static rent. So up we go to market rate and higher with new market rates set.

But there will be people who have been renting on the now active 1 year freeze and got a review in say March this year. I think that what it will mean is that those rents are stuck for 1 year because that was the criteria for that rent increase in the first place. And then on their one year anniversary the landlord will raise to the max possible (because he knows that raise will be stuck for the two years after that), maybe even slightly more than the market rate, creating a new higher market rate.

So, rents are going to shoot up quickly and they wont be settling down now.

They should have left it alone, but the govern,ment just cant help interfering with and then wrecking markets

Well that's because it's a half arsed measure. They should force a rent at 80% of market now.

Jaketherake

Eugene Norman wrote: »

Well that's because it's a half arsed measure. They should force a rent at 80% of market now.

Maybe they should force the price of a sliced pan and a litre of milk to come down 80% too

Eugene Norman

The attitudes to government intervention here show exactly why it's isn't the politicians that are responsible for the boom & bust. Had the government intervened in 2003 the same anti government rhethoric would have flourished then as now.

Jaketherake

Eugene Norman wrote: »

The attitudes to government intervention here show exactly why it's isn't the politicians that are responsible for the boom & bust. Had the government intervened in 2003 the same anti government rhethoric would have flourished then as now.

The government did intervene in the years before the crash. Several times.

Eugene Norman

Jaketherake wrote: »

Maybe they should force the price of a sliced pan and a litre of milk to come down 80% too

Those industries aren't subsidised by the taxpayer unlike the entire housing and banking sector in Ireland.

April 73

Eugene Norman wrote: »

Well that's because it's a half arsed measure. They should force a rent at 80% of market now.

Wouldn't mind that if the government forced banks to take just 80% of mortgage payments for everyone too!!! :-D

quadrifoglio verde

Eugene Norman wrote: »

Those industries aren't subsidised by the taxpayer unlike the entire housing and banking sector in Ireland.

Farmers aren't subsidised???
Lol

mickoneill31

Eugene Norman wrote: »

Those industries aren't subsidised by the taxpayer unlike the entire housing and banking sector in Ireland.

http://farmsubsidy.openspending.org/IE/2013/

Eugene Norman

April 73 wrote: »

Wouldn't mind that if the government forced banks to take just 80% of mortgage payments for everyone too!!! :-D

The government is doing that for tens of thousands of mortgage holders including btl landlords.

Are you people living in the same country?

Eugene Norman

quadrifoglio verde wrote: »

Farmers aren't subsidised???
Lol

Nt to the same level. Not to the billions spent on propping up banks, developers, buying up property in Nama etc.

Irelands landlord classes support the free market for renters but not themselves.

pc7

Eugene Norman wrote: »

Well that's because it's a half arsed measure. They should force a rent at 80% of market now.

And a decrease of 80% on mortgages too so

Eugene Norman

pc7 wrote: »

And a decrease of 80% on mortgages too so

Answered that. Not that interest rates have gone up since the boom. When they do I fully expect vast amounts of moaning from landlords and property owners.

pc7

Eugene Norman wrote: »

Answered that. Not that interest rates have gone up since the boom. When they do I fully expect vast amounts of moaning from landlords and property owners.

How are they doing it for landlord?

quadrifoglio verde

Eugene Norman wrote: »

Nt to the same level. Not to the billions spent on propping up banks, developers, buying up property in Nama etc.

Irelands landlord classes support the free market for renters but not themselves.

Sorry Mr Norman, but can you provide evidence to me where landlords have received cash payments from the state outside of the BELOW market rates for providing housing to rent supplement and RAS tenants.
That's not a subsidy.

As far as I know, landlords don't get a couple of grand each year from the state for providing housing to private tenants.
Could you point out to me where these grants are available?

Farmers however do get grants and subsidies for providing food to the market, on top of the market rate that they receive from buyers.
To say that farmers receive less grants and subsidies than landlords is a blatant lie

gizmo555

Lux23 wrote: »

Of course not, but is there any real reason for a landlord to increase rent by 25% if the cost base is remaining the same? Other than profiteering of course.

