Rent a room - opt out of provisions

intheclouds

Am considering renting out a self contained unit attached to my property that meets the requirements for opting out of the provisions in Part 4 of the Residential Tenancies Act 2004.

According to Citizens Info, if I do so I must give the tenant notice in writing before they start the tenancy.

Is there a template available to use for this or can anyone suggest some wording?

From Citizens Info:

Self-contained units
If you rent out a self-contained unit in your home, such as a converted garage attached to your home or a basement flat, the rights and obligations under residential tenancies legislation apply to you. For example, you are obliged to register the tenancy with the Residential Tenancies Board (RTB), provide a rent book to the tenant and ensure that the accommodation provided meets minimum physical standards.

The residential tenancies legislation provides for security of tenure for tenants. These provisions are in Part 4 of the Residential Tenancies Act 2004. However, if the self-contained flat or apartment was originally part of the main house, you can choose to opt out of these provisions. This option is available under Section 25 of the Act. You must give the tenant notice in writing, before the start of the tenancy, if you wish to take this option.

Baby01032012

intheclouds wrote: »

Am considering renting out a self contained unit attached to my property that meets the requirements for opting out of the provisions in Part 4 of the Residential Tenancies Act 2004.

According to Citizens Info, if I do so I must give the tenant notice in writing before they start the tenancy.

Is there a template available to use for this or can anyone suggest some wording?

From Citizens Info:

Well if your renting out a room under the rent a room scheme in your own home the RTA does not apply and the person renting is not a tenant they are a license and have no tenant rights. However you need to be sure you meet the requirements for rent a room - is there access from the main house directly to the self contained unit?

intheclouds

Baby01032012 wrote: »

Well if your renting out a room under the rent a room scheme in your own home the RTA does not apply and the person renting is not a tenant they are a license and have no tenant rights. However you need to be sure you meet the requirements for rent a room - is there access from the main house directly to the self contained unit?

Yes to all of the above.

There is no question meeting the requirements. Thats not what I am asking.

I am asking if there is a template or suggested wording to use for

However, if the self-contained flat or apartment was originally part of the main house, you can choose to opt out of these provisions. This option is available under Section 25 of the Act. You must give the tenant notice in writing, before the start of the tenancy, if you wish to take this option.

Baby01032012

intheclouds wrote: »

Yes to all of the above.

There is no question meeting the requirements. Thats not what I am asking.

I am asking if there is a template or suggested wording to use for

From my reading of it opting out of section 25 and rent a room relief are two different things. If you are opting for rent a room relief the RTA does not apply in anyway. There is no tenancy, the person will be a licensee and has no rights, there are no requirements around licensees.

The section 25 is where rent a room does not apply where there are separate units and a tenancy applies but as the landlord is resident in one of those units they can opt out of the security of tenure provisions of the RTA.

So both are very different.

intheclouds

Baby01032012 wrote: »

From my reading of it opting out of section 25 and rent a room relief are two different things. If you are opting for rent a room relief the RTA does not apply in anyway. There is no tenancy, the person will be a licensee and has no rights, there are no requirements around licensees.

The section 25 is where rent a room does not apply where there are separate units and a tenancy applies but as the landlord is resident in one of those units they can opt out of the security of tenure provisions of the RTA.

So both are very different.

This is not my reading of it at all.

Have you any link to illuminate further?

According to citizens info, self contained unit CAN qualify for rent a room relief under certain conditions and those conditions are met you can use section 25 to opt out of RTA but you must provide written notice to tenant prior to tenancy beginning.

However, regardless of the reading of it, my question pertains to wording of the written notice, any suggestions?

Baby01032012

intheclouds wrote: »

This is not my reading of it at all.

Have you any link to illuminate further?

According to citizens info, self contained unit CAN qualify for rent a room relief under certain conditions and those conditions are met you can use section 25 to opt out of RTA but you must provide written notice to tenant prior to tenancy beginning.

However, regardless of the reading of it, my question pertains to wording of the written notice, any suggestions?

There are some more better qualified to offer their opinion on this, failing further responses a call to the RTB would be the best bet.

