Residential tenancies bill 2016 proposals and discussion

dr.fuzzenstein

Villa05 wrote: »

No its not
Government picked up huge amounts of property not so long ago an sold it for a pittance to vulture funds, yet apparently building social housing is cost prohibitive. If they kept what they purchased, the state could have with good management, achieved social and affordable housing and turn a small profit out of it.

Every issue outlined in this thread has a simple solution.

I think I remember once hearing that the government couldn't use that housing stock for social housing because it did not comply with standards. Which doesn't surprise me, considering the "quality" of most boom era buildings.

pilly

dr.fuzzenstein wrote: »

I think I remember once hearing that the government couldn't use that housing stock for social housing because it did not comply with standards. Which doesn't surprise me, considering the "quality" of most boom era buildings.

So bringing it up to standard would cost more than starting new builds? I would hope not.

GGTrek

seamus wrote: »

newacc2015 wrote: »

There is no demand for long term leasing.

You have no evidence for this claim.

Irish law as it stands doesn't support long-term leasing, so how can you measure the level of demand for something which doesn't exist?

Back in the day, in fact eircom used to use this same argument as the reason why they didn't need to invest in broadband infrastructure; there was no demand for it.

And like that, long-term leases are a "build it and they will come" type of arrangement. When it becomes something that's possible, people will avail of it. And they will realise how much better it is.

And if there is no demand, then ultimately this law will make no difference, so what's the problem?

I do not agree that there is a market for long-term lettings in Ireland unless it is forced upon the tenants.

I have proposed several times to prospective tenants fixed-term tenancy agreements longer than 12 months, which is the closest you have in Ireland to a european style tenancy agreement and they never once accepted. What the Irish tenants love is the very one sided and very favourable (to the tenant only) Part 4 agreement where they get the right to terminate at a much shorter notice than a landlord giving no reason at all and many times they don't care at all about notice periods since they can always avoid paying the last month rent, while the landlord is stuck with it for 4 years, which is not a short term at all!

Now with these new RTA 2004 amendments, the landlord is stuck indefinitely with a Part 4 tenancy of the same type: termination rights with no reason provided to tenant at any time but no termination rights for no reason to landlord at all! Sorry but I totally disagree with you on this point. Either the government allows a proper fixed term for both parties with penalties also for the tenant or the current proposal is the usual joke on the landlord! As I said I strongly believe that the repeal of section 42 is uncostitutional since it is a full-front attack on the property rights of landlords, so should the Government approve this joke, I will check if IPOA and with other landlords who wish to mount a legal challenge to get it written off on constitutional grounds. As I said the government is threading a very thin line this time and I believe they know it but they don't care as long as it looks good on the media!

Check article 40 and 43 of the Constitution, Government and legislators cannot take away property rights without proper compensation and respecting a lot of other legal tests and these amendments combined appear to be a clear attack to property rights with no compensation:
http://www.supremecourt.ie/supremecourt/sclibrary3.nsf/(WebFiles)/7FC625DAD10A956C802575F3002D6B7E/$FILE/Housing_%5B1983%5D%20IR%20181.htm
https://www.boards.ie/b/thread/2056474841
http://www.flac.ie/download/doc/g_whyte_constitutional_property_rights_and_public_interest.doc

seamus

GGTrek wrote: »

Check article 40 and 43 of the Constitution, Government and legislators cannot take away property rights without proper compensation and respecting a lot of other legal tests and these amendments combined appear to be a clear attack to property rights with no compensation

Indeed, it's these articles that's the reason why tenants can leave without reason and with shorter notice. Surely you recognise that the rights of someone to their home trump someone else's right to their property?

A landlord is just out of pocket when there's a problem, but a tenant may be out on the streets. The landlord still has their own home no matter what the outcome.

So the impact of a dispute is, on balance, greater on the tenant and therefore the balance of rights sits in the tenants favour.

And bluntly if you can't accept that then you shouldn't be a landlord. To you it's just an investment. To a tenant it's the roof over their head.