The landlord is running a business to make a profit. Were you on here complaining about tenants "profiteering" when their rents collapsed, by more than 25%, along with the property market in 2007/2008?

It will be interesting to see if the government's proposals offer any "rent certainty" for landlords against falling market rents. Somehow I think I already know the answer to that . . .

Eugene Norman

pc7 wrote: »

How are they doing it for landlord?

There were 20,000 landlords in arrears at one stage. That means the renter had to pay the landlord who was withholding mortgage payments.

Eugene Norman

gizmo555 wrote: »

The landlord is running a business to make a profit. Were you on here complaining about tenants "profiteering" when their rents collapsed, by more than 25%, along with the property market in 2007/2008?

You can't "profiteer" unless you are making a profit. What the state was allow the landlords to keep possession of property in arrears. In most countries btl landlords lose their shirt in recessions, here they were coddled by government owned banks. Private profit and socialised losses.

It will be interesting to see if the government's proposals offer any "rent certainty" for landlords against falling market rents. Somehow I think I already know the answer to that . . .

nearly all controlled rent ( like my Paris rental) is upward only for the duration of the lease. The rate is inflation however. Not market. You get market when the tenant leaves.

Darkest Horse

Jaketherake wrote: »

Maybe they should force the price of a sliced pan and a litre of milk to come down 80% too

And why not throw fuel on there while we're at it!

Darkest Horse

Eugene Norman wrote: »

There were 20,000 landlords in arrears at one stage. That means the renter had to pay the landlord who was withholding mortgage payments.

Really? Does being in arrears mean that landlords were keeping all the rental income themselves and at least not trying to pay off what they could?

Eugene Norman

Darkest Horse wrote: »

Really? Does being in arrears mean that landlords were keeping all the rental income themselves and at least not trying to pay off what they could?

I assume that's what it means. arrears means no payment.

mickoneill31

Eugene Norman wrote: »

I assume that's what it means. arrears means no payment.

I don't think it does. Arrears means some of the debt hasn't been paid. It doesn't mean no payment at all. Someone can be in arrears with a bank and still making an effort.

ABC101

Eugene Norman wrote: »

I assume that's what it means. arrears means no payment.

Ah... no that is not what I understand it to be...

Mortgage arrears can be where a payment is made.... but it is less than the monthly payment.. ...i.e.

In a case of a monthly mortgage of 1000 euro / month... if the property owner can only pay 800 euro a month.... then a payment is still made.

The mortgage then starts to go into arrears.. i.e. it falls behind the repayment schedule... but there is still a payment made.

Obviously... if no payments are made every month... then the mortgage arrears start to accumulate very quickly. In addition there could also be penalties added... which added on financial penalties to the outstanding principle.

If you cannot meet the monthly repayment... but you can offer 80% of it etc then you are best to do that.

SKETT

gizmo555 wrote: »

It will be interesting to see if the government's proposals offer any "rent certainty" for landlords against falling market rents.

Are you joking, this is the most short-sighted, idiotic, pre-election "seen to be doing something" action I have ever witnessed in the history Irish politics. Talk about closing the stable door after the horse is bolted, the horse is now on another planet, in another dimension of another universe, for the last 2 years at least.

Darkest Horse

SKETT wrote: »

Are you joking, this is the most short-sighted, idiotic, pre-election "seen to be doing something" action I have ever witnessed in the history Irish politics. Talk about closing the stable door after the horse is bolted, the horse is now on another planet, in another dimension of another universe, for the last 2 years at least.

And from what I have been able to gather, it only applies to future rent hikes so that if a tenant had rent increased this year and was due a review in 2016, only that one is frozen for two years, not the previous one. That means for my own tenant, I have no choice but to increase from 800 to 950, as opposed to the 875 I was going to go for which is unfortunate but on the other side of the coin, I've got a mortgage to pay!

gizmo555

Darkest Horse wrote: »

That means for my own tenant, I have no choice but to increase from 800 to 950, as opposed to the 875 I was going to go for which is unfortunate but on the other side of the coin, I've got a mortgage to pay!