I'd be grateful to hear what they say.

I still stand over fact that rent a room is not governed in anyway by RTA and therefore no letter notification required. Rent a room is a revenue scheme and is governed by the revenue commissioners.

intheclouds

Baby01032012 wrote: »

There are some more better qualified to offer their opinion on this, failing further responses a call to the RTB would be the best bet.

I'd be grateful to hear what they say.

I still stand over fact that rent a room is not governed in anyway by RTA and therefore no letter notification required. Rent a room is a revenue scheme and is governed by the revenue commissioners.

Yeah I'll give them a call.

Will update if anything of interest.

While I agree with you that the room is not governed by RTA, it's the fact that it is a self contained unit means the letter is needed (in my understanding). I guess it's because it could be rented out under RTA if I wasn't living in main house (ie, I could rent out the whole property in 2 separate rentals). But while I'm resident in main house and they are attached (with shared access) I am choosing to rent it out under rent a room.

The_Conductor

Definitely interested in what they say- as my understanding of the rent-a-room scheme is that it *has* to (without exception) be part of the main dwelling and with access to the main dwelling. Opting out of Section 25- where you are not giving a tenant rights under the Residential Tenancy Acts- in the case of a dwelling on the premises of the property in which you yourself are dwelling- is just that- its opting out of the Act- legitimately- and the 'tenant' is not afforded the protections of the Act- however, you have to pay tax on all the income (you don't get a 12k- or whatever the current level is- like you do with the rent-a-room scheme).

Let us know in any case the advice you get- perhaps you'll be happily surprised.

intheclouds

I'm on the iPad so copy/paste ain't great but here is the relevant excerpt from citizens info on self contained units and rent a room:

If you rent out a room (or rooms) in your home to private tenants, the rental income you earn will be exempt from income tax, provided this income does not exceed a certain limit in a tax year. This is called the rent-a-room relief. A self-contained unit, such as a basement flat or a converted garage attached to your home, can qualify for this relief.

Depending on their circumstances, your tenant(s) may be entitled to claim Rent Supplement. You will have to fill out part of the tenant’s application form and provide your PPS number. In an area where the Housing Assistance Payment (HAP) is in operation, your tenant may qualify for this payment instead – read more in ‘Housing Assistance Payment’ below.

Your tenant(s) may be entitled to claim tax relief on rent paid – see details in our document on Tax issues for tenants.

Read more about rent-a-room relief in A Revenue guide to rental income (IT 70) and in this detailed note (pdf).

Residential tenancies legislation

Self-contained units
If you rent out a self-contained unit in your home, such as a converted garage attached to your home or a basement flat, the rights and obligations under residential tenancies legislation apply to you. For example, you are obliged to register the tenancy with the Residential Tenancies Board (RTB), provide a rent book to the tenant and ensure that the accommodation provided meets minimum physical standards.

The residential tenancies legislation provides for security of tenure for tenants. These provisions are in Part 4 of the Residential Tenancies Act 2004. However, if the self-contained flat or apartment was originally part of the main house, you can choose to opt out of these provisions. This option is available under Section 25 of the Act. You must give the tenant notice in writing, before the start of the tenancy, if you wish to take this option.

Just based on the above I think it's clear that self contained can qualify for rent a room if it meets the conditions and you can choose to opt out using section 25 and inform tenant in writing?

Unless I'm reading it completely arse ways?

The detailed note gives further info:

4. Qualifying Residence
4.1 Sole or main residence
The room or rooms must be in a residential premises that is situated in the State and that is occupied by an individual as his/her sole or main residence during the particular tax year. An individual may live in more than one residence but can only avail of rent-a-room relief in respect of his/her sole or main residence. In general, an individual’s sole or main residence is that individual’s home for the greater part of the time and where friends and correspondents would expect to find him/her. The individual does not have to own the residence and it could, for example, be occupied as rented accommodation.

4.2 Self-contained unit
It is not possible to let an entire residence because the room or rooms that are let must form part of the residence and the residence must be occupied by the individual receiving the rent as his/her sole or main residence. The room or rooms can comprise a self-contained unit within the residence such as a basement flat or a converted garage attached to the residence. However, a self-contained unit that is adjacent to the residence but not actually attached to it cannot qualify for the relief.