This law doesn't actually affect landlords' rights to own or transfer property. A sitting tenant doesn't prevent you from selling a property; the market does. The only reason the market insists on vacant possession is because it can. Once that goes away, so too will the insistence on vacant possession.

Look at other countries - sitting tenants are advertised as a positive, like double glazing or a south-facing garden, when they're good long-term tenants.

Graham

seamus wrote: »

Look at other countries - sitting tenants are advertised as a positive, like double glazing or a south-facing garden, when they're good long-term tenants.

At the same time there aren't many landlords in those other countries that would be forced to consider advertising their property with a sitting tenant that hasn't paid rent in 2 years.

Balance is the key here, something that's sadly missing in different areas on both sides of the arrangement.

DubCount

seamus wrote: »

Indeed, it's these articles that's the reason why tenants can leave without reason and with shorter notice. Surely you recognise that the rights of someone to their home trump someone else's right to their property?

A landlord is just out of pocket when there's a problem, but a tenant may be out on the streets. The landlord still has their own home no matter what the outcome.

So the impact of a dispute is, on balance, greater on the tenant and therefore the balance of rights sits in the tenants favour.

And bluntly if you can't accept that then you shouldn't be a landlord. To you it's just an investment. To a tenant it's the roof over their head.

This law doesn't actually affect landlords' rights to own or transfer property. A sitting tenant doesn't prevent you from selling a property; the market does. The only reason the market insists on vacant possession is because it can. Once that goes away, so too will the insistence on vacant possession.

Look at other countries - sitting tenants are advertised as a positive, like double glazing or a south-facing garden, when they're good long-term tenants.

This reflects a major problem with the Irish Property market. The responsibility for keeping someone in their home currently rests with the Landlord. That should not be the case. It is the Government who should be responsible for providing homes for people.

Look at the UK. If you get evicted, either you re-house yourself or the local authority provides emergency/replacement accommodation for you. If you are a non-paying / anti-social tenant in the UK, you are evicted in about 3 months.

A landlord is only a business providing a service. Like all other businesses, you should be able to stop providing a service if you don't get paid or you don't want to continue providing the service.

seamus

To be honest I don't know why any LL bother with leases, its only reducing their already very limited rights. For example a one year lease prevents them getting rid of someone in the first 6 months.

I'd be offering no lease or at most 5 months were I renting a place. The vast majority of LL would run a mile from a long term lease I'd imagine.

seamus wrote: »

Indeed, it's these articles that's the reason why tenants can leave without reason and with shorter notice. Surely you recognise that the rights of someone to their home trump someone else's right to their property?

A landlord is just out of pocket when there's a problem, but a tenant may be out on the streets. The landlord still has their own home no matter what the outcome.

.

This is wrong imo, a persons right to their property should trump the tenants rights to stay there. Its not the LLs problem if they can't find an alternative accommodation if given a reasonable time-frame to do so. Also you are making it sound like being out of pocket is ok, its certainly is not in any shape or form and a LL should not be out of pocket. If someone isn't paying rent a LL should be able to throw them out of the house after a second missed rent payment imo, physically remove them if necessary.

Also out of pocket for a LL could put them in serious trouble with their own home too if they are replying on the rental income so its not a fair statement to say its "only" out of pocket. Also using emotive terms like "out on the streets" is just used by people to stir things, in the vast vast majority of cases people will just be moving to alternative accommodation.

markpb

seamus wrote:

A landlord is just out of pocket when there's a problem, but a tenant may be out on the streets. The landlord still has their own home no matter what the outcome.

So the impact of a dispute is, on balance, greater on the tenant and therefore the balance of rights sits in the tenants favour.

Justin Thousands Yachtsman wrote:

This is wrong imo, a persons right to their property should trump the tenants rights to stay there.

Surely it's better to say that the law should be a compromise between tenants and landlords rights rather than giving priority to either?

A good tenant deserves protection from being evicted illegally or with too little notice because they risk not being able to find an alternative in time.