Similar story here. Under the current system, I had intended soon to give notice to my tenant of an increase from €1,100 to €1,200, to come into effect from January next. This is actually well below the market rate - an identical apartment in the same complex was advertised on Daft the other week for €1,400 (and it's now let). I get on well with my tenant though and he always pays on the button each month. It's worth it to me not to press for the maximum rent which I could, to have a reliable tenant .

I should also say that he's been in the apartment for a number of years, during a period of falling market rents, which he got the full benefit of as each year's review went by. His initial rent was €1,100 and for several years it was as low as €800.

I'm not going to try to jump the gun and give him notice of an increase before the government publishes details of its scheme. But what I will say to him is that he can agree voluntarily to a €100 increase next January and will then have a guaranteed rent for two years, or in January 2017 I'll reluctantly be looking to increase the rent to the maximum possible given the prevailing market conditions then.

Assuming there has been no fall in rents by this time next year, he'll then end up paying an increase €3,600 over two years, instead of €2,400. Will he be grateful to Alan Kelly for his intervention? I doubt it.

Lux23

Lux23 wrote: »

It's blatant profiteering.

A LL is running a business, the aim of which is to make as much money as possible why wouldn't they raise the rent even if the cost base is the same as it means more profit, i.e. the whole point of renting the property in the first place.

Calling it profiteering is sensationalist nonsense.

Do you think any business charge any less than they can just out of the goodness of their heart? No they charge what people will pay and if people will pay the increased rents then a LL would be a fool and a poor business man not to incase them.

Jaketherake

Darkest Horse wrote: »

And from what I have been able to gather, it only applies to future rent hikes so that if a tenant had rent increased this year and was due a review in 2016, only that one is frozen for two years, not the previous one. That means for my own tenant, I have no choice but to increase from 800 to 950, as opposed to the 875 I was going to go for which is unfortunate but on the other side of the coin, I've got a mortgage to pay!

The review due in 2016 wont be frozen. Only two years from your NEXT review will be frozen.

gizmo555

Jaketherake wrote: »

The review due in 2016 wont be frozen. Only two years from your NEXT review will be frozen.

That doesn't tally with what the Irish Times reported on Thursday last:

It [the government proposal] effectively means that anyone who had their rent increased in the summer this year will not face another increase until summer 2017.

http://www.irishtimes.com/news/politics/rents-to-be-increased-only-every-two-years-under-housing-plan-1.2419019


The government is really just making this stuff up as it goes along.

Jaketherake

gizmo555 wrote: »

That doesn't tally with what the Irish Times reported on Thursday last:

It [the government proposal] effectively means that anyone who had their rent increased in the summer this year will not face another increase until summer 2017.

http://www.irishtimes.com/news/politics/rents-to-be-increased-only-every-two-years-under-housing-plan-1.2419019


The government is really just making this stuff up as it goes along.

I doubt it. When someone got their last increase there was an understanding that it could be increased one year from that date. Plans were made based on this. That is still the reality. Moving the goal posts on plans already made would be even worse.

gizmo555

Jaketherake wrote: »

That is still the reality

The government could change that reality with the stroke of a pen. We'll see on Tuesday.

Jaketherake

gizmo555 wrote: »

The government could change that reality with the stroke of a pen. We'll see on Tuesday.

And thats an even bigger problem in itself, if they can do that.

I wonder how many rent increases are going out on Monday, just in case.

Darkest Horse

gizmo555 wrote: »

That doesn't tally with what the Irish Times reported on Thursday last:

It [the government proposal] effectively means that anyone who had their rent increased in the summer this year will not face another increase until summer 2017.

http://www.irishtimes.com/news/politics/rents-to-be-increased-only-every-two-years-under-housing-plan-1.2419019


The government is really just making this stuff up as it goes along.

The point is that when the time comes, landlords will just compensate for any perceived deficits, no matter what the timescale.