Edited to add - the previous owner did have it rented out under rent a room a number of years ago.

Gumbo

intheclouds wrote: »

Am considering renting out a self contained unit attached to my property that meets the requirements for opting out of the provisions in Part 4 of the Residential Tenancies Act 2004.

According to Citizens Info, if I do so I must give the tenant notice in writing before they start the tenancy.

Is there a template available to use for this or can anyone suggest some wording?

From Citizens Info:

You might check that the Granted Planning Permission for the extension in the first place prohibits the sale or lease of the extension to a separate entity.

But if its under the RTR Scheme, you may be ok.

intheclouds

kceire wrote: »

You might check that the Granted Planning Permission for the extension in the first place prohibits the sale or lease of the extension to a separate entity.

But if its under the RTR Scheme, you may be ok.

The extension always existed, it didn't have separate planning permission. It was part of the main residence when it was built.

4ensic15

Rent a room is a taxation issue. Nothing to do with tenure. The RTA automatically excludes from its ambit dwellings in which the landlord resides. In a case where a dwelling has been split in two so that there are two independent dwellings as in a granny flat situation, and the landlord lives in one of the dwellings he can exclude certain provisions of the RTA provided he gives notice to the tenant before the tenancy commences. This applies to security of tenure only. Provided the two units are in the one building rent a room relief will apply even though the tenant is not a licensee.

Gumbo

intheclouds wrote: »

The extension always existed, it didn't have separate planning permission. It was part of the main residence when it was built.

Then ya not a self contained unit attached to your property. It's an extension and the licensee will be living within the one dwelling as the owner.

The_Conductor

kceire wrote: »

Then ya not a self contained unit attached to your property. It's an extension and the licensee will be living within the one dwelling as the owner.

Only applies if the principal dwelling has contiguous access to the whole of the property- which the OP has stated his 'apartment' which he proposes to let- does not.

Its a Revenue rule- rather than anything whatsoever to do with the Residential Tenancies Board- and despite both being organs of the State- they don't always agree with one another.........

4ensic15

kceire wrote: »

Then ya not a self contained unit attached to your property. It's an extension and the licensee will be living within the one dwelling as the owner.

It is a self contained unit if it has it's own kitchen and bathroom. It is a distinct dwelling from the point of view of the RTA. It may still qualify for rent a room relief.
In some cases a basement flat with its own entrance, kitchen and bathroom is allowed the rent a room relief even though the occupants are tenants. The o/p is trying to contract out of the security of tenure provisions, so he can throw the tenants out when he wants.

foggy_lad

intheclouds wrote: »

Am considering renting out a self contained unit attached to my property that meets the requirements for opting out of the provisions in Part 4 of the Residential Tenancies Act 2004.

According to Citizens Info, if I do so I must give the tenant notice in writing before they start the tenancy.

Is there a template available to use for this or can anyone suggest some wording?

From Citizens Info:

My reading of the section 25 opt out is that where a self contained unit such as a granny flat or converted garage was originally attached directly to the main building(not just on the same site/garden) the owner can regard such a flat or dwelling as being part of their house as guest accommodation and as such is free to opt out and treat anyone living in that flat as a licensee.

OP You just need a letter/notice stating that you are "opting out of part 4 of the residential tenancies act under section 25 and that any person renting the dwelling is NOT A TENANT but is a licensee."

4ensic15

foggy_lad wrote: »

My reading of the section 25 opt out is that where a self contained unit such as a granny flat or converted garage was originally attached directly to the main building(not just on the same site/garden) the owner can regard such a flat or dwelling as being part of their house as guest accommodation and as such is free to opt out and treat anyone living in that flat as a licensee.

OP You just need a letter/notice stating that you are "opting out of part 4 of the residential tenancies act under section 25 and that any person renting the dwelling is NOT A TENANT but is a licensee."