Likewise a bad tenant withholding on rent or damaging a property could put a landlord into financial trouble and make them lose their own house or business.

The_Conductor

markpb wrote: »

Likewise a bad tenant withholding on rent or damaging a property could put a landlord into financial trouble and make them lose their own house or business.

Or- in the case before the RTB a few weeks ago- featuring a family who moved abroad during the downturn- and now find a tenant overholding in their family home- the landlord themselves could find themselves homeless.........

Its a quagmire- the legislation as it stands- is firmly in a tenant's favour- and the proposals, if they are allowed come into being- quite simply will drive all small landlords out of business- in favour of the REITs (who in the main pay little if any tax whereas- a small scale landlord is hammered with tax which can be up to 54% of gross rental income- alongside non-deductible costs (which are deductible for the REITs) such as property tax.........

The proposal seems to be an over-reach in favour of REITs and very much against Irish property holders- and indeed, as has been mentioned by a few posters- is highly likely to run foul of the property rights enshrined in our constitution.

In my opinion- there should be a leveling of the playing field- so the same rules apply to all landlords, big and small- but also there should be an active incentive for all property owners, private individuals or REITs, to repay any debts associated with property- the manner in which REITs can cancel all their tax- by lending their own purchase vehicles funds at 15-20% so they never ever make a profit (this even extends to some strategic public sales, such as the National Lottery to the Quebec Teachers Pension Fund)- is nuts.

There is plenty wrong with the property sector as-is- however, the avenues being explored here are definitely not in the Irish taxpayers favour, will drive many landlords from the market- driving up rents for tenants- and leave tenants dealing with faceless REITs- who won't think twice about people as people, where many tenants have excellent interpersonal relationships with their landlords these days............

The proposed legislation- if it gets through the houses, which I seriously doubt- would have to be referred to council by the President (though I doubt it would get that far).

A discussion on how legislation should evolve is doubtlessly called for- however, the current proposals- are a massive over-reach, very probably unconstitutional, and very definitely not in a tenant's favour- though of course it will be sold in such a wishy-washy manner that it is the panacea to all the ills of the sector........

newacc2015

seamus wrote: »

You have no evidence for this claim.

Irish law as it stands doesn't support long-term leasing, so how can you measure the level of demand for something which doesn't exist?

Back in the day, in fact eircom used to use this same argument as the reason why they didn't need to invest in broadband infrastructure; there was no demand for it.

And like that, long-term leases are a "build it and they will come" type of arrangement. When it becomes something that's possible, people will avail of it. And they will realise how much better it is.

And if there is no demand, then ultimately this law will make no difference, so what's the problem?

http://www.irishtimes.com/news/social-affairs/ireland-s-rental-crisis-will-new-measures-help-1.2428825

An independent report commissioned stated there was little appetite for long term leases. Some people want them, but it far from the norm.

Can you supply evidence to contradict the claim of no demand for long term tenancies? You are saying there is no demand for them as there is no law in place for them, but there is part IV.

How does the law not support it? You are given 4 years under part IV. Despite this most tenants dont wait out the 4 years.

Eh?! What does bringing in an incompetent monopoly add to this argument? The rental market is perfectly competitive. If there was demand for long term leases, one of the several hundred thousand landlords/vulture funds/REITs would have offered them.

But there is no logical reason to do so. IMO if you are willing to offer a tenant a long term lease you are either an imbecile or seriously incompetent. Lets do the maths on a long term lease. Assume the rent is the same for 10 years or index linked aka the same for the next 10 years as we basically no inflation. What idiot would basically lock in their the same rent for 10 years when they can't fix their mortgage for 10 years? Some landlords have gone from having their variable mortgages go from 3.5% to almost 6% in the last few years. There is the fact the Government capped mortgage interest relief, introduced LPT, USC and PSRI. What rational person would cap their rents for the next 10 years when over night the Government/their bank can take a 30% cut over night?