Heisenberg.

This post has been deleted.

gizmo555

Jaketherake wrote: »

I wonder how many rent increases are going out on Monday, just in case.

If the Irish Times has it right, the government's action could potentially invalidate any such increases.

Bob24

gizmo555 wrote: »

If the Irish Times has it right, the government's action could potentially invalidate any such increases.

Not all of them.

If a landlord last increased the rent 13 months ago, reviewing the rent on Monday would not be an issue and would not be invalidated by the new rules (at least according to what the IT wrote). However if they wait until the rules comes into effect, they would then be stuck and have to wait another 11 months before they can do anything.

So there is in incentive for landlords who haven't reviewed the rent in the past 13-20 months to issue an increase notice on Monday as if they don't do it now they could then be stuck for couple of months.

Jaketherake

I can see a lot of rents now being set up something like this.

Monthly rent = €1200
Discretionary good tenant discount = €200 pm

Net payable €1000 pm


So in that case the landlord wants €1000 for rent, but has set the rent at €1200 and discounts it every month to make it €1000.
Now he has €200 a month to be able to add on by reducing the discount but not increasing the rent.

Bob24

Jaketherake wrote: »

I can see a lot of rents now being set up something like this.

Monthly rent = €1200
Discretionary good tenant discount = €200 pm

Net payable €1000 pm


So in that case the landlord wants €1000 for rent, but has set the rent at €1200 and discounts it every month to make it €1000.
Now he has €200 a month to be able to add on by reducing the discount but not increasing the rent.

Seems tricky.

Firstly if the contract says 1200 but the tenant can demonstrate payments have been 1000 for several months in a row, could there not be a case to raise with the PTRB saying there was a verbal agreement to reduce the rent after the contract was signed and the correct rent is based on the most recent agreement?

Secondly, what do you declare for tax purposes? Not sure Revenue would be too please if you give them a different amount from what the contract/PTRB have. And if you tell them 1200 you will be somehow lying to them and they will charge you more tax than you should really pay.

Jaketherake

Bob24 wrote: »

Seems tricky.

Firstly if the contract says 1200 but the tenant can demonstrate payments have been 1000 for several months in a row, could there not be a case to raise with the PTRB saying there was a verbal agreement to reduce the rent after the contract was signed and the correct rent is based on the most recent agreement?

Secondly, what do you declare for tax purposes? Not sure Revenue would be too please if you give them a different amount from what the contract/PTRB have. And if you tell them 1200 you will be somehow lying to them and they will charge you more tax than you should really pay.

Businesses do this all the time. Banks, insurance companies being the most visible and lots more.

Rent is still €1200 pm.
Landlord is just giving a "no claims discount" so to speak.
Or something like "Pay for 11 months get 1 month free" or "Pay by DD discount"

Tenant can refuse the discount if they want.

Wait and see. There will be many and varied charging structures for rents now.
Ive been experimenting with Air BnB myself.

April 73

There's a lot of unanswered questions on the two year freeze. How exactly will it work?
1) if rent was increased anytime in 2015 then it cannot be increased until the same date in 2017? That gives one year's respite to tenants whose rent increased in 2015 as there will be no increase until 2017. But it seems like a retrospective law.
What if the tenant signed a new lease agreeing to a rent review on Jan 1st 2016? Will this law overuse this lease agreement.

2) an increase rent due anytime in 2016 then applies for two years so that tenants know where they stand until 2018. Without a shadow of a doubt this will lead to steep increases in 2016.

It's a minefield & I see only steep increases either straight away or as soon as the 1st of Jan 2017. But it pushes the can down the road for a year beyond the next election.

_Kaiser_

April 73 wrote: »

But it pushes the can down the road for a year beyond the next election.

And that's the point - while telling us they've provided rent certainty and claiming another boost in the coffers as a result of their "Recovery"

Meanwhile (as usual with this current Government) the ordinary citizen foots the bill and suffers the consequences.

Bad as FF were/are, FG/LAB are a lot worse!