That is not the meaning of Section 25. There is another section 3 (2) g which states that the Act does not apply to a dwelling in which the LL also resides. You are trying to impute the same meaning to that as to Section 25 which is nonsense. What Section 25 allows the LL to do in respect of a dwelling in which he does NOT reside is to allow him opt out of the security of tenure provisions only. The occupant is a tenant for all purposes other than security of tenure.
How it is dealt with by the revenue is another matter.

intheclouds

4ensic15 wrote: »

That is not the meaning of Section 25. There is another section 3 (2) g which states that the Act does not apply to a dwelling in which the LL also resides. You are trying to impute the same meaning to that as to Section 25 which is nonsense. What Section 25 allows the LL to do in respect of a dwelling in which he does NOT reside is to allow him opt out of the security of tenure provisions only. The occupant is a tenant for all purposes other than security of tenure.
How it is dealt with by the revenue is another matter.

I do still live in the dwelling though. Shared gate, driveway, bins, wifi etc... There is only one property. It's just that a bit of it is self contained (it has its own kitchen, bathroom, entrance door).

So does the RTA apply then or not?

Baby01032012

intheclouds wrote: »

I do still live in the dwelling though. Shared gate, driveway, bins, wifi etc... There is only one property. It's just that a bit of it is self contained (it has its own kitchen, bathroom, entrance door).

So does the RTA apply then or not?

Based on this info. The RTA applies and you can opt out of security of tenure under section 25. However rest of the RTA applies and it is a landlord tenant relationship albeit not the security of tenure part.

BUT you can not avail of the Revenue scheme commonly known as Rent a Room Relief. So all income you receive will be taxable under subject to the normal tax deductions.

intheclouds

Baby01032012 wrote: »

Based on this info. The RTA applies and you can opt out of security of tenure under section 25. However rest of the RTA applies and it is a landlord tenant relationship albeit not the security of tenure part.

BUT you can not avail of the Revenue scheme commonly known as Rent a Room Relief. So all income you receive will be taxable under subject to the normal tax deductions.

What makes you think it doesn't fall under rent a room for taxation? I thought that was the clearest most undisputed part!

Self contained units are clearly listed as qualifying residences in revenues PDF on it (I quoted the relevant bit a few posts back).

Baby01032012

Baby01032012 wrote: »

intheclouds wrote: »

I do still live in the dwelling though. Shared gate, driveway, bins, wifi etc... There is only one property. It's just that a bit of it is self contained (it has its own kitchen, bathroom, entrance door).

So does the RTA apply then or not?

Based on this info. The RTA applies and you can opt out of security of tenure under section 25. However rest of the RTA applies and it is a landlord tenant relationship albeit not the security of tenure part.

BUT you can not avail of the Revenue scheme commonly known as Rent a Room Relief. So all income you receive will be taxable under subject to the normal tax deductions.

What are you basing this on, once there is direct access between the main building and the self contained unit (such as a door, even a permenantly locked one) the self contained unit is no different to a bedroom in the house. It does not come under the RTA and rent a room relief applies.

Op I think you are over complicating this, just rent it out and let the person know that they are living with you despite they having a self contained unit.

intheclouds

Alia Better Armor wrote: »

What are you basing this on, once there is direct access between the main building and the self contained unit (such as a door, even a permenantly locked one) the self contained unit is no different to a bedroom in the house. It does not come under the RTA and rent a room relief applies.

Op I think you are over complicating this, just rent it out and let the person know that they are living with you despite they having a self contained unit.

Sorry if you think I'm over complicating this. It's clear to me by the responses here that it us not a straightforward situation.

I intend to speak to both revenue and prtb before I rent it out at all (if I do decide to), to ensure I'm complying with the relevant laws.

I am confident it is a qualifying residence for tax purposes but I'm still not clear whether or not someone renting it from me would be a licensee or tenant, i.e., whether RTA applies.

It doesn't appear to be clear from the documentation available online and people here have different views on it.

4ensic15

intheclouds wrote: »

I do still live in the dwelling though. Shared gate, driveway, bins, wifi etc... There is only one property. It's just that a bit of it is self contained (it has its own kitchen, bathroom, entrance door).