There is no point offering long term leases if they can literally bankrupt landlords. Landlord terms lease can be a thing when landlords can fix their mortgages long term and the Government stops changing the tax code over night.

If people want long term leases demand more social housing. People need to stop expecting landlords to being not far off a charity...

murphaph

I'm a LL. I'd be ok with the notion of long term security of tenure but these proposals (yet again) are completely biased in favour of tenants with noting of significance for landlords whatsoever. Nothing about speedy evictions of non-paying tenants etc.

The government can do as they please but apart from a few reluctant landlords they can't force anybody to remain in the rental sector. The houses that pissed off landlords sell will dramatically reduce the rental stock as they invariably get purchased by families and the 3 bed house share accommodating 5 or 6 people now accommodates 3 or 4. The competition for remaining rentals will get even hotter. Successive governments have shown total ineptness in dealing with this sector professionally.

It this stuff looks like becoming law expect thousands of tenants to get served notice to quit as the property is going up for sale.

Mr. Incognito

This does not address the greatest problem of the PRTB

Vexatious claims where a tenant can stop paying rent. Bring a PRTB action and go through Adjudication and Tribunal before the LL can evict them legally.

The Adjudicator should have the power to summarily dismiss vexatious claims subject to appeal to the High Court not the Tribunal.

If not appealed to the High Court within 30 days they become binding and LL can evict legally.

I've seen cases where tenants have won that a notice of termination was invalid and sought to appeal that just to game the system. I'm not a landlord. I'm a Solicitor.

GGTrek

Mr. Incognito wrote: »

This does not address the greatest problem of the PRTB

Vexatious claims where a tenant can stop paying rent. Bring a PRTB action and go through Adjudication and Tribunal before the LL can evict them legally.

The Adjudicator should have the power to summarily dismiss vexatious claims subject to appeal to the High Court not the Tribunal.

If not appealed to the High Court within 30 days they become binding and LL can evict legally.

I've seen cases where tenants have won that a notice of termination was invalid and sought to appeal that just to game the system. I'm not a landlord. I'm a Solicitor.

Sorry it is unclear to me, but it would not make sense for a tenant to win a case of invalid notice at adjudication stage and then appeal, it usually is the other way around the landlord wins the case and tenant appeals without any ground for appealing because they know they will gain as a minimum 4 extra months rent free, but on average a multiple of that (given delays in appeal and then enforcement at Circuit Court). My issue as a landlord with High Court appeals is that they would be extremely expensive, I believe that Circuit or District court are perfectly capable of dealing with an appeal at a much lower cost, but they would stop the vast majority of spurious appeals as it happens now, since (a) the tenant would have to pay a reasonable amount of court fees (b) the standard of proof would be balanced between tenant and landlord,  sincean other issue at RTB at the moment is that they take tenants allegations at face value and the landlord has to prove or disprove everything with evidence, this is not a balance of probabilities, it is a joke.

handlemaster

pilly wrote: »

So bringing it up to standard would cost more than starting new builds? I would hope not.

Theres mention of 36 million refurb cost for Priory Hall. Best start from scratch

Kapips88

I originally registered here to research potential property investment for myself.
I have to say, I am totally off the idea now after reading. I will never invest in property in this country.

On another note regarding long term leases.
Would this be true?

A tenant and a landlord agree and sign a 10 year lease for the rental of an apartment.
The landlord is held to that 10 years and will suffer (fines etc) if he breaks the lease.
The tenant could just move out tomorrow and nothing will happen apart from they might lose some of their deposit.

Hardly seems like the lease is worth the paper its written on for the landlord.

The_Conductor

The simple fact of the matter is landlords are a convenient whipping boy- and despite the irrefutable fact that the legislation as it stands, is weighed heavily in favour of tenants, it is politically expedient to paint landlords as bogeymen- as it distracts from the shortcomings of politicians, the manner in which the legislative process is flawed- and indeed, the manner in which the RTB operates, and its complete and utter lack of teeth.