So does the RTA apply then or not?

There are 2 dwellings in one property. RTA applies to every dwelling unless it is one of the exceptions. You only live in one of the dwellings so RTA applies to the other.

4ensic15

Baby01032012 wrote: »

Based on this info. The RTA applies and you can opt out of security of tenure under section 25. However rest of the RTA applies and it is a landlord tenant relationship albeit not the security of tenure part.

BUT you can not avail of the Revenue scheme commonly known as Rent a Room Relief. So all income you receive will be taxable under subject to the normal tax deductions.

It falls under the rent a room scheme if the 2 dwellings are in the same building.

4ensic15

Alia Better Armor wrote: »

What are you basing this on, once there is direct access between the main building and the self contained unit (such as a door, even a permenantly locked one) the self contained unit is no different to a bedroom in the house. It does not come under the RTA and rent a room relief applies.

Op I think you are over complicating this, just rent it out and let the person know that they are living with you despite they having a self contained unit.

The self contained unit is a dwelling and kitted out as such. It is very different to a bedroom in the house.

intheclouds

Thank you 4ensic15.

So, RTA applies, the tenant is not a licensee, but I can choose to opt out of security of tenure?

intheclouds

4ensic15 wrote: »

There are 2 dwellings in one property. RTA applies to every dwelling unless it is one of the exceptions. You only live in one of the dwellings so RTA applies to the other.

Actually at the moment we live in both, we have it set up as a gym room and a tv room, we just don't really use the bathroom or kitchen. But it can be used as an individual dwelling.

4ensic15

intheclouds wrote: »

Thank you 4ensic15.

So, RTA applies, the tenant is not a licensee, but I can choose to opt out of security of tenure?

That is the situation. There will also be an issue about the local property tax which must be paid in respect of each dwelling.

4ensic15

4ensic15 wrote: »

Alia Better Armor wrote: »

What are you basing this on, once there is direct access between the main building and the self contained unit (such as a door, even a permenantly locked one) the self contained unit is no different to a bedroom in the house. It does not come under the RTA and rent a room relief applies.

Op I think you are over complicating this, just rent it out and let the person know that they are living with you despite they having a self contained unit.

The self contained unit is a dwelling and kitted out as such. It is very different to a bedroom in the house.

Totally wrong, the self contained unit is part of the house there is no debate about it it's clear cut. Anyone living in it is a licensee and rent a room relief applies.

There is only one dwelling and the op would retain full access to all parts. It's very clearly laid out in both the rent a room scheme and RTA that self contained units are with a permanent connection to the main house are really just a part of the main house.

4ensic15

Alia Better Armor wrote: »

Totally wrong, the self contained unit is part of the house there is no debate about it it's clear cut. Anyone living in it is a licensee and rent a room relief applies.

There is only one dwelling and the op would retain full access to all parts. It's very clearly laid out in both the rent a room scheme and RTA that self contained units are with a permanent connection to the main house are really just a part of the main house.

Nonsense. The rent a room scheme is a Revenue view of the situation. It has nothing to do with the RTA view of the situation. The RTA would not have Section 25 at all if your view was correct, since Section £ would cover it.

4ensic15

4ensic15 wrote: »

Alia Better Armor wrote: »

Totally wrong, the self contained unit is part of the house there is no debate about it it's clear cut. Anyone living in it is a licensee and rent a room relief applies.

There is only one dwelling and the op would retain full access to all parts. It's very clearly laid out in both the rent a room scheme and RTA that self contained units are with a permanent connection to the main house are really just a part of the main house.

Nonsense. The rent a room scheme is a Revenue view of the situation. It has nothing to do with the RTA view of the situation. The RTA would not have Section 25 at all if your view was correct, since Section would cover it.

If the op rented a bedroom and had a second kitchen and bathroom in his house which he opted not to use and allow the person renting the room to use there would be no one even questioning it. This is no different, the term self contained unit is simply confusing people. It's been spoken about on here many times and the result has always been that self contained units are not tenancy's and they fall under the rent a room scheme.

It's very clear that everything is under the one roof, I don't see why you are trying to muddy the waters.