The proposed legislation- in its current form, is most probably unconstitutional, as it invades property rights enshrined in our constitution. Even if it is watered down to try and play silly buggers and get around the inconvenience of the constitution- all it will do is lead to a further increase in landlords divesting of property- particularly now that the negative equity reason for holding onto property has been largely fixed through rampant house price inflation- lower volumes of property being available to rent- and before long- yet higher residential rental rates...........

It is telling that the cohort cheering on the proposed legislation from the sidelines- includes representatives of two of the largest property REITs-and they have also issued revised profit forecasts to their investors- based on the assumption of this going through........

For tenants- this is yet another of those 'be careful what you wish for, you just might get it' moments.......... Calling it the law of unintended consequences doesn't even begin to elaborate on the Pandora's box the proposed legislation will unfurl on the sector.............

sunnysoutheast

Kapips88 wrote: »

I will never invest in property in this country.

You could buy REIT stocks. That is what I have done. These moves are clearly intended to pave the way for institutional/corporate ownership of rental property as the norm in Ireland and there was often a lament for "professional landlords" so we will see where that takes us.

I think it is telling that, amongst the group of people we know who would be prime candidates for the much-reviled "small landlord" sector, very few are still renting out property, and many of those that do were already planning to sell.

The_Conductor

sunnysoutheast wrote: »

You could buy REIT stocks. That is what I have done. These moves are clearly intended to pave the way for institutional/corporate ownership of rental property as the norm in Ireland and there was often a lament for "professional landlords" so we will see where that takes us.

I think it is telling that, amongst the group of people we know who would be prime candidates for the much-reviled "small landlord" sector, very few are still renting out property, and many of those that do were already planning to sell.

If the landlord's nose was sufficiently out of joint- he/she could chase the tenant for any lost income between the date the tenant leaves, and the unit is relet, the costs of making good any damage and the cost of re-tenanting the property. In practice- even if the landlord is massively out of pocket (and there have been high profile cases where there were tens of thousands of Euro worth of damage)- its entirely pointless chasing the tenant- as even if you go to the trouble of taking a case, normally they will plead an inability to pay- and the landlord is left high and dry.

Best case scenario for most landlords is the property is not seriously damaged- and they take whatever costs on the chin..........

sunnysoutheast

The_Conductor wrote: »

If the landlord's nose was sufficiently out of joint- he/she could chase the tenant for any lost income between the date the tenant leaves, and the unit is relet, the costs of making good any damage and the cost of re-tenanting the property. In practice- even if the landlord is massively out of pocket (and there have been high profile cases where there were tens of thousands of Euro worth of damage)- its entirely pointless chasing the tenant- as even if you go to the trouble of taking a case, normally they will plead an inability to pay- and the landlord is left high and dry.

Best case scenario for most landlords is the property is not seriously damaged- and they take whatever costs on the chin..........

Not disagreeing with you but I think you meant to quote the other post?

The_Conductor

sunnysoutheast wrote: »

Not disagreeing with you but I think you meant to quote the other post?

Yes- sorry- giving kids baths here- badly distracted.........:o

Villa05

The_Conductor wrote:

For tenants- this is yet another of those 'be careful what you wish for, you just might get it' moments.......... Calling it the law of unintended consequences doesn't even begin to elaborate on the Pandora's box the proposed legislation will unfurl on the sector.............

Bang on., this is for very wealthy institutional investment firms and we are fast approaching a monopoly scenario in the rental market. Again many people are oblivious to what is going on and how it will effect them

Further fuel for a bubble in our high demand areas

Coveney was on Kenny this week and pointing the finger at everything except current government policy which is a large part of the problem both in rental and buying markets

GGTrek

Apparently senior figures of Fine Gael are showing more caution than Coveney:
http://www.irishtimes.com/news/politics/coveney-s-rental-strategy-faces-resistance-from-within-fine-gael-1.2892918
"A number of Government sources said that, given the level of State interventions in the housing sector over the past two years or so, it may not be desirable to make further dramatic, market-altering moves."
"It is claimed that the emerging indicators point to increased supply from 2017 and that this would help solve the housing and rental crisis. The changes already announced to increase housing supply should be allowed do their work, some sources said."
"Government figures are also wary that any pre-emptive flagging of the measures in Mr Coveney’s new strategy could affect the market and could tempt landowners to make changes before the policies kick in."
Maybe someone in government is thinking about the massive negative side effects of this further meddling by politicians in a market that is already very messed up: time will tell.

seklly

https://www.irishexaminer.com/ireland/coveney-plans-move-to-limit-rent-hikes-across-dublin-and-cork-434977.html

mahoganygas

Rent controls, in the long term are detrimental to the market.

Lux23

Rental rates effectively frozen? What does that mean, sure they can still go up 12% over the next three years.

nhunter100

mahoganygas wrote:

Rent controls, in the long term are detrimental to the market.

They work well in Berlin.

seamus

If anything rent controls will only increase demand in the areas that the controls apply.

There is some merit in it as a short-term measure in a housing crisis, as it ultimately means less people being forced out by increasing rents.

Most of the current homeless issue is not about a lack of housing, but a lack of housing where people want to live. Joe Bloggs is living in Rialto and gets forced out by increasing rents. He wants to live in Rialto, but can now only afford to live in Leixlip. So he goes on the housing list.

Boo-hoo you might say, but this is the issue at the heart of our housing crisis. If you freeze rents, then Joe can stay in Rialto and the person who would have taken his place will find somewhere else to live because they're more flexible.

Ultimately it will cause rents outside the "freeze" areas to go up disproportionately. Which means there's a bad chance of housing bubble mark 2 kicking in.

This should be part of a portfolio of measures to address the housing crisis and not a stopgap measure in isolation. On its own it won't improve anything in the long-term.

The_Conductor

Restricting soaring rents- does absolutely nothing whatsoever for the housing crisis.

We do not urgently need restrictions on soaring rents (which are moderating in Dublin and Cork- as they are simply unaffordable at this stage)- we urgently need supply- vast quantities of supply- of a reasonable size, a good standard- and where people want to live. Its not rocket science- the issue is the complete and utter lack of supply. Rent controls will do precisely nothing to address this obvious issue- if anything it will simply mean landlords will be more likely to use whatever implements at their disposal to make tenancies as short as possible- in order to minimise the periods they are locked into rents that might be below market rates.

We need large quantities of new supply- where people want to live- and of a size and standard that people won't view them as 'starter homes' that will have to be sold and traded up to larger dwellings- if/when they start a family.

The Minister's proposals are a short-term, knee-jerk reaction- that is going to make him look like a folk hero to a small cohort of people- however, medium term the self same cohort of people are going to discover that its yet another case of 'be careful what you wish for, you just might get it'. Its not even the law of unintended consequences here- the consequences are so bloody obvious- yet, the political expediency of this short term measure mean that providing the Minister is not around to have to pick up the pieces when it all blows up- he will sell it as a success..........

Is there an election for FG leadership on the horizon that Mr. Coveney is angling for? Seems to me to be the only thing that makes sense..........

Varik

Where's the 12% people are mentioning coming from, are they just going "less than 5" means 4 and over 3 years that 12%?

The 2 year still applies so, would it not be 8% over 4 years.

El_Duderino 09

The_Conductor wrote:

We do not urgently need restrictions on soaring rents (which are moderating in Dublin and Cork- as they are simply unaffordable at this stage)- we urgently need supply- vast quantities of supply- of a reasonable size, a good standard- and where people want to live. Its not rocket science- the issue is the complete and utter lack of supply. Rent controls will do precisely nothing to address this obvious issue- if anything it will simply mean landlords will be more likely to use whatever implements at their disposal to make tenancies as short as possible- in order to minimise the periods they are locked into rents that might be below market rates.

What would the landlords say if the government did decide to build all the houses needed? Wouldn't that drop the sale value and rental value of their asset? Do they actually want more competition for their property? Standards of older properties would need to improve to compete with the new ones.